United States: Second Circuit Affirms The Extraterritorial Discovery Reach Of 28 U.S.C. § 1782

Last Updated: November 14 2019
Article by Gilbert Samberg

The increasingly popular federal statute concerning cross-border judicial assistance, 28 U.S.C. § 1782, enables a District Court to order a "person" that "resides or is found" within its jurisdiction to produce evidence for use in a proceeding in a foreign or international tribunal. The Second Circuit recently addressed two questions concerning the application of this unique legislation: (1) on what bases does a District Court have personal jurisdiction over a non-party for purposes of the statute (how does a court interpret and apply the "resides or is found" criteria in jurisdictional terms); and (2) can the District Court order such a person to produce evidence that it maintains outside of the U.S.? See In re del Valle Ruiz, 2019 U.S. App. LEXIS 30002 (2d Cir. Oct. 7, 2019).

The Court's thumbs up decision concerning the latter ("extraterritoriality") issue has gotten the principal if not exclusive coverage in the legal press. (But its decision concerning the jurisdiction issue is likely to have a more regular impact on the utilization of the § 1782 discovery mechanism, and it is, at least in part, a bit of a head scratcher. The Second Circuit's test for specific personal jurisdiction over a non-party for purposes of discovery is, at its extreme, arguably murky, difficult to apply, and inequitable. In another article, we will propose a test that is simpler, more easily applied and more consistent with due process fairness.)

1. Overview

Concerning the effective geographic reach of the statute, the Court adopted the earlier reasoning of the Eleventh Circuit and decided simply that a District Court "is not categorically barred from allowing discovery under § 1782 of evidence located abroad." Id. at *24. In effect, the Federal Rules of Civil Procedure ("Federal Rules") on discovery will control.

Here is the context. In del Valle Ruiz, investors in Banco Popular Español ("BPE") were contesting the legality of a government-forced fire sale of BPE to Banco Santander ("Santander") in certain foreign proceedings. The investors sought discovery, under 28 U.S.C. § 1782, in New York from Santander and its New York-based affiliate, Santander Investments Securities, Inc. ("SIS"), "concerning the financial status of BPE."

Santander is a Spanish banking company with its principal place of business in Madrid, while SIS is a Delaware corporation with its principal place of business in New York City. Id. at *7 n.4. Santander argued in the District Court that it was not "found" within the Southern District, for purposes of § 1782, and that although SIS resided or was found in the Southern District, it was "not involved with the acquisition of BPE." Id. at *7-*8.

The District Court determined that it had general personal jurisdiction over SIS, and that finding was not challenged on appeal. (The Court noted that the parties apparently assumed that the term "resides," for these purposes, refers to the place where an individual is "essentially at home," thereby establishing general personal jurisdiction. Id. at *9 n.6.) Santander was not subject to such general personal jurisdiction, however, and so the court considered whether it had specific personal jurisdiction. It held that it did not.

The District Court ultimately denied the application vis-à-vis Santander for lack of personal jurisdiction, but granted discovery from SIS and in that regard "rejected [the] argument that § 1782 does not allow for extraterritorial discovery." Id. at *3-*4. The Second Circuit affirmed.

2. "Extraterritoriality"

The Circuit Court reviewed de novo the district court's decision under § 1782 that it could compel a person (in this case, SIS) to produce discovery material held overseas. See id. at *21. The Court first noted the statutory construction doctrinal presumption against extraterritoriality in the application of a federal statute ("absent clearly expressed congressional intent to the contrary, federal laws will be construed to have only domestic application"). See id. But the Court found that "this presumption has no role to play here." Id. at *22. Instead, the Court cited approvingly the reasoning of the Eleventh Circuit in a 2016 decision, and joined the Eleventh Circuit in holding that a district court is not barred from allowing discovery under § 1782 of evidence located abroad. See id. at *23-*24.

The Eleventh Circuit had noted that discovery pursuant to § 1782 would, by its terms, generally follow the Federal Rules of Civil Procedure, which in turn authorized extraterritorial discovery "so long as the documents to be produced are within the subpoenaed party's possession, custody or control." Id. at *23. Hence, it concluded that § 1782 likewise allows extraterritorial discovery of responsive materials. Id. at *23-*24. The Second Circuit agreed.

(As a grace note, however, the Second Circuit instructed that a district court should consider the location of documents and other evidence when deciding whether to exercise its discretion under § 1782 to authorize discovery. Id. at *24.)

3. Conclusion

The headline grabber has been the Second Circuit's opening of the door there to access via 28 U.S.C. § 1782 not only to evidence within the territory of the United States, but also to evidence held elsewhere that is within the reach of the Federal Rules concerning discovery. Limits may be placed case-wise by the courts, in their discretion, but the opportunity for more extensive and effective discovery is clearly there.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions