The Eleventh Circuit Court of Appeals recently concluded, as a matter of first impression, that private arbitral proceedings are considered a “foreign or international tribunal” for 28 U.S.C. § 1782 discovery purposes.
In Consorcio Ecuatoriano de Telecomunicaciones, S.A. v. JAS Forwarding (USA), Inc., No. 11-12897, 2012 WL 2369166 (11th Cir. June 25, 2012), Consorcio filed an application in the Southern District of Florida to obtain discovery under 28 U.S.C. § 1782 for use in a foreign proceeding pending in Ecuador against a non-party, JAS Forwarding (USA), Inc (“JAS USA”). The foreign proceedings included a pending arbitral proceeding between Consorcio and Jet Air Service Ecuador, S.A. (“JAS”) related to a foreign shipping contract billing dispute, and contemplated civil and criminal proceedings against two of Consorcio’s former employees for allegedly engaging in unlawful collusion under Ecuadorian law for approving JAS’s inflated invoices. Consorcio sought discovery against JAS USA, JAS’s United States counterpart, who was allegedly involved in the overbilling dispute. The Eleventh Circuit agreed with District Court Judge Donald L. Graham that arbitral proceedings fall within § 1782’s purview of a “foreign or international tribunal” as that phrase was interpreted by the United States Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004). In so holding, the Eleventh Circuit expressly disagreed with the Fifth and Second Circuits’ pre-Intel decisions which had concluded that arbitral proceedings are not a “foreign or international tribunal” for § 1782 purposes.
Title 28 U.S.C. Section 1782 authorizes a district court to order a person who resides in or is found within the district to provide testimony or produce documents or other things “for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation.” According to the Eleventh Circuit, a district court may grant a § 1782 request so long as four statutory requirements are met: (1) the request is made by a “foreign or international tribunal,” or by “any interested person”; (2) the request seeks evidence, either through testimony or through the production of documents or other things; (3) the evidence is for use in a “foreign or international tribunal”; and (4) the person from whom the discovery is sought is located within the district of the court granting such a request.
In Consorcio, JAS did not dispute that requirements (1), (2), and (4) were satisfied, but contested that the third requirement was met, i.e., that the evidence requested was to be utilized in a foreign or international tribunal. Relying on the Supreme Court’s seminal decision in Intel, the Eleventh Circuit concluded that the term “tribunal” as utilized in the statute should be interpreted broadly. Critical to the Consorcio court’s conclusion that private arbitral proceedings are a “foreign or international tribunal” for § 1782 purposes was the Supreme Court’s observation in Intel that in 1964 the phrase “any judicial proceeding” in § 1782 was amended to its current version of “a proceeding in a foreign or international tribunal.” According to the Supreme Court, this legislative change to § 1782 was intended “to provide the possibility of U.S. Judicial assistance in connection with administrative and quasi-judicial proceedings abroad.” Intel, 542 U.S. at 258. Because a private arbitral tribunal acts as a firstinstance adjudicative decision maker, has the power to gather and receive evidence, to determine liability, impose penalties, and its decision is subject to judicial review (albeit under limited circumstances), the Consorcio court concluded that private arbitral proceedings are a “foreign or international tribunal” for § 1782 purposes.
Lastly, the Eleventh Circuit held that a district court retains broad discretion in granting discovery pursuant to a § 1782 request. Once the four § 1782 statutory requirements are met, Rules 26-36 of the Federal Rules of Civil Procedure provide the guide posts for determining the permissible bounds of the discovery sought, and the manner in which the requested discovery is obtained.