Case of the Day: Pine Top Receivables v. Banco de Seguros del Estado

The case of the day is Pine Top Receivables of Illinois, LLC v. Banco de Seguros del Estado (7th Cir. 2014). Pine Top Insurance Company claimed it was owed more than $2 million by Banco de Seguros del Estado, an instrumentality of the Uruguayan government, under reinsurance contracts. When Pine Top failed, its claims against the bank ultimately ended up in the hands of Pine Top Receivables, which sued to collect. Under Illinois law, because the bank was not authorized to carry out an insurance business in the state, it had to post security when it served its answer to the complaint. It failed to do so, and Pine Top sought to strike the answer. The bank opposed the motion to strike on the ground that the security requirement was an attachment forbidden by the FSIA.
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Case of the Day: In re Petition of Boehringer Ingelheim Pharmaceuticals

Judge Richard Posner
Judge Richard Posner. Credit: chensiyuan
The case of the day is In re Petition of Boehringer Ingelheim Pharmaceuticals, Inc. (7th Cir. 2014). Judge Posner, who wrote the opinion and is also the author of the Heraeus Kulzer and GEA Group cases, continues to show a strong interest in international judicial assistance. The case arose on a petition for a writ of mandamus seeking to challenge an unusual discovery sanction—an order requiring depositions of foreign witnesses to take place in the United States.
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Section 1782 and Private Arbitration: An Update

Martin Luther King
Letters Blogatory wishes its readers a happy Martin Luther King Day!
Two recent appellate cases show that the availability of discovery under 28 U.S.C. § 1782 in private international arbitrations is as unsettled as it has been at any time since the Intel decision. I’m not going to review the first case, GEA Group AG v. Flex-N-Gate Corp. (7th Cir. 2014), in any detail. Judge Posner, in a dictum, notes that it’s not clear whether § 1782 applies to arbitral tribunals:

And GEA must have known that Flex-N-Gate could have asked the distict judge to provide evidence to a “foreign or international tribunal,” as district judges are authorized to do by 28 U.S.C. § 1782; see, e.g., Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d 591, 593 (7th Cir. 2011). The German panel conducting the arbitration between GEA and Flex-N-Gate might be considered such a tribunal. See Consorcio Ecuatoriano de Telecommunicaciones S.A. v. JAS Forwarding (USA), Inc., 685 F.3d 987, 997-98 (11th Cir. 2012). (Or might not—the applicability of section 1782 to evidence sought for use in a foreign arbitration proceeding is uncertain. See S.I. Strong, “Discovery Under 28 U.S.C. § 1782: Distinguishing International Commercial Arbitration and International Investment Arbitration,” 1 Stan. J. Complex Litig. 295 (2013)).

The second case, In re Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. (11th Cir. 2014), is more interesting. In a prior decision—the same decision Judge Posner cited—the Eleventh Circuit, had clearly held that a private arbitral tribunal was a “tribunal” for purposes of § 1782. But in the new decision, the court, on its own motion, withdrew its prior decision and substituted a new decision that reached the same result, but without the necessity of reaching any conclusion about arbitral tribunals a “tribunals” for purposes of the statute. Instead, the court based its decision affirming the decision to grant the § 1782 application on the fact that the applicant was contemplating judicial proceedings in Ecuador.

The upshot? One of the leading cases standing for the proposition that an arbitral tribunal is a “tribunal” under § 1782 is no longer good law. And Judge Posner thinks there’s something to Professor Strong’s doubts on the question.