- There are three basic requirements that must be met for a federal district court to be authorized to compel discovery within the U.S. pursuant to Section 1782:
- 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;
- that the evidence sought be “for use in a proceeding in a foreign or international tribunal”; and
- that the request or application be made by the foreign or international tribunal or by “any interested person.” 28 U.S.C. § 1782.
- “Resides or is found” in the district of the court in which the application is made
- Under Section 1782, testimony or documents can only be compelled from a person or entity that 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 and working abroad may be subject to an order compelling her testimony under Section 1782 if the individual is served with the order while on a visit to the U.S.; this is the case even if the order was originally granted while the individual was abroad. See Edelman v. Taittinger, 295 F.3d 171, 178, 180 (2d Cir. 2002). A business will likely be “found” in a district for purposes of Section 1782 if the business would be subject to personal jurisdiction in that district by virtue of its systematic and continuous activities there, even if its headquarters or place of incorporation are located elsewhere. See, e.g., In re Inversionesy Gasolinera Petroleos Valenzuela, 2011 U.S. Dist. LEXIS 5201 (S.D. Fla. Jan. 19, 2011) (Exxon is “found” in the Southern District of Florida under Section 1782, even though its headquarters and place of incorporation are not in that district); compare In re Godfrey, 526 F. Supp. 2d 417, 422 (S.D.N.Y. 2007) (Russian entity that had one employee temporarily relocate to New York for medical reasons, but had no permanent offices nor any other personnel in the district, was not “found” within the district for purposes of Section 1782).
- 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), cited in Weber v. Finker, 554 F.3d 1379 (11th Cir. 2009); 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).
- 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; see also In re Yukos Hydrocarbons Invs. Ltd., 2009 U.S. Dist. LEXIS 121268, at *18 (N.D.N.Y Dec. 30, 2009) (holding that an individual who was temporarily visiting New York from Russia was validly served with a deposition subpoena under Section 1782, but could not be compelled to testify in New York given the distance rule in Fed. R. Civ. P. 45(c)(3)(A)(ii)). 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)(iii) and Fed. R. Civ. P. 34(a). See Norex, 384 F. Supp. 2d at 55. The interaction of the Federal Rules of Civil Procedure with Section 1782 was summarized in a recent Seventh Circuit decision: “The section 1782 screen—the judicial inquiry that the statute requires—is designed for pre-venting abuses of the right to conduct discovery in a federal district court for use in a foreign court. Once the court has determined that such abuses are unlikely, the ordinary tools of discovery management, including Rule 26, come into play; and with objections based on the fact that discovery is being sought for use in a foreign court cleared away, section 1782 drops out.” Heraeus Kulzer, GmbH v. Biomet, Inc., 2011 U.S. App. LEXIS 1389, at *14 (7th Cir. Jan. 24, 2011)
- Discovery is for use “in a proceeding in a foreign or international tribunal”
- Does Section 1782 apply to private arbitration proceedings?
- Prior to the Intel case, both the Second and 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).
- Since Intel, there has been an increasing trend among district courts to grant discovery under Section 1782 in aid of private arbitrations. See In re Roz Trading Ltd., 469 F. Supp. 2d 1221 (N.D. Ga. 2006) (ordering discovery in aid of a private arbitral panel convened under the International Arbitral Centre of the Austrian Federal Economic Chamber in Vienna); In re Application of Hallmark Capital Corp., 534 F. Supp. 2d 951 (D. Minn. 2007) (ordering discovery in aid of a private Israeli arbitration); Comisión Ejecutiva, Hidroeléctrica Del Río Lempa v. Nejapa Power Company, LLC, Civil No. 08-135-GMS, 2008 U.S. Dist. LEXIS 90291 (D. Del. October 14, 2008) (holding that Section 1782 applies to “private foreign arbitrations”); In Re Application of Babcock Borsig AG, 583 F. Supp. 2d 233 (D. Mass. 2008) (finding that the court is authorized to order discovery in aid of an arbitration convened under the International Chamber of Commerce International Court of Arbitration, but denying the request on discretionary grounds).
- These district courts have argued that the Intel decision, although it did not expressly rule on the issue, 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. See, e.g., Roz Trading Ltd., 469 F. Supp. 2d at 1224-25. These courts have 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, these district courts have emphasized that, on a plain reading, the word “tribunal” is widely accepted to include arbitral bodies. Id. at 1228.
- At least one court has found that, although Intel does not require that private arbitral tribunals be considered “tribunals” for the purposes of Section 1782, it does require a case-by-case analysis of private arbitration agreements to determine whether any resulting proceeding would fall under the statute. See In re Winning (HK) Shipping Co., 2010 U.S. Dist. LEXIS 54290 (S.D. Fla. April 30, 2010). In Winning, the court held that because a purely private arbitration based in London may be subject to judicial review on questions of law under the Arbitration Act 1996 (of England), and the parties did not waive their rights to judicial review, the arbitration qualified as a “tribunal” under Section 1782. Winning, at *26-27. Another small line of cases has held that arbitrations conducted under the United Nations Commission on International Trade Law Arbitration Rules (“UNCITRAL Rules”) are “tribunals” under Section 1782, because they are “international-government sanctioned tribunals.” OJSC Ukrnafta v. Carpatsky Petroleum Corp., 2009 U.S. Dist. LEXIS 109492, at *12-13 (D. Conn. Aug. 27, 2009). This reasoning potentially reflects a misunderstanding – the UNCITRAL Rules merely provide a set of procedural rules available to any private entities wishing to establish an ad hoc arbitration. UNCITRAL does not administer arbitrations, and the use of its rules does not subject parties to judicial review or any government-sanctioned authority.
- Despite the trend among district courts toward granting Section 1782 discovery to assist private arbitrations, the Second and Fifth Circuits have not overturned their prior decisions that Section 1782 cannot be used to support discovery requests in private arbitration proceedings. The Fifth Circuit has expressly affirmed that Republic of Kazakhstan v. Biedermann Int’l remains good law, finding that the issue of whether a private international arbitration tribunal also qualifies as a “tribunal” under Section 1782 was not before the Supreme Court in Intel. El Paso Corp. v. La Comision Ejecutiva Hidroelectrica Del Rio Lempa, 341 Fed. Appx. 31, 34 (5th Cir. 2009). The Second Circuit recently chose not to address whether an arbitration pursuant to the Bilateral Investment Treaty between the United states and Ecuador was a proceeding in an international “tribunal” under Section 1782 or not, in a case where the discovery being sought was also relevant to ongoing non-U.S. litigations. See Chevron Corp. v. Berlinger, 2011 U.S. App. LEXIS 629, at *35 (2d Cir., January 13, 2011). However, note that the Third Circuit, in a related case, accepted without explanation that the same BIT arbitration was a proceeding in an international “tribunal.” In re Chevron Corp., 2011 U.S. App. LEXIS 2112, at *18-19 (3d Cir. Feb. 3, 2011). District court decisions upholding the view that private arbitrations should not be subject to Section 1782 discovery include Norfolk Southern Corp. v. Gen. Sec. Ins. Co., 626 F. Supp. 2d 882, 885 (N.D. Ill. 2009) (“[w]hile the private arbitral tribunal at issue here likely falls within the scope of ‘all bodies exercising adjudicatory powers,’ the Intel Court's language did not endorse such a broad definition of ‘tribunal’”), and In re Operadora DB Mexico, 2009 U.S. Dist. LEXIS 68091, at *37 (M.D. Fla. Aug. 4, 2009) (arbitration administered by the International Chamber of Commerce is not a qualified proceeding under Section 1782).
- For a more detailed discussion concerning discovery in the context of international arbitrations, see Chapter 20 and Chapter 22 of this Guide.
- Does Section 1782 apply to private arbitration proceedings?
Practice Tip: If you are concerned about a contracting party or potential adversary using Section 1782 in arbitration proceedings, consider circumscribing its use in advance, for example, by providing in the arbitration clause that discovery requests relating to the arbitration must be approved by the arbitral tribunal, or by expressly addressing Section 1782 in any discovery plan once the proceeding has begun.
- Does Section 1782 apply to non-adjudicative proceedings?
- 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, reviewable by the 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.
- 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 has used Intel’s broad language to conclude 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), cert. denied, 552 U.S. 1140 (2008) (“nothing in the plain language of Section 1782 requires that the proceeding be adjudicative in nature”).
Practice Tip: The district court decisions applying Section 1782 to private arbitrations, and the appeals court decision in Clerici, highlight the increasing trend of courts applying a more liberal interpretation of the requirements under Section 1782. Even in non-traditional, non-adjudicative proceedings outside the U.S., such as investigations, administrative actions, or even arbitrations, always consider whether Section 1782 may be an available tool for yourself or your adversary.
- Application is being made by the non-U.S. tribunal or by “any interested person”
- 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.
Practice Tip: Following Intel, courts are taking an increasingly broad and liberal view of all of the requirements to obtain relief under Section 1782. Consider whether you can take advantage of Section 1782, or are at risk of being subject to discovery in the U.S., even in non-traditional legal proceedings.