On March 17, 2020, the U.S. District Court for the District of Delaware found that the most useful tool for foreign litigants seeking evidence from persons or entities located within the United States – section 1782 of the U.S. Code - may not be available to litigants involved in private commercial arbitration proceedings abroad. This decision is noteworthy not because it breaks new ground, but rather because it highlights the uncertainty surrounding this issue, with federal district and circuit courts across the country near evenly split.
In In re: EWE Gasspeicher GmbH, the Delaware District Court found that a private commercial arbitration in Germany was not a “tribunal” within the meaning of section 1782. In doing so, the district court fell in line with numerous districts across the country, and at the same time broke with the prior decisions of many others.
Section 1782 of the U.S. Code is frequently used as a means for foreign litigants to obtain discovery from a person or entity located in the United States in aid of a foreign proceedings; as a general matter, it permits a district court, on application by a foreign tribunal or any interested party, to order discovery against a person or entity that either “resides” or is “found” in the district where the application is made.
Although the statute has existed in its current form since 1964, its first four decades were marked by wide disagreement among federal courts as to its scope. Much of that uncertainty was clarified in 2004 by the U.S. Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc., wherein the Supreme Court, among other things, held that a “tribunal” under section 1782 includes administrative and quasi-judicial proceedings. 542 U.S. 241 (2004). Yet, as a recent decision by the U.S. District Court for the District of Delaware demonstrates, the issue of which bodies qualify as “tribunals” within the meaning of the statute has not been unanimously resolved.
At issue before the district court in In re: EWE Gasspeicher GmbH was whether a private commercial arbitration proceeding is a “tribunal” under section 1782. No. CV 19-MC-109-RGA, 2020 WL 1272612 (D. Del. Mar. 17, 2020). In answering “no,” the district court distinguished the arbitration from the quasi-judicial proceedings endorsed by the Supreme Court in Intel, principally noting the lack of judicial review and the fact that the arbitration was private and not before any public body. In doing so, the district court implicitly declined to follow Intel dictum that “the term ‘tribunal’…includes magistrates, administrative and arbitral tribunals….”
The district court’s holding does not purport to close the book on the issue, however. Rather, the district court acknowledged that federal courts are near evenly split – not just across jurisdictions, but even within the same district – and that there were “reasonable arguments on both sides of the debate.”