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      Proskauer on International Litigation and Arbitration:
       Managing, Resolving, and Avoiding Cross-Border Business or Regulatory Disputes
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  1. There are three basic requirements that must be met in order for a federal district court to be authorized to grant a request to compel discovery within the U.S. pursuant to Section 1782:
    1. that the person from whom discovery is sought “resides or is found” in the district of the court to which the request or application is made;
    2. that the evidence sought be “for use in a proceeding in a foreign or international tribunal”; and
    3. that the request or application be made by the foreign or international tribunal or by “any interested person.” 28 U.S.C. § 1782.
  2. “Resides or is found” in the district of the court in which the application is made
    1. Under Section 1782, testimony or documents can only be compelled from a person or entity who resides or is found in the district of the court to which the application is made. For the purpose of compelling testimony, mere physical presence in the district, even if temporary, is enough to satisfy this requirement. Moreover, an individual living abroad may be subject to an order compelling his or her testimony under Section 1782 if the individual is served with the order while on a visit to the U.S., even if the order was originally granted while the individual was still abroad. See Edelman v. Taittinger, 295 F.3d 171, 175, 180 (2d Cir. 2002).
    2. Without expressly holding that documents located outside the U.S. can never be subject to an order under Section 1782, courts have refused on discretionary grounds to compel U.S.-based entities to turn over documents, when the documents were in the possession of non-U.S.-based affiliates or parents. See, e.g., Norex Petroleum Ltd. v. Chubb Ins. Co. of Can., 384 F. Supp. 2d 45, 52 (D.C. 2005); Kestrel Coal PTY. LTD. v. Joy Global, Inc., 362 F.3d 401, 405 (7th Cir. 2004); but see In re Gemeinschaftpraxis Dr. Med. Schottdorf, 2006 U.S. Dist. LEXIS 94161, *21 (S.D.N.Y. 2007) (holding that Section 1782 contains no express bar to production of documents located abroad, and ordering consulting firm with headquarters in the U.S. to produce documents it created and maintained in Germany). In one case, a district court found that it was authorized to compel production under Section 1782 of documents belonging to a non-U.S. entity, where the documents were temporarily in the possession of that entity’s U.S. counsel, although the court denied the discovery request on discretionary grounds. In re Application of Schmitz, 259 F. Supp. 2d 294, 296-97 (S.D.N.Y. 2003), aff’d on other grounds, 376 F.3d 79 (2d Cir. 2004).
    3. Note that the Federal Rules of Civil Procedure governing discovery still apply to orders under Section 1782. Thus, for example, Fed. R. Civ. P. 45(c)(3)(A)(ii), which requires courts to quash or modify a subpoena that forces a person who is not a party or an officer of a party to travel more than 100 miles from where that person resides, may prevent the taking of a deposition under Section 1782 even if the “resides or is found” requirement is met. Edelman, 295 F.3d. at 178. In addition, a U.S.-based entity can only be compelled to turn over documents to the extent it is in “possession, custody, or control” of the documents pursuant to Fed. R. Civ. P. 45(a)(1)(C) and Fed. R. Civ. P. 34(a). See Norex, 384 F. Supp. 2d at 55.
  3. Discovery is for use “in a proceeding in a foreign or international tribunal”
    1. The assistance of Section 1782 is not limited to “imminent” or even “pending” proceedings. This was clarified in the Intel case, which held that Section 1782 requires only that a dispositive ruling by an adjudicative tribunal, reviewable by courts, be “within reasonable contemplation.” Intel Corp., 542 U.S. at 259. Thus, an antitrust investigation by the European Commission is a “proceeding in a foreign or international tribunal,” where it will result in an administrative finding that is reviewable in court. Id. at 255.
    2. Other courts had previously concluded that Section 1782 did not apply to purely investigative, non-adjudicative proceedings.  See, e.g., In re Letters of Request to Examine Witnesses from Court of Queen's Bench for Manitoba, Canada, 488 F.2d 511 (9th Cir. 1973) (does not include a public commission of inquiry whose purpose is only to investigate and then report to executive or legislative branches of government). However, at least one recent case following Intel's broad language to concluded that Section 1782 does not require that the proceeding at issue be adjudicative in nature.  In In re Clerici, the Eleventh Circuit Court of Appeals expressly held that a post-judgment petition filed in a Panamanian court to obtain evidence from a U.S. resident qualified as a "proceeding" under Section 1782, even though the petition itself it may not have been adjudicative in nature.  In re Clerici, 481 F.3d 1324, 1333 (11th Cir. 2007) ("nothing in the plain language of §1782 requires that the proceeding be adjudicative in nature"). A petition for review of this decision by the U.S. Supreme Court was denied on January 14, 2008.
      1. Practice Tip: The important appeals court decision in Clerici highlights the increasing trend of courts applying a very liberal interpretation of the requirements under Section 1782. Even in non-traditional, non-adjudicative proceedings outside the U.S., always consider whether Section 1782 may be an available tool for yourself or your adversary.
    3. Prior to the Intel case, both the Second and the Fifth Circuit Courts of Appeal had held that Section 1782 cannot be used to support discovery requests in private arbitration proceedings. Nat'l Broad. Co. v. Bear Stearns & Co., 165 F.3d 184, 191 (2d Cir. 1999); Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880, 883 (5th Cir. 1999). Although the Intel case did not expressly address this issue, at least one case has relied on Intel to hold that those decisions are no longer good law and that, on a plain reading of the statute, a “proceeding in a foreign or international tribunal” does include private commercial arbitrations. In Re Roz Trading, the District Court for the Northern District of Georgia held that it was authorized under Section 1782 to order discovery in the U.S. in aid of a private arbitral panel convened under the International Arbitral Centre of the Austrian Federal Economic Chamber in Vienna. In re Roz Trading Ltd., 469 F. Supp. 2d 1221, 1228 (N.D. Ga. 2006). The Court noted that the Intel decision interpreted the phrase “proceeding in a foreign or international tribunal” broadly to include proceedings that result in a “dispositive ruling… reviewable in court,” an interpretation which could include private arbitrations. Id. at 1224-25. The Court also pointed to dicta in Intel where the Supreme Court quoted language from an academic article that described the term “tribunal” to include “investigating magistrates, administrative and arbitral tribunals, and quasi-judicial agencies, as well as conventional civil, commercial, criminal, and administrative courts.” Id. Finally, the Court found that under a plain reading, the word “tribunal” is widely accepted to include arbitral bodies. After it ordered discovery to proceed, the Court's decision was appealed, however the discovery dispute was settled before the appeal was heard.  The reasoning in In re Roz Trading has been followed by at least one other district court.  See In re Hallmark Capital Corp., Civil No. 07-MC-39, 2007 WL 4917301 (D.Minn. Spet. 13, 2007). For a broader discussion concerning discovery in the context of international arbitrations, see Chapter 20 .and Chapter 22. of this Guide.
  4. Application is being made by the non-U.S. tribunal or by “any interested person”
    1. A discovery order pursuant to Section 1782 may be made at the request of the foreign tribunal, or on the application of “any interested person.” The Supreme Court clarified that “any interested person” is intended to include not only litigants before foreign or international tribunals, but also foreign and international officials as well as any other person who possesses a “reasonable interest” in obtaining judicial assistance. Intel Corp., 542 U.S. at 256-57. In Intel, this included a complainant before the antitrust division of the European Commission.
  5. Practice Tip: Following Intel, courts are taking an increasingly broad and liberal view of the requirements to obtain relief under Section 1782.  Consider whether you can take advantage of Section 1782, or are at risk of being sugject to discovery in the U.S., even in non-traditional legal proceedings such as investigations, administrative actions, or even arbitrations.

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