Originally published in Law Exchange International on 4/25/17.
OBTAINING EVIDENCE IN THE U.S. FOR USE IN FOREIGN PROCEEDINGS
A company involved in a foreign litigation or other legal proceeding – or considering bringing a foreign proceeding – can use a powerful federal tool to obtain evidence in aid of that proceeding, including documents and deposition testimony, from parties located in the United States: 28 U.S.C. § 1782.
Under Section 1782, “any interested person” may apply, ex parte, to the federal district court “in which a person resides or is found” for an order to produce documents or provide testimony “for use in a proceeding in a foreign or international tribunal.” 28 U.S.C. § 1782(a). The district court has discretion whether to grant the application and will look to four factors: (i) whether the person from whom discovery is sought is participating in the foreign proceeding; (ii) the nature of the foreign tribunal and its receptiveness to U.S. judicial assistance; (iii) whether the request conceals an attempt to circumvent foreign proof-gathering restrictions; and (iv) whether the request is unduly intrusive or burdensome. See Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 264-65 (2004).
Section 1782 has expansive reach and should be considered by any company involved in litigation or other proceeding outside of the U.S.
Not Limited to Parties in Litigation
Section 1782 is applicable to proceedings in any foreign “tribunal,” including traditional civil, commercial, criminal and administrative courts. It also applies to “investigating magistrates, administrative and arbitral tribunals, and quasi-judicial agencies,” Intel Corp., 542 U.S. at 258, although there is some disagreement amongst the courts as to whether it applies to private international arbitrations. Moreover, Section 1782 is available not only to a party in a foreign proceeding, but any person with significant “participation rights” in the proceeding that possesses a “reasonable interest in obtaining [judicial] assistance.” Id. at 256 (alteration in original) (citation omitted).
Includes Reasonably Contemplated Proceedings
Discovery under Section 1782 is not limited to ongoing proceedings, or even to proceedings that are pending or imminent. The proceeding only needs to be “within reasonable contemplation” at the time of the application. Id. at 259. OBTAINING EVIDENCE IN THE U.S. FOR USE IN FOREIGN PROCEEDINGS Two recent Second Circuit cases have addressed this point. In Mees v. Buiter, the Court held that, as long as the proceeding is “within reasonable contemplation,” the discovery sought does not need to be “necessary . . . to succeed in the foreign proceeding” and it does not need to “be sought for the purpose of commencing a foreign proceeding.” 793 F.3d 291, 295 (2d Cir. 2015). However, in Certain Funds, Accounts &/or Inv. Vehicles v. KPMG, L.L.P., the Court warned that the proceeding “cannot be merely speculative” and an applicant must show some “concrete basis” that “the contemplated proceeding is more than just a twinkle in counsel’s eye.” 798 F.3d 113, 124 (2d Cir. 2015).
No Exhaustion or Discoverability Requirements
In order to grant an application under Section 1782, the district court does not need to determine whether the evidence would be discoverable in the foreign proceeding or will ultimately be admissible in that foreign tribunal. See Intel, 542 U.S. at 260-63. There is also no requirement that the interested party first attempt to obtain discovery in the foreign proceeding. See Mees, 793 F.3d at 303.
Expansive U.S. Discovery
As opposed to foreign or international tribunals, which often provide for narrow discovery and limit the procedures for gathering evidence, the discovery permitted under Section 1782 is relatively broad and operates under the Federal Rules of Civil Procedure. As a result, an applicant may be able to obtain documents and testimony from parties in the U.S. that it could not obtain if those parties were located elsewhere.
Global Litigation Strategy
Given the scope of available discovery under Section 1782, companies involved in foreign litigation should consider seeking discovery of any relevant third parties in the U.S. In addition to potential witnesses, these third parties include financial institutions, subsidiaries or affiliates located in the U.S.
If your company is involved in foreign litigation, the Business Litigation Team at Phillips Lytle can assist in developing and implementing a global litigation strategy.
For more information on obtaining evidence in the U.S. for use in foreign proceedings, contact Phillips Lytle Business Litigation Associate Jeffrey D. Coren at (716) 847-7024 or firstname.lastname@example.org.