mars 29 2021

US Supreme Court to Consider Whether Federal Courts May Compel Discovery for Use in Private Foreign Arbitrations


The Supreme Court has agreed to hear a case regarding whether a statute that authorizes federal district courts to compel discovery for use in a “foreign or international tribunal,” 28 U.S.C. § 1782, applies to private commercial arbitrations. The Supreme Court’s decision will impact whether parties in arbitrations taking place abroad will continue to have more extraterritorial discovery rights than parties in arbitrations taking place in the United States. 

Background: For more than 150 years, Congress has facilitated international cooperation by providing the assistance of federal courts in gathering evidence for use in foreign tribunals. Congress has addressed that foreign discovery in 28 U.S.C. § 1782, which authorizes litigants before a “foreign or international tribunal” to seek an order from a federal district court compelling testimony or document production from residents of the district.

The Supreme Court has interpreted Section 1782 only once. In 2004, the Court considered whether a proceeding before the EU’s Directorate General for Competition was a “proceeding in a foreign or international tribunal.” The Court held that the Directorate, a public agency with quasi-judicial authority, qualifies as a foreign tribunal. In reaching that conclusion, the Court addressed the legislative history of Section 1782, noting a law review article’s statement that the term “tribunal” in Section 1782 includes, among other entities, “arbitral tribunals.”

The question of whether Section 1782 applies to commercial arbitral tribunals has divided lower courts. The Second, Fifth and Seventh Circuits have held that Section 1782 does not authorize district courts to compel discovery for use in private foreign arbitrations. The Fourth and Sixth Circuits have reached the opposite conclusion. The issue currently is pending in the Third and Ninth Circuits.

Analysis: Those who support the broader reading of Section 1782 argue that the plain meaning of the phrase “foreign or international tribunal” clearly encompasses private arbitral tribunals and that none of the provision’s other sections limits its application to governmental entities alone. They also rely on the Supreme Court’s suggestion (through the citation to the law review article) that “arbitral tribunals” count as “tribunals.” Additionally, they note that a 1964 amendment to the predecessor statute to Section 1782 replaced the word “court” with “tribunal,” which suggests that Congress meant to expand the statute to include all bodies that adjudicate disputes, including private arbitral tribunals. As a policy matter, they explain that their reading will not necessarily open the floodgates to federal court involvement in proceedings before all private arbitral tribunals because district courts have broad discretion to deny discovery requests.

Those who support a reading that excludes private arbitral tribunals point to dictionaries from when Congress amended the statute that define “tribunal” to mean an entity that exercises power bestowed by a government. They also argue that the Supreme Court’s reference to the law review article’s statement about “arbitral tribunals” does not necessarily include private arbitral tribunals. In addition, they argue that the statute should be limited to governmental tribunals because Section 1782 specifies that a federal court that orders discovery may do so after receiving a “letter rogatory,” which is a request from the judiciary of a foreign country. Furthermore, they argue that reading Section 1782 to apply to private arbitral tribunals could significantly increase discovery costs in those proceedings.

Next Steps: Briefing on the case likely will be submitted to the Supreme Court over the summer, and the case likely will be heard by the Court in October or November 2021.

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