Court Opinion

ID: 67733
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:25:01+00
Date Added: 2024-06-11T17:20:59.625858
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                 FILED
                                                                           August 6, 2009

                                       No. 08-20771                    Charles R. Fulbruge III
                                                                               Clerk

EL PASO CORPORATION,

                                                   Respondent–Appellee,
v.

LA COMISION EJECUTIVA HIDROELECTRICA DEL RIO LEMPA,

                                                   Movant–Appellant.
v.

ROBERT HART,

                                                   Movant-Appellee.

                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 4:08-MC-335

Before DAVIS, OWEN, and HAYNES, Circuit Judges.
PER CURIAM:*
       La Comision Ejecutiva Hidroelectrica Del Rio Lempa (CEL) appeals the
district court’s denial of its request for discovery for use in a private
international arbitration proceeding pursuant to 28 U.S.C. § 1782. We affirm.
                                              I

       *
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
                                  No. 08-20771

      CEL brought this suit to obtain discovery from a party in the United
States for use in a private international arbitration in Geneva, Switzerland. The
arbitration involves a contractual dispute between CEL, a state-owned utility
company in El Salvador, and Nejapa Power Company (NPC), a utility company
that contracted to construct a power plant and provide power to CEL for twenty
years. Appellee El Paso Corporation is a company related to NPC from whom
CEL seeks discovery for use in the arbitration.         The arbitration is being
conducted pursuant to the parties’ agreement under the United Nations
Commission on International Trade Law (UNCITRAL) arbitration rules, El
Salvadoran substantive law, and Swiss procedural law.
      The Swiss arbitral tribunal rejected CEL’s request for broad discovery and
issued an order limiting document production to those papers that were
“relevant and material to the outcome of the case.” The arbitral tribunal also
established a time line for serving document requests and issuing rulings on any
objections. At the same time, CEL filed ex parte § 1782 applications in two
federal district courts, one in the District of Delaware and one in the Southern
District of Texas, to obtain production of documents and depositions. The Texas
application sought depositions from three El Paso employees, as well as Robert
Hart, a legal representative for a company acquired by El Paso.
      Both district courts granted the ex parte § 1782 applications, and CEL
issued document production requests and deposition subpoenas to El Paso and
Hart. Up until this point, El Paso, Hart, NPC, and the arbitral tribunal had not
been informed of the § 1782 applications. El Paso and Hart filed motions for
protection and reconsideration in the Texas district court arguing that CEL
made material misrepresentations in its application and failed to apprise the
court of Second and Fifth Circuit opinions directly on point.       The arbitral
tribunal issued an order expressing its views on the § 1782 application, noting
that it was not receptive to these discovery efforts.

                                        2
                                          No. 08-20771

      The Texas district court granted El Paso and Hart’s motions for
reconsideration, which it treated as a Rule 60(b) motion for relief from a
judgment or order; vacated its ex parte order; and quashed the outstanding
discovery requests. Relying on the Fifth Circuit’s precedent in Republic of
Kazakhstan v. Biedermann International,1 the court held that § 1782 did not
apply to discovery for use in a private international arbitration. The court also
held that, even if it did have the authority under § 1782, “it would not [grant the
application], out of respect for the efficient administration of the Swiss
arbitration.”
      CEL appealed the Texas district court’s grant of the Rule 60(b) motion and
moved for an expedited appeal, arguing that the appeal may be rendered moot
if the evidentiary hearing for the arbitration were to take place before the court
ruled. This court denied the motion for expedited appeal. Subsequently, the
evidentiary hearing in the arbitration concluded, after which the arbitral
tribunal closed the evidence. El Paso then filed a motion to dismiss the appeal
as moot, which was carried forward with the appeal.
                                               II
      In its motion to dismiss the appeal as moot, El Paso argues that because
the evidentiary hearing for the arbitration has concluded and the arbitration
panel has closed the evidence, the discovery CEL seeks with its § 1782
application can no longer be used in the arbitration and there is no longer a live
case or controversy. This circuit has never addressed the issue of mootness with
respect to a request for discovery under § 1782. The Second Circuit has held
that, where the proceeding in which the discovery is to be used has already

      1
          168 F.3d 880 (5th Cir. 1999).

                                               3
                                         No. 08-20771

concluded such that the § 1782 discovery can no longer be used in the
proceeding, the appeal of a § 1782 application becomes moot.2
       In In re Application of Ishihara Chemical Co., for example, the Second
Circuit held that an appeal of the district court’s denial of a § 1782 application
seeking evidence for use in a Japanese patent invalidity proceeding became moot
when the evidentiary hearing in the proceeding concluded while the appeal was
pending.3 But unlike in Ishihara, in which it was clear to the court that the
§ 1782 movant had no means of using the evidence in the invalidity proceeding
after the evidentiary hearing had closed,4 here, a mechanism exists for CEL to
introduce the evidence in the Swiss arbitral tribunal.               Under UNCITRAL
arbitration rules, an “arbitral tribunal may, if it considers it necessary owing to
exceptional circumstances, decide, on its own motion or upon application of a
party, to reopen the hearings at any time before the award is made.” 5 If CEL
discovers new evidence from its § 1782 application, it may ask the arbitral
tribunal to reopen the evidentiary hearing to consider the evidence. Though this
might be unlikely given the arbitral tribunal’s expressed disapproval of CEL’s
discovery efforts in the United States, the possibility is enough to prevent the
appeal from becoming moot. Having concluded that a live case or controversy
still exists, we will address the merits of the appeal.
                                               III
       We review the decision to grant a Rule 60(b) motion for abuse of discretion.
Such a motion can be granted for a number of reasons, including “mistake,

       2
         See In re Application of Ishihara Chem. Co., 251 F.3d 120 (2d Cir. 2001); Euromepa,
S.A. v. R. Esmerian, Inc. (In re Application of Euromepa), 154 F.3d 24 (2d Cir. 1998).
       3
           In re: Ishihara, 251 F.3d at 126.
       4
           Id.
       5
          UNCITRAL           Arb.     R.    Art.     29(2)     (1976),    available      at
http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1976Arbitration_rules.html.

                                               4
                                               No. 08-20771

inadvertence, surprise, or excusable neglect” and “any other reason that justifies
relief.”6 “The law of this circuit permits a trial judge, in his discretion, to reopen
a judgment on the basis of an error of law.” 7
      In Republic of Kazakhstan v. Biedermann International, we held that a
“tribunal” within the meaning of § 1782 did not include a private international
arbitral tribunal, and thus § 1782 did not apply to discovery sought for use in
such a tribunal.8 The district court relied on this holding in denying CEL’s
§ 1782 application. CEL argues that Biedermann is no longer controlling in light
of the Supreme Court’s decision in Intel Corp. v. Advanced Micro Devices, Inc.9
We disagree.
      In Intel, the Supreme Court held that the Commission of European
Communities qualified as a “tribunal” within the meaning of § 1782 and that a
district court was not categorically barred from ordering discovery for use in a
proceeding before the Commission, even though the proceeding was not yet
pending or imminent.10                The question of whether a private international
arbitration tribunal also qualifies as a “tribunal” under § 1782 was not before the
Court. The only mention of arbitration in the Intel opinion is in a quote in a
parenthetical from a law review article by Hans Smit. That quote states that
“the term ‘tribunal’ . . . includes investigating magistrates, administrative and
arbitral tribunals, and quasi-judicial agencies, as well as conventional civil,

      6
       F   ED .   R. CIV . P. 60(b)(1), (6).
      7
       Fed. Deposit Ins. Corp. v. Castle, 781 F.2d 1101, 1104 (5th Cir. 1986) (quoting
Fackelman v. Bell, 564 F.2d 734, 736 (5th Cir. 1977)).
      8
          168 F.3d 880 (5th Cir. 1999).
      9
          542 U.S. 241, 258 (2004).
      10
           Id. at 258-59.

                                                    5
                                            No. 08-20771

commercial, criminal, and administrative courts.” 11 Nothing in the context of the
quote suggests that the Court was adopting Smit’s definition of “tribunal” in
whole.
          Moreover, none of the concerns raised in Biedermann regarding the
application of § 1782 to private international arbitrations were at issue or
considered in Intel. In Biedermann, this court noted that § 1782 authorizes
broader discovery than what is authorized for domestic arbitrations by Federal
Arbitration Act § 7. 12             If § 1782 were to apply to private international
arbitrations, “the differences in available discovery could ‘create an entirely new
category of disputes concerning the appointment of arbitrators and the
characterization of arbitration disputes as domestic, foreign, or international.’” 13
We also noted that empowering parties in international arbitrations to seek
ancillary discovery through federal courts could destroy arbitration’s principal
advantage as “a speedy, economical, and effective means of dispute resolution”
if the parties “succumb to fighting over burdensome discovery requests far from
the place of arbitration.” 14 Neither private arbitration nor these questions were
at issue in Intel.
          Because “[w]e cannot overrule the decision of a prior panel unless such
overruling is unequivocally directed by controlling Supreme Court precedent,” 15
we remain bound by our holding in Biedermann. Therefore the district court did
not abuse its discretion in granting El Paso’s Rule 60(b) motion.

          11
               Id. at 258.
          12
               Biedermann, 168 F.3d at 883.
          13
               Id. (quoting National Broad. Co. v. Bear Stearns & Co., 165 F.3d 184, 188-90 (2d Cir.
1999)).
          14
               Id.
          15
        Cain v. Transocean Offshore USA, Inc., 518 F.3d 295, 300 (5th Cir. 2008) (quoting
United States v. Zuniga-Salinas, 945 F.2d 1302, 1306 (5th Cir. 1991)).

                                                    6
                                  No. 08-20771

                              *        *         *
     For these reasons, we DENY El Paso’s motion to dismiss the appeal as
moot and AFFIRM the district court’s grant of the Rule 60(b) motion.

                                       7