Supreme Court to Decide Whether U.S. Courts Can Compel U.S. Discovery for Use in Foreign Private Commercial Arbitrations under 28 U.S.C. § 1782(a)

26 March 2021 Legal News: Insurance & Reinsurance Litigation Publication
Author(s): Max B. Chester Charles W. Niemann

The Supreme Court granted a petition for a writ of certorari in Servotronics Inc. v. Rolls Royce PLC et al, No. 19-1847, 2020 WL 5640466 (7th Cir. Sept. 22, 2020) and will have the opportunity to resolve an important question, which resulted in a growing circuit split — whether U.S. courts have the power to compel U.S. discovery for use in foreign private commercial arbitrations under 28 U.S.C. § 1782. The statute provides:

“(a) The district court of the district in which a person resides or is found may order [the person] to give [the person’s] testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation….”

Courts have differed in their interpretation of the term “foreign or international tribunal,” with the Second, Fifth, and Seventh circuits holding that the term does not encompass private commercial arbitration, and the Fourth and Sixth circuits holding the opposite.

Background of the Servotronics Dispute

The underlying dispute in Servotronics arises from an arbitral proceeding pending in the United Kingdom between Servotronics and Rolls-Royce. Servotronics sought discovery from Boeing under 28 U.S.C. § 1782(a) in district courts within the Fourth and Seventh Circuits, and Boeing opposed those applications. The Fourth and Seventh Circuit Courts of Appeal thus had the opportunity to analyze Section 1782 in connection with the same underlying dispute but reached contradictory conclusions.

The Fourth Circuit held that Section 1782 affords district courts discretion to compel discovery “for use” in foreign private arbitral proceedings. The Court largely centered its analysis on the Supreme Court’s decision in Intel Corp. v. Advanced Micro Devices Inc., 542 U.S. 241 (2004), citing the legislative history and statutory context of Section 1782 to support its conclusion that the term “foreign … tribunal” includes private arbitral bodies. The Seventh Circuit found this rationale unpersuasive and took issue with the Fourth Circuit’s interpretation of the statute’s legislative history and reading of the Intel opinion. Servotronics filed its petition for a writ of certiorari after the Seventh Circuit affirmed the lower court’s holding that Section 1782 does not authorize a court to provide assistance in private arbitrations.

Importance of the Case

If the Supreme Court holds that Section 1782 allows U.S. courts to compel U.S. discovery for use in foreign private arbitration proceedings, we would expect more foreign litigants to avail themselves of this opportunity to obtain relevant documents and testimony for the underlying foreign arbitral disputes. It is critical to note that Section 1782 discovery remains squarely within the discretion of district courts such that parties should be prepared to make arguments regarding the proper use of this discretion. Until the circuit split is resolved, the ability to discover relevant information for use in a foreign private commercial arbitration may depend, in large measure, on where in the U.S. the application is made.