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Split as to Whether Magistrate Judge May Order § 1782 Discovery — Deposition and Documents May Be Compelled from Expert for Party to BIT Arbitration under § 1782

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From In re Application of Rep. of Ecuador, 2010 U.S. Dist. LEXIS 143796 (N.D. Fla. Aug. 24, 2010):

This is an application for an order pursuant to 28 U.S.C. § 1782(a) to issue a subpoena to Robert E. Hinchee, Ph.D., for a deposition and production of documents for use in a foreign proceeding, that is, Chevron Corporation and Texaco Petroleum Corporation v. The Republic of Ecuador, PCA Case No. 2009-23, a Bilateral Investment Treaty arbitration, under the rules of the United Nations Commission on International Trade Law. ***

It is not clear to me that I may determine this matter by an order rather than a report and recommendation. The cases are mixed. A report and recommendation was entered without comment in In re FG Wilson (Engineering) Ltd., 2011 WL 1115359 (S.D. Fla. Mar 24, 2011) (No. 10-20839-MC). An order was entered without comment in In re Application of Heraeus Kulzer for Order Pursuant to 28 U.S.C. section 1782, 2009 WL 2058718 (N.D. Ind. Jul 09, 2009) (No. 309-CV-183RM), reversed on other grounds sub nom., Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d 591 (7th Cir. 2011) (Nos. 09-2858, 10-2639). The issue was directly addressed and the court concluded that orders were appropriate in Weber v. Finker, 2008 WL 2157034 (M.D. Fla. May 20, 2008) (No. 307-MC-27-J-32MCR), in In re Chevron Corp., order, Case No. 1:10-MI-0076-TWI-GGB (N.D. Ga. Mar 2, 2010), doc. 21-3, pp. 6-7 (Exhibit 22 to Doc. 15), and in Chevron Corp. v. Camp, 2010 WL 3418394 (W.D. N.C. Aug 30, 2010) (No. 1:10MC27, 1:10MC28) (noting authority from the Tenth Circuit to the contrary2). The Eleventh Circuit affirmed Weber but avoided the issue, finding that appellants had waived any objection by failing to object until after the magistrate judge had entered an order. Weber v. Finker, 554 F.3d 1379, 1385 (11th Cir. 2009), cert. denied, 130 S.Ct. 59 (2009).

Footnote 2. Phillips v. Beierwaltes, 466 F.3d 1217 (10th Cir. 2006) (indicating in apparent dicta that the magistrate judge should have entered a report and recommendation, but finding that a magistrate judge's order in a § 1782 proceeding was not a final appealable order until the district judge had acted on a motion for reconsideration).

This is especially contentious litigation, and the parties have shown that no stone will be left unturned to delay or advance its progress. In an abundance of caution, and to prevent unnecessary collateral litigation, I will enter a report and recommendation. ***

The parties have shown that the arbitral tribunal may order production of documents from a party and Chevron is a party. Article 24, ¶ 3, of the United Nations Commission on International Trade (UNCITRAL) Rules, doc. 21-1, p. 17 (Exhibit 22 of doc. 15); Article 3, ¶¶ 2-8 of the Rules adopted by the "Members of the IBA [International Bar Association] Rules of Evidence Review Subcommittee." Dr. Hinchee is not a party, however. There is no provision in the UNCITRAL Rules for production of documents from a non-party. Article 3, ¶ 9, of the Rules adopted by the "Members of the IBA [International Bar Association] Rules of Evidence Review Subcommittee," which the tribunal may consult on an advisory basis, only applies to the process of obtaining documents from a non-party "from whom the Party cannot obtain the Documents on its own . . .," and the party may only ask the Tribunal to "take whatever steps are legally available." Doc. 21-2, p. 8 (Exhibit 23 to doc. 15) (emphasis added). Ecuador can obtain documents from Dr. Hinchee by means of § 1782. Thus, on its face this rule is not available to Ecuador to obtain documents from Dr. Hinchee.

Chevron argues that since Dr. Hinchee was retained by Chevron for the Lago Agrio litigation, Chevron has the right to require Dr. Hinchee to produce documents and therefore the arbitral tribunal may simply order Chevron to produce the documents sought by Ecuador. It is true that "[u]nder Fed.R.Civ.P. 34, control is the test with regard to the production of documents. Control is defined not only as possession, but as the legal right to obtain the documents requested upon demand." Searock v. Stripling, 736 F.2d 650, 653 (11th Cir. 1984). But this argument is premised upon the tenuous assumption that the arbitral tribunal would conclude that Dr. Hinchee's documents, as an expert retained by Chevron in the Lago Agrio litigation, are the documents of a party, Chevron. The tribunal to date has been completely silent as to discovery, and thus, has not expressed any opinion as to this specific discovery issue. Further, and of paramount importance, Chevron has not shown that Ecuador could obtain a deposition of Dr. Hinchee through procedures of the arbitral tribunal. Chevron argues that it has offered to agree to depositions (would agree if so ordered), but this falls very far short of the ready remedy at hand, § 1782. Chevron has not shown that evidence from Dr. Hinchee would not be received by the tribunal,6 or that the tribunal restricts this kind of discovery. Indeed, Ecuador has shown that in another arbitration before the same tribunal, the tribunal takes no position with respect to whether a party may engage in discovery in the United States pursuant to 28 U.S.C. § 1782. Doc. 30-4, p. 2 (Exhibit 3 to doc. 30).

Footnote 6. "The party resisting discovery must point to 'authoritative proof' that the foreign tribunal would reject the evidence sought." In re Veiga, 746 F.Supp.2d 8, 23-24 (D. D.C. 2010).

For these reasons, Chevron has not shown that a subpoena for documents from Dr. Hinchee and a subpoena for his deposition would "circumvent foreign proof-gathering restrictions or other policies" of the arbitral tribunal as those words were intended in Intel. "[Section] 1782(a) does not incorporate an exhaustion requirement, and an applicant is not required to first seek discovery from the foreign tribunal. See In re Imanagement Servs., Ltd., 2005 WL 1959702, at *5 (E.D. N.Y. 2005); cf. Infineon Techs. AG v. Green Power Techs. Ltd., 247 F.R.D. 1, 5 (D.D.C.2005) (attempting to more efficiently obtain use of relevant documents from a district court does not evidence an intent to circumvent foreign discovery rules)." Id., at 24.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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