City of Almaty, Kazakhstan v. Sater

Background

City of Almaty, Kazakhstan and BTA Bank JSC sued Felix Sater, companies owned by Sater, Daniel Ridloff, a company owned by Ridloff, and other defendants. The plaintiffs allege that Sater and Ridloff assisted Mukhtar Ablyazov and Viktor Khrapunov in laundering money stolen from the plaintiffs. Sater asserted, among other defenses, that the plaintiffs’ claims were barred by a release in a Confidential Assistance Agreement involving the plaintiffs, Kazakhstan, and Litco, a company owned by Sater. The plaintiffs contended that the agreement was invalid from the beginning because Litco fraudulently induced them to sign it by concealing Sater’s ownership.

Sater served notices for depositions under Federal Rule of Civil Procedure 30(b)(6). That rule allows a party to require an organization to designate a person to testify about specified topics on the organization’s behalf. The proposed topics included the alleged schemes and flow of funds, the Confidential Assistance Agreement and release, the plaintiffs’ knowledge of Sater’s role with Litco, the plaintiffs’ worldwide asset-recovery efforts and lawsuits, their relationship with Arcanum, alleged corruption and attempted bribery by agents of Almaty, and various relationships, finances, and personal matters involving Kenes Rakishev. Sater also sought to depose Rakishev separately. Rakishev was BTA’s majority shareholder and former board chairman, but was not currently employed by BTA.

Rule 30(b)(6) Deposition Topics

The court explained that deposition topics must seek information relevant to the claims and defenses, be proportional to the needs of the case, and be described with reasonable particularity. The court found that many of Sater’s topics did not meet those requirements.

The court rejected Sater’s argument that he needed broad information to determine whether Ablyazov and Khrapunov had actually stolen and laundered money. The complaint already described the alleged stolen funds, the relevant court findings, the companies that allegedly received the funds, and the movement of money into the real-estate investments at issue. Sater could question Almaty about why it believed the money used for those specific investments came from BTA or Almaty and was covered by the United Kingdom freezing orders. He was not entitled to examine all money allegedly stolen, all assets recovered worldwide, or the plaintiffs’ entire asset-recovery program.

The court also found that inquiries into Rakishev’s relationships with people unrelated to the case, his compensation, net worth, and assets; the Federal Bureau of Investigation’s dealings with Christopher Steele; and unspecified corruption or attempted bribery were speculative and irrelevant. The court concluded that these topics did not bear on whether the funds used for the specific investments were traceable to Ablyazov and Khrapunov or covered by the freezing orders, nor on the scope of the release. It further found that topics concerning lawsuits, asset misappropriation, Arcanum, and actions against the Khrapunovs were too broad and insufficiently specific for the plaintiffs to prepare properly.

Deposition of Kenes Rakishev

The court held that a non-party generally cannot be compelled to attend a deposition without a subpoena under Federal Rule of Civil Procedure 45. It did not decide whether Rakishev was subject to a Rule 30 deposition notice. Instead, it concluded that a separate deposition was not proportional to the needs of the case and was unlikely to produce relevant information.

Rakishev had previously testified in an earlier related proceeding and had little personal knowledge to contribute. The court also noted that the issue of the plaintiffs’ knowledge of Sater’s ownership of Litco had already been addressed through prior testimony and court decisions. Any remaining questions about that knowledge could be asked in the Rule 30(b)(6) deposition. The court allowed Sater to raise the possibility of deposing Rakishev again if later discovery showed that Rakishev might have personal knowledge of Sater’s ownership of Litco when the agreement was signed.

Disposition

Judge Katharine H. Parker granted the plaintiffs’ motion for a protective order. The order granted protection against the discussed Rule 30(b)(6) topics and against the separate deposition of Rakishev. The opinion does not state that the motion was granted with or without prejudice.