Judicial Assistance

• Author: International Law Group

Kestrel Coal, an Australian company, brought an action in the Supreme Court of Queensland against Longwall Roof Supports, a British company, for allegedly defective roof supports under a 1991 contract. Among the co-defendants is Joy Global, a Delaware company with its principal place of business in Milwaukee, which indirectly controls all of Longwall's stock.

Kestrel sought to discover certain documents from Joy Global's Australian and British subsidiaries. The Australian court considered the documents unnecessary. Kestrel then brought an action in district court in Wisconsin under 28 U.S.C. Section 1782, seeking production of those documents abroad for use in the Australian proceeding.

The district court in fact ordered the production of the documents.

This appeal ensued The U.S. Court of Appeals for the Seventh Circuit reverses. Section 1782(a) provides that "[t]he district court of the district in which a person resides or is found may order him to give testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal ... To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or thing produced, in accordance with the Federal Rules of Civil Procedure." Here, Joy Global resides in Wisconsin and the intended use is for a pending foreign proceeding. However, to obtain documents under Rule 26 and other discovery rules, one must seek them from the person or company who actually possesses them, and not from an investor. Furthermore, even though Section 1782(a) does not specify that the evidence must be present in the U.S., there is an implied requirement that such discovery not interfere with court processes in other countries.

"Joy Global leads with the argument that courts of this nation should not order disclosure of information that the court handling the underlying suit has held not discoverable. Five Circuits have adopted that rule. Two have held otherwise. They observe that, if the foreign court denies the request because it believes that disclosure of evidence in the United States should be governed by U.S. law, it would be perverse for the U.S. court to take the foreign decision as blocking use of Section 1782. The Supreme Court may decide this Term which view is correct, and whether foreign decisions that leave discovery to U.S. tribunals should be distinguished from those that ... deny discovery because the...