UNITED STATES DISTRICT COURT
FOR TI~[E DISTRICT OF COLUMBIA

 

INRE THIRD PARTY SUBP()ENA TO
FUSION GPS,

'c/o Zuckerrnan Spaeder LLP
1800 M Street, N.W.
Washington, D.C. 20036

 

Case No. 1:]7-n1c-02171 (TNM)

ALEKSEJ GUBAREV, et al.,

Plaintiffs,

V. Case No. 17-`cv-60426-UU
BUZZFEE-D, INC. et al.,

.Defendants.

 

 

MEMORANDUM OPINION

On August 31, 2017, Fusion GPS (“Fusion”) filed a motion in the United States District
Court for the District of Colurnbia seeking to quash a third-party subpoena issued in connection

With a defamation action currently pending in the United States District Court for the Southern

District of Florida. On January 3, 2018, Fusion sent a letter to me asking that l consider

disqualifying myself, and on January 8, 2018, l invited Fusionto submit formal briefing on the
matter. NoW before the Court is Fusion’s motion for recusal, Which argues that my impartiality
in deciding its motion to quash might reasonably be questioned because a shareholder-of one of
rny former clients and Prcsident Trump have purported interests in the matter. Because a

reasonable person Who Was informed of all the surrounding facts and circumstances Would not

believe that such an interest exists nor that such an interest, if it existed, Would create an

appearance of bias, the motion for recusal Will be denied.

 

 

 

 

I. BACKGROUND

ln the underlying litigation, Aleksej Gubarev, XBT l-Ioldings S.A., and WebZilla, lnc.,
(collectiveiy, “the Plaintiffs”) are suing Buzzfeed, Inc., and its editor in chief for defamation As
quoted in their complaint, their defamation claim arises out of Buzzfeed’s publication of the
following statement:
[Redacted] reported that over the period March-September 2016 a company called
XBT/Webzilla and its affiliates had been using botnets and pom traffic to transmit
viruses, plant bugs, steal data and conduct “altering operations” against the
Democratic Party leadership Entities linked to one Aleksei GUBAROV fsic] were
involved and he and another backing expert, both recruited under duress by the
FSB, Seva KAPSUGOVICH, were significant players in this operation In Prague,
COHEN agreed [to] contingency plans for various scenarios to protect the
operations, but in particular what was to be done in the event that l-Iillary CLINTON
won the presidency. lt was important in this event that all cash payments owed
were made quickly and discreetly and that cyber and that cyber [sic] and other
operators were stood down / able to go effectively to ground to cover their traces.
Mot. Quash Ex._ 6 ‘[[ 26. This statement appeared in the last of a series of memoranda written by
Christopher ,Steele after he was retained by Fus'ion to investigate Donald Trump’s ties to Russia.
Fusion is not a_ party to the underlying litigation, but it is the recipient of a third-party
subpoena from the Plaintiffs with which it does not wish to comply. ln light of Fusion’s
concerns about disclosing the information requested by the subpoena, the Plaintiffs in the
underlying case have agreed that any information Fusion produces Will be designated
“Attorneys’ Eyes Only,” meaning that “it will not be shared with anyone other than the lawyers
Working on the underlying case in Florida” and that it will not be shared with any of the parties
or with lawyers working on related matters. Opp. to Mot. Quash EX. 5. Notwithstanding that

agreement, Fusion has moved to quash the subpoena Fusion now asks that l disqualify myself

from consideration of its motion _to quash.

 

 

II. LEGAL STANDARD

28 U.S.Ci § 455 sets forth rules governing the disqualification of federal judges. Section
455(b) lays out specific situations in which a judge must recuse himself from a matter, such as
When he previously served as a lawyer in the matter in controversy, when he-or a close family
member has a financial interest in the matter in controversy, or when he or a sufficiently close
relation is a party to the proceeding Section 455(a) is a general catchall provision, requiring that
a federal judge disqualify himself “in any proceeding in Which his impartiality might reasonably
be questioned.” Section 45 5(a) calls for an objective inquiry into whether there is an appearance
of impartiality, “from the perspective of a reasonable observer who is informed of all the
surrounding facts and circumstances.” Cheney v. Um'ted States Dist. Cr. for the Dist. of
Co]umbia, 541 U.S. 9137, 924 (2004) (mem.) (Scalia, J.); See also fn re Barry, 946 F.2d 913,__914
(D.C. Cir. 199 l). A judge’s duty to disqualify himself where his impartiality might reasonably
be questioned under § 45 S(a) cannot be interpreted “as implicitly eliminating a limitation
explicitly set forth in § 455(b).” Lz'teky v. United Stacl‘es,l 510 U.S. 540, 553 (1994).1 ln other
words, a litigant cannot claim that § 455(a)’s catchall provision requires disqualification where
§ 455(b) addresses the scenario and does not require disqualification Moreover, “a judge has as
much an obligation not to recuse himself where there is no reason to do so as he does to recuse
himself when proper.” SEC v. Bilzerz'an, 729 F. Supp. 2d 19, 22 (D.D.C.) (citing United States v.

Greenspan, 26 F.3d 1001, 1005 (lOth Cir. 1994)).

 

1 “lt Would obviously-be wrong, for example, to hold that ‘impartiality could reasonably be
questioned’ simply because one of the parties is in the fourth degree of relationship to the judge.
_ Section 455(b)(5), which addresses the matter of relationship specifically, ends the disability at

the third degree of relationship, and that should obviously govern for purposes of § 455(a) as
well. Similarly, § 455(b)(l), Which addresses the matter of personal bias and prejudice
specificaliy, contains the ‘extraj udicial source’ limitation-and that limitation (since nothing _in
the text contradicts it) should govern for_ purposes of § 455(a) as well.”. Id.

 

 

 

III. ANALYSIS

Notably, Fusion does not argue that any of the disqualifying circumstances enumerated in
§ 455 (b) are present in this matter. lnstead, it argues that there are two grounds on which my
impartiality might reasonably be questioned under § 45 S(a)i Firstj “Mikhail Fridman_,the
Court’s recent former client_has a significant interest in the outcome of Fusion’s motion to "
quash." Reply ISO l\/lot. -Recuse at l. Second, “the Court’s recent former empioyer, President
Donald Trump, also has an interest in the outcome of the motion.” Id. For the reasons explained

below, Fusion’s recusal arguments are misguided and unpersuasive

A. Both Mikhail Fridman’s Connection to the Court and His Alleged Interest in
This Matter Are Too Attenuated to Raise Reasonable Doubt Regarding My
Impartiality ,

As an initial matter, Fusion is simply incorrect in characterizing Mikhail Fridman as my
former client. The fact of the matter is that l do not know, have not met, and have never Worked
for l\/lr. Fridman. Nor has Fusion even alleged facts to support its description of Mr. Fridman as
my former client, Rather, Fusion notes that l was previously part of the legal team providing
compliance advice to VimpelCom Ltd.2 in a Foreign Corrupt Practices Act (“F_CPA”) matter
when l was a partner at Baker & l\/chenZie. Mot. Recuse at 5-6, 8. Fusion further alleges that
VimpelCom_ “is controlled by Mikhail Fridman and he serves as a director of the company.” Id_
l\/lr. Fridman’s alleged control of the company appears to be indirect: Fusion represents that he
has an_investrnent vehicle that owns 48% of the company’s shares and that he has control cfa

foundation that owns an additional 8_% of the company’s shares. Id. at 6 n.8. Mr. Fridman

appears to be one often directors on VimpelCom’s board, and is not the board’s chairmanl

 

2 VimpelCom has since been renamed Veon but is referred to as VimpeiCom in this opinion.

 

 

By no stretch of the imagination is VimpelCom a mere shell company serving as l\/lr. .
Fridman’s alter ego. It is one of the world’s largest publicly traded companies, with nearly
42,000 employees and a market cap of $6.8 billion, and it provides telecommunications services
to_ customers in 17 countries around the world.3 Accordingly, my- prior representation of
VimpelCom should not be confused with representation of Mr. Fridman. See Firsf Nat. City
` Bonk v. chco Para El Comercir) Exterz`or de Cubc'z, 462 U.S. 61 l, 623, 629-30 (eXplaining that
“a corporation and its shareholders are deemed separate entities for most purposes” and that a
court will only “pierce the corporate veil” and treat the two as the same “where a corporate entity
is so extensively controlled by its owner that a relationship of principal and agent is created”).

lFusion offers no authority for the proposition that a judge should disqualify himself based
on the interests of a person with such an attenuated connection to the judge’s time in private
practice4 Section 455(b)(2) specifically addresses private-practice-related conflicts, and it limits
disqualification to situations in which the judge “served as lawyer in the matter in controversyJ or _
a lawyer with whom he previously practiced law served during such association as a lawyer
concerning the matter, or the judge or such lawyer has been a material witness concerning it.”

This is not such a situation, and Fusion does not claim otherwise The matter in which 1 advised

 

3 F_orbes, “Veon on the Forbes Global 2000 List,” l\/lay 2017. Available at
https:`//www.forbes.com/companies/veon/ (last accessed Feb. 16, 2018). _

4 Fusion cites three state rules for the proposition that a judge should disqualify himself from
cases in which a recent former client is an actual party and cites a recommendation in an
advisory opinion by the Committee on _Codes of _Conduct that a judge consider disqualifying
himself from cases involving a firm at which he recently worked. Id. at 9 & n.17. Apparently
recognizing that these non-binding authorities are also not on point given that Mr. Fridman is not
my former client and is noia party to the case before me, Fusion argues that a “similar” rule
should apply in cases like this. However, extending these persuasive authorities by analogy
would require acting contrary to the binding authority of Liteky.

 

 

VimpelCom is not the matter raised by the motion to quash and is not related to it.5 Nor are
there any special circumstances in this case that would justify overlooking the limitations of .
§ 455(b)(2). See Lz'teky, 510 U.S. at 553 (warning against interpreting § 455(a) in a manner that
is inconsistent with § 455(b)(2)). To a “reasonable observer who is informed of all the
surrounding facts and circumstances,” Ch-eney, 541 U.S. at 924, my past representation of
VimpelCorn-the company-says nothing about my relationship with its individual board
members or with its (indirect) shareholders._ By contrast, the fact that there is no relationship
between me and Mr. Fridman would assure a reasonable observer that l will not favor any
interest he purportedly has in the case before me.6
Even if there were some connection between me and Mr. FridmanJ there is no cognizable
connection between Mr. Fridman and the motion to quash. Fusion argues that, although Mr.
Fridman is not a party to the case before me or to the underlying litigation, he is “interested” in

the case due to the fact that he has filed a separate defamation claim against`l?usion.7 Mot.

Recuse at 4-5, 9-10; Reply ISO Mot. Recuse at 1-4; See also`Fridman v. Bean LLC, l7-cv-02041

 

5 Fusion asserts that my role in VimpelCom’s representation is “relevant” to a different lawsuit
that Mr. Fridman has brought against Fusion because, in that case, Fusion referenced
VimpelCom’s FCPA settlement as part of an effort to show that Mr. Fridman is a public figure.

j Mot. Recuse at 9-10. My representation of VimpelCom did not begin until after the settlement in

que`stion. Even if 1 had represented VimpelCom in the settlement, Fusion’s assertion that the
settlement is relevant to Mr. Fridman’s case would have nothing to do with the case presently
before me.

6 Fusion also makes passing reference to the fact that my former firm also represented the Alfa
Group,` alleging that Mr Fridman is one of the Alfa Group’ s three primary owners Mot Recuse

-at 10 n.18. This alleged connection between me and Mr Fridman is even more attenuated than
- __ the connection through VimpelCom and does nothing to change the fact that l have no

relationship with him.

7 Fusion also notes that Mr. Fridman has a case pending_against Buzzfeed in New York state
court. See Fridman et al. v. Buzzfeed et al., Index No. 154895/2017 (N.Y. Sup. Ct.).

 

 

(D'.D.C). Fusion alleges that Mr. Fridman’s other case causes him to be interested in the motion
to quash for two reasons: (1) Fusion plans to make some of the same arguments against
discovery in Mr. Fridman’s case that it has made in this case, particularly with regard to First
Amendment privilege; and (2) Some of the information that the subpoena seeks in this case
would be relevant to Mr. Fridman’s case. Mot. Recuse at 4-5; Reply ISO Mot. Recuse at 2-3.
With respect to l\/lr. Fridman’s first alleged source of interest, l note that a decision in this case
would not be binding on the court deciding Mr. Fridman’s case and would not even be the first to
address Fusion’s assertion of First Amendment privilege over its activities See Bean LLC v.
Jo_hn Doe Bank, 17-02187, _ F. Supp. 3d _ (D.D.C. lan. 4, 2018) (Leon, .l.) (re_jecting Fusion’s
challenge to subpoena issued by House Permanent Select Committee on lntelligence). With
respect to Mr. Fridman’s second alleged source of interest, l note that the “Attorneys’ Eyes
Only” agreement would prevent-him from obtaining any information discovered in this case for
use in his own. See Opp. to Mot. Quash EX. 5.

l\/lr. Fridman’s alleged interests in this case are not cognizable for purposes of § 455(a).
Fusion relies on two cases to establish that a judge may be disqualified based on a third party’s _
interests, but both cases concern financial interests that Were far more direct than l\/lr. Fridman’s
alleged interests here.' Mot. Recuse at 9; Reply lSO l\/lot. Recuse at 3-4. First, Fusion cites
Preston v. Um`ted States, in which the Ninth Circ_uit found a judge disqualified based on his
relationship with a third party that had contracted to indemnify one of the parties before him.
See 923 F.2d 731, 732 (9th Cir. 1991). Second, Fusion cites Lz'ljeberg v. Healrh Services '
Acquisition Corporarion, in which the Supreme Court found a judge disqualified based on his
relationship with a third party whose success in negotiating a multi-million contract with a party

to the case depended on the outcome of the case. See 486 U.S. 847, 855-56 (1988). Although

 

 

Mr._ Fridman may consider my resolution of this discovery dispute interesting, he is not an
interested third party in the same sense as the third parties in the cases on which Fusion relies.
Those third parties had an immediate financial interest in the outcome of the cases. By contrast,
Mr._Fridman’s interests in this case ar_e too attenuated to form a reasonable basis for questioning
my impartiality, particularly in light of the fact that l have no relationship with him and no

reason to care about any interests he may have in the matter.

B. Both President Trump’s Connection to the Court and His Allegcd Interest in
This_Matter Are Too Attenuated to Raise Reasonable Doubt Regarding My
Impart_iality ` ' '

Fusiou’s view that “the Court’s recent former employer, President-Donald Tru`rnp, also
has an interest in the outcome of the motion” is similarly factually misinformed and legally
unpersuasive See Reply ISO Mot. Recuse at l. Fusion’s characterization of President Trump as
my recent former employer appears to be based on public documents reflecting the fact that l
“volunteered-as a vetter for President Trump’s transition team.” l\/lot.- Recuse at 6; see also id. at
7-8, 10-11; Reply lSO Mot. Recuse at 1, 4.` However, my sporadic and unpaid volunteer activity
during the fall of 2016 did not make President Trump my employer. See Employer, Black’s Law
Dictionary-(lOth ed. 2014) (“A person, company, or organization for whom someone works ;
esp., one who controls and directs a worker under an express or implied contract of hire and Who

pays the worker’s salary or wages.”).8 As a volunteer, l reviewed public-source information

about potential cabinet appointees for approximately four hours every few weeks for two to three

 

8 ln` 2017, l did serve as a Deputy Assistant Attorney General in the U.S._Department of .lustice,
but Fusion’s briefing has not claimed that my government employment made the President my
employer, nor that my_ service there raises any grounds for disqualification

 

 

 

months. l did not come into contact with Mr. 'l`rump or any of the senior members of his
campaign team. In fact, l do not know the President and have never met him in any capacity.

Fusion cites two cases in its effort to suggest that this tenuous connection with President
Tnimp provides grounds for disqualification, neither of which are binding in this circuit or in any
other. First, it cites United States v. er'ske, in which a district judge disqualified himself with
extreme reluctance based on his understanding of Eighth Circuit precedent, his friendship with
the Clintons, and the possibility that one of the parties might eventually be alleged to have
connections with the Clintons. 968 F. Supp. 433, 439 (E.D. Ark. 1996). Elecond, it cites fn re
` Srarr for the proposition that a particular “judge’s political activities ‘could at one time be said to
have called into question this Judge’s impartiality,”’ suggesting that the judge would have
recused herself if an extended period of time had not passed since the activities in question Mot.
Recuse at 11 n.21 (quoting fn re Starr, 986 F. Supp. 1157, 1158 (E.D. Ark. 1997)).

These cases do not support the view that my attenuated connection with President Trump
provides grounds for disqualification As for Fiske, the district judge-in that case_disqualified
himself in the interest of judicial economy because he interpreted the Eighth Circuit’s decision in
United States v. Tucker expansiver and was concerned that, if some connection between a party
and the Clintons were alleged after he decided the case, the Eighth Circuit might determine that
he was disqualified and vacate his decision. Fi'ske, 968 F. Supp. at 438-39 But even Tucker
would not require my recusal here. ln Tucker, the Eighth Circuit disqualified a judge from
. deciding a matter related to the lndependent Co_unsel’s investigation of the Clintons after the
judge publicly stated that he wouldn recuse himself from any matter conceming President Clinton
_ because of the judge’s personal relationship with Hilary Clinton. United Stales v. Tucker, 78

F-,3d 1313, 1322-25 (Sth Cir. 1996). Unlike the judges in Fiske and Tucker, l do not have any

 

 

relationship with either President Trump or the First Lady. As for fn re Starr,_Fusion’s brief

relies on a partial quotation to suggest that the district judge would have recused herself if her

political activities had been more recent although she in fact declined to reach that question See

fn re Srarr, 986 F. Supp. 1157, 1158 (E.D. Ark. 1997) (“Eve_n pf this ludge’s political activities in
1974 could at one time be said to have called into question this Judge"s impartiality, any such
questions have long since dissipated . . .” (emphasis added)). A reasonable observer would not
conclude that l should disqualify myself based on the attenuated connection with President
Trump that l developed through my limited volunteer activities with people who were not under
his direct supervision to identify qualified individuals for government positions, and these cases
do not suggest otherwise..

Even if there had been some reasonably strong connection between the President and me,
it is far from clear that President Trump has the type of legally-cognizable interest in this case
that would call my impartiality into question Fusion argues that President _Trump has an interest
in the motion to quash because he has twceted criticisms of Fusion and of the memoranda that
Christopher Steele wrote after he was retained by Fusion to investigate President Trump’s ties to
Russia. Mot. Recuse at 10-11; Reply lSO l\/lot. Recuse at 4. According to Fusion, denying the

motion to quash would further President Trump’s' “political interests.” Mot.-Recuse at l 1.

However, a reasonable observer would not question my ability to remain impartial based on the

possibility that discovery in this case might help the Plaintiffs show that they were defamed and
that this, in tum, might further the President’s political interests by indirectly justifying his

criticisms of a detractor.9

 

9 This case is particularly unlikely to become a leading source of information that is of interest

.t_o the President in light of the “Attorneys’ Eyes Only” agreement Of course, any question about

10

 

 

Even a personal friendship with a politician is generally not grounds for disqualification

unless “the personal fortune or the personal freedom of the friend” is at issue. See Cherzey, 541

U.S. at 916 (determining that a .lustice’s impartiality in a case where the Vice President was
named as the defendant in his official capacity could not reasonably be questioned based on the
fact that he was friends with the Vice President and that he was part of a group that went on a
multi-day duck-hunting trip with the Vice President while the case was pending, when the Vice
President did not host the trip or have private conversations with the Justice). Whatever the
President’s political interests may be, Fusion has not shown that his personal fortune and
personal freedom are jeopardized by the discovery dispute in the underlying case. Every
President has a wide range of political interests, and President Trump has commented on a
plethora of people, companies,` and cases. lt cannot be that the President has a cognizable

interest in every matter that has the potential to indirectly vindicate his public comments

' Fusion’s argument that I should look beyond the traditional grounds of disqualification to

consider President Trump’s alleged political interests proves too much. Such an argument would

lead to the disqualification of numerous judges appointed by the sitting President on a wide

range of cases. C.f, Irz re Exe_c. Ojice of the President, 215 F.3d 25, 25 (D.C. Cir. 2000)

(holding that a judge was not disqualified from hearing a case involving conduct by the President

_-'who appointed him and noting that two Justices appointed by President Clinton sat on the

Clinron v. Jones case, three J'ustices appointed by President Nixon sat on United Srares v. foon,
and two judges appointed by President Nixon sat on other cases related to the production of

Nixon’s tapes).

 

the eventual disclosure of information at trial would be decided by the District Court for the
Southern District of Florida, not me.

ll

 

 

“It is, of course, an inescapable part of our system of government that judges are drawn
primarily from lawyers who have participated in public and political affairs The fact of past
political activity alone will rarely require recusal . . . .” Higganbotham v. Oklo.. Transp. n
Comm ’n, 328 F.3d 63 8, 645 (10th Cir. 2003). A reasonable observer keeps in mind that when a
judge takes office he leaves the political arena and enters a “life-tenured position and [an] oath to
‘faithfully and impartially discharge and perform all duties . . . under the Constitution and laws
of the United States.”’ fn re Exec. Ojj‘z`ce of the President, 215 F.3d at 25 ; `see also Cheney, 541
U.S. 916-17, 924-26 (describing close personal relationships of Justices with Presidents through
history that did not cause recusal issues even among the most conscientious). Life tenure is
designed to insulate the judiciary from political pressures See The Federalist No. 78 (Alexander
Hamilton). Accordingly, “{t]o expect judges to take account of political consequences_and to l
_ assess the high or low degree of them~»-is to ask judges to do precisely what they should not do.”
Cheney, 541 _U.S. at 920. “After appointment, . . . we are expected to put political considerations
aside and decide issues on the merits.” Fiske, 968 F. Supp. at 439. Yet Fusion asks me to focus
on political considerations and to avoid considering the merits of its motion to quash l decline
Fusion’s invitation to decide its motion based on the alleged connection between the motion to
quash and President Trump’s political interests The President’s connection with me and his

interest in this case are simply too tenuous to cause a reasonable observer to question my

impartiality

12

 

 

IV. CONCLUSION

For the foregoing reasons Fusion"s arguments for disqualification do not demonstrate an
appearance of bias, whether taken individually or as a whole. Accordingly, Fusion’s motion for

recusal will be denied.

 

.1"

Dated: February 16, 2018

United States District Judge

l3

 

