Sixth Circuit Creates Split on International Arbitration Discovery Question

The United States Court of Appeals for the Sixth Circuit has created a circuit split regarding whether 28 U.S.C. §1782(a) authorizes a federal court to order discovery in a private international arbitration proceeding.  In Abdul Latif Jameel Transportation Co. v. FedEx Corp., No. 19-5315 (6th Cir., September 19, 2019), a Saudi Arabia-based transportation company, Abdul Latif Jameel (“ALJ”), filed a Section 1782(a) discovery application related to a foreign commercial arbitration proceeding against United States-based FedEx in the Western District of Tennessee at Memphis.  Under Section 1782(a), a district court may order an individual “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.”

The federal district court held the arbitral proceeding did not involve a “foreign or international tribunal” and denied ALJ’s motion.  On appeal, the Sixth Circuit Court of Appeals stated the case was “an issue of first impression” despite that the United States Supreme Court provided some statutory guidance in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004).  After examining both the language and history of Section 1782(a), the appellate court held the law permitted discovery in foreign arbitration proceedings.  Consequently, the United States Court of Appeals for the Sixth Circuit reversed the district court’s order and remanded the case for further consideration.

Interestingly, the Sixth Circuit recognized in its opinion that the appellate court’s holding was at odds with two 1999 decisions issued by the Fifth and Second Circuits.  The court said, “After considering the legislative history of § 1782(a) as well as policy considerations, the Second and Fifth Circuits concluded that ‘tribunal’ includes only ‘governmental or intergovernmental arbitral tribunals and conventional courts and other state-sponsored adjudicatory bodies.’ NBC, 165 F.3d at 190; see Biedermann, 168 F.3d at 882.” The Sixth Circuit, however, disagreed:

We are unpersuaded. Even if we were inclined to permit statements in congressional reports to color our view of a statutory term, we would hesitate to rely upon such statements as did NBC. Those statements do not exclude privately constituted proceedings from the meaning of “tribunal.” If anything, what the statements make clear is Congress’s intent to expand § 1782(a)’s applicability. Although FedEx Corp. argues that “there is nothing in the legislative history suggesting the expansion extended to private arbitration,” Appellee Br. at 18, this argument fails to appreciate that the legislative history does not indicate that the expansion stopped short of private arbitration. The facts on which the legislative history is most clear are that the substitution of “tribunal” for “judicial proceeding” broadened the scope of the statute, and the repeal of §§ 270–270g removed the requirement that the United States be a party to an international agreement under which a proceeding takes place. Further inferences from the legislative history must rely on speculation.

Ultimately, the Sixth Circuit Court of Appeals found there was “no tension between § 1782(a)’s legislative history and our textual conclusion regarding the scope of the word ‘tribunal.’”

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