The Power of Section 1782 in Foreign Discovery Efforts

July 9th, 2024

THE POWER OF SECTION 1782 IN FOREIGN DISCOVERY EFFORTS

28 U.S.C. § 1782 (“Section 1782”) of the US Code allows individuals or entities involved in foreign legal proceedings to obtain discovery from entities within the United States. Petitioners globally have used it to obtain evidence from U.S. entities for non-U.S. regulatory and civil litigation. It also aids judgment and award creditors in identifying and pursuing debtor assets worldwide, making it a powerful tool for satisfying unpaid judgments and awards.

U.S. courts have allowed discovery under Section 1782 for post-judgment collection proceedings abroad. For instance, in In re China Construction Bank (Asia) Corporation Limited, the Southern District of New York denied a motion to quash subpoenas for discovery to enforce a judgment against Zhang Kangyang, a foreign debtor. The court ruled that the Hong Kong debtor examination was an adjudicative proceeding under Section 1782, as it involved factual findings that could lead to Zhang’s imprisonment if he failed to comply with the judgment or disclose his assets. On a separate occasion, the District Court for the Northern District of Ohio upheld Section 1782 requests for discovering assets in foreign proceedings by approving subpoenas for foreign defendants Francesco and Anna Pocci. The Ohio court agreed that discovery was for either ongoing or reasonably anticipated post-judgment proceedings pursuant to section 1782.

Higher courts have since followed this standard. In In re Clerici, the Eleventh Circuit upheld that U.S. district courts could grant discovery requests regarding assets for use in post-judgment proceedings. There, a Panamanian court sought discovery from Clerici, a U.S. resident, regarding his assets for a civil lawsuit. The U.S. District Court granted the application, and the Eleventh Circuit upheld it, clarifying that the request was for obtaining evidence, not enforcing a Panamanian judgment in the U.S.

Significantly, Section 1782 can still be used for collection proceedings regarding unpaid arbitral awards in foreign courts. Although in ZF Automotive US, Inc. v. Luxshare, Ltd. the U.S. Supreme Court limited Section 1782’s scope to governmental or intergovernmental bodies, excluding private arbitrations, it remains applicable for post-award enforcement in foreign judicial proceedings.

To read more about Section 1782’s scope in foreign discovery, click here.

To read how CASTAYBERT PLLC can assist you with arbitration matters, click here.