Eleventh Circuit
considers whether § 1782 precludes the use, in civil litigation in the United
States, of evidence previously obtained for use in a proceeding in a foreign or
international tribunal
Helga
Glock (“Plaintiff”) and Gaston Glock, Sr. were husband and wife, who in 1963
founded Glock KG, an Austrian limited partnership that manufactured guns. In
1982, Gaston Glock created the Glock 17 handgun for the Austrian army. Four
years later, Glock’s guns started selling in the United States. In 2011, Gaston
and Helga began their divorce proceedings in Austria.
In
2013, Helga filed an application pursuant to 28 U.S.C. § 1782 in the U.S.
District Court for the Northern District of Georgia, seeking to discover
evidence from Glock, Inc., Glock Professional, Inc., and Consultinvest, Inc.
(collectively, “Glock Entities”), in the United States for use in the Austrian
divorce proceedings. The parties ultimately agreed to a protective order that
limited Helga’s use of any materials that the Glock Entities marked
“confidential” to proceedings to which she was a party (the “Protective
Order”).
A
year and a half after she filed her § 1782 application, Helga filed a separate lawsuit
under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) in U.S.
District Court for the Northern District of Georgia against Gaston and the
Glock Entities (“the RICO Action”). Moreover, she returned to the § 1782 court
to seek authorization to allow her to disclose the documents she obtained in
that litigation to her RICO attorney, for potential use in the RICO Action. The
magistrate judge granted Helga’s motion in a paperless order. The Glock
Entities then filed their response opposing Helga’s use of the documents,
asserting that, as a matter of law, documents obtained under § 1782 may not be
used in domestic litigation, and even if they could, the Protective Order
precluded the use of the § 1782 documents in Helga’s domestic litigation.
In
November 2014, the magistrate judge vacated her earlier paperless order;
entered a written order granting Helga permission to use the documents in the
RICO Action; and rejected the Glock Entities’ argument that granting her use of
the documents would intrude on the RICO Action judge’s prerogatives.
The
Glock Entities filed objections to the magistrate judge’s order pursuant to
Rule 72(a), Fed. R. Civ. P., contending that the order was contrary to law
because § 1782 prohibits documents obtained for use in foreign proceedings to
be used in litigation in the United States.
The
District Court sustained the Glock Entities’ objections, concluding that the
magistrate judge’s determination was “contrary to law.” It also opined with
respect to the Protective Order that, although it did not expressly exclude use
of the documents in civil lawsuits in the United States, it must be construed
to prohibit such use since it was entered into in the context of a § 1782
action. The Court stated that “This order does not preclude Helga Glock from
seeking the documents in the [RICO] Action.” Helga appealed.
The
United States Court of Appeals for the Eleventh Circuit reversed the district
court’s order.
The
key issue on appeal is whether § 1782 precludes the use, in civil litigation in
the United States, of evidence previously obtained under the statute.
In
a de novo review, the Court started its analysis by considering what, if any,
limitations § 1782 imposes on the later use of documents obtained pursuant to §
1782 in United States civil litigation.“In relevant part, § 1782 provides,
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
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. § 1782(a). The plain language of this statute creates a procedure by
which a person may obtain discovery in the United States ‘for use in a proceeding
in a foreign or international tribunal.’ Though it is clear from the statutory
language that the law does not also establish a method for procuring discovery
for use in a domestic proceeding, we find nothing in the language of § 1782
that purports to limit later uses of evidence that have been properly obtained
under § 1782. Had Congress intended to restrict the use of evidence previously
obtained under § 1782 to proceedings in foreign or international tribunals, it
easily could have expressed that intention in any number of ways, even by
simply adding the word ‘only’ or ‘solely’ to the phrase ‘for use in a
proceeding in a foreign or international tribunal.’ But it did not do that.”
“On
the other hand, neither did Congress include a sentence in the statute
providing that once discovery is lawfully received under § 1782, it may be used
for other legal purposes, including United States litigation. Instead, the
statute is entirely silent on the issue of whether material procured under §
1782 may be used after it is lawfully obtained and used for the purpose for
which it was obtained.”
As
nothing in the statutory language or in the Senate Report accompanying the law
suggests that Congress ever specifically contemplated whether documents
previously obtained under § 1782 could later be used in civil United States
proceedings, and no circuit has addressed this issue, the court considers the
analogy of how domestic litigation works.
“First,
though, we pause to distinguish between the concepts of using evidence and
admitting evidence in court proceedings: A party may use evidence—whether or
not it is admissible in court under the Federal Rules of Evidence—to develop a
theory of the case, to prepare a complaint, to lead it to admissible evidence,
to help it to settle a case, and to accomplish other aspects of prosecuting or
defending a case. That fact, however, does not mean that the court will admit
the evidence or even that the evidence is potentially admissible. Indeed, our
discovery rules expressly contemplate the use of inadmissible evidence in
prosecuting or defending a case. See Fed. R. Civ. P. 26(b)(1) (‘Relevant
information need not be admissible at the trial if the discovery appears
reasonably calculated to lead to the discovery of admissible evidence.’).”
“As
a general rule, in United States litigation, to help prosecute or defend their
lawsuits, parties may use any evidence they lawfully possess. If, for example,
a plaintiff obtains documents in discovery from a defendant in one case,
nothing precludes her from using that evidence in a wholly separate lawsuit
against the same defendant or a different party, even though she would not have
had those documents to use in the second case had she not lawfully received
them as discovery in the first case. The law does not require her to rediscover
the documents in the second case. Nor must she apply to the court in either
lawsuit before being able to, say, draft a complaint in the second case based
on information contained in the documents discovered in the first case. This is
so even though no rule or law expressly authorizes a party to use, in
furtherance of litigation, evidence that it lawfully possesses, whether as a
result of earlier litigation or other circumstances.”
“[…]
As the Federal Rules of Civil Procedure suggest, goals of our system of civil
litigation include ‘secur[ing] the just, speedy, and inexpensive determination”
of the proceeding. See Fed. R. Civ. P. 1. Allowing parties to use, for purposes
of litigation, documents they have lawfully obtained, regardless of whether
they could have obtained them through discovery in the case in which they use
them, furthers these goals. We see no reason why a different rule should apply
to the use, in United States litigation, of documents that were previously
lawfully obtained under § 1782.”
The
court did not accept the Glock Entities’ argument based on the decision in In
re Letter of Request from Crown Prosecution Service of the United Kingdom, 870
F.2d 686 (D.C. Cir. 1989), where the district court “did not abuse its
discretion by not entering a `protective order to guard against improper use of
the evidence in auxiliary or unrelated proceedings here or abroad. The district
court’s order does not permit the Commissioners to do anything but send the evidence
to the British prosecutors . . . and any other use by them would require court
permission.’”
As
for the third Intel factor: “In Intel, the Supreme Court explained that once a
party satisfies § 1782’s statutory requirements to obtain discovery, the
district court has the authority to grant a § 1782 application, but whether
then to do so falls within the district court’s discretion. See id., 542 U.S.
at 264, 124 S. Ct. at 248283. To guide the district court’s exercise of its
discretion, the Supreme Court set forth four factors for consideration. See id.
at 26465, 124 S. Ct. at 2483. The third Intel factor[8] suggests evaluating
whether the § 1782 application ‘conceals an attempt to circumvent foreign
proof-gathering restrictions or other policies of a foreign country or the
United States.’ Id. at 26465, 124 S. Ct. at 2483. […]”
“We
acknowledge that a § 1782 applicant could attempt to abuse the statute to
obtain documents outside the discovery procedures set forth in the Federal
Rules of Civil Procedure. But it naturally follows from the existence of the
third Intel factor that this kind of subterfuge is a valid reason to reject a §
1782 application in the first place. Parties concerned in a particular case
that a § 1782 applicant is attempting to use foreign litigation as a ruse for
obtaining discovery in the United States without complying with the usual
procedures of the Federal Rules of Civil Procedure can and should bring
evidence of such chicanery to the § 1782 court’s attention.”
“Our
system does not require a party to ‘rediscover’ evidence that it has properly
obtained, so the substantive United States court’s authority is not implicated
prior to the filing of the subsequent lawsuit. And once the substantive case
has been filed, it is the substantive United States court that makes all
decisions regarding the admissibility of evidence, though it may choose to do
so, in part, if it wishes, based on the conclusions of the § 1782 court
regarding whether a litigant improperly used § 1782 for the purpose of
obtaining United States discovery that otherwise would not have been
authorized.”
“But
a rule that would categorically hold that documents lawfully obtained under §
1782 can never be used in United States civil litigation lacks a basis in the
statutory language and has significant potential to adversely affect the goals
and efficiency of United States litigation. […]Along the same lines, a blanket
rule prohibiting the use of evidence obtained under § 1782 would create a
perverse incentive for a party responding to a § 1782 order to flood the
applicant with evidence in an effort to insulate itself from United States
litigation by precluding the requesting party’s ability to use any of the
evidence obtained in any future United States litigation.”
The
Court concludes that “[t]he restrictions on subsequent use of evidence obtained
under § 1782 urged here by the Glock Entities are simply not supported by
statutory text, legislative history, conventional discovery practice, or policy
considerations. In short, we find that § 1782 does not preclude, as a matter of
law, the use of evidence procured pursuant to it in subsequent United States
civil litigation.”
The
Court reversed the district court’s order finding it erroneous as a matter of
law.
*** Mr. Kenneth Todd Wallace is an attorney and founding partner of the law firm. He has nearly 20 years of experience in the legal and business professions with established excellence in trial advocacy, negotiation, strategic and initiative planning, government relations, mergers and acquisitions, and team building. See http://www.walmey.com/
