The case of the day is In re Application of Accent Delight International, Ltd. (S.D.N.Y. 2018). The case is part of the same § 1782 proceeding I covered in a post from August 2017, and so I am not going to repeat the facts.
The case presents two interesting features. First, the party that had received discovery for use in one foreign proceeding sought leave to use the evidence in another proceeding. Typically a protective order in a § 1782 case limits the use of any confidential material to the particular proceeding for which the material was sought. The judge, relying on prior decisions in the case, held that the applicant should be allowed to use the material in the second proceeding as long as the other party could not show “bad faith or other chicanery.” This rule is sound. The reason for hesitating before allowing an applicant to use material in a second proceeding is the fear that the applicant may be guilty of a “bait and switch,” but when the facts don’t support such a claim, there is really no good reason why the evidence shouldn’t be available for use in a second proceeding, and many good reasons of efficiency and economy why it should. One interesting feature in this case was that the applicant had made no use of the material in the proceeding for which it originally sought it—a foreign criminal investigation—except to pass it along to an investigating magistrate. But that is precisely what the applicant had said it would do at the time of the application, so there was no basis for arguing bad faith. The court noted that the applicant had failed to explain its role in the second case at the time of the application, but the court marked that up to “bad advocacy” rather than bad faith. Certainly it behooves an applicant to be forthcoming with the court at the time of the application, especially if there is some reason to think the applicant may later approach the court for leave to use the evidence obtained for purposes other than those for which it is sought in the first instance.
Second, the court held that a Section 1782 subpoena can reach documents located outside the United States, following the Eleventh Circuit’s decision in Sergeeva v. Tripleton International. I believe this holding is likely correct, because the statute imposes no geographic limits, but rather provides that discovery is to be taken in accordance with the FRCP, which as we know can reach documents wherever located, as long as they are within the possession, custody, or control of the person to whom the subpoena is directed. I pause only to note that the concept of the location of documents is, in the long run, ripe for a re-think in the age of cloud computing.