The unique time frames and need for evidence from foreign entities pose many challenges for both complainants and respondents in Section 337 investigations. While the US International Trade Commission (Commission or ITC) has the authority to issue requests for international judicial assistance for obtaining discovery of foreign non-parties, their use in high-speed Section 337 cases is often impractical because of the time it takes to enforce such requests. Thus, ITC subpoena practice can fill the void in some, but not all, instances.
The procedures for obtaining and enforcing subpoenas in a Section 337 investigation are different from those set forth under the Federal Rules of Civil Procedure. To obtain a subpoena in a Section 337 investigation, a party must first file an ex parte application with the presiding Administrative Law Judge (ALJ). (19 CFR §§ 210.32(a), (e).) The party can only serve the subpoena once it has been signed by the ALJ. Subpoenas may be issued to a non-party, such as a US entity, its foreign affiliates, or both.
The party seeking information has the burden to establish the relevance and substantial need for information sought from a non-party. Certain Set-Top Boxes and Components Thereof, Inv. No. 337-TA-454, Order No. 14 at 2 (June 25, 2001). It is not uncommon for a subpoena to be issued to a US subsidiary for the purpose of seeking information from its foreign parent. However, such a subpoena is enforceable only if the subsidiary has control of the subpoenaed documents. This is consistent with cases in which a subpoena is issued to a US parent company and seeks information from its wholly owned foreign subsidiary, where courts have found that the US parent company has control over the requested information. See Certain Lens-Fitted Film Packages, Inv. No. 337-TA-406, Order No. 12 at 10-12 (Aug. 20, 1998). The ALJ’s Order is available online.
The ITC will not issue subpoenas directed to a US subsidiary when the subsidiary has no control over the requested information in the possession of its foreign parent. The ITC has held that a non-party is not in control of its foreign parent company’s documents unless it has a legal right to obtain the parent company’s documents. See Certain Recordable Compact Discs and Rewritable Compact Discs, Inv. No. 337-TA-474, Order No. 9 (Dec. 23, 2002) (holding that US subsidiary did not have a right to obtain documents from its foreign parent company where the US subsidiary did not have a close working relationship with its foreign parent). The ALJ’s Order is available online. If a seeking party fails to offer any evidence to establish the legal right of a US subsidiary to obtain documents from its foreign parent, a US subsidiary’s motion to quash or limit a subpoena will likely be granted to the extent it seeks documents in possession of the foreign parent company.
Similarly, attempts to seek information from a non-party foreign parent company by serving a subpoena issued to that foreign company upon its non-party US subsidiary usually fail. Service on wholly-owned US subsidiaries does not effect service on the foreign parent corporation where separate corporate identities are maintained. See Certain Encapsulated Integrated Circuit Designs and Products Containing Same, Inv. No. 337-TA-501, Order No. 29 (Apr. 13, 2004). The ALJ’s Order is available online.
When a non-party foreign entity has sufficient presence in the United States, the ITC can exercise personal jurisdiction over the foreign entity, including the issuance of a subpoena to the non-party foreign entity. See Certain Personal Computers and Digital Display Devices, Inv. No. 337-TA-606, Order No. 5 (July 12, 2007). The ALJ’s Order is available online. For example, in HSP Modems, the ALJ denied a foreign company’s motion to quash a subpoena finding that because the foreign parent company had at least three manufacturing facilities, operated a sales force and conducted research and development in the United States, and more than 20% of the foreign company’s revenue came from North America, the ITC had personal jurisdiction based on the foreign company’s systematic and continuous contacts in the United States. See Certain HSP Modems, Software and Hardware Components Thereof, and Products Containing Same, Inv. No. 337-TA-439, Order No. 13 (Feb. 9, 2001). The ALJ’s Order is available online.
The ITC does not have subpoena power over a foreign non-party when that party has no minimum contact or significant presence in the United States. The mere fact that the foreign company has a US subsidiary will not support Commission power over the foreign parent company. See Certain Personal Computers and Digital Display Devices, Inv. No. 337-TA-606, Order No. 5 (July 12, 2007). In that type of situation, parties seeking discovery of foreign non-parties may utilize the Hague Convention, as well as the letters rogatory process when seeking evidence in a foreign country that is not a party to the Hague Convention.
A party to the Section 337 investigation must obtain ITC approval to seek evidence under the Hague Convention and the letters rogatory method. The ITC will then make a formal request for judicial assistance to a federal court to issue a letter of request under the Hague Convention or a letter rogatory for evidence. Such a letter of request may include a request for international assistance to the associated foreign authority to process the request, as well as a request for compliance with the ITC rules in terms of timing. ALJs frequently make such requests to the District Court for the District of Columbia1.
Some countries do not interpret the Hague Convention as extending to discovery in administrative proceedings2. The ALJ’s Order is available online.
However, when these requests are likely to be the only effective means of obtaining needed information from foreign non-parties, the ITC has been more permissive in granting these requests. For example, in Certain Home Vacuum Packaging Machines, the ALJ included the Office of Unfair Import Investigations staff attorney as a party to the Hague Convention letter of request with the hope that the request would more likely be given effect. Certain Home Vacuum Packaging Machines, Inv. No. 337-TA-496, Order Nos. 38, 39 (Jan. 12, 2004). The ALJ’s Order is available online.
The enforcement of a request heavily depends on the national law of the foreign country where the non-party is located because the request will be executed (or not) by the judicial authority of the foreign state. Furthermore, discovery requests under the Hague Convention and letter rogatory method may not be practical because of the time it takes to enforce these requests.
- Because of the fast procedural schedules in Section 337 investigations, as well as the multiple layers of communication required to seek discovery of foreign entities under the Hague Convention and letters rogatory method (i.e., involving the parties, the Commission, the central authority in the foreign country, and perhaps even a local court), parties should make such discovery requests as early as possible.
- A motion for recommendation to issue a letter request under the Hague Convention or to issue a letter rogatory should be narrowly tailored and should set forth sufficient details to establish that the requested discovery is reasonably necessary to fully investigate the allegations at issue.
- A party seeking discovery under the Hague Convention or letters rogatory method should understand the local law of the foreign country when assessing whether the foreign country will enforce the request. It is advantageous to consult with an attorney in the foreign country before making the request to the ITC so that the request may be tailored to meet any particular requirements imposed by the local laws and practices of the foreign country.
FOR OTHER CASES ADDRESSING DISCOVERY FROM FOREIGN ENTITIES IN SECTION 337 PROCEEDINGS:
- Inv. No. 337-TA-545, Certain Laminated Floor Panels – The ALJ denied respondents’ request for judicial assistance in procuring evidence in Germany. Respondents asserted that they needed the requested evidence in order to support their invalidity defense. However, respondents did not provide any authority under which the ALJ could make such a request of an authority in Germany, and German authorities do not regard the Hague Evidence and Service Conventions as applying to administrative cases. However, they may entertain requests for service and evidence if made by letters rogatory. The ALJ’s Order is available online.
- Inv. No. 337-TA-547, Certain Personal Computers, Monitors and Components Thereof – The ALJ denied complainants’ application for recommendation to the District Court for the District of Columbia to issue letters rogatory to the appropriate judicial authority in Taiwan because: (1) the deposition topics and document requests were too broad; (2) the letters rogatory failed to identify with adequate specificity the persons to be deposed; and (3) the letters rogatory did not include a certified translation in Mandarin Chinese. Complainants’ consistent use of open ended language gave the appearance of a “fishing expedition,” which the State Department has warned should be avoided. The ALJ’s Order is available online.