One of the lesser known but more powerful tools available to parties in litigation outside the U.S. is section 28 U.S.C. §1782 (“section 1782”). Under section 1782, a party to a litigation in a foreign (non-U.S.) country can seek discovery for use in that litigation in a U.S. federal district court. In other words, when a lawsuit is taking place in Israel (or in any other country, for that matter) and the plaintiff (or defendant) learns that there is potential evidence located in the U.S. The foreign court can’t (and probably won’t) assist the party with seeking that evidence. A U.S. federal court, however, may provide such assistance, if the following statutory requirements are met:
(1) that the person from whom discovery is sought resides in the district of the district court to which the application is made;
(2) the discovery is for use in a proceeding before a foreign tribunal; and
(3) the application is made by a foreign or international tribunal or any interested person.
By way of example, a plaintiff files a lawsuit in Israel against his/her former business partner for breach of contract and fiduciary duties. However, documents that will assist the plaintiff in proving the claim are located in New York. These documents could be bank statements of an account of a non-party. Both the bank and the non-party reside in New York. Due to Israel's somewhat limited discovery mechanisms and the fact that Israel would most probably lack personal jurisdiction on the non-parties, access to those documents would be all but foreclosed...but for section 1782.
1782 allows the plaintiff to request from a federal court (i.e. the federal court in the district whether the 1782 target resides) to issue subpoena's against both the bank and the owner of the account to get those bank statements.
Section 1782's power is further evidenced by its broad application. For example, there is no requirement under section 1782 that the requested material be admissible or even discoverable under the local rules governing in the foreign jurisdiction. Brandi-Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76, 82 (2nd Cir. 2012) (just “as a district court should not consider the discoverability of the evidence in the foreign proceeding, it should not consider the admissibility of evidence in the foreign proceeding in ruling on a section 1782 application”).
Let's go back to our previous example of the partnership dispute. Israel's discovery mechanisms for non-parties is extremely limited. This is also true for many civil law countries and even common law countries. For example, there is no Israeli equivalent of a subpoena duces tecum such as that authorized by rule 45 of the Federal Rules of Civil Procedure. Also, Israeli civil procedure does not allow for deposition upon oral examination. However, the plaintiff could utilize section 1782, both for deposing a non-party and demanding documents in the possession of that non-party.
Simply put, section 1782 provides the foreign litigant with the opportunity to avail himself/herself/itself of the advantages of the federal discovery mechanisms, notwithstanding the inability to pursue such methods in the foreign jurisdiction.
Notably, however, complying with the statutory requirements does not automatically ensure a favorable decision. Prior to granting a 1782 application, a federal court will also consider several discretionary factors, enumerated by the Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 264–65, (2004). These factors include:
(1) Is the party from whom discovery is sought a party to the foreign proceeding? If so, a federal court is likely to deny the motion. This is simply because a foreign tribunal that has jurisdiction over those appearing before it can itself order them to produce the evidence.
(2) A court presented with a section 1782 request may take into account the nature of the foreign proceedings and the receptivity of the foreign court to federal court judicial assistance. In this regard, to the extent the foreign proceeding is a traditional commercial lawsuit, it is safe to assume that the proceeding is fit for a 1782 application. In fact, in recent case, a court granted 1782 discovery pursuant to an Israeli commercial lawsuit where the defendants were government instrumentalities, rather than private parties. In re Application of RSM Production Corporation and Jack Grynberg, 195 F.Supp. 3d 899 (S.D. Tex., 2016).
(3) Third, a district court could consider whether the section 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States. As we already mentioned, however, the fact that a discovery mechanism is not available in the foreign jurisdiction is not a reason to deny the request.
These discretionary factors, however, do not diminish 1782’s utility. A well planned and drafted motion that addressed both the statutory and discretionary factors, supported by relevant documents and declarations, is likely to convince the federal court that the 1782 relief is warranted.
In sum, section 1782 can be a powerful instrument for counsel litigating civil cases in foreign jurisdictions where local rules of procedure limit discovery of documents and other evidence.
