Authors: Kyle Kolb and George V. Utlik
28 U.S.C. § 1782 (“Section 1782”) is a powerful tool to obtain evidence, both documents and deposition testimony, for use in a dispute outside the U.S. Whether Section 1782 is available depends on U.S. federal courts’ broad discretion and interpretation of the statute. This alert provides a summary of Section 1782’s standards and practical considerations for practitioners who seek to apply for, or defend against, discovery under Section 1782.
Summary of Section 1782 Standards
Section 1782 allows any “interested person” (an individual or entity) in a “proceeding in a foreign or international tribunal” to make an application with a U.S. federal court for authority to serve a subpoena on a person or business that resides or is found in that court’s district.[1] The subpoena can seek documents and/or testimony from parties or non-parties to the foreign proceeding.
If Section 1782’s statutory elements are met, U.S. federal courts consider a list of “non-exclusive” factors to determine whether they should exercise their discretion to grant the application. The four factors established by the U.S. Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc.[2] are: (i) whether the person from whom discovery is sought is a participant in the foreign proceeding; (ii) whether the foreign tribunal is receptive or hostile to the assistance of the U.S. court; (iii) whether the application conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the U.S.;[3] and (iv) whether the discovery requests are unduly intrusive or burdensome.[4]
Practical Considerations
While Section 1782 statutory requirements and the Intel discretionary factors appear straightforward, U.S. courts have interpreted them in varying ways that are important to understand before filing a Section 1782 application. Below, we highlight the following four considerations:
1. Section 1782 evidence for use in a private commercial arbitration: is a private foreign commercial arbitration a “foreign proceeding” under Section 1782?
Many U.S. federal courts authorize Section 1782 applications to obtain evidence for use in private foreign arbitrations, as opposed to for use in only state-sponsored foreign arbitrations. Recent appellate decisions, however, have created a split on this issue. The Fourth Circuit Court of Appeals and the Sixth Circuit Court of Appeals have concluded that Section 1782 can be used to seek discovery for use in a private commercial foreign arbitration, whereas the Second Circuit Court of Appeals recently held that Section 1782 cannot be used to obtain discovery for use in a private commercial foreign arbitration.[5] The Second Circuit’s latest decision re-affirmed its prior decision, holding that U.S. law does not allow federal courts to order discovery in aid of private foreign arbitration.[6] The Fifth Circuit had followed suit and joined the Second Circuit in holding that Section 1782 does not apply to private foreign arbitrations.[7] Lower U.S. federal courts have a similar split on the issue. For example, the latest decisions by federal judges located in Delaware (the state where a large number of U.S. corporations are incorporated) have held that private commercial arbitrations are not “tribunals” under Section 1782, moving away from the court’s prior contrary decision on the issue.[8] As a result, counsel to parties in foreign private arbitrations should recognize the split of authorities and, among other considerations, carefully select a jurisdiction where to file a Section 1782 application and be prepared to litigate this issue.
2. Extra-territorial application: are documents located abroad discoverable under Section 1782?
U.S. federal courts differ on the issue of whether Section 1782 applies “extraterritorially,” i.e., whether the court can order a person or company located in its district to comply with a subpoena that was authorized under Section 1782 to produce documents that are “located” abroad. Two appellate courts—the Second Circuit Court of Appeals and the Eleventh Circuit Court of Appeals—have addressed the issue, concluding that a court considering a Section 1782 application “is not categorically barred from allowing discovery under § 1782 of evidence located abroad.”[9] While the Second Circuit’s decision resolved a growing split among the lower courts in New York, the decision did not conclude that Section 1782 should always be applied extraterritorially. Rather, the court concluded that the location of the documents should be considered when tailoring the scope of the discovery sought. Several U.S. federal courts have adopted the reasonings of the Second Circuit’s and Eleventh Circuit’s decisions.[10]
3. Time and place: when and where should the Section 1782 application be filed?
Clients often ask when to file a Section 1782 application and how long the process would take to obtain the requisite evidence. A court’s consideration of a Section 1782 application may vary widely based on where it is filed and, of course, which judge is assigned to preside over the matter. Some courts treat Section 1782 applications as “miscellaneous” proceedings, while others treat them as “civil” proceeding. These designations may affect when and how a matter is assigned to a judge. Courts differ on whether a magistrate judge can hear the dispute.
Further, certain courts are inclined to grant a Section 1782 application on an ex parte basis, allowing the subpoena recipient to subsequently file a motion to quash the subpoena. Other courts require that the Section 1782 applicant’s filings with the Court first be served on the proposed subpoena recipient, providing the recipient an opportunity to respond to the application before any subpoena can be served. In addition, other participant(s) in the foreign proceeding may seek to intervene in the U.S. court to have its views heard.
U.S. Courts also have different appetites for entertaining a request for discovery on an expedited basis. Consequently, a Section 1782 applicant should seek advice from experienced U.S. counsel as soon as possible to consider whether, and when, to seek discovery under Section 1782. Notably, foreign practitioners should note that Section 1782 applications can be filed before a foreign proceeding is even commenced, while it is merely contemplated.[11]
4. “Reciprocal” discovery: what effects should be considered?
Section 1782 applicants should also consider potential repercussions for seeking evidence in a U.S. court. In response to being served with a subpoena under Section 1782, recipients may demand documents from the applicant. This approach is known as seeking “reciprocal” discovery and often takes place in an ordinary litigation posture. U.S. courts have largely rejected such approach as being required under Section 1782. Indeed, a recent decision by the Second Circuit Court of Appeals affirmed the district court’s denial of just such an attempt.[12]
[1] 28 U.S.C. § 1782(a).
[2] 542 U.S. 241, 264-65 (2004).
[3] As to the third factor, which is often misconstrued, it should be noted that “there is a difference between a § 1782(a) request that seeks documents that cannot be obtained in a foreign proceeding because the foreign jurisdiction does not provide a mechanism for such discovery, and one that seeks documents that cannot be obtained because the foreign jurisdictionprohibitsthe discovery of those documents.” In re Accent Delight Int'l Ltd., 791 F. App’x 247, 251 (2d Cir. 2019) (emphasis in the original) (citing Mees v. Buiter, 793 F.3d 291, 303 n.20 (2d Cir. 2015)).
[4] See Kiobel by Samkalden v. Cravath, Swaine & Moore LLP, 895 F.3d 238, 244 (2d Cir. 2018) (internal quotation marks omitted).
[5] Compare Servotronics, Inc. v. Boeing Co., 954 F.3d 209, 214 (4th Cir. 2020) andAbdul Latif Jameel Transportation Company Ltd. v. FedEx Corp., 939 F.3d 710, 723 (6th Cir. 2019) (authorizing discovery of evidence for us in foreign private commercial arbitration); with In re Guo, 965 F.3d 96, 104-05 (2d Cir. 2020) (holding that the term “foreign or international tribunal” under Section 1782 does not encompass private arbitral panels). The Fourth Circuit Court of Appeals hears appeals from federal courts in Michigan, Ohio, Kentucky, and Tennessee. The Sixth Circuit Court of Appeals hears appeals from federal courts in Maryland, Virginia, West Virginia, South Carolina, and North Carolina. The Second Circuit Court of Appeals hears appeals from federal courts in New York, Vermont, and Connecticut.
[6] National Broadcasting Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2d Cir. 1999).
[7] See Kazakhstan v. Biedermann International, 168 F.3d 880 (5th Cir. 1999) (similar holding as the Second Circuit’s Guo decision). The Fifth Circuit Court of Appeals hears appeals from federal courts in Texas, Louisiana, and Mississippi.
[8] Compare In re Ex Parte Application of Axion Holding Cyprus Ltd. Pursuant to 28 U.S.C. § 1782 for Leave to Take Discovery for Use in Foreign Proceedings, No. 20-00290, 2020 WL 5593934, at *1 (D. Del. Sept. 18, 2020) (agreeing with the reasoning and conclusions of those opinions that hold that private commercial arbitrations are not “tribunals” covered under § 1782 and denying Section 1782 discovery applications for use in two proceedings before London Court of International Arbitration), In re Storag Etzel GmbH, No. 19-mc-209, 2020 WL 1849714, at *3 (D. Del. Apr. 13, 2020) (limiting statute to conferring authority to offer assistance “only to courts and government agencies, not to private arbitral bodies”) (collecting cases on both sides), and In re EWE Gasspeicher GmbH, No. 19-mc-109, 2020 WL 1272612, at *2 (D. Del. Mar. 17, 2020); with Comision Ejecutiva Hidroelectrica del Rio Lempa, 2008 WL 4809035, at *1 (D. Del. Oct. 14, 2008) (holding the opposite).
[9] In re del Valle Ruiz, 939 F.3d 520, 523 (2d Cir. 2019); Sergeeva v. Tripleton Int’l Ltd., 834 F.3d 1194 (11th Cir. 2016). The Eleventh Circuit Court of Appeals hears appeals from federal courts in Florida, Alabama, and Georgia.
[10] See In re De Leon, No. 19-mc-15, 2020 WL 1180729, at *9 (S.D. Ohio Mar. 12, 2020); Illumina Cambridge Ltd. v. Complete Genomics, Inc., No. 19-mc-80215, 2020 WL 820327, at *10 (N.D. Cal. Feb. 19, 2020); In re Barnwell Enterprises Ltd., 265 F. Supp. 3d 1, 15 (D.D.C. 2017) (collecting pre-Sergeeva cases reaching the opposite conclusion); see also In re Stati, No. 15-mc-91059, 2018 WL 474999, at *6 (D. Mass. Jan. 18, 2018) (finding the locations of the documents “not an absolute bar”).
[11] See Intel Corp., 542 U.S. at 223.
[12] Samepdro v. Silver Point Capital LP, et al., 958 F.3d 140 (2d Cir. May 1, 2020).
