Inconsistent case law on 28 U.S.C. § 1782 continues to confuse litigants and district courts

Litigants have been making increasing use of 28 U.S.C. § 1782 (“§ 1782”), a provision which allows foreign litigants to obtain evidence through U.S. District Courts. As interpreted by the U.S. Supreme Court’s decision in Intel Corp. v. Advanced Micro Devices, Inc., § 1782 imposes three statutory requirements and four discretionary factors for the district court to weigh. 542 U.S. 241, 247 (2004). The provision has generally been interpreted liberally by district courts, permitting a broad swath of foreign litigants to obtain documents or take depositions from entities or individuals located in the United States. Recently courts have been issuing contradictory opinions, sometimes directly opposing the instructions of the Supreme Court in Intel.

One issue that seems to be a burgeoning split among the circuit courts, relates to the ability of litigants to obtain discovery possessed by the foreign litigation parties’ U.S. counsel. In Kiobel v. Cravath, Swaine & Moore, LLP, petitioners sought documents from Cravath, the law firm which represented the petitioners’ foreign adversary, Royal Dutch Shell.  895 F.3d 238 (2018). The Second Circuit held that an existing confidentiality order in the United States and restrictive discovery practices in the Netherlands weighed against the petitioners’ request to obtain discovery. In contrast, the Third Circuit in In re Biomet Orthopaedics Switzerland GmBh, saw no issue with a petitioner seeking documents from its affiliate’s U.S. counsel, and remanded to the district court for further consideration of the Intel factors. 2018 WL 3738618 (3d. Cir. 2018).

The Kiobel and Biomet split highlights a growing divergence in the judicial interpretation of § 1782, and application of the Supreme Court’s Intel factors. This is particularly apparent with regard to two of the discretionary factors, which consider, respectively, whether the person from whom discovery is sought is a participant in the foreign proceeding, and whether the application is an attempt to circumvent foreign proof gathering restrictions. The Supreme Court has been clear that the first factor weighs in favor of applicants who could not otherwise obtain the discovery they seek through the foreign court, typically non-litigants. Likewise, the other factor favors litigants whose home discovery systems are less robust than in the United States.  In granting discovery to litigants who would have difficulty obtaining the discovery abroad, courts conform to the statute’s dual goals: “providing efficient means of assistance to participants in international litigation in our federal courts and encouraging foreign countries by example to provide similar means of assistance to our courts.”  Application of Malev Hungarian Airlines, 964 F.2d 97, 100 (2d. Cir. 1992). Yet, the Second Circuit found that restrictive discovery in the Netherlands weighed against Kiobel.  This type of divergence is becoming common in district court decisions applying § 1782.

For more on Kiobel and Biomet read Sarah LaFreniere’s article here.