January 31, 2020 Practice Points

Expanding Discovery Exports to Foreign Tribunals under 28 U.S.C. § 1782

Obtaining discovery from United States entities to assist in foreign disputes is now easier than ever.

By James C. Walls III

Under 28 U.S.C. § 1782, parties to foreign proceedings may obtain relevant discovery from persons or entities based within the United States. That statute allows “[t]he 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 . . . .” 28 U.S.C. § 1782(a). In two recent decisions, the Second and Sixth Circuit Courts of Appeals broaden the application of section 1782 beyond the scope that had be previously understood.

The Second Circuit Takes an Expansive View of Personal Jurisdiction under Section 1782

In In re del Valle Ruiz, 939 F.3d 520, 529 (2d Cir. 2019), the Second Circuit interpreted the phrase “found in” under section 1782(a), to encompass all persons (natural or otherwise) subject to the district court’s personal jurisdiction to the fullest extent permitted by due process. The court rejected the respondent’s argument that “found in” must be limited to persons physically present in the forum and subject to the court’s subpoena power. This interpretation broadened the scope of section 1782 to encompass persons subject to a district court’s specific personal jurisdiction.

The Second Circuit used In re del Valle Ruiz to also announce a modified or “translated” test to determine whether respondents are subject to a district court’s specific personal jurisdiction. Often, as was the case in In re del Valle Ruiz, a respondent to a section 1782 petition is not a party to the pending foreign action for which the discovery is sought. This complication required the Second Circuit to modify the traditional test for specific personal jurisdiction to account for nonparties. To that end, the Second Circuit instructed district courts to: (1) “first assess the connection between the nonparty’s contacts with the forum and the order at issue” and (2) “then decide whether exercising jurisdiction for the purposes of the order would comport with fair play and substantial justice.” Id. (quoting Gucci Am., Inc. v. Weixing Li, 768 F.3d 122, 137 (2d Cir. 2014)). This “translated version of the specific-jurisdiction test,” focuses on “the connection between the nonparty’s contacts with the forum and the discovery at issue.” Id. at 529. It is not enough to establish that the respondent’s contacts to the forum are related to a cause of action asserted in the international litigation. Rather, the nonparty respondent’s contacts with the forum must be proximately related to the discovery material sought for the respondent to be “found in” that forum under section 1782.

The Sixth Circuit Allows Section 1782 to Be Used for Private Arbitrations

In In re Application to Obtain Discovery for Use in Foreign Proceedings, 939 F.3d 710, 731 (6th Cir. 2019), the Sixth Circuit interpreted the phrase “foreign or international tribunal” under section 1782 to encompass international private, contracted-for commercial arbitrations. This interpretation conflicts with Second and Fifth Circuit precedent interpreting “tribunal” to be limited to “governmental or intergovernmental arbitral tribunals and conventional courts and other state-sponsored adjudicatory bodies.” Id. at 726 (referring to Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880, 883 (5th Cir. 1999); National Broadcasting Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2d Cir. 1999)). The Sixth Circuit justified its break with the Second and Fifth Circuits by relying on the Supreme Court’s interpretation of “tribunal” in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), which was decided after the Second and Fifth Circuits’ conflicting opinions.

In Intel, the Supreme Court interpreted “tribunal” to include a non-judicial international commission. Intel 542 U.S. at 257. In support of this interpretation, the Supreme Court reasoned that Congress intended to expand section 1782 beyond judicial proceedings when it replaced the phrase “in any judicial proceeding pending in any court in a foreign country” with the phrase “in a proceeding in a foreign or international tribunal” in the 1964 amendment. In re Application 939 F.3d at 724 (applying Intel, 542 U.S. at 248–49). The Sixth Circuit reasoned that Congress did not demonstrate any intent to prohibit the application section 1782 to foreign tribunals and expanded on the Supreme Court’s analysis in Intel to find that term “tribunal” in section 1782 included private arbitration panels.

Conclusion

In re del Valle Ruiz and In re Application expand the previously understood limits on where persons and entities in the United States may be subject to discovery under section 1782 and for what purpose. However, it is too early to tell if district court will follow the expansion of section 1782’s application and use their discretion to issue section 1782 orders more liberally. Nevertheless, practitioners should be aware of the potential impact on United States-based clients whose activities cross international borders.

James C. Walls III is an attorney with Spilman Thomas & Battle, PLLC, in Pittsburgh, Pennsylvania.


Copyright © 2020, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).