Sampedro v. Silver Point Capital, 958 F.3d 140

Background

Sampedro and his brother were Codere, S.A. executives who challenged Codere’s Board decision to terminate their at-will employment in two fora: a Commercial Court in Madrid (the "Spanish Litigation") and an ICC arbitration (the "ICC Arbitration").
Appellants (Silver Point, Contrarian, Reganato, Sorensen Valdez) are named respondents in the ICC Arbitration but not parties to the Spanish Litigation. They are Board members/major shareholders of Codere.
Sampedro filed an ex parte § 1782 application in D. Conn. seeking discovery from Appellants for use in the Spanish Litigation; the district court granted the application and issued subpoenas.
Appellants moved to quash and sought (1) to bar Sampedro from using produced materials in the ICC Arbitration and (2) reciprocal discovery from Sampedro; the district court denied the request to bar use and denied reciprocity for lack of a particularized showing.
After a more specific reciprocal-discovery motion, the magistrate judge denied reciprocity because the only foreign proceeding at issue was the Spanish Litigation, to which Appellants were not parties; the district court overruled objections and denied relief.
On appeal the Second Circuit affirmed, holding district courts have broad discretion under § 1782 and are not required to consider every foreign proceeding when deciding whether to condition discovery on reciprocity.

Issues

Issue	Appellants' Argument	Sampedro's Argument	Held
Whether a district court must consider all pending foreign proceedings (e.g., the ICC Arbitration) when deciding to condition § 1782 discovery on reciprocity	The court should consider the ICC Arbitration because Appellants are parties there and Sampedro could use produced materials in that arbitration	§ 1782 discretion is limited to the foreign proceeding identified in the application (the Spanish Litigation); courts need not consider every separate proceeding	No. District courts have broad discretion and need not consider all foreign proceedings when deciding reciprocity; affirmed
Whether Appellants’ asserted substantial interest in the Spanish Litigation requires reciprocal discovery	Their Board membership/shareholder status gives them a substantial interest entitling them to reciprocity	Appellants are not named parties in the Spanish Litigation and magistrate reasonably focused on whether they could use the discovery in that proceeding	Denial of reciprocity was not an abuse of discretion
Whether the district court erred by declining to bar Sampedro from using produced materials in the ICC Arbitration (protective order)	Court should preclude use in the ICC to avoid unfair use outside the Spanish Litigation	No evidence Sampedro’s application for Spanish Litigation discovery was a ruse to obtain materials for the ICC; protective order unnecessary	District court properly declined to bar use absent evidence of ruse or bad faith
Standard of review for the magistrate judge’s nondispositive order on reciprocity	Magistrate erred in applying the law	District court reviewed for clear error; appellate review is abuse of discretion	Magistrate’s decision was not clearly erroneous and district court did not abuse its discretion

Key Cases Cited

Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095 (2d Cir. 1995) (§ 1782 relief may be conditioned on reciprocal discovery but courts are not required to impose reciprocity)
Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) (district courts may condition § 1782 relief on reciprocal exchange and identify discretionary factors)
In re Accent Delight Int’l Ltd., 869 F.3d 121 (2d Cir. 2017) (district courts have broad discretion to tailor § 1782 discovery and prevent misuse)
Mees v. Buiter, 793 F.3d 291 (2d Cir. 2015) (statutory requirements for § 1782 and discretionary review constrained by statute’s purposes)
In re Esses, 101 F.3d 873 (2d Cir. 1996) (twin aims of § 1782: assist international litigation and encourage reciprocity)
Kiobel by Samkalden v. Cravath, Swaine & Moore LLP, 895 F.3d 238 (2d Cir. 2018) (discussing Intel factors and § 1782 discretion)
Certain Funds, Accounts &/or Inv. Vehicles v. KPMG, LLP, 798 F.3d 113 (2d Cir. 2015) (non-parties cannot obtain § 1782 discovery absent showing they can use evidence in foreign proceedings)
In re Malev Hungarian Airlines, 964 F.2d 97 (2d Cir. 1992) (district courts can accept offers of reciprocal discovery but are not required to supervise such arrangements)