City of Almaty, Kazakhstan v. Sater

Background

The plaintiffs allege that Mendel Mochkin, MeM’s owner, conspired with Ilyas Khraphunov and Mukhtar Ablyazov to launder money allegedly stolen from BTA Bank and the City of Almaty. According to the plaintiffs, the money moved through shell companies and United States real-estate investments. They further allege that payments MeM received as a broker’s commission or finder’s fee were actually payments for public-relations work intended to generate negative publicity about Kazakhstan and positive publicity about Ablyazov.

The alleged public-relations work included connecting Ablyazov’s lawyer with an Italian journalist who wrote about the deportation of Ablyazov’s wife and daughter from Italy. The plaintiffs assert claims against MeM for unjust enrichment and money had and received, alleging that MeM’s payments came from stolen funds and violated a worldwide freezing order issued by a court in the United Kingdom.

Discovery dispute

MeM moved to compel further discovery under Federal Rule of Civil Procedure 26(b)(1). Its document requests sought materials concerning immigration-related activities in Italy or Kazakhstan involving Ablyazov’s family members, including arrests, visa revocations, deportations, attempted kidnappings, related media reports, and any role by Kazakh or Italian officials. Its interrogatories sought the identities of all people with knowledge of those subjects.

The plaintiffs objected based on relevance, breadth, and proportionality. They stated that Almaty did not possess or control information solely held by the Republic of Kazakhstan concerning immigration matters. They nevertheless identified Kazakh government offices responsible for extradition and immigration matters. The plaintiffs also said they had produced relevant emails and bank records and had conducted an additional search that recovered 32 documents, all media alerts concerning reporting about the litigation or Ablyazov.

Court’s analysis

Rule 26(b)(1) limits discovery to information relevant to a claim or defense and proportional to the needs of the case. The requesting party initially bears the burden of explaining relevance. The court held that MeM did not meet that burden.

MeM argued that the information could support its position that Mochkin acted out of concern about a human-rights abuse rather than as an improper agent for Ablyazov. The court found that MeM already had enough information to make that argument. It also found that MeM’s requests rested on a speculative suggestion that the plaintiffs had some connection to the deportation, without supporting facts. The court held that what happened to Ablyazov’s wife and daughter in Italy was not relevant to the claims and defenses in this action.

The court additionally found the discovery disproportionate. It was unclear why Almaty or BTA would be better positioned than MeM to obtain information about Italy’s decision to deport the family members. The court stated that the Italian government and Ablyazov appeared more likely to have the best information. It also concluded that the requested information was not important to resolving the case, particularly because the plaintiffs said they had already produced the information supporting their allegations and MeM had already presented its human-rights-abuse theory.

Disposition

The court denied MeM’s motion to compel discovery, ECF No. 453.