Section 1782 Discovery

Section 1782 of Title 28 of the United States Code is a federal statute that allows a litigant (party) to a legal proceeding outside the United States to apply to an American court to obtain evidence for use in the non-US proceeding. The full name of Section 1782 is "Assistance to foreign and international tribunals and to litigants before such tribunals."[1]

The text of Section 1782(a) reads as follows:

The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person. ... The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure. A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.

In essence, an applicant under Section 1782 merely needs to show three things:

(a) it is an "interested person" in a foreign proceeding,

(b) the proceeding is before a foreign "tribunal," and

(c) the person from whom evidence is sought is in the district of the court before which the application has been filed.[2]

The type of evidence that may be obtained under Section 1782 includes both documentary evidence and testimonial evidence.

The Intel decision

For many years, district courts and appellate courts disagreed as to

(a) the scope of permitted discovery (evidence-taking) under Section 1782,

(b) who may request section 1782 discovery,

(c) at what stage of a non-US proceeding a section 1782 order may be granted,

(d) the meaning of the statute's term "tribunal," and

(d) whether an applicant under section 1782 needs to show that the requested evidence would be "discoverable" in the foreign jurisdiction.

The case law concerning Section 1782 was largely clarified in 2004, when the Supreme Court of the United States issued its decision in Intel Corp. v. Advanced Micro Devices, Inc.[3] Intel held that

(a) section 1782 discovery may be sought by any "interested person,"

(b) such discovery may sometimes be sought even prior to the initiation of formal proceedings outside the United States, and

(c) a "tribunal" within the meaning of the section is any tribunal that acts as a "first instance decisionmaker."

The court also largely did away with any requirement of "discoverability" before the non-US tribunal.

In essence, Intel held that section 1782 discovery is available to a non-US litigant almost as freely as discovery is available in connection with a lawsuit that is pending entirely before a court in the United States.

Section 1782 has received great attention in recent years, following Intel.

Use of Section 1782 versus use of the Hague Evidence Convention

The subject matter of Section 1782 – obtaining evidence in the US for use in legal proceedings outside the United States – overlaps to some extent with the subject matter of a treaty to which the US and approximately sixty nations are signatories, the Hague Evidence Convention.

In at least two respects, when a non-US litigant seeks evidence from the United States, there is an advantage in using section 1782 over the Hague Evidence Convention:

• there is no need to have first requested the discovery from the non-US tribunal; and
• sometimes discovery can be granted even before a lawsuit is commenced outside the United States.

Who has been filing Section 1782 applications?

In the post-Intel era, most applications under section 1782 have been filed by companies from England, Germany, and other European countries. There has been an increase in recent years in applications from Middle Eastern countries.

Other than Japan, few Asian litigants have filed section 1782 applications in recent years.

In 2010, Chevron Corporation filed several section 1782 applications to obtain evidence in connection with the defense of product liability claims brought against it in the Republic of Ecuador.

Many observers believe that cost considerations have been one of the reasons that Section 1782 has not been used more extensively.

Controversy regarding Section 1782 discovery

Not all American lawyers or businesspeople believe that section 1782 discovery is a good thing.

The United States Chamber of Commerce has expressed concerns as to the burden upon American businesses in having to comply with orders to produce evidence under Section 1782. That concern was echoed by Justice Stephen Breyer in his dissent in the Supreme Court's Intel decision. Justice Breyer stated that "discovery and discovery-related judicial proceedings take time, they are expensive, and cost and delay, or threats of cost and delay, can themselves force parties to settle underlying disputes."[4]

Most, but not all, private law firms that engage in international litigation are of the view that the availability of section 1782 discovery is good.

Writing in the International Practicum of the New York State Bar Association (1999), Hugh L. Burns and Sharad A. Shany (both New York) have referred to section 1782 as the international litigant's discovery "weapon of choice."

In a commentary in Mealey's International Arbitration Report, Barry Garfinkel and Timothy Nelson (both New York), discussed a decision from a federal district court in Georgia that permitted Section 1782 discovery in connection with a non-US arbitration. Entitling their commentary "Sweet Georgia," Garfinkel and Nelson called the Georgian decision "ground breaking." Writing in the New York Law Journal in May 2007, Eric Schwartz and Alan Howard (both New York) commented on that same decision from Georgia but expressed a critical view both of the case and of the apparent trend that it represents. Schwartz and Howard predicted that the pro-discovery ruling from Georgia could result in "the doors of the U.S. federal courts [swinging] open to a flood of future applications for the discovery of evidence against U.S. businesses for use in international arbitration proceedings." (emphasis added). Schwartz and Howard further asserted that such possibility should be "cause for alarm" for the U.S. business community.

Writing in the International Litigation Quarterly (of the American Bar Association) in March 2008, Eric Sherby (Israel) rejected the contention that section 1782 imposes too much of a burden on Corporate America. Focusing on five cases from the mid-1990s through 2006, Sherby argued that the availability of Section 1782 discovery makes it more likely that an American court will grant a forum non conveniens (inconvenient forum) dismissal in many lawsuits brought against American defendants. As a result, Sherby further argued, Section 1782 is a blessing in disguise for those American companies that are engaged in international commerce yet do not want to be sued in American courts in connection with those activities.

Writing in a newsletter of the ABA's Committee on Pretrial Practice & Discovery, Jonathan I. Handler and Erica Tennyson have observed that Section 1782 "may lead to nonreciprocal access to discovery and may even allow private litigants to exploit the statute to obtain information about a competitor and force an adversary to settle the underlying dispute." At the same time, Handler and Tennyson note that these "potential inequities" can be offset by a district court's broad discretion in deciding whether and to what extent to grant Section 1782 requests.

The section 1782 litigation that has received the most attention has involved Chevron Corporation, which brought several section 1782 motions in various courts throughout the United States in connection with a massive tort claim against Chevron in Ecuador.[5]

Remaining areas of uncertainty concerning Section 1782

The appellate courts are divided as to whether an arbitration constitutes a private tribunal for purposes of 1782 discovery. The Second and Fifth Circuits have held that an arbitration does not fall within the definition of tribunal. The 11th Circuit, however, has rejected the reasoning of its sister courts and has held that an arbitration is a foreign tribunal.

The case law so far is split as to whether a section 1782 order may compel a person located in the United States to produce documents that are located outside the US. Sherby has argued that most cases that have addressed the subject do not expressly hold that there is any geographical limitation to section 1782 and that, in determining whether to apply section 1782 to documents outside the US, the main issue that courts have considered is whether there is evidence indicating either (1) that the applicant is trying to circumvent a restriction of the foreign tribunal or (2) that an order of production would interfere with the foreign proceedings.[6]

Some authorities are of the view that Section 1782 authorizes non-parties to produce documents and to give oral testimony but not to answer written interrogatories. At least one 2007 case, however, did require a non-party to answer interrogatories.

In August 2008, a court in New York held that a German tax authority is a "tribunal" for purposes of Section 1782 discovery.

References

1. 28 U.S.C. § 1782
2. https://scholarship.law.unc.edu/ncilj/vol40/iss3/4/
3. https://scholar.google.com/scholar_case?case=15516143881871359176&q=Intel+Corp.+v.+Advanced+Micro+Devices,+Inc.,+542+U.S.+241&hl=en&as_sdt=2006&as_vis=1 Retrieved 15 January 2015
4. 542 U.S. 241, 268.
5. http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202474598298
6. See International Aspects of U.S. Litigation (ABA 2017), ch. III.D at 602-03.