Court Opinion

ID: 9000863
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:02:28.32031+00
Date Added: 2024-06-11T17:11:09.588627
License: Public Domain

FEINBERG, Circuit Judge
(dissenting):
The surest way to misconstrue a statute, one of our greatest federal judges said, is to apply it literally without regard to its purpose. See Cabell v. Markham, 148 F.2d 737, 739 (2d Cir.1945), aff’d, 326 U.S. 404, 66 S.Ct. 193, 90 L.Ed. 165 (1945). That, I fear, is what the majority has done here, thereby creating a precedent that bodes ill for a federal judicial system that is struggling to stay afloat. This appears to be the only reported decision requiring a United States court generally to supervise imposition of United States procedures *103with respect to evidence that is all subject to the jurisdiction of the foreign court. As appellee points out, if the majority opinion stands, United States courts can be required to become global “Special Masters for Discovery” to supervise proceedings in any court “in the world ... if either a litigant [in the foreign court] or its evidence can be found here.” I submit that 28 U.S.C. § 1782, the statute relied on by the majority, does not require such an unwise result.
I. Background
The facts before us are simple. United Technologies International, Inc., Pratt & Whitney Commercial Engine Business (Pratt) manufactures airplane engines. In July 1991, it sued Malev Hungarian Airlines (Malev), seeking a declaratory judgment that Malev was bound by contract to purchase five of Pratt’s jet aircraft engines. The lawsuit thus grows out of a garden-variety commercial dispute. Pratt sued Malev in the Municipal Court of Budapest, apparently under the assumption that it would be difficult for Malev, the Hungarian national airline, to disregard a judgment of the Hungarian court.
Pour days after Malev filed its response to the complaint, without any prior request or notice to Pratt or to the court in Hungary, Malev filed a proceeding under 28 U.S.C. § 17821 in the United States District Court for the District of Connecticut, seeking broad, United States-type discovery from Pratt. Malev requests discovery of, among other things, every document in Pratt’s files concerning (a) any engine contract it has with the national airlines of Yugoslavia and Rumania; (b) Pratt’s efforts to sell engines to the airlines of Poland, Czechoslovakia and the Soviet Union; and (c) Pratt’s development of its jet engine for all of Eastern Europe. Malev pressed these requests in the Connecticut district court even though Pratt is the plaintiff in the lawsuit in Hungary and is therefore subject to the full jurisdiction of that court. Malev included in its list of witnesses to be deposed the name of Robert F. Daniell, the chairman of Pratt’s parent corporation, United Technologies Corporation. Malev claimed that because Mr. Daniell was linked by unnamed sources in a newspaper article to a criminal investigation of defense procurement practices by United Technologies and many other defense contractors in the United States, he should be deposed in connection with Pratt’s suit against Malev in Hungary because he “may be able to provide information with respect to [Pratt’s] practices in seeking to influence government employees____” That request has apparently been dropped on appeal. Pratt asserts that Malev’s action here and its broad requests for discovery are part of a strategy of delay and trench warfare.
This was the background of the dispute as it came before Judge T. Emmet Clarie, former Chief Judge of the Connecticut District Court and an experienced jurist. The court had before it extensive submissions from both Malev and Pratt on the propriety of using section 1782 in this context, and heard argument for more than two hours. Judge Clarie’s reaction to this extraordinary proceeding was as follows:
First, the judge was concerned with the breadth of Malev’s requests and with the *104necessary burden of supervising discovery. As a glimpse of what that burden might be in this fiercely-contested litigation, I note that after thorough briefing and argument in this court, the parties have continued to favor us with no fewer than 18 items of correspondence. The most notable of these includes a thick document translating a recent opinion of the Hungarian court, and there apparently has been a dispute as to the accuracy of the translation.
Second, the judge was concerned by the precedent he might set if he granted Malev’s requests. Thus, he noted that
the world is as small as the screen on your television set — as the world gets smaller, it means that every litigation in every country of the world involving an American manufacturer or party ... could simply come in and ask for almost unlimited disclosure and discovery ... .under the supervision of the courts of this country which would bring with it a burden beyond present contemplation.
Third, the judge noted that Malev had never made a formal discovery request upon Pratt in the Hungarian court and that counsel for Pratt had represented to the district court that it would comply with any order the Hungarian court imposes. In the exercise of his discretion, the judge denied Malev’s request. This appeal followed.
II. Analysis
At the outset, it should be noted that Malev has not only involved a federal district court in routine discovery matters concerning a case in the Hungarian court but has also involved this court, thereby occasioning additional delay, expense and diversion. Malev has accomplished this even though ordinary litigants unsuccessfully seeking discovery in routine commercial cases in the district court could not achieve the same result. Such litigants, of course, would be bound by the final judgment rule, which does not countenance immediate appeals from the resolution of ordinary discovery disputes. American Express Warehousing, Ltd. v. Transamerica Ins. Co., 380 F.2d 277, 280-81 (2d Cir.1967). But since Malev’s section 1782 discovery motion in effect constituted the whole of its action in the district court, our precedents appear to allow Malev’s appeal from the denial of the motion. See In re Letters Rogatory Issued by the Director of Inspection, 385 F.2d 1017, 1018 (2d Cir.1967).
Putting that consideration to one side, however, and going directly to the merits of the appeal, the issue before us is whether Judge Clarie abused his discretion in denying discovery. The statute uses the term “may,” see note 1, supra, in describing the court’s power to respond to a request for discovery, thus clearly lodging discretion in the district court. The cases confirm that abuse of discretion is the applicable standard. See Lo Ka Chun v. Lo To, 858 F.2d 1564, 1565-66 (11th Cir.1988); In re Request for Assistance from Ministry of Legal Affairs, 848 F.2d 1151, 1154 (11th Cir.1988), cert. denied, 488 U.S. 1005, 109 S.Ct. 784, 102 L.Ed.2d 776 (1989). A party challenging a district judge’s exercise of discretion “can prevail only if there was no reasonable basis for [its] decision.” S.E.C. v. Bausch & Lomb Inc., 565 F.2d 8, 18 (2d Cir.1977).
Under the applicable test, it simply cannot be said that Judge Clarie abused his discretion in denying Malev’s request for discovery. Pratt brought an uncomplicated commercial lawsuit against Malev in the latter’s country; Malev almost immediately brought this proceeding in this country seeking overly broad discovery; the indications were clear that this was all-out discovery warfare, which would require significant supervision by the district court; and Malev sought information here that, if appropriately sought, could have been obtained through the Hungarian court, but Malev never sought it there. In denying discovery, Judge Clarie not only did not abuse his discretion; he clearly reached the right result.
Why, then, does the majority refuse to affirm here and insist on sending this case back to Judge Clarie for “supervising” Malev’s discovery from Pratt? The reasons given are that (1) the judge told Malev first to seek the requested discovery from the Hungarian court; and (2) the judge also said that he was denying the relief sought *105“[a]bsent a request from the Hungarian court to become involved in the oversight of discovery.” According to the majority, neither of these conditions appears in the statute and therefore neither could be a legitimate reason for denying discovery. Finally, the majority chides the district court for observing that “[tjhis Court’s involvement would unnecessarily complicate the case and bring with it significant reciprocal discovery problems.” The majority concludes that the district court was “worried about having to supervise discovery from Malev by Pratt ... in the United States as well, if it granted Malev’s request in order to ensure fairness to Pratt____” According to the majority, this concern was inappropriate because the district court “was free to grant Malev’s request without assuming responsibility for supervising [Pratt’s] ... discovery from Malev.”
None of these reasons, singly or together, justify reversal of the district court here. With regard to the first, which the majority itself characterizes as “a quasi-exhaustion requirement,” the majority suggests that the district court impose the same condition upon remand. Specifically, the majority states that under Fed.R.Civ.P. 26, the district court could require Malev to show that the discovery is “ ‘not obtainable from some other source ... ’ such as the Hungarian court.” If the district judge can impose such a sensible requirement later, why bar it at the outset? “Quasi-exhaustion” may not be written into the statute, but why not require it? The doctrine of exhaustion of remedies is not unknown to judges, cf. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463, 82 L.Ed. 638 (1938), and section 1782 seems to be an appropriate instance for utilizing it. Moreover, there is no indication, either in the text or the legislative history of section 1782, that Congress intended the statute to be used for anything other than to provide information necessary to foreign litigation but beyond the power of the foreign court. The district court here did not mechanically require exhaustion. Its decision in this respect turns on Malev’s failure to show any need for invoking section 1782.
As for the second reason given by Judge Clarie, I agree with the majority that the statute allows an application to be made by “any interested person,” not just by the foreign tribunal. But Judge Clarie did not deny Malev relief because he misapprehended this principle. He denied discovery because there was no showing of need and he was concerned over the burden of involving a Connecticut district court in granting routine discovery for a foreign litigation. His reference to a request from the Hungarian court was clearly meant only to signal that he might reconsider the need for such discovery if asked to by a foreign court.
Finally, the majority’s disapproval of the judge’s reference to reciprocal discovery is hard to understand. Of course, the statute does not require reciprocal discovery and Judge Clarie did not believe that it did. But, in the district court, Malev offered “to engage in reciprocal discovery,” obviously to put itself in a more palatable light. Can it seriously be urged, in the face of such an offer, that a United States litigant in a foreign proceeding should be subjected to United States-style discovery but at the same time obtain only the discovery that the foreign system grants? Fairness, in view of Malev’s offer, suggests otherwise. Judge Clarie was absolutely right to be concerned about supervising such discovery and the complications that might ensue. On top of these burdens, the district court will now have to determine the viability of Malev’s discovery request in light of the Hungarian court’s decision referred to in the majority opinion at note 5.
In sum, Malev seeks to use section 1782 to engage in broad United States-style discovery against its opponent in a foreign litigation, where the party and all the information sought are — by Malev’s own concession at oral argument — subject to the process of the foreign court. Malev cites no reported case — and I have found none— in which section 1782 has been used in such circumstances. The section is generally used to seek limited amounts of evidence (commonly bank records) from third parties in this country not subject to the jurisdiction of the foreign court. See, e.g., In re Request for Assistance from Ministry of *106Legal Affairs, 117 F.R.D. 177, 178 (S.D.Fla. 1987), aff’d, 848 F.2d 1151 (11th Cir.1988), cert. denied, 488 U.S. 1005, 109 S.Ct. 784, 102 L.Ed.2d 776 (1989); In re Letter of Request for Judicial Assistance, 669 F.Supp. 403, 408 (S.D.Fla.1987). It is true that in the leading case relied on by Malev — John Deere, Ltd. v. Sperry Corp., 754 F.2d 132, 138 (3d Cir.1985) — the Third Circuit reversed a district court’s denial of discovery pursuant to § 1782 requested by Deere, which was then being sued by Sperry in Canada. But the district court there had relied on impermissible reasons — lack of a reciprocal foreign statute and the inadmissibility at trial of the evidence sought— in denying discovery. Id. Moreover, the main focus of the circuit court’s opinion was on Deere’s right under § 1782 to obtain the deposition of a Sperry employee after Deere had unsuccessfuly requested the same relief from the Canadian court. John Deere, 754 F.2d at 137.
Malev’s position, in effect, is that section 1782 can be used as a matter of right against party litigants to supplant foreign procedures with discovery under United States rules, supervised by heavily burdened United States courts, any time a litigant is subject to the jurisdiction of this country’s courts. I do not believe that this is the law. Accordingly, I respectfully dissent.

. 28 U.S.C. § 1782 provides, in relevant part:
(a) 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 pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or 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. By virtue of his appointment, the person appointed has power to administer any necessary oath and take the testimony or statement. 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. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.