Unbeknown to many, Section 1782 of Title 28 of the US Code permits parties to obtain discovery in the United States in aid of non-US legal proceedings, including – in some instances – international arbitrations. Such discovery can include documents and sworn testimony (eg, depositions). In conducting an arbitration seated outside the United States (or other non-US legal proceedings), it is useful to understand the mechanics, requirements and key issues of Section 1782 discovery.
Section 1782 states that:
(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, including criminal investigations conducted before formal accusation. 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.
In In re Gianoli Aldunate, the Second Circuit of the US Court of Appeals stated that: "Since its inception, Congress has steadily increased the scope of the discovery available under [Section 1782] such that it has been given 'increasingly broad applicability'."(1)
To request Section 1782 discovery, a party must file an ex parte petition in the US judicial district where the target of the discovery "resides or is found". The petition describes:
- the requested discovery;
- the applicable non-US legal proceedings; and
- why the discovery should be permitted.
The court can rule on the petition ex parte or accept submissions from other parties and the target. If the petition is granted, the requested discovery is issued and will proceed under the Federal Rules of Civil Procedure. If the petition is denied, an appeal may be raised.
Requirements and discretionary factors
For a district court to grant Section 1782 discovery, three requirements must be met:
- the application must be made by an "interested party" or a foreign or international tribunal;
- the person from whom discovery is sought must "reside" or be "found" in the jurisdiction of the district court where the Section 1782 petition is filed; and
- the document or testimony must be for "use" in a foreign or international tribunal.
In addition to these requirements, the Supreme Court has identified four discretionary factors that a district court should consider when ruling on a Section 1782 petition:
- whether the person from whom discovery is sought is a participant in the foreign proceedings;
- the nature of the foreign tribunal, the character of the proceedings and the receptivity of the foreign government or the court or agency abroad to US federal court judicial assistance;
- whether the Section 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States; and
- whether the discovery would be unduly intrusive or burdensome.(2)
Can Section 1782 be used in aid of international arbitration proceedings?
Prior to Intel Corp v Advanced Micro Devices, Inc, two US courts of appeal had held that Congress had not intended international arbitrations to fall within the scope of 'foreign tribunals' under Section 1782. Post-Intel, the trend in US courts has shifted, as courts have relied on the dicta in Intel that 'foreign tribunals' include 'quasi-judicial' bodies and those that act as first-instance decision makers whose decisions are subject to judicial review, including international arbitral tribunals.
However, the authority is still not unified. In the First, Third, Eighth and DC Circuits, district courts have held that at least some types of private arbitral tribunals fall within the scope of Section 1782, while district courts in the Fifth, Seventh, Ninth and Tenth Circuits have held the opposite. The Second Circuit has not weighed in, but at least one Second Circuit district court – recognising tension between circuit precedent and Intel on this issue – looked outside the jurisdiction for guidance and ultimately held that a series of private commercial arbitrations occurring before the London Maritime Arbitration Association qualified as proceedings before a 'foreign tribunal' within the meaning of Section 1782.(3)
Must the non-US proceedings be pending?
No. In Intel, the Supreme Court rejected the argument that Section 1782 discovery is limited to pending or imminent adjudicative foreign proceedings, holding that Section 1782 requires only that a dispositive ruling by a foreign judicial or quasi-judicial body, reviewable by the courts, be within "reasonable contemplation".(4)
Is the term 'interested person' limited to actual litigants?
No. In Intel, the Supreme Court held that Section 1782's "any interested person" requirement includes not only litigants before foreign or international tribunals, but also any other person who possesses a "reasonable interest" in obtaining judicial assistance.
The facts of Intel are instructive. The petitioner there had filed an antitrust complaint with the Directorate General for Competition of the European Commission and in that proceeding held certain participation rights, including the right to submit information to the commission and the right to proceed to court if the commission discontinued the investigation or dismissed the complaint. The Supreme Court found these participation rights sufficient to give the petitioner the required "reasonable interest" in obtaining judicial assistance to qualify it as an 'interested person'.
What is the meaning of 'resides or is found'?
Section 1782 can be requested only in a judicial district where a person "resides or is found". The Supreme Court has not yet interpreted this term. One appellate court has ruled that for depositions, mere physical presence in the district, even if temporary, is enough to satisfy this requirement.(5) For requests for production of documents, no circuit authority exists. However, the weight of authority suggests that a person must meet the standard US requirements of general or specific personal jurisdiction in order to satisfy the 'resides or is found' requirement.
Must the requested discovery be located within the United States?
Only one circuit court has weighed in on whether Section 1782 can be used to obtain documents located outside the United States. In 2016 the Eleventh Circuit held that – particularly with regards to electronically stored information – the physical location of documents does not establish a bar per se to Section 1782 discovery.(6) The court ordered production of documents held electronically in The Bahamas by an affiliate of a US-based company based on evidence that the companies regularly shared documents and information, and the documents were therefore in the "possession, custody and control" of the US-based company, even though they were located in The Bahamas.
The few district courts that have considered the issue, both before and after Sergeeva, are split. A New York district court summarised the Second Circuit authority: "the bulk of authority in this Circuit suggests that a § 1782 respondent cannot be compelled to produce documents located abroad."(7) A California district court refused to consider the issue, but cited a Ninth Circuit case as "acknowledging support for the view that § 1782 was not intended to support discovery of material located outside the United States".(8) In 2005 the Washington DC district court found that the existing case law suggested that "§ 1782 is not properly used to seek documents held outside the United States as a general matter".(9) However, later cases have granted Section 1782 petitions where documents may be held outside the United States as long as the documents are in the possession, custody or control of a person that falls within the court's jurisdiction.(10)
Must the requested discovery be discoverable under the rules of the non-US jurisdiction?
No. In Intel, the Supreme Court held that there is no threshold requirement under Section 1782 that the evidence being sought must be discoverable under the law governing the non-US proceedings or that the discovery would otherwise be discoverable in US domestic litigation analogous to the non-US proceedings.
Endnotes
(1) 3 F3d 54, 57 (2d Cir 1993).
(2) Intel Corp v Advanced Micro Devices, Inc, 542 US 241, 264-65 (2004).
(3) See In re ex parte application of Kleimar NV, 16-MC-355, 2016 WL 6906712 (SDNY 16 Nov 2016).
(5) See Edelman v Taittinger, 295 F3d 171, 178, 180 (2d Cir 2002).
(6) See Sergeeva v Tripleton International Ltd, 834 F3d 1194 (11th Cir 2016).
(7) In re Kreke Immobilien KG, 13 MISC 110 NRB, 2013 WL 5966916, at *4 (SDNY 8 Nov 2013) (citing In re Godfrey, 526 F Supp 2d 417, 423–24 (SDNY 2007).
(8) In re ex parte application of Qualcomm Inc, 162 F Supp 3d 1029, 1036 (ND Cal 2016) (citing Four Pillars Enterprises Co, Ltd v Avery Dennison Corp, 308 F3d 1075 (9th Cir 2002).
(9) Norex Petroleum Ltd v Chubb Ins Co of Canada, 384 F Supp 2d 45, 52 (DDC 2005).
(10) See In re Barnwell Enterprises Ltd, 265 F Supp 3d 1, 16 (DDC 2017).
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