The case of the day is In re Campuzano-Treviño (D. Md. 2022). Manuel Campuzano-Treviño, a Mexican national, was the president and CEO of Universidad Tecnológica de México. The University was owned by Laureate Education, Inc., a Delaware company with its offices in Miami, but formerly with offices in Baltimore. Campuzano sued the University and Laureate in Mexico for wrongful termination. He obtained an $11 million prejudgment attachment against the University, but the Mexican court dismissed the claims against Laureate. The University then brought a criminal complaint in Mexico against Campuzano, alleging that he had taken intellectual property to start a competing business. It was unclear whether the Mexican authorities’ investigation was ongoing.
Campuzano sought leave under 28 U.S.C. § 1782 to serve a subpoena on Laureate seeking evidence for use in his wrongful termination suit, in a prospective claim against the University for dano moral, a Mexican cause of action “akin to intentional or negligent infliction of emotional distress,” arising out of the criminal complaint the University had made, and in a prospective claim against the University for fraudulent transfer of assets. The application sought evidence about the University’s and Laureate’s assets in Mexico, in addition to evidence directly relevant to his Mexican claims. The court granted the application ex parte, and Laureate moved to quash.
The court began by observing, correctly in my view, that Section 1782 does not authorize asset discovery aimed at assisting a future judgment creditor in collecting. I won’t make a blanket statement about asset discovery once you have a judgment, but it seems clearly correct to me to say that you can’t get asset discovery until you win. The court doesn’t put it this way, but I would note that in ordinary US domestic litigation, asset discovery is not permissible under FRCP 26. It is permissible under FRCP 69, but that rule only applies in aid of judgment or execution. Section 1782 surely does not give a foreign plaintiff greater discovery rights than a US plaintiff has in an ordinary domestic case.
The court also held that the dano moral claim and the fraudulent transfer claims were not within reasonable contemplation. Section 1782 does not require that the foreign proceeding be pending, but it must at least be in reasonable contemplation. Here, the court found that Campuzano had not provided enough evidence that he would bring the claims soon to make them more than speculative.
Thus the court disposed of much of the subpoena’s requests on statutory grounds. But the subpoena clearly sought evidence relevant to the wrongful termination claim’s merits. On that part of the subpoena, the court undertook an Intel analysis. Here, the court held that the first Intel factor weighed against the subpoena, because Laureate had been a party to the Mexican case and was the parent of the University. That’s a fair point, but the best reading of the first factor, in my view, doesn’t focus mechanically on whether the target of the subpoena is a party to the main case, but looks to policies behind the factor. The reason the Intel court focused on the target’s status as a party to the foreign case was that it thought a foreign court could order a party to the foreign case to produce the evidence; why, then, should an American court intervene? But in practice, most foreign countries, and certainly Mexico, don’t make evidence so freely available. The first factor should not weigh against an applicant when the applicant could not obtain the information under the applicable foreign law.
Somewhat bafflingly, the court also found that the third factor, circumvention, weighed against the subpoena. It reasoned that the wrongful termination case “is not fundamentally a multijurisdictional dispute, such that § 1782 discovery is warranted.” But there is no rule suggesting that a dispute must be multijurisdictional before § 1782 applies. There are many vanilla domestic lawsuits where it’s necessary to take evidence abroad.
Finally, the court found that the fourth factor weighed against the subpoena. It reasoned that the discovery sought was unduly burdensome because Campuzano could obtain the evidence from the University in Mexico. It would be interesting to look at the briefing on Mexican law, because I question whether the judge is right about this.
In short, the decision seems right to me on the statutory points, but its Intel discussion seems off-base to me. The court did not adequately consider the lack of discovery tools abroad.