U.S. Discovery in Foreign Litigation
A very useful discovery device is attracting increased attention from lawyers involved in foreign litigation where potential witnesses or documents may be available in the United States. The extent of the discovery available under the procedures described below may exceed that permitted in the foreign jurisdiction, and in certain cases discovery may precede institution of the foreign litigation.
Section 1782 of Title 28 of the U.S. Code allows parties to foreign litigation, and foreign courts, to apply to a U.S. federal district court for an order directing a witness to give testimony or to produce documents or other physical evidence:
§ 1782. Assistance to foreign and international tribunals and to litigants before such tribunals.
(a) The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. . . .
A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege. . . .
Any court or litigant may apply for Section 1782 discovery, not only those in countries which are parties to the Hague Convention, which is entirely separate and does not limit rights under Section 1782. The various formalities of a Hague Convention request need not be followed in a Section 1782 application.
In order to secure testimony or document discovery in a Section 1782 proceeding, the application must be made by a foreign court or tribunal or litigant or "any interested person," it must be for use in a foreign proceeding, and "the person or entity from whom the discovery is sought must be a resident of, or be found in, the district in which the application is filed." In re Bayer, 146 F.3d 188, 193 (3d Cir. 1998) (clarifying John Deere Ltd. v. Sperry Corp., 754 F.2d 132 (3d Cir. 1985)).
The application for judicial assistance can usually be made ex parte, without notice to the subject of the application, and the subpoena directing testimony or production of documents is issued by the court if the requirements of Section 1782 are prima facie satisfied. If the subject of the subpoena objects, then the usual procedure is a motion to quash the subpoena, and the District Court then schedules a hearing on the motion.
The applicant does not first have to attempt to secure the requested testimony or documents in the foreign proceeding. Application of Malev Hungarian Airlines, 964 F.2d 97, 100-101 (2d Cir. 1992), cert. denied sub nom. United Technologies Int'l Inc. v. Malev Hungarian Airlines, 506 U.S. 86 (1992). And the prevailing view is that the foreign proceedings need not be actually pending but must be at least "within reasonable contemplation" or "imminent" in the sense that they are very likely to occur very soon. See Euromepa S.A. v. R. Esmecian, Inc., 154 F.3d 24, 28 (2d Cir. 1998). If the foreign rules permit new evidence on appeal, then Section 1782 may be available even post-verdict.
A foreign private commercial arbitration is not a "proceeding in a foreign or international tribunal" as those words are used in Section 1782. National Broadcasting Company, Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184, 191 (2d Cir. 1999); accord Republic of Kazakhstan v. Biederman Int'l, 168 F.3d 880, 883 (5th Cir. 1999). See the Federal Arbitration Act, 9 U.S.C. § 1 et seq., for the exclusive available discovery alternatives involving foreign arbitrations. The foreign proceeding must be before an "adjudicatory" panel, and guardianship, bankruptcy and similar proceedings have formed the proper basis of Section 1782 applications.
The principal issue litigated under Section 1782 is "discoverability," that is, whether the testimony or documents sought in the Section 1782 application would be available according to the discovery rules of the foreign jurisdiction. The various Federal Courts of Appeal are not in accord on this issue, and to date the U.S. Supreme Court has declined to resolve the conflict, so at the moment the answer to the "discoverability" question depends on where the application is made:
In the First Circuit (Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island), Eleventh Circuit (Alabama, Florida, and Georgia), and the D.C. Circuit (Washington), only discovery allowed in the foreign jurisdiction is available in Section 1782 applications. In re Application of Asta Medica S.A., 981 F.2d 1, 7 (1st Cir. 1992); In re Request for Assistance from Ministry of Legal Affairs of Trinidad and Tobago, 848 F.2d 1151, 1156 (11th Cir. 1988); In re Crown Prosecution Service of the United Kingdom, 870 F.2d 686, 692-93 & 692 n.7 (D.C. Cir. 1989). But see Marra v. Papandreou, 59 F. Supp. 2d 65, 74 n.9 (D.D.C. 1999).
In the Second Circuit (Connecticut, New York, and Vermont), Third Circuit (Delaware, New Jersey, Pennsylvania, and the Virgin Islands), and Seventh Circuit (Illinois, Indiana, and Wisconsin), there is no discoverability requirement in Section 1782 proceedings, although in some circuits the issue has not yet been decided at the Court of Appeals level. Application of Euromepa S.A., 51 F.3d 1095, 1099 (2d Cir. 1995); Euromepa S.A. v. R. Esmerian, Inc., 154 F.3d 24, 28 (2d Cir. 1998); In re Bayer, 146 F.3d 188, 195 (3d Cir. 1998); See Bayer AG v. Betachem, Inc., 173 F.3d 188 (3d Cir. 1999); Elm Energy and Recycling (UK) Ltd. v. Basic, 1996 WL 596456, *10 (N.D. Ill. 1996).
In the Fourth Circuit (Maryland, North Carolina, South Carolina, Virginia, and West Virginia) there is no discoverability requirement with respect to Section 1782 applications by foreign courts, but the issue is open if the application is by a civil litigant. In re Letter of Request from Amtsgericht Ingolstadt, Federal Republic of Germany, 82 F.3d 590, 592 (4th Cir. 1996).
In the Fifth Circuit (Louisiana, Mississippi, and Texas), the Court of Appeals has expressed its approval of a discoverability requirement for a civil litigant. In re Letter Rogatory from the First Court of First Instance in Civil Matters, Caracas, Venezuela, 42 F.3d 308, 310-311 (5th Cir. 1995). At least one district court, however, has said that the Court of Appeals approval was mere dicta and that a discoverability requirement should not be imposed. Application of Time, Inc., 1999 U.S. Dist. LEXIS 15858 (E.D. LA 1999).
In the Ninth Circuit (Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington), the Court of Appealshas not yet decided the discoverability issue, but a lower Federal court has required discoverability on the theory that to permit discovery where the foreign court would not would be an affront to the foreign jurisdiction. In re Application for an Order for Judicial Assistance in a Foreign Proceeding in the High Court of Justice, Chancery Division, England, 147 F.R.D. 223, 226 (C.D. Cal. 1993).
The Sixth, Eighth, and Tenth Circuits have not addressed the discoverability issue.
At least one foreign jurisdiction has approved the introduction of Section 1782 evidence in a case where equivalent discovery would not have been permitted under local law. See the House of Lords decision in South Carolina Ins. Co. v. Assurantie Maatschappij "De Zeven Provincien" N.V. (1987) 1 AC 24, (1986) 3A11 ER 487 (1986) 3 WLR 398, (1986) 2 Lloyd's Rep. 317.
Litigants opposing a Section 1782 application can still argue that the specific discovery requested would be an affront to the foreign court or to foreign law (and the opposing party has the burden of proof), but this is an argument directed to the court's discretion, and courts presented with this argument have been more inclined to narrow the requested discovery than to prohibit it. See In re Gianoli Aldunate, 3 F.3d 54, 61-62 (2d Cir. 1993), In re Bayer, supra, and Euromepa, supra. One court has stated that the discovery would be prohibited only if the opposing litigant could demonstrate that the foreign court would reject evidence obtained with the aid of Section 1782. Esses v. Hanania, 101 F.3d 873 (2d Cir. 1997).
If the Section 1782 application is granted, it can be as broad (or narrow) as the U.S. Federal Rules of Civil Procedure contemplate, and could, for example, require production of documents outside the U.S. (Societe Nationale Industrielle Aerospatiale v. U.S. District Court for the Southern District of Iowa, 482 U.S. 522, 546 (1987)), and even require production which would violate foreign law. Alfadda v. Fenn, 149 F.R.D. 28, 33 (S.D.N.Y. 1993). But see In re Application of Sarrio S.A., 119 F.3d 143, 148 (2d Cir. 1997) (Congress may have intended Section 1782 to reach only evidence located within the United States). The U.S. privilege rules typically are applied. E.g., In re Attel & Cie, 1999 U.S. Dist. LEXIS 6010, *1-2 (S.D.N.Y. 1999)(attorney-client privilege applied to documents requested pursuant to Section 1782); In re Mohamed Al Fayed, 36 F. Supp. 2d 694, 696 (D.MD. 1999)(Requested National Security Agency discovery denied in case involving death of Princess Diana).
Further information regarding the substance of and procedures under Section 1782 is available from Robert A. McTamaney (firstname.lastname@example.org), Jeffrey S. Boxer (email@example.com), or Gerald W. Griffin (firstname.lastname@example.org) of our New York Office.
Carter Ledyard & Milburn LLP uses Client Advisories to inform clients and other interested parties of noteworthy issues, decisions and legislation which may affect them or their businesses. A Client Advisory does not constitute legal advice or an opinion. This document was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
© 2018 Carter Ledyard & Milburn LLP.
© Copyright 2000