Interpretative Challenges of 28 U.S.C. [section] 1782 in the Aftermath of Intel Corp, v. Advanced Micro Devices, Inc.

• Author: Clark, Gabriela Barriuso

TABLE OF CONTENTS I. INTRODUCTION 1378 II. THE ENACTMENT AND HISTORY OF 28 U.S.C. [SECTION] 1782: AN EXAMINATION OF THE PROVISION'S LEGISLATIVE HISTORY, TEXT, AND PURPOSE 1383 A. The Road to 28 U.S.C. [section] 1782 1383 B. The Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (Hague Evidence Convention) and Other Instruments for Judicial Assistance Incorporated into US Law 1387 C. The Supreme Court's Interpretation of 28 U.S.C. [section] 1782: Intel Corp. v. Advanced Micro Devices, Inc. 1389 III. THE CIRCUIT COURTS' DIVERGENT INTERPRETATIONS OF 28 U.S.C. [SECTION] 1782 AND INTEL 1391 A. Extraterritorial Application 1391 B. The Meaning of "Foreign or International Tribunals" 1395 C. Impact of Applicant Delay 1399 D. Courts' Ability to Compel Production of Confidential Documents in Possession of Third Parties, Including US Legal Counsel 1402 E. A Summary of the Existent Postures 1406 IV. REFORMING 28 U.S.C. [SECTION] 1782 TO AFFORD ASSISTANCE IN EVERY POSSIBLE INSTANCE WHILE ESTABLISHING SAFEGUARDS TO PRESERVE THE INTEGRITY OF OUR ADVERSARIAL SYSTEM 1409 A. Other Jurisdictions' Frameworks as Alternatives. 1410 1. Common Law Approaches 1411 B. Amending 28 U.S.C. [section] 1782 1417 1. The Statutory Language Portion 1419 2. The Judicial Discretion Portion: Codifying a Modified Intel Test 1423 V. CONCLUSION 1426 I. INTRODUCTION

The advent of modern means of communication, paired with the increased availability of international transportation, has multiplied the opportunities to enter in international transactions and dealings. (1) Naturally, these cross-border transactions have been tied to an increase of international litigation, as well as domestic litigation with an international component. (2) Although the federal powers of the United States have recognized the unique procedural challenges presented by international litigation since at least 1855, (3) it was not until the middle of the twentieth century that Congress started to substantially regulate the ability of federal domestic courts to assist in obtaining evidence for use in foreign and international proceedings. (4)

Since 1948, 28 U.S.C. [section] 1782 (5) has provided a mechanism for foreign parties and tribunals to take depositions and obtain discovery from companies and individuals located within the United States for use in foreign or international proceedings. (6) A product of decades of experimentation and subject to continuous changes, (7) the provision seeks to fulfill a dual set of aims: providing an efficient means of assistance to participants in international litigation and encouraging foreign countries to provide a similar means of support to US courts. (8)

However, the continuous amendments to 28 U.S.C. [section] 1782 and its increasingly broad scope have created confusion for both foreign and domestic parties. (9) The uncertainty regarding how to interpret a variety of aspects covered by [section] 1782 has only worsened after a series of conflicting and unclear judicial interventions. (10) The Supreme Court's holding in Intel Corp. v. Advanced Micro Devices, Inc. (Intel) sought to provide lower courts with answers to some of these interpretative conflicts while equipping them with a set of balancing factors to assist in the determination of whether to grant aid in a foreign proceeding. (11)

Far from solving these problems, Intel has generated further debate as to the interpretation of [section] 1782, ultimately leading to several federal circuit court splits and diverging interpretations of the statute. (12) The circuit courts disagree on a number of issues, including: (1) the extraterritorial reach of the statute, (2) whether "foreign or international tribunals" under [section] 1782 should be read to include international arbitral tribunals, (3) the impact of applicant delay in requesting aid on the courts' ability to grant discovery, and (4) whether an applicant's ability to obtain discovery pursuant to [section] 1782 extends to a foreign party's US legal counsel, and if it does, whether the applicant's potential to reach documents held by US legal counsel extends to documents that have been declared confidential in the context of a domestic proceeding. (13)

This Note focuses on surveying cases to determine how different courts have resolved the challenges presented by [section] 1782 while looking for a possible solution to their divergence in exercising discretion under the statute. To date, these cases have generated an intense debate within the legal profession (14) due to a seeming departure from the traditional liberal interpretation of [section] 1782 propitiated by Intel. This debate is particularly important given the potential impact such decisions have on multinational corporations. (15) Section 1782 makes US broad discovery rules and procedures available to foreign litigants whose domestic litigation systems are often stricter or do not even contemplate pretrial discovery. (16) At the same time, access to US discovery rules and procedures allows a larger number of lawsuits to survive at the expense of the party producing the discovery (generally, financial institutions and other large multinational corporations). (17)

The debate about the judiciary's inability to exercise discretion homogenously in the context of [section] 1782 became once again relevant after the Second Circuit issued its 2017 decision on Kiobel v. Cravath, Swaine & Moore, LLP, reversing a district court's grant of a [section] 1782 discovery request seeking to reach confidential documents held by a foreign party's counsel in the United States. (18) In determining that the district court abused its discretion by granting the request, the Second Circuit reasoned that the Intel factors went against the petitioner and also pondered "the respect owed to confidentiality orders, and the concerns for lawyer--client relations." (19) A year later, the Third Circuit reversed a district court's decision quashing a subpoena issued pursuant to [section] 1782 in a case with similar facts (In re Biomet Orthopaedics Switzerland GmbH), showing the courts inability to reach an agreement as to the proper scope of [section] 1782 and how to properly apply the Intel factors. (20)

Another recent example of a controversy involving 28 U.S.C. [section] 1782 is the Second Circuit's decision in In re del Valle Ruiz. (21) The case presented a question regarding the extraterritorial reach of [section] 1782, in particular, whether the applicants could use a discovery request in the Southern District of New York to reach documents stored in Spain for use in a procedure in front of the Court of Justice of the European Union. (22) In this instance, the court took a surprising stance, distancing itself from the holding of a majority of the circuit's lower courts and the court's own previous dicta by endorsing the Eleventh Circuit's reasoning underlying the 2016 Sergeeva v. Tripleton International Ltd. decision. (23)

This Note argues that 28 U.S.C. [section] 1782 should be amended and that judicial discretion in its application should be restricted in order to afford aid to foreign-interested parties and tribunals in pursuance of the provision's twin aims (increasing efficiency and encouraging reciprocity) in every possible instance while establishing the necessary safeguards to preserve the key features of the American adversarial system. (24) Part II discusses the history and development of 28 U.S.C. [section] 1782, as well as other related international commitments developed in parallel to this provision. Part III then presents a range of circuit courts' decisions, analyzes the proposed interpretative solutions put forth by legal scholars, and assesses a variety of procedures followed by other states' legal systems facing the foreign-discovery issue. Finally, Part IV proposes a legislative amendment that aims to resolve each of the existent interpretative disagreements.

2. THE ENACTMENT AND HISTORY OF 28 U.S.C. [section] 1782: AN EXAMINATION OF THE PROVISION'S LEGISLATIVE HISTORY, TEXT, AND PURPOSE

   1. The Road to 28 U. S.C. [section] 1782

      In 1855, Congress enacted its first act recognizing the need for judicial assistance to foreign parties and tribunals under the title "An Act to Prevent Mis-trials in the District and Circuit Courts of the United States, in Certain Cases." (25) The statute's enactment occurred after the federal government realized that it lacked a statutory grant of power to execute letters rogatory--a court's request for assistance to a foreign court in the context of ongoing litigation (26)--when a French court requested assistance in obtaining testimony in connection with a proceeding taking place in France. (27) The Act provided:

      [W]here letter rogatory shall have [been] addressed, from any court of a foreign country to any circuit court of the United States, and a United States commissioner designated hy said circuit court to make the examination of witnesses in said letter mentioned, said commissioner shall be empowered to compel the witnesses to appear and depose in the same manner as to appear and testify in court. The 1855 Act was followed by "An Act to Facilitate the Taking of Depositions within the United States, to be used in the Courts of other Countries, and for other Purposes," which restricted the scope of judicial aid in response to the submission of letters rogatory by establishing new requirements. (29) In particular, the Act established that the testimony sought had to be used (1) "in any suit for the recovery of money or property," (2) in a court "in any foreign country with which the United States are at peace," and (3) "the government of such foreign country shall be a party or shall have an interest" in the proceeding. (30) In practice, these new requirements discouraged federal courts from providing assistance in foreign proceedings. (31)

      It was not until 1948 that Congress moved towards a model focused on...