In In re del Valle Ruiz, 939 F.3d 520 (2d Cir. 2019), the Second Circuit held there is no per se bar to the extraterritorial application of 28 U.S.C. §1782 and that it may be used to reach documents located outside of the United States.
In the Southern District of New York, two U.S. based asset management companies filed an application pursuant to 28 U.S.C. §1782 to take discovery from New York based Santander Investment Securities, Inc. (“SIS”), for use in foreign proceedings brought before the General Court of the Court of Justice of the European Union and in Spanish criminal proceedings. SIS was not a party to these foreign proceedings. The targeted discovery related to the financial condition and value of Banco Popular Español, S.A., which was sold in a government forced sale to Spanish banking giant, Banco Santander, S.A.
The district court rejected the argument that New York based SIS cannot be compelled “to produce documents located abroad, or that producing documents located abroad would be unduly burdensome and intrusive” and granted the §1782 application. In re Ruiz, 342 F. Supp. 3d 448, 459 (S.D.N.Y. 2018). The Second Circuit affirmed, following the reasoning of the Eleventh Circuit in Sergeeva v. Tripleton Int’l Ltd., 834 F.3d 1194 (11th Cir. 2016), that “the location of responsive documents and electronically stored information—to the extent a physical location can be discerned in this digital age—does not establish a per se bar to discovery under § 1782.” The Second Circuit abandoned dicta from a prior opinion based upon a Senate report.
28 U.S.C. §1782 is a very powerful litigation tool for parties to non-U.S. court proceedings, allowing them to obtain bank records, documents and witness testimony from sources within the U.S., even if such evidence is unobtainable through the home forum’s own discovery procedures. The types of evidence that can be obtained include International Wire Transaction Records (U.S. Dollar wires typically transit through the U.S.), emails, correspondence, phone and travel records, accounting, banking, credit card and corporate documents such as shareholder and board meeting records.
Thomas C. Sullivan is a senior attorney in the Philadelphia office of Marks & Sokolov LLC. Mr. Sullivan represents Western, Russian and Ukrainian clients in complex commercial disputes including civil RICO, securities fraud, Foreign Corrupt Practices Act, Convention on the International Sale of Goods and ICC Arbitration matters. He has litigated numerous Section 1782 discovery matters throughout the United States and was recently published in Obtaining U.S. Discovery For Use In Non-U.S. Tribunals Pursuant To 28 U.S.C. § 1782 (Chapter 7), Juris Publishing, LLC, 2020.
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