Application of Consorcio Ecuatoriano De Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc.

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 11-12897 JUNE 25, 2012
________________________ JOHN LEY
CLERK
D.C. Docket No. 1:10-mc-22320-DLG
APPLICATION OF CONSORCIO ECUATORIANO DE
TELECOMUNICACIONES S.A.,
Pursuant to 28 USC 1782 for Judicial Assistance in
Obtaining Evidence From JAS Forwarding (USA), Inc.,
For Use In a Foreign Tribunal,
Plaintiff - Appellee,
versus
JAS FORWARDING (USA), INC.,
Defendant,
JET AIR SERVICE EQUADOR S.A.,
Intervenor - Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(June 25, 2012)
Before MARCUS and BLACK, Circuit Judges, and HODGES,* District Judge.
MARCUS, Circuit Judge:
This appeal arises out of a foreign shipping contract billing dispute between
Consorcio Ecuatoriano de Telecomunicaciones S.A. (“CONECEL”) and Jet Air
Service Equador S.A. (“JASE”). CONECEL filed an application in the Southern
District of Florida under 28 U.S.C. § 1782 to obtain discovery for use in foreign
proceedings in Ecuador. According to CONECEL, the foreign proceedings
include both a pending arbitration brought by JASE against CONECEL for non-
payment under the contract, and contemplated civil and private criminal suits
CONECEL might bring against two of its former employees who, CONECEL
claims, may have violated Ecuador’s collusion laws in connection with processing
and approving JASE’s allegedly inflated invoices. CONECEL’s application seeks
discovery from JASE’s United States counterpart, JAS Forwarding (USA), Inc.
(“JAS USA”), which does business in Miami and was involved in the invoicing
operations at issue in the dispute. The district court granted the application and
authorized CONECEL to issue a subpoena. Thereafter, JASE intervened and
moved to quash the subpoena and vacate the order granting the application. The
*
Honorable Wm. Terrell Hodges, United States District Judge for the Middle District of
Florida, sitting by designation.
2
district court denied the motion, as well as a subsequent motion for
reconsideration. JASE now appeals the denial of both.
After thorough review and having had the benefit of oral argument, we
affirm the orders of the district court. We hold that the arbitral tribunal before
which JASE and CONECEL’s dispute is now pending is a foreign tribunal for
purposes of the statute. The arbitral panel acts as a first-instance decisionmaker; it
permits the gathering and submission of evidence; it resolves the dispute; it issues
a binding order; and its order is subject to judicial review. The discovery statute
requires nothing more. We also hold that the district court did not abuse its
considerable discretion in granting the section 1782 discovery application over
JASE’s objections that it would be forced to produce proprietary and confidential
information. The application was narrowly tailored and primarily requested
information concerning JASE’s billing of CONECEL, which is undeniably at issue
in the current dispute between the parties. Finally, the district court did not abuse
its discretion in denying JASE’s motion for reconsideration.
I.
CONECEL and JASE have had a lengthy contractual relationship that
3
reaches back at least a decade.1 JASE agreed to provide transportation logistics
services in connection with the international transportation of cell phones and
accessories for CONECEL. The contracts between the parties contain descriptions
of the potential services to be provided by JASE and detailed terms pertaining to
the rate to be charged per applicable unit of weight transported. According to
CONECEL, between 2002 and 2007 JASE invoiced, and CONECEL paid, more
than $88 million for services rendered under the contracts. The relationship
between the parties soured in 2008, and CONECEL contends that an internal
investigation and audit “using the limited documentation in its possession”
revealed that CONECEL had been improperly overbilled by millions of dollars.
CONECEL says that the agreements between the parties provided that
CONECEL would pay the rate specified by the agreements (in terms of dollars per
unit of weight) multiplied by the weight of the shipment. CONECEL contends
that JASE introduced an “extra-contractual multiplication factor” into the
equation, which “varied from shipment to shipment based on factors that are not
known to CONECEL.”2 CONECEL also claims that the calculation of the
1
The agreements themselves are confidential and not part of the record. The parties both
describe in materially similar terms the overall contours of the agreements, however.
2
Specifically, CONECEL claims that JASE inflated the invoices in this way:
Stated mathematically, the process employed by JAS Ecuador looked like this: (gross
4
“chargeable weight” of the shipments was erroneous.
CONECEL reports that an internal investigation and audit has led it to
believe that two of its former employees, Lucy Egas Ribadeneira (“Egas”) and
Germania Narváez (“Narváez”), had a hand in the overbilling scheme. The two
former employees allegedly “participated in the processing and approval of JAS
Ecuador’s invoices during the relevant period and . . . there are indications that
Ribadeneira and Narváez may be liable to CONECEL for its damages.”
CONECEL adds that its contemplated civil action for collusion would be filed in
the civil-mercantile court of competent jurisdiction in Quito, Ecuador, and that
under the applicable procedural rules, CONECEL must present all of the evidence
necessary to support its claims at the moment it files the action. Then, if
successful in a civil action, CONECEL could, under Ecuadorian law, pursue a
private criminal action against its former employees. Since a party must present
its evidence up front along with the pleadings, CONECEL seeks the discovery
specified in section 1782 before commencing suit in Ecuador.
Not surprisingly, JASE tells a wholly different story. It claims that in 2008
weight or volumetric weight, whichever was higher) x (the extra-contractual
multiplication factor) x (rate to be charged per the parties’ agreement) = amount billed to
CONECEL. The extra-contractual multiplication factor applied in this process was at the
heart of the scheme which resulted in over-billing and damages to CONECEL.
5
CONECEL failed to pay several invoices. Pursuant to the contractual agreements
between the parties, JASE has pursued arbitration in Ecuador before the Center for
Arbitration and Conciliation of the Guayaquil Chamber of Commerce.
CONECEL’s primary defense in the pending arbitration proceeding is that the
invoices do not correspond to the parties’ agreed-upon price.
II.
On July 14, 2010, CONECEL filed an ex parte application for judicial
assistance in the Southern District of Florida in order to obtain evidence pursuant
to 28 U.S.C. § 1782. Section 1782 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, including criminal investigations conducted
before formal accusation. 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 and may direct that the
testimony or statement be given, or the document or other thing be
produced, before a person appointed by the court. . . . 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. § 1782(a).
CONECEL’s detailed application, accompanied by two declarations and a
6
memorandum of law, sought evidence from JAS USA relating primarily to the
invoicing and calculation of rates charged to CONECEL.3 The application was
3
More specifically, CONECEL’s application requested the following discovery from the
relevant time period of January 1, 2002 up through and including December 31, 2008:
I. Document Production
(a) Any and all documents pertaining or relating to the rates charged or to be charged to
CONECEL for any of JAS Ecuador’s or its affiliates’ services.
(b) Any and all documents pertaining or relating to the procedure or methodology for
applying the rates to be charged to CONECEL for any of JAS Ecuador’s or its affiliates’
services.
(c) Any and all documents pertaining or relating to the calculation of “gross weight” and
“chargeable weight” for services provided by JAS Ecuador or its affiliates to CONECEL.
(d) Any and all documents pertaining to Jet Air Service (Ecuador) S.A.’s billing or
invoicing to CONECEL.
(e) Any and all documents pertaining to JAS Ecuador Forwarding S.A.’s billing or
invoicing to CONECEL.
(f) Any and all documents pertaining or relating to Lucy Egas Ribadeneira.
(g) Any and all documents pertaining or relating to Germania Narváez.
(h) Any and all documents evidencing the actions of and services rendered by JAS USA
in connection with shipments to CONECEL or via Jet Air Service (Ecuador) S.A., or JAS
Ecuador Forwarding S.A., or JAS USA.
(i) Any and all documents pertaining to any audit, accounting, tabulation or investigation
undertaken by JAS USA alone or in collaboration with any of its affiliates in relation to
JAS Ecuador’s claims in the Ecuadorian Arbitration Case or the actions of former
CONECEL employees, Lucy Egas Ribadeneira and / or Germania Narváez.
II. Deposition(s)
(a) The sworn deposition of the JAS USA person (or persons) with most knowledge
regarding:
7
also accompanied by a sample air waybill purporting to show that JAS USA’s
Miami office was involved in the provision and invoicing of transport services to
CONECEL.
On July 20, 2010, the district court granted the ex parte application and
authorized CONECEL to issue and serve a subpoena on JAS USA seeking the
discovery outlined in CONECEL’s application. JASE moved to intervene to
vacate the order granting the application. After full briefing, the district court
permitted the intervention but denied the motion to vacate.
The district court began its analysis by addressing the “primary disputed
issue” of “whether the subpoenaed documents will be used in a proceeding [in] a
foreign or international tribunal.” The court observed that, as interpreted by the
Supreme Court, section 1782 does not require that the foreign proceeding be
pending or imminent, but rather only that the proceeding “be within reasonable
contemplation.” Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 259
1. The documents requested by CONECEL, including without limitation their
authentication;
2. The services rendered to CONECEL by JAS Ecuador Forwarding S.A., Jet Air
Service (Ecuador) S.A., JAS Ecuador, and/or JAS USA from January 1, 2002, up
through and including, December 31, 2008.
8
(2004). The district court determined that CONECEL had “established that the
civil and criminal actions are within reasonable contemplation.” Having
concluded that CONECEL’s civil and criminal suits against its two former
employees were within reasonable contemplation, the district court did not have to
reach the question of whether the pending arbitration between JASE and
CONECEL was a proceeding in a foreign tribunal under the statute. The court did
observe, however, that “upon a review of the case law, the Court finds that the
arbitral tribunal, in this action, is likely within the purview of section 1782.”
Finally, as for JASE’s argument that the application should have been
denied anyway because CONECEL sought confidential materials, the district court
rejected the claim this way:
JAS Ecuador’s primary discretionary argument is that the subpoena
requests confidential materials. The Court disagrees. The subpoena
simply requests information as it relates to how JAS Ecuador billed or
invoiced CONECEL. It does not request information on how JAS
Ecuador bills other clients. Indeed, it relates directly to the contract at
issue -- the same contract JAS Ecuador uses to assert confidentiality.
Accordingly, the Court finds this argument without merit.
. . . [T]he Court does not find that JAS Ecuador is embarking on a
“fishing expedition.” The Court finds the Subpoena narrowly tailored
and not unduly intrusive or burdensome. Accordingly, the motion to
quash must be denied.
9
JASE moved for reconsideration; the district court denied the motion,
concluding that it appeared to be nothing more than an effort to relitigate matters
that the court had already decided. This timely appeal of both the order denying
JASE’s motion to vacate and the order denying JASE’s motion for reconsideration
followed.
III.
A district court’s decision to honor or deny a section 1782 discovery request
is reviewed for abuse of discretion. United Kingdom v. United States, 238 F.3d
1312, 1319 (11th Cir. 2001). This deferential standard is identical to the one we
use when reviewing a district court’s ordinary discovery rulings, including rulings
such as whether the foundation for a claim of privilege has been established. Id.To the extent the district court’s decision is based on an interpretation of law,
however, our review is de novo. Id. at 1319 n.8. Thus, we review de novo the
district court’s interpretation of a federal statute like section 1782. In re Clerici,
481 F.3d 1324, 1331 (11th Cir. 2007). Finally, we review the district court’s
denial of a motion for reconsideration only for abuse of discretion. Richardson v.
Johnson, 598 F.3d 734, 740 (11th Cir. 2010) (per curiam); Sanderlin v. Seminole
Tribe of Fla., 243 F.3d 1282, 1285 (11th Cir. 2001).
Three issues are raised in this appeal: first, whether there is a “proceeding in
10
a foreign or international tribunal,” 28 U.S.C. § 1782(a), for which CONECEL
sought discovery; second, assuming the statutory requirements have been met,
whether the district court nonetheless abused its discretion in granting the
application because the disclosures would reveal confidential pricing information;
and, third, whether the court abused its discretion in denying JASE’s motion for
reconsideration. We take each issue in turn. We emphasize, however, that this
appeal is not about whether JASE actually overbilled CONECEL, with or without
the collusion of CONECEL’s former employees; or whether CONECEL owes
JASE any money under the contracts between the parties; or, finally, whether any
other underlying dispute among the parties and related persons has merit. Like the
district court, we have no occasion to address any of these issues, which will likely
be resolved in various tribunals in Ecuador.
A.
A district court has the authority to grant an application for judicial
assistance under section 1782 if four statutory requirements are met:
(1) the request must be made “by a foreign or international tribunal,” or
by “any interested person”; (2) the request must seek evidence, whether
it be the “testimony or statement” of a person or the production of “a
document or other thing”; (3) the evidence must be “for use in a
proceeding in a foreign or international tribunal”; and (4) the person
from whom discovery is sought must reside or be found in the district of
11
the district court ruling on the application for assistance.
In re Clerici, 481 F.3d at 1331-32 (footnote omitted) (quoting 28 U.S.C. §
1782(a)). JASE does not dispute that requirements (1), (2), and (4) have been met
here. As a party to the dispute, CONECEL plainly is an “interested person”;
CONECEL’s application seeks evidence in the form of document production and
deposition testimony; and the application seeks discovery from JAS USA, which
has an office and does business in Miami and is therefore “found in the district of
the district court ruling on the application for assistance” -- namely, the Southern
District of Florida.
At issue is the third requirement -- that the evidence sought must be for use
in a proceeding in a foreign or international tribunal. JASE claims that there is no
such proceeding. CONECEL advances two independent theories for why there is:
that the arbitration between the parties is a proceeding already pending in a foreign
tribunal; and that CONECEL also wants the evidence for use in reasonably
contemplated civil collusion proceedings that it may file against two of its former
employees. Because we now hold that the pending arbitration proceeding is a
“proceeding in a foreign or international tribunal,” 28 U.S.C. § 1782(a), we have
no occasion to address the second theory.
Although an issue of first impression in this Circuit, the determination of
12
whether a foreign arbitration falls within the scope of section 1782 is guided in
substantial measure by the Supreme Court’s seminal decision in Intel Corp. v.
Advanced Micro Devices, Inc., 542 U.S. 241 (2004). Most significantly for our
purposes, the Court in Intel emphasized the breadth of the statutory term
“tribunal.” In discussing the legislative history of section 1782, Justice Ginsburg,
writing for the Court, observed that Congress in 1964 introduced the word
“tribunal” into the statute to replace the previous version’s term “judicial
proceeding,” quoting with approval from a Senate Report “explain[ing] that
Congress introduced the word ‘tribunal’ to ensure that ‘assistance is not confined
to proceedings before conventional courts,’ but extends also to ‘administrative and
quasi-judicial proceedings.’” Id. at 248-49 (quoting S. Rep. No. 88-1580, at 7
(1964), reprinted in 1964 U.S.C.C.A.N. 3782, 3788). And then, in determining
whether the Directorate-General for Competition of the European Commission
was a “tribunal” under the statute, the Supreme Court reiterated that the legislative
change from the phrase “any judicial proceeding” to the current phrase -- “a
proceeding in a foreign or international tribunal” -- was intended to “provide the
possibility of U.S. judicial assistance in connection with administrative and quasi-
judicial proceedings abroad.” Id. at 258 (alterations and internal quotation marks
omitted). As the Supreme Court noted, “[w]hen Congress acts to amend a statute,
13
we presume it intends its amendment to have real and substantial effect.” Id. at
258-59 (quoting Stone v. INS, 514 U.S. 386, 397 (1995)).
Moreover, the Court quoted with approval the following broad definition of
“tribunal” set forth by a leading scholar on international procedure: “[t]he term
‘tribunal’ . . . includes investigating magistrates, administrative and arbitral
tribunals, and quasi-judicial agencies, as well as conventional civil, commercial,
criminal, and administrative courts.” Id. at 258 (alterations in original) (emphasis
added) (quoting Hans Smit, International Litigation Under the United States Code,
65 Colum. L. Rev. 1015, 1026 n.71 (1965)).4 Applying this broad definition to the
case, the Supreme Court concluded that because the European Commission acted
as a “proof-taking” body and a “first-instance decisionmaker,” the Court had “no
warrant to exclude the European Commission . . . from § 1782(a)’s ambit.” Id. at
257-58; accord id. at 246-247 (“[T]he Commission is a § 1782(a) ‘tribunal’ when
it acts as a first-instance decisionmaker . . . .”); id. at 255 & n.9 (noting that a
European Commission proceeding “leads to a dispositive ruling, i.e., a final
administrative action both responsive to the complaint and reviewable in court,”
4
Professor Smit, whose articles are repeatedly cited by the Supreme Court in Intel, is
more than a leading scholar in the field. Indeed, one of the reasons offered for citing his views as
persuasive authority on the interpretation of section 1782 is that, as then-Judge Ginsburg
explained in an earlier D.C. Circuit opinion, Professor Smit is “the dominant drafter of, and
commentator on, the 1964 revision of 28 U.S.C. § 1782.” In re Letter of Request from the
Crown Prosecution Serv. of the U.K., 870 F.2d 686, 689 (D.C. Cir. 1989).
14
and observing that the European Commission has the “authority to determine
liability and impose penalties, dispositions that will remain final unless overturned
by the European courts”).
Thus, while the Supreme Court in Intel was not tasked with specifically
deciding whether a private arbitral tribunal falls under the statute, its broad
functional construction of the term “tribunal” provides us with substantial
guidance. Consistent with this functional approach, we examine the
characteristics of the arbitral body at issue, in particular whether the arbitral panel
acts as a first-instance adjudicative decisionmaker, whether it permits the
gathering and submission of evidence, whether it has the authority to determine
liability and impose penalties, and whether its decision is subject to judicial
review. See id. at 255 & n.9, 257-58; see also In re Winning (HK) Shipping Co.,
2010 WL 1796579, *7 (S.D. Fla. April 30, 2010) (“Intel suggests that courts
should examine the nature of the arbitral body at issue to determine whether it
functions as a ‘foreign tribunal’ for purposes of section 1782.”); In re Roz Trading
Ltd., 469 F. Supp. 2d 1221, 1228 (N.D. Ga. 2006) (“Where a body makes
adjudicative decisions responsive to a complaint and reviewable in court, it falls
within the widely accepted definition of ‘tribunal,’ the reasoning of Intel, and the
15
scope of § 1782(a) . . . .”).5
The pending arbitration between JASE and CONECEL meets the functional
criteria articulated in Intel. In connection with its section 1782 application,
CONECEL submitted declarations from its Ecuadorian counsel explaining that the
arbitral panel has the “authority to receive evidence, resolve the dispute, and
award a binding decision.” The declaration further states that after the conclusion
of the arbitration proceedings,
the parties will be able to appeal the decision before an ordinary court
of the Ecuadorian state for causes related to procedural defects during
the proceedings, for example, for the lack of service of the complaint to
the defendant or lack of notification relating to some relevant decision
that prevented one of the parties to exercise its defense rights, or a
violation of the rules regarding designation of arbitrators or the selection
of the tribunal, etc. The nullification action is resolved by the Provincial
Court in the jurisdiction in which the arbitral award is rendered. Against
the decision of the Provincial Court, an appeal can be made before the
National Court of Justice.
The declaration also opined that “another possible option is to attack an arbitral
5
Other district courts across the country largely have followed the interpretation of Intel
set forth by the district court in Roz Trading. See In re Babcock Borsig AG, 583 F. Supp. 2d
233, 239 (D. Mass. 2008); In re Hallmark Capital Corp., 534 F. Supp. 2d 951, 954, 956 (D.
Minn. 2007); see also Comisión Ejecutiva, Hidroeléctrica del Río Lempa v. Nejapa Power Co.,
2008 WL 4809035, at *1 (D. Del. Oct. 14, 2008) (denying motion for reconsideration of order
granting section 1782 application, noting that “the Supreme Court’s decision in Intel (and post-
Intel decisions from other district courts) indicate that Section 1782 does indeed apply to private
foreign arbitrations”).
16
award through an extraordinary action of protection provided for in the new
Constitution of 2008.” This kind of constitutional attack on the arbitral award is
“made before the Constitutional Court,” and the action would be viable if “a
guaranteed right under the Constitution has been violated, whether by act or
omission.”
Notably, JASE does not contest that the arbitral tribunal at issue is a first-
instance decisionmaking body that can receive evidence and bind the parties with
its ruling; it only contests whether the arbitral tribunal’s decision is subject to
judicial review. JASE submitted in the district court its own declaration from
Ecuadorian counsel stating only that “[t]he sum and substance of [arbitrators’]
rulings, including determinations of fact and law are not reviewable by appeal.”6
The parties’ declarations are in no way inconsistent. JASE’s declaration
does not dispute that the award of the arbitral panel is subject to nullification
6
The relevant paragraph of the declaration provides in full:
It should further be noted that the subject arbitration is a private arbitration
proceeding initiated due to a contractual agreement, mutually negotiated, whereby
the commercial parties thereto chose to deprive the Court system of jurisdiction
with respect to any disputes arising under the Agreement. In this manner, it is
commonplace between large corporations to resolve commercial matters outside
the scope of the judiciary. Arbitrations in Ecuador, while sanctioned and afforded
the most basic constitutional protections, are not conducted by Judges, but by
private citizens, typically attorneys, who issue their decisions. The sum and
substance of the rulings, including determinations of fact and law are not
reviewable by appeal.
17
based on procedural defects in the arbitration proceeding and to constitutional
attack if the constitutional rights of one of the parties has been violated. The
opposing declarations read together demonstrate that judicial review of arbitration
awards in Ecuador, much like a federal court’s review of an arbitration award, is
focused primarily on addressing defects in the arbitration proceeding, not on
providing a second bite at the substantive apple that would defeat the purpose of
electing to pursue arbitration in the first instance. Cf. 9 U.S.C. § 10(a) (providing
that a district court may vacate an arbitration award where the award was procured
by corruption or fraud, where the arbitrators were partial or corrupt, where
misbehavior by the arbitrators prejudiced the rights of any party, or where the
arbitrators exceeded their powers); Hall St. Assocs., L.L.C. v. Mattel, Inc., 552
U.S. 576, 578 (2008) (holding that “the statutory grounds” for judicial review in
the Federal Arbitration Act “are exclusive,” and may not be supplemented by
contract); White Springs Agric. Chems., Inc. v. Glawson Invs. Corp., 660 F.3d
1277, 1280 (11th Cir. 2011) (“Because these Sections [9 U.S.C. §§ 10-11] are the
exclusive means for upsetting an arbitration award, a panel’s incorrect legal
conclusion is not grounds for vacating or modifying the award.”).
One could not seriously argue that, because domestic arbitration awards are
only reviewable in court for limited reasons (notably excluding a second look at
18
the substance of the arbitral determination), this amounts to no judicial review at
all. As the Supreme Court has expressly recognized, the Federal Arbitration Act
provides the exclusive statutory grounds for “expedited judicial review.” Hall St.,
552 U.S. at 578 (emphasis added). Yet JASE urges us, for section 1782 purposes,
to conclude that the functional requirement of being subject to judicial review is
only satisfied when the sum and substance of the arbitral body’s decision is
subject to full judicial reconsideration on the merits. This definition is far too
stringent, and we can discern no sound reason to depart from the common sense
understanding that an arbitral award is subject to judicial review when a court can
enforce the award or can upset it on the basis of defects in the arbitration
proceeding or in other limited circumstances. Based on the undisputed record
before this Court, the arbitral panel in Ecuador, after receiving evidence from the
parties, will render a first-instance binding decision on the merits that is subject to
judicial review. This arbitral panel is, in the words of the Supreme Court, “a first-
instance decisionmaker” whose judgment is subject to judicial review, and we
therefore “have no warrant to exclude [it] . . . from § 1782(a)’s ambit.” Intel, 542
U.S. at 258.7 In short, CONECEL’s
7
We are aware that two of our sister circuits, prior to the Supreme Court’s decision in
Intel, had reached a different conclusion, holding that private arbitral tribunals fall outside of
section 1782’s scope because the statute was only “intended to cover governmental or
19
application satisfied the prima facie requirements of 28 U.S.C. § 1782(a).
intergovernmental arbitral tribunals and conventional courts and other state-sponsored
adjudicatory bodies.” Nat’l Broad. Co. v. Bear Stearns & Co., 165 F.3d 184, 190 (2d Cir. 1999);
accord Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880, 881 (5th Cir. 1999). Most
notably for our purposes, these decisions, and the categorical distinction they drew between
governmental and private tribunals, were rendered without the benefit of the Supreme Court’s
subsequent Intel decision, in which the Court set forth a far broader and wholly functional
definition of the term “tribunal,” and declined to impose “categorical limitations” on the scope of
section 1782(a). Intel, 542 U.S. at 255; see also Roz Trading, 469 F. Supp. 2d at 1228. To the
extent that JASE relies here on a categorical distinction between governmental and private
arbitral tribunals, we are unpersuaded, because neither the text of the statute nor the Supreme
Court’s decision in Intel make, or even suggest, drawing any such distinction. As the Supreme
Court explained, Congress in 1964 replaced the term “judicial proceeding” with the term
“tribunal” precisely in order to broaden the reach of section 1782 and extend the authority of
district courts to provide assistance in connection with quasi-judicial proceedings abroad. Intel,
542 U.S. at 258. And the view that the statutory term “tribunal” includes “arbitral tribunals,”
strongly endorsed by the Supreme Court, albeit in dicta, see id., was not qualified in any way or
limited only to governmental arbitral tribunals. Indeed, we note that Professor Smit has also
written that “[c]learly, private arbitral tribunals come within the term the drafters used” and that
“the term ‘tribunal’ in Section 1782 includes an arbitral tribunal created by private agreement.”
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, 5-6 (1998).
Moreover, the Intel decision also made clear that a district court, in the exercise of its
sound discretion, may consider a number of the concerns that animated the decisions of the
Second and Fifth Circuits, such as the claim that application of section 1782 to private arbitration
is at odds with the limited scope of discovery and streamlined procedures that lead parties to
elect to pursue arbitration in the first place. See Kazakhstan, 168 F.3d at 883; Nat’l Broad. Co.,
165 F.3d at 190-91. Thus, for example, the Fifth Circuit reasoned that “arbitration’s principal
advantages may be destroyed if the parties succumb to fighting over burdensome discovery
requests far from the place of arbitration.” Kazakhstan, 168 F.3d at 883. This concern is real,
but we recognize that the district court is in the best position to weigh the section 1782
applicant’s asserted need for the evidence against the nature of the foreign proceeding and
concerns of undue burden or intrusiveness -- two factors that the Supreme Court expressly
instructed district courts to consider in determining whether to grant a section 1782 application.
Intel, 542 U.S. at 264-65; accord id. at 264 (“[T]he grounds Intel urged for categorical limitations
on § 1782(a)’s scope may be relevant in determining whether a discovery order should be granted
in a particular case.”); In re Winning, 2010 WL 1796579, at *10 n.5 (“[The party resisting
discovery] correctly asserts that the broadened definition of ‘international tribunal’ by the
Supreme Court in Intel may result in additional discovery burdens that parties to private
arbitration seek to avoid. However, because courts may modify discovery requests based upon
the discretionary factors set forth in Intel, such burdens may be significantly curtailed by a court,
and thus allow parties to still reap the benefits of private arbitration.”).
20
B.
Our inquiry does not end with the statutory requirements. The law is clear
that “a district court is not required to grant a § 1782(a) discovery application
simply because it has the authority to do so.” Intel, 542 U.S. at 264 (citing United
Kingdom, 238 F.3d at 1319). Thus, JASE argues that, even if the statutory
requirements have been met, the district court abused its discretion in granting
CONECEL’s application anyway.
Section 1782 is the product of over 150 years of congressional effort to
provide federal-court assistance in gathering evidence for use in foreign tribunals.
See id. at 247-49 (reviewing at some length the history of congressional efforts to
provide judicial assistance to foreign tribunals and developments designed to
broaden the scope of federal courts’ power to respond to foreign or international
discovery requests). “The history of Section 1782 reveals Congress’ wish to
strengthen the power of district courts to respond to requests for international
assistance.” Lo Ka Chun v. Lo To, 858 F.2d 1564, 1565 (11th Cir. 1988).
Accordingly, as we have said, “[w]hether, and to what extent, to honor a request
for assistance pursuant to § 1782 has been committed by Congress to the sound
discretion of the district court” and “this court may overturn the district court’s
decision only for abuse of discretion.” United Kingdom, 238 F.3d at 1318-19.
21
We have further made clear that “[t]his deferential standard is identical to that
used in reviewing the district court’s ordinary discovery rulings.” Id. at 1319; cf.
Harris v. Chapman, 97 F.3d 499, 506 (11th Cir. 1996) (“District judges are
accorded wide discretion in ruling upon discovery motions, and appellate review
is accordingly deferential.”).
Interpreting the Supreme Court’s decision in Intel, a panel of this Court
already has spelled out four factors that should be considered by the district court
in exercising its discretion:
Once the prima facie requirements are satisfied, the Supreme Court in
Intel noted these factors to be considered in exercising the discretion
granted under § 1782(a): (1) whether “the person from whom discovery
is sought is a participant in the foreign proceeding,” because “the need
for § 1782(a) aid generally is not as apparent as it ordinarily is when
evidence is sought from a nonparticipant”; (2) “the nature of the foreign
tribunal, the character of the proceedings underway abroad, and the
receptivity of the foreign government or the court or agency abroad to
U.S. federal-court judicial assistance”; (3) “whether the § 1782(a)
request conceals an attempt to circumvent foreign proof-gathering
restrictions or other policies of a foreign country or the United States”;
and (4) whether the request is otherwise “unduly intrusive or
burdensome.” The Supreme Court in Intel added that “unduly intrusive
or burdensome requests may be rejected or trimmed.”
In re Clerici, 481 F.3d at 1334 (citation omitted) (quoting Intel, 542 U.S. at 264-
65). JASE’s argument that the district court abused its discretion only focuses on
22
the fourth factor. JASE claims that CONECEL’s request for discovery from JAS
USA is overbroad and improperly seeks confidential and proprietary information
related to how both JAS USA and JASE price their services.
The main problem with JASE’s claim is that it fails to provide us with any
sound basis for overturning the district court’s exercise of discretion or for
upending the district court’s determination that the discovery request was narrowly
tailored. This Circuit has held that once the section 1782 factors are met and the
district court is therefore authorized to grant the application, “the federal discovery
rules, Fed. R. Civ. P. 26-36, contain the relevant practices and procedures for the
taking of testimony and the production of documents.” Weber v. Finker, 554 F.3d
1379, 1384-85 (11th Cir. 2009) (quoting In re Clerici, 481 F.3d at 1336). As we
explained in Weber:
Section 1782 does not require that every document discovered be
actually used in the foreign proceeding. Quite the opposite. Section
1782 expressly provides that the district court should grant discovery
under the Federal Rules of Civil Procedure. Pursuant to Rule 26(b)(1)
of the Federal Rules of Civil Procedure, “[p]arties may obtain discovery
regarding any nonprivileged matter that is relevant to any party’s claim
or defense -- including the existence, description, nature, custody,
condition, and location of any documents . . . .” Fed. R. Civ. P. 26(b)(1).
Id. at 1385.
CONECEL’s discovery requests in the instant section 1782 application were
23
undeniably relevant to CONECEL’s defense in the pending arbitration.
CONECEL’s defense in the arbitration is based on establishing that JASE
overbilled in violation of the contractual arrangement between the parties.
Evidence in JAS USA’s possession relating to, for example, “the rates charged or
to be charged to CONECEL” or “the procedure or methodology for applying the
rates to be charged to CONECEL” is plainly relevant to this defense. Moreover,
we find unpersuasive JASE’s unsubstantiated claim that JAS USA’s compliance
with the subpoena would require the disclosure of confidential pricing information
that would harm its competitiveness in the marketplace. On its face, CONECEL’s
application does not seek general price information from JASE or JAS USA or
information about how JASE or JAS USA bills any other clients besides
CONECEL. Rather, every request in the application that bears on pricing
information uses language limiting the request to information relating directly to
CONECEL, such as “the rates charged or to be charged to CONECEL,” or
“services provided by JAS Ecuador or its affiliates to CONECEL,” or “billing or
invoicing to CONECEL,” or “services rendered . . . in connection with shipments
to CONECEL.” The district court did not abuse its discretion in concluding that
the subpoena requests information that “relates directly to the contract at issue”
and was “narrowly tailored.”
24
Moreover, JASE does not appear to have taken any steps to meet
CONECEL somewhere in the middle or to narrow the discovery request in any
particular way; rather, it has taken an all-or-nothing approach seeking to remove
JAS USA from the burden of having to produce any documents or deposition
testimony, even those that seem unambiguously relevant. We have previously
recognized that such an approach is problematic:
Finally, as to the fourth Intel factor -- whether the § 1782 request is
unduly intrusive -- the district court’s order granting the § 1782
application specifically indicated that if Clerici wished to pursue his
“unduly intrusive” argument, Clerici should file a motion to limit
discovery. Clerici never did so and instead chose to appeal the grant of
any discovery whatsoever. On appeal, as in the district court, Clerici
does not identify the terms of the written request that are overly broad
or assert how the scope of the request should be narrowed. Thus, we,
like the district court, have no occasion to address the scope of the
Panamanian Court’s discovery request.
In re Clerici, 481 F.3d at 1335.8
The Seventh Circuit has raised similar concerns about all-or-nothing
discovery challenges in the course of reversing a district court’s complete denial
of a section 1782 application as an abuse of discretion:
8
Although the district court in this case did not expressly invite subsequent motions to
limit discovery, the basic concern raised by the panel in In re Clerici remains: it is a tall order
indeed for a party resisting a section 1782 application to establish on appeal that the district court
abused its broad discretion in granting any discovery at all.
25
Heraeus’s discovery demands are broad . . . . For all we know, they are
too broad. But if so, it doesn’t follow that Heraeus is not entitled to any
discovery. It’s not as if its demands were frivolous; it obviously needs
a good deal of discovery in order to prepare its case against Biomet. If
it’s asking for too much, the district court can and should cut down its
request, but not to nothing, as it did. That was unreasonable, and
therefore reversible.
Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d 591, 597-98 (7th Cir. 2011); see
also id. at 598 (noting that the district court’s denial of any discovery “was all the
more unreasonable because Biomet had refused to meet with Heraeus to negotiate
a reduction in the amount of discovery sought” and because of Biomet’s “refusal
to present any evidence of the burdens that granting Heraeus’s discovery request
would impose”). These concerns are persuasive. In this case, JASE has failed to
identify which particular discovery requests in CONECEL’s application are
unduly burdensome or to provide any specific evidence to support its blanket
claim that JAS USA should be exempted from having to comply with any and all
discovery obligations due to overarching concerns about confidentiality that are
stated only at the highest order of abstraction.
Finally, JASE suggests that the district court erred because its order denying
the motion to vacate did not contain a sufficiently detailed analysis of JASE’s
arguments about confidential price information. This argument too is without
26
merit. The district court considered the motions and pertinent parts of the record,
correctly identified the four Intel factors that guide the exercise of its discretion,
correctly observed that JASE objected to the production of purportedly
confidential pricing information, and then made the determination that it
“disagree[d]” with JASE’s confidentiality claim and further found “the Subpoena
narrowly tailored and not unduly intrusive or burdensome.” We can discern no
abuse of discretion in any of these findings.
C.
JASE’s final claim is that the district court erred in denying its motion for
reconsideration under Fed. R. Civ. P. 59 and 60.9 Although not a model of clarity,
JASE’s motion, beyond merely reiterating JASE’s previously raised claims,
appeared to seek relief in large part under Fed. R. Civ. P. 60(b)(2), which permits
relief from a final judgment, order, or proceeding based on “newly discovered
evidence.” In this Circuit, we employ a five-part test that a movant must meet in
order to be entitled to such relief:
9
No one disputes that Rules 59 and 60 are appropriate vehicles to seek reconsideration
of a district court’s order denying a motion to vacate, because the order denying the motion to
vacate is final and leaves nothing further pending before the district court, much like any other
form of final judgment. Cf. Heraeus Kulzer, 633 F.3d at 593 (holding that a district court order
denying a section 1782 application was final and appealable because “[t]he court is finished with
the matter -- as the only matter is discovery -- and when no further proceedings are contemplated,
the court’s last order, even if it is a discovery order, is an appealable final order.”).
27
(1) the evidence must be newly discovered since the trial [or final
judgment or order]; (2) due diligence on the part of the movant to
discover the new evidence must be shown; (3) the evidence must not be
merely cumulative or impeaching; (4) the evidence must be material;
and (5) the evidence must be such that a new trial [or reconsideration of
the final judgment or order] would probably produce a new result.
Waddell v. Hendry Cnty. Sheriff’s Office, 329 F.3d 1300, 1309 (11th Cir. 2003)
(citing Toole v. Baxter Healthcare Corp., 235 F.3d 1307, 1316 (11th Cir. 2000)).
The newly discovered evidence that JASE brought to the district court’s
attention was an April 2011 action filed in Ecuador by Egas, one of the two former
CONECEL employees discussed in the section 1782 application. Egas’s suit
seeks damages from CONECEL for slander based on CONECEL’s allegations of
her wrongdoing in this section 1782 application. JASE met the first three factors
of the Waddell analysis because the evidence was new, discovered with due
diligence, and not cumulative. The district court order denying JASE’s initial
motion to vacate the order granting the section 1782 application was issued in
April 2011, the same month that Egas commenced her lawsuit in Ecuador. JASE
promptly brought the new evidence to the attention of the district court by filing a
timely motion for reconsideration in May 2011.
But JASE’s evidence falls short under the fourth and fifth Waddell factors.
JASE claims that Egas’s suit establishes that any potential civil action by
28
CONECEL against its former employees would be baseless and without merit,
thereby confirming that there were no reasonably contemplated proceedings and
that CONECEL’s section 1782 application was merely a fishing expedition
designed to harass JASE and JAS USA. But we cannot simply assume that the
allegations in Egas’s lawsuit are true and the allegations in CONECEL’s section
1782 application are false. Like the district court, we are in no position to assess
the merits of either CONECEL’s potential suit against Egas or Egas’s retaliatory
suit for slander. More importantly, the Egas lawsuit has no bearing on our holding
that the pending arbitration between JASE and CONECEL satisfies the
requirements of section 1782. Evidence of Egas’s slander lawsuit is immaterial to
the outcome of this case.
In short, JASE’s newly discovered evidence proffered in its motion for
reconsideration was not material evidence nor evidence that would have probably
changed the outcome of the district court’s decision. See Waddell, 329 F.3d at
1309. Indeed, the bulk of JASE’s motion for reconsideration just reiterated
JASE’s already-rejected arguments. The district court, therefore, acted entirely
within its sound discretion in denying JASE’s motion for reconsideration. See
Richardson, 598 F.3d at 740 (“A motion for reconsideration cannot be used ‘to
relitigate old matters, raise argument or present evidence that could have been
29
raised prior to the entry of judgment.’” (quoting Michael Linet, Inc. v. Vill. of
Wellington, 408 F.3d 757, 763 (11th Cir. 2005))).
The district court’s denial of JASE’s motion to vacate the order granting
CONECEL’s 28 U.S.C. § 1782 application and the denial of JASE’s motion for
reconsideration are AFFIRMED.
30
BLACK, Circuit Judge, specially concurring:
I concur in the judgment affirming the district court. I would affirm the
district court, however, on the basis of CONECEL’s second theory for why the
evidence it seeks is for use in a “proceeding in a foreign or international tribunal”
under § 1782. See Opinion at 12.
Section 1782(a) does not limit the provision of judicial assistance to
“pending” or “imminent” adjudicative proceedings. Intel Corp., 542 U.S. at 259(rejecting the view that a proceeding must be “very likely to occur and very soon
to occur”). The statute requires only that an adjudicative proceeding be “within
reasonable contemplation.” Id.I conclude the record supports the district court’s determination that
CONECEL’s potential litigation against Egas and Narváez was “within reasonable
contemplation.”
31