Commercial Litigation and Arbitration

International Discovery

Gregory P. Joseph*

The Supreme Court has rewritten the law governing the availability of U.S. discovery procedures to gather evidence for use in proceedings abroad, pursuant to 28 U.S.C. §1782(a). In Intel Corp. v. Advanced Micro Devices, Inc., 124 S.Ct. 2466, 159 L.Ed.2d 355 (2004), the Supreme Court held that §1782(a) discovery might be appropriate even though:

  • the person seeking discovery was not a litigant in a foreign proceeding;
  • no foreign proceeding was either pending or imminent; and
  • the evidence sought was not discoverable in the foreign jurisdiction.

The Intel Court did not rule that discovery must be allowed. Rather, it stressed the enormous discretion vested in the district court and articulated several factors relevant to the determination. The way district courts apply these factors in the future will determine whether the initial reaction to Intel — that it liberalizes discoverability under §1782(a) — will, in hindsight, prove as acute as the initial reaction that the law of expert evidence had been liberalized by Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993) (in its jettisoning the Frye rule).

Statute. Section 1782(a) is a relatively straightforward statute. In pertinent part, it provides:

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 and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. *** 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.

Elements. Thus, the basic elements of an application for discovery under the statute are:

(1) The object of the discovery request must ‛reside or [be] found“ in the district;

(2) The purpose of the discovery must be ‛for use;“

(3) The use must be ‛in a proceeding;“

(4) The proceeding must be ‛in a foreign or international tribunal;“ and

(5) The application must be made either by a foreign or international tribunal or by an ‛interested person.“

Prior to Intel, the Circuits were split primarily on a sixth element:

(6) Foreign discoverability — whether the evidence sought under §1782(a) must be of a sort that would be discoverable if it were located in the foreign jurisdiction. (Three Circuits had said, ‛Yes;“ three, ‛No;“ and two, ‛Sometimes.“)

The facts in Intel led the Court to address every element set forth above but (1) (residency of the defendant was not contested). The facts are a bit cumbersome but can be distilled briefly and are essential to an understanding of the case.

The applicant seeking §1782(a) discovery, AMD, is a competitor of Intel’s. AMD convinced the European Commission to investigate Intel for antitrust violations. AMD suggested that the EC’s Directorate-General for Competition (the EC’s antitrust investigator) petition the U.S. courts to obtain documents produced by Intel in a U.S. antitrust litigation. The Directorate-General declined. AMD then filed its own application under §1782(a) to obtain that discovery to provide it to the Directorate-General. The trial court denied discovery; the Ninth Circuit reversed; and the Supreme Court affirmed that reversal.

Foreign Discoverability. The Supreme Court rejected foreign discoverability as a prerequisite to obtaining relief under §1782(a). It observed that, apart from protecting privilege, ‛nothing in the text of §1782 limits a district court’s production-order authority to materials that could be discovered in the foreign jurisdiction if the materials were located there.“ 159 L.Ed.2d at 375.

Circuits that had imposed a foreign-discoverability requirement focused on comity (avoiding giving offense to foreign governments) and parity (all parties may not be subject to §1782(a) discovery). The Supreme Court reasoned that ‛comity and parity concerns may be important as touchstones for a district court’s exercise of discretion in particular cases“ but did not warrant judicial ‛insertion of a generally applicable foreign-discoverability rule into the text of §1782(a).“ Id.

‛Interested Person.“ AMD was not a party to any foreign litigation. Nonetheless, it was deemed an ‛interested person“ because it ‛possesses a reasonable interest in obtaining [§1782(a)] assistance.“ Id. at 372. Under EC procedures, AMD, as complainant, had the right to submit data to the Directorate-General and appeal any decision by the D-G not to proceed. Accordingly, the Supreme Court decided that AMD was sufficiently ‛interested“ to seek discovery under §1782(a).

‛Foreign or International Tribunal.“ The Directorate-General investigates. It decides not to proceed or it recommends EC action. It is scarcely a ‛tribunal.“ The Supreme Court held the ‛tribunal“ element satisfied in two other ways. First, courts are available to review any decision coming out of the EC — including a decision by the Directorate-General not to proceed or an action taken by the EC. Second, over the EC’s protests (id. at 382 (Breyer, J., dissenting)), Intel holds that the EC itself, ‛as a first-instance decisionmaker,“ is a ‛tribunal“ because it is acting in at least a quasi-judicial capacity.Id. at 373-74.

‛In a Proceeding.“ Intel argued that there was nothing going on in Europe but an investigation — hardly a ‛proceeding.“ The Supreme Court held that the proceeding need not be ‛‘pending’ or ‘imminent’“ (observing that the 1964 amendment of §1782(a) had explicitly stricken the word ‛pending“). Rather, ‛§1782(a) requires only that a dispositive ruling by the Commission, reviewable by the European courts, be within reasonable contemplation.“ Id. at 374 (emphasis added).

‛For Use.“ Given the absence of a pending or imminent proceeding, one might reasonably wonder how the ‛for use“ requirement was satisfied. The Supreme Court reasoned that AMD needed the discovery ‛for use“ in future EC or judicial-review proceedings because the only evidence that any of these tribunals would consider was that submitted at the current, investigative stage.

Countervailing Factors. The Intel decision, not unlike Daubert, harnesses the discretion it appears to unleash. After establishing that the statute places few limits on the district court’s exercise of discretion, the Supreme Court proceeds to do so by identifying ‛factors that bear consideration in ruling on a §1782(a) request“ (id. at 377).

  • Party vs. Non-Party: ‛[T]he need for §1782(a) aid generally is not as apparent“ when the target of discovery is a party to the foreign proceedings because a ‛foreign tribunal has jurisdiction over those appearing before it, and can itself order them to produce evidence.“ The Court considered Intel to fall within this category. Id.

  • Comity/Rejected Arguments as Factors: The Supreme Court emphasized that each of the arguments it had rejected as placing categorical limit on discovery under the statute ‛may be relevant in determining whether a discovery order should be granted in a particular case,“ including ‛the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance.“ Id..

  • End Run: Specifically, the district court may consider whether the §1782(a) application ‛conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States.“ Id. at 377-78

  • Reciprocity: The Supreme Court noted that, if the person seeking discovery under §1782(a) is not itself subject to such discovery, the district judge ‛could condition relief upon that person’s reciprocal exchange of information.“ Id. at 375

  • Burdensomeness: Adhering to the traditional view of the statute, Intel recognizes ‛unduly intrusive or burdensome requests may be rejected or trimmed.“ Id. at 378.

Implications. The decision raises many questions for civil litigation. A few:

Reasonable Contemplation Test. How far removed from an adjudicative proceeding may an applicant, or application, be? That a proceeding is ‛within reasonable contemplation“ covers a lot of ground. The Circuit level cases cited by Intel as support for the reasonable-contemplation test dealt with criminal inquiries, and the last clause of the first sentence of §1782(a) expressly authorizes discovery for ‛criminal investigations conducted before formal accusation.“ Intel effectively extends this to the civil sphere.

It is highly unlikely that the Supreme Court intends to open up the U.S. courts to requests for pre-filing discovery from private foreign parties in connection with litigation that they have not yet filed but simply assert that they ‛reasonably contemplate“ bringing. That would not only grant foreign parties pre-filing discovery rights beyond those available to domestic litigants but encourage U.S. persons to litigate, or trigger litigation, abroad. Circumstances dictate results. If, for example, a §1782(a) application were made during a pre-filing hiatus mandated by foreign law, it is possible that the reasonable-contemplation test might be deemed satisfied. Even then, however, it may be difficult to see why the district court should not wait until private civil proceedings are actually filed.

Foreign or International Tribunal. How far may Intel be properly read to extend §1782(a) discovery to investigations or other pre-litigation inquiries whose nexus to a ‛proceeding in a foreign or international tribunal“ is potential judicial review? The Supreme Court focused on judicial, administrative and ‛quasi-judicial proceedings.“ Id. at 368. Intel does not, by its terms, embrace every activity over which judicial review hovers at some distant altitude or after several intervening levels of action. Perhaps Justice Holmes’ famous first-step dictum has some modifiable application (‛‘The general tendency of the law, in regard to damages at least, is not to go beyond the first step.’“ Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 533 (1918)). One does wonder whether, for example, there are acts of the U.N. General Assembly or Security Council that would not parallel, in some sense, the action that qualified the EC as a ‛Tribunal“ for §1782(a) purposes.

International Arbitration. Historically, the courts have not deemed international arbitration panels to be ‛tribunals“ within §1782(a). See, e.g., NBC v. Bear Stearns & Co., 165 F.3d 184, 185 (2d Cir. 1999); Application of the Republic of Kazakhstan, 168 F.3d 880, 881 (5th Cir. 1999). But the principal scholar relied upon the Supreme Court for its interpretation of §1782(a) — who is cited over a dozen times in Intel — has disagreed in an article that is itself cited by Intel twice for other reasons. Hans Smit, American Assistance to Litigation in Foreign and International Tribunals, 25 Syracuse J. Int'l. L. & Com. 1, 5 (1998). Query whether Intel does not require that this issue be revisited, including the interesting attendant questions it raises about the relationship between §1782 and the Federal Arbitration Act, 9 U.S.C. §1, et seq.

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