481 F.Supp.3d 166
S.D.N.Y.2020Background
- Applicant (Atvos Agroindustrial Investimentos S.A.), a Brazilian company and litigant in Brazilian proceedings, seeks discovery under 28 U.S.C. § 1782 from multiple U.S.-located entities about a 2014 $600M loan and related collateral arrangements involving Odebrecht affiliates.
- In April 2017 Natixis obtained a fiduciary lien over a controlling block of Atvos shares; on May 4, 2020 LSF10 (a Lone Star affiliate) purchased 50%+1 share of Atvos from Natixis via an SPA, triggering disputes over the foreclosure/sale.
- Multiple Brazilian actions followed: (a) an arbitration (CAM-CCBC) initiated by Applicant challenging the foreclosure and SPA, (b) several injunction/registration proceedings in Brazilian courts involving Applicant, LSF10, and Natixis (some pending, some dismissed/appealed), and (c) regulatory reviews by CADE and INCRA.
- On May 20, 2020 Applicant filed a § 1782 application in SDNY and obtained an ex parte order (June 3, 2020) authorizing subpoenas to Lone Star respondents, several lender respondents (Natixis, MUFG, Sumitomo, Intesa) and BBVA; those respondents moved to vacate/quash.
- The magistrate judge held (1) the CAM‑CCBC arbitration is not a "foreign or international tribunal" for § 1782, but Applicant made a de minimis showing that the requested discovery was "for use" in pending Brazilian court proceedings, and (2) applied the Intel discretionary factors to grant relief in part: vacating the ex parte order and quashing subpoenas as to the Lone Star respondents, while allowing discovery from the lender respondents and BBVA only after narrowing the subpoenas via meet-and-confer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the CAM‑CCBC arbitration is a “foreign or international tribunal” under § 1782 | Applicant treated arbitration as a foreign tribunal tied to related court litigation | Respondents argued private arbitration is not a § 1782 tribunal | Court: Arbitration is not a § 1782 tribunal (citing controlling Second Circuit precedent) |
| Whether discovery sought is “for use” in a foreign tribunal | Applicant: discovery is for use in pending Brazilian court proceedings (LSF10 Proceeding) | Respondents: challenge relevance/admissibility | Court: Applicant made the de minimis showing that discovery is for use in Brazilian court proceedings |
| Intel factor 1 — Are respondents participants in the foreign proceeding? | Applicant sought documents from respondents generally | Lone Star: LSF10 is a party to Brazilian proceedings and controls relevant documents | Court: Weighs against § 1782 relief for Lone Star respondents (LSF10 is a participant); weighs in favor for lender respondents and BBVA (they are non‑participants) |
| Intel factors 2–4 and scope/burdensomeness | Applicant: Brazilian courts receptive; willing to narrow scope if needed | Respondents: object to circumvention of Brazilian discovery limits and to broad temporal/scope burdens; BBVA raised EU data concerns | Court: Receptivity favors discovery; but concerns about circumvention and burden favor denying discovery as to Lone Star respondents and requiring narrowed subpoenas (meet‑and‑confer) for lenders/BBVA |
Key Cases Cited
- Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (U.S. 2004) (establishes discretionary Intel factors for § 1782 applications)
- Kiobel by Samkalden v. Cravath, Swaine & Moore LLP, 895 F.3d 238 (2d Cir. 2018) (sets statutory threshold framework for § 1782 in Second Circuit)
- In re Guo, 965 F.3d 96 (2d Cir. 2020) (private arbitral panels are not § 1782 "foreign or international tribunals")
- Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79 (2d Cir. 2004) (denial of § 1782 where discovery effectively sought from an opposing party in the foreign litigation)
- Mees v. Buiter, 793 F.3d 291 (2d Cir. 2015) (foreign discoverability is relevant but not dispositive under Intel)
- In re Metallgesellschaft AG, 121 F.3d 77 (2d Cir. 1997) (broad § 1782 interpretation and twin aims of statute)
- Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095 (2d Cir. 1995) (receptivity standard: deny only with authoritative proof the foreign tribunal would reject § 1782‑obtained evidence)