Under 28 U.S.C. §1782, the U.S. offers a very powerful litigation tool to parties to non-U.S. court proceedings allowing them to obtain bank records, documents and witness testimony from sources within the U.S., even if such evidence is unobtainable through the home forum’s own discovery procedures. The types of evidence that can be obtained include International Wire Transaction Records (U.S. Dollar wires typically transit through the U.S.), emails, correspondence, phone and travel records, accounting, banking, credit card and corporate documents such as shareholder and board meeting records.
In Hornbeam Corp. v. Halliwell Assets, Inc., 790 F. App’x 199 (11th Cir. 2020), the Eleventh Circuit vacated the district court’s order granting §1782 discovery for use in a contemplated, but unfiled action in the British Virgin Islands. The Court’s rationale was that because the §1782 applicant, Hornbeam Corp., had changed its litigation strategy and now would not be instituting legal proceedings in the British Virgin Islands, the discovery was no longer “for use in a foreign proceeding,” a core statutory requirement under §1782.
On remand, on March 17, 2020, Magistrate Judge Louis ordered Hornbeam to destroy all documents collected and retained as part of the §1782 proceeding by March 31, 2020; denied Hornbeam’s motion to extend the deadline for destruction of the documents collected; and denied Hornbeam’s motion to amend the protective order to use the collected discovery in domestic, Delaware Chancery Court proceedings. The court noted that the parties had relied upon the agreed protective order and that Glock v. Glock, Inc., 797 F.3d 1002, 1009 (11th Cir. 2015) “does not stand for the proposition that the court should amend an agreed upon stipulated protective order to defeat the confidentiality and use limitation negotiated and relied upon by the parties.” See In re Hornbeam Corp., 2020 U.S. Dist. LEXIS 51208, *12 (S.D. Fla. Mar. 17, 2020).
Appellants Halliwel, Inc. and Panikos Symeou were represented by Marks & Sokolov, LLC.
Thomas C. Sullivan is a senior attorney in the Philadelphia office of Marks & Sokolov LLC. Mr. Sullivan represents Western, Russian and Ukrainian clients in complex commercial disputes including civil RICO, securities fraud, Foreign Corrupt Practices Act, Convention on the International Sale of Goods and ICC Arbitration matters. He has litigated numerous Section 1782 discovery matters throughout the United States and written extensively on the topic.
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