The US Court of Appeals for the Second Circuit has interpreted 28 U.S.C. § 1782 as granting a US district court discretion to order the production of documents in support of a foreign criminal investigation.

Background

Following the Bernard Madoff scandal, Franck Berlamont (then CEO of Switzerland-based Geneva Partners) filed a criminal complaint in Switzerland against Optimal Investment Services (“OIS”) and its former director general, Manuel Echeverrìa.  Mr. Berlamont alleged that Geneva Partners invested in a fund managed by OIS and that Mr. Echeverrìa made false statements about that fund’s investment with Bernard Madoff.  Shortly thereafter, a Swiss magistrate commenced a criminal investigation into Mr. Echeverrìa.

In a separate action, a number of OIS investors commenced a civil claim against OIS in the Southern District of New York, alleging that they had also been misled by OIS concerning the investments with Madoff.  The civil case was ultimately dismissed, but only after the plaintiffs took the deposition of an ex-officer of OIS. After hearing of the deposition, Mr. Berlamont made a Section 1782 application seeking a copy of the deposition transcript in support of the Swiss investigation.  The application was granted and OIS was ordered to produce the transcript.  A subsequent motion by OIS to suppress this order was denied and OIS appealed to the 2nd Circuit.

Section 1782 allows a US district court the discretion to order the production of documents “for use in a proceeding in a foreign or international tribunal”.  An application must demonstrate that:

the person from whom discovery is sought “reside[s]” or is “found” in the district where the request is made the discovery request is “for use in a proceeding in a foreign or international tribunal”; and the application is made by “a foreign or international tribunal” or by an “interested person”.

In their appeal, OIS argued that a Swiss investigating magistrate did not constitute “a foreign or international tribunal” within the meaning of Section 1782. The 2nd Circuit, however, rejected this argument, holding that Section 1782 does permit district courts to order the production of documents for use in a foreign criminal investigation conducted by an investigating magistrate. In so holding, the court noted that the legislative history of Section 1782 (and its amendments) demonstrates that the word “tribunal” was added to Section 1782 to expand its reach beyond proceedings before traditional courts, and to specifically include proceedings before investigating magistrates in foreign countries.

The court also noted that the 1996 amendments to Section 1782 explicitly covered “criminal investigations conducted before formal accusation” and that “[t]he Swiss criminal investigation […] is exactly the type of proceeding that the 1996 amendments […] were intended to reach”.

This decision is a useful precedent for those seeking US discovery in support of criminal investigations conducted by a foreign investigating magistrate.