Parties involved in non-U.S. court or arbitration proceedings involving persons or companies based in the U.S. may not be aware of their ability in certain cases to obtain discovery from those persons or companies under the broad U.S. discovery procedures.
In 2004, the United States Supreme Court’s landmark case Intel Corp. v. Advanced Micro Devices, Inc.,1 made it easier for parties in foreign disputes to obtain documentary and testimonial evidence from U.S. persons and companies using U.S. discovery mechanisms, pursuant to the judicial assistance provisions in 28 U.S.C. §1782. As the United States permits more extensive pretrial discovery than many other countries, the international discovery available under section 1782 has become an increasingly important tool for foreign parties engaged in disputes worldwide.
28 U.S.C. § 1782 Generally
28 U.S.C. § 1782 authorizes litigants and “interested persons” in proceedings before foreign and international tribunals, as well as the tribunals themselves, to obtain discovery in the United States. There are three basic requirements for successfully invoking section 1782: (1) the person or entity from whom the discovery is sought resides or is found in the district of the court authorizing the section 1782 discovery; (2) the discovery must be for use in a proceeding in a foreign or international tribunal; and (3) the application must be made by a foreign or international tribunal or by an “interested person.”2
The U.S. district court evaluating an application under section 1782, however, is not limited to these factors. Other discretionary factors that may be considered include: (1) whether the person from whom discovery is sought is a participant in the foreign proceeding; (2) the nature of the foreign tribunal and the character of the proceeding abroad; (3) whether the request is an attempt to circumvent proof-gathering restrictions or policies in the foreign jurisdiction; and (4) whether the request is unduly intrusive or burdensome.3
Thus, although a potentially useful tool for litigants, the scope of section 1782 can be difficult to define due to the numerous statutory and discretionary factors involved in a U.S. court’s decision as to whether U.S. discovery procedures, pursuant to section 1782, should be made available in foreign litigation.
Perhaps the most complicated factor in the section 1782 equation is the definition of “foreign or international tribunal.” The Supreme Court in Intel held that section 1782 assistance is not limited to proceedings before conventional courts, but also extends to “administrative and quasi-judicial proceedings.”4 The Supreme Court also clarified that section 1782 judicial assistance is available to aid in proceedings before foreign or international tribunals, regardless of whether the proceedings are criminal, civil, or administrative in nature. Thus, Intel defined a “foreign or international tribunal” broadly for section 1782 purposes.
The outer limit of the “foreign or international tribunal” definition, however, remains open. Complicating foreign litigants’ analyses as to when U.S. discovery procedures under section 1782 may apply, two recent U.S. Court of Appeals cases addressing the definition of a “foreign or international tribunal” under the statute appear to have taken differing positions.
Narrowly defining “foreign or international tribunal”: Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS forwarding (USA) Inc.
In Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS forwarding (USA) Inc.,5 the U.S. Court of Appeals for the Eleventh Circuit reversed its earlier decision, and interpreted the scope of “foreign or international tribunal” narrowly. Specifically, the court declined to find that section 1782 discovery was available to parties involved in an international commercial arbitration.
While the Consorcio court did not preclude the availability of U.S. discovery under section 1782 for disputes before foreign arbitral tribunals, it noted that a functional analysis test is necessary to establish in each case whether a decision-making body constitutes a tribunal under section 1782. Specifically, the court explained that the functional analysis test includes determining whether a body “acts as a first-instance adjudicative decision-maker, permits the gathering and submission of evidence, has the authority to determine liability and impose penalties, and issue decisions subject to judicial review.”6
Broadly defining “foreign or international tribunal”: Optimal Investment Services v. Franck Berlamont
In contrast to the narrower interpretation in Consorcio, the U.S. Court of Appeals for the Second Circuit’s December 2014 ruling in Optimal Investment Services v. Berlamont7 treated the “foreign or international tribunal” definition more broadly. In Optimal Investment, the Second Circuit held that section 1782 discovery assistance was available for use in a criminal investigation conducted by a foreign magistrate.
In reaching this conclusion, the court looked at the statutory language of section 1782, which permits discovery “for use in . . . criminal investigations conducted before formal accusation.”8 The court reasoned that broader allowance for U.S. discovery under section 1782 comported with the legislative amendments and history of the statute, as the “’goals of the law . . . to provide ‘equitable and efficacious’ discovery procedures in American courts ‘for the benefit of tribunals and litigants involved in litigation with international aspects.’”9
Absent a unified interpretation as to when U.S. discovery procedures are available under section 1782 to aid foreign disputes, foreign litigants must consider and evaluate the relevant case law in the U.S. district in which the discovery sought is located. If available, U.S. discovery procedures under Section 1782 can provide a significant advantage to foreign parties, potentially allowing for the gathering of documentary and testimonial evidence from U.S. persons or companies otherwise unavailable to foreign litigants.