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Schindler Elevator Corp. v. Otis Elevator Co.

September 24, 2009

SCHINDLER ELEVATOR CORP., PLAINTIFF,
v.
OTIS ELEVATOR CO., DEFENDANT,
OTIS ELEVATOR CO., COUNTERCLAIM PLAINTIFF,
v.
SCHINDLER ELEVATOR CORP. AND SCHINDLER AUFZÜGE AG, COUNTERCLAIM DEFENDANTS.



The opinion of the court was delivered by: Falk, U.S.M.J.

Hon. Dennis M. Cavanaugh

OPINION

The issue to be decided is whether a party seeking to take a deposition of a Swiss corporate defendant must comply with the Hague Convention or may it simply follow the Federal Rules of Civil Procedure. Defendant/Counterclaim Plaintiff Otis Elevator ("Otis") noticed a deposition of Counterclaim Defendant Schindler Aufzüge AG ("Schindler Aufzüge"), a Swiss corporation, in accordance with the Federal Rules of Civil Procedure. Schindler Aufzüge insists that Otis must follow the procedures of the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (the "Convention") 23 U.S.T. 2555, reprinted in 28 U.S.C. § 1781. For the reasons that follow, Otis may proceed with the deposition of Schindler Aufzüge pursuant to the Federal Rules.

BACKGROUND

This action began as a declaratory judgment action by Schindler Elevator Corporation ("Schindler"), alleging that United States Patent No. 6,739,433 ("the '433 patent") is invalid. Otis owns the '433 patent, which is directed to a tension member for an elevator.

On May 14, 2009, Otis was granted leave to file an amended answer and counterclaim joining Schindler Aufzüge as a counterclaim defendant. Schindler Aufzüge is a Swiss entity with its principal place of business in Switzerland.*fn1 Otis alleges that Schindler and Schindler Aufzüge directly infringe the '433 patent through their manufacturing, use, and sale of certain elevator belt products, including the Gates Tension Member ("the Gates Tension Member"). Otis alleges that Schindler Aufzüge has sold and used the Gates Tension Member in Europe and that Schindler intends to use the Gates Tension Member or similar products in the United States. Otis further alleges that Schindler Aufzüge has imported, or has assisted in importing, the Gates Tension Member into the United States, and that Schindler Aufzüge directs Schindler's research and development efforts related to the intended use and sale of the Gates Tension Member.

On June 10, 2009, an amended scheduling order was entered that authorized Schindler Aufzüge to file a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), and permitted expedited discovery relating to the issue of personal jurisdiction over Schindler Aufzüge. Schindler Aufzüge's jurisdiction motion was filed on June 26, 2009.

Supporting the motion is a certification from Berhard Gysi (the "Gysi Declaration"), a Senior Vice President with Schindler Aufzüge, which details Aufzüge's business relationship with Schindler and its alleged absence of contacts with the State of New Jersey. The Gysi declaration is cited approximately 50 times in Schindler Aufzüge's brief in support of dismissal.

Beginning jurisdictional discovery, Otis noticed a 30(b)(6) deposition of Schindler Aufzüge. The subject of the deposition is the substance of the Gysi Declaration. In response, Schindler Aufzüge refused to produce a witness unless Otis utilized the procedures in the Hague Convention. Otis raised the dispute with the Court, and the parties submitted papers in support of their positions. The matter is ripe for decision.

DISCUSSION

A. The Parties' Arguments

In opposing the deposition, Schindler Aufzüge argues that it has been unwillingly "dragged" into this case and has not voluntarily invoked any discovery procedures under the Federal Rules. It further argues that binding case law that permits the use of the Federal Rules only applies to document discovery, not depositions. Aufzüge also argues that there will be little or no delay in this case because depositions in Switzerland taken pursuant to the Hague Convention are generally completed in less than six months. Schindler Aufzüge further argues that two sections of the Swiss Penal Code prohibit the deposition and subject the deponent to criminal prosecution. Finally, Aufzüge implores the Court to demonstrate "the respect for the special situation of foreign litigants seeking to rightfully invoke the Hague Convention procedures." (Aufzüge's Letter at 14.)

Otis argues that the Federal Rules should govern its discovery demands. It cautions that it is doubtful a deposition taken in accordance with the Convention will produce adequate evidence.

Otis further argues that it is fundamentally unfair for Schindler Aufzüge to premise its jurisdiction motion on a declaration and then refuse to allow Otis to explore its potent conclusions through a question and answer deposition. Otis states that proceeding according to the Convention will lead to unreasonable delay. Finally, Otis alleges that Schindler Aufzüge is in no danger of violating Swiss penal laws because the deposition will not occur in Switzerland and ...


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