Practitioners in England and Wales ought to be aware of the different routes for obtaining evidence from third-parties, which generally are (i) applying for a Norwich Pharmacal Order (“NPO”); or (ii) third-party disclosure orders under CPR 31.17.
There is however an alternative route thanks to U.S. federal statute. Title 28 of the U.S. Code § 1782 (the “Section 1782 Method”) provides a gateway through which litigants in foreign jurisdictions can obtain “discovery” (disclosure), from a particular U.S. jurisdictional district.
The recoverability of evidence under the Section 1782 Method is broader compared to the CPR equivalent, encompassing depositions, document production and requests for admission. The evidence sought must, understandably, be within the Respondent’s “possession, custody or control”. This includes, for example, requiring companies based in a U.S. jurisdictional district to produce material which may be stored overseas, as long as they have practical control over it.
It is an underutilised means of obtaining material to bolster foreign proceedings. It stands as a possible, often effective (but not undefeatable) tool to assist with evidence gathering prior to or during proceedings in foreign courts.
A cautious approach should however be taken to avoid accusations that an application is speculative and/or the requests being too expansive (which will often be met with accusations of a ‘fishing expedition’).
The procedural mechanism
The Section 1782 Method has three central statutory elements with which all applications for a Section 1782 order must comply.
Firstly, the Applicant must be an “interested person”, which is typically a current or potential claimant or defendant. Secondly, the Respondent, whether a person or entity, must “reside” or be “found” in the judicial district in which the application is made. Crucially, there needs be no more than physical presence in the district to satisfy this element and the presence itself need not be the registered address of the entity. Thirdly, the eventual disclosure must be “for use in a proceeding in a foreign or international tribunal”; notably, it need only relate to actual or reasonably contemplated litigation in a foreign jurisdiction.
Applications are typically made ex parte and decided “on the papers”. Often, hearings are not required but may be appropriate in certain circumstances. Once granted, the order is served on the Respondent, who typically has 30 days to comply or contest by way of appeal. The U.S. district courts have various discretionary powers in this event, which may result in the request being narrowed or quashed entirely. Each matter will turn on its own facts having regard to criteria established in statute and case law.
Location
The above requirements, albeit straight forward in their meaning, can create certain practical challenges. Although the Section 1782 Method is broad in its scope and applicability, the practicalities ought to be considered before progression.
Where the request is sought for an individual person or entity, the judicial district may be readily identifiable. Conversely, as is often the case in litigation, there may be multiple parties. This can prove a complicating factor if they do not all reside in the same judicial district.
This is not prohibitive for bringing the application as the scope of the statue is broad and the U.S. district courts have construed it widely. An Applicant may rely on whether the legal entity may be “found” in the jurisdiction as a result of “continuous and systematic” affiliations in the particular district. Failing this, the Applicant may consider whether the Respondent would be subject to the U.S. district court’s “personal” jurisdiction. Applicants should approach Section 1782 applications with careful forethought should this present an issue to make sure that the application is lodged in the appropriate and most advantageous judicial district.
This route for obtaining disclosure is attractive and may be a cost-effective option when considering it against its counterparts. However, should multiple applications be required under different factual circumstances, this can multiply the costs incurred for doing so. Early strategic planning helps ensure that the application is tailored to meet the statutory elements.
Discretionary powers
Should a party satisfy the U.S. district court that the above basic elements are met, the court exercises their overarching discretion, guided by the factors established in Intel Corp v AMD Inc, 542 U.S. 241 (2004).
The first Intel factor which the court may consider is whether the “person from whom discovery is sought is a participant in the foreign proceedings.” The U.S. courts are more willing to grant a 1782 order where the Respondent is outside of the foreign court’s control and, therefore, the only realistic route for disclosure is through the intervention of the U.S. courts.
The second factor prompts the U.S. court to consider 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 US federal-court judicial assistance.” U.S. courts may allow the request for disclosure even if the foreign court may hold that the evidence is inadmissible. However, they generally decline to intervene by making an order for disclosure if doing so would undermine the foreign court from which the request has been made. This means that if the domestic court has previously refused to grant the requested disclosure and/or stated that the Section 1782 Method shall not apply, the U.S. courts are unlikely to interfere.
The third consideration is whether the request “conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States.” The U.S. district court is unlikely to intervene where doing so would contradict an adverse foreign ruling or seeks to avoid unfavourable rulings in foreign courts. However, the Applicant need not have exhausted all discovery options in the domestic jurisdiction for the Section 1782 Method to be available.
Finally, the U.S. courts would query whether the request is proportionate and/or “unduly intrusive or burdensome.” This is the most common way that an application is contested and consideration of the extent of the request ought to be prioritised as a result.
Contesting a Section 1782 order
The Respondent reserves the right to contest any order made against them. If successful, the Court can use its broad discretionary powers to alter the terms of the order or to quash it entirely.
Respondents typically contend that the request for disclosure was overly board, burdensome and/or seeks privileged information. Respondents have also sought to bolster their objections on the basis that it breaches constitutional First Amendment rights. Development of case law suggests that the U.S. courts shall extend such First Amendment protections only over its own citizens and within its own territory. If the information sought relates to a foreign individual for example, the U.S. courts are more likely to approve of the application, even if it engages First Amendment rights.
Whilst many Section 1872 orders are not often defeated when they are contested by the Respondent, this does not eradicate the real possibility that the terms of the request can be amended by the U.S. Court to significantly narrow the thrust of inquiry. Ultimately, each matter will turn on its own facts and is subject to the will of the U.S. Court.
Conclusions and looking to the future
At its core, the Section 1782 Method allows foreign litigants to tap into the federal court system and, by way of an order, compel a person or entity to disclose material evidence. The Section 1782 Method should be borne in mind as an additional tool from which a party can obtain evidence from U.S. persons or entities as part of a broader evidence-gathering strategy, regardless of whether the evidence itself is stored within the judicial district (so long as the party has control over the evidence).
As an applicant does not need to have commenced proceedings and instead need only be “within reasonable contemplation” of the party, the Section 1782 Method also provides a direct route when urgent action is required to obtain information. It can be particularly beneficial for identifying an anonymous party before issuing proceedings in England or Wales. Likewise, if the party resides in the U.S (over which the English and Welsh courts have no jurisdictional reach), it avoids the requirement to first obtain an NPO/CPR 31.17 and an order for service out of the jurisdiction.
Certainly, the Section 1782 Method can aid in requiring disclosure from parties residing in the U.S. but it is not the only mechanism by which evidence may be obtained. For example, in the insolvency context, practitioners may rely instead on the more expansive powers afforded by an application under the United States Bankruptcy Code, 11 USC, Chapter 15. However, the Section 1782 Method applies to a broader spectrum of legal fields and may generate a wider scope of evidence compared with what can be provided by disclosure orders made by the courts of England and Wales.
The Section 1782 Method remains limited in its scope: the order is enforceable only against those “found” or “residing” in the U.S. and neither does it eradicate the need for proceedings in the Courts of England and Wales. Any such request may be defeated considering the discretionary powers which are afforded to the U.S. district courts in the context of applications pursuant to U.S. Code § 1782. Ultimately, each matter shall turn on its own factual matrix and careful forethought is essential before making an application under the U.S. Code § 1782. Looking forward, practitioners should adopt a pro-active approach by mapping evidence early, pre-emptively planning and strategising with regards to the evidence required to bring forward a claim, and carefully assessing the base criteria and Intel factors to assess the likelihood of success and anticipate potential objections.
In an age where fundamental rights to privacy, protection of personal data and confidentiality are increasingly central to the legislature and legal practitioners alike, it is likely that the bounds of the U.S. Code § 1782 will continue to be tested by U.S. based companies as they challenge discovery requests. For media lawyers in particular, it provides a useful alternative to urgently obtaining information in order to identify anonymous parties online that are unlawfully using social media platforms that are based in the U.S.
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