The case of the day is Illumina Cambridge Ltd. v. Complete Genomics, Inc. (N.D. Cal. 2020). I last wrote about the case a couple of months ago. In most respects, it is a typical Section 1782 case, but I want to call two points to your attention.
First, the case was before the court on review of a magistrate judge’s decision denying the respondents’ motion to vacate the subpoenas the court had issued. The motion to vacate took the position that the district judge should review the decision de novo under FRCP 72(b) on the theory that the decision was dispositive. The Ninth Circuit has not ruled on the standard of review, although most courts have taken the view that a district judge should review the magistrate judge’s decision for clear error under FRCP 72(a). It may be tempting for the party that prevailed before the magistrate judge to press this issue, because clear error review is much more deferential than de novo review. But the risk is that you create a juicy issue that the Ninth Circuit will want to take, possibly delaying matters for a long, long time. We (I was counsel to Illumina Cambridge) asked the court to rule under both standards, in order to avoid a “needless battle about the standard of review that cannot affect the outcome” (because in our view the outcome was clear no matter which standard you use). The judge agreed and ruled that Illumina Cambridge prevailed both on de novo review and on clear error review.
Second, the judge affirmed the magistrate judge’s ruling that after a respondent is on notice of a § 1782 proceeding, it has an obligation to preserve the evidence in its possession, custody, or control, and it must produce the evidence that was in its possession, custody, or control at that time, even if it later entered into a corporate transaction that arguably deprived it of control of documents. In this case, the respondent was, at the time it was put on notice, the ultimate parent of a Chinese subsidiary. Later, they engaged in a transaction in which the Chinese subsidiary became the parent. The court held that this transaction did not alter the respondent’s duty to produce whatever was in its control at the time it was put on notice. Along similar lines, the judge ordered the respondent to produce information “that they are able to access over shared servers, databases, or drives having documents or information potentially responsive” to the subpoenas. I have written before about the problem of locality in the age of cloud computing. The new decision stakes out a clear functional approach to the problem.