Judicial Assistance

• Author: International Law Group

Michael Schmitz and 27 other German investors (hereinafter petitioners) filed a lawsuit in Germany against the German telecom company "Deutsche Telekom AG" (hereinafter DT) which the government owns in part. Petitioners claimed that the company had misled investors by overstating the value of its real estate assets. Similarly, American investors brought a parallel action in a New York federal court.

In January 2003, petitioners sought the production of evidence under 28 U.S.C. Section 1782 from the U.S. law firms involved in the U.S. action, particularly the documents that DT had already produced and handed over to those firms.

Section 1782(a) provides for judicial aid in obtaining evidence for foreign proceedings. It provides that "the district court ... may order [a person] to give his testimony or statements or to produce a document or other thing for use in a proceeding in a foreign or international tribunal ..." The district court first decided that petitioners met the statutory requirements of Section 1782. Nevertheless, it concluded that the request would run counter to the twin aims of the statute. These are [1] to provide efficient evidentiary assistance to international tribunals and litigants and [2] to encourage foreign countries to give similar aid to American courts.

Here, the German government opposed judicial assistance by the American court. The German Ministry of Justice and the Prosecutor in Bonn who were looking into DT's affairs asked the district court to deny production. They asserted that it would jeopardize the ongoing German criminal investigation and impugn German sovereignty.

Furthermore, the Federal Ministry of Justice submitted that DT had made the documents available in the American action on condition that they be used exclusively for that action. Exercising its statutory discretion, the court denied the application for evidence and petitioners filed this appeal. The U.S. Court of Appeals for the Second Circuit affirms.

The Court first lays down the standard for granting such discovery requests. "We have held that a district court is authorized to grant a Section 1782 request where '(1) ... the person from whom discovery is sought reside[s] (or [is] found) in the district of the...