Muddy Waters in the Land of Section 1782
Regular readers of this column will recall that, over the years, we have closely followed the development of the law under Section 1782 of Title 28 of the U.S. Code (Section 1782).1 In this article, we use the occasion of the 10th anniversary of the Supreme Court's lone Section 1782 decision to discuss the significant uncertainty that remains concerning an issue spawned by that decision.
To start, a reminder about the statute. Section 1782 authorizes a district court to grant a petition for judicial assistance—ordering the production of documents, as well as depositions of witnesses—if three statutory requirements are met: (1) the request for discovery is made "by a foreign or international tribunal" or "any interested person"; (2) the discovery requested is "for use in a proceeding in a foreign or international tribunal"; and (3) the person from whom the discovery is sought resides, or is found, in the district of the district court where the request has been made. If these statutory requirements are met, the district court may—although it is not required to—exercise its discretion and grant the petition.
Section 1782 authorizes a federal district court to order the production of documents, as well as depositions of witnesses. The Section 1782 application is typically initiated through an ex parte application and does not require that the foreign proceeding even be pending at the time of the application.
In Aid of Arbitration
The Supreme Court's only treatment of Section 1782 is that in Intel Corp. v. Advanced Micro Devices.2 Prior to that decision, the question of whether Section 1782 could be used in aid of international arbitration—that is, whether an "arbitral tribunal" qualified as an "international tribunal" for purposes of the statute—had been answered in the negative. See Nat'l Broad. Co. v. Bear Stearns & Co.3 and Republic of Kazakhstan v. Biedermann International.4 But the Intel opinion appeared to open the door on that issue when it included the following quotation from an article written by the primary draftsman of the revised version of the statute:
[T]he term 'tribunal'…includes investigating magistrates, administrative and arbitral tribunals, and quasi-judicial agencies, as well as conventional…courts.5
As a result, after Intel, whether Section 1782 could be used in aid of international arbitration became the subject of debate, with the courts rendering varying decisions.
One of the earliest decisions to hold that Section 1782 could be used in aid of arbitration was In re Application of Oxus Gold.6 There, a district court in New Jersey reasoned that, "[t]he international arbitration at issue is being conducted by the United Nations Commission on International Law [UNCITRAL], a body operating under the United Nations and established by its member states." This important part of the decision was clearly in error. In fact, the UNCITRAL Rules are a set of rules that can be used in non-administered arbitrations, but neither the United Nations nor UNCITRAL plays a role in arbitrations conducted under those rules. Nevertheless, Oxus Gold was frequently cited and numerous other decisions also held that Section 1782 could be used in aid of private, commercial arbitration.7
There were also many district court decisions that went the other way. In In re Operadora DB Mexico,8 for example, a district court held that Section 1782 does not apply to an arbitration conducted under the arbitration rules of the International Chamber of Commerce.9 Adding to the confusion, some decisions held that Section 1782 could be used in "state-sponsored" arbitration but not private arbitration, without indicating whether "state-sponsored" meant investor-state arbitration or something else.10 Another decision quoted from the misguided language of the Oxus Gold decision in concluding that private arbitrations do not fall under Section 1782 although "state-sponsored" (such as those "under" UNCITRAL) do. 11
With such uncertainty at the district court level, might the circuit courts provide clarity? An inquiry on this score begins sensibly with the Second and Fifth Circuits, to see whether they adhered to their pre-Intel decisions. The Second Circuit has not, since Intel, taken up the issue of the use of Section 1782 in aid of arbitration. The Fifth Circuit, in contrast, had occasion to consider the issue in 2009. The court declined to reconsider its earlier Biedermann decision regarding the non-application of Section 1782 to private international arbitration because, it said, Intel did not deal with any of the concerns that were at issue in Biedermann. Biedermann, therefore, remained good law.12
More recently, the Fifth Circuit addressed the issue again.13 In one of the many Chevron-related Section 1782 cases, the Republic of Ecuador sought 1782 discovery from a non-party named Connor. Chevron, despite, having used 1782 against Ecuador in many cases across the country, opposed the request. The district court denied the request, believing that Biedermann controlled its decision. On appeal, the Fifth Circuit reversed, relying on the principle of judicial estoppel. Because, in its own efforts to obtain 1782 discovery to use against Ecuador, Chevron had argued that 1782 may be used to seek discovery in aid of a bilateral investment treaty (BIT) arbitration, it was estopped from arguing that the same BIT arbitration could not support Ecuador's request for 1782 discovery.
Significantly, however, the Fifth Circuit did not decide the issue of whether the Biedermann decision applied to BIT or other investor-state arbitration: "[W]e need not and do not opine on whether the BIT arbitration is an 'international tribunal.'"14 Therefore, even in the Fifth Circuit, there is uncertainty as to whether that court will ultimately distinguish between commercial and investor-state arbitrations for purposes of deciding whether to permit discovery under Section 1782.