IN RE APPLICATION OF VENEQUIP, S.A., Petitioner-Appellant, v. CATERPILLAR INC., Respondent-Appellee.
No. 22-1463
United States Court of Appeals for the Seventh Circuit
Decided October 10, 2023
Argued September 29, 2022
Before SYKES, Chief Judge, and ROVNER and JACKSON-AKIWUMI, Circuit Judges.
SYKES, Chief Judge.
For many years, Venequip, S.A., a Venezuelan heavy-equipment supplier, sold and serviced products made by Caterpillar Inc., the Illinois-based manufacturer of industrial equipment and machinery. Venequip‘s dealership was governed by sales and service agreements with Caterpillar Sàrl (“CAT Sàrl“), a Swiss subsidiary of Caterpillar. In 2019 CAT Sàrl terminated the dealership, triggering international litigation. The contracts contain forum-selection and choice-of-law clauses that direct all disputes to Swiss courts for resolution under Swiss law. In October 2021 Venequip commenced court proceedings against CAT Sàrl in Geneva, Switzerland, alleging breach of contract.
In the months that followed, Venequip filed a flurry of applications in federal district courts across the United States seeking broad discovery under
In Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247 (2004), the Supreme Court explained that ”
Ruling on Venequip‘s application, the district judge addressed the Intel factors and added two more: (1) the parties’ contractual choice of forum and law; and (2) Caterpillar‘s agreement to provide discovery in the Swiss court. After weighing these considerations, the judge denied the application. Venequip argues on appeal that the judge misapplied the Intel factors. Caterpillar responds that subsequent developments in the Swiss court may have mooted this appeal and, alternatively, that the judge‘s decision was faithful to the Court‘s instructions in Intel. The appeal is not moot, and the judge appropriately weighed the Intel factors and other permissible considerations in denying Venequip‘s
I. Background
In 2004 Venequip became an authorized distributor of Caterpillar products in a territory primarily, though not exclusively, covering Venezuela. Venequip‘s dealership was governed by distribution and service agreements with Caterpillar subsidiaries—first Caterpillar Americas SARL and then CAT Sàrl, Caterpillar‘s Swiss subsidiary.
In 2019 CAT Sàrl terminated Venequip‘s dealership. The reasons are vigorously disputed. The details are not directly relevant here, but in brief: CAT Sàrl says that Venequip defaulted on its outstanding loan obligations; Venequip accuses CAT Sàrl of breach of contract. The disagreement has spawned litigation that spreads from Switzerland to district courts across the United States.
The contracts between Venequip and CAT Sàrl include forum-selection and choice-of-law provisions that require the parties to resolve disputes in Swiss courts under Swiss law. In October 2021 Venequip lodged its grievance about the termination in the Court of First Instance in Geneva, Switzerland.
Soon after initiating the Geneva proceedings, Venequip filed nine
The district judge denied the application. Addressing the factors identified in the Supreme Court‘s Intel decision, the judge first noted that Caterpillar was not a party to the Swiss litigation, which “slightly” favored granting the
The judge next addressed whether Venequip‘s request appeared to be an attempt
Finally, the judge considered the intrusiveness and burdens imposed by the discovery request. He described Venequip‘s application as “a series of typically broad and comprehensive discovery requests seeking ‘all documents or communications’ ‘regarding’ or ‘related to’ various aspects of the business dealings between Venequip and CAT [Sàrl] for the better part of two decades.” As the judge put it, this was not “a surgically measured request for particularized information.” The judge also assigned weight to Caterpillar‘s pledge to cooperate with discovery in the Swiss court, emphasizing that he anticipated good-faith compliance with that commitment.
On balance and considering all these factors, the judge denied Venequip‘s
Venequip appealed the judge‘s ruling. After briefing was completed, Venequip filed a motion asking us to take judicial notice of certain intervening developments in the Swiss proceedings. The Swiss Code of Civil Procedure requires litigants to attempt “conciliation” (i.e., mediation) before a plaintiff may file a “Statement of Claim“—the pleading that formally initiates adversarial proceedings. In the judicial-notice motion, Venequip reported that it had not filed a statement of claim by the deadline set by the Swiss court, explaining that it chose not to do so because it “lack[ed] important evidence on the extent of its damages.” Venequip also said that it had filed a “standalone Request for Evidence” from CAT Sàrl in the Swiss court seeking a subset of the records it had requested from Caterpillar in the
Caterpillar responded to the motion, agreeing that the two developments in the Swiss court—Venequip‘s failure to file a timely statement of claim and its later request for evidence from CAT Sàrl—are proper subjects for judicial notice. Caterpillar objected, however, to taking judicial notice of Venequip‘s asserted justification for missing the claim-filing deadline or its purported future litigation strategy. Those matters, the company argued, are not judicially noticeable facts because they cannot be “accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”
II. Discussion
A. Mootness
We begin, as we must, with Caterpillar‘s suggestion of mootness.
Mootness doctrine “addresses whether an intervening circumstance has deprived the plaintiff of a personal stake in the outcome of the lawsuit.” West Virginia v. EPA, 142 S. Ct. 2587, 2607 (2022) (quotation marks and alterations omitted). “If an intervening circumstance deprives the plaintiff of a ‘personal stake in the outcome of the lawsuit,’ … the action can no longer proceed and must be dismissed as moot.” Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 72 (2013) (quoting Lewis, 494 U.S. at 477-78). In other words, a suit becomes moot “when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.” Chafin, 568 U.S. at 172 (quoting Already, LLC v. Nike, Inc., 568 U.S. 85, 91 (2013)).
Caterpillar contends that Venequip‘s failure to file a timely statement of claim in the Swiss court means that it has abandoned the underlying foreign proceedings and no longer has a live stake in this
We accept the parties’ agreement that the two developments in the Swiss court—Venequip‘s failure to file a timely statement of claim and its subsequent request for evidence from CAT Sàrl—are judicially noticeable facts. “Once formal briefing in an appeal has concluded, [the] parties are not prohibited from informing the court of important developments in related court proceedings (about which we may take judicial notice), so long as those developments have a direct relation to the matters at issue.” Loughran v. Wells Fargo Bank, N.A., 2 F.4th 640, 652 (7th Cir. 2021) (quotation marks omitted); see also Fosnight v. Jones, 41 F.4th 916, 922 (7th Cir. 2022) (explaining that records of court proceedings are proper subjects for judicial notice under
These intervening developments, however, do not moot this appeal. Caterpillar‘s suggestion of mootness is keyed to the threshold requirements for a
Caterpillar focuses on the second condition but overlooks that the Supreme
Venequip‘s Swiss discovery request asserts that the evidence it seeks from CAT Sàrl “is part of a dispute … regarding distribution contracts for the sale and service of Caterpillar machinery and parts” and is necessary to assess “its chances of success” in the “substantive action it intends to bring against [CAT Sàrl].” This confirms that proceedings in the foreign tribunal are within reasonable contemplation notwithstanding the lapse in the proceedings Venequip initially commenced in October 2021.
So the appeal is not moot. Rather, it continues to present a live controversy in which Venequip and Caterpillar have a personal stake.
B. Merits
With our jurisdiction secure, we proceed to the merits.
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 threshold statutory requirements are satisfied here. Everyone agrees that Caterpillar is “found” in the Northern District of Illinois and Venequip is an “interested person” entitled to pursue discovery assistance under
The parties’ dispute centers on a disagreement over the district court‘s application of the Supreme Court‘s Intel decision. Intel resolved several debates about the meaning of
More specifically, the Court identified four factors that may be relevant to a court‘s evaluation of a
First, when the person from whom discovery is sought is a participant in the foreign proceeding … , the need for
§ 1782(a) aid generally is not as apparent as it ordinarily is when evidence is sought from a nonparticipant in the matter arising abroad. …Second, … a court presented with a
§ 1782(a) request may take into account 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. … [Third,] a district court could consider whether the§ 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign coun-try or the United States. … [And fourth,] unduly intrusive or burdensome requests may be rejected or trimmed.
Importantly, although the Intel factors inform and guide the court‘s exercise of its statutory discretion, they are neither exclusive nor mandatory. Id. In other words, the district court enjoys broad discretion when deciding whether, and to what extent, to provide discovery assistance under
With the legal framework now in place, we turn to the judge‘s ruling on Venequip‘s
The judge‘s analysis of the first Intel factor was quite nuanced. He recognized that Caterpillar is not a participant in the foreign proceeding, which tilted slightly in favor of Venequip. But he also noted that the parent–subsidiary relationship between Caterpillar and CAT Sàrl, coupled with Caterpillar‘s commitment to cooperate with the discovery process in the Swiss court, diminished the weight of this factor.
The second and fourth factors—the “nature of the foreign tribunal” and the intrusiveness of Venequip‘s discovery requests—together seemed to tip the scales slightly in Caterpillar‘s favor. After reviewing the Swiss authorities cited by the parties, the judge accepted Venequip‘s claim that the Swiss courts would not consider evidence collected under U.S. discovery rules in a
The judge‘s evaluation of the third factor—the circumvention of foreign proof-gathering restrictions—proved to be the most important to his decision. At this step in the framework, the judge considered the parties’ contractual choice of forum and law. He reasoned that “Venequip finds itself unable to obtain robust early discovery not because it lost a race to the courthouse door … but because it agreed ex ante to a particular forum and the set of rules that comes with that choice.” The judge acknowledged Intel‘s rejection of a “foreign discoverability” rule. But he nonetheless thought it important that the parties—sophisticated international companies—had agreed to resolve their disputes in Swiss courts under Swiss law, with its more circumscribed discovery procedures. On this reasoning, the judge concluded that “[t]he third factor … strongly favors Caterpillar.”
This analysis reflects a faithful application of the Intel factors and a reasonable exercise of the judge‘s wide discretion under
Venequip criticizes the judge‘s consideration of the forum-selection clause, arguing that he essentially imposed a “foreign discoverability” rule contrary to Intel. This argument both misconstrues the judge‘s analysis and misses an important point in our circuit caselaw. Taking the latter observation first, our decision in Kulzer—issued long after Intel—specifically endorsed the consideration of a forum-selection clause as a relevant and potentially important factor in the
Moreover, the judge did not give dispositive weight to the forum-selection clause or “resurrect” the “foreign discoverability” rule, as Venequip claims. Rather, he pointed to the differences between Swiss and American procedural law, the sophistication of the parties, and our advice in Kulzer about the potential import of forum-selection clauses—all of which are relevant factors in assessing whether Venequip‘s
Venequip next argues that Caterpillar failed to produce “authoritative proof” that Swiss courts reject U.S. discovery assistance under
Finally, Venequip argues that the judge disregarded a different part of our decision in Kulzer in which we determined that the district court in that case should not have wholly rejected the
This case is not analogous. The judge‘s decision here rests on case-specific inputs carrying different weights and degrees of importance. Of these, the judge found it particularly noteworthy that the parties had contractually selected Swiss courts and Swiss law, that Venequip had cast a very wide net in its
Before closing, we have one final observation. The judge‘s careful wait-and-see approach is especially appropriate as an expression of respect for the prerogatives of the Swiss court—the forum freely and intelligently chosen by the parties—and the deference owed to its views about the scope of discovery needed to resolve this dispute. “After all, the animating purpose of
AFFIRMED.
SYKES
Chief Judge