Availability of Section 1782 Discovery in International Arbitration Proceedings – Will the Supreme Court Finally Have its Say?

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Section 1782 of Title 28 of the United States Code (§1782) was enacted in 1964 to govern the authority of a federal district court in providing discovery assistance to proceedings before foreign and international tribunal. It provides that “the district court for 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 or in a foreign or international tribunal…” Under this provision, the parties to arbitrations taking place outside the United States can request that district court under whose jurisdiction one of them resides, to order discovery to assist in that foreign arbitration proceeding. Consequently, the use of this provision has led to many conflicting decisions and views since its enactment.

            A party’s ability to obtain documents and testimony is often limited in international arbitration as compared to the ability of litigators obtaining evidence from non-parties in domestic litigation before the United States federal courts. International arbitration borrows aspects of its procedure from the civil and common law traditions that originated in Europe, where discovery is not allowed as frequently or as extensively as in the United States.[1]

Section §1782 seeks to permit parties in international arbitrations to benefit from the expansive discovery in the United States, but courts differ on how expansive this process can be. Congress’ view is that judicial assistance should be available regardless of whether the foreign or international proceeding or investigation is of administrative, civil, criminal, or other nature, as reflected in the legislative history of §1782. S. Rep. No. 1580, at 9, as reprinted in 1964 U.S.C.C.A.N. 3782, 3789. Furthermore, legislative history does not suggest that Congress intended to impose a sweeping discovery restriction for foreign and international tribunal proceedings under §1782, but it also did not intend to impose an expansive blanket rule.

What constitutes a “tribunal” under §1782?

            The key question now is, what is considered “tribunal” under §1782? Since the Supreme Court’s decision in Intel Corporation v. Advanced Micro Devices in 2004, the circuit courts are split on whether, under §1782, “tribunal” includes a foreign arbitral tribunal.[2] At present, the issue of whether a foreign private or corporate arbitration process is included under “tribunal” as per §1782 has been addressed by five federal appeals courts, with two pending decisions in other circuit courts. In 1999, the Second and Fifth Circuits held that district courts are not authorized to provide discovery assistance to private foreign arbitrations under §1782.[3] District courts under these jurisdictions, therefore, are only able to provide discovery assistance to state-sponsored foreign tribunals. In 2020, the Second Circuit reaffirmed its holding in National Broadcasting Co. from 1999 in In Re: Application and Petition of Hanwei Guo, noting that “foreign or international tribunal” in the statute does not encompass private arbitral panels.[4] If the arbitration qualifies as a private international commercial arbitration, it therefore falls outside the scope of §1782, within the jurisdiction of the Second and Fifth circuit courts

Courts that have addressed what a “tribunal” is under §1782

The Seventh Circuit agreed with the Second and Fifth Circuits in 2020 in Servotronics, Inc. v. Rolls-Royce PLC.[5] The court initially focused on whether the Chartered Institute of Arbitrators constituted a “tribunal” under §1782. First, the court evaluated the statutory context of “tribunal,” noting a potential conflict between the Federal Arbitration Act (“FAA”), the Intel decision, and the legislative history of §1782. Second, the court also noted that the correct reading of §1782 is a more limited one, where the narrower understanding of “tribunal” leads to a serious conflict with the FAA. Under the FAA, the assistance rights in domestic arbitrations are very narrow, and the court was not able to find a rationale for affording parties to private foreign arbitrations such expansive discovery assistance while precluding domestic parties from this very same assistance. The Seventh Circuit ultimately held that within the meaning of §1782, private foreign arbitration is not “a proceeding in a foreign or international tribunal.”[6]

            In a unanimous opinion, however, the Sixth Circuit created a circuit split in 2019 in In re Application to Obtain Discovery for Use in Foreign Proceedings, holding that “foreign or international tribunal” encompasses private arbitrations.[7] In arriving at this decision, the court first looked at legal and non-legal dictionary definitions to interpret the word “tribunal.” The dictionaries did not settle the questions because some were expansive enough to incorporate private arbitrations, while others were too narrow and stopped short. The court then investigated the use of “tribunal” in legal writing, finding no support for a narrow reading. Looking at a nineteenth-century treatise by Justice Story, a U.S. Supreme Court case, and a Sixth Circuit Case, the court found evidence that “American jurists and lawyers have long used the word ‘tribunal’ . . . [to] include private, contracted-for, commercial arbitral panels.” See Bernhardt v. Polygraphic Co. of America, 350 U.S. 198, 203 (1956); Toledo Steamship Co. v. Zenith Transportation Co., 184 F. 391, 400 (6th Cir. 1911). Ending with the statutory context and structure, the court concluded that a broad reading was supported.

            The Fourth Circuit joined the Sixth Circuit in 2020 in an action once again brought by Servotronics, this time against Boeing, disagreeing with the Second, Fifth, and Seventh Circuits. The Fourth Circuit held that because in the United States and the United Kingdom, a contractual arbitration is the “product of government-conferred authority,” it is a “tribunal.” The court reasoned that to conclude otherwise would represent “too narrow an understanding of arbitration” and would therefore defeat Congress’ goal of “increase[ing] international cooperation by providing US assistance in resolving disputed before not only foreign courts but before all foreign and international tribunals.”[8]

Courts that have not Addressed what “tribunal” is under §1782

This question has yet to be addressed by the First, Third, Eighth, Ninth, Eleventh, and D.C. Circuits. But the Third and Ninth Circuits currently have cases pending to answer the issue. EWE Gasspeicher GmbH is currently pending in the Third Circuit.[9] The United States District Court for the District of Delaware held that private arbitration proceedings do not constitute “tribunal” under §1782 since, relying on the holding in Intel, private commercial arbitration is neither a quasi-judicial agency nor a foreign court. In re HRC-Hainan Holding Co. LLC is currently pending in the Ninth Circuit.[10] The California district court held that the court is able to aid in discovery of private commercial arbitration, rejecting other recent California district court decisions.

            The United States Supreme Court has not decided a §1782 case since the decision in Intel, holding that the scope of the provision encompasses discovery “for use” in a foreign proceeding by a public agency so long as it has quasi-judicial authority (non-judicial body that can interpret law). Intel did not directly address if §1782(a) applies to international arbitral tribunals. But in delivering the opinion of the Court, Justice Ginsburg, relying on legislative history, wrote that “the term ‘tribunal . . . includes . . . arbitral tribunals,” as used in §1782.[11]

Recently, after the Supreme Court agreed to take up a dispute over whether §1782 permits discovery for use in a private, or corporate, foreign arbitration, Servotronics withdrew the cert petition prior to setting an oral argument date.[12] With circuit courts becoming increasingly broader and more expansive in the applicability of §1782 for use in private arbitrations, there is bound to be more discussion in the future. Within days of Servotronics removal from oral argument calendar, a petition for a writ of certiorari before judgment was filed in ZF Automotive US, Inc. v. Luxshare, Ltd. The Court granted the application on October 27, 2021, and distributed for the December 3, 2021, conference.[13] Raising a substantively identical question as presented in Servotronics, the issue is whether §1782 encompasses private commercial arbitral tribunals (as held by the 4th and 6th Circuits) or excludes those tribunals (as held by the 2nd, 5th, and 7th, Circuits).  

The time has now come. The Court’s decision may have large implications on international arbitration practices in the future. If the Court were to side with the Fourth and Sixth Circuits, parties to international arbitration proceedings will gain access to the expansive U.S. discovery practices. But if the Court were to side with the Second, Fifth, and Seventh Circuits, district courts will not be authorized to provide discovery assistance to private or corporate foreign arbitrations.

[1] Mauro Rubino-Sammartano, International Arbitration Law and Practice 675 (2d ed. 2001).

[2] Intel Corp. v. Advanced Micro Devices, Inc. 124 S. Ct. 2466 (2004).

[3] See National Broadcasting Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2nd Cir. 1999); Republic of Kazakhstan v. Bledermann International, 168 F.3d 880 (5th Cir.1999).

[4] In Re Guo, 965 F.3d 96 (2nd Cir. 2020).

[5] Servotronics, Inc. v. Rolls-Royce PLC, 975 F.3d 689 (7th Cir. 2020).

[6] Id.

[7] In re Application to Obtain Discovery for Use in Foreign Proceedings v. FedEx Corporation, 939 F.3d 70 (6th Cir. 2019).

[8] Servotronics, Inc. v. Boeing Co., 954 F.3d 209 (4th Cir. 2020).

[9] In re EWE Gasspeicher GmbH F.Supp.3d 2020 WL 127612 (March 17, 2020).

[10] In re HRC-Hainan Holding Co. LLC, No. 20-15371 (9th Cir. March 4, 2020).

[11] Intel Corporation v. Advanced Micro Devices, 542 U.S. 241 (2004).

[12] Servotronics, Inc. v. Rolls-Royce PLC, 975 F.3d 689 (7th Cir. 2020), cert. granted, — S. Ct. —, 2021 WL 1072280 (Mem.) (March 22, 2021) (petition withdrawn).

[13] ZF Automotive US, Inc. v. Luxshare, Ltd., SCOTUSBlog, https://www.scotusblog.com/case-files/cases/zf-automotive-us-inc-v-luxshare-ltd/