Questions Remain About Powerful Foreign Discovery Tool

Alex Lawrence spoke to Law360 about the U.S. Supreme Court's opinion in ZF Automotive U.S., Inc. v. Luxshare, Ltd., concluding that only foreign or international tribunals that are imbued with governmental authority fall within the ambit of Section 1782 of the U.S. Code, which allows federal courts to order entities in their districts to turn over evidence to be used in proceedings taking place before those bodies.

“There’s been a real explosion of 1782 litigation in the federal district courts,” Alex said, adding that the number of cases filed under the statute likely would have continued going up if the court had expanded its scope. “So there may be some aspect of closing the valve a bit.”

Additionally, he noted, the court’s opinion reinforces that parties choose arbitration for a reason: It’s supposed to be faster and more efficient. There’s an understanding in arbitration that the parties to the proceeding won’t be subject to broad, U.S.-style discovery.

“I think what the court’s saying is, you selected arbitration, you knew what you were getting, and you weren’t getting this,” Alex said. “You weren’t getting this right to go into the U.S. courts, and get broad third-party discovery, depositions, documents, right? And that was your choice as a party. You signed up to this when you signed up for arbitration.”

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