Cross-border commercial disputes are common in today's interconnected global economy and can involve witnesses, documents or assets located in more than one jurisdiction. The use of a so-called "1782 Action" can be a powerful tool for Brazilian litigants in circumstances where evidentiary discovery is needed in the U.S.
Under Section 1782 of the United States Code, "Interested persons" involved in a foreign legal proceeding can apply to a U.S. District Court to obtain evidence for use in such foreign legal proceeding. A 1782 Action is commenced by the filing of an application with a U.S. District Court seeking approval of an order to compel discovery from a person or entity in the district in which the Court sits. The type of evidence that may be compelled under Section 1782 includes both documentary and testimonial evidence.
Elements of a 1782 Application
In essence, an applicant under Section 1782 needs to show that:
(1) it is an "interested person" in a foreign proceeding. The case law defines an "interested person" broadly. In fact, an interested person does not even need to be a party to the foreign proceeding;
(2) the foreign proceeding should be before a "tribunal." In this connection, the U.S. Supreme Court has explained that the proceeding does not need to be pending. Rather, the proceeding must simply be in "reasonable contemplation" at the time the discovery is sought; and
(3) the person from whom evidence is sought is in the district of the Court before which the application has been filed. The Courts have interpreted this requirement broadly. One Court explained that mere physical presence is enough to satisfy the requirement. With respect to corporate entities, Courts have found that conducting business or having offices in the judicial district is sufficient for the purposes of a 1782 action.
Factors Considered by the Reviewing District Court
In addition to the statutory elements set forth above, the following general factors are material to a District Court considering a 1782 application:
whether the person from whom discovery is sought is a participant in the foreign proceeding;
the nature of the foreign tribunal, the character of the proceeding and the receptivity of the foreign court or agency to offer on a reciprocal basis judicial assistance to U.S. federal courts. In the case of Brazil, it is generally receptive to U.S. federal-court judicial assistance;
whether the discovery request seeks to circumvent applicable discovery limits in the foreign jurisdiction. Generally, 1782 applications that seek to circumvent discovery limitations imposed by a foreign tribunal are not favored. The applicant's adversary, however, bears the burden of proving that the application is violative of the discovery limitations imposed by the foreign tribunal; and
whether the discovery requests are "unduly intrusive or burdensome." The discovery sought in a 1782 application must be tailored so that the requests do not impose an unreasonable burden on the party from whom discovery is requested.
Upon receipt of a 1782 application, the Court will either grant or deny the application or ask for further briefing from the applicant's adversary. If the Court invites the adversary to oppose/challenge the 1782 application, the applicant will be required to submit a brief in further support of the application and possibly appear for oral argument.
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