Global Litigator. U.S. Discovery for Use in Foreign Proceedings

• Author: Laura G. Ferguson
• Pages: 15-16

Global Litigator

Published in Litigation, Volume 48, Number 1, Fall 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be

copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. 15

LAURA G. FERGUSON

The author is a member of Miller & Chevalier Chartered.

U.S. DISCOVERY FOR USE

IN FOR EIGN

PROCEEDINGS:

NAV IGATI NG C ROSS -

BORDER DISCOVERY

UNDER 28 U.S.C. §1782

A federal statute, 28 U.S.C. §1782, provides

a mechanism for litigants in foreign pro

-

ceedings to conduct discovery here in the

United States. Whether you represent a

party petitioning for a section1782 sub-

poena, the subpoena respondent, or the

foreign target of the U.S. discovery, there

are several facets of the statute to consider

when advising your client and many re-

cent court decisions to evaluate when de-

ciding how to proceed.

Courts deciding whether to issue a sec-

tion1782 subpoena must first determine

whether the petitioner has met the three

statutory requirements: (1) the person

from whom discovery is sought must “re-

side” or be “found” in the district, (2) the

application must be made by aforeignor

international tribunal or “any interested

person;” and (3)the discovery must be “for

use in a proceeding in aforeignor inter-

national tribunal.”

The first two requirements rarely

present an issue. A party to a foreign pro-

ceeding is an “interested person,” and

section1782 petitions routinely are filed

where the subpoenaed entity “resides”

or is “found.” For example, many foreign

litigants file section1782 petitions in the

Southern District of New York seeking

records of banks based in New York or in

the Northern District of California seeking

records from technology companies such

as Google or Facebook.

The third, “for use in” requirement has

posed more questions for litigants. Must

the foreign proceeding have started? No,

the foreign proceeding need not be pend-

ing, so long as it is within reasonable con-

templation and not merely speculative.

Must the discovery be admissible or even

discoverable in the foreign proceeding?

No. The U.S. court will not delve into ques-

tions of foreign law regarding admissibil-

ity and discoverability in the foreign pro-

ceeding. If, however, the materials sought

are patently irrelevant to the foreign pro-

ceeding, the U.S. court would deny the pe-

tition. In a recent case from the Second

Circuit, Gorsoan Ltd. v. Sundlun, the court

of appeals held that a section1782 peti-

tion should be denied where the petitioner

sought discovery regarding the target’s

current assets, which were not relevant to

the foreign litigation about alleged fraud

that occurred a decade ago. The petition-

er argued the discovery was relevant to a

possible future contempt proceeding, but

the court of appeals viewed that proceed-

ing as too speculative. Can the discovery

be in aid of a private international com-

mercial arbitration? Here, the circuits are

split. The Second Circuit held last year

that section1782 does not apply to such

proceedings, but in the past few years, the

Fourth and Sixth Circuits have reached

the opposite conclusion, holding that

discovery may be taken in aid of private

arbitration. The Supreme Court will re-

solve the circuit split in Servotronics Inc.

v. Rolls-Royce PLC, No. 20-794, which is

scheduled for argument in October 2021.

If the statutory elements are met, the

court will then exercise its discretion

whether to grant the petition, applying

the four factors identified by the Supreme

Court inIntel Corp. v. Advanced Micro

Devices, Inc., 542 U.S. 241 (2004). The

first factor is whether “the person from

whom discovery is sought is a participant

in theforeignproceeding.” If so, there is

no evident need for the section1782 dis-

covery. The second factor is “the nature of

theforeigntribunal, the character of the

proceedings underway abroad, and the

receptivity of theforeigngovernment or

the court or agency abroad to U.S. federal-

court judicial assistance.” This factor gen-

erally weighs in favor of discovery unless

there is some clear indication the foreign

tribunal would reject evidence obtained

via section1782. For example, in one case,

the foreign tribunal filed an amicus brief

stating it had no need or use for the sec-

tion1782 discovery. The third factor is

whether thesection1782 discovery re-

quest “conceals an attempt to circum-

ventforeignproof-gathering restrictions

or other policies of aforeigncountry or

the United States.” Here, recognizing that

U.S.-style discovery is broader in scope

than typical of most jurisdictions, the pe-

titioner need not show that the foreign ju-

risdiction expressly provides a mechanism