Source: https://openjurist.org/121/f3d/77
Timestamp: 2019-03-26 05:59:38
Document Index: 376865545

Matched Legal Cases: ['§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782', '§ 1782']

121 F. 3d 77 - Application for an Order Permitting Metallgesellschaft Ag to Take Discovery Metallgesellschaft Ag v. Hodapp
121 F3d 77 Application for an Order Permitting Metallgesellschaft Ag to Take Discovery Metallgesellschaft Ag v. Hodapp
121 F.3d 77
In re: APPLICATION FOR AN ORDER PERMITTING
METALLGESELLSCHAFT AG TO TAKE DISCOVERY, Pursuant To The
Federal Rules of Civil Procedure, of Siegfried Hodapp for
Use In An Action Pending in the Employment Court
("Arbeitsgericht") of Frankfurt Am Main, Germany.
METALLGESELLSCHAFT AG, Appellant,
Siegfried HODAPP, Appellee.
The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal. The order may be made ... upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court.... The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing.
Under § 1782, once the statutory requirements are met, a district court is free to grant discovery in its discretion. See In re Esses, 101 F.3d 873, 875 (2d Cir.1996) (per curiam); In re Lancaster Factoring Co., 90 F.3d 38, 42 (2d Cir.1996). The parties do not dispute that the statutory requirements of § 1782 are satisfied: (1) Hodapp resides in the Southern District of New York, (2) the information sought is for use in a proceeding before a foreign tribunal, and (3) the applicant, as the defendant in that proceeding, is an interested person. See Esses, 101 F.3d at 875. The only open question is whether the district court abused its discretion in denying discovery.
The permissive language of § 1782 vests district courts with discretion to grant, limit, or deny discovery. However, on several occasions recently, we have circumscribed that discretion. See, e.g., In re Application of Euromepa, S.A., 51 F.3d 1095, 1099-1100 (2d Cir.1995); In re Application of Gianoli, 3 F.3d 54, 58-60 (2d Cir.1993); In re Application of Malev Hungarian Airlines, 964 F.2d 97, 100-01 (2d Cir.1992). Underlying these decisions is our view that district courts must exercise their discretion under § 1782 in light of the twin aims of the statute: "providing efficient means of assistance to participants in international litigation in our federal courts and encouraging foreign countries by example to provide similar means of assistance to our courts...." Malev, 964 F.2d at 100. In stating its views, the district court did not advert to these objectives, explicitly or implicitly, and in fact the reasons the court did give were at odds with these goals. Specifically, the district court remarked:
We have rejected any requirement that evidence sought in the United States pursuant to § 1782(a) be discoverable under the laws of the foreign country that is the locus of the underlying proceeding. Gianoli, 3 F.3d at 59-60. Our holding in Gianoli rests on the text of § 1782, which "makes no reference whatsoever to a requirement of discoverability under laws of the foreign jurisdiction," id. at 59, as well as the history and purpose of the provision, see id. at 57-58. Similarly, we have held that a district court may not refuse a request for discovery pursuant to § 1782 because a foreign tribunal has not yet had the opportunity to consider the discovery request. See Malev, 964 F.2d at 100. Such a "quasi-exhaustion requirement," finds no support in the plain language of the statute and runs counter to its express purposes, as "[i]t would undermine the policy of improving procedures for assistance to foreign and international tribunals by imposing an additional burdens on persons seeking assistance from our federal courts...." Id. The district court abused its discretion by imposing such extra-statutory requirements and, as noted, by failing to take into consideration the twin aims of the statute in reaching its decision.
Hodapp contends that the district court acted properly in considering the foreign discoverability of the material sought in exercising its discretion. In doing so, Hodapp relies on language in Gianoli, 3 F.3d at 60, where we observed that "district judges may well find that in appropriate cases a determination of discoverability under the laws of the foreign jurisdiction is a useful tool in the exercise of discretion under section 1782." See also Euromepa, 51 F.3d at 1098. However, this language was not meant to authorize denial of discovery pursuant to § 1782 solely because such discovery is unavailable in the foreign court, but simply to allow consideration of foreign discoverability (along with many other factors) when it might otherwise be relevant to the § 1782 application. For example, if it were clear that discovery were equally available in both foreign and domestic jurisdictions, a district court might rely on this evidence to conclude that the § 1782 application was duplicative, see Fed.R.Civ.P. 26(b)(2), or was brought vexatiously, see In re Request for Assistance from Ministry of Legal Affairs of Trinidad and Tobago, 848 F.2d 1151, 1156 (11th Cir.1988) (noting that "[i]f the judge ... suspects that the [§ 1782 discovery] request is a 'fishing expedition' or a vehicle for harassment, the district court should deny the request").
In the present case, however, the district court considered discoverability under foreign law as more than merely, as Gianoli indicated, a "useful tool," 3 F.3d at 60: it was the beginning and end of the inquiry. As we declared in Gianoli, foreign discoverability cannot be used, consistent with the language and purpose of § 1782, as such a blunt instrument. Id. at 58-59.
Moreover, even if the district court were animated by a concern that permitting discovery in this jurisdiction would alter the balance created by the procedural rules of the German court, recently, we have made the point that although American-style discovery for one party may skew foreign litigation, "it is far preferable for a district court to reconcile whatever misgivings it may have about the impact of its participation in the foreign litigation by issuing a closely tailored discovery order rather than by simply denying relief outright." Euromepa, 51 F.3d at 1101. The district court did not follow this guidance. Instead of tailoring discovery pursuant to its authority under Fed.R.Civ.P. 26 or imposing reciprocal discovery obligations, the district court denied discovery outright.
We can understand how a district court might conclude, almost instinctively, that "it is better to have these discovery issues come up on the 18th of April in the German court and be decided be the German court." Joint Appendix at 160. After all, that foreign tribunal has the greatest interest in the case. However, through § 1782 Congress has seen fit to authorize discovery which, in some cases, would not be available in foreign jurisdictions, as a means of improving assistance by our courts to participants in international litigation and encouraging foreign countries by example to provide similar means of assistance to our courts. See Malev, 964 F.2d at 100. If district courts were free to refuse discovery based upon its unavailability in a foreign court or because the foreign court had not first passed on the discoverability of the material sought, § 1782 would be irrelevant to much international litigation, frustrating its underlying purposes.
Hodapp also argues at some length that the district court was required to deny discovery because, under § 1782(a), "[a] person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege." This argument is unavailing because--contrary to Hodapp's assertion--the district court did not base its decision on the existence of a privilege under German law. The court made no mention of the matter. Anyway, as is evident from the parties' briefs and oral argument, whether such a privilege exists under German law is far from clear. To require the district court to determine such an issue would involve it in a "speculative foray[ ] into legal territories unfamiliar to federal judges." Euromepa, 51 F.3d at 1099. Such a foray would result in " 'an unduly expensive and time-consuming fight about foreign law,' " id. (quoting Hans Smit, Recent Developments in International Litigation, 35 S. Tex. L.Rev. 215, 235 (1994)), undermining the twin aims of the statute. Thus, absent "authoritative proof that a foreign tribunal would reject the evidence obtained with the aid of section 1782," id. at 1100--in this instance presumably because of a violation of the alleged privilege--a district court should not refrain from granting the assistance afforded under the Act based simply on allegations to that effect.
No such "authoritative proof" was forthcoming, notwithstanding Hodapp's opportunity to request a ruling from the Labor Court in Frankfurt at the April 18th hearing. See Euromepa, 51 F.3d at 1100 & n. 3. In the face of this inaction, we will not speculate--particularly on the basis of an ambiguous affidavit submitted by Hodapp's German counsel--whether Hodapp enjoys a privilege under German law entitling him to refuse to comply with a discovery order under § 1782.
Hon. Donald P. Lay of the United States Court of Appeals for the Eighth Circuit sitting by designation