A federal district court may order discovery under 28 U.S.C. Section 1782 “for use in a proceeding in a foreign or international tribunal” upon application by any “interested person”. A district court has the discretion to permit discovery under statutory prerequisites where a) the party seeking the discovery is an “interested person” with reasonable interest in judicial assistance of the U.S. court or is a “foreign or international tribunal”, b) the evidence sought is to used in a “proceeding in a foreign or international tribunal”, although that action does not have to be pending, and c) the target for production “resides” or “is found” in the U.S. court’s district.
The 2d Circuit in In re Del Valle Ruiz, 939 F.3d 520, involved Section 1782 discovery sought from Banco Santander’s New York based-affiliate. The issue was whether a Spanish banking company with its principal place of business in Spain “resides or is found” within New York for the purpose of Section 1782 and whether the parties could seek discovery of documents located outside the United States under Section 1782. The 2d Circuit interpreted the term “found” to extend Section 1782 application to include individuals who are served while physically present in the forum. However, the court opined that there must be some connection between the individual’s contact with the forum and the actual discovery sought. To establish jurisdiction, the materials should proximately result from the individual’s forum contacts-i.e. the applicant is seeking discovery related to the individual’s contacts in the U.S. However, if the individual has more specific and extensive contact within the forum, the applicant need only show that the evidence would not be available but for the forum’s contacts.
The 6th Circuit in Abdul Latif Jameel Transp. Co. v. FedEx Corp. (In re Application to Obtain Discovery for Use in Foreign Proceedings), 939 F.3d 710, was asked to decide if Section 1782 permits U.S.-style discovery for use in non-U.S. private arbitration. The 6th Circuit found that “tribunal” encompasses privately contracted-for arbitrations. The court concluded that the use of the word “tribunal” in Section 1782 was permissive and was not limited to judicial or public entities of a country that have prescribed policies and procedures for discovery. An international arbitration is a “foreign or international tribunal”.
The 2d Circuit decision gives Section 1782 applicants two paths. If the subpoenaed documents are sought from a U.S. entity, applicants can seek documents that are located abroad. Thus, U.S. banks that do foreign business are potential targets for worldwide discovery. But, as for foreign corporations located in the US, applicants must target their discovery to the targeted company or individual’s contacts in the U.S. As for the 6th Circuit’s holding, it opens the door to discovery in support of private international commercial arbitration. That decision still limits discovery to the factors under the statute.