City of Almaty, Kazahkstan v. Mukhtar Ablyazov

Background

The City of Almaty and BTA sought to recover funds allegedly embezzled in Kazakhstan and laundered in the United States. The opinion concerns the deposition of non-party witness Kairat Sadykov, a former BTA employee who was expected to have knowledge about spreadsheets that the Kazakh Entities said reflected sham payments eventually flowing to Triadou.

Judge Parker had allowed the Kazakh Entities to identify certain witnesses late, but limited the subjects of their depositions. Her September 4, 2019 minute order permitted questioning of Sadykov and another witness about the authenticity of specified spreadsheets, the meaning of those spreadsheets, and related foundational questions. The court explained that these limits concerned authenticating the spreadsheets under Federal Rule of Evidence 901 and laying the foundation for their admission into evidence.

Sanctions and Objections

During Sadykov’s deposition, the Kazakh Entities showed him only one spreadsheet, and he testified that he had never seen it before. Despite repeated objections from Triadou’s counsel, the Kazakh Entities also asked about BTA personnel, other records concerning offshore transfers, and the payment status of BTA loans.

Triadou requested sanctions under Federal Rule of Civil Procedure 37 for violating the discovery order. Judge Parker granted that request in part. She declined to prevent Sadykov from testifying at trial, but struck substantial portions of the deposition testimony that exceeded the authorized scope and awarded Triadou half of the fees and costs associated with the deposition.

The Kazakh Entities objected to Judge Parker’s sanctions ruling. They argued that she acted on an incomplete record because she had not held a pre-motion conference and that her order limiting the deposition was unclear or incomplete.

Court’s Analysis

The court applied the “clearly erroneous or contrary to law” standard governing objections to a magistrate judge’s ruling on a non-dispositive discovery matter. Under that standard, the district court gives substantial deference and overturns the ruling only when the record leaves it with a firm conviction that a mistake occurred.

The court rejected the argument that Judge Parker had to hold a pre-motion conference. It found that the discovery issues had already been extensively addressed in conferences and written submissions and that Judge Parker had the relevant deposition testimony before her.

The court also concluded that the deposition-order limits were clear. In the court’s view, a reasonable attorney would understand the order to permit questioning about authenticating the spreadsheets and laying the foundation for their admission, not questioning about every subject related to the spreadsheets’ contents. The court further deferred to Judge Parker’s understanding of her own order and the surrounding litigation history.

Finally, the court held that the sanctions themselves were within Judge Parker’s broad discretion. Striking the improper testimony prevented the Kazakh Entities from benefiting from their violation of the discovery order, and the partial fee award was appropriate because much of the overseas deposition involved questioning outside the authorized scope.

Disposition

The court overruled the Kazakh Entities’ objections to Judge Parker’s March 12, 2020 sanctions opinion. It denied the Kazakh Entities’ motion for oral argument as moot. The opinion states that these rulings resolved Docket Numbers 1231 and 1243.