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Living abroad won’T necessarily help you duck a subpoena: A unanimous panel of the U.S. Court of Appeals for the Second Circuit in July found that a person who lives and works in a foreign country cannot escape a process server in the United States simply because the discovery order was issued when the person was not physically present in the country. In its ruling, the court emphasized that the statute in question was enacted by Congress to make discovery for foreign litigation “simple and fair,” and that it had been amended over the years to promote broader discovery powers. The dispute over the statute arose out of securities litigation in France between Soci�t� du Louvre, a French company, and veteran U.S. arbitrageur Asher Edelman and the five investment funds he controls. Soci�t� has sued Edelman in France, alleging that he manipulated the market for the company’s securities by making offers to purchase Soci�t� that he never intended to complete. Edelman countersued, claiming that Claude Taittinger, a member of Soci�t�’s board of directors, has mismanaged Soci�t� for his own benefit and to the detriment of shareholders. To bolster his claim, Edelman sought a discovery order, which was issued by U.S. district judge Barbara Jones, in the Southern District of New York, in October 2000. Artful Dodger The order did not name Taittinger but did authorize subpoenas for deposition testimony to any “additional individuals and entities with knowledge and information.” Taittinger, a citizen of France, was served three days later while visiting the Gagosian Gallery in New York. Taittinger later moved to throw out the subpoena, arguing that it was not permitted. He also claimed that since he was not a party to the litigation or an officer of Soci�t�, he could not be made to travel more than 100 miles for a deposition. Southern District judge Lawrence McKenna agreed that the subpoena was improper and quashed it, but in early July the Second Circuit vacated that ruling and remanded it to the district court. Judge Richard Cardamone, writing for the court, said that the lower court’s strict interpretation of the statute would create needless procedural roadblocks for those seeking evidence in foreign litigation. The judge also rejected arguments that, to be valid, a discovery order must be signed while a foreign citizen was in the United States. Procedural Hoops “To comply with the restriction, a party seeking discovery would have to wait until the unsuspecting prospective deponent wanders into the district, and then rush to the courthouse to have a judge sign an already-drafted discovery order,” Cardamone wrote. “We see no benefit in requiring those involved in this process to be compelled to jump through such procedural hoops.” Addressing Congress’s intent, the judge wrote: “It would be anomalous for Congress to want visitors to be subject to a discovery order and for the statute to have a broad reach, and at the same time for us to direct that there be a precise match between the time the order issues and the visitor’s presence in the district.” Despite its ruling, Cardamone said, the court did not necessarily mean that Taittinger must be deposed. The judge ordered the district court to address Taittinger’s claim that he cannot be compelled to travel more than 100 miles for a deposition since he is not a party to the litigation or an officer of Soci�t�. Judge McKenna did not decide the issue, having quashed the subpoena on other grounds. Mark Cohen of Arkin Kaplan & Cohen in Manhattan, who represented Edelman, said the ruling gives Americans who invest in foreign companies more options in defending themselves against foreign litigation. “In an era of increasing globalization, this opinion is a natural result,” Cohen said. James Masella III of New York’s Sullivan & Cromwell, who represented Taittinger, declined to comment. Judges Wilfred Feinberg and Rosemary Pooler concurred with Cardamone’s decision. This article originally appeared in The New York Law Journal, a sibling publication of Corporate Counsel and a part of American Lawyer Media.

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