*1 Before the Court is a motion to compel compliance with a subpoena issued to non-party Lithium Werks, Inc. (“LW, Inc.”), (Dkt. 1), filed by Vertiv Group Corporation and Vertiv Corporation (collectively, “Vertiv”). Having considered the parties' briefs, the evidence, and the relevant law, the Court finds that the motion should be granted.

This is a motion to compel third-party compliance with a subpoena in an underlying action, LiiON, LLC v. Vertiv Group, et al., No. 1:18-cv-6133 (N.D. Ill.). That underlying litigation involves breach of contract and misappropriation of trade secrets claims by LiiON, LLC (“LiiON”) against Vertiv related to lithium-ion battery cabinets. (LiiON Compl., Dkt. 1-2, at 15–34). In developing its battery cabinets, LiiON worked with Vertiv and non-party Valence Technology, Inc. (“Valence”). (Id. at 9–13). LW, Inc. later acquired Valence, and Vertiv recently learned during the Illinois action that LW, Inc. is also in the process of purchasing LiiON. (Mot., Dkt. 1, at 2).

In order to build its defense against LiiON's misappropriation claims in the Illinois action, Vertiv served LW, Inc. with a subpoena that requested six categories of documents:

(See Subpoena, Dkt. 1-3, at 13). Vertiv also requested that LW, Inc. produce a corporate representative for a deposition. (Id. at 3). LW, Inc. contacted Vertiv in response to the subpoena, and the parties agreed to postpone the deposition. (Mot., Dkt. 1, at 2). The parties conferred, but were ultimately unable to reach an agreement regarding LW, Inc.'s production of documents related to Vertiv's first, second, and fourth requests for production. (See Mot., Dkt. 1, at 2–3; Resp., Dkt. 7, at 2–3). Vertiv moves to compel LW, Inc.'s compliance. (Mot., Dkt. 1).

Under Federal Rule of Civil Procedure 45(a)(1)(A)(iii), a subpoena may command a person to attend a deposition or produce “documents, electronically stored information, or tangible things in that person's possession, custody, or control.” A person commanded to produce documents may serve written objections to producing requested materials. Fed. R. Civ. P. 45(d)(2)(B). Once an objection is made, the serving party may then move the court for the district where compliance is required for an order compelling production. Id. A non-party's objections to discovery requests in a subpoena are subject to the same requirements that objections “be made with specificity and that the responding party must explain and support its objections.” MetroPCS v. Thomas, 327 F.R.D. 600, 607 (N.D. Tex. 2018). Similarly, any discovery sought from a third party is limited to the scope of discovery permitted under Federal Rule of Civil Procedure 26(b)(1) in the underlying action; “[d]iscovery outside of this scope is not permitted.” Garcia v. Prof'l Contract Servs., Inc., No. A-15-CV-585-LY, 2017 WL 187577, at *2 (W.D. Tex. Jan. 17, 2017). The court may also consider whether the request represents an undue burden, expense, and inconvenience to the third party. See Wiwa, 392 F.3d at 818. The burden lies with the party seeking discovery. See id.; United States v. Int'l Union of Petroleum & Indus. Workers, AFL-CIO, 870 F.2d 1450, 1452 (9th Cir. 1989).

*2 The sole dispute[1] is LW, Inc.'s obligation to respond to Vertiv's first request for production: “All documents regarding a potential or actual purchase or sale of LiiON.” (See Subpoena, Dkt. 1-3, at 13). In response to this request, LW, Inc. argues that it does not have any “possession, custody, or control of responsive documents” because any responsive documents that exist were generated, and are held by, LW, Inc.'s foreign sister entity, Lithium Werks, B.V. (“LW, B.V.”) and its foreign parent entity, Lithium Group, B.V.[2] (Resp., Dkt. 7, at 6). According to LW, Inc., Vertiv must seek documents from the foreign entities using the Hague Convention protocols. (Id. at 4. 7–8).

A party must produce or permit inspection of documents responsive to a request for production of documents when such documents are in the party's “possession, custody or control.” Fed. R. Civ. P. 34(a). “Possession, custody, or control” includes more than actual possession; it extends to a party's legal right or practical ability to obtain documents from a non-party on demand. Duarte v. St. Paul Fire & Marine Ins. Co., No. EP-14-CV-305-KC, 2015 WL 7709433, at *5 (W.D. Tex. Sept. 25, 2015). Courts have considered a non-exhaustive list of five factors to determine whether one corporation may be deemed under control of another: (1) commonality of ownership; (2) exchange or intermingling of directors, officers, or employees of the two corporations; (3) exchange of documents between the corporations in the ordinary course of business; (4) any benefit or involvement of the nonparty corporation in the transaction; and (5) involvement of the nonparty corporation in the litigation. Shell Global Sols. (US) Inc. v. RMS Eng'g, Inc., No. 4:09-CV-3778, 2011 WL 3418396, at *2 (S.D. Tex. Aug. 3, 2011).

Courts have consistently found that “control” exists where two affiliates are owned by the same individual. See id. at *3; Costa v. Kerzner Int'l Resorts, Inc., 277 F.R.D. 468, 471–72 (S.D. Fla. 2011) (collecting cases). Here, LW, Inc.; LW, B.V.; and Lithium Group, B.V. are part of a unified corporate structure; LW, Inc. and LW, B.V. are held by Lithium Group, B.V. (Resp., Dkt. 7, at 7–8). Additionally, LW, Inc. and Lithium Group, B.V. share common officers and directors. The CEO and co-founder of LW, Inc., Joe Fisher, is also the CEO of LW, B.V., and holds an officer role with Lithium Group, B.V. (Id. at 8; Reply, Dkt. 11, at 3). The same is true with respect to Christian Ringvold, CMO and co-founder of LW, Inc. (Reply, Dkt. 11, at 3). This common ownership and overlapping management structure supports finding that the relationships between LW, Inc. and its European affiliates are close enough to find that the former has the ability to obtain documents held by the latter.

*3 But the similarities between LW, Inc. and its European affiliates go beyond mere shared ownership and management. A subsidiary can be deemed to have control over documents held by a foreign parent corporation where “there is a close working relationship on a common transaction and the subsidiary could easily obtain the documents when it is in its interest to do so.” Costa, 277 F.R.D. at 472. Both Fisher and Ringvold engaged directly in acquisition discussions with LiiON. (Mot., Dkt. 1, at 5; Resp., Dkt. 7, at 8; see also Hoffman Dep., Dkt. 2-2, at 5–7; Gray Dep., Dkt. 2-3, at 6–8). Fisher, based in the United States, is a signatory to the LW–LiiON Purchase Agreement on behalf of Lithium Group, B.V. (Reply, Dkt. 11, at 3; Purchase Agreement, Dkt. 10-1, at 28). Finally, there is some indication that LW, Inc. benefits from the LiiON acquisition: LW, Inc. is listed as a buyer of LiiON on term sheets and purchase agreements. (See Term Sheet, Dkt. 15-1, at 2; Purchase Agreement, Dkt. 15-2, at 2). That the evaluation of LiiON may have originated with and is currently held by European individuals is insufficient to show a lack of control. See Cooper Indus., Inc. v. British Aerospace, 102 F.R.D. 918, 919–20 (S.D.N.Y. 1984) (“The fact that the documents are situated in a foreign country does not bar their discovery.”).

Based on these facts, the Court finds that there is sufficient intermingling of resources, management, and involvement to show that LW, Inc. could obtain documents related to the LiiON acquisition from its European affiliates, whether LW, B.V. or Lithium Group, B.V., upon request. At the hearing on Vertiv's motion to compel, LW, Inc. noted that they have not attempted to request documents from its European affiliates, and that any order to do so would create internal procedural difficulties. The Court finds that these logistical concerns do not undermine the finding that LW, Inc. could obtain the requested documents from its foreign affiliates. LW, Inc. also previously informed Vertiv that it must use Hague Convention protocols to obtain the documents it sought from its European-based arms, but LW, Inc. did not press that point in either its response or at the hearing on Vertiv's motion.[3] Regardless, the Hague Convention is a permissive supplement, not a preemptive replacement, for other means of obtaining evidence located abroad. Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist. of Ia., 482 U.S. 522, 538, 546 (1987). Vertiv is not required to resort to the Hague Convention before seeking discovery by subpoena under the Federal Rules.

The Court thus finds that LW, Inc. could obtain responsive documents from its foreign affiliates and thus that LW, Inc. has “possession, custody, or control” of those documents. The Court will order LW, Inc. to conduct a reasonable search of documents held by its foreign affiliates, Lithium Group, B.V. and Lithium Werks, B.V., and to produce any documents within its control related to Vertiv's first request for production of documents.

For the reasons given above, IT IS ORDERED that Vertiv's Motion to Compel Non-Party Compliance with Subpoena, (Dkt. 1), is GRANTED.

IT IS FURTHER ORDERED that LW conduct a reasonable search of documents held by its foreign-based affiliates, Lithium Group, B.V. and Lithium Werks, B.V., and produce all documents regarding a potential or actual purchase or sale of LiiON to Vertiv within thirty (30) days. The parties are ORDERED to confer regarding the parameters of any search for responsive documents.

*4 IT IS FINALLY ORDERED that LW, Inc. make a representative available for deposition.

SIGNED on July 30, 2019.

The parties initially disputed LW, Inc.'s compliance with Vertiv's first, second, and fourth requests for production under the subpoena. (Mot., Dkt. 1, at 2–3; Resp., Dkt. 7, at 6 n.3). LW, Inc. argued in its response to Vertiv's motion to compel that Vertiv narrowed its request to the LiiON acquisition materials and that any responsive documents to the second and fourth requests are duplicative and do not justify interference with a third party under Federal Rule of Civil Procedure 45. (Resp., Dkt. 7 n.3). Vertiv disagrees. (Reply, Dkt. 11, at 2 & n.7). Regardless, at the hearing on Vertiv's Motion to Compel, LW, Inc. unequivocally represented that it has no documents that are responsive to Vertiv's second or fourth requests. This representation is sufficient to show that LW, Inc. has conducted a reasonable search of all sources reasonably likely to contain responsive documents and that LW, Inc. has not found any documents that are responsive to Vertiv's second and fourth requests for production. Accordingly, the Court limits its analysis to Vertiv's first request for production: the LiiON acquisition materials.

LW, Inc. has not disputed the relevance of Vertiv's request or argued that Vertiv's request represents an undue burden, expense, or inconvenience.

The party seeking the application of the Hague Convention bears the burden of establishing that its procedures govern discovery over the Federal Rules. Rotstain v. Trustmark Nat'l Bank, No. 3:09-CV-2384-N-BG, 2015 WL 13031698, at *2 (N.D. Tex. Dec. 9, 2015). District Courts in the Fifth Circuit apply a five-factor comity analysis: (1) the importance of the required discovery to the litigation; (2) the degree of specificity of the request; (3) whether the information originated in the United States; (4) the availability of alternative means of securing the information; and (5) the extent to which non-compliance with the request would undermine important interests of the state where the information is located. See, e.g., Henry Zoch II v. Daimler, A.G., No. 4:17-CV-578, 2017 WL 5177959, at *4–5 (E.D. Tex. Nov. 8, 2017). Neither party addresses these factors or their application to the facts in this case.