Date: May 15, 2020
Author: Thomas Sullivan, Esq
The U.S. offers a very powerful litigation tool for participants in Russian court proceedings to obtain bank records, documents and witness testimony from sources within the U.S., even if such evidence is unobtainable through Russian court procedures. This procedure, authorized under 28 U.S.C. §1782, can be a relatively quick and efficient method for obtaining crucial information to win a case. There is no need to obtain Letters Rogatory or pursue discovery through the Hague Evidence Convention.
What Information Can Be Obtained?
Documentary and testimonial evidence including:
- International Wire Transaction Records (U.S. Dollar wires typically transit the U.S.)
- Emails, Correspondence, Phone and Travel Records
- Banking, Credit Card and Business Transaction Records
- Corporate Documents including Shareholder and Board Meeting Records
- Accounting, Employment and Intellectual Property Records
- Property and Real Estate Transaction Records
- Attorney Records (that are not subject to attorney-client privilege)
- Medical and Educational Records
U.S. Courts Frequently Allow Russian Entities To Take Discovery For Use In Russia
Numerous Russian entities obtained discovery in the U.S., including for use in Russian commercial disputes, criminal prosecutions and bankruptcy proceedings. For example:
- We obtained an order for a Russian diamond company to take discovery from New York banks of wire-transfer and account information regarding various international shell companies alleged to have siphoned funds from an African diamond mining company. In re ALROSA Request for Ex Parte Discovery Pursuant to 28 U.S.C. §1782, 19-Misc.-00184 (S.D.N.Y. May 12, 2019).
- A Russian bank was authorized taking discovery in San Francisco for corporate documents, loan documents and deposition testimony, for use in various Russian court proceedings. In re Joint Stock Co. Raiffeinsenbank, 2016 U.S. Dist. LEXIS 152090 (N.D. Cal. Nov. 2, 2016).
- We obtained an order requiring Renova, Inc., a company controlled by Victor Vekselberg, to produce documents and present a witness for deposition in New York, for use in Russian court proceedings. In re Kolomoisky, 2006 U.S. Dist. LEXIS 58591 (S.D.N.Y. Aug. 18, 2006).
- The CEO of The Bank of New York was ordered to produce documents and appear for deposition for use in a fraud proceeding before the Moscow City Arbitrazh Court. In re Imanagement Services, Ltd., 2006 U.S. Dist. LEXIS 8876 (D.N.J. Feb. 28, 2006).
The Process For Obtaining Discovery In The U.S. For Use In Russia Is Not Complicated
The United States Supreme Court has stated that the “twin aims” of 28 U.S.C. §1782 discovery is “providing efficient assistance to participants in international litigation and encouraging foreign countries by example to provide similar assistance to our courts.” A Russian litigant can readily utilize this law and the procedures for obtaining U.S. discovery are not complicated.
First, the Russian litigant should determine what information located in the U.S. it wants to obtain – accounting and banking records, emails, corporate resolutions, etc. Then it should be determined what person or entity possesses the and where in the U.S. they are located. This is important because this determines in which U.S. federal judicial district the discovery should be brought.
Second, an “Application” is prepared and filed by U.S. counsel with a federal court typically requesting authorization to issue a subpoena, or subpoenas, for the production of documents or a witness to appear for deposition. In order for the court to grant the Application, certain statutory considerations must be satisfied. This may be accomplished by setting forth in the Application that (1) the person from whom discovery is sought resides or can found within the district of the federal court – for example, if wire transfer records are being sought, the proper forum for filing the Application is the United States District Court for the Southern District of New York where money center banks are located through which international wires transit; (2) the information is “for use in a proceeding in a foreign or international tribunal”; and (3) explaining how the discovery sought can be utilized to some advantage or serve some use in the Russian proceeding – there is no requirement for the evidence to be admissible or discoverable in the Russian proceeding. The court will consider additional discretionary factors, but these can usually can satisfied with a well crafted Application addressing whether the discovery target is a party to the Russian proceedings or subject to the jurisdiction of the Russian court, the nature of the Russian proceedings and/or addressing any relevant Russian and U.S. public policy interests.
Third, after the Application is granted, subpoenas are served upon the discovery targets for the production of documents or appearance of witnesses. Typically, notice is given to the opposing party in the Russian litigation. In some cases, the discovery targets will simply comply with the subpoena and produce documents or appear for deposition. In other cases, the discovery target may file a motion with the court opposing or seeking to narrow the scope of discovery and/or the opposing party in the Russian litigation may “intervene” and seek to vacate or otherwise oppose the order granting discovery, including seeking a protective order limiting use of the discovery to just the Russian litigation. The discovery Applicant will be heard in response to any objections and the American court will rule, more often than not, in favor of permitting discovery, in accordance with the “twin aims” of 28 U.S.C. §1782, and require the discovery targets to produce documents or witnesses.
If you have any questions or would like more information on this topic, we invite you to contact us.
Thomas Sullivan’s practice includes representation of Western and Russian clients in complex international commercial disputes and discovery matters. He has successfully brought and defended numerous Section 1782 matters throughout the United States.
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