THE FEDERAL REPUBLIC OF NIGERIA, ABUBAKAR MALAMI, Thе Attorney General of the Federal Republic of Nigeria v. VR ADVISORY SERVICES, LTD., VR ADVISORY SERVICES (USA) LLC, VR CAPITAL GROUP, LTD., VR GLOBAL ONSHORE FUND, L.P., VR ARGENTINA RECOVERY ONSHORE FUND II, L.P., RICHARD DIETZ, JEFFREY JOHNSON, ASHOK RAJU
Docket No. 20-3909-cv
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
February 3, 2022
August Term, 2021
Argued: December 7, 2021
Before: LYNCH, CARNEY, and SULLIVAN, Circuit Judges.
Applicants-Appellants the Federal Republic of Nigeria and its Attorney General (together, “Nigeria“), appeal an order of the United States District Court for the Southern District of New York (Engelmayer, J.) vacating its earlier grant of Nigeria‘s application for discovery from Respondents-Appellees pursuant to
Accordingly, we VACATE the judgment of the district court and REMAND for further consideration of the application.
ALEXANDER D. PENCU, Meister Seelig & Fein LLP, New York, NY (Christopher J. Major and Austin D. Kim, on the brief), for Applicants-Appellants.
ZACHARY D. ROSENBAUM, Kobre & Kim LLP, New York, NY (Michael S. Kim, Josef M. Klazen, and Darryl G. Stein, on the brief), for Respondents-Appellees.
Applicants-Appellants the Federal Republic of Nigeria and its Attorney General, Abubakar Malami (together, “Nigeria“), appeal from a November 6, 2020 order of the United States District Court for the Southern District of New York (Paul A. Engelmayer, J.) vacating its earlier ex parte grant of Nigeria‘s application to compel discovery pursuant to
We hold that the district court‘s decision was based on an error of law, and thus amounted to an abuse of discretion, because it effectively erected an impermissible “extra-statutory barrier[] to discovery” under
We therefore VACATE the judgment of the district court and REMAND for further consideration of Nigeria‘s application.
BACKGROUND
I. Factual Background
This case grows out of a contract dispute between Nigeria and Process & Industrial Developments, Ltd. (“P&ID“), a company in which VR holds a 25-percent ownership stake. P&ID wаs incorporated in the British Virgin Islands in 2006 by Martin Quinn, an Irish national and former music manager engaged in the Nigerian arms trade, and his associate Brendan Cahill, also an Irish national. At the time of its incorporation, P&ID had no assets and a small number of employees. Nevertheless, within a few years, it convinced a number of Nigerian businesspersons and government officials to help it secure a contract to construct a natural-gas processing plant in Nigeria.
That contract, the Gas Supply and Processing Agreement (“GSPA“), was signed in January 2010. Under its terms, P&ID would build a plant in Nigeria to process unrefined “wet gas” supplied by Nigeria into a product suitable for public-utility use and return much of the refined gas to Nigeria; P&ID would be entitled to keep the natural gas liquids stripped from the wet gas. The GSPA provided that legal disputes relating to the contract would be decided by an arbitration panel in London applying Nigerian law. The agreement was to run for a term of 20 years.
For reasons that are in dispute, the GSPA fell through. Nigeria alleges that P&ID procured the GSPA by fraud and bribery, and never had any intention or ability to build a natural-gas plant. P&ID has alleged in other proceedings, and VR appears to take the position here, that P&ID secured funding and drew up plans for the plant, but that Nigeria breached thе GSPA by refusing to help P&ID secure a source of wet gas.
VR, an international investment fund with offices in New York City, acquired a 25-percent ownership interest in P&ID in 2018. Nigeria now seeks discovery principally of documents that VR obtained from P&ID in the course of that acquisition.
II. Prior Proceedings
The dispute over the failed GSPA has spawned a decade of litigation spanning three continents. In addition to proceedings in the United States, the proceedings most relevant to the present appeal are an arbitration in England (“the Arbitration“) in which P&ID secured a multi-billion-dollar award against Nigeria (“the Arbitration Award” or “the Award“); P&ID‘s attempt to enforce that award in England and Nigeria‘s attempt to have the English court set the Award aside (“the English Proceeding“); and criminal investigations and prosecutions in Nigeria related to the GSPA and the Arbitration Award (“the Nigerian Proceedings“).
A. The Arbitration
P&ID initiated an arbitration in London in August 2012, alleging that Nigeria had repudiated the GSPA by failing to make available wet gas as required by its terms, and seeking $5,960,226,233 plus interest in damages for lost profits. The arbitral tribunal held a liability hearing on June 1, 2015, by which time Quinn had died and was thus unavailable to testify in person.
B. The English Proceeding
On March 16, 2018, P&ID applied to the High Court of Justice, Queen‘s Bench Division, Commercial Court in London (“the English Court“) for leave to enforce the Arbitration Award in the United Kingdom. The court granted P&ID leave to enforce the Award on September 26, 2019.
Soon thereafter, Nigeria sought to challenge the Arbitration Award. On December 5, 2019, Nigeria applied to the English Court for an extension of time to challenge the Award, alleging that it had uncovered evidence of fraud both in the inducement of the GSPA and in the procurement of the Award. On September 4, 2020, the English Court granted Nigeria‘s application for an extension of time to challenge the Award, holding - without making any definitive factual findings - that “Nigeria ha[d] established a strong prima facie case that the GSPA was procured by bribes paid to insiders as part of a larger scheme to defraud Nigeria” and that Quinn had perjured himself in his written testimony, on which the arbitral tribunal had heavily relied. J. App‘x at 366. The English Court has scheduled a trial on Nigeria‘s fraud claims for January 2023.
C. The Nigerian Proceedings
Nigerian authorities began investigating P&ID and its procurement of the GSPA in February 2016. In 2019, after the English Court granted P&ID‘s application to enforce the Arbitration Award, Nigeria initiated a series of criminal prosecutions against P&ID and its affiliates. P&ID and P&ID Nigeria pleaded guilty to multiple counts, including conspiracy to defraud Nigeria, money laundering, tax evasion, and unauthorized trading. It is unclear whether any additional prosecutions remain pending in Nigeria related to the GSPA or the Arbitration Award, but Nigeria asserts that it is actively investigating criminal wrongdoing in connection with the Award.
D. Prior Proceedings in the United States
1. P&ID‘s enforcement action in the District of Columbia
In 2018, roughly contemporaneously with its enforcement action in England, P&ID brought an action in the United States District Court for the District of Columbia to enforce the Arbitration Award against Nigeria in the United States. See Process and Industrial Developments Ltd. v. Fed. Republic of Nigeria, No. 18-cv-594, 2018 WL 8997443 (D.D.C. Oct. 1, 2018). Nigeria moved to dismiss the action for want of subject matter jurisdiction, arguing that the Foreign Sovereign Immunities Act (“FSIA“) immunized it from even having to brief the merits of the case. Id. at *1. The district court (Christopher R. Cooper, J.) rejected that argument and set a
On remand, the district court again denied Nigeria‘s motion to dismiss, holding that Nigeria had implicitly waived its sovereign immunity by signing the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Process and Industrial Developments Ltd. v. Fed. Republic of Nigeria, 506 F. Supp. 3d 1, 6-11 (D.D.C. 2020). Nigeria‘s interlocutory appeal of that order is now pending before the District of Columbia Circuit.
2. Nigeria‘s first § 1782 application in New York
On March 25, 2020, in the United States District Court for the Southern District of New York, Nigeria applied under
P&ID claims without support that it is an “interested party” but fails to articulate any cognizable interest it has in the Application, or present any reason why it should be provided with access to discovery materials produced by Bank Respondents. P&ID cites to its September 19, 2019 fraud conviction in Nigeria, but makes no claim that it has or will challenge this conviction, or that it plans to use documents produced by Bank Respondents in connection with any ongoing investigation or proceeding. Rather, P&ID believes it is entitled to discovery produced in these legal proceedings based on rank speculation that Applicants may seek to cite to documents produced by Bank Respondents “in other proceedings.” P&ID‘s speculation is insufficient to transform P&ID into an interested party.
J. App‘x at 275 (citation omitted). Importantly, Nigeria did not assert that it would not use the discovery materials in the English Proceeding; indeed, it argued in the same filing that it had every right to use any discovery the court might order in other proceedings if it so chose. See Id. at 276, quoting In re Accent Delight Int‘l Ltd., 869 F.3d 121, 135 (2d Cir. 2017) (“Section 1782 does not prevent an applicant who lawfully has obtained discovery under the statute with respect to one foreign proceeding from using the discovery elsewhere.“).
On May 7, 2020, the district court (Lorna G. Schofield, J.) granted Nigеria‘s
III. The Present § 1782 Application
On May 12, 2020, five days after Judgе Schofield granted Nigeria‘s first
Judge Engelmayer, to whom this second application was assigned, initially granted Nigeria‘s ex parte application and allowed it to subpoena the various VR respondents. Nigeria then served subpoenas requesting 56 categories of documents, including “[a]ll documents concerning the terms of VR Advisory‘s acquisition of Process & Industrial Developments, or any of its assets,” “[a]ll documents and communications concerning the enforcement of any award granted in the Arbitration,” and documents pertaining to transactions with various persons and entities involved in the GSPA affair. J. App‘x at 136-42.
After those subpoenas were served, VR moved to quash them, to vacate the order granting the application, and to stay discovery. VR argued primarily that by seeking discovery under
On November 6, 2020, the district court granted VR‘s motion to quash the subpoenas and vacate the earlier order granting
Beginning with the statutory requirements, the district court determined that if Nigeria had sought discovery for use in the English Proceeding, the application “would fail
Proceeding to its discretionary balancing of the Intel factors, the court held that the first factor, whether “the person from whom discovery is sought is a participant in the foreign proceeding,” Intel, 542 U.S. at 264, favored granting the application, but “only nominally . . . because P&ID - which is involved in the Nigerian criminal proceeding - is the likely source of documents held by [VR] relevant to that proceeding.” Fed. Republic of Nigeria, 499 F. Supp. 3d at 13. It held that the second factor, “the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance,” Intel, 542 U.S. at 264, favored granting the application, because the Nigerian government was clearly receptive to, and in fact sought, the assistance in question, Fed. Republic of Nigeria, 499 F. Supp. 3d at 13.
The district court held, however, that the third Intel factor, “whether the
Finally, the district court held that the fourth factor, whether the request was “unduly intrusive or burdensome,” Intel, 542 U.S. at 265, weighed against the application because “various document requests in the subpoena appear to sweep well beyond [the] subject” of bribery, which Nigeria was ostensibly investigating, possibly evincing an intent to use discovery materials “for purposes outside the contemplation of
Considering the four factors together, the district court vacated its earlier grant of Nigeria‘s application and quashed the subpoenas that Nigeria had already served pursuant to that grant. Nigeria filed a notice of appeal on November 17, 2020.
DISCUSSION
I. Applicable Law
A. Section 1782
“We review de novo the district court‘s interpretation of the statutory requirements of
A district court abuses its discretion if it (1) bases its decision on an error of lаw or uses the wrong legal standard; (2) bases its decision on a clearly erroneous factual finding; or (3) reaches a conclusion that, though not necessarily the product of a legal error or a clearly erroneous factual finding, “cannot be located within the range of permissible decisions.”
Millea v. Metro-North R. Co., 658 F.3d 154, 166 (2d Cir. 2011), quoting McDaniel v. County of Schenectady, 595 F.3d 411, 416 (2d Cir. 2010).
“Section 1782 is the product of congressional efforts, over the span of nearly 150 years, to provide federal-court assistance in gathering evidence for use in foreign tribunals.” Intel, 542 U.S. at 247. The present version of the statute, as enacted in 1964 and amended in 1996, provides in relevant part:
The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court.
The analysis of a district court hearing an application for discovery pursuant to
First, the court must determine whether the application satisfies
(1) the person from whom discovery is sought resides (or is found) in the district of the district court to which the application is made, (2) the discovery is for use in a foreign proceeding before a foreign [or international] tribunal, and (3) the application is made by a foreign or international tribunal or any interested person.
Mees, 793 F.3d at 297, quoting Brandi-Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76, 80 (2d Cir. 2012) (alteration in original). We have held that in order to satisfy the second statutory requirement, the applicant must seek discovery for use in an “adjudicative” proceeding. See In re Letters Rogatory Issued by Dir. of Inspection of Gov‘t of India (“India“), 385 F.2d 1017, 1020-22 (2d Cir. 1967) (Friendly, J.) (holding that assessment by an Indian tax official was not a “proceeding in a foreign or international tribunal” because of the official‘s essentially executive, rather than adjudicative, function).
Second, if the district court has determined that the statutоry requirements are met, it “may grant discovery under
(1) whether “the person from whom discovery is sought is a participant in the foreign proceeding,” in which case “the need for
§ 1782(a) aid generally is not as apparent“; (2) “the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance“; (3) “whether the§ 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States“; and (4) whether the request is “unduly intrusive or burdensome.”
Mees, 793 F.3d at 298, quoting Intel, 542 U.S. at 264-65.
While the ultimate decision to grant or deny an application is discretionary, we have cautioned that courts are “not free to read extra-statutory barriers to discovery into section 1782” under the guise оf exercising their discretion. Gianoli Aldunate, 3 F.3d at 59; see also In re Malev Hungarian Airlines, 964 F.2d 97, 100 (2d Cir. 1992) (“[D]istrict courts issuing discovery orders pursuant to
B. The United States-Nigeria MLAT
“We review de novo a district court‘s interpretation of a treaty.” Swarna v. Al-Awadi, 622 F.3d 123, 132 (2d Cir. 2010).
The preamble to the United States-Nigeria MLAT states that its purposes are “to improve the effectiveness of the law enforcement authorities of both countries in the investigation, prosecution, and prevention of crime through cooperation and mutual legal assistance in criminal matters,” “[c]onsidering in particular the need to fight against illicit production of and trafficking in narcotic drugs and other controlled substances,” and “to enhance assistance in the fight against crime.”
Article I lays out the treaty‘s basic functions. The two sovereigns “shall, upon request and in accordance with the provisions of th[e] Treaty, provide mutual assistance in connection with the investigation, prosecution, and prevention of crimes, and in proceedings related to criminal matters.” United States-Nigeria MLAT, art. I, ¶ 1. The types of assistance available include:
(a) taking the testimony or statements of persons;
(b) providing documents, records, and articles of evidence;
(c) serving documents;
(d) locating and identifying persons;
(e) transferring persons in custody for testimony or other purposes;
(f) executing requests for searches and seizures;
(g) tracing, identifying, and immobilizing criminally obtained assets;
(h) assisting in proceedings related to forfeiture, restitution, and collection of fines; and
(i) any other form of assistance not prohibited by the laws of the Requested State.
Id. art. I, ¶ 2. The conduct being investigated in the Requesting State need not be a crime under the laws of the Requested State, and the treaty states that it “is intended solely for mutual legal assistance” between the two sovereigns, expressly disclaiming the creation of any “right on the part of any private party to obtain, suppress, or exclude any evidence, or to impede the execution of a request.” Id. art. I, ¶¶ 3-4.
Articles II and IV-VII lay out the procedures by which the Requesting State requests, and the Requested State grants or denies, assistance. Under Article II, each country has a “Central Authority” that handles MLAT requests: “the Attorney General or a person designated by him” for the United States, and “the Attorney General of the Federation or a person designated by him” for Nigeria. Id. art. II, ¶¶ 1-2. Thus, in this country, the Department of Justice processes MLAT requests. Articles IV-VII concern various technical aspects of the procedures for requesting assistance and processing such requests.
Articles III and VIII place substantive limitations on the content of requests and the use of materials obtained, respectively. “The Central Authority of the Requested State may deny assistance” if
(a) a request is not in compliance with the provisions of th[e] Treaty;
(b) the request relates to a political offense;
(c) the request relates to an offense under military law which would not bean offense under ordinary criminal law; or
(d) the execution of the request would be contrary to the Constitution of the Requested State or would prejudice the security or other essential national interests of that State.
Id. art. III, ¶ 1. “The Requesting State shall not use any information or evidence obtained under th[e] Treaty in any investigation, prosecution, or proceeding other than that described in the request without the prior consent of the Requested State,” unless the information or evidence has already become public. Id. art. VIII, ¶¶ 1-2.
Article XIX provides a rule of construction that is directly relevant to the present case:
Assistance and procedures provided by this Treaty shall not prevent or restrict either оf the Contracting Parties from granting any assistance under other applicable international conventions, arrangements, agreements, practices, or under the laws of the Contracting Parties.
Id. art. XIX. In its report recommending approval of the treaty, the Senate Foreign Affairs Committee explained that Article XIX “provides that the Treaty shall not be deemed to prevent recourse to any assistance available under the internal laws of either country,” “leaves the provisions of United States and Nigerian law on letters rogatory completely undisturbed, and does not alter any pre-existing agreements concerning investigative assistance.” S. Exec. Rep. No. 106-24, at 102 (Oct. 4, 2000).
The Department of Justice has its own set of internal procedures for processing MLAT requests from foreign sovereigns like Nigeria and their prosecutors. See U.S. Dep‘t of Just., Crim. Res. Manual § 286, https://www.justice.gov/archives/jm/criminal-resource-manual-286-assisting-foreign-prosecutors (last accessed Feb. 1, 2022). Generally, the Department will utilize the
II. The Present Application
In this case, the district court held or assumed arguendo that all three statutory requirements of
A. The Third Intel Factor
The district court gave the greatest weight, and Nigeria devotes the bulk of its argument, to the third Intel factor - “whether the
1. VR did not lack standing to raise the MLAT issue.
Nigeria first argues that the district court erred in rejecting its standing argument and allowing VR to raise the MLAT issue as a reason to vacate the earlier grant of discovery. We disagree.
Ordinarily, “absent protest or objection by the offended sovereign, an individual has no standing to raise the violation of international law,” including treaties, “as an issue,” unless the treaty creates “privately enforceable rights” or gives “some other indication that the intent of the treaty drafters was to confer rights that could be vindicated in the manner sought by affected individuals.” Georges v. United Nations, 834 F.3d 88, 97 (2d Cir. 2016) (alterations, citations, and internal quotation marks omitted).
That rule, however, concerns attempts by private parties to assert private rights under treaties. In United States v. Davis, 767 F.2d 1025 (2d Cir. 1985), for example, we held that a criminal defendant was not entitled to have evidence against him excluded simply because it was gathered pursuant to an MLAT request to Switzerland that did not comply with the procedures contemplated by the United States-Switzerland MLAT, which expressly disclaimed the creation of private rights. Id. at 1029-31; see also Georges, 834 F.3d at 97-98 (holding that treaty created no private right to pierce United Nations’ immunity where United Nations committed “material breach” of treaty); In re United Kingdom, 685 F.3d 1, 13-15 (1st Cir. 2012) (holding that United States-United Kingdom MLAT did not create private right for targets оf MLAT requests to move to quash subpoenas on grounds that requests did not comply with procedures outlined in treaty).
Here, Nigeria makes a different kind of argument: that VR lacked standing even to point to the United States-Nigeria MLAT as a factor that might be relevant to the district court‘s discretionary evaluation of the third Intel factor. It is true that Article I, ¶ 4 of the United States-Nigeria MLAT expressly disclaims the creation of rights in “any private party to obtain, suppress, or exclude any evidence, or to impede the execution of a request.”
Nigeria‘s standing argument, however, misapprehends the rule against private invocation of treaty rights. In raising the MLAT issue, VR was neither arguing that the MLAT conferred any rights on it nor seeking to assert such rights. Rather, it was appealing to the district court‘s discretion to deny discovery on grounds that Nigeria was attempting to “circumvent” proof-gathering restrictions or policies of the United States or Nigeria, a factor that
2. As a matter of law, Nigeria‘s request does not “circumvent” the MLAT.
Nigeria next argues that in holding that its application concealed an attempt to “circumvent” the United States-Nigeria MLAT, the district court committed a legal error and effectively erected an impermissible “extra-statutory barrier[]” to discovery. Gianoli Aldunate, 3 F.3d at 59. We agree.
As an initial matter, we are not persuaded by VR‘s argument that what the MLAT requires by its terms is not dispositive of this appeal because the district court was exercising its discretion rather than purporting to definitively interpret the treaty. To be sure, the district court acknowledged that “there is no principle of law compelling a foreign nation seeking evidence in this country for use in a criminal case to proceed first via an MLAT,” and it buttressed its analysis with policy reasons for preferring MLAT requests to
To date, neither the Supreme Court nor any Court of Appeals has considered whether a foreign sovereign that has an MLAT with the United States “circumvents” that MLAT by filing a
guidance in Intel and the meaning of the United States-Nigeria MLAT.
We begin with the word “circumvent,” the focus of the third Intel factor. Something that is “circumvented” must be an obstacle that one ordinarily would expect to encounter. See Circumvent, Oxford English Dictionary (2021) (“To get the better of by craft or fraud; to overreach, outwit, cheat, ‘get round‘, ‘take in‘. Also, to evade or find a way around (a difficulty, obstacle, etc.).“); Circumvent, Black‘s Law Dictionary (11th ed. 2019) (“To avoid (a restrictive problem, rule, etc.), esp. by clever and sometimes dishonest means . . . To avoid (an obstacle, etc.) by changing route.“). If there are two equally valid means to the same end and neither is meant to restrict use of the other, the choice of one over the other is not “circumvention.” For example, if two trains run from Lagos to Abuja but one makes fewer stops along the way and therefore completes the journey in less time, a passenger who chooses the faster express train has not “circumvented” the slower local.
In the context of
That provision alone should end the matter. Section 1782 is, of course, a law of the United States, one of the Contracting Parties, and it was in place at the time the treaty was signed and entered into force. The text of the MLAT makes plain that it does not operate as a restriction on evidence-gathering by means of such an existing law.2 The preamble to the treaty further supports that construction: It explains that the treaty‘s purposes are “to improve the effectiveness of the law enforcement authorities of both countries in the investigation, prosecution, and prevention of crime through cooperation and mutual legal assistance in criminal matters” and “to enhance assistance in the fight against crime.” (Emphasis added.) A treaty could hardly be said to “improve” or “enhance” the capabilities of law enforcement authorities if it deprived them of tools previously at their disposal.3
To be sure, parts of the United States-Nigeria MLAT do impose limits on the assistance that the Department of Justice or Nigerian Attorney General will provide in response to an MLAT request. Article III, ¶ 1, for instance, authorizes the relevant authorities to deny requests that are noncompliant with the provisions of the treaty, relate to political offenses, relate to conduct that is only criminal under military law, or would violate the Requested State‘s constitution or endanger its essential national interests. In addition, Article VIII imposes restrictions on the use of assistance obtained through MLAT requests. But reading those limiting provisions together with Article XIX‘s rule of construction, it is clear that they are intended only as internal limits applicable to MLAT requests, not as restrictions on proof-gathering means external to the treaty.
Reading the treaty‘s procedures and substantive limitations as purely internal not only comports with the clear commands
For similar reasons, we are unpersuaded by VR‘s policy argument that opening the
Nor do the policy reasons that the district court identified justify an insistence on first resort to the MLAT process. While district courts have broad discretion to grant or deny
The district court may well be correct that the MLAT process
promotes comity and consistent outcomes . . ., adds protection for the domestic entities from whom discovery is
sought by foreign prosecutors and criminal investigators, and assures that the U.S. government‘s expertise and analytic rigor is applied to the application, including to assure that the discovery is not sought for ulterior (non-prosecutive) ends.
Fed. Republic of Nigeria, 499 F. Supp. 3d at 15. It may also be that foreign sovereigns and prosecutors - both those with an MLAT and those without - often send their evidence-gathering requests to the Department of Justice instead of making applications under
In sum, the United States-Nigeria MLAT does not, as a matter of law, embody a “proof-gathering restriction[] or [] polic[y]” that prefers its own procedures above other means of gathering evidence for use in criminal matters. Intel, 542 U.S. at 265. Nigeria does not “circumvent” any relevant restriction or policy within the meaning of Intel by filing an application under
3. It would not be “improper” for Nigeria to use the
Nigeria further argues that the district court erred in considering its potential use of evidence gathered pursuant to its
In evaluating the statutory requirements of
From the record before us, it appears that the English Proceeding would independently qualify as a “proceeding in a foreign or international tribunal” within the meaning of the statute. In concluding that it did not, the district court relied principally upon Euromepa, S.A. v. R. Esmerian, Inc., 154 F.3d 24 (2d Cir. 1998). In that case, the applicant initially sought discovery for use in a civil fraud action in France. Euromepa, 154 F.3d at 25. While the application was pending, however, the French trial court entered judgment for the plaintiff (the respondent in this country), and France‘s court of last resort for the matter affirmed that judgment. Id. at 25-26. The defendant (the applicant in this country) then declared bankruptcy in France. Id. at 26. The respondent moved in the district court to dismiss the
Contrary to the district court‘s reasoning in the present case, the English Proceeding is not “of a similar post-judgment character” to the French bankruptcy proceeding in Euromepa. Fed. Republic of Nigeria, 499 F. Supp. 3d at 10. True, there is something resembling an “already extant judgment” here - the Arbitration Award - and Nigeria is attempting to keep that Award from being “enforced” in the English Proceeding. Euromepa, 154 F.3d at 28. But the district court misread Euromepa to the extent that it understood that case to hold that the mere completion of an initial adjudication of a dispute categorically disqualifies a foreign proceeding under
Here, in contrast, Nigeria is expressly asking the English Court to probe the merits of, and set aside, the Arbitration Award, and VR has nеver disputed that the English Court has the authority to do so. The English Court, unquestionably a foreign tribunal, has scheduled a trial, a quintessential adjudicative proceeding, to determine the merits of a contention that an arbitral award should be vacated as fraudulently obtained, a recognized judicial function in this country as well as in the United Kingdom. Cf. India, 385 F.2d at 1020-22 (explaining that “an Indian Income-Tax Office is not a ‘tribunal‘” and its tax-collection efforts are not adjudicative proceedings). We have no doubt, therefore, that if Nigeria had sought to obtain discovery under
Of course, Nigeria did not state in the present application that it sought discovery for use in the English Proceeding - it stated that it sought discovery for use in the Nigerian Proceedings. But we have held that “Section 1782 does not prevent an applicant who lawfully has obtained discovery under the statute with respect to one foreign proceeding from using the discovery elsewhere.” Accent Delight, 869 F.3d at 135. While that holding concerned the statutory “for use” requirement, it necessarily follows that the possibility of use in a different but independently qualifying proceeding does not constitute an attempt to “circumvent” a proof-gathering restriction or policy of the United States or a foreign state. The district court thus erred
For the same reason, the district court‘s concern about Nigeria‘s representations to Judge Schofield was misplaced. Nigeria asserts that the district court‘s characterization of those representations as “dishonest” was clearly erroneous. We need not decide that question, because the district court considered Nigeria‘s putative dishonesty to Judge Schofield relevant only insofar as it evinced an intent “to avoid [Department of Justice] scrutiny into whether Nigeria is seeking discovery from the VR entities for the improper purpose of attempting to undermine the arbitral Award against it,” Fed. Republic of Nigeria, 499 F. Supp. 3d at 16, which, as just discussed, would not be an improper purpose. Regardless of whether Nigeria “misled” Judge Schofield regarding its intentions, the district court‘s reasoning as to why any putative dishonesty would be relevant to its analysis of the third Intel factor relied on legal error, strengthening our conclusion that the district court abused its discretion in evaluating the third Intel factor.6
B. The Fourth Intel Factor
Finally, Nigeria argues that the district court abused its discretion in dеtermining that the fourth Intel factor - whether the discovery request is “unduly intrusive or burdensome,” Intel, 542 U.S. at 265 - weighed against the application. We agree to the extent that the district court‘s evaluation of the fourth factor relied on the possibility that Nigeria would use the materials it obtained in the English Proceeding.
The district court concluded that the fourth factor weighed against the application for two reasons: (1) because “various document requests in the subpoena appear to sweep well beyond [the] subject” of “bribery in connection with procuring the [Arbitration] Award;” and (2) because “the breadth of the requests for materials relating to the arbitration and its enforcement may reflect an intention to use U.S. discovery for purposes outside the contemplation of § 1782.” Fed. Republic of Nigeria, 499 F. Supp. 3d at 17. We detect no reversible error in the first reason. Although Nigeria‘s discovery requests seem largely consistent with a purpose of criminally investigating the procurement of the Arbitration Award, the ultimate question of burdensomeness is within the district court‘s discretion to decide, and not ours. The second reason is somewhat opaque, but appears to refer to the possibility that Nigeria would use the materials it obtained pursuant to this application in the
We therefore conclude that the district court erred in evaluating the fourth Intel factor insofar as its reasoning depended on its view that the use of evidence in the English Proceeding was a “purpose[] outside the contemplation of § 1782.” Id.
III. The Appropriate Remedy
Having concluded that the district court relied on erroneous legal premises in evaluating the third Intel factor, and to some extent in evaluating the fourth, we turn to the appropriate appellate remedy. The third Intel factor clearly was the driving force behind the district court‘s decision to vacate its earlier ex parte grant of the application. See id. at 14 (“[T]he Court agrees both that [the third] factor merits the greatest weight in the discretionary analysis here, and that it strongly counsels against authorizing U.S. discovery under § 1782.“). Moreover, we see no alternative grounds upon which we could affirm the district court‘s judgment.7
At the same time, the district court‘s evaluation of the fourth Intel factor - which was, at most, only erroneous in part - counsels against outright reversal. As explained above, the district court evidently had some concern about the sheer breadth оf Nigeria‘s discovery requests and their proportionality to the allegations of fraud and bribery under investigation. It is conceivable that, if the district court conducted a fuller analysis of the fourth factor, it would still conclude that Nigeria‘s discovery requests were sufficiently burdensome to warrant a denial, or more likely a limitation, of the application. See Fed. Republic of Nigeria, 499 F. Supp. 3d at 17 (“At a minimum, [] were the § 1782 subpoenas otherwise to be upheld, they would need to be carefully pruned.“). We therefore conclude that it is not appropriate for us to reverse the district court‘s judgment outright and order the discovery that Nigeria has sought. Cf. Intel, 542 U.S. at 266 (“Several facets of this case remain largely unexplored . . . . On the merits, this case bears closer scrutiny than it has received to date . . . . [W]e leave it to the courts below to ensure an airing adequate to determine what, if any, assistance is appropriate.“).
Rather, we believe that the appropriate remedy for the district court‘s abuse of
CONCLUSION
For the reasons stated above, the judgment of the district court is VACATED and the case is REMANDED for further consideration of Nigeria‘s application consistent with this Opinion.
Notes
This request, from the Attorney General of Akwa Ibom State to the U.S. District Court for the Eastern District of Virginia, would circumvent the procedure that the Government of the United States and the Government of the Federal Republic of Nigeria have established to facilitate precisely this type of request. Thus, the facts of this case point persuasively to [sic] conclusion that applicant‘s request should properly be handled by the United States executive branch through diplomatic means. As such, it is appropriate for applicant to direct his request to the relevant U.S. authorities designated under the Treaty.