Recipient Names] Request for Discovery

Recipient Names]

Request for Discovery under 28 U.S.C.S. § 1782

Does a party's request for discovery documents meet the statutory requirements of 28 U.S.C.S. § 1782, so that it can be entertained by the Court?

Facts:

-Wal-Co, a U.S. company headquartered and incorporated in New York, is a manufacturer of a synthetic material, SyntheWal, that is commonly used in building construction. SyntheWal sells for considerably less than similar products. Because of its low cost, Wal-Co sells SyntheWal to construction companies around the world, including to Expert Builders, Inc. In Northden, a small country in Europe.

Two years ago, Expert Builders signed a contract with Wal-Co for ninety tons of SyntheWal. Previously, Expert Builders had used a natural material produced by a competitor of Wal-Co, but in an effort to save money, they decided to try out SyntheWal. Unfortunately, it soon became clear that SyntheWal could not withstand the cold winters in Northden, and buildings using the SyntheWal product began cracking and collapsing. Expert Builders demanded that Wal-Co refund them the cost of the SyntheWal and allow them to return the remaining product. Wal-Co refused.

-According to the arbitration clause in the contract signed by the two parties, Expert Builders filed a complaint with the International Chamber of Commerce (ICC) in Paris, seeking to resolve the dispute with Wal-Co. Expert Builders' lawyers have learned that Wal-Co has been sued many times in the past in U.S. courts and they want to review information from Wal-Co's prior lawsuits to gain a better understanding of Wal-Co's manufacturing process, product, and sales contracts. The lawyers have learned of a U.S. law, 28 U.S.C § 1782, that may assist them in obtaining company documents from Wal-Co. Under this statute, Expert Builders has filed a request with the U.S. District Court for the Southern District of New York to obtain "all documents related to previous lawsuits against Wal-Co regarding its SyntheWal product," including "any communication between Wal-Co and their attorneys with advice regarding potential problems with the sales contract terms." The documents would be submitted to Expert Builders as well as the ICC for consideration. The ICC has not opposed Expert Builders' discovery request in the U.S. district court. Additionally, the ICC rules on evidence are broad, and the ICC arbitral panel may request additional materials from either party at any time during the proceedings. There are no specific limitations as to what types of evidentiary materials may be requested by the arbitral panel.

Short Answer:

The Circuits are split regarding whether this party's request for discovery documents would meet the statutory requirement of 28 U.S.C.S. § 1782, so that it could be entertained by the Court. In order to determine whether the court should consider the petition, it needs to consider whether the party seeking the petition is an interested person, whether the person against whom the petition is sought meets the residency requirements of 28 U.S.C.S. § 1782(a), whether the ICC is a tribunal under 28 U.S.C.S. § 1782(a), and whether the complaint in front of the ICC is a proceeding within the meaning of 28 U.S.C.S. § 1782(a).

Expert Builders is an interested person under the requirements of § 1782, as it is the complainant in the underlying proceeding, and complainants are interested persons. Wal-Co does meet the residency requirements of § 1782(a), as it is a New York corporation and Expert Builders has brought suit in the Southern District of New York. That some of the material Expert Builders is seeking to discover might be located outside of New York does not impact the residency requirement, as the statute's residency requirement is discussing the residency o the parties, not of the information sought. The complaint in front of the ICC is a proceeding within the meaning of § 1782, as the I.C.C. is a decision-making body that can make final decisions that are subject to review. Therefore, the first three elements of the statute are easily satisfied.

However, the Circuits are split on whether a decision-making body like the I.C.C., is a tribunal within the terms of § 1782. In La Comision Ejecutia Hidroelecctrica Del Rio Lempa v. El Paso Corp., 617 F.Supp.2d 481 (S.D. TX, 2008) and National Broadcasting Co. Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2nd Cir.1999), the courts held that § 1782 did not apply to arbitration panels like the I.C.C. However, in re: Application of Babcock Borsig AG for Assistance before a Foreign Tribunal, 583 F.Supp.2d 233 (2008), the U.S. District Court for the District of Massachusetts determined that § 1782 did apply to proceedings before the I.C.C.

As a result, the court must look to the totality of the circumstances. Wal-Co is under the jurisdiction of the I.C.C. And subject to their discovery requests. Expert Builders has not sought discovery through the I.C.C. Expert Builder's discovery request seeks privileged information, w which makes its failure to seek discovery through the I.C.C. appear as if its § 1782 petition might be an attempt to circumvent discovery rules. Therefore, the court should not entertain its petition.

Analysis:

28 U.S.C.S. § 1782 (a) provides that "The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. By virtue of his appointment, the person appointed has power to administer any necessary oath and take the testimony or statement. The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure. A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege" (28 U.S.C.S. § 1782(a)).

In in re Application of Gemeinshcaftspraxis Dr. Med. Schottdorf, 2006 WL 3844464 (S.D.N.Y.), the United States District Court for the Southern District of New York determined that any request for discovery under § 1782 had to first consider whether the court was authorized to grant the request, and then whether it should grant the request (2006 WL 3844464, 4). The focus of this memo will be whether the court is authorized to grant the request. In order to determine whether the Court should consider the petition, it needs to consider whether the party seeking the petition is an interested person, whether the person against whom the petition is sought meets the residency requirements of 28 U.S.C.S. § 1782(a), whether the ICC is a tribunal under 28 U.S.C.S. § 1782(a), and whether the complaint in front of the ICC is a proceeding within the meaning of 28 U.S.C.S. § 1782(a).

The first question under 28 U.S.C.S. § 1782 (a), is whether the party resides or is found in the district in which the suit has been brought. Wal-Co is a New York corporation and petition was brought in the Southern District of New York, so that it appears that the court would have jurisdiction over the party in this instance. However, there is a likelihood that the documents in question are not all located within the jurisdiction, particularly given the existence of other lawsuits. However, the location of discoverable material does not dictate whether or not the court has the ability to hear the petition. Under §1782, the requirement is specific as to the location of the party, and does not address the potential location of discoverable material. (2006 WL 3844464 at 4). Therefore, Wal-Co satisfies the residency requirement.

The second question under 28 U.S.C.S. § 1782 (a) is an interested person. In Intel Corp. v. Advanced Micro Devices, Inc., 124 S. Ct. 2466 (2004), the Court determined that the district court had the authority to entertain a discovery request by a complainant before the Commission of the European Communities (124 S. Ct. 2466, 2469). In fact, the statute specifically makes discovery available to complainants who do not have the status of private litigants in a pending suit and are not sovereign agents (124 S. Ct. 2466, 2469). Therefore, Expert Builders is almost certainly an interested party in the terms of § 1782.

However, the fact that Expert Builders is an interested party does not necessarily mean that § 1782 is going to be applicable. In Intel, the Court established that parties to foreign proceedings that have the power to compel discovery in those proceedings may actually be less entitled to § 1782 relief from other parties in those proceedings than it would be from non-parties. The foreign tribunal has jurisdiction over the parties appearing before it, and can order them to comply with discovery, while it might not be able to exercise that same power over non-parties and would need the assistance of a statute like § 1782. (124 S. Ct. 2466, 2471). Both Wal-Co and Expert Builders are parties in the foreign proceeding, which has the power to grant broad discovery to either party, therefore the Court would lack a compelling reason to grant the discovery request.

In this instance, there is a pending complaint with the I.C.C. However, Expert Builders would not have had to file a complaint in order to seek a discovery order. Instead, § 1782 is applicable when a dispositive ruling by a tribunal is within reasonable contemplation. (124 S. Ct. 2466, 2468). That means that the proceeding with the I.C.C. almost certainly meets § 1782's requirements for a proceeding.

Furthermore, the District Court does not attempt to impose U.S. discovery rules upon the foreign tribunals. In fact, purpose of § 1782 is to aid the foreign tribunals in their attempts to get at discoverable information. The courts do not try to determine whether the evidence sought would be discoverable under the laws governing those foreign proceedings (124 S. Ct. 2466, 2468). Nor do they attempt to determine whether that information would be discoverable under U.S. laws (124 S. Ct. 2466, 2468).

However, the statute does specifically prohibit the discovery of privileged information, which is relevant because Expert Builders is seeking information about the communication between Wal-Co and its attorneys. This issue is not critical when trying to determine whether the court should hear the petition, but it can be considered. When making a ruling on a request for domestic discovery in a foreign proceeding, the district court can look at whether the request is an attempt to circumvent the rules of evidence or other proof-gathering restrictions of the foreign jurisdiction or the United States (124 S. Ct. 2466, 2471). Courts can reject unduly burdensome requests (124 S. Ct. 2466, 2471). Furthermore, the Court may consider whether the party has attempted to first obtain discovery in the foreign jurisdiction. (583 F.Supp.2d 233, 241). Taking all of these factors together, the Court should be suspicious that Expert Builders is attempting to use § 1782 discovery as a fishing expedition in contravention of domestic and international rules of discovery.

While the above issues are of interest in helping the court determine whether or not it should consider the petition, the real question at issue is whether the International Chamber of Commerce (ICC) in Paris is a tribunal under § 1782. Whether or not a private arbitration committee qualifies as a tribunal is a matter of some disagreement among the circuits. The Supreme Court has previously determined that the Commission of the European Communities is a "tribunal" under 28 U.S.C.S. § 1782(a), because it is a first-instance decisionmaker (124 S. Ct. 2466, 2470). Furthermore, in re: Application of Babcock Borsig AG for Assistance before a Foreign Tribunal, 583 F.Supp.2d 233 (2008), the U.S. District Court for the District of Massachusetts determined that Private, foreign arbitral body, operated by International