Heraeus Kulzer Revisited

Louis M. Solomon has a new post with an interesting take on Heraeus Kulzer GmbH v. Biomet, Inc. (7th Cir. 2011), a case we covered here back in January. In Heraeus, the court held that the district court had abused its discretion by refusing a German plaintiff’s request for discovery under § 1782 for use in a German trade secrets case. Solomon focuses on a procedural aspect of the decision:

Importantly, the Court of Appeals here ruled that, if the District Court determines that the discovery requests are not the product of abuse, “the ordinary tools of discovery management, including Rule 26, come into play”.

He asks whether this aspect of the decision, incorporating Rule 26, is at odds with In re Application of Mettalgesellschaft AG, 121 F.3d 77 (2d Cir. 1997), where, he writes, the court held that on the face of the statute it was improper for the U.S. court to consider “relevance to the non-U.S. proceeding.” This is a little puzzling, because as I read Mettalgesellschaft, the issue wasn’t relevance, but whether the evidence would have been discoverable in the foreign proceeding: especially given the limited scope of pre-trial discovery in other systems, there surely is evidence that will not be discoverable even if it is relevant. But I was interested by the implication of Solomon’s comment: if Rule 26 applies, what happens if the U.S. court seeks to make an independent determination of the relevance of the information sought to the foreign proceeding? This could lead to a pretty involved ancillary litigation involving the merits of the foreign case.

As we discussed in connection with the May 6 case of the day, Article 12 of the Hague Evidence Convention does not include relevance to the foreign proceeding as one of the grounds for refusing to execute a letter of request. So to the extent a foreign party is concerned that some U.S. courts may apply the relevance standards of Rule 26 and make their own independent determinations of what is and is not relevant in the foreign case, the party may want to obtain a letter of request from the foreign tribunal, if possible, rather than to make an application without resort to the Convention, as § 1782 allows. Of course, there is a downside: the foreign tribunal may not issue a letter of request that is as broad as the party would wish. But in any event, parties should consider whether there may be an advantage, in the particular circumstances of the foreign case, to seeking a letter of request rather than applying directly to the U.S. court for judicial assistance.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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