I.                   INTRODUCTION / SUMMARY

In the context of bankruptcies or other legal proceedings in Norway, it may on occasion be desirable to collect evidence in the United States.  Such evidence may be of value either for the investigation and marshalling of a Norwegian debtor’s foreign assets or for the development of facts at issue in a Norwegian legal dispute.

One avenue for the collection of such evidence is of course the Hague Convention on the Collection of Evidence Abroad in Civil or Commercial Matters (“Hague Convention”), to which the United States and Norway are signatories.  The Hague Convention, whose terms are well known, certainly provides a useful mechanism for evidence gathering in the United States through resort to an international treaty.

It is important to note, however, that United States law offers certain additional tools for the collection of evidence for use abroad.  These tools may allow some or all of the formalities of the Hague Convention to be bypassed.  Perhaps more important, these tools may also allow for very broad discovery of evidence, and the collection of evidence in the United States of a type that generally could not be obtained under Norwegian rules of civil procedure. 

The most powerful tool for the collection of documentary or testimonial evidence in the United States is a provision of the United States Code: 28 U.S.C. § 1782 (“Section 1782”).  Section 1782 allows foreign courts or private  litigants in a foreign proceeding  to apply directly to a United States federal court for an order directing a person or entity in the United States to produce evidence or to give oral testimony.  Thus, Section 1782 does not require that requests for evidence be channeled through governmental “central authorities” as would be required under the Hague Convention.

In addition, it is not required under Section 1782 that the evidence sought be obtainable under the law of the country in which the legal proceedings are pending.   For example, it may be possible to obtain a court order directing a person or entity in the United States to produce general classes of relevant documents for use in a Norwegian proceeding, without reference to the strict requirement of specificity (spesifikasjonskravet) of Norwegian civil procedure law.  Similarly, pretrial oral depositions of witnesses in the United States may be allowed under Section 1782 even where such depositions would not be allowed under the laws of the country (England, for example), where the dispute is pending.  Section 1782 is discussed in somewhat greater detail in part II, below.

Another tool for the collection of evidence in the United States, available only to foreign administrators in the context of bankruptcy proceedings, can be found in the provisions of the United States Bankruptcy Code, 11 U.S.C. §1501 et seq. (“Chapter 15”).  Chapter 15 sets the guidelines for the conduct of ancillary bankruptcy proceedings in the United States in connection with foreign bankruptcies.  It replaces the prior statutory provision regarding such ancillary proceedings, 11 U.S.C. § 304.  Chapter 15, and specifically 11 U.S.C. § 1521(a)(4), allows under appropriate circumstances for the collection of evidence in the United States with respect to the debtor’s assets and liabilities there.

Chapter 15 may allow for a broader range of discovery than Section 1782 under certain circumstances.  For example, preliminary depositions conducted under Chapter 15 and Bankruptcy Rule 2004 may allow for “fishing expeditions” and a range of questioning that might be impermissible in other contexts.  Depending on the circumstances and type of evidence sought to be obtained in the United States, a Norwegian bankruptcy administrator might find Chapter 15 the most appropriate device to employ in the information gathering process.   Further information regarding Chapter 15 is set forth in part III, below.

II.                SECTION  1782

A.                Background

Section 1782    (Title 28 U.S.C. § 1782) reads, in pertinent part, as follows:

§ 1782. Assistance to foreign and international tribunals and to litigants before such tribunals.

(a) 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. . . .  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.

A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege. . . .

As is clear from the text of the statute, Section 1782 allows parties to foreign litigations, as well as foreign courts, to apply directly to a United States federal district court for an order directing a witness within the court’s jurisdiction to give testimony or produce documents.  Section 1782 may be invoked by litigants or courts from countries that are not signatories to the Hague Convention.  Litigants and courts in countries that are signatories to the Hague Convention, however, may also invoke Section 1782.  Indeed, if a Section 1782 application is made by a party directly to the United States court, without invocation of the Hague Convention, it may be possible to bypass the convention’s often time-consuming formalities.[i]

B.                Recent Decision by the United States Supreme Court

Until recently, Section 1782 was interpreted differently by the various federal appellate courts.  This led to a situation where litigants might be allowed more or less discovery depending on the jurisdiction in which the Section 1782 application was filed. 

A very brief explanation of the federal court system in the United States may be in order.  The United States Supreme Court is the ultimate arbiter of federal law.  Its rulings are binding on all federal courts.[ii]   Below the Supreme Court are thirteen Circuit Courts of Appeal, whose decisions are binding on the federal district courts (trial courts) within the appellate courts’ jurisdiction, usually geographical areas consisting of several states.  Thus, for example, the Second Circuit Court of Appeals hears all appeals from the federal district courts in the states of New York, Connecticut and Vermont, and its decisions are binding on and must be followed by those district courts.  The Second Circuit’s rulings are not binding, however, on federal district courts in, for example, California, because California lies within the jurisdiction of the Ninth Circuit Court of Appeals.

Fortunately, in 2004, the United States Supreme Court issued a decision that settled many (but not all) outstanding questions regarding Section 1782’s proper application.  In that decision, Intel Corp. v. Advanced Micro Devices, Inc.,[iii] the Supreme Court confirmed that Section 1782 is to be construed liberally, and expanded rather than limited the discovery available to foreign litigants in the United States. 

Various significant aspects of Section 1782, as well as the Intel decision’s impact upon the statute’s interpretation, are discussed below. 

C.                Prima Facie Requirements under Section 1782.

The prima facie showing necessary to obtain evidence pursuant to Section 1782 is (1) that the application be made 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 federal district in which the application is filed.[iv]

1.                 Any Interested Person

The Intel decision made it clear that the term “interested person” is not limited to parties to a litigation.  Indeed, the petitioner in the Intel case was an entity that had initiated an antitrust complaint against a United States corporation before the Directorate-General for Competition of the European Commission.  The Supreme Court affirmed the lower appellate court’s ruling that the petitioner/complainant, although not formally a party to the foreign proceedings, was an interested party entitled to discovery of evidence in the United States pursuant to Section 1782.

2.                 Use in a Foreign or International Tribunal

That the use of Section 1782 was sanctioned in connection with a complaint to the EC’s Directorate-General for Competition – which is not a court of law in the traditional sense – also reflects the liberal approach taken by the Supreme Court in the Intel decision to the question of what constitutes a “foreign or international tribunal” within the meaning of the statute.[v]  The Court found its liberal interpretation to be consistent with the legislative history associated with Section 1782, which suggested that the term “tribunal” was meant to include “investigating magistrates, administrative and arbitral tribunals, and quasi-judicial agencies, as well as conventional civil, commercial, criminal, and administrative courts.”[vi]   As is clear from prior case law, evidence may be sought pursuant to Section 1782 for use, for example, in preliminary proceedings before a French juge d’instruction,[vii] or in foreign competency and paternity proceedings.[viii]  Of particular significance for purposes of this article is that evidence may be sought for use in a foreign bankruptcy, and the administrator of a foreign bankruptcy estate has standing to bring an application under Section 1782.[ix]

A cautionary note must be made here with respect to the availability of Section 1782 discovery in connection with foreign arbitrations.  Two influential appellate court decisions, issued prior to the 2004 Intel decision, denied Section 1782 relief in connection with foreign private arbitrations.[x]  However, in light of the expansive interpretation of the term “tribunal” accepted by the Supreme Court in Intel, lower courts in certain United States jurisdictions have determined that Section 1782 discovery may be had in connection with foreign arbitration proceedings.[xi]  At this point in time, the issue is open, and care must be taken to examine the controlling law in the United States district or circuit where the witness is located before seeking discovery for use in a foreign arbitration.

3.                 Located in the District Where the Application is Filed.

The requirement that a witness be located in the federal district where the Section 1782 application is filed is relatively straightforward.  However, it should be noted that recent cases have cast doubt on whether a witness, even if located in a federal district in the United States, can be forced through an order issued under Section 1782 to produce evidence located outside the United States.

It is well-established that a United States court has the authority to order a witness subject to its jurisdiction to produce documents or other evidence physically located in a foreign country.[xii]  In addition, under certain circumstances, a United States court may order the production of documents or testimony by a witness subject to its jurisdiction, even when doing so will force the witness to violate foreign law.[xiii]  It is not yet established, however, whether these rules, which usually are invoked in litigation conducted within the United States, are applicable when the documents or testimony are sought pursuant to Section 1782 for use in a foreign proceeding.  The Second Circuit Court of Appeals has stated in dictum that there is reason to believe that Congress intended Section 1782 to reach only evidence located within the United States.[xiv]  At least two subsequent district court decisions have followed this dictum and have denied requests under Section 1782 for production of evidence located outside the United States.[xv]

D.               Discoverability Requirement

Prior to the Intel decision, the most controversial issue concerning Section 1782 had been whether the United States district court, in granting relief under the statute, is permitted to order production of evidence in the United States that cannot be obtained under the rules applicable in the foreign forum where the litigation is pending.[xvi]  The Second and Third Circuit Courts of Appeals had taken a liberal approach,  allowing collection of evidence for use in foreign proceedings, even if the type of evidence sought was not obtainable under the laws of the foreign forum.   In contrast, the Courts of Appeals for the First, Eleventh and District of Columbia Circuits had taken the position that only discovery allowed in the forum state should be allowed in the United States pursuant to Section 1782.[xvii]  Taking a middle position, the Fourth and Fifth Circuit Courts of Appeals had ruled that there was no discoverability requirement with respect to Section 1782 requests filed by foreign courts but had left open the question whether discoverability would be required when the request was made by a private litigant.[xviii]

It was against this background that the United States Supreme Court issued its 2004 decision in Intel, ruling that no discoverability requirement should be read into Section 1782, and that both foreign courts and private litigants may obtain discovery in the United States even if that type of discovery might not be provided for under the forum country’s procedural rules.

Needless to say, the absence of a discoverability requirement is significant for the Norwegian litigant seeking evidence in the United States.  The practical application of the position adopted by the United States Supreme Court is that it may be possible to obtain an order directing an individual or corporate entity to produce broad categories of documents, as would be allowed in United States litigation, without reference to the strict requirement of specificity (spesifikasjonskravet) that might control document production under Norwegian law.  Similarly, it may be possible to obtain oral depositions of witnesses, without engaging in an in-depth analysis of whether such depositions would or would not be permitted under Norwegian law.  

It should be noted that the rule adopted by the United States Supreme Court does not reflect any disrespect for foreign court systems.  Rather, the Supreme Court has taken the position that it is a matter of discretion for the foreign court to determine whether and to what extent evidence obtained through Section 1782 proceedings may be used in the foreign proceedings.  To date, in fact, there is no substantial evidence that foreign courts have been troubled by the use of Section 1782 to obtain evidence by procedures not available in the home forum.  Indeed, decisions of courts in Great Britain and elsewhere have generally indicated an acceptance that litigants are free to make use of Section 1782 to collect evidence under United States law in ways that might not be permissible at home.  For example, in the 1987 case of South Carolina Insurance Co. v. Assurantie Maatschappij “De Zeven Provincien” N.V.,[xix] the English House of Lords ruled that English litigants are free to take pretrial discovery from third parties in the United States pursuant to Section 1782, even where such discovery may not be permitted under English procedural rules.[xx]

The Norwegian litigant seeking evidence in the United States could, if the need arose, make useful reference to the English House of Lords decision.  Because the Norwegian system, like the English, is adversarial as opposed to inquisitorial in nature, it can be argued that it is up to the parties to gather evidence in the manner they see fit, including by means that are considered legal and appropriate in the jurisdiction where the evidence is being sought.

On the other hand, it is a fact that United States courts will not allow unlimited discovery.  Requirements of relevance apply, as do principles of reasonableness.  Thus, care must be taken to tailor discovery requests as narrowly as possible, and to seek to minimize the burden on the witness wherever possible.[xxi]  Among other things, it should be borne in mind that, as the language of the statute states, Section 1782 cannot be used to force a witness to give evidence in violation of any applicable privilege.[xxii]

E.                Proceeding Need Not Be Pending or Even Imminent.

Another controversial issue that was addressed and resolved by the Supreme Court in the 2004 Intel decision, was whether a case abroad must actually be pending or imminent before Section 1782 discovery may be sought.  The Intel Court specifically rejected the requirement of “imminence” that had been adopted by at least one federal appellate court, adopting instead the requirement that a foreign proceeding need merely be “within reasonable contemplation” before Section 1782 discovery may be obtained.

In light of the foregoing, it seems very likely that evidence could be collected pursuant to Section 1782 after a Norwegian settlement complaint (forliksklage) has been filed but before the filing of a formal city court complaint (stevning).[xxiii]  One might argue that discovery could be sought at an even earlier stage, although it is at present difficult to see where a court might draw the line.

It should be noted that, at the other end of the temporal spectrum, evidence may be sought pursuant to Section 1782 for use in foreign appellate proceedings where, as in Norway, the appellate court allows the parties to present new evidence on appeal.[xxiv]  (On the other hand, if proceedings have already been concluded in the foreign forum, Section 1782 relief may be denied as moot.[xxv])

F.                 Granting of Section 1782 Relief is Discretionary

It must be noted that, although the rules surrounding Section 1782 are generally liberally interpreted, the granting of relief is within the discretion of the federal district court before which the application is made.  The Supreme Court has identified some of the factors that a district court may consider in deciding whether to grant  or limit the requested discovery.

First of all, the appropriateness of Section 1782 relief generally will be easier to establish when evidence is sought from a non-party rather than a party to the foreign proceedings.  As the Supreme Court noted: “A foreign tribunal has jurisdiction over those appearing before it, and can itself order them to produce evidence.”[xxvi]  Nevertheless, as in the Intel case itself, it may under appropriate circumstances be possible to obtain evidence in the United States from parties to the foreign proceedings.

In addition, the district court may also “take into account 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.”[xxvii]  Moreover, a district court could consider whether the [Section 1782] request conceals an attempt to circumvent foreign proof-gathering restrictions  or other policies of a foreign country or the United States.  . . . Also, unduly intrusive or burdensome requests may be rejected or trimmed.”[xxviii]  In addition, “a district court could condition relief upon [the applicant’s] reciprocal exchange of information.”[xxix]

The foregoing confirms that the district court will have wide discretion to grant or deny the Section 1782 request, or to limit the scope of discovery that will be allowed.

G.               Exhaustion of Foreign Procedures

At least in the Second and Third federal circuits, a private litigant in foreign proceedings may apply ex parte to a United States court for an order directing the production of evidence pursuant to Section 1782, without first having sought to obtain the desired evidence through the foreign tribunal.[xxx]  Indeed, the Second Circuit has stated that exhaustion of foreign procedure is an “impermissible factor”—one that could not be considered by the district court—in determining whether to grant Section 1782 relief.[xxxi]

H.               Collection of Evidence From Governmental Bodies

A limitation on Section 1782 discovery to note is that the statute cannot be used to obtain classified or other sensitive material from governmental entities in the Unites States.[xxxii]  Indeed, one court has ruled that the United States, as a sovereign power, is not a “person” within the meaning of Section 1782, from which evidence may be obtained.[xxxiii]  On the other hand, litigants seeking evidence from governmental bodies in the United States may be able to make use of other devices, such as the United States Freedom of Information Act, 5 U.S.C. § 552, or analogous statutes in force in particular American states. 

I.            Summary Re: Section 1782

Section 1782 provides a useful tool for gathering evidence in the United States for purposes of Norwegian bankruptcy matters, and for purposes of other Norwegian legal proceedings.  There remain some issues with respect to which Section 1782 may be interpreted inconsistently by courts within separate federal districts or circuits of the United States federal court system; however, the recent decision of the United States Supreme Court in Intel has clarified many of the outstanding issues regarding the statute’s proper application, and has confirmed that the statute is to be construed liberally in favor of those seeking evidence in the United States.

 

III.             CHAPTER  15 OF THE BANKRUPTCY CODE   

A.                Background

Title 11, section 1501 et seq. of the United States Bankruptcy Code (11 U.S.C. § 1501 et seq.)(“Chapter 15”) governs the conduct of bankruptcy proceedings in the United States ancillary to foreign bankruptcy proceedings.   Chapter 15 was enacted in 2005 and replaces the rules that had previously governed such ancillary bankruptcy proceedings, specifically, 11 U.S.C. § 304, which has been repealed.

Among the tools made available to foreign bankruptcy administrators by Chapter 15 is a provision that allows the administrator to collect evidence in the United States.  Specifically, 11 U.S.C. § 1521(a)(4) reads as follows:

§ 1521. Relief that may be granted upon recognition.

(a) Upon recognition of a foreign proceeding, whether main or nonmain, where necessary to effectuate the purpose of this chapter, and to protect the assets of the debtor or the interests of the creditors, the court may, at the request of the foreign representative, grant any appropriate relief, including ---

. . .

(4) providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor’s assets, affairs, rights, obligations or liabilities . . . .

 

Chapter 15 may allow for a broader range of discovery than Section 1782 under certain circumstances.  For example, preliminary depositions conducted under Chapter 15 and Bankruptcy Rule 2004 may allow for “fishing expeditions” and a range of questioning that might be impermissible in other contexts.  Depending on the circumstances and type of evidence sought to be obtained in the United States, a Norwegian bankruptcy administrator might find Chapter 15 the most appropriate device to employ in the information gathering process.  

B.                Limitations Of Chapter 15

Because Chapter 15 was enacted so recently, there is little case law interpreting its provisions.  However, reference to case law decided under the now-repealed Section 304 suggests that there may be certain limitations on the discovery available under Chapter 15.

For example, one issue upon which courts disagreed with respect to the proper application of Section 304 was whether there is a “discoverability” requirement in the statute, such that the foreign administrator would be allowed only such discovery in the United States as he or she would be allowed in the foreign forum.[xxxiv]  Whether such a discoverability requirement would be upheld in the wake of the Intel decision discussed above is an open question.  On the one hand, it can be argued that the Intel decision is not relevant, because it interpreted Section 1782, rather than a request for evidence in ancillary bankruptcy proceedings under either Section 304 or Chapter 15.  On the other hand, Intel can also be read as an affirmation of the United States’ desire to promote assistance to United States litigants abroad by offering broad assistance to foreign litigants before United States Courts.

Another point to bear in mind is that Chapter 15 discovery is available only to the bankruptcy estate’s foreign representative, and not to other parties involved in the bankruptcy.  Moreover, Chapter 15 relief may also be limited to the gathering of evidence regarding the debtor’s assets, affairs, obligations or liabilities, and may not extend to the collection of evidence for use in contested proceedings abroad.[xxxv]

In light of the foregoing, Chapter 15 offers another useful tool for the bankruptcy administrator who requires evidence regarding a bankrupt’s finances in the United States.  In some contexts, Chapter 15 may allow for more far-ranging discovery than would be allowed with respect to a Section 1782 application outside the bankruptcy context.  The manner in which this new statute will be applied in the future, however, cannot be predicted with certainty. Whether to invoke Section 1782 or Chapter 15, or both, in the context of ancillary bankruptcy proceedings may depend on the facts of the particular case and the type of evidence desired.

IV.             CONCLUSION

United States law offers tools, in addition to the mechanisms available under the Hague Convention for the Taking of Evidence Abroad in Civil or Commercial Matters, for the collection of evidence in the United States for use in foreign proceedings.  The bankruptcy administrator or other practitioner in Norway who wishes to collect evidence in the United States may wish to take advantage of these tools.  The advantages and disadvantages of all available mechanisms should be considered, in order to determine which is best suited to the task at hand.