Section 1782 Discovery - Controversy Regarding Section 1782 Discovery

Controversy Regarding Section 1782 Discovery

Not all American lawyers or businesspeople believe that section 1782 discovery is a good thing.

The United States Chamber of Commerce has expressed concerns as to the burden upon American businesses in having to comply with orders to produce evidence under Section 1782. That concern was echoed by Justice Stephen Breyer in his dissent in the Supreme Court's Intel decision. Justice Breyer stated that "discovery and discovery-related judicial proceedings take time, they are expensive, and cost and delay, or threats of cost and delay, can themselves force parties to settle underlying disputes."

Most, but not all, private law firms that engage in international litigation are of the view that the availability of section 1782 discovery is good.

Writing in the International Practicum of the New York State Bar Association (1999), Hugh L. Burns and Sharad A. Shany (both New York) have referred to section 1782 as the international litigant's discovery "weapon of choice."

In a Commentary in Mealey's International Arbitration Report, Barry Garfinkel and Timothy Nelson (both New York), discussed a decision from a federal district court in Georgia that permitted Section 1782 discovery in connection with a non-US arbitration. Entitling their Commentary "Sweet Georgia," Garfinkel and Nelson called the Georgian decision "ground breaking." Writing in the New York Law Journal in May 2007, Eric Schwartz and Alan Howard (both New York) commented on that same decision from Georgia but expressed a critical view both of the case and of the apparent trend that it represents. Schwartz and Howard predicted that the pro-discovery ruling from Georgia could result in "the doors of the U.S. federal courts open to a flood of future applications for the discovery of evidence against U.S. businesses for use in international arbitration proceedings." (Emphasis added). Schwartz and Howard further asserted that such possibility should be "cause for alarm" for the U.S. business community.

Writing in the International Litigation Quarterly (of the American Bar Association) in March 2008, Eric Sherby (Israel) rejected the contention that section 1782 imposes too much of a burden on Corporate America. Focusing on five cases from the mid-1990s through 2006, Sherby argued that the availability of Section 1782 discovery makes it more likely that an American court will grant a forum non conveniens (inconvenient forum) dismissal in many law suits brought against American defendants. As a result, Sherby further argued, Section 1782 is a blessing in disguise for those American companies that are engaged in international commerce yet do not want to be sued in American courts in connection with those activities.

Writing in a newsletter of the ABA's Committee on Pretrial Practice & Discovery, Jonathan I. Handler and Erica Tennyson have observed that Section 1782 "may lead to nonreciprocal access to discovery and may even allow private litigants to exploit the statute to obtain information about a competitor and force an adversary to settle the underlying dispute." At the same time, Handler and Tennyson note that these "potential inequities" can be offset by a district court’s broad discretion in deciding whether and to what extent to grant Section 1782 requests.

The section 1782 litigation that has received the most attention has involved Chevron Corporation, which brought several section 1782 motions in various courts throughout the United States in connection with a massive tort claim against Chevron in Ecuador.