Banca Pueyo SA v. Lone Star Fund IX, 55 F.4th 469

Background:

The appellees (various investors) sought ex parte discovery under 28 U.S.C. § 1782 from Lone Star-related entities for use in two related Portuguese litigations arising from Banco Espírito Santo’s liability retransfer and the subsequent sale of Novo Banco.
The Northern District of Texas granted the ex parte § 1782 application and issued subpoenas for documents and testimony to the appellants (Lone Star Fund IX, Lone Star Global Acquisitions, Hudson Advisors).
Appellants moved to quash and for reconsideration, arguing the appellees had not satisfied § 1782’s statutory prerequisites and the Supreme Court’s discretionary Intel factors; they submitted affidavits challenging the district court’s factual and legal basis.
The magistrate judge and district court held that, after an ex parte § 1782 grant, respondents could not relitigate the statutory or Intel-factor bases and limited challenges to a Rule 45 motion to quash; the court relied on its reading of Texas Keystone.
The Fifth Circuit held that the district court misread Texas Keystone and abused its discretion by denying adversarial testing of the § 1782 application’s statutory prerequisites and Intel-factor analysis; the case was reversed and remanded.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Can a respondent challenge the merits (statutory prerequisites and Intel factors) of an ex parte § 1782 order after the court grants discovery?	Appellees: ex parte grants are appropriate and subsequent disputes should proceed under Federal Rules for scope; Intel factors already weighed.	Appellants: respondents must be allowed adversarial testing of whether statutory requirements and Intel factors were met; ex parte order does not foreclose that.	Held: Respondents may challenge the § 1782 statutory requirements and Intel factors; district court erred by denying adversarial reconsideration.
Does Texas Keystone bar merits reconsideration and restrict challenges to Rule 45 motions to quash?	Appellees: Texas Keystone supports treating the § 1782 threshold as resolved and addressing enforcement under discovery rules.	Appellants: Texas Keystone does not immunize ex parte § 1782 grants from later adversarial testing; that case actually reversed an improper ex parte quash.	Held: The district court misread Texas Keystone; it does not preclude adversarial merits review of an ex parte § 1782 grant.
Is treating an ex parte § 1782 grant as immune from adversarial testing consistent with Intel’s instruction for an adequate airing?	Appellees: limiting post-grant challenges causes no prejudice because scope disputes are governed by Federal Rules.	Appellants: Intel requires adequate airing of whether assistance is appropriate; ex parte rulings must not strip respondents of rights to litigate statutory and Intel issues.	Held: Intel requires an adequate airing; denying adversarial testing conflicts with Intel and basic notice-and-hearing principles.
Was the district court’s error harmless given later Rule 45 burden defenses and overlapping foreign discovery?	Appellees: any error was harmless because Rule 45 undue-burden protections and motion-to-quash framework exist.	Appellants: The burdens and standards under Intel differ from Rule 45; burden of proof differs and foreign-receptivity and overlap with Portuguese discovery were not considered.	Held: Error was not harmless on the record; appellants raised substantive Intel/statutory challenges that were never considered.

Key Cases Cited

Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) (establishes discretionary Intel factors and instructs courts to ensure an adequate airing before granting § 1782 discovery)
Texas Keystone, Inc. v. Prime Natural Res., Inc., 694 F.3d 548 (5th Cir. 2012) (discussed but not to be read as barring adversarial merits review of ex parte § 1782 grants)
Ecuadorian Plaintiffs v. Chevron Corp., 619 F.3d 373 (5th Cir. 2010) (describes Intel factors and standard of review for § 1782 issues)
Wiwa v. Royal Dutch Petroleum Co., 392 F.3d 812 (5th Cir. 2004) (motion-to-quash burden discussion cited by district court)
Heraeus Kulzer GmbH v. Biomet, Inc., 633 F.3d 591 (7th Cir. 2011) (discusses § 1782 screening and interplay with discovery rules)
Government of Ghana v. ProEnergy Servs., LLC, 677 F.3d 340 (8th Cir. 2012) (addresses post-threshold discovery procedure under § 1782)
In re Schlich, 893 F.3d 40 (1st Cir. 2018) (holds district courts should consider submissions from both parties in weighing Intel factors)
In re Accent Delight Int’l Ltd., 869 F.3d 121 (2d Cir. 2017) (affirming that adversarial process helps weed out abusive § 1782 applications)
Granny Goose Foods, Inc. v. Bhd. of Teamsters, 415 U.S. 423 (1974) (fundamental notice-and-hearing principle cited against peremptory ex parte action)