Section 1782 allows U.S.-based discovery in overseas prosecutions

Companies involved in foreign litigation often overlook a powerful tool available in the United States. Recognizing that foreign courts may not have the power or the desire to order broad discovery, Congress passed 28 USC § 1782, which allows any “interested” party in a foreign proceeding to seek U.S.-style discovery from any entity “found” in the United States. . If the request is granted, which is generally the case, the requester can obtain a discovery in the manner of the United States.

This vast discovery can be a game-changer by giving one party a decisive informational advantage. Additionally, the law can be used to support “intended” proceedings, which means that a business can be discovered before it has even filed a lawsuit. Given the power of this tool, it is important to understand the basics of Section 1782 and how it works.

What is Section 1782?

Section 1782 permits a plaintiff to apply to a United States federal court for discovery “for use in” a foreign proceeding. The statute provides:[t]The district court for the district in which a person resides or is found may order that person to give testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international court.

Article 1782 has two purposes. First, it provides “fair and effective” communication “for the benefit of courts and litigants involved in disputes with international aspects”.¹ Second, it “encourages[s] foreign countries for example to provide similar means of assistance to our courts.² Courts attempt to promote both of these goals by giving the law “increasingly broad applicability.”³

Who can get Section 1782 Discovery?

Any “interested person” in a foreign proceeding can use Article 1782. This is not limited to parties to an ongoing proceeding; this may include entities opening an investigation or simply having the right to submit information in a legal case or controversy. For example, a company that complained to the European Commission of anti-competitive behavior was an “interested person” because it could present evidence during the Commission’s investigation and had the right to appeal.⁴

Additionally, the proceeding does not have to be traditional civil litigation – courts have granted disclosure under Section 1782 in support of contemplated litigation, criminal proceedings, proceedings before administrative bodies, and certain arbitrations. .⁵

Where should an application under Section 1782 be filed?

A plaintiff must file a petition under Section 1782 in the United States federal district court where the target, person or entity from whom the information is sought resides or is located. Although Article 1782 does not define “resides” or “found”, the courts agree that it is at least the place where the company is incorporated or has its principal place of business.⁶

Alternatively, a petition can be filed when the target has a substantial and systematic presence.⁷ Specifically, the 1782 discovery section is also available “when the discovery material sought results approximately from the [target’s] forum contacts” or where “the [target] deliberately taking advantage of the forum [is] the main or immediate reason why the evidence sought is available. »⁸

When can a request under Section 1782 be filed?

Discovery under Section 1782 is available even if a foreign “procedure” is not “pending” or “imminent”.⁹ The only requirement is that the proceeding be reasonably “envisaged,” which means a plaintiff can receive Section 1782 discovery without prosecuting. Courts are divided on whether this rule also applies to advance arbitrations.^ten

What factors do the courts take into account?

Courts use both statutory and discretionary factors to assess a discovery request under Section 1782. The law has three requirements: (1) the target must reside or be in the district where the request is made; (2) the discovery must be “intended for use in” a proceeding in a foreign court; and (3) the applicant must be an “interested person”.¹¹ Well-advised applicants rarely struggle to meet statutory factors.

But courts also consider discretionary factors first set out in the landmark Intel Corp case. vs. Advanced Micro Devices, Inc., 542 US 241, 247 (2004). Intel factors include: whether the foreign court has the power to order the same discovery; whether the foreign court would be receptive to discovery; if the request is intended to circumvent foreign restrictions on the collection of evidence; and whether the request is “unduly burdensome”.¹²

Challenges often focus on discretionary factors, particularly whether the foreign court can order production of the documents, would accept the evidence, and whether the request is unduly burdensome. Unexpectedly, courts are often more likely to allow discovery by third parties because discovery against parties is often available against parties, but not against third parties.

What type of evidence is available?

If the Section 1782 request is granted, discovery proceeds under standard United States discovery rules. This means that companies can serve requests for documents, take depositions and request any relevant evidence in support of a foreign proceeding. The evidence need not be admissible in the foreign jurisdiction; the question is whether it is reasonably connected to the foreign proceeding as considered in the broad lens of relevance under Rule 26 of the Federal Rules of Civil Procedure.¹³

Conclusion

Section 1782 provides parties to foreign proceedings with a powerful tool to gather information to support their case. They can gather an immense amount of evidence that would not otherwise be available, both from their adversary and from third parties. Parties to proceedings under Section 1782, whether petitioners or defendants against a petition, should be familiar with these basic principles.

NOTES

1. Intel Corp. v. Advanced Micro Devices, Inc., 542 US 241, 247 (2004) (providing a brief history of the law).

2. Brandi-Dohrn v IKB Deutsch Industriebank, AG, 673 F.3d 76, 80 (2d Cir. 2012).

3. Identifier. at 80 years old.

4. Intel, 542 US at 256–57.

5. Intel, 542 US to 259.

6. See, for example, In re BNP Paribas Jersey Tr. Corp., 2018 WL 895675, at *3 (SDNY 14 February 2018) (target “resides or is in this district because it has a corporate director” in the district) ; LEG Q LLC v. RSR Corp., 2017 WL 3780213, at *6 (ND Tex. August 31, 2017) (plaintiff had shown that the target “resided[d] or can be found in the Northern District of Texas because they are all headquartered and maintain their primary places of business in Dallas. ); HRC-Hainan Holding Co., LLC c. Yihan Hu, 2020 WL 906719, at *4 (ND Cal. Feb. 25, 2020) (“A business entity is ‘found’ in the judicial district where it has its principal place of business.”).

7. In re del Valle Ruiz, 939 F.3d 520, 528 (2d Cir. 2019) (“The “reside or be found” language of § 1782 extends to the limits of personal jurisdiction pursuant to due process.”).

8. Identifier. at 530.

9. Identifier. at 259.

10. Compare In re Clerici, 481 F.3d 1324, 1332–1333 (11th Cir. 2007) (“[N]nothing in the plain language of § 1782 requires the proceedings to be jurisdictional in nature”) with Euromepa, SA v. R. Esmerian, Inc., 154 F.3d 24, 27–28 (2d Cir. 1998) (“In analyzing second element of” § 1782, the court must consider “whether a foreign proceeding is jurisdictional in nature.”) .

11. Identifier.

12. Intel, 542 US at 264–65.

13. See, for example, Brandi-Dohrn, 673 F.3d at 82.