US courts interpret the scope of 28 U.S.C. § 1782 | Practical Law

US courts interpret the scope of 28 U.S.C. § 1782 | Practical Law

Daniel J. Leffell (Partner), Marc Falcone (Partner) and Jeffrey D. Kleinman (Associate), Paul, Weiss, Rifkind, Wharton & Garrison LLP

US courts interpret the scope of 28 U.S.C. § 1782

Practical Law Legal Update 7-422-4955 (Approx. 3 pages)

US courts interpret the scope of 28 U.S.C. § 1782

Published on 03 Sep 2009USA
Daniel J. Leffell (Partner), Marc Falcone (Partner) and Jeffrey D. Kleinman (Associate), Paul, Weiss, Rifkind, Wharton & Garrison LLP
In a number of recent rulings, US courts have interpreted the scope of 28 U.S.C. § 1782, which authorises federal courts to order the production of evidence or documents for use in a "proceeding in a foreign or international tribunal." These rulings, which all resulted in dismissing §1782 applications, may suggest a growing trend towards narrowly interpreting the statute.
On 3 August 2009, in Comision Ejecutiva Hidroelectrica del Rio Lempa v. Nejapa Power Company, No. 08-3518 (3rd Cir. 2009), the United States Court of Appeals for the Third Circuit ordered a lower court in Delaware to dismiss a § 1782 application for discovery assistance. The court reasoned that the underlying arbitration proceeding was nearly over, and therefore, no further evidence could be accepted. The court ruled that the arbitration should not be "reopened" or "revised" to consider new evidence, holding that the entire matter had become moot, and therefore, the § 1782 application should be dismissed.
On 6 August 2009, in El Paso Corporation v. La Comision Ejecutiva, No. 08-20771 (5th Cir. 2009), the United States Court of Appeals for the Fifth Circuit held that § 1782 does not apply to discovery for use in a private international arbitration. The Fifth Circuit relied on its own decision in a 1999 case, Republic of Kazakhstan v. Biedermann International, 168 F.3d 880 (5th Cir. 1999), where the court held that a "tribunal" within the meaning of § 1782 did not include a private international arbitral tribunal. The court noted that empowering parties in international arbitrations to seek ancillary discovery through federal courts could interfere with the efficiency of arbitration. In National Broadcasting Co. v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999), the Second Circuit also held that "tribunals" under § 1782 does not include private international arbitral panels. The Fifth Circuit's decision in El Paso therefore brings it in line with the Second Circuit, the only other federal appellate court to address the scope of § 1782 in private international arbitrations.
Consistently with these decisions, on 1 August 2009, in In Re Application of Operadora DB Mexico, 6:09 CV 383 (M.D. Fl. 2009), the United States District Court for the Middle District of Florida held that a private arbitral tribunal constituted under the International Chamber of Commerce International Court of Arbitration (ICC) does not qualify as a foreign or international tribunal under § 1782, and thus is not entitled to discovery assistance under § 1782. The court found that the source of the ICC panel's authority (private agreement between the parties) and its purpose, as an alternative to governmental or state-sponsored proceedings, militate against classifying it as a foreign or international tribunal.
The question of whether § 1782 can be invoked in aid of international arbitration proceedings has been the subject of a good deal of debate following dicta in Intel v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) which suggested that this might be possible. These recent cases, however, suggest a trend in favour of the pre-Intel narrower interpretation of the provision.