Courts Weigh in Obtaining eDiscovery in Foreign Proceedings
Parties involved in foreign litigation can apply to U.S. federal courts in order to seek the production of electronically stored information, or ESI, from litigants within the court’s jurisdiction. Under 28 U.S.C. 1782, the district court is not required to grant such applications, but may do so after considering a number of mandatory and discretionary factors.
Within the last year, there have been cases involving Section 1782 from the 5th and 2nd Circuits. In Texas Keystone Inc. v. Prime Natural Resources, Inc., No. 12-20515 (5th Cir. 2012), the Court ruled it the district court erred in not affording a litigant seeking discovery under 1782 the chance to respond to a Motion to Quash its subpoenas. Further, the lower court erred by not issuing an opinion explaining its ruling. Finally, the court reiterated that once a threshold determination is made that the litigant can pursue discovery, the federal rules of discovery apply.
The Second Circuit issued an opinion in 2012 regarding the scope of discovery under 1782. In Brandi-Dohrn v. IKB Deutsche Industriebank, 673 F.3d 76 (2nd Cir. 2012), the parties were engaged in German litigation regarding securities fraud. The German case was dismissed in the lower courts, but the plaintiff applied to a U.S. district court to obtain discovery from three U.S. non-parties for the German appeal. The district court denied the 1782 application on the grounds that the evidence was likely to be inadmissible in the German court.
However, the 2nd Circuit reversed, citing the Supreme Court’s rejection of the foreign discoverability rule (which would bar courts from ordering discovery in the U.S. if it would not be discoverable in the foreign country). The Second Circuit drew a parallel and refused to uphold a “foreign admissibility rule” that would consider admissibility in the foreign courts when deciding a 1782 application.