Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca11-15-14913/USCOURTS-ca11-15-14913-0/pdf.json

Parties Involved:
Bracha Foundation
Appellee
Halliwel Assets, Inc.
Appellant
Hornbeam Corporation
Appellee
Panikos Symeou
Appellant

Document Text:

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 15-14913

________________________

D.C. Docket No. 2:15-mc-00748-KOB

IN RE: Application of Bracha Foundation

HALLIWEL ASSETS, INC.,

PANIKOS SYMEOU,

Intervenors-Appellants,

 versus

HORNBEAM CORPORATION, 

Intervenor-Appellee,

BRACHA FOUNDATION,

Movant-Appellee.

________________________

Appeal from the United States District Court

for the Northern District of Alabama

________________________

September 22, 2016

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Before MARTIN and JORDAN, Circuit Judges, and VINSON,* District Judge.

PER CURIAM: 

Three Ukrainian businessmen and friends bought a steel mill in Ohio. They 

incorporated a company in the British Virgin Islands to act as the sole 

member/owner of the steel mill and each retained one-third of the shares of the 

BVI parent company. When a rift between two of the businessmen took place, one 

of the men was effectively shut out of the operation of the steel mill. Amidst 

allegations of self-dealing between the two still-friendly shareholders, their related 

entities, and the steel mill, the odd-man-out pursued lawsuits in the BVI and in 

state court in Ohio against the BVI parent company and his former friends. In 

addition, pursuant to 28 U.S.C. § 1782, he sought evidence of the self-dealing in 

New York, Delaware, Florida, and Alabama, for use in as-of-yet-unfiled foreign 

proceedings. This is an appeal from one such discovery action. 

After review, and with the benefit of oral argument, we affirm in part, and 

vacate and remand in part.

I

Section 1782 provides a mechanism for “any interested person” to apply to 

the district court for an order granting discovery “for use in a proceeding in a 

 

* Honorable C. Roger Vinson, United States District Judge for the Northern District of 

Florida, sitting by designation.

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foreign or international tribunal.” 28 U.S.C. § 1782. A district court is authorized 

to grant such an application under § 1782 if the following four statutory 

requirements are met:

(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.

In re Clerici, 481 F.3d 1324, 1331–32 (11th Cir. 2007) (quoting § 1782) (footnote 

omitted). If these statutory requirements are met, a district court is authorized—

but not required—to grant a § 1782 discovery application. See Intel Corp. v. 

Advanced Micro Devices, Inc., 542 U.S. 241, 264 (2004).

The Supreme Court has provided four factors for a district court to consider

in exercising its discretion under § 1782: “(1) whether ‘the person from whom 

discovery is sought is a participant in the foreign proceeding,’ because ‘the need 

for § 1782(a) aid generally is not as apparent as it ordinarily is when evidence is 

sought from a nonparticipant’; (2) ‘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’; (3) 

‘whether the § 1782(a) request conceals an attempt to circumvent foreign proofUSCA11 Case: 15-14913 Date Filed: 09/22/2016 Page: 3 of 26
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gathering restrictions or other policies of a foreign country or the United States’; 

and (4) whether the request is otherwise ‘unduly intrusive or burdensome.’” In re 

Clerici, 481 F.3d at 1334 (quoting Intel, 542 U.S. at 264–65).

“Because Congress has given the district courts such broad discretion in 

granting judicial assistance to foreign countries, this court may overturn the district 

court’s decision only for abuse of discretion.” United Kingdom v. United States, 

238 F.3d 1312, 1319 (11th Cir. 2001) (quotations and citation omitted). This 

“extremely limited and highly deferential” standard of review “is identical to that 

used in reviewing the district court’s ordinary discovery rulings . . . .” Id.

(citations omitted). However, “to the extent the district court’s decision is based 

on an interpretation of law, our review is de novo.” Id. at n.8. 

II

The § 1782 application in the instant case arises out of an ongoing complex 

commercial dispute. We present here only the facts essential to the resolution of 

this appeal.

A

In 2001, corporate entities controlled by Vadim Shulman purchased a steel 

mill in Warren, Ohio. Mr. Shulman shared this investment opportunity with two of 

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his friends, Igor Kolomoisky, and Gannady1 Bogolubov. In November of 2007, 

ownership of the mill was transferred to Warren Steel Holdings, LLC, a Delaware 

limited liability company. Warren Steel’s beneficial owners were Mr. Shulman, 

Mr. Kolomoisky, and Mr. Bogolubov. In April of 2008, ownership of Warren 

Steel was transferred to Halliwel Assets, Inc., a BVI company, and Panikos 

Symeou became Halliwel’s director. 

Warren Steel is Halliwel’s only asset. Halliwel, in turn, has three registered 

shareholders: Hornbeam Corporation (a Panamanian entity held in trust for Mr. 

Shulman); Mr. Symeou (who holds shares in trust for Mr. Kolomoisky); and 

Marigold Trust Company Limited (which holds shares in trust for Mr. Bogolubov). 

Although the details of the corporate structures are complex, it is undisputed that 

Mr. Shulman, Mr. Kolomoisky, and Mr. Bogolubov ultimately each owns or 

controls one-third of Halliwel. 

On December 19, 2014, Hornbeam initiated a transfer of its Halliwel shares 

to Bracha Foundation, a Liechtenstein foundation which is wholly owned or 

controlled by Mr. Shulman, and requested Halliwel to amend its books to record 

the new ownership. Around this time, Hornbeam recorded its resolution of 

 

1 The parties’ affidavits and briefs contain various spellings for Mr. Bogolubov’s first 

name. We adopt the spelling from Appellants’ brief. See Br. for Appellants at 5.

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dissolution. Mr. Symeou has not recorded the transfer. Accordingly, Hornbeam 

remains the record owner.

B

The merits of the underlying commercial dispute between Mr. Shulman, Mr. 

Kolomoisky, and Mr. Bogolubov are not presently before the Court and we do not 

attempt to resolve the underlying issues. However, a brief overview is useful for 

purposes of context. 

According to the § 1782 application, initially filed ex parte by Bracha, Mr. 

Kolomoisky and Mr. Bogolubov “appear to be using entities and individuals under 

their control to execute an elaborate self-dealing scheme focused on exploiting 

Warren Steel.” D.E. 1 at 6. “It appears that [Mr. Kolomoisky and Mr. Bogolubov] 

are forcing Warren Steel to transact with related parties on terms unfavorable to 

Warren Steel and to accept ill-advised on-demand loans secured by Warren Steel’s 

assets and revenues from parties related to [Mr.] Kolomoisky, [Mr.] Bogolubov, or 

[Mr.] Korf, but not [Mr.] Shulman.” Id.

In response, Mr. Shulman, through the various entities under his control, has 

initiated a number of proceedings against Halliwel, its director, and its 

shareholders. In 2014, Hornbeam commenced an action in the BVI to enjoin an 

“extraordinary” shareholder meeting to approve a proposed restructuring of 

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Warren Steel’s debt. In 2015, Bracha and Hornbeam pursued an action in Ohio 

state court to prohibit the sale or transfer of Warren Steel to other entities owned 

and controlled by Mr. Kolomoisky and Mr. Bogolubov. Discovery has also been 

sought by Hornbeam pursuant to § 1782 in New York, Delaware, Ohio, and 

Florida.

C

As relates to the instant action, Bracha filed an ex parte application for 

discovery pursuant to § 1782 in the Northern District of Alabama. Bracha sought

an order directing Regions Bank, a bank present in the Northern District of 

Alabama, to provide discovery of certain documents for use in contemplated 

foreign legal proceedings (i) in the BVI against Halliwel and its other shareholders 

(Mr. Symeou and Marigold) “for violation of the BVI Business Companies Act of 

2004, including, without limitation, an accounting, valuation, shareholder 

oppression, and buyout”; (ii) by Mr. Shulman or one of his entities against Mr. 

Symeou, in either BVI or Cyprus, for breach of contract and fiduciary duties; and 

(iii) by Mr. Shulman or one of his entities against Mr. Kolomoisky, and/or Mr. 

Bogolubov for breach of their joint venture agreement. D.E. 1 at 3–4. The district 

court granted Bracha’s ex parte application. 

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A few months later—after Bracha served its non-party subpoena on Regions 

Bank and provided notice of the same to Appellants Halliwel and Mr. Symeou 

(hereinafter, Halliwel)—Halliwel filed a motion to intervene, a motion to vacate, 

and an emergency motion for protective order. In its motion to vacate, Halliwel

argued, inter alia, that § 1782 applications should not be granted ex parte; that 

Bracha was not an “interested person” under § 1782 because it was not the record 

owner of the Halliwel shares and, under BVI law, only record owners have 

standing to bring the contemplated action against Halliwel in BVI courts; and that 

Bracha’s discovery was a mere fishing expedition for use in domestic litigation.

Shortly thereafter, Bracha and Hornbeam moved jointly for Hornbeam to 

intervene or for the district court to amend the original § 1782 application to 

include Hornbeam, so as to expedite the court’s consideration of the merits of the 

application. 

At a hearing where all parties were represented, the district court granted 

Halliwel and Hornbeam’s respective motions to intervene. As to Halliwel’s 

argument that Bracha failed to satisfy § 1782’s “interested person” requirement, 

the district court noted: 

I think at one point there was an issue as to whether Bracha was truly 

the entity with an interest and, therefore, satisfied the standing issue. 

But I think with Hornbeam now added as a party, perhaps we need to 

amend the initial order to reflect both as interested parties or 

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alternatively interested parties, but I think we satisfy any question 

about whether there was an interested party with standing upon the 

intervention of Hornbeam.

D.E. 51 at 8. Halliwel requested that if the district court was going to amend the 

§ 1782 order, Hornbeam should be substituted in as the party entitled to discovery 

in place of Bracha. The district court demurred from this request, describing it as 

“a point without a real significant difference” because the issue before the district 

court was “whether the subpoena to Regions [Bank] that was issued as a result of 

this should be somehow withdrawn as a result of a vacated order.” Id. at 13.

After the hearing, the district court issued an order denying Halliwel’s 

motion to vacate, but sua sponte quashing the subpoena issued to Regions Bank 

and amending its original order to reflect the intervention of Hornbeam and to 

narrow the scope of ordered discovery. The district court rejected Halliwel’s

argument against granting § 1782 applications ex parte, concluding that the use of 

ex parte § 1782 applications is widespread, and even if the original proceeding was 

ex parte, the district court held a hearing and amended its original order in light of 

the arguments and submissions of all of the parties. With both Bracha and 

Hornbeam as applicants, the district court concluded that “no reasonable dispute 

currently exists” on the interested person requirement—it was met. D.E. 46 at 4. 

The district court specifically declined to determine whether Bracha alone would 

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satisfy the requirement and the amended final order refers to both Bracha and 

Hornbeam as applicants. See D.E. 47 at 2 (“The court GRANTS the application of 

Bracha and Hornbeam as amended . . . .”). The district court was also satisfied that 

Bracha and Hornbeam reasonably contemplated foreign litigation because the

contemplated BVI claims were distinct from the claims previously brought in the 

Ohio state court suit, and the applicants also agreed to enter into a protective order 

limiting the use of evidence obtained as a result of their § 1782 application to 

foreign proceedings.

After the Ohio state court dismissed Bracha and Hornbeam’s suit to prevent 

the sale of Warren Steel based on the internal affairs doctrine and forum non 

conveniens, Halliwel moved under Rule 60(b) for the district court to reconsider its 

decision authorizing discovery. The district court denied this motion. It concluded

that the “Ohio court rulings regarding the internal affairs doctrine and forum non 

conveniens addressed in a lawsuit in Ohio,” were different from what the district 

court had addressed in its prior rulings—“a § 1782 application for discovery in 

reasonable contemplation of future litigation in the BVI.” D.E. 53 at 1.

III

On appeal, Halliwel raises five arguments. First, Halliwel argues that the 

district court should have abstained from exercising jurisdiction over the § 1782 

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application due to the operation of the internal affairs doctrine. Second, Halliwel

argues that the application failed to meet two of the § 1782 statutory requirements 

because one of the applicants, Bracha, was not an “interested person,” and also 

because the discovery was not for use in a proceeding “within reasonable 

contemplation” in a foreign or international tribunal. Third, Halliwel contends that 

two of the discretionary factors identified by the Supreme Court in Intel militate 

against granting discovery because the § 1782 aid was not necessary and 

circumvented foreign proof-gathering restrictions. Fourth, Halliwel contends that 

§ 1782, which partially incorporates the Federal Rules of Civil Procedure, does not 

permit discovery prior to the filing of a foreign proceeding. Finally, Halliwel

argues that the district court abused its discretion in granting the § 1782 application 

on an ex parte basis. 

A

Halliwel’s first argument is that the district court erred in granting the 

§ 1782 application because the proper application of the internal affairs doctrine 

required the district court to abstain from ordering the discovery of documents 

concerning Warren Steel from Regions Bank. As it did in its Rule 60(b) motion, 

Halliwel relies heavily on the Ohio state court action, in which the Court of 

Common Pleas of Trumbull County, Ohio, General Division, dismissed an action 

by Bracha asserting the right of a shareholder under Ohio corporate law to view the 

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records of a corporation and seeking, inter alia, permanent injunctive relief under 

Ohio corporate law to stop the sale of Warren Steel or any of its assets to named 

companies. See D.E. 52-1 (Order in Bracha Foundation v. Warren Steel Holdings, 

LLC, No. 2015 CV 1117, 2015 CV 1577 (Trumbull Cty. Ohio Ct. Com. Pl., Oct. 

22, 2015)).

The Supreme Court has described the internal affairs doctrine as a “conflict 

of laws principle which recognizes that only one State should have the authority to 

regulate a corporation’s internal affairs—matters peculiar to the relationships 

among or between the corporation and its current officers, directors, and 

shareholders—because otherwise a corporation could be faced with conflicting 

demands.” Edgar v. Mite Corp., 457 U.S. 624, 645 (1982) (citation omitted). The 

Court has explained that the doctrine serves a number of important policy goals. 

See CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 89–90 (1987) (explaining 

that efficiency of national capital markets rely on the fact that the internal affairs of 

corporations are generally governed by the law of a single jurisdiction). 

However, not all litigation involving corporations triggers the internal affairs 

doctrine. Rather, the litigation must involve the regulation of the internal affairs of 

a company. See, e.g., Edgar, 457 U.S. at 645 (“Tender offers contemplate 

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transfers of stock by stockholders to a third party and do not themselves implicate 

the internal affairs of the target company.”) (citations omitted).

Halliwel’s reliance on the internal affairs doctrine is without merit because

the instant § 1782 application does not attempt to regulate the internal affairs of 

any company. As the district court below correctly observed, “the § 1782 

application does not propose to litigate a dispute about Halliwel’s internal affairs

here in the Northern District of Alabama. Rather, the application is merely a 

discovery device to obtain evidence here in the jurisdiction where the evidence 

exists, and then to litigate elsewhere.” D.E. 46 at 9. See also D.E. 33-31 at 17–18 

(Order in In re Application of Hornbeam Corp., No. 1:14-mc-00424-P1 (S.D.N.Y. 

Sept. 17, 2015) (“This argument also makes no sense because a § 1782 request is 

merely a discovery device not a pleading or means of actually litigating a dispute 

about Halliwel’s internal affairs.”)).

Halliwel’s reliance on the Ohio state court judgment is similarly misplaced. 

That case involved an action under Ohio corporate law asserting substantive 

shareholder rights under that law and seeking permanent injunctive relief against 

internal corporate decisions of a foreign corporation. The § 1782 order in the 

instant case, in contrast, merely requires a third party, Regions Bank, to produce 

various documents relating to Warren Steel. It does not presume to regulate 

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Warren Steel’s (or Halliwel’s) internal affairs or the relationships among or 

between Warren Steel and its current officers, directors, and shareholders. The 

internal affairs doctrine accordingly provides no bar to the district court’s exercise 

of jurisdiction over the § 1782 application.

B

Next, Halliwel argues that the district court erred in granting the § 1782 

application because the application failed to meet two of the § 1782 statutory 

requirements: (1) that the application be made by “any interested person”; and (2) 

that the requested discovery is “for use in a proceeding in a foreign or international 

tribunal.”

1

Section 1782 requires that the discovery request be made “by a foreign or 

international tribunal” or by “any interested person.” The controversy lies with 

Bracha’s status as an “interested person.” The § 1782 application in this case—

unlike the ones filed in New York, Florida, Ohio, and Delaware—was filed by 

Bracha. After the district court granted Hornbeam’s motion to intervene, the 

district court expressly declined to decide the question of Bracha’s status as an 

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“interested person,” and yet, Bracha remained listed as a party entitled to § 1782 

discovery.

2

Halliwel argues that Bracha does not meet the statutory requirement as an 

“interested person” because it lacks standing to sue Halliwel in the contemplated 

BVI proceeding. Halliwel cites to its expert’s affidavit, stating that “[u]nder §§ 

1841, 184 and 78 of the BVI Business Companies Act of 2004, only registered 

shareholders have standing to bring derivative or direct ‘unfair prejudice’ claims.” 

Br. for Appellants at 38 (citing affidavit of legal expert). Under Halliwel’s articles 

of association, it maintains, Halliwel is not required to treat a transferee of a share 

as a shareholder until the transferee’s name has been entered in the register of 

shareholders. See id. Mr. Symeou (presumably in his role as Halliwel’s director, 

and not its shareholder) has not recorded the transfer. Halliwel indicates that Mr. 

 2 Halliwel has repeatedly conceded that Hornbeam is an “interested person” until 

recently. Now it argues that “Hornbeam’s dissolution . . . could conclude in less than three 

years, disabling it from filing any claims, or it could lose its status as a registered Halliwel 

shareholder as a result of the BVI execution proceedings, causing it to lose standing to bring BVI 

§ 1841 claims.” Reply Br. for Appellants at 23 n.14. Bracha and Hornbeam, on the other hand, 

argue that Hornbeam’s commencement of the voluntary dissolution process does not mean it can 

no longer bring an action in the BVI for shareholder oppression. See Br. for Appellees at 29 n.11 

(citing to representations by Mr. Symeou himself that Hornbeam continues to exist despite 

dissolution proceedings). 

We will not presume to determine what could happen between these parties in the next 

three years. At this point in time, it is undisputed that Hornbeam is an interested party. 

In addition, we note that any reliance by Halliwel on the outstanding BVI judgment may 

be moot in light of the uncontested Rule 28(j) filing from counsel for Bracha and Hornbeam, 

stating that “on August 24, 2016, Hornbeam’s BVI counsel issued a check in the amount of 

$924,916.62 (representing the $846,526 cost order plus interest) to BVI counsel for Halliwel, 

Symeou, and Marigold.”

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Symeou is waiting for Hornbeam to pay an outstanding $846,526 judgment to 

Halliwel that is remnant from Hornbeam’s prior unsuccessful suit in the BVI prior 

to doing so. See id. at 9.3

Bracha and Hornbeam, for their part, contend that the district court did not 

err in reserving judgment on Bracha’s status because it was sufficient that 

Hornbeam was an interested person. In the alternative, they argue Bracha is an 

“interested person” because its rights align with Hornbeam as the anticipated party 

in the contemplated BVI suit. Moreover, they argue, “[e]ven if the relevant 

standard were ‘participation rights’ under BVI law, a beneficial owner [like 

Bracha] may bring a shareholder action under BVI law.” See id. at 31 n.13 (citing 

to Halliwel’s expert evidence for support). 

We agree with Halliwel that the district court’s decision to grant the 

application to both Hornbeam and Bracha, without deciding whether Bracha was 

an “interested person,” was an error. Section 1782 requires that the application be 

made by an “interested person.” However, the Intel Court expressly rejected the 

narrow construction of “interested person” advanced by Halliwel—that the term is 

 

3 We note that this reason for delaying effectuating the transfer may be nullified. See 

note 2, supra.

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exclusively limited to litigants—holding that “[t]he text of § 1782(a) . . . plainly 

reaches beyond the universe of persons designated ‘litigant.’” 542 U.S. at 256. 

In Intel, a complainant before the Commission of the European 

Communities qualified as an “interested person” despite its lack of status as a 

litigant. The Supreme Court explained that the complainant was an “interested 

person” within the meaning of § 1782 because it had a “significant role in the 

process,” as the one who triggered the investigation, and also retained “significant 

procedural rights,” such as the right to submit information for the DirectorateGeneral for Competition’s consideration and the right to proceed to court if the 

Commission discontinued the investigation or dismissed the complaint. Id. at 255–

256. “Given these participation rights,” the Supreme Court held, the “complainant 

possesses a reasonable interest in obtaining judicial assistance, and therefore 

qualifies as an ‘interested person’ within any fair construction of that term.” Id. at 

256 (citation, quotation marks, and brackets omitted).

The central question here, then, is whether Bracha—as a beneficial owner, 

but not the record owner, of shares in Halliwel (the corporation set to be the target 

of the contemplated litigation)—has sufficient participation rights in the 

contemplated BVI (or other contemplated foreign) litigation so as to qualify as an 

“interested person.” Because the district court did not decide this issue and there 

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are disputes of fact regarding BVI legal proceedings and arguments that are not 

adequately developed by the parties on appeal, we find that remand is appropriate. 

We therefore vacate the portion of the district court’s order granting § 1782 

discovery to Bracha, but affirm as to Hornbeam. On remand, the district court 

should determine whether Bracha is an “interested person.” 

2

The third of the four § 1782 statutory requirements is that the requested 

discovery must be “for use in a proceeding in a foreign or international tribunal.” 

§ 1782(a). The foreign proceeding for which a court may authorize discovery need 

not be “pending or imminent.” Intel, 542 U.S. at 259 (internal quotation marks 

omitted). Rather, the statute requires only that foreign proceedings “be within 

reasonable contemplation.” Id. Although “[t]he future proceedings must be more 

than speculative,” it suffices that the district court has “‘sufficient indication that a 

proceeding in court would eventuate in which the evidence gathered can be 

weighed impartially.’” Application of Consorcio Ecuatoriano de 

Telecomunicaciones S.A. v. JAS Forwarding (USA) Inc., 747 F.3d 1262, 1270 

(11th Cir. 2014) (quoting In re Letter of Request from the Crown Prosecution Serv. 

of the U.K., 870 F.2d 686, 691 (D.C. Cir. 1989)).

Halliwel argues that the district court erred in granting discovery because the 

requested discovery was not “within reasonable contemplation.” Its main 

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argument is that the existence of an outstanding judgment of $846,526 in the BVI

against Hornbeam—remnant from Hornbeam’s prior unsuccessful suit in the BVI, 

and the satisfaction of which is a requirement for Hornbeam to proceed with any 

new BVI proceedings—prevents any future foreign proceedings from being 

“within reasonable contemplation.” See Br. for Appellant at 32–33.

We hold that the district court did not abuse its discretion in determining that 

future proceedings in the BVI were “within reasonable contemplation” despite the 

existence of this outstanding judgment. Although Hornbeam cannot pursue new 

litigation until it satisfies the judgment, there is no reason to believe it will not or 

cannot pay.4 Bracha and Hornbeam have represented their intention to return to 

litigation in the BVI and have articulated a theory upon which they intend to 

litigate. Indeed, we suspect that the decision to satisfy the judgment and pursue 

new litigation in the BVI may depend on its success in the instant § 1782 discovery 

proceedings. For these reasons, it is clear that the district court did not err in 

finding that the requested discovery is for use in a proceeding in a foreign or 

international tribunal.

 

4 Again, we note this argument may be moot. See note 2, supra. 

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C

We turn next to Halliwel’s international comity argument. Halliwel 

contends that the district court erred in concluding that the first and third Intel 

discretionary factors favored discovery, and that it abused its discretion in granting 

the § 1782 application. 

The district court found that the first Intel factor—“whether ‘the person from 

whom discovery is sought is a participant in the foreign proceeding,’” In re Clerici, 

481 F.3d at 1334 (quoting Intel, 542 U.S. at 264–65)—favored granting 

Hornbeam’s application because the entity from whom discovery is sought, 

Regions Bank, was not a participant in the foreign proceedings. The district court 

recognized that Bracha and Hornbeam might also be able to seek some records 

directly from Halliwel in the contemplated BVI proceeding, but reasoned that a 

BVI court would still have no jurisdiction to compel the production of evidence 

from Regions Bank, a non-party financial institution located in the Northern 

District of Alabama. 

As to the third Intel factor—“‘whether the § 1782(a) request conceals an 

attempt to circumvent foreign proof-gathering restrictions or other policies of a 

foreign country or the United States,’” id. (quoting Intel, 542 U.S. at 264–65)—the 

district court concluded that it also favored discovery. The district court credited 

Bracha and Hornbeam’s explanation that, given their “lack of success in past BVI 

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proceedings,” they “needed to be armed with evidence to support their claims of 

bad financial acts on the part of the proposed defendants, and that obtaining 

financial records from a bank not located within the jurisdiction of BVI tribunals to 

show inconsistencies and anomalies in those records could provide that support.” 

D.E. 46 at 9. This was not, the district court concluded, an attempt to forum shop 

and circumvent BVI evidence gathering procedures. See id.

On appeal, Halliwel contends that “the question is not, as the [district court] 

found, whether the documents are located in a United States judicial district, but 

whether they can be obtained from a party to foreign litigation.” Br. for Appellant 

at 30. Halliwel argues that the district court abused its discretion because Bracha 

and Hornbeam did not first attempt to seek the requested documents from Halliwel 

in the BVI, and instead sought to obtain “Warren Steel records through the back 

door.” Id. We are not persuaded.

As the Supreme Court explained in Intel, § 1782 discovery is more likely to 

be justified when the person from whom the discovery is sought is not a participant 

in the prospective foreign proceeding because “nonparticipants in the foreign 

proceeding may be outside the foreign tribunal’s jurisdictional reach; hence, their 

evidence, available in the United States, may be unobtainable absent § 1782(a) 

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aid.” 542 U.S. at 264. Here, it is undisputed that Regions Bank is not a participant 

in the prospective foreign proceedings. 

In addition, the documents sought in the subpoena to Regions Bank are 

broader in scope than, and not clearly duplicitous of, documents that would be in 

Halliwel’s (or even Warren Steel’s) possession in the BVI. For example, the 

district court authorized the production of “[a]ll communications and relationships 

with Related Party Lenders, Related Entities, and Related Individuals . . . 

concerning Warren Steel, business transactions with Warren Steel, or loans to 

Warren Steel.” D.E. 47 at 3 (emphasis added).

5 Thus, the district court did not 

abuse its discretion in granting an application seeking domestic documents in the 

possession of a domestic party that would not be available in the foreign 

jurisdiction. Cf. Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 81–

84 (2d Cir. 2004) (finding the first Intel factor weighed against discovery where 

German investors could seek the same documents from the German company in 

the German litigation as the investors sought to discover from the law firms

representing the German company in a similar litigation commenced in the United 

 

5 The definitions of “Related Party Lenders,” “Related Entities,” and “Related 

Individuals,” include many parties unfamiliar to this Court, including Divot Enterprises Limited, 

CC Metal and Alloys LLC, Felman Trading, Inc., and Optima Acquisitions, LLC. See D.E. 47 at 

3 n.1.

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States). Finally, we note that we have previously upheld discovery under § 1782 in 

the context of intra-shareholder disputes. See Weber v. Finker, 554 F.3d 1379 

(11th Cir. 2009). 

Other courts have held that even when the requested documents may be 

available in the foreign jurisdiction, there is no requirement to first seek discovery 

from the non-US tribunal or exhaust other options before applying to a district 

court for § 1782 discovery. See In re Malev Hungarian Airlines, 964 F.2d 97, 

100–101 (2nd Cir. 1992) (rejecting a “quasi-exhaustion requirement” because 

“requiring an interested person first to seek discovery from the foreign or 

international tribunal is at odds with the twin purposes of 28 U.S.C. § 1782 . . . . It 

would undermine the policy of improving procedures for assistance to foreign and 

international tribunals by imposing an additional burden on persons seeking 

assistance from our federal courts for matters relating to international litigation. 

Additionally, it would undermine the policy of prompting foreign courts to act 

similarly based on our own generous example.”); In re Bayer AG, 146 F.3d 188, 

195–96 (3d Cir. 1998). We too decline to adopt such a requirement.

In sum, we discern no abuse in the district court’s decision to permit 

discovery based on the Intel discretionary factors.

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D

We turn next to Halliwel’s argument that the district court erred by 

authorizing pre-filing discovery. Specifically, Halliwel argues that the district 

court erred because § 1782 incorporates the Federal Rules of Civil Procedure and 

the Federal Rules do not generally permit pre-filing discovery.

This argument appears to misunderstand the relationship between § 1782 

and the Federal Rules of Civil Procedure. As we have explained,

The district court’s authority to order [a person residing or found in a 

district] to give testimony “for use in a proceeding in a foreign . . . 

tribunal” stems from § 1782. 28 U.S.C. § 1782(a). Section 1782(a) 

then provides that, in its order granting § 1782 assistance, the district 

court “may prescribe the practice and procedure . . . for taking the 

testimony or statement or producing the document or other thing.” 

Id. (emphasis added). This “practice and procedure” may be “in 

whole or part the practice and procedure of the foreign country or the 

international tribunal.” Id. To the extent that the district court does 

not otherwise prescribe the practice and procedure, § 1782(a) 

provides that “the testimony or statement shall be taken, and the 

document or other thing produced, in accordance with the Federal 

Rules of Civil Procedure.” Id.

In re Clerici, 481 F.3d at 1335–36.

In other words, while the Federal Rules of Civil Procedure provide the 

default “practice and procedure” in which § 1782 discovery is be taken, the 

statutory authorization for district courts to compel discovery for use in foreign or 

international proceedings comes not from the Federal Rules of Civil Procedure but 

rather from § 1782 itself. See id. at 1336 (“Section 1782(a) refers to the Federal 

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Rules, not for whether the district court can order [a person] to give any testimony, 

but only for the procedures or manner in which that testimony is to be taken.”).

Accordingly, we look to § 1782, and not to the Federal Rules of Civil Procedure, to 

determine whether § 1782 discovery may only be authorized after the filing of a 

foreign proceeding. Section 1782 contains no such requirement.

E

Finally, we reject Halliwel’s argument that the district court erred in 

granting the original § 1782 order ex parte. The district court quashed the 

subpoena issued to Regions Bank pursuant to the original ex parte § 1782 order, 

and amended the original § 1782 order following full participation of all of the 

parties. Therefore, this argument is moot. We furthermore decline Halliwel’s 

invitation to entertain this argument on the basis that “in the future [Bracha and 

Hornbeam] may file new ex parte applications.” Br. for Appellants at 40 n.11. 

IV

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For the reasons discussed above, the district court’s order granting Bracha 

and Hornbeam’s § 1782 application is AFFIRMED with regards to Hornbeam but 

VACATED to the extent that it grants discovery to Bracha. We REMAND for the 

district court to determine whether Bracha is an interested party.

AFFIRMED IN PART, VACATED AND REMANDED IN PART.

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