Canada: Obtaining U.S. Discovery In Aid Of Canadian Litigation

Originally published in the February 2009 edition of Commercial Litigation Review.

In virtually every commercial case, we look for "hot documents" – those documents that tell the story with such impact that no witness could deny their truth. When a party fails to produce these documents, we go looking for them in the hands of non-parties. Canadian civil procedure allows for the discovery of this evidence, but typically only with leave of the court and only upon demonstrating fairness and necessity. As a result, orders for discovery of non-parties are the exception, not the norm, in Canada. Often, non-party evidence is simply out of reach of Canadian litigants. All is not lost, however: the evidence may be located in the United States.

U.S. federal law empowers district courts to permit any interested party to obtain discovery for use in a foreign proceeding from a person located in the district, even if this evidence could not be accessed under the rules governing the foreign proceeding.1 This legislative provision opens the door to Canadian parties gathering highly relevant information from U.S. sources, without seeking leave from a Canadian court. Counsel should use caution, however: Canadian courts have probably not yet given their last word on this litigation strategy, which, although expedient, may not sit well with Canadian judicial policy on the proper scope of discovery.

The Limits to Non-Party Discovery in Canada

In most Canadian jurisdictions, it is onerous to obtain discovery from non-parties. In Ontario, rules 30.10 and 31.10 of the Rules of Civil Procedure provide that discovery may be obtained from a non-party (whether by way of production of documents or examination for discovery) but only with leave of the court, upon showing a higher level of relevancy and proving that it would be unfair to require the moving party to proceed to trial without this discovery.2 An Ontario court shall not allow the examination for discovery of a non-party unless it is satisfied that (i) the moving party has been unable to obtain the information from other persons or from the person the party seeks to examine; (ii) it would be unfair to require the moving party to proceed to trial without having the opportunity to examine the person; and (iii) the examination will not unduly delay the commencement of the trial of the action, entail unreasonable expenses for other parties or result in unfairness to the non-party.3

Two judicial policies underscore limits on non-party discovery. First, non-parties should generally be immune from the intrusive, costly and time-consuming process of discovery.4 Second, the Rules articulate the view that the "effective and efficient resolution of civil lawsuits is not served if the discovery process takes on dimensions more akin to a public inquiry than a specific lawsuit."5 This latter policy – of limiting the scope and costs associated with discovery – has been reaffirmed repeatedly in Ontario in recent years, including in the 2003 Report of the Task Force on the Discovery Process in Ontario;6 in the 2007 Summary of the Findings & Recommendations of the Civil Justice Reform Project;7 and in the recent 2008 amendments to the Rules of Civil Procedure.8

As a result, orders for production from or discovery of non-parties remain the exception in Canadian commercial litigation.9

The U.S. Federal Courts' Willingness to Compel Discovery in Aid of Foreign Proceedings

By contrast, in U.S. federal courts, non-party discovery is available as of right.10 U.S. federal law allows foreign parties to take advantage of this style of discovery, for use in any international or foreign proceeding. 28 U.S.C. § 1782 reads in part:

(a) The district court of the district in which a person resides or is found may order him 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, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court . . .

In Intel Corp. v. Advanced Micro Devices, Inc.,11 Advanced Micro Devices, Inc. (AMD) had filed an antitrust complaint against Intel with the Directorate General for Competition of the European Commission (DG-Competition), alleging that Intel had violated European competition law. After the DG-Competition declined AMD's recommendation to seek documents that Intel had produced in a private antitrust suit in the United States, AMD applied to a U.S. district court under § 1782 for an order directing Intel to produce those documents. The U.S. Supreme Court held that a U.S. district court has discretion to grant assistance in aid of a foreign interested party if (i) the evidence is sought from a person residing in the court's district; (ii) the applicant is an interested person; and (iii) the testimony or document sought are for use in a foreign proceeding. The Supreme Court held that assistance may be granted to any interested party, even if this party is not a litigant in the foreign proceeding (AMD was only a complainant before the Commission). Further, the foreign proceeding need not be pending or imminent, provided that it is within reasonable contemplation.

Section 1782 is far-reaching because it does not impose a foreign discoverability requirement: a party cannot resist a § 1782 application on the sole ground that the discovery could not be obtained in the foreign proceeding or that the interested party did not exhaust its avenues of discovery under foreign law.12 The U.S. Supreme Court went so far as to reject the argument that a § 1782 applicant must show that U.S. law would allow discovery in domestic litigation analogous to the foreign proceeding.

Although the Supreme Court rejected categorical limitations on the availability of § 1782, it suggested a number of factors to assist district courts in exercising their discretion, including

  1. whether the documents or testimony sought are within the foreign tribunal's jurisdictional reach, and thus accessible absent §1782 aid: U.S. courts have been more willing to allow discovery against non-parties on the theory that they would generally not be within the foreign tribunal's jurisdiction;

  2. 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: comity and parity may be legitimate touchstones for a district court's exercise of discretion;

  3. whether the § 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States (discussed more fully below); and

  4. whether the subpoena contains unduly intrusive or burdensome requests.

U.S. courts have liberally granted assistance under § 1782. For example, courts have held that § 1782 requires only that the discovery sought be useful.13 The influential District Court for the Southern District of New York held in one case that the primary issue for the court is whether the applicant is pursuing discovery in good faith.14 The bounds of discovery available under § 1782 also appear to be expanding. For example, at least one district court has allowed the discovery of documents located abroad but within the control of a person located within the district.15 Several courts have held that interested parties to foreign arbitration may rely on § 1782.16

Impact of Lack of Foreign Discoverability on § 1782 Applications

What weight U.S. courts place on evidence that judicial assistance would circumvent foreign limits on discovery remains unclear. In In re Microsoft Corp.,17 for example, the district court denied Microsoft's request to access documents located in New York in the face of representations by the European Commission (the foreign tribunal at issue) that Microsoft was seeking to circumvent the Commission's access to file rules. The Court stated that it had not found a single case "where a court has granted § 1782 discovery in the face of express objection by the foreign court where the underlying proceeding is pending." Similarly, in In re Godfrey,18 the Court held that granting the aid requested would not be appropriate, "because the likelihood of interfering with Dutch discovery policy is substantial . . . petitioners would not have access to third party discovery outside the Netherlands."

By contrast, in In re Procter & Gamble Co.,19 the Court dismissed the argument that the discovery sought was broader than that permitted in the foreign proceeding: "Granting discovery under § 1782(a) would not undermine the policies of foreign governments in favor of low discovery costs because as a general rule it imposes no costs on such governments or on their inhabitants." It was of no moment that P&G had not exhausted its discovery opportunities in the foreign proceeding or that the foreign court was in a better position to determine whether the documents sought were relevant. The district court granted P&G's application because, in its view, denying discovery would lead to an inefficient, if not ineffective, process.

One explanation for the difference between P&G and Microsoft may be the courts' different appreciation of whether the foreign tribunal had a legitimate interest in limiting discovery. Short of Canadian authorities intervening before U.S. courts (as the European Commission did in Microsoft), however, expert evidence about Canadian law may do little to affect the grant of § 1782 aid. At least one U.S. court of appeal has suggested that "only authoritative proof that a foreign tribunal would reject evidence obtained with the aid of section 1782" is relevant and that such proof should be embodied "in a forum country's judicial, executive or legislative declarations."20 As discussed below, Canadian courts have stopped short of providing such guidance.

The Views of Canadian Courts on § 1782

There are few reported cases on the use of § 1782 by a Canadian party that has not first obtained a letter of request from a Canadian court.21 In CC Chemicals Ltd. v. Sternson Ltd,22 the defendant sought to examine for discovery the assignor of a Canadian patent, who resided in the United States. At the time, the Federal Court Rules allowed for this type of discovery as of right, but the Rules failed to provide the means to do so if the assignor was out of the court's jurisdiction. Therefore, the defendant obtained an order under § 1782 to examine the assignor in the U.S., for use in the Federal Court of Canada proceeding. On motion from the plaintiff, the Trial Division enjoined the defendant from carrying out the examination. The Federal Court of Appeal reversed the decision, holding that the defendant's actions did not warrant an injunction: the defendant had not circumvented the Federal Court Rules, but merely used § 1782 to fill in a procedural gap. Further, the § 1782 application did not otherwise interfere with the Canadian action (for example, the action had not been stayed). The Court of Appeal observed, however: "It may well be that the testimony could not be read at the trial, but it would be of use in preparing the appellant's case, which is one of the purposes of an examination for discovery."23

The British Columbia Court of Appeal also tacitly approved of the use of § 1782 in Penty v. Law Society of British Columbia.24 The central issue in Penty was the jurisdiction of the Law Society of British Columbia to gather testimonial evidence in the United States, but the Court of Appeal observed that "the order the Law Society obtained under § 1782 of Title 28 of the United States Code is unobjectionable." 25However, Penty does not address whether, or how, the Law Society might use the evidence so gathered at the relevant administrative hearing.

The most relevant recent case appears to be Vitapharm Canada Ltd. v. F. Hoffmann-La Roche Ltd.26 In Vitapharm, putative plaintiffs in an Ontario class action intervened in a parallel proceeding in U.S. district court to vary its protective order and thereby gain access to U.S. discovery. The Canadian defendants responded by filing a motion in Ontario Superior Court seeking to enjoin the plaintiffs from pursuing their motion before the U.S. court.

Justice Cumming held that the Superior Court had jurisdiction to grant the relief sought on the motion. However, he concluded that a "Canadian court generally will be reluctant to prevent someone from gathering evidence extraterritorially, as its ultimate admissibility in a Canadian proceeding will be determined by the Canadian courts."27 Justice Cumming therefore denied the injunction requested, noting that the plaintiffs did not seek to compel U.S. discovery but only to gain access to existing evidence. In the Court's view, the Canadian plaintiffs' course of action would lead to significant savings in litigation costs because, although the plaintiffs were not entitled to discovery before certification, the U.S. discovery would assist them in deciding what was irrelevant to the Canadian proceeding.

On appeal, the majority of the Divisional Court affirmed on the narrow ground that the plaintiffs were not seeking to compel discovery but only to gain access to existing evidence. In a concurring opinion, however, Justice Farley described Ontario's discovery rules extensively – one might speculate, to inform the U.S. court seized of the plaintiffs' motion of Ontario's relevant policies. Justice Farley went on to conclude that if the Canadian plaintiffs had asked the U.S. court to actively engage in discovery in the United States (rather than seek an amendment to a protective order), such a request "would then be an end run around Rules 30, 31 and 36.28 In such a case, he noted, "if the Canadian plaintiffs did engage in active sense discovery, then this (Canadian) Court would determine (a) whether the fruits of that labour could be employed in the Canadian proceedings and (b) the other sanctions for infringement of our discovery rules."29

The Ontario Court of Appeal reaffirmed Justice Cumming's order. The Court held that the plaintiffs' effort to gather evidence in the U.S. in accordance with the rules of that jurisdiction raised no comity concern, overriding policy or issue of fairness that would warrant issuing an injunction. Interestingly, the Court also turned down the appellants' suggestion that it provide guidance to the U.S. court about the governing rules of practice and procedure in Ontario, for the purpose of assessing § 1782 relief. The Court stated that such guidance, should it be necessary, could be provided by expert evidence adduced by the parties before the U.S. court.

The Current State of Play on § 1782

From these U.S. and Canadian cases, four propositions emerge. First, parties to Canadian proceedings may, relatively easily, obtain discovery from U.S. sources under § 1782. Although grants of § 1782 aid are discretionary, a survey of the case law turns up many cases in which U.S. courts have granted such applications.

Second, Canadian courts are, and will likely remain, reluctant to enjoin Canadian parties from gathering evidence in the United States in accordance with the rules of that jurisdiction. Such injunctions raise issues of international comity that extend beyond the propriety of allowing a party to gather additional evidence in a specific proceeding.

Third, permission to gather testimony and documents under § 1782 does not resolve the issue of how this evidence may be introduced at the Canadian trial. While the testimony and documents gathered from U.S. sources may always be useful to prepare one's case, having this evidence introduced at trial poses the same challenges as any other non-party testimony or documents. In many cases, a party will require leave of the Canadian court, whether to hold a commission to hear the evidence afresh or to have hearsay evidence admitted into the record despite rules of procedure and evidence to the contrary.30

Fourth, it remains to be seen how a Canadian court that has seen its process circumvented through a § 1782 application will deal with a request to introduce at trial evidence gathered in this way or, as Justice Farley noted, "whether the fruits of that labour could be employed in the Canadian proceeding" and what "the other sanctions for infringement of our discovery rules" would be.31 A Canadian court's answer to these questions will probably depend on its understanding of the policy underlying the limits on non-party discovery. If the court views the main goal of curtailing non-party discovery as protecting strangers from the cost and inconvenience associated with it, then the court may not object to these burdens being imposed, in accordance with U.S. law, on persons residing there. But if the court views the policy objectives as also including limiting the parties' discovery costs, then it may take a dim view of a party using a § 1782 application to open a new discovery front without prior leave of the court. In such a case, a Canadian court may consider sanctioning the use of this tactic and, possibly, excluding the evidence so obtained.

Section 1782 offers Canadian litigants an unparalleled procedure to obtain discovery from U.S. sources, especially from non-parties, but counsel should consider carefully how this evidence may ultimately be used at the Canadian trial.

Vincent de Grandpré practises litigation with an emphasis on intellectual property matters at Torys LLP in Toronto. He is admitted to practice in Ontario, Quebec and New York.


1.See 28 U.S.C. § 1782.

2.The evidence must go to a "material issue" in the proceeding. See, e.g., Lowe v. Motolanez (1996), 30 O.R. (3d) 408 (C.A.) at 413 ("The test for relevancy for non-party discovery is higher than that relating to obtaining production from a party in the action").

3.By contrast, in Newfoundland and Nova Scotia, any person may be examined for discovery as of right, subject to the court's discretion to disallow vexatious, improper or unnecessary examinations. See Nfld. Rules, rule 30.01(1) and N.S. Rules, rule 18.01(1).

4.See Ontario (Attorney General) v. Stavro (1995), 26 O.R. (3d) 39 (C.A.) at 12 [Stavro]; Goodman v. Rossi (1995), 24 O.R. (3d) 359 (C.A.) (discovery is an intrusion upon privacy interests).

5.Stavro, ibid. at para. 13.

6.Toronto: Task Force on the Discovery Process in Ontario, 2003, available at .

7.Coulter Osborne, Civil Justice Reform Project: Summary of Findings & Recommendations (Toronto: November 2007), available at .

8.R.R.O. 1990, Reg. 194 (last amended by Reg. 438/08), available at (and, in particular, rule 29.2 on proportionality in discovery).

9.See, e.g., Tribax Management Ltd. v. Laswind Investment Ltd., [2006] O.J. No. 3439 (S.C.J.) at para. 5 (QL).

10.Rule 30 of U.S. Federal Rules of Civil Procedure allows parties to stipulate to the discovery of any person (including non-parties), subject to certain limits and exceptions.

11.542 U.S. 241 (2004) [Intel].

12.The U.S. Supreme Court held so in spite of the European Commission's arguments that granting judicial assistance in these circumstances would encourage "fishing expeditions" and undermine the Commission's program offering prosecutorial leniency for admissions of wrong-doing. Intel, ibid. at page 2484.

13.See, e.g., In re Servicio Pan Americano De Proteccion, C.A., 354 F. Supp. 2d 269, at 271 (S.D.N.Y. 2004).

14.Minatec Fin. s.a.r.l. v. SI Group Inc., 2008 U.S. Dist. LEXIS 63802 at 26-27 (S.D.N.Y. 2008

15.In re Gemeinshcaftspraxis Dr. Med. Schottdorf, 2006 U.S. Dist. LEXIS 94161 at para. 5 (S.D.N.Y 2006).

16.See, e.g., Roz Trading Ltd., 469 F. Supp. 2d 1221, at 1223 (N.D. Ga. 2006).

17.428 F. Supp. 2d 188, (S.D.N.Y. 2006) [Microsoft].

18.526 F. Supp. 2d 417, at 423 (S.D.N.Y. 2007).

19.334 F. Supp. 2d 1112, at 1114 (E.D. Wis. 2004) [P&G].

20.Euromepa, S.A. v. R. Esmerian, Inc., 51 F.3d 1095, 1101 (2d Cir. 1995).

21.By contrast, there is no doubt that it is appropriate for a Canadian party to obtain the issuance of letters rogatory in Canada and then seek their enforcement in U.S. district courts under § 1782.

22.(1980), 116 D.L.R. (3d) 239 (F.C.T.D.), rev'd (1981), 124 D.L.R. (3d) 76 (F.C.A.) [CC Chemicals].

23.Ibid. at para. 18.

24.(1999), 68 B.C.L.R. (3d) 159 (S.C.) at 162, rev'd (1999), 69 B.C.L.R. (3d) 97 (B.C.C.A.) at 107-108, application for leave to appeal dismissed with costs, [1999] S.C.C.A. No. 616 [Penty].

25.Ibid. at para. 15.

26.[2001] O.J. No. 237 (S.C.J.), aff'd (2002), 212 D.L.R. (4th) 563 (Ont. Div. Ct.), aff'd (2003), 223 D.L.R. (4th) 445 (Ont. C.A.) [Vitapharm].

27.Ibid. (S.C.J.). at para. 45.

28.Ibid. (Div. Ct.) per Farley J. at para. 15.

29.Ibid. at para. 10.

30.For example, rule 31.11 of the Ontario Rules of Civil Procedure does not allow a non-party examination for discovery to be read into evidence at trial without an order of the trial judge. The Court would also need to conclude that this hearsay evidence meets the required thresholds of reliability and necessity.

31.Supra note 29

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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