A key distinction between US and non-US litigation is the liberal discovery available to parties in the United States. However, non-US litigants have a powerful tool that can provide the benefit of US discovery rules to obtain broad discovery for use in proceedings abroad. United States Statute 28 USC §1782 empowers a district court to order a person who either ‘resides’ or ‘is found’ in the court’s district 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.’ This article explains the requirements that a §1782 application must satisfy and what type of discovery can be expected if the application is granted.
Requirements of a §1782 Application
Section 1782 can be invoked by letters rogatory or a request issued by a foreign or international tribunal, or by application of any ‘interested person.’ A litigant in the foreign proceeding for which discovery is sought constitutes an interested person. But even if the applicant is not a litigant, they may still be ‘interested’ if they have a right to provide evidence for the foreign tribunal’s consideration or if they have a recognised relationship (such as agent-principal) with a litigant.
An application for discovery under §1782 can be made by initiating a case in a US district court, which is often done on an ex parte basis. The application must establish satisfaction of §1782’s requirements, as well as persuade the court to exercise its discretion to grant the discovery.
The §1782 application must first establish that the target from which discovery is sought ‘resides’ or ‘is found’ in the court’s district. For individuals, this requirement is satisfied when the individual is physically present in the district, and may also be satisfied in certain cases when the individual maintains a residence in the district. For corporations, this requirement is satisfied in any jurisdiction in which the corporation is incorporated or has its principal place of business. The law is less clear when a corporation is not incorporated and does not have a principal place of business in the district. Some courts will still find that such corporations reside in the district if they have offices or employees there, while other courts impose a more stringent requirement, holding that corporations only reside in districts where they have more extensive contracts.
The §1782 application must also establish that the discovery is sought ‘for use in a proceeding in a foreign or international tribunal.’ Both civil and criminal litigation generally constitute foreign proceedings that may support a §1782 application. Some courts require that the foreign proceeding be adjudicative in nature, which may exclude judgment enforcement or certain bankruptcy proceedings where there is no adjudication of liability. US courts are also sharply divided over whether §1782 discovery may be granted in aid of private arbitration proceedings.
The foreign proceeding that forms the basis for the §1782 application need not be pending or even imminent. Rather, it need only be in ‘reasonable contemplation’. Courts may require some objective evidence that the action is contemplated, such as an affirmation from counsel that litigation will soon be filed.
If the statutory requirements are satisfied, the court has the discretion to grant discovery. The court’s discretion will be guided by numerous factors. The court will consider whether the target is already participating in the foreign proceeding – if so, §1782 discovery is less necessary because the foreign tribunal can order discovery itself. The court will also consider the nature of the foreign tribunal, the character of the proceedings, and the receptivity of the foreign government, court, or agency to the assistance of a US court. The court will also consider whether the applicant appears to be attempting to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the US. Finally, the court will consider whether the request is unduly intrusive or burdensome.
One issue on which US courts are split is whether §1782 authorises courts to order that targets produce documents and data that are within their possession, custody or control, but are located outside of the US. Even for courts holding that §1782 authorises such extraterritorial discovery, they may be less willing to exercise their discretion to grant such discovery, particularly when the documents are located within the jurisdiction where the foreign proceeding is pending.
Discovery pursuant to §1782
If a court grants a §1782 application, the court may order that discovery proceed according to the procedures of the foreign tribunal or according to the United States Federal Rules of Civil Procedure. Many courts opt for the latter, which is the default under §1782 and the procedure with which US courts are more familiar.
US discovery rules tend to be far more liberal than those in many other countries, permitting discovery of any non-privileged matter that is relevant to any party’s claim or defence and proportional to the needs of the case. Under §1782, there is no requirement that the discovery sought would also be discoverable in the foreign forum. Accordingly, successful §1782 applicants may obtain discovery that they would never have received if they had simply followed the discovery processes of the foreign forum.
US rules allow for depositions, which are proceedings conducted outside the presence of the court but subject to the court’s supervision, in which a witness is asked questions and provides sworn answers that are transcribed by a court reporter. US rules also allow for extensive discovery of documents and electronically stored information.
Section 1782 is a valuable tool for building and litigating cases outside the US. The law applying §1782 has been developing rapidly, and there are many important distinctions among US courts in how it is interpreted and applied. As a result, while §1782 applicants may be limited to a few potential districts where their discovery targets are found or reside, applicants should carefully consider which of those districts will be most advantageous for their §1782 application.