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Legal Tech: Will the U.S. Become a Haven for International Discovery Under Section 1782?
28 U.S. Code Section 1782(A) provides that an individual or entity that resides or is found in a jurisdiction may be ordered to produce documents or give testimony for disputes before foreign or international tribunals, so long as that person or entity is in possession or control of relevant evidence. U.S. courts are split on what is required to show "control" of documents, but generally apply either the "legal right standard" or the "practical ability standard." Under the legal right standard, a party is deemed to have control over documents possessed by others only if the party has the legal right to obtain them. The practical ability standard is broader, expanding the definition of control to include instances where a party has the practical ability to obtain the documents sought, regardless of that party's legal right to the documents.
Once control has been established, potential discovery under Section 1782 must be examined under the four factors identified in Advanced Micro Devices v. Intel, 542 U.S. 241 (2004). The four Intel factors, described in the court's opinion authored by Justice Ruth Bader Ginsburg are:
- Whether the material sought is within the foreign tribunal's jurisdictional reach and thus accessible absent 1782 aid.
- The nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court jurisdictional assistance.
- Whether the 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States.
- Whether the subpoena contains unduly intrusive or burdensome requests.
Any court analyzing a discovery request under Section 1782 needs to carefully analyze those discretionary factors to determine if the requested discovery is appropriate. However, even if a court determines that the Intel analysis weighs in favor of discovery, there remains the question of the extraterritorial reach of Section 1782 — does it extend to documents that are not even located in the United States? Recently, the U.S. Court of Appeals for the Second Circuit resolved that question in favor of U.S. courts being a forum for obtaining such discovery, following an earlier decision along the same lines decided in the Eleventh Circuit. See, In re Del Valle Ruiz, 939 F.3d 520 (2nd Cir. 2019), following Sergeeva v. Tripleton International, 834 F.3d 1194 (11th Cir. 2016).
In the Ruiz case, the petitioners sought discovery relating to the respondent company's knowledge of the financial status of a recently purchased entity. The petitioners brought discovery under Section 1782 against Banco Santander and its New York-based affiliate, Santander Investment Securities Inc. (SIS). Santander and SIS objected to the request, arguing that Section 1782 did not reach documents located outside of the United States.
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