How may terabytes in a cargo container?
How may terabytes in a cargo container?

Rulings on 28 U.S.C. § 1782

Since mid-July 2015, federal courts of appeals have decided at least five cases involving a federal statute that allows “any interested person” to apply for an order requiring a party “found” in a judicial district to produce discovery “for use” in a foreign proceeding. 28 U.S.C. § 1782(a). In this post, I will review the facts and holdings of the cases.

Second Circuit: Intent to bring Dutch defamation case satisfied “for use” requirement

Willem H. Buiter, the chief economist of Citigroup, accused Heleen Mees, a writer, of stalking him. Although Dutch by birth, both lived in New York. Buiter’s charges resulted in Mees’s arrest. A New York trial court dismissed the case against Mees after she completed counseling and complied with an order of protection for Buiter and his wife.

Mees filed a petition under section 1782 to obtain discovery from Buiter for use in drafting a defamation case against Buiter in The Netherlands. The district court denied the application on the ground that Mees did not need the discovery as she already had enough to plead her claim and intended to bring the case in any event.

The Second Circuit reversed. It held that Mees had shown she wanted the material “for use” in the foreign proceeding. Mees v. Buiter, No. 14-1866 (2d Cir. July 17, 2015).

Federal Circuit: Section 1782 may not apply to modification of protective orders, but courts should look to it for that purpose anyway

Nippon Steel & Sumitomo Metal brought a patent infringement case in the District of New Jersey. It also sued POSCO in Japan for theft of trade secrets.

After POSCO produced documents in the New Jersey patent case under a protective order, Nippon asked the district court to modify the protective order to allow it (Nippon) to use some of the documents in the Japanese proceeding. The district court granted the request but imposed conditions on what Nippon could do with the documents in the Japanese court.

The Federal Circuit granted POSCO’s mandamus petition. In re POSCO, No. 15-112 (Fed. Cir. July 22, 2015). The panel voted 2-1 to require district courts to apply the “Intel factors”, the Supreme Court outlined in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), in determining whether or not to modify protective orders for the purpose of allowing a party to use discovery material that it already has in an overseas proceeding.

The third judge concurred. He rejected the idea that section 1782 or the Intel factors should play any role where the party that wants to use material overseas already has it. But he did believe the district court erred by limiting what Nippon could do with the material in the foreign proceeding.

Eleventh Circuit: Petitioner may later use material section 1782 as she wishes

Helga Glock brought an action in the Northern District of Georgia to obtain documents from firearm maker Glock, Inc., for use in Austrian divorce proceedings with her husband, Gaston Glock. The company did not resist, but the district court did enter a protective order that limited use of the materials Helga obtained to matters that involved her as “a party”.

Helga later asked the court for permission to deploy the Glock, Inc., documents in a new case, this one an action under the Racketeer-Influenced and Corrupt Organizations Act. The district court denied the request. It read the protective order as incorporating section 1782 and ruled that the statute would bar a party from using in a domestic proceeding discovery material that the party had properly obtained under section 1782 for a foreign case.

The Eleventh Circuit reversed. It held that section 1782 places no restrictions on what a petitioner may do with discovery once it obtains the stuff. Glock v. Glock, Inc., No. 14-15701 (11th Cir. Aug. 17, 2015).

Second Circuit: Investors monitoring foreign proceedings failed to show “for use” or “interested person” status

Funds that Fortress Investment Group managed invested around $380 million in Saudi entities. After the Saudi firms defaulted, foreign proceedings sprouted in Saudi Arabia, Cayman Islands, and Bahrain. Fortress brought a case under section 1782 to get documents from KPMG and PricewaterhouseCoopers.

The district court denied the application. It ruled that Fortress had no role in the foreign proceedings and therefore could not show it needed the material “for use” in those proceedings. Nor did Fortress qualify as an “interested person” under the statute. The Second Circuit affirmed. Certain Funds v. KPMG, L.L.P., No. 14-2838 (2d Cir. Aug. 20, 2015).

Ninth Circuit: Patent contests in Europe and Japan meet “for use” element

Biopharmaceutical company Akebia brought proceedings to contest European and Japanese patents of biotechnology company FibroGen in Europe and Japan. Akebia sought document and deposition subpoenas under section 1782 from the Northern District of California. The district court granted the application.

The Ninth Circuit affirmed. Akebia Therapeutics, Inc. v. FibroGen, Inc., No. 15-15274 (9th Cir. July 16, 2015).