Eleventh Circuit Applies 28 USC § 1782 Extraterritorially to Aid Asset Recovery in Case of First Impression

By: Ava Borrasso, Miami*

In an issue of first impression in the Circuit, the Eleventh Circuit granted extraterritorial discovery pursuant to 28 USC § 1782 to support an asset recovery case. 

Following marital dissolution proceedings in Russia, a former wife undertook efforts to discover concealed marital assets in multiple jurisdictions including Cyprus, Latvia, Switzerland, the BVI and the Bahamas. She ultimately sought discovery in the United States to support her claim before a presiding Moscow court adjudicating the division of marital assets. The application sought information from third party Trident Atlanta and its employee regarding information related to the former husband's beneficial ownership of a Bahamian company.

The Court first set forth the prima facie requirements to obtain relief pursuant to 28 USC § 1782: "(1) the request must be made "by a foreign or international tribunal," or by "any interested person"; (2) the request must seek evidence, whether it be the "testimony or statement" of a person or the production of "a document or other thing"; (3) the evidence must be "for use in a proceeding in a foreign or international tribunal"; and (4) the person from whom discovery is sought must reside or be found in the district of the district court ruling on the application for assistance." (citations omitted).

After determining that the predicate factors were met, the Court addressed the discretionary factors as set forth by the United States Supreme Court (the "Intel factors"): "(a) whether aid is sought to obtain discovery from a participant in the foreign proceeding ("First Factor"); (b) "the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance" ("Second Factor"); (c) whether the applicant is attempting to use § 1782 to "circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States" ("Third Factor"); and (d) whether the discovery requests are "unduly intrusive or burdensome" ("Fourth Factor")." (citations omitted).

Trident Atlanta took issue with the third factor arguing that Section 1782 does not apply extraterritorially. The Court examined Section 1782 and held that it plainly provides for production consistent with the Federal Rules of Civil Procedure. Because Rule 45 calls for broad production of non-privileged documents, including those located outside of the U.S., the Court determined the only limitation imposed by the rules related to the "location for the act of production" not the location of the underlying documents. Therefore, documents subject to the subpoenaed party's control were subject to production.

Trident Atlanta then argued that it lacked legal control over non-U.S. affiliates in order to obtain the subpoenaed information. Again, the Court rejected the argument and determined that a legal right to obtain information from an affiliated or related business entity with access to the information was sufficient. Notably, the Court also affirmed a monetary contempt sanction in excess of $200,000 imposed by the district court on Trident Atlanta for failing to establish a good-faith attempt to comply with the subpoena.

The case is notable because it applied Section 1782 extraterritorially and required production of accessible information in the hands of an affiliate or member of a group of companies. The case is Sergeeva v. Tripleton Int'l Ltd. et al., Nos. 15-13008 & 15-15066 (11th Cir. August 23, 2016).

*Ava Borrasso is the Principal of Ava J Borrasso, P.A., a Miami-based law firm that concentrates on business and international arbitration and litigation. She also serves as an Arbitrator and is a member of the Commercial Panel of the American Arbitration Association.

September 26, 2016

Please join the New York State Bar Association,  International Section with the Florida Bar Association, International Law Section for a Special Ethics Panel that will be hosted at the Miami offices of Greenberg Traurig - 333 SE 2nd Ave. Suite 4400, Miami, 4-8 PM.  This CLE-accredited program will focus on the implications of the recent decisions in Schoenefeld v. Schneiderman, No. 11-4283 (2d Cir., April 22, 2016) and Schoenefeld v. State, 25 N.Y.3d 22 (N.Y. 2015), which, collectively, require attorneys practicing in New York to maintain a physical office in the State.  This unprecedented panel includes the lead plaintiff, Ekaterina Schoenefeld, so you can hear directly from those involved in this interesting case. Al Lindsay, Chair of the ILS, will moderate the Panel. Click here to download the event flyer. Following the event, a Memorandum of Understanding will be signed by the two sections (see details above).

September 28, 2016

The Wilberforce Miami Seminar 2016 on " Litigating International Family Disputes - Attacking and Defending Offshore Family Wealth-Holding Structures" will be held on September 28, 2016, 4.30-6.15 PM at 1 SE 3rd Avenue, 10th Floor, Miami, FL 33131. For more information and to read the speakers' bio please refer to the event program. To register, you can email Janet Betancourt ( [email protected]).

September 29 - October 1, 2016

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September 30 - October 2, 2016

ILS Retreat: Celebrating the Past and Leading into the Future.   Join us for another exciting International Law Section retreat at the Boca Raton Resort & Club !  The theme of this year's retreat will be celebrating our past as we lead the world into the future of international law.  We are encouraging all Section members to join us for  a fun and inspirational weekend .  In addition to an exciting program featuring both alumni and future leaders, and an exciting keynote speaker, we are making sure to build in plenty of time for socializing with friends and family at this world-class resort. Don't wait, submit your registration form today!

October 6-8, 2016

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October 9-11, 2016 

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November 13-15, 2016

The International Chamber of Commerce will hold its 14th annual Miami Conference on International Commercial Arbitration in Latin America at the Mandarin Oriental hotel.  The conference attracts approximately 550 participants representing about 40 nationalities and features a rich training and networking program.  For more information and to register for this event, visit the ICC Conference website.