Section 1782 Revisited: Deconstructing ZF Automotive - Is there Hope for a Work-Around? - ARIA - Vol. 33, No. 3
Eric van Ginkel, FCollArb, FCIArb, J.D. (Leiden University 1964), J.D. (Columbia University 1969), LL.M. in Dispute Resolution (Straus Institute for Dispute Resolution, Pepperdine University 2003), is an independent international arbitrator and mediator. He is also an Adjunct Professor at both the Law School of the University of Texas at Austin and the Straus Institute for Dispute Resolution at the Caruso Law School at Pepperdine University. During the calendar year 1966, Mr. van Ginkel was a research associate and assistant to Professors Hans Smit and Richard Pugh for the Project on European Legal Institutions at Columbia Law School.
Originally from the American Review of International Arbitration
“Deconstructing ZF Automotive” discusses in detail the reasoning the Supreme Court (unanimous opinion by Justice Amy Coney Barrett) employed in ZF Automotive US, Inc. v. Luxshare, Ltd., 142 S.Ct. 2078 (2022) to reach the conclusion that the words “international or foreign tribunal” as used in 28 U.S.C. § 1782(a) do not include arbitral tribunals, but instead must be “imbued with governmental authority.” This discussion is preceded by a brief introduction to the history of Section 1782 and the only other Supreme Court decision involving Section 1782, Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004)—while Intel involved a different application of “international or foreign tribunal,” the Court’s opinion, written by the late Justice Ruth Bader Ginsburg, clearly implied the opposite conclusion.
The article also looks at the original case that led to a split among the circuit courts of appeals, NBC v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999). Finally, the article looks at the implications of ZF Automotive for the world of international commercial arbitration and the possibility of a work-around by using summonses issued pursuant to 9 U.S.C. § 7 in international arbitrations.
Federal statute 28 U.S.C. § 1782(a) is a provision that allows a foreign or international tribunal or any interested person to petition a federal district court in the United States to compel a person to provide testimony or a statement, or to produce documentary evidence for use by or before such tribunal. The question has arisen whether the wording “foreign or international tribunal” includes arbitral tribunals. Prior to ZF Automotive v. LuxShare, two federal circuits held that the answer to this question is clearly yes, but three other circuits had come to the opposite conclusion.
On June 13, 2022, the Supreme Court published its long-awaited decision in ZF Automotive regarding 28 U.S.C. § 1782(a), resolving this issue whether the wording “foreign or international tribunal” should be held to include tribunals engaged in international commercial arbitration and/or investor-state arbitration. ZF Automotive consolidated two cases on appeal: Luxshare, Ltd. v. ZF Automotive US, Inc. and Fund for Protection of Investor Rights in Foreign States Pursuant to 28 U.S.C. § 1782 for Order Granting Leave to Obtain Discovery for use in Foreign Proceeding v. AlixPartners, LLP.
In a unanimous decision, the Supreme Court in ZF Automotive held that the statute reaches only governmental or intergovernmental adjudicative bodies, which excludes private arbitral panels such as DIS, the German Institution of Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit e.V.), the tribunal in Luxshare, and the ad hoc tribunal (following UNCITRAL Arbitration Rules) chosen under the BIT between the Russian Federation and Lithuania, in AlixPartners.
To quote the very first paragraph of the Court’s opinion,
Congress has long allowed federal courts to assist foreign or international adjudicative bodies in evidence gathering. The current statute, 28 U.S.C. §1782, permits district courts to order testimony or the production of evidence “for use in a proceeding in a foreign or international tribunal.” These consolidated cases require us to decide whether private adjudicatory bodies count as “foreign or international tribunals.” They do not. The statute reaches only governmental or intergovernmental adjudicative bodies, and neither of the arbitral panels involved in these cases fits that bill.
Part I of this article describes Section 1782 and its history; Part II discusses the Supreme Court’s decision in Intel v. AMD, the only Supreme Court case about Section 1782 prior to ZF Automotive, the “factors” developed therein to guide the district courts in exercising their discretionary authority when applying Section 1782 in practice, and the split among the Circuits; Part III analyzes the Supreme Court opinion in ZF Automotive, and Part IV analyzes Nat’l Broad. Co. v. Bear Stearns & Co., the case that led to the split among the Circuits.
Finally, Part V discusses the implications of ZF Automotive and the possibility of a work-around created by the use of Section 7 of the Federal Arbitration Act (“FAA”) in international commercial arbitration as suggested by the recent decision of the Ninth Circuit in Jones Day v. Orrick Herrington & Sutcliffe.