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TechCrunch - Denial of Petition for Discovery Surrounding Alleged Facebook IPO Fraud

TechCrunch - Denial of Petition for Discovery Surrounding Alleged Facebook IPO Fraud

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Published by Josh Constine
For details read: http://techcrunch.com/2012/06/13/court-denies-petition-to-question-zuckerberg-and-banks-about-alleged-facebook-ipo-fraud/
For details read: http://techcrunch.com/2012/06/13/court-denies-petition-to-question-zuckerberg-and-banks-about-alleged-facebook-ipo-fraud/

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Published by: Josh Constine on Jun 14, 2012
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06/14/2012

Case 1:12-mc-00492-LY Document 3

Filed 06/13/12 Page 1 of 3

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FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION
BOGDAN RENTEA,
§

PETITIONER,
V.

§
§

CIVIL NO. A-12-MC-492-LY

---

§
§

FACEBOOK, INC., MARK ZUCKERBERG, DAVID A. EBERSMAN, DAVID M. SPILLANE, MORGAN STANLEY & CO., LLP, J.P MORGAN SECURITIES, LLC, AND GOLDMAN

§
§ §

§
§ § §

SACHS&CO.,
RESPONDENTS.

ORDER
Before the court in the above styled and numbered cause is Petitioner Bogdan Rentea's
Verified Petition to Perpetuate Testimony, filed June 6, 2012 (Clerk's Doe. No. 1). Rentea seeks
an order allowing him to proceed with depositions of the respondents named in this action in order to perpetutate their testimony under Rule 27 of the Federal Rules of Civil Procedure. Rentea states

that he expects to be a plaintiff in a claim against the respondents and that the requested discovery

will assist in developing facts essential to the future suit. Rule 27 provides a mechanism for a "petitioner [who] expects to be a party to an action
cognizable in a court of the United States" to depose expected adverse parties in order to "perpetuate

their testimony." FED. R. Civ. P. 27(a)(1). This process is only available to a petitioner who is "presently unable to bring [the action] or cause it to be brought" and who demonstrates "an

immediate need to perpetuate testimony." Shore v. Acands, Inc., 644 F.2d 386, 388 (5th Cir. 1981)

(citingFED.R.Clv.P.27(a)(1)(A));Penn. Mut. Ljfe Ins. Co.

v.

United States, 68F.3d 1371,1374-75

(D.C. Cir. 1995). Accordingly, to be granted the relief available under Rule 27, "[t]he petitioner

Case 1:12-mc-00492-LY Document 3

Filed 06/13/12 Page 2 of 3

must show that he is presently unable to bring the action in any court, state or federal, anywhere in
the United States" and "that without the perpetutation of the testimony a failure or delay ofjustice

will occur." In re Eisenberg, 654 F.2d 1107, 1111(5th Cir. 1981); Shore v. Acands, Inc., 644 F,2d
at 388. See also Ash
v.

Cort, 512 F.2d 909, 912 (3rd Cir. 1975) (Rule 27 "is available in special

circumstances to preserve testimony which could otherwise be lost.").

Rentea does not represent to the court that there is any urgency surrounding his desire to
depose the respondents or that he is unable to presently bring suit against the respondents. Rather,
he asserts that he "desires to conduct actual formal discovery through oral depositions and requests

for documents" in order to determine whether allegations surrounding Facebook's Initial Public

Offering (IPO) contained in various newspaper accounts are, in fact, true. If so, states Rentea, "the
allegations are a clear basis for claims of serious security laws violations."

"[lit is well settled that Rule 27(a) is not a method of discovery to determine whether a cause

of action exists; and if so, against whom action should be instituted." See In re Boland, 79 F.R.D.
665, 668 (D.D.C. 1978) (internal quotation omitted). See also Petition of the State of N.C., 68

F.R.D. 410 (S.D.N.Y. 1975) ("Rule 27 petition cannot be used for the purpose of ascertaining facts
to be used in drafting a complaint."). Because Rentea seeks not to perpetuate testimony, as permitted

under Rule 27, but rather to determine whether a cause of action exists, the court finds that his
petition to perpetuate testimony should be denied.

2

Case 1:12-mc-00492-LY Document 3

Filed 06/13/12 Page 3 of 3

IT IS THEREFORE ORDERED that Petitioner TAKE NOTHING by his Petition to
Perpetuate Testimony (Clerk's Doc. No. 1).
SIGNED this
day of June, 2012.

UNI ED STAT S DISTRICT JUDGE

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