The Southern District of New York recently denied an application brought by Elvis Presley Enterprises LLC  (“EPE”) for an order to take discovery pursuant to 28 U.S.C. § 1782, a provision of the United States Code that allows for discovery in aid of foreign litigation. See In re Elvis Presley Enters. LLC, No. 15mc386 (DLC) (S.D.N.Y. March 1, 2016).

The underlying lawsuit, brought by EPE in Munich, Germany, against Arista Music in December 2010, sought equitable relief, as well as information, relating to “grossly disproportionate” revenues purportedly earned by Arista Music through its exploitation of its rights in Elvis Presley’s sound recordings. The court noted that “EPE’s request for information in the German lawsuit was a substantive cause of action under German law” and not a “discovery request.” Following dismissal of the initial action and a subsequent appeal, Arista Music was ordered to produce to EPE information that would allow EPE to calculate the value of its claim for equitable remuneration. That judgment became final in September 2013. Documents were not produced until July 2014, when EPE requested production of the documents subject to the September 2013 judgment. EPE contended that Arista Music’s production was insufficient and inaccurate. Several months later, in December 2014, EPE resumed the underlying proceeding before the German court, but did not seek any relief from that court for Arista Music’s purported failure to comply with the September 2013 order. A hearing was scheduled for December 16, 2015, at which the German court dismissed EPE’s claim for equitable remuneration, but without discussion of the sufficiency of Arista Music’s compliance with the September 2013 judgment.

On December 1, 2015, EPE filed an application for discovery under § 1782 against Arista Music’s corporate parent, Sony Music Entertainment (“SME”), seeking broad discovery in aid of its German action against Arista Music. Title 28 U.S.C. § 1782, a powerful tool for persons seeking to obtain discovery in aid of foreign proceedings, provides, in relevant part:

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. . . . To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.

Accordingly, there are three threshold requirements for a successful petition under Section 1782: (1) the person from whom discovery is sought must reside or be found in the district where the application is filed; (2) the discovery sought must be for use before a foreign tribunal; and (3) the application must be made by a foreign or international tribunal or any interested person. Once it determines that these threshold requirements are met, a district court may, in its discretion, order the requested discovery. The discretionary test applicable to § 1782 applications was announced by the Supreme Court in Intel Corp. v. Advanced Micro Devices, 542 U.S. 241 (2004). The eponymous “Intel factors” described by the Court include the following:

First, when the person from whom discovery is sought is a participant in the foreign proceeding, as Intel is here, the need for §1782(a) aid generally is not as apparent as it ordinarily is when evidence is sought from a nonparticipant in the matter arising abroad. A foreign tribunal has jurisdiction over those appearing before it, and can itself order them to produce evidence. In contrast, nonparticipants in foreign proceedings may be outside the foreign tribunal’s jurisdictional reach; thus, their evidence, available in the United States, may be unobtainable absent §1782(a) aid.

Second, a court presented with a §1782(a) request may consider the nature of the foreign tribunal, the character of proceedings underway abroad, and the receptivity of the foreign government, court, or agency to federal-court judicial assistance.

Further, the grounds Intel urged for categorical limitations on §1782(a)’s scope may be relevant in determining whether a discovery order should be granted in a particular case. Specifically, a district court could consider whether the §1782(a) request conceals an attempt to circumvent foreign proof-gathering limits or other policies of a foreign country or the United States.

There was no dispute among the parties that the threshold factors were met. Assessing the first of the discretionary Intel factors, the district court found that EPE’s request for discovery was within the scope of the substantive relief it sought, and was granted, before the German court. Rather than seek redress for what it claimed was incomplete and inaccurate production before the German court, which, significantly, was an option available to it, EPE chose instead to file the § 1782 application. Accordingly, the district court found that this factor weighed against EPE.

With respect to the second Intel factor, the nature and character of the foreign tribunal and proceedings, the district court was troubled by the fact that EPE only filed its § 1782 request on December 1, 2015—just two weeks before the substantive hearing—even though it had known of the hearing date since April 2015. Moreover, EPE’s failure to raise Arista Music’s allegedly deficient production before the German court, and the subsequent dismissal of EPE’s claim by that court, further weighed against granting EPE’s § 1782 application.

As far as the final factor is concerned, the district court did not find that EPE’s § 1782 application sought to circumvent foreign law. Noting the Supreme Court’s admonition that “nothing in the text of 1782 limits a district court’s production-order authority to materials that could be discovered in the foreign jurisdiction if the materials were located there,” this district court found this to be a neutral factor.

In addition to the Intel factors, the district court found the request to be unduly burdensome due, in part, to overbreadth, and noted that EPE had only belatedly agreed to narrow its discovery requests, despite being ordered by the court to meet and confer for that purpose.

Section 1782 remains a very powerful tool for obtaining discovery in aid of foreign litigation. This case, however, should serve as a warning that even though the statutory thresholds for a § 1782 application are easily met, U.S. courts will rigorously scrutinize the discretionary Intel factors.