Global Gaming Philippines, LLC v. Razon, Jr.

Background

On September 16, 2021, Magistrate Judge Netburn denied a motion by Bloomberry Resorts and Hotels Inc. and Sureste Properties, Inc. to compel Global Gaming Philippines, LLC to produce documents. The magistrate judge stated that the defendants had not met their heavy burden of showing that enforcing the arbitration awards would violate United States public policy. The order also noted that the arbitration tribunal’s final award had addressed the Department of Justice’s non-prosecution agreement with LVS and the defendants’ assertions about the actions and consequences involving Weidner and Chiu.

The magistrate judge further concluded that allowing collateral litigation in a foreign forum could undermine the Federal Arbitration Act and the New York Convention. The order denied the defendants’ motion to compel Global Gaming Philippines, LLC.

Objections and legal standard

Bloomberry and Sureste timely objected to the September 16 order. They argued that the order misunderstood their motion as seeking documents to support a claim that Bloomberry had been fraudulently induced to enter the MSA, rather than their argument that Global Gaming Philippines had committed fraud during the arbitration.

The district court explained that a motion to compel is a nondispositive matter. Under Federal Rule of Civil Procedure 72(a), a district court may modify or set aside a magistrate judge’s order only if it is clearly erroneous or contrary to law. The court also stated that magistrate judges’ decisions on nondispositive matters receive substantial deference and may be overturned only for an abuse of discretion.

Ruling

Judge Schofield overruled Bloomberry’s and Sureste’s objections. She stated that confirmation of an arbitration award is a summary proceeding that turns an already-final arbitration award into a court judgment, and that discovery in such a proceeding should be limited to prevent the goals of arbitration—efficient dispute resolution and avoidance of lengthy, expensive litigation—from being undermined.

The court held that the September 16 order denying the motion to compel was not clearly erroneous or contrary to law. The order therefore left that denial in place.