United States District Court, N.D. Illinois
March 17, 2004.
INTERNATIONAL INSURANCE COMPANY, Plaintiff,
CAJA NACIONAL DE AHORRO Y SEGURO, Defendant
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
In October 2000, an arbitration panel awarded Plaintiff,
International Insurance Company, an award of $4,702,428.12 against
Defendant, Caja Nacional De Ahorro Y Seguro (Caja), an Argentine entity,
hi its March 26, 2001 Amended Memorandum Opinion and Order, this Court
ordered Defendant to post a pre-judgment security and struck Defendant's
answer to the petition. Defendant failed to post a pre-judgment security
and answer to Plaintiffs petition. Default judgment was issued against
Defendant on July 5, 2001. On September 5, 2001, Plaintiff filed a
citation to discover assets as a supplementary proceeding for aid in
enforcing its judgment against Defendant. The citation had a return date
of October 2, 2001. Defendant did not file a response to the citation and
failed to produce witnesses or documents on October 2, 2001. This Court
entered a rule to show cause against Defendant and set a rule to show
cause hearing for October 31, 2001.
On November 27, 2001, the Court quashed the outstanding citation to
discover assets. That same day, Plaintiff filed a new citation to
discover assets. On June 6, 2002, the Court ordered Defendant to comply
with Plaintiffs discovery requests by June 20, 2002. Defendant failed to
comply with the discovery requests; and, on December 4, 2002, the Court
awarded Plaintiff sanctions
in the amount of $2,000 per day for Defendant's refusal to respond
in good faith with the requested discovery materials. In July 2003,
Defendant provided responses to Plaintiff's interrogatories; however,
Defendant's response to interrogatory #2 was incomplete. At the September
30, 2003 status hearing, Plaintiff noted the deficiencies in Defendant's
responses. Defendant's counsel offered the deposition of Dr. Guillermo
Sobral, the current liquidator of Defendant, to provide an explanation of
the extent of the Ministry of the Economy's knowledge regarding
Defendant's assets. The court ordered the parties to confer and prepare a
joint status report.
On October 21, 2003, the parties presented their joint status report
that Dr. Sobral would be deposed in Argentina "pursuant to U.S. Federal
Rules of Civil Procedure," and that Defendant's counsel would provide
dates for the deposition. The parties requested ninety days to complete
the deposition and to translate and analyze the transcript. The Court
granted the request and set the next status hearing for January 27, 2004.
Defendant failed to comply with the joint status report, and Plaintiff
filed a Motion to Compel, hi its response to Plaintiffs Motion to Compel,
Defendant stated that it would amend its answer to interrogatory
#2, produce the requested documents, and make Dr. Sobral
available for deposition in Buenos Aires pursuant to the Hague Convention
of the Taking of Evidence Abroad in Civil or Commercial Matters ("Hague
Convention"). Defendant did not dispute Plaintiffs statement that the
parties had previously agreed that Dr. Sobral's deposition would be taken
as an American-styled, question-and-answer deposition. On February 26,
2004, the Court granted Plaintiffs Motion to Compel, ordering the
Defendant to provide deposition dates for Dr. Sobral.
Subsequently, Defendant sought "clarification" of the Court's February
26 Order, contending that Dr. Sobral should be deposed in accordance with
the Hague Convention. Plaintiff opposes the
deposition pursuant to the Hague Convention, arguing that Defendant
is judicially estopped from arguing that the Hague Convention procedures
must be used and that the facts of the instant case warrant application
of the Federal Rules of Civil Procedure, not the Hague Convention.
In its brief addressing the present issue, Defendant argues that the
joint status report only indicated that the deposition would occur
pursuant to the U.S. Federal Rules of Civil Procedure and did not specify
Federal Rule of Civil Procedure 30. As such, Defendant argues that the
deposition could also be governed by Federal Rule of Civil Procedure
28(b), which allows for depositions pursuant to the Hague Convention.
However, Defendant still does not contest Plaintiff's contention that the
parties' previous agreement, as set forth in the joint status report, was
for the deposition to occur as an American-style, question-and-answer
deposition as set forth in Federal Rule of Civil Procedure 30.
Accordingly, Defendant's argument that the joint status report should be
interpreted to show the parties' intent was to allow the deposition be
governed by the Hague Convention is without merit.
The doctrine of judicial estoppel prohibits a litigant to repudiate a
legal position on which it has prevailed. See Continental III. Corp.
v. Commissioner of Internal Revenue, 998 F.2d 513, 518 (7th Cir.
1993) (Continental). Generally, the doctrine is applied to
successive lawsuits; however, it is not limited to only successive
lawsuits. See Continental, 998 F.2d at 518. "A party can argue
inconsistent positions in the alternative, but once it has sold one to
the court it cannot turn around and repudiate it in order to have a
second victory. . . ." Continental, 998 F.2d at 518.
Here, the Defendant previously represented to the Plaintiff, as well as
the Court, that it had agreed to have Dr. Sobral's deposition be taken as
an American-style, question-and-answer deposition. Defendant does not
dispute this representation. Now, after significant delays in these
post-judgment proceedings, Defendant seeks to change his position.
This change in position is barred by the doctrine of judicial estoppel.
Furthermore, the facts of this case warrant the application of the
Federal Rules of Civil Procedure for Dr. Sobral's deposition as opposed
to the Hague Convention.
The Hague Convention is not the exclusive avenue for obtaining
discovery in a foreign country. See Societe Nationale Industrielle
Aerospatiale v. United States District Court for the Southern Dist. of
Iowa, 482 U.S. 522, 539-40 (1987) (Societe). Courts must
determine on a case-by-case basis whether it is more appropriate to take
discovery in a foreign country under the Hague Convention or under the
Federal Rules of Civil Procedure. Three factors the court utilizes to
determine which method of discovery should be utilized are: (1) the
appropriateness of the proposed discovery given the facts of the
particular case, (2) the sovereign interests involved, and (3) the
likelihood that resort to the Hague Convention would be an effective
discovery device. See Societe, 482 U.S. at 544-46; In re
Aircrash Disaster Near Roselawn, Indiana October 31, 1994,
172 F.R.D. 295, 309 (N.D. Ill. 1997).
Here, the proposed discovery is directly relevant to the enforcement of
the now four-year-old arbitration award. Defendant has asserted that all
of its assets have been transferred to the Argentine government; and,
thus, it has no remaining assets. However, Defendant has failed to
provide any information with respect to the status or nature of the
transferred assets. Plaintiff seeks the deposition of Dr. Sobral because
he has been identified by Defendant as the individual who provided
Defendant with the limited information that Defendant has provided to
Defendant argues that a question-and-answer deposition is not
appropriate because it differs from the norm in Argentine, and such
depositions can be considered by Argentine nationals as an
affront or invasion of privacy. However, the U.S. courts have no
duty to use the procedures normally used in a foreign country. See
Societe, 482 U.S. at 543-44. In addition, Plaintiff does not seek
any personal information from Dr. Sobral. Instead, Plaintiff seeks
information about the assets of the Defendant.
As to the second factor, "[f]irst and foremost, the United States has
its own sovereign interest in protecting its citizens." In re
Aircrash, 172 F.R.D. at 309, Defendant argues that requiring Dr.
Sobral to sit for a deposition pursuant to the Federal Rules of Civil
Procedure would be an affront to the sovereignty of Argentina because
Defendant is now under the control of the Argentine state, through the
Ministry of Economy and Production. However, the information sought by
Plaintiff relates to an entity which was not under the control of the
Argentine government at the time of the transactions between the parties
and relates to assets of the Defendant, not Argentina.
In addition, the interest in the United States' protecting its citizens
outweighs the interests asserted by Defendant under the facts of the
instant case. Defendant's efforts to avoid the application of the Federal
Rules of Civil Procedure would undermine the United States' interests by
further delaying and frustrating the discovery of the information to
which Plaintiff is legally entitled. Defendant has already delayed the
discovery of this information and has been sanctioned for such delay.
Lastly, allowing the discovery of the material sought pursuant to the
Hague Convention would not be an effective discovery device. As stated
above, Defendant has a history of avoiding and delaying discovery in this
case; and requiring that information sought be provided by the letter
request process would only further delay the present proceedings. The
letter requests sought to be used by Defendant under the Hague Convention
are generally considered inferior to the traditional
deposition format because the deposition format is more flexible
and efficient. In addition, letter requests often generate answers
prepared by lawyers rather than the witness. See Madness v.
Madness, 199 F.R.D. 135, 142 (S.D.N.Y. 2001).
For the foregoing reasons, Dr. Sobral's deposition is to be taken
pursuant to Federal Rule of Civil Procedure 30.
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