Heraeus Kulzer GmbH v. Biomet, Inc.
633 F.3d 591
| 7th Cir. | 2011Background
- Heraeus Kulzer seeks discovery under 28 U.S.C. § 1782 in Indiana federal court for use in a German trade secret suit against Biomet.
- District court denied Heraeus's application to take discovery and the Seventh Circuit treats the ruling as a final appealable order because no ongoing district court litigation remained.
- § 1782 authorizes a district court to order production for use in a foreign proceeding, subject to Federal Rules of Civil Procedure unless the order provides otherwise.
- The German proceeding cannot provide broad discovery (Rule 26-like) and Heraeus argues U.S. discovery is essential to prove misappropriation; Biomet contends discovery should be limited or denied due to burdens and foreign-law mechanisms.
- The district court found potential abuses and burdens but did not require negotiation to reduce scope or consider alternatives; the court ultimately denied discovery without proper limitation.
- The Seventh Circuit reverses and remands to assess Heraeus’s discovery demands under Rule 26 with appropriate limits, rather than under § 1782 alone.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1782 authorizes broad discovery for use in a foreign proceeding | Heraeus: § 1782 permits broad discovery to aid foreign suit. | Biomet: discovery should be limited and burdens weighed; German process suffices. | Yes, § 1782 authorizes discovery, but must be bounded by Rule 26 standards. |
| Whether the district court properly denied discovery without limiting scope or negotiating reductions | Heraeus: needs extensive discovery; burdens can be managed with limits. | Biomet: requests are excessive and burdensome; court should deny or substantially trim. | District court erred by denying discovery outright without attempting scope reduction. |
| Whether the district court should address discovery under Rule 26 after initial § 1782 screening | Heraeus: once abuses are unlikely, Rule 26 controls discovery management. | Biomet: no clear burden: discovery should be restricted or denied. | Courts should apply Rule 26 after screening; § 1782 dropping out once abuses are unlikely. |
Key Cases Cited
- Kestrel Coal Pty. Ltd. v. Joy Global, Inc., 362 F.3d 401 (7th Cir. 2004) (final appealability of discovery orders in certain circumstances)
- Bayer AG v. Betachem, Inc., 173 F.3d 188 (3d Cir. 1999) (appealability and scope of discovery orders in 1782 context)
- In re Letters Rogatory from Tokyo District Prosecutor's Office, 16 F.3d 1016 (9th Cir. 1994) (principles governing cross-border discovery)
- Wiwa v. Royal Dutch Petroleum Co., 392 F.3d 812 (5th Cir. 2004) (avoidance of harassment and evidentiary considerations in cross-border discovery)
- Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095 (2d Cir. 1995) (policy rationale for allowing U.S. discovery to aid foreign litigation)
- Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (U.S. Supreme Court 2004) (abuses considerations in discovery and parallel litigation concerns)
- In re Microsoft Corp., 428 F. Supp. 2d 188 (S.D.N.Y. 2006) (limits and management of complex discovery in § 1782 context)
- Olivieri v. Rodriguez, 122 F.3d 406 (7th Cir. 1997) (reasonable limits on discovery and reversal where error occurred)