Second Circuit Limits Use Of Section 1782 Discovery Against Law Firms

28 U.S.C. § 1782 ("Section 1782") is a powerful tool that allows litigants to obtain broad, US discovery to gather evidence for use in proceedings before non-US or international tribunals.1 On July 10, 2018, the Second Circuit issued an opinion that struck a blow against abusive use of Section 1782. Reversing in relevant part the decision of the trial court, the Second Circuit, in Kiobel v. Cravath, Swaine & Moore LLP, No. 17-424, held that plaintiffs' lawyers could not use Section 1782 to obtain discovery of documents for use in a Dutch action for several reasons, including that plaintiffs' lawyers were: (1) attempting an end run around limitations on discovery in the Netherlands, (2) seeking documents directly from counsel (rather than from the party), and (3) seeking documents that were subject to a confidentiality order issued in a prior US litigation. The case offers comfort to those who share non-US documents with their US lawyers and to those who produce documents subject to a confidentiality order and underscores the importance of obtaining such orders.

Background

In 2002, in Kiobel v. Royal Dutch Petroleum ("Kiobel"), Esther Kiobel and 11 other Nigerian plaintiffs filed a lawsuit in the Southern District of New York against four defendants affiliated with Royal Dutch Shell ("Shell"), alleging that Shell aided and abetted violations of international law committed by the Nigerian government.2 Pursuant to a stipulated confidentiality order, most of the documents Shell produced were to be used "solely for the purposes" of Kiobel (or other related actions). Ultimately Kiobel was dismissed, a decision affirmed by the Supreme Court pursuant to a presumption against extraterritoriality.3

Years later, Ms. Kiobel prepared to file suit against Shell once again, this time in the Netherlands. In October 2016, plaintiffs' lawyer representing Ms. Kiobel filed a Section 1782(a) petition, seeking authorization to serve a subpoena on Cravath, Swaine & Moore, which represented Shell in Kiobel. The subpoena would request the documents that Shell produced to the plaintiffs in Kiobel (and related cases).

The district court granted the Section 1782 petition, holding that Ms. Kiobel needed the documents to file suit in the Netherlands; not all of the documents she sought were likely to be still in Shell's possession over a decade after litigation began in the United States; and the production would be minimally burdensome for Cravath. The district court...