In Re Application Pursuant to 28 U.S.C. § 1782 for an Order Permitting Bayer AG , 146 F.3d 188 ( 1998 )

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
6-9-1998
In Re: Bayer AG
Precedential or Non-Precedential:
Docket 97-5047
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Filed June 9, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 97-5047
In re: Application pursuant to 28 U.S.C. S 1782 for an
Order permitting BAYER AG, Applicant-Appellant, to take
discovery, pursuant to the Federal Rules of Civil
Procedure, of BETACHEM, INC. for use in an action
pending in the FIRST INSTANCE COURT NO. 25
of BARCELONA, SPAIN
Bayer AG,
Appellant
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 96-cv-05650)
Argued September 26, 1997
Before: SLOVITER, COWEN and LEWIS,* Circuit Judges
(Filed June 9, 1998)
Milton Sherman (Argued)
Kaye, Scholer, Fierman, Hays &
Handler
New York, New York 10022
Attorney for Appellant
_________________________________________________________________
* Judge Lewis heard argument in this matter but was unable to clear the
opinion due to illness.
Dwight E. Yellen (Argued)
Ballon, Stoll, Bader & Nadler
New York, New York 10018
Will Levins
Ballon, Stoll, Bader & Nadler
Hackensack, N.J. 07601
Attorneys for Appellee
OPINION OF THE COURT
SLOVITER, Circuit Judge.
The promulgation of the Federal Rules of Civil Procedure,
with their emphasis on securing "the just, speedy, and
inexpensive determination of every action," Fed. R. Civ. P.
Rule 1, initiated a revolution in the litigation process in the
federal courts in this country. Although those rules were
not applicable to foreign litigation, they were not without
influence. It was not surprising that within three decades
there would be a concerted effort to liberalize the
procedures in the United States for assisting foreign and
international tribunals and litigants in obtaining oral and
documentary evidence in the United States. Eventually this
effort led to congressional action. Section 1782(a) of Title 28
of the United States Code now authorizes district courts to
render assistance to foreign courts and the litigants before
them in obtaining discovery from United States residents
for use in foreign proceedings.
Pursuant to that section, Bayer AG, a drug manufacturer
organized under the laws of the Federal Republic of
Germany, filed an application in the district court of New
Jersey to obtain discovery from BetaChem, Inc., a New
Jersey corporation, for use in a patent infringement action
pending in the Court of First Instance in Spain. The district
court denied the application and Bayer appeals. The
question before us is whether the district court relied on
inapplicable or erroneous considerations when it denied
Bayer's request.
2
I.
Facts and Procedural Background
In a related action, Bayer filed suit in January 1992 in
the United States District Court for the Southern District of
New York against Barr Laboratories, Inc., alleging patent
infringement. Bayer alleged that Barr had infringed Bayer's
United States ciprofloxacin patent no. 4,670,444 by filing
an application with the United States Food and Drug
Administration for permission to sell ciprofloxacin, a broad
spectrum antibiotic drug. According to Bayer's allegations,
Barr had purchased and planned to continue to purchase
ciprofloxacin from BetaChem, which is the United States
sales agent for Chemo Iberica, S.A. ("Chemo") and its
affiliate Quimica Sintetica, S.A. ("Quimica"), both Spanish
corporations. During the course of discovery in that action,
Barr produced a confidential document that describes
Chemo's process for making ciprofloxacin. Bayer also
learned that BetaChem had submitted similar documents
to the FDA on Barr's behalf.
Apparently as a result of the information received, Bayer
filed a patent infringement action in June 1993 against
Chemo and Quimica in the Court of First Instance No. 25
in Barcelona, Spain, claiming that Chemo and Quimica had
infringed and were infringing its Spanish process patent no.
505,138 by manufacturing and selling ciprofloxacin. Bayer
believed the document it had received from Barr in
discovery in the New York action was important for its case
in Spain. Indeed, that document has been referred to as the
"smoking gun document." App. at 100. Therefore, sometime
in early 1996, Bayer sought to submit that document to the
Spanish court. Before doing so, it sought permission from
the magistrate judge who had entered a confidentiality
order in the New York action. The magistrate judge gave
approval, subject to the Spanish court's willingness to enter
a confidentiality order.
Bayer then approached the Spanish court and on
October 14, 1996, it obtained an order from the Spanish
court stating that it would receive "any document that may
be presented," that it would determine the document's
3
admissibility at a later date, and that it would keep the
document confidential to the extent permissible under
Spanish law. Thereafter, the New York magistrate judge
was reported to have signified his satisfaction that this
order "effectively implements my confidentiality
requirement." App. at 102.
On December 3, 1996, Bayer filed the pending action in
the United States District Court for the District of New
Jersey pursuant to 28 U.S.C. S 1782(a). Bayer alleged that
it owned patents covering the composition and/or process
for making ciprofloxacin in numerous countries, including
its Spanish patent no. 505,138 covering a process for
making ciprofloxacin; that Chemo and its affiliated
corporation Quimica infringe that Spanish patent; and that
BetaChem purchased ciprofloxacin from Chemo and/or
Quimica which BetaChem in turn sold to Barr. Bayer
alleged that BetaChem has material information about
Chemo's process to make ciprofloxacin, and that Spanish
law provides no procedures for the orderly exchange of
documents. Bayer sought permission to seek discovery of
all of BetaChem's documents relating to the process of
Chemo and Quimica for manufacturing ciprofloxacin,
including the Drug Master File allegedly containing the
document that BetaChem had filed with the FDA on Barr's
behalf. Bayer also sought permission to depose certain
BetaChem employees.
BetaChem opposed Bayer's application on three grounds.
First, it argued that discovery requests made pursuant to
S 1782(a) may be granted only if the material sought would
be discoverable in the foreign jurisdiction. In that regard, it
submitted a written legal opinion from a Spanish attorney,
who stated that under Article 603 of the Spanish Civil
Procedure Law a Spanish court may, at the request of a
party, order the disclosure of documents that are the
exclusive property of a non-litigant if the judge who will
decide the litigation determines that the documents sought
would be material to the court's decision. App. at 61-62.
BetaChem argued that, absent such a determination of
materiality by the Spanish court, the testimony and
materials sought by Bayer would not be discoverable in
Spain and, therefore, are not discoverable underS 1782(a).
4
Second, BetaChem argued that because the Spanish
action was already sub judice and Bayer had been aware of
the documents since 1993, Bayer's application was
untimely. Third, BetaChem argued that the documents in
the Drug Master File are highly confidential and should not
be discoverable.
In its opinion delivered orally, the district court, relying
on our opinion in John Deere Ltd. v. Sperry Corp., 754 F.2d
132 (3d Cir. 1985), framed its inquiry as whether
permitting the discovery would "offend[ ] the foreign
jurisdiction." App. at 94. Although the court stated that it
did not consider discoverability in the foreign jurisdiction to
be a prerequisite to obtaining discovery under S 1782(a), its
discussion nevertheless focused exclusively on the
requirement under Spanish law of a determination that the
documents sought from a non-litigant would be material.
The district court reasoned that even though it would
probably regard the discovery Bayer sought to be material,
its own view was irrelevant because it was the Spanish
judge who was to make the materiality determination. The
court then ruled that because Bayer had not obtained such
a materiality ruling, the discovery it sought from BetaChem
would not be discoverable in Spain and therefore Bayer
lacked proof that granting its application would not offend
the Spanish court. App. at 112-14. Accordingly, the district
court denied Bayer's application and dismissed the action.
This appeal followed.
On September 1, 1997, while this appeal was pending,
the Court of First Instance ruled against Bayer in its
infringement action. Bayer then filed an appeal in the
Provincial Court of Barcelona. Both parties agree that,
under Spanish law, the Provincial Court may, under certain
circumstances, receive new evidence not submitted to the
Court of First Instance. Accordingly, neither party contends
that the issue before us has been mooted by the disposition
in the Court of First Instance.
II.
Discussion
The district court's denial of Bayer's discovery application
constitutes a final order over which we have jurisdiction
5
pursuant to 28 U.S.C. S 1291. See In re Gianoli Aldunate, 3
F.3d 54, 57 (2d Cir. 1993). In general, we review a district
court's decision to deny a S 1782 application for abuse of
discretion. Where the district court misinterpreted or
misapplied the law, however, or where the court relied on
inappropriate factors in the exercise of its discretion, our
review is plenary. See id. at 58; see generally Redland
Soccer Club, Inc. v. Department of the Army, 55 F.3d 827,
845 (3d Cir. 1995).
A.
Section 1782, entitled "Assistance to foreign and
international tribunals and to litigants before such
tribunals," provides, in relevant part:
The district court of the district in which a person
resides or is found may order him to give his testimony
or statement or to produce a document or other thing
for use in a proceeding in a foreign or international
tribunal . . . . The order may be made pursuant to a
letter rogatory issued, or request made, by a foreign or
international tribunal or upon the application of any
interested person . . . The order may prescribe the
practice and procedure, which may be in whole or part
the practice and procedure of the foreign country or
the international tribunal, for taking the testimony or
statement or producing the document or other thing.
To the extent that the order does not prescribe
otherwise, the testimony or statement shall be taken,
and the document or other thing produced, in
accordance with the Federal Rules of Civil Procedure.
28 U.S.C. S 1782(a).
In adopting the 1964 amendments now incorporated in
S 1782, Congress liberalized many of the procedures for
obtaining discovery for use in foreign litigation. The Senate
Report sets forth the following general statement regarding
the purpose of the statute:
Until recently, the United States has not engaged
itself fully in efforts to improve practices of
international cooperation in litigation. The steadily
6
growing involvement of the United States in
international intercourse and the resulting increase in
litigation with international aspects have demonstrated
the necessity for statutory improvements and other
devices to facilitate the conduct of such litigation.
Enactment of the bill into law will constitute a major
step in bringing the United States to the forefront of
nations adjusting their procedures to those of sister
nations and thereby providing equitable and efficacious
procedures for the benefit of tribunals and litigants
involved in litigation with international aspects.
It is hoped that the initiative taken by the United
States in improving its procedures will invite foreign
countries similarly to adjust their procedures.
S. Rep. No. 88-1580, at 2 (1964), reprinted in 1964
U.S.C.C.A.N. 3783.
Thus, the amendment to S 1782 was designed to facilitate
the conduct of litigation in foreign tribunals, improve
international cooperation in litigation, and put the United
States into the leadership position among world nations in
this respect. It appears that the scope of discovery is not as
far-reaching in foreign litigation as it is in domestic
litigation. The Senate Report makes clear that under
amended S 1782(a), "the issuance of an appropriate order"
is left to the discretion of the district court. Id. at 3788.
That court may refuse to issue an order or may impose
conditions it deems desirable. The Report further states
that "[i]n exercising its discretionary power, the court may
take into account the nature and attitudes of the
government of the country from which the request
emanates and the character of the proceedings in that
country." Id.
In light of the absence of any language in the text of
S 1782 that limits its application to cases in which the
materials sought to be discovered would be discoverable in
the foreign jurisdiction, see In re Esses, 101 F.3d 873, 875
(2d Cir. 1996), we must examine the basis for the district
court's exclusive focus on whether the materials sought by
Bayer would be discoverable in Spain.
7
The inquiry begins with the district court's interpretation
of John Deere Ltd. v. Sperry Corp., 754 F.2d 132 (3d Cir.
1985), this court's oft-cited opinion addressingS 1782.
John Deere Limited and Deere & Company (jointly referred
to as John Deere), which had been sued in Canada by
Sperry Corporation for patent infringement, filed a S 1782
application in the Eastern District of Pennsylvania seeking
to depose Horace McCarty and Emmett Glass, named as
the co-inventors of the patented machine at issue. McCarty
and Glass were American employees of Sperry. The district
court denied John Deere's application, both because
Canada would not honor letters rogatory emanating from a
court of the United States and because the material sought
was not clearly admissible at trial in Canada. Before this
court had an opportunity to hear John Deere's appeal from
this ruling, the Federal Court of Canada issued an opinion
and order directing Sperry to produce McCarty, a Sperry
officer, but not Glass, a non-officer.
In its appeal from the district court's denial of its
discovery application, John Deere challenged the relevancy
under S 1782(a) of the availability of reciprocal foreign
procedures and the admissibility of the evidence in the
foreign jurisdiction, the issues the district court deemed
determinative. We held that neither reciprocity nor
admissibility were controlling concerns under S 1782(a). We
stated instead that the "liberal intent to provide judicial
assistance whether or not reciprocity exists has been
acknowledged as a primary statutory goal since section
1782's inception." Id. at 135.
Although we gleaned through the legislative history that
the district courts were authorized "to scrutinize the
underlying fairness of foreign proceedings to ensure they
comply with notions of due process," we stated that it
would seem to exceed the proper scope of S 1782 to require
the district court to undertake a more extensive inquiry. Id.at 136 & n.3. Indeed, it "would contradict the express
purpose of section 1782" if the American court were
required to predict the actions of another country's
tribunal. Id. at 136. Significantly, we held that inasmuch as
the Canadian court had held that McCarty's testimony
would be material and required by the equities, the district
8
court should have required that of Glass as well. Id. at 137-
38.
In reading John Deere, it is important to recognize that
because the Canadian court had already held the
information discoverable, the discoverability issue was not
before us. Some courts have placed significance on our
statements that "[a]s a cooperative measure, section 1782
cannot be said to ignore those considerations of comity and
sovereignty that pervade international law. A grant of
discovery that trenched upon the clearly established
procedures of a foreign tribunal would not be within section
1782." Id. at 135. We also stated that we would not
"countenance the use of U.S. discovery procedures to evade
the limitations placed on domestic pre-trial disclosure by
foreign tribunals." Id. at 136.
Those comments made explicit our concern over comity,
but nothing in them signifies an intent to impose a
discoverability requirement. Such a requirement would be
inconsistent with much of the language of the opinion,
where we stated, inter alia, "Nor should the practice of
Canadian courts in refusing to render judicial assistance,
be the determinative factor in the construction given
section 1782 by an American court." Id. at 135-36. In fact,
in John Deere itself we were satisfied that granting the
S 1782 application would not have caused any offense to
the Canadian tribunal, even though discovery from Glass
had not been authorized by the Canadian courts.
The application of the John Deere opinion by the district
court in this case is understandable because at least two
courts of appeals have read the opinion as imposing a
discoverability requirement. See In re Asta Medica, S.A.,
981 F.2d 1, 6 (1st Cir. 1992); In re Request for Assistance
from Ministry of Legal Affairs of Trinidad and Tobago, 848
F.2d 1151, 1156 (11th Cir. 1988); see also In re First Court
of First Instance in Civil Matters, Caracas, Venezuela, 42
F.3d 308, 310 (5th Cir. 1995) (dictum); In re Crown
Prosecution Service of the United Kingdom, 870 F.2d 686,
692-93 & n.7 (D.C. Cir. 1989) (same).
In contrast, the Second Circuit read John Deere as we do
and recognized that the opinion decided only that S 1782
9
does not require that foreign courts have reciprocal
assistance procedures or that the materials sought would
be admissible in the foreign jurisdiction. Gianoli Aldunate,
3 F.3d at 60. That court said, insightfully, "John Deere is
not a case about whether section 1782 requires
discoverability, and the court never explicitly states that
such a requirement exists." Id. It thus declined to interpret
our general statements addressing the circumvention of
foreign discovery laws as reading "an absolute
discoverability requirement into section 1782." Id. See In re
Euromepa S.A., 51 F.3d 1095, 1099-1100 (2d Cir. 1995).
This case presents us with our first opportunity to revisit
our opinion in John Deere, and we use the occasion to
make explicit our view that imposing a requirement that
the materials sought be discoverable in the foreign
jurisdiction would be inconsistent with both the letter and
spirit of the statute. The prima facie showing mandated by
the statute is only that the application be made (1) "by a
foreign or international tribunal" or "any interested person,"
(2) that it be "for use in a proceeding in a foreign or
international tribunal," and (3) that the person or entity
from whom the discovery is sought be a resident of or be
found in the district in which the application is filed. See
Esses, 101 F.2d at 875. If Congress had intended to impose
an additional element as restrictive as a requirement that
the materials sought be discoverable in the foreign
jurisdiction, it would have done so explicitly. See Gianoli
Aldunate, 3 F.3d at 59 (citing statute's permissive language
authorizing district court to resort to practice of the foreign
country).
The legislative history is equally devoid of any indication
that Congress intended to limit the scope of S 1782 to those
situations in which the discovery sought would be
discoverable under the laws of the foreign jurisdiction. In
adopting the 1964 amendments, Congress's overarching
goals were to provide efficient means of assistance to
foreign courts and litigants and encourage other nations to
return the favor by providing similar assistance to United
States courts. See In re Malev Hungarian Airlines, 964 F.2d
97, 100 (2d Cir. 1992); see also S. Rep. No. 88-1580, at 2
(1964), reprinted in 1964 U.S.C.C.A.N. 3783. Neither of
10
these congressional purposes requires courts to impose a
discoverability requirement as a bright-line rule. See
generally United States v. Ron Pair Enters. Inc., 489 U.S.
235, 242 (1989) ("The plain meaning of legislation should
be conclusive, except in the rare cases in which the literal
application of a statute will produce a result demonstrably
at odds with the intentions of its drafters.") (citation &
quotations omitted).
It is instructive to turn to the Senate Report, which states
that "[i]f the court fails to prescribe the procedure, the
appropriate provisions of the Federal Rules of Civil
Procedure are to be followed, irrespective of whether the
foreign or international proceeding or investigation is of a
criminal, civil, administrative, or other nature." S. Rep. No.
88-1580, at 9 (1964), reprinted in 1964 U.S.C.C.A.N. 3789.
In light of the well-known liberality of our Federal Rules, it
is unlikely that Congress would have painted with so broad
a brush if it had intended courts applying S 1782 to be
limited to following another nation's more limited approach
to discovery. See In re Metallgesellschaft AG, 121 F.3d 77,
80 (2d Cir. 1997) ("through S 1782 Congress has seen fit to
authorize discovery which, in some cases, would not be
available in foreign jurisdictions"). Moreover, if we were
unwilling in John Deere to condition a S 1782 order on the
availability of the particular discovery procedure in the
foreign country, there is no reason why we should make
discoverability itself a condition.
The policies advanced by the Court of Appeals for the
First Circuit as the basis for reading a discoverability
requirement into S 1782, see Asta Medica, 981 F.2d at 5-7,
are not persuasive. The court expressed concern that a
foreign party could invoke S 1782 and obtain broad
American-style discovery while the same would not be
available for that party's American adversary. Id. at 5-6. In
essence, that is simply another way of imposing a
reciprocity requirement, a requirement we rejected in John
Deere. Any patent unfairness can be dealt with by the
district court crafting an appropriate discovery order. See
Euromepa, 51 F.3d at 1101. In any event, that
consideration is not present in this case where S 1782 is
being invoked against an entity that is not a party to the
Spanish patent litigation.
11
The First Circuit also based its Asta Medica decision on
its concern that granting a S 1782 application where the
discovery sought would not be available in the foreign
jurisdiction "would lead some nations to conclude that
United States courts view their laws and procedures with
contempt," thereby frustrating Congress's desire to
stimulate foreign tribunals to provide reciprocal assistance
to litigants before our own courts. Id. at 6-7. We agree that
"Congress did not seek to place itself on a collision course
with foreign tribunals and legislatures" and that we ought
to avoid a construction of the statute that would lead other
nations to conclude that we do not respect their laws and
procedures. Id. We said as much in John Deere. 754 F.2d
at 135. It does not follow that the inability to obtain
discovery means that the foreign court objects to the
inquiry. In many of such situations it may signify merely
the unavailability of an applicable procedure.
It appears that the decision in Asta Medica was based on
the unavailability of pretrial discovery from non-party
witnesses in the countries in which the foreign patent
litigation was pending. Asta Medica, 981 F.2d at 6-7.
However, there is no reason to assume that because a
country has not adopted a particular discovery procedure,
it would take offense at its use. Professor Hans Smit, one
of the principal forces behind the 1964 revisions toS 1782,
has stated, "although a foreign court might not compel
production of the evidence in the manner employed by an
American court, it might very well, and ordinarily would,
readily accept and rely on the evidence obtained with the
help of the American court." Hans Smit, Recent
Developments in International Litigation, 35 S. Tex. L. Rev.
215, 236 (1994). In John Deere, we declined to preclude the
testimony merely because "the Canadian court may
question its own power to devise and grant an order for the
discovery of a corporate employee resident outside its
jurisdiction." John Deere, 754 F.2d at 138.
The opinion of the House of Lords in South Carolina Ins.
Co. v. Assurantie Maatschappij "De Zeven Provincien" N.V.,
[1987] 1 App. Cas. 24 (1986) (appeal taken from Court of
Appeal), is informative. There, a party involved in a re-
insurance lawsuit pending in the English Commercial Court
12
filed a S 1782 application in the Western District of
Washington seeking to obtain discovery from two Seattle-
based companies not parties to the English litigation.
Before the application could be heard, the Commercial
Court enjoined the parties before it from pursuing the
application on the ground that "the English court should
retain the control of its own procedure and the proceedings
that are before it." Id. at 34. On appeal, the House of Lords
reversed.
First, it found that the availability of discovery under
S 1782 posed no "interference with the [English] court's
control of its own process." Id. at 41. Despite the court's
inability to compel the discovery, the information could be
obtained by a party if the possessor voluntarily produced it.
Thus, the mere fact that the English court could not compel
the production at issue did not mean that it would be
offensive to the court if a party obtained it. See id. at 42.
Second, the House of Lords rejected the argument that by
submitting to the jurisdiction of the English court, the
parties were bound to accept its procedures. See id. It held
that the parties to an English litigation were entitled to
prepare their case by obtaining documents in a foreign
country and this included the right to seek discovery under
S 1782. See id. Moreover, because England's proscription of
discovery from parties not before the court was intended to
protect the non-parties rather than the litigating parties, it
would make little sense to extend the protection of the
English courts to American non-parties subject to discovery
under the laws of the United States. See id. Finally, the
House of Lords rejected the notion that resort to American
discovery procedures would cause increased cost and delay.
It reasoned that such effects were essentially self-imposed
by the party's decision to oppose and fight a S 1782
application. Id. at 42-43.
The analysis used by the House of Lords, reflecting as it
does the view of a foreign country with less liberal discovery
procedures and applied in a real case, is an effective
response to the First Circuit's assumption that a grant of
discovery not available in the foreign jurisdiction would
offend that jurisdiction's courts.
13
Of course, we recognize that there are some instances in
which permitting discovery of certain evidence may cause
offense to the courts of the foreign jurisdiction. Some
countries may regard information held by spouses or
children to be privileged; others may have different limits.
The comity concerns we expressed against "use of U.S.
discovery procedures to evade the limitations placed on
domestic pre-trial disclosure by foreign tribunals," John
Deere, 754 F.2d at 136, are applicable only when the
substance of the discovery is objectionable. See generally
Metallgesellschaft, 121 F.3d at 80 ("If district courts were
free to refuse discovery based upon its unavailability in a
foreign court . . . , S 1782 would be irrelevant to much
international litigation, frustrating its underlying
purposes."); Hans Smit, Recent Developments in
International Litigation, 35 S. Tex. L. Rev. 215, 234-38
(1994) (discussing Congress's intention to make discovery
available where the same would not be discoverable under
foreign law). It follows that the lack of a finding of
discoverability is an inadequate basis on which to deny a
S 1782 application.
B.
The reference in S 1782 to the Federal Rules suggests
that under ordinary circumstances the standards for
discovery under those rules should also apply when
discovery is sought under the statute. Consistent with the
statute's modest prima facie elements and Congress's goal
of providing equitable and efficacious discovery procedures,
district courts should treat relevant discovery materials
sought pursuant to S 1782 as discoverable unless the party
opposing the application can demonstrate facts sufficient to
justify the denial of the application. In determining whether
the foreign tribunal would take offense, the district court
would be free, in the exercise of its discretion, to consider
any materials, typically statutes or case law from the
foreign jurisdiction, that may be presented by the parties.
Cf. Hans Smit, American Assistance to Litigation in Foreign
and International Tribunals: Section 1782 of Title 28 of the
U.S.C. Revisited, 25 Syracuse J. Int'l L. & Com. 1, 14 (1998)
("when a foreign or international tribunal has ruled that
14
production of the evidence pursuant to Section 1782 would
not be appropriate, an American court should heed that
ruling and deny the application").
In this case, however, the district court concluded,
without any evidentiary showing, that granting the
requested discovery would be offensive to the Spanish
tribunal. When pressed at oral argument for an explanation
why the Spanish court would be offended by the grant of
Bayer's S 1782 application, counsel for BetaChem argued
only that Bayer could have gone to the Spanish court to
seek production of the BetaChem materials before coming
to the United States and invoking S 1782. This fails to
answer the question. Indeed, a "quasi-exhaustion
requirement" of the kind advocated by BetaChem on appeal
has been rejected by those courts that have addressed it.
See, e.g., Malev Hungarian Airlines, 964 F.2d at 100.
In fact, the evidence presented to the district court
strongly suggested receptivity by the Spanish court to the
evidence sought by Bayer rather than offense. In dealing
with different documents but of a similar type, Judge Amigo
of the Court of First Instance issued a ruling on October
14, 1996, in Bayer's patent infringement action that the
court would receive "any document that may be presented,"
although he reserved decision as to any document's
admissibility. App. at 87-89. For its part, BetaChem
produced no evidence from which the district court might
have reasonably concluded that presentation of the
material sought here would offend the Spanish court.
Inasmuch as relevant evidence is presumptively
discoverable under S 1782, the burden of demonstrating
offense to the foreign jurisdiction, or any other facts
warranting the denial of a particular application, should
rest with the party opposing the application, here
BetaChem.
In John Deere, we considered the testimony sought there
to be discoverable in the foreign jurisdiction after noting
simply that "the testimony sought would generally be
subject to discovery were all the parties in Canada." 754
F.2d at 136 (emphasis added). Here, the parties'
uncontested submissions make clear that the documents
sought by Bayer would be subject to discovery in Spain
15
were all the parties located there. By insisting that the
Spanish court make the materiality determination, the
district court, in our view, insisted on too much. See
generally, Metallgesellschaft, 121 F.3d at 80 (denying an
application "because the foreign court had notfirst passed
on the discoverability of the material sought" would
contravene S 1782's purpose).
III.
Our discussion is not intended to suggest that Bayer is
necessarily entitled to have its application granted. That
determination will have to await the district court's proper
exercise of its discretion on remand when it will be free to
consider the relevance of factors not before us, such as the
timeliness of Bayer's application and appropriate measures,
if needed, to protect the confidentiality of the materials. For
the reasons discussed above, we will vacate the order of the
district court and remand for further proceedings
consistent with this opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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