We have been fielding questions on Section 1782 subpoenas and defenses in Florida, and seek to provide quick and free information here. To recap Section 1782 subpoenas, United States Code (U.S.C.) Section 1782 is the federal statute that allows people and companies in other countries to subpoena evidence from people and companies in the U.S., without letters rogatory or a full lawsuit pending in the U.S. The law on Section 1782 subpoenas and defenses in Florida is still in flux, as it is throughout the U.S. This leaves a significant amount of uncertainty in the Section 1782 field.

Thus, we provide some answers to FAQs on Section 1782 subpoenas and defenses in Florida. If you have further questions on Section 1782 subpoenas, please contact Bernhard Law Firm at www.bernhardlawfirm.com, abernhard@bernhardlawfirm.com, or 786-871-3349.

 

1. What type of foreign forum is a sufficiently official “tribunal” to sustain issuance of a Section 1782 subpoena in Florida?

The actual code of Section 1782 requires that the evidence obtained through a Section 1782 subpoena be for use in a foreign “tribunal.” This requirement derives from an underlying purpose of Section 1782: to further official country-to-country relationships between governments and judicial systems (mutual back-scratching). The “tribunal” requirement can readily be shown when the Section 1782 subpoena applicant has a litigation pending in an official foreign government-funded and government-run court that generally resembles a U.S. court. However, questions arise when the foreign person requesting a Section 1782 subpoena does not have a litigation pending in a traditional state/government-related court abroad. These non-traditional forums can range from state-sanctioned private arbitration forums to entirely informal panels run by law schools or private companies abroad. Doubt also arises when a foreign government agency or regulatory body, rather than a court, is ruling on a particular matter that could benefit from evidence likely located in the U.S.

• Are any of these non-traditional forums a sufficient “tribunal” to suffice the requirements of Section 1782?

Put another way, is the particular foreign forum a sufficiently official “tribunal” to merit a U.S. court’s official involvement and issuance of a Section 1782 subpoena? The answer in Florida generally hinges on whether the foreign forum is somehow state-sponsored or state-related, and whether the foreign forum is subject to foreign state court judicial review. Only then does the foreign forum likely merit the U.S. court’s participation in foreign proceedings, in the name of state-to-state governmental comity under Section 1782.

As of this article, Florida has not expressly reached and decided the question of the sufficiency of a private arbitration as a “tribunal” under Section 1782. Application of Consorcio Ecuatoriano de Telecomunicaciones, S.A. v. JAS Forwarding (USA), Inc., 747 F.3d 1262, 1270 n.4 (11th Cir. 2014) (“We decline to answer . . .”); In re Grupo Unidos Por El Canal S.A., 14-mc-80277-JST (DMR) (N.D. Cal. Apr. 21, 2015) (confirming that the Eleventh Circuit explicitly declined to answer this question); In re Petrobras Securities Litigation, 393 F. Supp. 3d 376, 385–86 (S.D.N.Y. 2019) (a private Brazilian arbitration does not suffice “tribunal”).

There is a large quantity of courts around the country that have found a private foreign arbitration forum does not suffice the official “tribunal” requirement under § 1782. See In re Application of Operadora DB, 2009 WL 2423138, *8–10 (M.D. Fla. Aug. 4, 2009) (district court declined to adopt position that § 1782 applied to private arbitration); In re Petrobras Securities Litigation, 393 F. Supp. 3d 376, 386 (S.D.N.Y. 2019) (same); In re Application of Hanwei Guo for an Order to Take Discovery for Use in a Foreign Proceeding Pursuant to 28 U.S.C. § 1782, No. 18 MC 561, 2019 WL917076 (S.D.N.Y. Feb. 25, 2019) (same); In re Application of Caratube Int’l Oil Co., LLP, 730 F. Supp. 2d 101, 106 (D.D.C. 2010) (same); In re Application of Finserve Group Ltd., No. 4:11-mc-2004-RBH (D.S.C. Oct. 20, 2011) at *5 (same); El Paso Corp. v. La Comision Ejecutiva Hidroelectrica del Rio Lempa, 341 Fed App’x 31, 34 (5th Cir. Aug. 6, 2009) (same); In re an Arbitration in London, England, 626 F. Supp. 2d 882 (N.D. Ill. 2009) (same); La Comision Ejecutiva Hidroelectrica del Rio Lempa v. El Paso Corp., 617 F. Supp. 2d 481 (S.D. Tex. 2008) (same); Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880, 881–83 (5th Cir. 1999) (same); Republic of Kazakhstan v. Biederman Int’l, 168 F.3d 880 (5th Cir. 1999); NBC v. Bear Stearns, 165 F. 3d 184, 185 (2d Cir. 1999) (same).

However, the courts are split on this issue. Two California courts provide a great breakdown of the split between courts on this issue and how they have analyzed the matter: In re Dubey, 949 F. Supp. 2d 990, 993–96 (C.D. Cal. 2013) (summarizing law and denying 1782 relief) and In re Grupo Unidos Por El Canal S.A., 14-mc-80277-JST (DMR) (N.D. Cal. Apr. 21, 2015) at *11–20 (same).

If a U.S. court does not outright reject a foreign forum simply because it is not the official government-run court presiding there, a U.S. court may still determine that the foreign forum is not a sufficient “tribunal” under § 1782 if it is not automatically subject to judicial review by the official government-run court presiding there. Operadora at *20 (judicial review is key in 1782); Mesa Power Group, LLC, 878 F. Supp. 2d 1296, 1303 (S.D. Fla. 2012) (citing In re Consorcio Ecuatoriano, 685 F.3d 987, 995 (11th Cir. 2012)); Ex. G (Getulio rules); Ex. H (IBA Rules). This is usually decisive.

The U.S. court in Florida may also look to the foreign forum’s rules or organizational documents to show that it is somehow a state-sponsored court, under a functional analysis. If the forum’s panel or decion-maker derives its power from a private agreement, the parties are free to adopt any rules they desire counter to government law, rules, and procedure, and the forum runs independently of state-sponsored tribunals, then it likely does not qualify under Section 1782. Operadora at 10. Accordingly, the foreing forum may not be considered a sufficient “tribunal” under prevailing case law or a functional analysis, and the U.S court in Florida will refrain from interfering in private foreign matters.

 

2. If the foreign forum can handle the discovery subpoenaed directly, e.g. because the subpoena respondents are allegedly owners or officers of the foreign defendant, should the U.S. court still involve itself?

This question arises from the Section 1782 test and analysis required under Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004). To recap, Intel provided a four-factor analysis that a U.S. court should run when determining whether to get involved in providing evidence for a foreign litigation. Under the first Intel factor, the U.S. court must consider if the subpoena respondent in the U.S. is also a participant to the foreign proceeding. If so, everything should just be done in and through the foreign proceeding, without complicating matters through a U.S. court’s involvement. Otherwise the discovery is duplicative and rulings on objections may conflict. Thus, frequently asked questions include:

• Is the subpoena respondent considered a “participant” to the foreign proceedings?

• Who is considered a “participant”?

• If the foreign forum can handle the discovery subpoenaed directly, e.g. because the subpoena respondents are allegedly owners or officers of the foreign defendant, should the U.S. court still involve itself?

Under applicable case law in Florida, if you are suing a company, that company’s owners, officers, attorneys, agents, employees, and sometimes even parent companies and affiliates are all considered “participants” who should notbe subjected to duplicative § 1782 discovery here—that would include e.g. an alleged officer-owner of the party-company in the foreign litigation. See In re Lloreda, 323 F. Supp. 3d 552, 559–60  (S.D.N.Y. 2018) (employee of party-company was considered a participant); Kiobel v. Cravath, Swaine & Moore LLP, 895 F.3d 238, 245 (2d Cir. 2018) (attorney); Lazaridis v. Int’l Centre for Missing and Exploited Children, Inc., 760 F. Supp. 2d 109, 114 (D.D.C. 2011) (company to president/officer); In re Judicial Assistance Pursuant to 28 U.S.C. § 1782 by Macquarie Bank Ltd., 2:14-cv-797, 2015 WL 3439103, at *6 (D. Nev. May 28, 2015) (related but distinct entity); In re Kreke Immobilien KG, 2013 WL 5966916, at *5 (S.D.N.Y. Nov. 8, 2013) (subsidiary, because “the notion that [the parent company] could somehow be a nonparticipant in the foreign action [against subsidiary] is untenable”); In re IPC Do Nordeste, LTDA, 2012 WL 4448886, *9–10 (E.D. Mich. Sept. 25, 2012) (affiliate); Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 85 (2d Cir. 2004) (non-party).

[NOTE: this also aligns with decisions outside of Section 1782 matters. Wilson v United States, 221 U.S. 361, 380 (1911) (in determining whether documents are corporate or private, inquiry should focus on “nature of the documents and capacity in which they are held,” not physical custody); United States v. MacKey, 647 F.2d 898, 899 (9th Cir. 1981) (per curiam) (subpoena to vice president of company for personal diaries, calendars, and appointment books were for documents that were “corporate rather than personal in nature,” despite that documents were not owned or kept by the corporation)].

This is because the key issue is whether the discovery sought is obtainable through the foreign proceeding, not whether the technically named “party” is the same as the specific Section 1782 subpoena respondent. Id.; see alsoAndover Healthcare, Inc. v. 3M Co., 817 F.3d 621, 623 (8th Cir. 2016) (aff’ing denial of § 1782); In Matter of Application of Leret, 51 F. Supp. 3d 66, 70–71 (D.D.C. 2014) (denying § 1782 aid on non-party); In re Application of OOO Promnesfstroy, Misc. No. M 19099 (RJS), 2009 WL 3335608, at *5 (S.D.N.Y. Oct. 15, 2009)  (“not the nominal target” of subpoena); In re Godfrey, 526 F. Supp. 2d 417, 419 (S.D.N.Y. 2007) (denying § 1782 aid); In re Microsoft Corp., 428 F. Supp. 2d 188, 194 and n.5 (S.D.N.Y. 2006) (quashing on non-parties).

In addition to the above American case law showing that officers, directors, owners, attorneys, some parent and subsidiary companies, and even some agents should be considered a “participant,” the foreign forum’s rules should be reviewed. They may define party, or contemplate a “party,” as its officers, employees, legal advisors, and other representatives. This may show that these related persons are considered participants to the foreign proceedings, and thus that discovery should be handled in the foreign proceeding directly.

An applicant seeking a U.S. court’s aid through Section 1782 may need to provide some explanation as to why the documents or evidence sought are not accessible directly through a party to the foreign proceeding. In re Ex Parte LG Electronics Deutschland GmbH, 2012 WL 1836283, *3 (S.D. Cal. May 21, 2012) (“LEG has not explained why that information cannot be obtained from Mitsubishi in [the foreign lawsuit]. . . . Accordingly, the Court finds that this factor actually weighs against granting this [§ 1782] application.). Any conclusory and unverified statements to the contrary have no value. See, e.g., Shipping and Transit, LLC v. 1A Auto, Inc., 283 F. Supp. 3d 1290, 1299 (S.D. Fla. 2017) (conclusory and unsupported statements have no evidentiary value). If the applicant does not, and a U.S. court’s involvement appears duplicative or may lead to contradictory rulings on objections, then the analysis weighs against Section 1782 aid.

 

3. What if allowing discovery under Section 1782 unfairly disrupts the parties’ parity or hurts the fair due process abroad?

Is fairness, parity, and maintenance of due process a factor in a U.S. court’s decision to get involved in an entirely foreign dispute through Section 1782?

It should be. These concerns can be brought to the U.S. court’s attention in a manner of ways, including through the second Intel factor on Section 1782. At first blush, the second Intel factor may seem unrelated, as it is a further reflection on government-to-government comity, with the aim to improve it. Again, the idea is that we help judicial process in other countries’ governments, in the hope that other countries’ governments will help our judicial process here. To see if that effect will occur through any particular Section 1782 application, the U.S. court must “look to the nature, attitude, and procedures of that [foreign] jurisdiction” as to whether Section 1782 discovery would improve comity with the foreign country.  Schmitz, 376 F.3d at 84 (denying § 1782 under second Intel factor). The U.S. court should then make efforts to avoid injecting duplicative or otherwise inappropriate discovery under Section 1782, particularly where the foreign proceedings are private, where there is very limited information given by the Section 1782 applicant, or where Section 1782 involvement may unfairly disrupt the parties’ parity in a country that is plainly not receptive to U.S. intrusion, as such disruption by a U.S. court would not further international comity.

For this analysis, it may help the U.S. court if experts have opined that the nature, attitude, and procedures of the foreign forum, and whether these indicate that U.S. court intrusion will not further government-to-government comity. It bears punctuating whether the foreign forum is a state court, given that helping purely private forums will not likely facilitate official government-to-government comity. If foreign litigants chose purely private adjudication over an action in the foreign government’s state courts, the U.S. court should be “reluctant [] to interfere with the parties’ bargained-for expectations concerning the process.” Caratube at 106 (“resort to § 1782 in the teeth of such [arbitration] agreements suggests a party’s attempt to manipulate United States court processes for tactical advantage.”). The U.S. court may analyze whether there is evidence that the foreign parties discussed or requested discovery from the foreign forum, and if not whether that weighs against Section 1782 involvement. Caratube at 106–07.

The U.S. court should also look for any authoritative proof that a foreign forum would reject Section 1782 discovery, which is “embodied in a forum country’s judicial, executive, or legislative declarations that specifically address the use of evidence gathered under foreign procedures.” Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095, 1100 (2d Cir. 1995). [NOTE: the Section 1782 applicant should provide actual evidence of receptivity to fulfill this second Intel factor, and certainly more than conclusory assertions. In re Digitechnic, 2007 WL 1367697, at *5–6 (W.D. Wash. 2007) (weighing second Intel factor against applicant where it failed to provide any actual evidence of its assertion of receptivity)].

If the foreign government, the U.S. government, or experts specifically state that the foreign government/forum is not receptive to U.S. intrusion in its evidentiary matters, or interprets it as jeopardizing state sovereignty, then the U.S. court may wish to refrain from involvement through Section 1782. Schmitz at 84; Digitechnic at *6. Disregarding this would “generally discourage future assistance to our courts” and contradict the aims of Section 1782. Id.

Further, a U.S. court’s involvement “should not be applied in a way that will create obvious confusion or skew the results in the foreign litigation,” because that does not help comity, and the U.S. court “should consider the effect of its decision on the “procedural parity’ of the parties to the foreign litigation,” and “exercise its discretion . . . in a manner which does not prejudice either party.” In re Edelman, 295 F.3d 171, 181 (2d Cir. 2002) (for “equitable procedures”)); Leret, 51 F. Supp. 3d at 70 (aff’ing denial of § 1782). Thus, even where a foreign forum may be receptive, the forum’s nature or the character and stage of the proceedings may still counsel against Section 1782 involvement. Caratube, 730 F. Supp. 2d at 106 (denying § 1782 on nature/character despite receptivity). If experts have opined that allowing Section 1782 involvement in foreign proceedings will unfairly skew the results in the foreign litigation and eliminate procedural parity of the parties to the foreign litigation, then the U.S. court may wish to stay out of the matter. Edelman at 181; Leretat 70.

Lastly, “whether a petitioner has sought the intended discovery from the foreign tribunal [at all] does have some bearing on the foreign court’s receptivity to American judicial assistance,” even if there is no foreign exhaustion requirement. Green Dev. Corp. S.A. De C.V. v. Zamora, 2016 WL 2745844, at *8, 19–20 (S.D. Fla. May 10, 2016) (quashing § 1782 subpoena). In other words, if the Section 1782 applicant has not sought the discovery at all in the foreign proceeding, it is likely because the forum is not receptive to the discovery sought and/or would not appreciate its authority and discretion being preempted. Id.; Andover, 817 F.3d at 624 (8th Cir. 2016). The Court should analyze whether the Section 1782 applicant refuses to disclose how/if it sought discovery in the foreign forum and that forum’s position on it. Green at *7. If the Section1782 applicant has not sought the discovery at all in the foreign proceeding, it is likely because the forum is not receptive to the discovery sought, weighing against the U.S. court’s involvement under Section 1782. In sum, if allowing discovery under Section 1782 unfairly disrupts the parties’ parity or hurts the fair due process abroad, then the U.S. court may wish to refrain from getting involved, so as not to harm international comity.

 

4. What if the Section 1782 applicant refuses to provide information on the foreign proceedings? Is Section 1782 just a way to avoid limitations in a foreign system, given the relatively quick and accessible nature of U.S. courts?

This question colors the concept of circumvention by the Section 1782 applicant. Often, the signs point to a circumvention of restrictive foreign rules and processes, particularly upon review of the foreign rules governing the foreign proceeding, or consideration of a Section 1782 applicant’s obfuscation or lack of transparency. These concerns can usually be addressed under the third Intel factor.

The third Intel factor asks “whether the § 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country of the United States.” See In re Kurbatova, 18-mc-81554-BLOOM/Valle (S.D. Fla. May 17, 2019) at *6. “This factor suggests that a district court should be vigilant against a petitioner’s attempt to ‘replace a [foreign] decision with one by [a U.S.] court.’” In re Kreke at *6 (no § 1782).

Although the U.S. court need not determine if an applicant has first exhausted discovery abroad, “a perception that an applicant has ‘side-stepped’ less-than-favorable discovery rules by resorting immediately to § 1782 can be a factor in a court’s analysis.” In re Cathode Ray Tube (CRT) Antitrust Litig., 2013 WL 183944, at *3 (N.D. Cal. Jan. 17, 2013) (quashing § 1782 subpoena); Caratube, 730 F. Supp. 2d at 101 (same); Salcido-Romo v. S. Copper Corp., 2016 WL 3213212, at *3 (D. Ariz. June 10, 2016) (same); In re IPC, 2012 WL 4448886 at *12 (same).

Like with the other Intel factors, an expert opinion that the Section 1782 applicant’s activity disturbs the fairness of the arbitration proceeding may convince a U.S. court that there is an improper circumvention occurring. Often times a Section 1782 applicant’s activity will not make sense unless it is a circumvention. In re IPC at *12. As the IPC court stated where there are circumstances of obfuscation or restrictive foreign discovery rules:

Because rational actors do not needlessly increase their own litigation costs, there must be a reason that [the Section 1782 applicant] is seeking the information here rather than in [the foreign forum]. One reasonable explanation is that [the Section 1782 applicant] is attempting to circumvent proof-gathering restrictions of the [foreign forum’s] court. [citations omitted]. If so, the third Intel factor weighs against [the Section 1782 applicant]. If not, this [third Intel] factor nevertheless weighs against [the Section 1782 applicant] because its conduct contravenes an express policy of the United States: ‘providing efficient assistance to participants in international litigation.’ Intel Corp., 542 U.S. at 252.

Id. at 12–13. It may be worth highlighting the foreign forum’s rules, or the Section 1782 applicant’s refusal to cite them and discuss how they allow the requested 1782 discovery, as indicia of circumvention. The U.S. court should be wary of any Section 1782 application that lacks solid information from the foreign proceedings and laws, as this often reflects a trap being artfully laid by the applicant.). The U.S. courts should reject such a refusal to specifically address any foreign proof-gathering restrictions at all as a circumvention by omission of information. IPC Do Nordeste at *12. In sum, Florida law generally weighs against activity that appears to obfuscate or circumvent events abroad.

 

5. How do you address expansive Section 1782 requests that seem unrelated to any foreign litigation?

Section 1782 subpoena recipients often balk at the expansive nature of Section 1782 requests. How do you deal with requests that are not narrowly tailored to specific causes of action abroad, or impermissibly seek privileged, private, financial, corporate, and personal information, or may color general constitutional rights against self-incrimination?

These concerns can be addressed through the fourth Intel factor, which inserts standard U.S. discovery rules and notions into the foreign discovery request. The U.S. courts should consider whether the scope of the discovery requests themselves create undue intrusion or burden. The discovery must be relevant to the actual causes of action and narrowly tailored. Kang v. Noro-Mosely Partners, 246 F. App’x 662, 664 (11th Cir. 2007) (denial on § 1782). As with regular Florida litigation, requests into confidential financial information and corporate structure are improper and must be quashed. See Ochoa v. Empresas ICA, S.A.B. de C.V., 2012 WL 3260324, at *6–9 (S.D. Fla. Aug. 8, 2012) (denying attenuated § 1782 requests). Requests cannot be overbroad on their face, such as by using “relating to” and “involving;” “[a]s such, the subpoenas, as drafted, cannot stand.” See In re Bernal, 2018 WL 6620085 at *9 (S.D. Fla. 2018). If the Section 1782 applicant fails to narrowly tailor its requests to the causes of action abroad, then the Court should limit or deny its involvement through Section 1782.

 

6. What if I have other questions about a Section 1782 subpoena in Florida?

This article sought to provide quick and free information, not an exhaustive discussion of Section 1782. As discussed, the law on Section 1782 subpoenas and defenses in Florida is still in flux, as it is throughout the U.S. This leaves a significant amount of uncertainty in the Section 1782 field.

If you have further questions on Section 1782 subpoenas, please contact Bernhard Law Firm at www.bernhardlawfirm.com, abernhard@bernhardlawfirm.com, or 786-871-3349.