The Death Knell and the Wild West: Two Dangers of Domestic Discovery in Foreign Adjudications

Shay M. Collins* October, 2023

Under 28 U.S.C. § 1782(a), parties to foreign legal proceedings can obtain discovery orders from United States federal courts. In other words, if a foreign party needs physical evidence located in—or testimony from a person residing in—the United States to support their claim or defense, they can ask a district court to order the production of that evidence. For almost two decades, § 1782(a) practice has operated as a procedural Wild West. Judges routinely consider § 1782(a) applications ex parte—that is, without giving the parties subject to the resulting discovery orders a chance to oppose them—and grant those applications at a staggering rate: more than 90% of the time. In its June 2022 decision in ZF Automotive US, Inc. v. Luxshare, Ltd., the Supreme Court transformed § 1782 jurisprudence for the worse. The Court held that private arbitral tribunals do not fall under § 1782(a)’s scope and that, as a result, parties cannot obtain discovery for use in foreign private arbitration under the provision. This Note argues that, after ZF Automotive, § 1782(a) jurisprudence contains two dangers: (1) it subjects some parties to burdensome discovery orders with few procedural safeguards, and (2) it prevents parties who have chosen to arbitrate rather than litigate from obtaining discovery entirely. This Note contributes to existing scholarship by proposing structural changes that would improve § 1782(a) practice. Specifically, it argues that courts cannot root out the procedural flaws that plague § 1782(a), and that, consequently, Congress should enact a new and improved § 1782 to address these manifold problems.

Introduction

Imagine that you, “Lawyer X,” represent “Foreign Corp,” a corporation chartered outside of the United States, in a commercial dispute. A critical part of your argument depends on information in the business records of a bank chartered in the United States. A U.S. statute—28 U.S.C. § 1782(a)—permits you to ask the district court with jurisdiction over the bank to order a bank representative “to give [their] testimony or statement or to produce a document or other thing.”¹ The statute also states that the district court can only order discovery “for use in a proceeding in a foreign or international tribunal.”² So far, so good—until June 2022.

In ZF Automotive US, Inc. v. Luxshare, Ltd., the U.S. Supreme Court held that private arbitral tribunals are not “foreign or international tribunal[s]” and directed district courts to deny foreign applications for discovery if the underlying dispute is in arbitration rather than litigation.³ If Foreign Corp signed an arbitration agreement that covers the dispute—which it likely did⁴—it will need to arbitrate without access to key information. This is true even if Foreign Corp signed the arbitration agreement a few years ago, when it had no indication that doing so would prevent it from obtaining discovery assistance from U.S. courts.

Now imagine Lawyer Y, who represents the U.S. bank, “Big Bank,” from which Foreign Corp seeks discovery. Big Bank first hears of the underlying dispute when it receives a subpoena ordering it to produce “all documents ever created relating to the billion-dollar acquisition of another bank, including documents about bank operations predating the purchase.”⁵ To comply with the subpoena, Big Bank will need to commit a substantial amount of money and resources to produce the requested information. Big Bank’s directors turn to Lawyer Y for advice. But Lawyer Y has only bad news to share.

Lawyer Y must explain that Big Bank only learned about the underlying proceedings upon receiving a subpoena because federal courts have consistently held that district courts can consider § 1782(a) applications ex parte⁶—meaning that the subpoena may be granted without waiting for, or even requesting, a response from the other party. As a result, when the district court decided whether to grant Foreign Corp’s § 1782(a) application, and what information the resulting order could relate to, it did so solely based on Foreign Corp’s arguments about the scope and reasonableness of its request.

By now, Big Bank’s directors are fuming at Lawyer Y. They ask, “What about due process?” Lawyer Y does not have a satisfying answer. The district court may have reasoned (as other courts have) that it could consider Foreign Corp’s application ex parte without violating Big Bank’s due process rights because Big Bank can seek to have the motion quashed or vacated.⁷ But this approach raises issues for clients in practice. Big Bank must convince either the district or circuit court to grant a stay of the order while it appeals the district court’s decision. Federal courts have held that parties in a similar position to Big Bank do not satisfy the standard for granting a stay pending appeal.⁸ As a result, Big Bank faces a “comply or contempt” dilemma: if it cannot obtain a stay pending appeal, it must either expend significant funds to comply with the subpoena or risk being held in contempt of court.

In ZF Automotive, the Supreme Court failed to improve the current state of § 1782(a) practice. Following ZF Automotive, the availability of discovery turns arbitrarily on whether a foreign dispute is in arbitration or litigation. And while the Court’s decision may help Big Bank avoid some burdensome discovery orders that relate to private arbitration, it in no way addresses the other problems that plague § 1782(a) discovery practice. As long as the order relates to a foreign lawsuit, administrative proceeding, or some other form of “official” adjudication, Big Bank and similar parties must still contend with the obstacles created by the district court’s ex parte consideration, the unreliable process for obtaining a stay while appealing the order, and the fact that they bear the burden of persuasion on appeal.

This Note critiques the current state of § 1782(a) jurisprudence and argues that ZF Automotive has only complicated and worsened judicial practice regarding domestic discovery for use in foreign proceedings. As an analytical matter, the Court’s decision in ZF Automotive depended on circular logic and weakly supported propositions. And as a policy matter, the piecemeal decisions governing § 1782(a) practice have created a system marked by unpredictability and unfairness both for parties seeking § 1782(a) orders and for parties subject to them. Part I provides a historical overview of § 1782(a)’s text and jurisprudence to demonstrate that the provision grants district courts an inordinate amount of discretion compared to the detailed rules governing discovery for use in domestic proceedings. Part II critiques the Supreme Court’s decision in ZF Automotive and concludes that the Court adopted the wrong interpretation as a matter of law. Part III argues that the unfair and indeterminate case law governing § 1782(a) necessitates a legislative—rather than judicial—solution. Specifically, Congress should enact a new and improved § 1782 to both correct the Court’s interpretation in ZF Automotive and create the procedural safeguards that current § 1782(a) practice lacks.

I. The History and Current State of § 1782(a) Practice

This Part first describes how Congress has modified § 1782(a) throughout the years. This historical account sets the stage for two decisions in which the Supreme Court interpreted the term “foreign or international tribunal” based on congressional amendments to the provision’s text: Intel Corp. v. Advanced Micro Derives, Inc.⁹ and ZF Automotive.¹⁰ Next, this Part demonstrates that the plain text of the provision grants a vast amount of discretion to the federal judiciary, especially in terms of crafting—or rather failing to craft—procedural safeguards for parties subject to discovery orders. Finally, this Part discusses the factors that the Supreme Court laid out in Intel Corp. to govern district courts’ § 1782(a) decisions¹¹ and argues that the Intel Corp. framework failed to require district courts to consider § 1782(a) applications with sufficient skepticism.

A. The Evolution of § 1782(a)’s Text

Congress enacted § 1782(a) as part of the statute that created Title 28 of the United States Code, which governs the federal judiciary.¹² The original 1948 version of the provision only authorized district courts to order depositions and restricted the provision’s applicability based on three criteria.¹³ First, the deposition could be used only in a civil action; second, the deposition could be used only in court proceedings, rather than other forms of adjudication; and third, the foreign court had to be located “in a foreign country with which the United States is at peace.”¹⁴ Congress has, however, amended § 1782(a) several times since its initial enactment. Each successive amendment broadened § 1782(a)’s scope by expanding the provision’s coverage to more types of foreign legal proceedings and by authorizing district courts to order the production of more types of evidence.

Congress first amended § 1782(a) in 1949 to allow parties to multiple types of actions—rather than just civil actions—to seek discovery under the provision.¹⁵ Specifically, this amendment authorized district courts to order depositions for use in any “judicial proceeding,”¹⁶ and thereby substantially expanded § 1782(a)’s scope by permitting parties to request depositions for use in both civil and criminal proceedings at a minimum.

But the change brought about by the 1949 amendment pales in comparison to Congress’s 1964 overhaul of the provision. The 1964 amendment broadened the provision’s coverage and courts’ discretionary powers in three ways. First, the amended provision promoted comity between U.S. and foreign courts by permitting—though not requiring—district courts to order that depositions be taken in accordance with the procedure of the jurisdiction where the requesting party intended to use the deposition.¹⁷ Before the 1964 amendment, § 1782(a) had required that depositions be taken in a way that “conform[ed] generally” to U.S. practice and procedure.¹⁸ Second, the 1964 amendment permitted courts to order the production of documentary and physical evidence.¹⁹ Third, and most relevant to this Note, the 1964 amendment allowed courts to order the production of evidence for use in a “foreign and international tribunal,” rather than only in “judicial proceeding[s].”²⁰

Congress amended the provision once more in 1996 to permit courts to order the production of evidence for use in “criminal investigations conducted before formal accusation” but left the language created by the 1964 amendment unchanged.²¹ Thus, the 1964 amendment introduced almost the entirety of the current language of § 1782(a). The Supreme Court has therefore looked to the legislative history of the 1964 amendment in both of its major § 1782(a) decisions²²: Intel Corp.²³ and ZF Automotive.²⁴ Yet despite substantially altering the scope of § 1782(a)’s application and coverage several times, Congress has failed to update the provision in one critical way: it has never established procedural protections for parties subject to § 1782(a) orders.

B. Notable Omissions from § 1782(a)

The present version of § 1782(a) places few limitations on the type of discovery or discovery practice that district courts can order. Currently, § 1782(a) permits district courts to “prescribe the practice and procedure” that govern the deposition of parties and production of evidence under a given order.²⁵ If the district court does not expressly set out the governing practice and procedure, § 1782(a) provides that the Federal Rules of Civil Procedure (the “Federal Rules”) will apply. But if the district court does establish the applicable practice and procedure in its order, it has almost entirely unfettered discretion over the rules it chooses to apply. The provision includes only one universal protection for parties subject to § 1782(a) discovery orders: the district court cannot require parties to produce or testify about privileged information.²⁶ But aside from incorporating evidentiary privileges and specifying the Federal Rules as a default backstop, § 1782(a) grants district courts wide-ranging discretion. District courts’ discretionary powers cover when to order discovery, the extent of the information to be produced, and how to protect parties subject to those orders from far-ranging, expensive, and otherwise burdensome requests.²⁷

The broad discretion that § 1782(a) grants district courts does not necessarily conflict with the discovery regime set out in the Federal Rules. Although the Federal Rules impose certain limitations on discovery requests, the Rules otherwise permit parties to “obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.”²⁸ Additionally, the Federal Rules expressly state that “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.”²⁹ Thus, supporters of the current iteration of § 1782(a) might argue that the statute largely mimics the structure of the Federal Rules’ discovery regime: a general authorization conditioned by a small number of explicit rules and several discretionary factors to guide courts’ decisions.

In practice, though, district courts grant wide-ranging and exorbitant § 1782(a) orders and do so with almost unbounded regularity. For example, one court granted a request for documents “sufficient to disclose all assets exceeding Euros 10,000 anywhere in the world,” so long as the documents themselves were located in the United States.³⁰ Furthermore, district courts routinely consider and grant § 1782(a) orders ex parte and, as a result, parties subject to § 1782(a) orders are not guaranteed an opportunity to challenge the necessity or reasonableness of the underlying discovery request.³¹ This structural flaw prevents courts from realistically assessing the factors set out in the Federal Rules, including “the importance of the discovery in resolving the issues” and “whether the burden or expense of the proposed discovery outweighs its likely benefit.”³² While the Supreme Court clarified the factors that district courts should evaluate when considering § 1782(a) applications in Intel Corp.,³³ that decision largely failed to constrain district courts’ runaway practice of granting broad and burdensome discovery orders.³⁴

C. Intel Corp. and the Era of Unbounded Discretion

The Supreme Court articulated the extent to which district courts have discretion to rule on § 1782(a) orders in its 2004 decision in Intel Corp. v. Advanced Micro Devices, Inc.³⁵ The multi-factor framework laid out in Intel Corp. remains good law to this day. The central issue in Intel Corp. concerned whether § 1782(a) contained a “foreign-discoverability rule” that would “categorically bar a district court from ordering production of documents” if the documents would not be discoverable under the rules of the jurisdiction from which the request had been made.³⁶ The Court determined that § 1782(a) did not impose such a rule³⁷ but then directed district courts to weigh five factors when ruling on § 1782(a) applications.³⁸

Specifically, the Court instructed district courts to consider whether the application requested discovery from a party to the underlying proceeding or from a third party; the nature and character of the underlying proceeding; whether the foreign tribunal would be receptive to the district court’s assistance; whether the requesting party had used § 1782(a) to circumvent any jurisdiction’s restrictions on discovery; and whether granting the application would impose an undue burden on the party subject to the discovery order.³⁹ Writing for a six-justice majority, Justice Ginsburg pointed to a Senate report accompanying the 1964 amendment as evidence of the Senate’s decision to grant district courts discretion over whether to grant an order under the provision and what conditions to impose on their decisionmaking processes.⁴⁰

But Intel Corp. failed to usher in an era in which district courts moderated their practice of routinely granting § 1782(a) orders. In the following years, district courts granted § 1782(a) applications at a staggering rate. Professor Yanbai Andrea Wang has estimated that, from 2005 to 2017, district courts granted § 1782(a) applications for use in civil proceedings more than 90% of the time.⁴¹ When a foreign tribunal filed the § 1782(a) application, the estimated grant rate soared to an astounding 98.1%; when a party filed the application, the estimated grant rate remained above 85%.⁴² District courts may have considered the Intel Corp. factors in the decision’s aftermath, but they have rarely concluded that those factors weighed in favor of denying an application.

The staggering rate at which district courts grant § 1782(a) applications may be traceable to the fact that district courts routinely consider those applications ex parte.⁴³ Critics have argued that parties seeking discovery have little reason to provide information that would lead a district court to deny their applications.⁴⁴ As a result, even when district courts nominally apply the Intel Corp. factors, they may not have the information needed to carry out the requisite analyses. District courts can weigh some of the Intel Corp. factors with little information from requesting parties. For example, they can easily ascertain whether a request seeks discovery from a third party or a party to the underlying action and can easily characterize the nature of that action. But requesting parties do not have an incentive to tell a district court that the presiding tribunal will resist the court’s assistance, and they certainly do not have an incentive to disclose that they filed a § 1782(a) application to get around legal restrictions in their home jurisdiction.

As a result, while Intel Corp. properly appreciated the substantial discretion that Congress granted to district courts in § 1782(a), the Court’s decision failed to set § 1782(a) practice on the right path for two reasons. First, the Supreme Court failed to prescribe appropriate safeguards to ensure that district courts gain the information they need to fairly consider § 1782(a) applications. And second, § 1782(a) itself, and Title 28 more broadly, fail to provide adequate protections for the rights and interests of parties subject to § 1782(a) orders.

Yet in the Court’s next major § 1782(a) decision—ZF Automotive—the pendulum swung to the other extreme by categorically prohibiting district courts from granting discovery orders for use in private arbitration. ZF Automotive did not address the procedural flaws that pervade § 1782(a) practice, given that the only question before the Court concerned the meaning of the term “foreign or international tribunal.”⁴⁵ But the twin guideposts of Intel Corp. and ZF Automotive have shaped a § 1782(a) jurisprudence typified by unconstrained, burdensome discovery orders for use in foreign litigation and a complete lack of discovery assistance for use in foreign arbitration.

II. A House of Cards Argument: The Supreme Court’s Errors in ZF Automotive

This Part critiques the Supreme Court’s decision in the 2022 case ZF Automotive US, Inc. v. Luxshare, Ltd.⁴⁶ It first describes the ideological underpinnings of the Court’s opinion: an unquestioning adherence to legal formalism and an approach to statutory interpretation that privileges dictionary definitions over practical realities. This Part then demonstrates that the Court’s interpretation of the term “foreign or international tribunal” depends on weakly supported propositions and circular logic. Finally, this Part criticizes the Court for relying on the largely undefined and unlimited idea of “potential governmental connotations,” a term that does not appear in § 1782(a).

A. Untethered Legal Formalism

Writing for a unanimous Court in ZF Automotive, Justice Barrett adhered to a strict form of textualism that privileges a statute’s plain text over legislative intent or policy considerations.⁴⁷ Several justices follow this form of “modern textualism,” expounded by former Justice Scalia, that almost entirely eschews the use of legislative materials when interpreting a statute.⁴⁸ In ZF Automotive, Justice Barrett cited § 1782(a)’s legislative history only once and did so to bolster an argument that she had already laid out in purely textualist terms.⁴⁹ As a result, the majority’s opinion largely amounted to what Professor Felix S. Cohen termed “transcendental nonsense.”⁵⁰

In an influential article,⁵¹ Professor Cohen contended that a legal argument that uses a formal legal statement—such as, “a labor union is a person”⁵²—as its predicate will necessarily fall into “a vicious circle.”⁵³ He argued that basing legal arguments on formal statements relies on “asserting something that sounds like a proposition but which can not be confirmed or refuted by positive evidence or by ethical argument.”⁵⁴ In ZF Automotive, the Court’s interpretation of the term “foreign or international tribunal”⁵⁵ followed precisely this flawed argument structure. The Court justified its interpretation based on several dictionary definitions and interpretive rules, but nothing compelled the Court to use those definitions and rules rather than others that would have led to a different interpretation, nor did it have to base its argument on dictionary definitions at all.

Stated otherwise, the problem with the Court’s decision is not just that it was wrong but also that it was not justified by either the rules of its internal logic or by any policy. Textualists may argue that the Court’s duty was to determine a plausible interpretation of § 1782(a) and not to consider the systemic effects that its interpretation might have down the line. But accepting this argument still leads to the same conclusion: the time has come for Congress to overhaul § 1782(a) to address persistent flaws in domestic discovery procedure.

B. Using Circular Logic to Interpret the Word “Tribunal”

The bulk of the Court’s opinion in ZF Automotive consisted of a close reading of the term “foreign or international tribunal” that the Court used to determine whether the term covered private arbitral tribunals. Stating that the word “tribunal” is ambiguous on its own,⁵⁶ Justice Barrett implicitly applied the semantic canon of noscitur a sociis—ambiguous words should be interpreted in the context of surrounding words⁵⁷—to interpret it.⁵⁸ Rather than considering the phrase “foreign or international tribunal” as a whole, Justice Barrett parsed the phrase to interpret “foreign tribunal” and “international tribunal” separately.⁵⁹ Beginning with “foreign tribunal,” Justice Barrett wrote that “‘foreign’ takes on its more governmental meaning” when it “modif[ies] a word with potential governmental or sovereign connotations.”⁶⁰ She posited that “tribunal” does have potential governmental connotations and therefore concluded that “‘foreign tribunal’ more naturally refers to a tribunal belonging to a foreign nation than to a tribunal that is simply located in a foreign nation.”⁶¹ Finally, she stated, “for a tribunal to belong to a foreign nation, the tribunal must possess sovereign authority conferred by that nation.”⁶²

Problems with the Court’s decision immediately arise from this first argument. At the outset, the Court’s interpretation of the phrase “foreign tribunal” largely relied on circular reasoning. Consider the bare structure of Justice Barrett’s argument: “tribunal” is ambiguous standing alone, so noscitur a sociis justifies looking to surrounding words. The word “foreign” takes on a governmental meaning when modifying a word with “potential governmental . . . connotations”; “tribunal” is a word with potential governmental connotations; and, as a result of the foregoing propositions, “foreign tribunal” refers to only governmental—that is, not private—tribunals.⁶³ The argument began by stating that “tribunal” is too ambiguous to be interpreted on its own but then relied on the purported meaning of “tribunal” alone to provide the governmental connotation necessary to impart a governmental meaning on “foreign.” The same word that is so ambiguous that it cannot be interpreted in a vacuum is somehow also clear enough to be solely determinative of the meaning of the phrase in which it appears. As a result, Justice Barrett’s statement that “foreign” takes on a governmental meaning when it modifies a word with “potential governmental . . . connotations” is unnecessary; according to her argument, the interpretation of “foreign tribunal” turns solely on the meaning of “tribunal.”

A supporter of Justice Barrett’s argument might reply that the simplified version of the argument does not constitute circular logic, but rather that Justice Barrett identified two meanings of tribunal about which she had different levels of certainty. Justice Barrett did not want to proffer an authoritative definition of “tribunal” standing alone, but a reasonable interpreter should agree that at least some of the multiple possible definitions of “tribunal” have governmental connotations.⁶⁴ Even accepting this absurdity—a word whose own meaning is too unclear to determine on its own can clarify the meanings of other words—this counterargument does not address other issues with Justice Barrett’s interpretation. Specifically, Justice Barrett failed to justify or limit the other key interpretive rule at play in her argument: that “foreign” assumes a governmental meaning when modifying a word with “potential governmental . . . connotations.”⁶⁵

C. The “Potential Governmental Connotations” Standard

To support the proposition that “foreign” has a governmental meaning when it modifies a word with governmental connotations, Justice Barrett used examples from briefing and oral argument.⁶⁶ She accepted the argument that “‘foreign’ suggests something different in the phrase ‘foreign leader’ than it does in ‘foreign films,’”⁶⁷ and that “‘foreign leader’ brings to mind ‘an official of a foreign state, not a team captain of a European football club.’”⁶⁸ This argument relied on inductive logic: Justice Barrett looked at examples of words that appear to confer a governmental connotation to “foreign” and words that do not, and compared those examples to derive a rule. But Justice Barrett failed to contend with the key issue before the Court because she drew on examples that clearly do, or clearly do not, have governmental connotations.

A plethora of words, however, fall into a third category that could easily take on either a governmental or nongovernmental meaning when modified by “foreign.” “Foreign intel,” for example, could refer to intel gathered by a foreign government or to information gathered from private persons or entities in foreign nations; “foreign actors” could refer to foreign militaries, foreign nations, or simply foreign persons or entities. The term “foreign tribunal” fits in with these ambiguous terms more naturally than it fits in with something so obviously governmental as “foreign leader” or so obviously nongovernmental as “foreign films.” But rather than engage with the central, difficult question—why “foreign tribunal” necessarily indicates a tribunal imbued with governmental authority, if it necessarily indicates that at all—Justice Barrett simply stated her conclusion: “‘Tribunal’ is a word with potential governmental or sovereign connotations.”⁶⁹

Furthermore, Justice Barrett articulated an interpretive standard that was so broad that it lacked a meaningful limiting principle. Critically, Justice Barrett stated that the meaning of “foreign” turns on whether the word it modifies has “potential governmental or sovereign connotations,” rather than just “governmental or sovereign connotations.”⁷⁰ Justice Barrett did not explain or delimit what constitutes a “potential” governmental connotation, and as a result the standard includes a vast number of terms. Even a foreign film—the purported example of a word that clearly lacks any potential governmental connotations⁷¹—could refer to a film commissioned or funded by a foreign government.

The “potential governmental connotations” standard obscured what may have been the actual basis of the Court’s interpretation. The Court’s discussion of “foreign leaders” and “foreign films” indicates that the Court was, in fact, simply sorting terms based on the justices’ intuitions.⁷² But such an approach misses the key problem underlying the case: the central dispute of ZF Automotive arises from reasonable disagreement over whether “tribunal” necessarily refers only to governmental bodies. If this interpretive disagreement could be decisively resolved based on a handful of dictionary definitions, as the Court’s method suggests, then it is unclear why the federal judiciary would diverge so substantially over the term’s meaning.⁷³ But rather than engage with the circuit split that gave rise to ZF Automotive, the Court dispatched the disagreement with a single, conclusory sentence entirely lacking citation to case law, legislative history, or even a dictionary definition.⁷⁴

D. What the Court Did Not Say, and the Need for Overarching Reform

While textualist arguments dominated the Court’s opinion, the Court included several nontextualist justifications. First, Justice Barrett invoked the provision’s congressional history and noted that the 1964 amendment changed § 1782(a) to refer to “foreign or international tribunal[s]” rather than “foreign courts.”⁷⁵ Justice Barrett also acknowledged that the 1964 amendment reflected the work of the congressionally created Commission on International Rules of Judicial Procedure, which Congress tasked with, inter alia, improving “the rendering of assistance to foreign courts and quasi-judicial agencies.”⁷⁶ As a result, Justice Barrett concluded that the 1964 amendment and the statutory language it created “did not signal an expansion from public to private bodies, but rather an expansion of the types of public bodies covered.”⁷⁷

Next, Justice Barrett invoked the “animating purpose of § 1782”: comity.⁷⁸ Justice Barrett reasoned that providing judicial assistance to foreign governmental bodies “promotes respect for foreign governments and encourages reciprocal assistance” and stated that “[i]t is difficult to see how enlisting district courts to help private bodies would serve that end.”⁷⁹ Third, Justice Barrett highlighted discrepancies between the extent of discovery permitted by § 1782(a) and the extent of discovery permitted for use in domestic arbitration under the Federal Arbitration Act.⁸⁰ Specifically, Justice Barrett pointed out that § 1782(a) allows “foreign or international tribunals or any ‘interested person’” to make discovery requests while the FAA only permits arbitrators to make requests, and that § 1782(a) permits predispute discovery while the FAA prohibits it.⁸¹ As a result, Justice Barrett concluded that allowing parties to access domestic discovery under § 1782(a) for use in foreign arbitration would “create a notable mismatch between foreign and domestic arbitration.”⁸²

Yet beyond these three purposivist and structural arguments, the Court did not engage with the overall state of § 1782(a) jurisprudence despite extensive briefing on the topic.⁸³ As a result, the Court did not discuss the problems endemic to § 1782(a) practice: district courts’ routine practice of considering § 1782(a) applications ex parte and, thus, without complete information; the difficulty that many parties face when appealing § 1782(a) orders; and the fact that the information that parties need to successfully challenge or appeal § 1782(a) orders is often shrouded by confidentiality provisions in the underlying arbitration agreements.

The Court likely could not stamp out all the problems that typify current § 1782(a) practice in a single case even if it so desired. The structural problems that plague § 1782(a) practice come not from the statute itself but from the degree to which Congress has delegated decisions about judicial procedure to the judiciary. In practice, however, the Court’s textualist opinion represents another myopic and piecemeal decision that has, in combination with prior Court decisions and district court practice, brought § 1782(a) jurisprudence to a point where it requires large-scale reform. This Note therefore argues that, because these problems have become entrenched in § 1782(a) practice, the judiciary lacks an adequate mechanism to root them out on its own. Rather, Congress should address the problems in one fell swoop by revising § 1782(a) to create an overarching, structural solution.

III. The New and Improved § 1782(a)

This Part describes three ways in which Congress should amend § 1782(a) to address the judicial practices that have caused courts to grant § 1782(a) requests at stratospheric rates while failing to protect the interests of parties subject to their orders and categorically prohibiting discovery requests in arbitration. First, Congress should once again update the language defining the statute’s scope to address the question that the Supreme Court analyzed in ZF Automotive: does § 1782(a) apply to private arbitral tribunals? This Part contends that including arbitral tribunals under the provision’s coverage would bring § 1782(a) in accordance with the FAA’s pro-arbitration stance. Next, this Part asserts that Congress should draw on limitations that already exist in the Federal Rules of Civil Procedure to curtail ex parte consideration of § 1782(a) applications. Finally, this Part argues that § 1782(a) should provide for either a mandatory stay of orders granted under the provision upon appeal or an automatic stay that applies in specified scenarios.

A. Definitions

The Supreme Court’s opinion in ZF Automotive, and the circuit split that preceded it,⁸⁴ are evidence that Congress should clarify the scope of § 1782(a)’s coverage. Congress’s decision to broaden § 1782(a)’s coverage beyond “judicial proceeding[s]” through the 1964 amendment better accounted for the variety of adjudicative tribunals abroad. But arbitration’s popularity as a dispute resolution method⁸⁵ calls for Congress, rather than the courts, to clarify whether the provision covers private arbitral tribunals.

Congress could promote several goals by amending § 1782(a) to specify that private arbitral tribunals qualify as “foreign or international tribunal[s]” under the provision. First, as the Court explained in ZF Automotive, “[p]ermitting federal courts to assist foreign and international governmental bodies promotes respect for foreign governments and encourages reciprocal assistance.”⁸⁶ The Court questioned how “enlisting district courts to help private bodies would serve that end,” but this proposition assumes that foreign governments lack interest in promoting and enforcing arbitration as a method of dispute resolution.⁸⁷ Yet arbitration presents the same benefits in other nations as it presents in the United States. Specifically, arbitration conserves judicial resources by providing parties with a route to adjudicate disputes outside of the court system;⁸⁸ it allows parties to protect information that they do not want disclosed through litigation;⁸⁹ and it permits parties to resolve disputes cost-effectively by agreeing to ex ante discovery and evidentiary limitations.⁹⁰ Numerous countries have enacted statutes analogous to the United States’ Federal Arbitration Act,⁹¹ an act that evidences the United States’ national interest in promoting arbitration abroad. Stated otherwise, directing federal courts to assist private bodies by granting discovery orders for use in arbitration would serve comity by respecting and supporting other nations’ interests in promoting arbitration as a form of dispute resolution.

As several scholars argued in an amicus brief filed in ZF Automotive, the Supreme Court’s eventual decision in the case marked a break from the way that numerous foreign court systems treat their equivalents to § 1782(a) requests.⁹² Specifically, these scholars noted that the United Kingdom, New Zealand, France, Germany, Sweden, and Switzerland all, as a matter of statutory law, permit domestic courts to order discovery “for use by foreign-seated international commercial arbitral tribunals.”⁹³ The scholars specified that “[m]any of those statutes also include safeguards that prevent overbroad requests.”⁹⁴ Thus, several other nations, which include “some of the most important arbitration jurisdictions,”⁹⁵ have already enacted statutory provisions, analogous to a new and improved § 1782, that balance the country’s interest in promoting reciprocal support for arbitration with the interests of parties subject to discovery orders.⁹⁶

B. Limitations on Ex Parte Orders

Perhaps the issue currently affecting § 1782(a) practice the most is the astounding rate at which district courts grant § 1782(a) applications.⁹⁷ This extraordinary grant rate may be largely attributable to the fact that courts routinely consider § 1782(a) applications ex parte. As a result, courts decide whether to grant a discovery order based solely on arguments made by the party seeking discovery. Several federal courts have held that district courts can properly consider § 1782(a) applications ex parte,⁹⁸ and federal statutes and procedural rules place few concrete restrictions on courts’ abilities to consider and grant motions ex parte. The Federal Rules of Civil Procedure mention ex parte motions several times but do not expressly state which motions courts may or may not consider ex parte, nor do they offer a standard governing when courts may conduct business or grant motions ex parte.⁹⁹

Instead, the jurisprudence that governs ex parte judicial practice focuses on the Due Process Clauses of the Fifth and Fourteenth Amendments of the United States Constitution and has developed largely in the criminal, rather than civil, arena.¹⁰⁰ Based on that strand of due process jurisprudence, federal courts have held that they can consider § 1782(a) applications ex parte because other procedures safeguard the due process rights of parties ordered to produce discovery.¹⁰¹ Typically, courts point to Federal Rule 45, which directs courts to quash or modify a subpoena that “requires disclosure of privileged or other protected matter” or that “subjects a person to undue burden.”¹⁰² Yet parties face an uphill battle when attempting to persuade appellate courts to reverse district courts’ decisions regarding § 1782(a) orders.

Furthermore, regardless of the burdens that § 1782(a) orders can impose on those required to produce evidence or provide testimony, the routine practice of considering § 1782(a) applications ex parte prevents district courts from completing the inquiry required by Intel Corp.¹⁰³ accurately and thoroughly. Parties have no incentive to candidly inform district courts whether their home tribunal would be receptive to the district court’s assistance or tell the district court that they are filing a § 1782(a) application to evade domestic restrictions on evidence-gathering.¹⁰⁴ Thus, by restricting courts from considering § 1782(a) applications ex parte, Congress would both protect the interests of parties subject to § 1782(a) orders and ensure that district courts base discovery orders on complete and accurate information. Finally, if Congress prefers to give district courts some discretion to grant § 1782(a) orders ex parte in rare and pressing circumstances, Congress could, for example, incorporate the Federal Rules’ standard for issuing temporary restraining orders ex parte into § 1782(a).¹⁰⁵

C. Mandatory Stays Pending Appeal

Currently, parties subject to § 1782(a) orders not only lack a guaranteed opportunity to challenge the propriety of the order before a district court grants it; they also frequently face an uphill battle to have the order quashed or vacated after the district court issues its decision. Part of this uphill battle results from the difficulty that parties face when trying to obtain a stay pending appeal of the district court’s order. While parties can immediately appeal final district court decisions under 28 U.S.C. § 1291,¹⁰⁶ courts have broad latitude regarding whether to stay a court order while the party subject to it appeals the district court’s decision. Specifically, district and appellate courts have the power to stay a court order while a party appeals under the All Writs Act, which places few limitations on, and offers little guidance as to, when federal courts should stay an order.¹⁰⁷

In the § 1782(a) context, federal courts use a four-factor test created by the Supreme Court¹⁰⁸ to determine whether to issue a stay while the party subject to the discovery order appeals.¹⁰⁹ The four-factor test directs courts to analyze (1) the applicant’s likelihood of success on the merits, (2) whether the applicant will suffer an irreparable injury without a stay, (3) whether issuing a stay will substantially injure other parties to the proceeding, and (4) any impact that stay might have on the public interest.¹¹⁰

Parties who seek to obtain a stay pending appeal typically fare poorly when attempting to satisfy the “irreparable injury” factor. Despite the substantial costs that parties can incur from complying with a § 1782(a) order, federal courts have been hesitant to hold that a party’s anticipated costs of compliance constitute an “irreparable injury.”¹¹¹ Additionally, parties cannot easily satisfy the “likelihood of success on the merits” factor because they bear the burden of persuasion upon appeal.¹¹² As a result, courts frequently discount the party’s likelihood of having the § 1782(a) order vacated because the party must convince an appellate court to overturn the district court’s decision based on a deferential “abuse of discretion” standard of review.¹¹³ In a sense, the burdens that parties face upon appeal create a harmful feedback loop. The likelihood of convincing an appellate court to overturn a district court’s § 1782(a) order on appeal is so low that federal courts invoke that difficulty as a reason to deny a party’s motion for a stay pending appeal. But parties’ inability to obtain a stay of the § 1782(a) order pending appeal in turn forces the party into a “comply or contempt” dilemma, in which it must either expend large sums to comply with the subpoena or risk being held in contempt of court.¹¹⁴

To mitigate the burdens that parties face after a district court grants a § 1782(a) order, Congress should amend the provision to require courts to stay the order when the party required to produce evidence files an appeal of the order. Federal courts’ decisions regarding when to grant a stay pending appeal may represent a trade-off between the cost of delay and the cost of compliance, but importantly, in the § 1782(a) context, the trade-off balances the cost of delay and the cost of unnecessary compliance. A party that (1) appeals a § 1782(a) order, (2) fails to obtain a stay pending appeal, (3) begins production while the appeal is pending, and then (4) has the order quashed or vacated, will have borne the cost of gathering evidence that it ultimately does not have to produce. A policy placing the costs of delay or production on the party that has commenced the discovery proceedings accords with basic notions of fairness.

Congress could enact a simple fix by amending § 1782(a) to include a rebuttable presumption in favor of granting a stay pending appeal. By structuring the amended language as a rebuttable presumption, Congress would preserve courts’ discretionary powers while requiring the party who filed the § 1782(a) application to bear the burden of persuading the court to reverse course. And preserving a discretionary element would allow courts to refuse to grant a stay when the movant can convince the court that the party opposing the order does so without good cause, or for an improper purpose like delaying arbitration. Both suggested structural amendments—creating a general prohibition on ex parte consideration with an emergency exception and shifting the burden of persuasion for stays pending appeal—acknowledge that federal courts need some discretion to respond to frivolous and bad faith arguments and exigent circumstances. But the extraordinary rate at which district courts have granted § 1782(a) applications in recent years indicates that the current iteration of § 1782(a) grants the judiciary far too much latitude.

Amending § 1782(a) to expressly address whether the provision applies to private arbitration, to generally prohibit courts from considering applications ex parte, and to shift the burden of persuasion regarding stays pending appeal would promote two goals that the provision should effectuate. First, these changes would promote comity and reciprocity by preserving a path in the federal courts for parties to obtain necessary evidence for use in foreign arbitration proceedings. Second, these changes would provide the structural safeguards—which are absent currently—for protecting the rights and interests of parties subject to § 1782(a) orders.

Conclusion

Imagine that Congress enacts the amendments described above and creates the new and improved § 1782. How would things change for our aforementioned cast of characters: Lawyer X, Foreign Corp, Lawyer Y, and Big Bank? This Note contends that the amendment would promote and protect all their interests. If Congress abrogated ZF Automotive by expressly stating that parties can use § 1782(a) to obtain discovery for use in private arbitration, Foreign Corp could obtain the discovery it needs to resolve its disputes efficiently and accurately through arbitration. As a result, Foreign Corp may continue to use arbitration agreements with its counterparties going forward, which would in turn effectuate the interest of Foreign Corp’s home jurisdiction in promoting arbitration to conserve judicial resources. At the same time, Big Bank would receive notice and an opportunity to challenge § 1782(a) applications and would be able to proactively convince the district court to deny or limit those applications. Limiting district courts’ abilities to consider § 1782(a) applications would not only protect Big Bank from unnecessary and expensive discovery but would also ensure that district courts reached their decisions based on complete and accurate information. As for Lawyer X and Lawyer Y, they would no longer have to navigate a system of judicial practice that created substantive and procedural obstacles to vigorously representing their clients’ needs and interests at every turn. Viewed on a systemic level, amending § 1782(a) to cover discovery requests relating to private arbitration and to impose procedural safeguards would bring consistency and transparency to an area of judicial practice that has long operated as a procedural Wild West.

* J.D., May 2023, University of Michigan Law School. My sincere thanks to Professor Timothy Dickinson for his invaluable feedback and to my family for all their support.