Legal Update
Jun 15, 2022
US Supreme Court Clarifies the Scope of 28 U.S.C. § 1782
The federal statute 28 U.S.C. §1782 allows litigants in a foreign proceeding to obtain discovery in the United States, under the broad US discovery rules, for use in such proceedings. Although Section 1782’s use has been expanding (which you can read about here) and has been applied even to documents held overseas (which you can read about here and here), there was a split in authority regarding whether the statute was broad enough to permit US courts to authorize discovery for use in private arbitrations overseas. The Fourth and Sixth Circuit courts of appeals held that it was broad enough to cover private arbitrations, while the Second, Fifth and Seventh Circuits held that the statute does not extend to private arbitrations. On June 13, 2022, the US Supreme Court resolved the split and sided with the courts holding that the statute does not extend to private arbitrations overseas.1
In a unanimous decision, the Court examined language in Section 1782 that the discovery ordered by a US Court must be “for use in a proceeding in a foreign or international tribunal.”2The Court held that the word “tribunal,” standing alone, could refer not only to a court, but “can also be used more broadly to refer to any adjudicatory body.” The Court found that Congress intended “tribunal” to be used in that broader sense because a prior iteration of the statute had referred specifically to “judicial proceeding[s].” Congress’s amendment simply to “tribunal” was intended to make the statute broader.3The Court continued, however, that “‘[t]ribunal’ does not stand alone—it belongs to the phrase ‘foreign or international tribunal.’” Based on that context, the Court found that the statute refers to “a tribunal imbued with governmental authority by one nation” or “a tribunal imbued with governmental authority by multiple nations.”4
The Court found support for this holding in the statute’s history, including the statute’s previous references to “courts” and “judicial proceedings” and its emphasis on “respecting foreign nations and the governmental and intergovernmental bodies they create.”5The Court also looked at the discovery available under the Federal Arbitration Act (“FAA”), which is narrower than that provided for in Section 1782. The Court therefore concluded that if Section 1782 covered private arbitrations, there would be a “mismatch between foreign and domestic arbitration” in which foreign litigants would be entitled to broader discovery under Section 1782 than domestic litigants operating under the FAA.6
The Court next examined whether the two arbitrations at issue in the cases before it qualified as “foreign or international tribunals” for purposes of Section 1782. The first arbitration was a private arbitration, pursuant to a private contract, before a “private dispute-resolution organization” operating under that organization’s own rules. The Court quickly concluded that this arbitral body did not qualify as a “foreign or international tribunal” under Section 1782.7The second arbitration involved a foreign sovereign as one of the arbitrating parties and was undertaken pursuant to an international treaty that provided an option to arbitrate. Nonetheless, the Court held that this arbitration did not qualify under Section 1782 because the arbitration was before an ad hoc arbitration panel formed specifically for the purpose of hearing a dispute between the foreign sovereign and a non-sovereign party. Thus, the international treaty did “not itself create” the panel, the panel was not affiliated with any sovereign, and there was no indication that the panel could exercise governmental authority.8
The Court’s decision not only resolves an important circuit split, but provides guidance to courts going forward about how to distinguish “foreign and international tribunals” from private tribunals for purposes of Section 1782. The Court’s decision also narrows somewhat the broad scope of Section 1782 by limiting the types of proceedings to which it applies. Nonetheless, Section 1782 will remain a powerful tool for overseas litigants proceeding in forums other than private arbitrations.
1. ZF Automotive US, Inc. v. Luxshare Ltd., Case Nos. 21-401 and 21-518, available at https://www.supremecourt.gov/opinions/21pdf/21-401_2cp3.pdf.
2. 28 U.S.C. § 1782(a).
3. Opinion at 6.
4. Id. at 7-9.
5. Id. at 9-11.
6. Id. at 11.
7. Id. at 11-12.
8. Id. at 12-17.