A recent federal court order highlights the scope, and the limitations, of a U.S. court’s authority to order domestic discovery for use in a foreign proceeding under 28 U.S.C. § 1782. The court in In re Ex Parte Application of Qualcomm Incorporated rejected Qualcomm’s Section 1782 applications to subpoena a host of U.S. technology giants for information to use in Qualcomm’s defense of a Korea Fair Trade Commission (“KFTC”) proceeding.
In the fall of 2015, Qualcomm received an Examiner’s Report from the KFTC charging it with violations of South Korean antitrust law. The Report referenced information received from at least seven U.S. technology companies.
Qualcomm filed ex parte applications under 28 U.S.C. § 1782 to serve document and deposition subpoenas on the U.S. companies. Qualcomm argued that the Examiner’s Report cited information provided by each of the companies and discovery from them was needed for Qualcomm’s defense in the KFTC. Qualcomm sought all the information the companies provided to the KFTC, as well as several additional categories of documents and Rule 30(b)(6) depositions.
As the magistrate judge noted, Section 1782 is a “curious quirk of our law” that allows a federal court to authorize discovery in the U.S. – documents, information, and testimony – for use in a foreign “tribunal,” including administrative and “quasi-judicial” proceedings. In considering such a request, a court must determine (i) whether it is statutorily authorized to grant the request, and (ii) whether it should exercise its discretion to do so.
Section 1782’s statutory requirements are straightforward: (i) is the target of the discovery in the district?; (ii) is the discovery for use in a foreign tribunal?; and (iii) is the request made by a tribunal or interested person? The court held that Qualcomm’s requests satisfied these requirements.
However, even if Section 1782’s statutory requirements are satisfied, a court still must consider so-called “Intel factors” (Intel Corp v Advanced Micro Devices Inc) to decide whether to exercise its discretion to authorize discovery. The Intel factors are: (1) whether the material sought could be accessed through the foreign tribunal’s jurisdiction absent Section 1782; (2) the nature of the foreign tribunal, the character of the proceedings, and the receptivity of the tribunal to U.S. assistance; (3) whether Section 1782 is being used to circumvent restrictions or policies of the foreign tribunal or of the United States; and (4) whether the subpoena contains unduly intrusive or burdensome requests.
In Qualcomm’s case, the court held that each of the Intel factors was either neutral or weighed against Qualcomm’s request. Critical to that determination was an amicus curiae letter submitted by the KFTC and the court’s view that Section 1782 must be tempered by principles of international “comity” – i.e., due respect for the judgment and operation of a foreign legal system. The KFTC stated that (i) the requests would subvert the KFTC’s power to control disclosure of confidential investigatory materials, discouraging third-party cooperation, and (ii) the documents Qualcomm sought were not necessary to the KFTC proceeding or its determination.
The court also held that, on their face, Qualcomm’s requests were “unduly intrusive and burdensome,” especially in light of the recent “proportionality” amendments to the Federal Rules of Civil Procedure. In this regard, the court seemed particularly concerned about Qualcomm’s requests for documents that did not concern Korea, were duplicative of documents Qualcomm should have, or were confidential documents filed in a series of U.S. lawsuits.
The court did acknowledge that, without the U.S. discovery, Qualcomm would be able to obtain copies only of the selected third-party materials that supported the Examiner’s Report – and not those that the Examiner deemed unhelpful or did not even request. And, in an antitrust case, evidence concerning how the market actually operates often is critical (and competitors may even benefit from a foreign investigation of their rival). Nonetheless, the court determined that it should defer to the KFTC’s judgment that allowing U.S.-style discovery would do serious damage to the KFTC’s ability to work with third parties in future investigations.
The court ultimately denied each of Qualcomm’s seven applications. The court’s denial underscores both a U.S. court’s discretionary power to grant Section 1782 applications, and perhaps also the reluctance of a U.S. court to disregard “principles of comity [by] substitut[ing] its own judgment for the [foreign authority’s] on how best to manage its affairs.”