In re Dubey
In re Dubey
Opinion of the Court
ORDER RE: APPLICATION FOR ORDER
Before the Court is Prabhat K. Dubey’s (“Petitioner’s”) Application for an Order Directing MTI Laboratory (“MTI”) to Produce Documents For Use in an International Tribunal pursuant to 28 U.S.C. § 1782. (Appl., Docket No. 1.) MTI opposes the application. (Opp’n, Docket No. 13.) Petitioner filed a reply. (Reply, Docket No. 23.) For the following reasons, the Court DENIES the Application for Order.
I. Background
On November 26, 2012, Microelectronics Technology, Inc., a Taiwan Corporation, and its El Segundo, California-based subsidiary MTI, filed an arbitration against Petitioner and several other Respondents. (Appl., Greenstein Decl. Ex. 2 (“Demand for Arbitration”) ¶ 13, Docket No. 7.) The arbitration involves a sale of assets to MTI, which closed on June 1, 2009, pursuant to an Asset Purchase Agreement (“Agreement”). (Id. ¶ 19.) MTI was sued by Powerwave Technologies, Inc. for patent infringement in federal court. (Id. ¶ 23.) MTI seeks indemnification from Petitioner and Respondents for the costs of defending the lawsuit in accordance with certain provisions in the Agreement. (Id. ¶¶ 20-22.) The Agreement provides that any dispute arising out of the Agreemént would be resolved by confidential binding arbitration under the American Arbitration Association (“AAA”) International Dispute Resolution Procedures, to be held in Los Angeles, California. (Id. ¶ 13.)
On March 28, 2013, the AAA administrator provided the parties with a list of AAA arbitrators for purposes of selecting the arbitration panel. (Opp’n, Moore Decl. Ex. A, Docket No. 13-1.) On March 25, 2013, the parties submitted their selections for arbitrators. (Id. Ex. B.) On April 29, 2013, the arbitration administrator provided the parties the opportunity to challenge one of the arbitrators selected by Respondents by May 14, 2013. (Id. Ex. C.) As of this date, the arbitration panel has not yet been assembled to set the case schedule and hear the case. (Opp’n Br. 2.)
Petitioner now seeks various documents relevant to the arbitration dispute. (Appl. Br. 8-9.)
II. Discussion
A. Statutory Requirements of 28 U.S.C. § 1782
Petitioner submits this application pursuant to 28 U.S.C. § 1782. The federal statute provides, in relevant part, that “[t]he district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal.” 28 U.S.C. § 1782. The primary purpose of § 1782 is
Only the second requirement is at issue here.
The crux of the dispute is whether a “proceeding in a foreign or international tribunal” applies to private arbitrations established by contract, such as the arbitration at issue here. The case law is unclear on this.
Since Intel, courts have split as to whether § Í782 applies to purely private arbitrations. Petitioner cites several post-Intel district court decisions to show that an international arbitral body qualifies as a “foreign or international tribunal” within the meaning of § 1782 (Appl. Br. 12-13). See In re Babcock Borsig AG, 583 F.Supp.2d 233, 240 (D.Mass. 2008); In re Hallmark Capital Corp., 534 F.Supp.2d 951, 952 (D.Minn. 2007); In re Roz Trading Ltd., 469 F.Supp.2d 1221, 1222 (N.D.Ga. 2006). Those holdings are based on a broad interpretation of the Intel case and a citation within Intel to Smit, International Litigation 1026-27 &' nn. 71, 73, quoting “[t]he term ‘tribunal’ ... includes investigating magistrates, administrative and arbitral tribunals, and quasi-judicial agencies, as well as conventional, civil, commercial, criminal, and administrative courts.” See Intel, 542 U.S. at 258, 124 S.Ct. 2466. Petitioner asks the Court to consider the,se “more complete reasoned” authorities. (Reply Br. 5.)
On the other hand, MTI argues that the Court should follow post-Intel district courts that have rejected applying § 1782 to private commercial arbitrations (Opp’n Br. 7). See In re Arbitration in London, England, 626 F.Supp.2d 882, 886 (N.D.Ill. 2009): In re Operadora DB Mex., S.A. de C.V., 2009 WL 2423138, at *12 (M.D.Fla. Aug. 4, 2009); La Comision Ejecutiva Hidroelecctrica Del Rio v. El Paso Corp., 617 F.Supp.2d 481, 485 (S.D.Tex. 2008). The Ninth Circuit has not addressed the issue, and there appears to be a division among circuits post-Intel. Compare El Paso Corp. v. La Comision Ejecutiva Hidroelectrica Del Rio Lempa, 341 Fed.Appx. 31, 34 (5th Cir. 2009) (affirming its holding in Biedermann and finding that none of the concerns regarding the application of § 1782 to private international arbitrations were at issue or considered in Intel), with Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 685 F.3d 987, 996-97 (11th Cir. 2012) (although Intel did not specifically decide whether a private arbitral tribunal falls under the statute, pending Ecuador arbitration fell within Intel’s broad functional construction of “tribunal”).
After reviewing Intel and the relevant cases, the Court finds that private arbitrations do not fall within the meaning of “foreign or international tribunal” under § 1782. First, the Court follows the district court decisions finding that Intel did not intend to expand the meaning of “foreign or international tribunal” to include private arbitrations. The Intel court never addressed this issue and instead focused its discussion on whether a
Second, the Court instead finds the reasoning in National Broadcasting and Biedermann directly on point and persuasive. Both the Second Circuit and Fifth Circuit “tackled the issue squarely,” considered both legislative history and policy reasons, and resolved the ambiguity against including private arbitrations in § 1782. La Comision, 617 F.Supp.2d at 486; see also Operadora, 2009 WL 2423138, at *11 (“NBC and Biedermann examined [] fundamental differences in detail, finding that proceedings that are the product of contractual agreements to resolve disputes are functionally different than, and often opposed to, state-sponsored proceedings.”). The Court is convinced by the legislative history and policy arguments. Construing § 1782 to apply to private contractual arbitrations would defeat the timeliness and cost-effectiveness of arbitration, and would place a heavy burden on the federal courts to determine discovery requests. Accordingly, because the proceeding here is a private arbitration contractually agreed upon by the parties, it does not fall within the meaning of § 1782.
The .parties also dispute whether the arbitration here is “international” for purposes of § 1782. MTI argues that § 1782 does not apply to arbitrations taking place in the United States, and the arbitration here largely consists of ,U.S. parties and will be conducted under the AAA. (Opp’n Br. 1, 3-4, 9.) Petitioner contends that the arbitration is international in nature and conducted pursuant to the International Dispute Resolution Procedures, and thus falls under § 1782’s “international” prong. (Reply Br. 2-3.) Because the Court finds that a private arbitration is not considered a “tribunal” under § 1782, it is not necessary to address whether the private arbitration here is “international” within the meaning of § 1782. However, it notes that all of the cases discussed — even those finding against including private arbitration under § 1782 — address arbitration held in a foreign country. See Arbitration in London, 626 F.Supp.2d at 883 (London arbitration); Operadora, 2009 WL 2423138, at *1 (Mexico arbitration conducted under the International Chamber of Commerce (“ICC”) Court of Arbitration); La Comision, 617 F.Supp.2d at 482 (foreign arbitration pending in Switzerland); Babcock, 583 F.Supp.2d at 236 (potential German arbitration before an ICC panel); Hallmark, 534 F.Supp.2d at 952 (Israeli arbitration proceeding); Roz Trading, 469 F.Supp.2d at 1222 (foreign arbitration before International Arbitral Centre in Austria); Oxus Gold, 2007 WL 1037387, at *1
In sum, Petitioner has not shown that his application meets the statutory requirements of § 1782.
B. Discretionary Factors
Even if Petitioner had met the statutory requirements, the Court would exercise its discretion and deny his § 1782 discovery application. In Intel, the Supreme Court laid out discretionary factors for considering whether a district court should exercise its discretion and grant a § 1782 application. 542 U.S. at 264, 124 S.Ct. 2466. These factors include (1) whether the person from whom discovery is sought is a participant in the foreign proceeding so that the foreign tribunal can order the participant to produce evidence; (2) the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or court or agency abroad to U.S.-federal court judicial assistance; and (3) unduly intrusive or burdensome requests. Id. at 264-65,124 S.Ct. 2466.
Under the circumstances of this case, it is unclear what the arbitrator’s position is regarding the parties’ need for documents because the panel has not been fully assembled.
III. Conclusion
For the foregoing reasons, the Court DENIES Petitioner’s Application for Order.
IT IS SO ORDERED.
. MTI concedes that MTI resides in this district and Petitioner is a party to the arbitration, thus meeting the first and third requirements. (See Opp'n Br. 3.)
. Petitioner argues that the plain language of the statute is clear because arbitration panels are included within the ordinary meaning of "tribunal,” thus ending the inquiry. (Reply Br. 6-7.) However, it is clear from the cases discussed infra that the meaning of "tribunal” is ambiguous within the context of § 1782.
. Some courts also conduct a "functional” analysis to determine whether the arbitration contains the characteristics of a tribunal emphasized by the Intel court in dictum. These characteristics include "whether the arbitral panel acts as a first-instance adjudicative decisionmaker, whether it permits the gathering and submission of evidence, whether it has the authority to determine liability and impose penalties, and whether its decision is subject to judicial review.” Consorcio Ecuatoriano, 685 F.3d at 995 (citing Intel, 542 U.S. at 255 & n. 9, 124 S.Ct. 2466); see, e.g., Roz Trading, 469 F.Supp.2d at 1225 (because the arbitration proceeding was a "firstinstance decisionmaker” that issues decisions "both responsive to the complaint and reviewable in court,” it must necessarily be considered a "tribunal”); Operadora, 2009 WL 2423138, at *9-10 (while some Intel attributes applied-such as the arbitrator's ability to gather evidence, apply the law, and enter a binding decision — the arbitration did not function as a tribunal because the final decision was not judicially reviewable and the Intel court did not consider the source of the arbitration panel's authority, which here, was the product of a contractual agreement); Arbitration in London, 626 F.Supp.2d at 886 (the arbitral tribunal did not fall within the Intel definition because "private arbitrations are generally considered alternatives to, rather than precursors to, formal litigation” and "the very narrow circumstances in which the Board's decisions may be subject to review does not allow for judicial review of the merits of the parties' dispute”); In re Winning (HK) Shipping Co. Ltd., 2010 WL 1796579, at *8-10 (S.D.Fla. Apr. 30, 2010) (conducting functional analysis and concluding that arbitration in London was a "foreign tribunal” because the arbitration award is reviewable by English courts); Ukrnafta v. Carpatsky Petroleum Corp., 2009 WL 2877156, at *4 (D.Conn. Aug. 27, 2009) (because the Stockholm arbitration governed by UNCITRAL is subject to judicial review, it is a "first-instance decision maker” falling under the purview of § 1782); In re Finserve Grp., 2011 WL 5024264, at *3 (D.S.C. Oct. 20, 2011) (because London Court of International Arbitration Rules waives judicial review, "the Court questions whether [it] would be consid
. Petitioner may not require the Court’s assistance as he might be able to obtain the requested documents pursuant to the arbitration rules. The International Dispute Resolution Procedures state that "[t]he Tribunal may order a party to deliver to the tribunal and to other parties a summary of the documents and other evidence which that party intends to present in support of its claim, counterclaim or defense.” (International Dispute Resolution Procedures art. 19, ¶ 2.) Furthermore, ”[a]t anytime during the proceedings, the tribunal may order parties to produce other documents, exhibits, or other evidence it deems necessary or appropriate.” (Id. art. 19, ¶ 3.) .
Petitioner argues that the fact that the panel has not yet been assembled and has not had a chance to rule on his discovery requests is not a factor to be considered, as set forth in Intel. (See Appl. Br. 14 n. 4; Reply Br. 13.) However, he is incorrect. Intel merely explained that § 1782 does not bar a district court from ordering production of documents when the documents would not be discoverable in the foreign jurisdiction, i.e., § 1782 does not impose a "foreign-discoverability” requirement. 542 U.S. at 259-63, 124 S.Ct. 2466. This means that Petitioner is not required to show that the documents are discoverable in the underlying arbitration. But Intel did not hold that the Court is barred from considering whether the arbitral panel could order production of the documents under its own procedures. In fact, its rejection of the foreigndiscoverability requirement suggests the opposite. See id. at 262, 124 S.Ct. 2466 (explaining that the primary objective of § 1782 is "to assist foreign tribunals in obtaining relevant information that the tribunals may find useful but, for reasons having no bearing on international comity, they cannot obtain under their own’laws”). That is, if § 1782 were the only means of relief for Petitioner, this would weigh in favor of the Court exercising its discretion to grant the application. But there is no indication that this is the case.
Reference
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- In re Application of Prabhat K. DUBEY
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