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Hemlock Semiconductor Corporation v. Solarworld Industries Sachsen Gmbh

United States District Court, E.D. Michigan, Northern Division

December 15, 2016

HEMLOCK SEMICONDUCTOR CORPORATION, Plaintiff,
v.
SOLARWORLD INDUSTRIES SACHSEN GmbH, f/k/a DEUTSCHE SOLAR GmbH, f/k/a DEUTSCHE SOLAR AG, Defendant.

          OPINION AND ORDER GRANTING IN PART PLAINTIFF'S MOTION TO COMPEL RESPONSES TO POST-JUDGMENT DISCOVERY, SETTING DEADLINE AND GRANTING MOTION FOR LEAVE TO FILE SURREPLY

          THOMAS L. LUDINGTON United States District Judge.

         On March 7, 2013, Plaintiff Hemlock Semiconductor Corporation (“Hemlock”) filed suit against Defendant SolarWorld Industries Sachsen GmbH (“Solarworld”). ECF No. 1. The dispute between the parties arises from a series of large-scale contracts for industrial-grade polycrystalline silicon from Hemlock to SolarWorld. On March 16, 2016, Hemlock filed a motion for summary judgment. ECF No. 91. On July 13, 2016, the Court granted summary judgment for Hemlock. ECF No. 120. The Court entered final judgment for Hemlock in the amount of $793, 467, 822.91. ECF No. 123. On August 9, 2016, Hemlock filed a motion requesting that it be awarded $2, 867, 892.47 in attorney's fees and $757, 451.38 in costs and expenses, for a total of $3, 625, 343.85. ECF No. 124. On November 2, 2016, the Court awarded Hemlock attorney fees in the amount of $2, 815, 212.22 and costs in the amount of $757, 451.38, for a total of $3, 572, 663.60. ECF No. 136.

         On October 3, 2016, Hemlock filed a motion to compel responses to post-judgment discovery requests. ECF No. 132. In the motion, Hemlock argues that SolarWorld has refused to fully respond to Hemlock's post-judgment discovery requests. In response, SolarWorld argues that discovery regarding SolarWorld's German assets is irrelevant because SolarWorld believes that European Union and German antitrust law will bar enforcement of the judgment in Germany. SolarWorld also argues that Hemlock's discovery requests are unduly burdensome in scope and detail. For the reasons stated below, Hemlock's motion will be granted in part.

         I.

         The underlying facts of the dispute are summarized in the Court's order granting summary judgment, ECF No. 120, and order granting Hemlock's motion for attorney fees and costs in part, ECF No. 136. The facts outlined in those orders will be adopted as if fully restated herein. Because relevant to the motion to compel, the post-judgment developments in this suit will also be outlined.

         After summary judgment was granted for Hemlock, SolarWorld filed an appeal. However, SolarWorld has not sought a stay of execution of the judgment. See Coll Decl. at ¶ 2, ECF No. 132, Ex. 1. On August 22, 2016, Hemlock served discovery requests on SolarWorld for the purpose of identifying assets that may be available to satisfy the judgment. Interrogatories, ECF No. 132, Ex. 2; Document Requests, ECF No. 132, Ex. 3. SolarWorld requested a ninety day extension of time to respond to the discovery requests. Elliot Letter, ECF No. 132, Ex. 7. Although Hemlock was unwilling to agree to a ninety day extension, Hemlock agreed to accept a “reasonable extension.” Ansbro Letter, ECF No. 132, Ex. 8. On September 26, 2016, SolarWorld served Hemlock with its objections and responses to the discovery requests. Obj. Interrogatories, ECF No. 132, Ex. 9; Obj. Document Requests, ECF No. 132, Ex. 10. In those responses, SolarWorld refused to disclose information about SolarWorld's assets located outside of the United States, arguing that EU and German law rendered the underlying judgment unenforceable in Germany. SolarWorld also challenged the scope of the discovery. The parties unsuccessfully attempted to resolve the dispute over the discovery requests. On October 3, 2016, Hemlock filed a motion to compel more detailed responses to its discovery requests. ECF No. 132.

         II.

         Pursuant to Federal Rule of Civil Procedure 69(a)(2), a judgment creditor “may obtain discovery from any person-including the judgment debtor-as provided in these rules or by the procedure of the state where the court is located.” The rules governing post-judgment discovery are “quite permissive.” Republic of Argentina v. NML Capital, Ltd., 134 S.Ct. 2250, 2254 (2014). “The general rule in the federal system is that, subject to the district court's discretion, ‘[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.'” Id. (quoting Fed. R. Civ. Pro. 26(b)(1)). Importantly, “‘the presumption should be in favor of full discovery of any matters arguably related to the [creditor's] efforts to trace [the debtor's] assets and otherwise to enforce the judgment.'” Ordos City Hawtai Autobody Co., Ltd v. Dimond Rigging Co., LLC, No. 13-14909, 2016 WL 5219537, at *1 (E.D. Mich. Sept. 22, 2016) (quoting Credit Lyonnais, S.A. v. SGC Int'l, Inc., 160 F.3d 428, 430-31 (8th Cir. 1998)).

         Despite its broad scope, post-judgment discovery is not limitless. Rather, post-judgment discovery is “constrained principally in that it must be calculated to assist in collecting on a judgment.” EM Ltd. v. Republic of Argentina, 695 F.3d 201, 207 (2d Cir. 2012), aff'd sub nom. NML Capital, Ltd., 134 S.Ct. 2250. See also E.I. DuPont de Nemours & Co. v. Kolon Indus., Inc., 286 F.R.D. 288, 292 (E.D. Va. 2012) (“[A]sset discovery should be tailored to the specific purpose of enabling a judgment creditor to discover assets upon which it can seek to execute a judgment and . . . not devolve into a fishing expedition for irrelevant or cumulative information.”). Judgment creditors may “seek disclosure related to assets held outside the jurisdiction of the court where the discovery request is made.” EM Ltd., 695 F.3d at 207 (citing First City, Texas Houston, N.A. v. Rafidain Bank, 281 F.3d 48, 54 (2d Cir. 2002)). Importantly, “the district court's power to order discovery to enforce its judgment does not derive from its ultimate ability to attach the property in question but from its power to conduct supplementary proceedings, involving persons indisputably within its jurisdiction, to enforce valid judgments.” Id. at 208.

         III.

         A.

         As an initial matter, SolarWorld has filed a motion for leave to file a surreply further opposing Hemlock's motion to compel responses. ECF No. 137. SolarWorld has attached the surreply as an exhibit to the motion. In the interest of allowing both parties to thoroughly brief the issues before the Court, SolarWorld's motion will be granted and the surreply will be accepted as filed.

         B.

         SolarWorld argues, first, that Hemlock's discovery requests, as least as they relate to SolarWorld's foreign assets, are not “reasonably calculated to lead to the discovery of attachable property” because supply agreements are unenforceable under EU and German antitrust law. SolarWorld attempted to raise this argument as an affirmative defense earlier in the litigation. See Answer at 11, ECF No. 14. The Court struck that affirmative defense after extensive briefing of SolarWorld's defense and the controlling precedent. Order Granting in Part Mot. Strike, ECF No. 66. The Court explained:

Deutsche Solar does not claim that the market transactions contemplated under the agreements are inherently illegal under EU antitrust law. Instead, Deutsche Solar claims that the agreements are illegal under EU antitrust law if Hemlock's market conduct transgresses certain EU-defined market conditions. As a result, it requests discovery on that point. . . .
The Supreme Court has determined that in such circumstances, the possibility of illegality, when that illegality resides in a violation of antitrust laws, cannot sustain an affirmative defense of illegality. Deutsche Solar's defense will be stricken.

Id. at 18-19.

         SolarWorld immediately filed a motion for reconsideration of the Court's order striking the affirmative defense. Mot. Reconsideration, ECF No. 67. In the order denying that motion for reconsideration, the Court clarified its rationale for striking the affirmative defense:

[T]he Court did not hold and does not now hold that the Agreements do not violate EU antitrust law. What the Court held in its May 7, 2015 Opinion and what it reaffirms now is: even assuming the combination of the provisions violates EU antitrust law, an affirmative defense ...

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