11th Circuit Affirms Extraterritorial Discovery to Assist International Proceeding & Production of Documents Held by Affiliates Abroad
In a case of first impression in the circuit (Sergeeva), the Eleventh Circuit affirmed an order granting extraterritorial discovery pursuant to 28 U.S.C. § 1782 to support an asset recovery case. The case is significant because it recognizes that the scope of discovery available to support a foreign proceeding is not limited to information confined within U.S. borders but also reaches information accessible to those subject to the reach of U.S. courts. The opinion, therefore, is significant in the landscape of 28 U.S.C. § 1782 because it expressly recognizes a substantially broadened access to evidence for foreign proceedings.
Moreover, the opinion—in interpreting “possession, custody, or control”—highlights that such access to documents beyond U.S. shores pursuant to federal subpoena power extends to information in the hands of affiliated entities under proper circumstances. As such, the significance of Sergeeva is two-fold: It resolves the issue, in this circuit, of whether Section 1782 can be applied extraterritorially, and it recognizes that subpoenaed documentary evidence also extends to affiliate entities consistent with the Federal Rules of Civil Procedure (as expressly incorporated into Section 1782).
Following marital dissolution proceedings in Russia, a former wife undertook efforts to discover concealed marital assets in multiple jurisdictions including Cyprus, Latvia, Switzerland, the BVI and the Bahamas. She ultimately sought discovery in the United States through 28 U.S.C. § 1782 to support her claim before a presiding Moscow court adjudicating the division of marital assets. The application sought information from third-party Trident Atlanta and its employee regarding information related to her former husband’s beneficial ownership of a Bahamian company.
Extraterritorial Application of 28 U.S.C. § 1782
The court first set forth the prima facie requirements to obtain relief pursuant to 28 U.S.C. § 1782:
(1) the request must be made “by a foreign or international tribunal,” or by “any interested person”; (2) the request must seek evidence, whether it be the “testimony or statement” of a person or the production of “a document or other thing”; (3) the evidence must be “for use in a proceeding in a foreign or international tribunal”; and (4) the person from whom discovery is sought must reside or be found in the district of the district court ruling on the application for assistance.
After determining that the predicate factors were met, the court addressed the discretionary factors as set forth by the United States Supreme Court (the Intel factors): “(a) whether aid is sought to obtain discovery from a participant in the foreign proceeding” (the first factor); (b) “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 U.S. federal-court judicial assistance” (the second factor); (c) whether the applicant is attempting to use § 1782 to “circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States” (the third factor); and (d) whether the discovery requests are “unduly intrusive or burdensome” (the fourth factor).
Trident Atlanta took issue with the third factor arguing that Section 1782 does not apply extraterritorially. The court examined Section 1782 and held that it plainly provides for production consistent with the Federal Rules of Civil Procedure. Because Rule 45 (subpoena) calls for broad production of non-privileged documents, including those located outside of the United States, the court determined that the only limitation imposed by the rules related to the “location for the act of production,” not the location of the underlying documents. Therefore, documents subject to the subpoenaed party’s control were subject to production.
While the determination appears rather straightforward, it addresses a conflict in the application of Section 1782 dating back to Intel. Essentially, there have been two varying views as to whether Section 1782 entitles an applicant to obtain discovery of documents located outside of the United States (assuming the remaining requirements are met). The predominant view was that Section 1782 did not apply extraterritorially, while the minority view declined to limit its scope to U.S. borders.
The full article is available at p. 22 of the Florida Bar’s Winter 2017 International Law Quarterly which focuses on international investigations.
Ava Borrasso is the principal of Ava J Borrasso, P.A., a Miami-based law firm that concentrates on business and international litigation and arbitration. She also serves as an Arbitrator.