From The Field

October 24, 2019

Two Circuit Courts of Appeal have recently released significant decisions regarding the scope and application of 17 U.S.C. § 1782. Section 1782 provides that a federal district court may, upon application by any interested person, provide for discovery for use in a proceeding before a foreign or international tribunal.

The first opinion of interest is Abdul Latif Jameel Transp. Co. v. FedEx Corp., et al, 2019 U.S. App. LEXIS 28348, 2019 WL 4509827 (6th Cir. September 19, 2019). In Abdul Latif, the Sixth Circuit decided that Section 1782 enables parties to seek assistance with discovery for use in a private commercial arbitration. Abdul Latif involved an application for discovery from FedEx Corp. in an arbitration in Dubai under the rules of the Dubai International Financial Centre-London Court of International Arbitration (“DIFC-LCIA”). The dispute was between the Abdul Latif Jameel Transportation Corp. (“ALJ”) and FedEx Corp.’s International affiliate FedEx International Inc. (“FedEx International”).

ALJ applied under Section 1782 for discovery from Fedex Corp. in support of its arbitration with Fedex International. Fedex Corp. challenged the application on the ground that Section 1782 is not applicable to private international arbitration proceedings. The district court agreed with FedEx Corp. and dismissed the petition. The Sixth Circuit, however, reversed. The Sixth Circuit, after an extensive analysis of the statutory language, found that the term “tribunal” as used in Section 1782 encompasses private international arbitration tribunals.

The Sixth Circuit took note that two other circuits, the Second Circuit and the Fifth Circuit, have found that Section 1782 does not apply to private arbitration. See NBC v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999); Republic of Kazakhstan v. Biedermann Int’l., 168 F.3d 880 (5th Cir. 1999). In discussing those cases, the Sixth Circuit said that it was not convinced by their reasoning regarding the plain meaning of “tribunal” or by their analysis of the legislative history.

The Sixth Circuit also focused on the Supreme Court’s decision in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), in which the Supreme Court granted Section 1782 discovery in a non-judicial proceeding before the European Directorate General for Competition (“the Commission”), and which post-dates NBC and Republic of Kazakhstan. In Intel, the Supreme Court held that the meaning of “foreign or international tribunal” did not exclude the Commission, to the extent it acts as a first-instance decisionmaker. Intel, 542 U.S. at 258. The Supreme Court also pointed out that, in 1964, Section 1782 had been amended to replace the phrase “in any judicial proceeding pending in any court in a foreign country” with “in a proceeding in a foreign or international tribunal,” which suggested a broadening of the scope of Section 1782 beyond traditional judicial proceedings. Id. at 248. The Sixth Circuit thus reasoned that, while Intel does not compel the inclusion of private arbitration within the scope of Section 1782, nothing in Intel caused the Sixth Circuit to doubt its textual analysis.

Soon after the Sixth Circuit released Abdul Latif, the Second Circuit decided In Re del Valle Ruiz, 2019 U.S. App. LEXIS 30002, 2019 WL 4924395 (2d Cir. October 7, 2019). In del Valle Ruiz, the Second Circuit decided that Section 1782 extends to the discovery of documents held outside the United States provided that the party from which the documents are sought is subject to personal jurisdiction in the district in which the documents are sought.

In del Valle Ruiz, the petitioner sought documents from certain banking entities having varying degrees of contact with the United States, but which kept the requested document outside of the United States. The Second Circuit held that personal jurisdiction under Section 1782 extends to the limits of personal jurisdiction consistent with due process. Accordingly, where the party holding the documents is subject to general jurisdiction, those documents may be discoverable wherever the documents may be located so long as the documents are within the party’s possession, custody or control.

The Second Circuit also held that specific jurisdiction can be established over the respondent, even when its contacts are insufficient to establish general jurisdiction, if the discovery material sought proximately results from the respondent’s contacts with the forum. Where the respondent’s contacts are broader and more significant, the Section 1782 petitioner need only demonstrate that the evidence sought would not be available but for the respondent’s forum contacts.

Together, Abdul Latif and del Valle Ruiz may lead to a significant expansion of activity with respect to Section 1782. Both courts emphasized however, that district courts retain the discretion to limit the scope of discovery sought in a Section 1782 petition after applying the factors the Supreme Court laid out in Intel.

Author: Sherman Kahn