In Re Hansainvest Hanseatische Investment-Gmbh
364 F. Supp. 3d 243
S.D. Ill.2018Background
- Applicants (Hansainvest and others) moved under 28 U.S.C. § 1782 to subpoena documents from Cerberus, J.C. Flowers, and GoldenTree for use in a contemplated German lawsuit against HSH Nordbank concerning the sale to private investors.
- The application was initially filed ex parte on July 2, 2018; the Court ordered service on respondents and set a briefing schedule after finding no compelling need to proceed ex parte.
- Applicants have taken concrete steps toward German litigation: retained German counsel, engaged experts, sent a detailed demand letter, and counsel represented at oral argument they would file suit before year-end.
- Respondents argued the German proceeding was not reasonably contemplated, that the request was a fishing expedition and burdensome, and raised concerns about foreign data privacy (GDPR) and documents located in Europe.
- The Court found the § 1782 statutory prerequisites satisfied (including that the discovery is "for use in a proceeding" because German litigation was reasonably contemplated) and evaluated the Intel discretionary factors.
- The Court granted the § 1782 application for documents held by U.S. custodians; for documents held by foreign custodians it granted production only if Applicants (1) bear production costs including GDPR compliance and (2) indemnify respondents against foreign data-privacy breaches; respondents may still raise overbreadth objections.
Issues
| Issue | Applicant's Argument | Respondents' Argument | Held |
|---|---|---|---|
| Whether discovery is "for use in a proceeding" (§ 1782 statutory prerequisite) | German litigation is reasonably contemplated—hired counsel, experts, demand letter, counsel represented suit would be filed by year-end | Litigation is speculative; not imminent; request is a fishing expedition | Held: Applicants met the "reasonable contemplation" standard (Intel/Mees/KPMG); statutory prerequisite satisfied |
| Whether foreign tribunal can obtain the evidence without § 1782 (Intel factor 1: jurisdictional reach) | Respondents are non-parties and documents in U.S. custodians may be beyond German court reach | Some documents may be obtainable from HSH in Germany | Held: Factor favors § 1782 relief because foreign tribunal likely cannot control U.S.-located evidence |
| Whether foreign tribunal would be receptive or does not accept evidence obtained via § 1782 (Intel factor 2: receptivity) | German courts routinely accept evidence gained via § 1782; no proof of unreceptivity | Implied concern that German law should control discovery | Held: No authoritative proof of unreceptivity; factor neutral-to-favorable for Applicants |
| Whether request circumvents foreign proof-gathering rules or is bad-faith (Intel factor 3: circumvention) | Use of § 1782 is proper; statute contains no foreign-discoverability requirement | Application is an end-run of German procedures because locus is Germany | Held: No evidence of bad faith; mere foreign locus insufficient to deny relief |
| Whether subpoenas are overbroad or unduly burdensome (Intel factor 4: burdensomeness) | Requests are tailored to specific claims; scope objections should be addressed request-by-request | Requests are broad, cover long time period, include many European-located documents and GDPR compliance burdens | Held: To mitigate burden, grant for U.S. custodians in full; for foreign custodians grant only if Applicants pay production and GDPR/compliance costs and indemnify respondents; respondents may assert overbreadth objections later |
Key Cases Cited
- Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (Sup. Ct.) (establishes discretionary Intel factors and clarifies "reasonable contemplation" standard)
- Mees v. Buiter, 793 F.3d 291 (2d Cir.) (materials need only be for use at some stage of a reasonably contemplated foreign proceeding)
- Certain Funds, Accounts and/or Inv. Vehicles v. KPMG LLP, 798 F.3d 113 (2d Cir.) (applicants must show objective indicia that foreign proceeding is reasonably contemplated)
- Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79 (2d Cir.) ( § 1782 statutory prerequisites and discretionary framework)
- In re Application of Esses, 101 F.3d 873 (2d Cir.) ( § 1782 statutory prerequisites)
- Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095 (2d Cir.) (burden on respondents to show foreign tribunal would reject § 1782-obtained evidence)
- Metallgesellschaft AG v. Hodapp, 121 F.3d 77 (2d Cir.) (discusses § 1782 aims and discretion)
- Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d 591 (7th Cir.) (recognizes German courts accept § 1782-obtained evidence)