United States District Court, D. Rhode Island
In re application of CMPC CELULOSE RIOGRANDENSE LTDA., For an Pursuant to 28 U.S.C. § 1782 to Take Discovery of Factory Mutual Insurance Company.
MEMORANDUM AND ORDER
WILLIAM E. SMITH, CHIEF JUDGE
the Court is Factory Mutual Insurance Company (“FM
Global”) and Mapfre Seguros Geraus S.A.'s
(“Mapfre”) Motion to Quash (ECF No. 5) a subpoena
issued pursuant to this Court's previous Order granting
CMPC Celulose Riograndense LTDA's (“CMPC”)
request for discovery pursuant to 28 U.S.C. § 1782.
See 3/18/2019 Text Order. For the following reasons,
the Motion to Quash is DENIED.
a Brazilian company and producer of various paper products.
See Mem. of Law in Supp. of Mot. to Quash
(“Mot. to Quash”), ECF No. 5-1. CMPC is directly
insured by Mapfre, another Brazilian company. Id. at
2. FM Global is Mapfre's Rhode Island-based reinsurer.
February 2017 a recovery boiler at CMPC's industrial
plant presented a leak. Id. CMPC filed an insurance
claim with Mapfre and FM Global, but coverage was denied in
October 2017. Decl. of Tomaz de Oliveria Tavares de Lyra
¶ 3-4 (“Lyra Decl.”), ECF No. 5-3. In
anticipation of contesting the denial in a soon to be filed
arbitration against Mapfre, CMPC asked the state court of
São Paulo, Brazil for an order to compel the
disclosure of documents exchanged between Mapfre, FM Global,
and insurance adjuster Addva-lora Brasil Reguladora de
Sinistros Ltda. (“Addvalora”). Id.
¶ 4. The state court of Brazil granted CMPC's
request for technical reports but denied CMPC access to
“private data resulting from relationships between
third parties.” Id. ¶ 10.
March 11, 2019 CMPC filed a civil action against Addvalora in
a Brazilian trial court. Mot. to Quash 5; Lyra Decl., ECF No.
5-3. Two days later, CMPC filed an ex parte
application with this Court pursuant to 28 U.S.C. § 1782
to obtain documents exchanged between FM Global and Mapfre.
(ECF No. 1). This Court granted the application and CMPC
served a subpoena on FM Global the next day. Mot. to Quash 5.
FM Global responded by moving to quash. Id.
motion, FM Global relies primarily on Republic of
Kazakhstan v. Biedermann International, 168 F.3d 880
(5th Cir. 1999) and NBC v. Bear Stearns & Co.,
165 F.3d 184, 190 (2d Cir. 1999) to argue that Congress never
contemplated whether international arbitral tribunals were
susceptible to § 1782. Mot. to Quash 7. FM Global
alleges CMPC knew the arbitral tribunal serving as the forum
for their dispute would not satisfy 28 U.S.C. § 1782,
and that with that knowledge, CMPC initiated a sham lawsuit
against Addvalora to create a foreign tribunal suitable for
obtaining discovery under the statute. Id. at 2. FM
Global further alleges CMPC's application is an improper
attempt to bypass the decision rendered by the Brazilian
State Court and that their requests are unduly burdensome.
is authorized to consider a discovery request pursuant to 28
U.S.C. § 1782 when: (1) the person from whom discovery
is sought “resides or is found” in the district
where the application is filed; (2) the discovery sought is
“for use in a proceeding” before a “foreign
or international tribunal;” (3)the application is made
by an “interested person;” and (4) the discovery
sought is not protected by any “legally applicable
privilege.” 28 U.S.C. § 1782(a); see Intel
Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 246
application meets the statutory requirements under §
1782, a district court must consider whether the following
discretionary factors weigh in favor of the request: (1)
whether the person from whom discovery is sought is a
participant in the foreign proceeding; (2) the receptivity of
the foreign tribunal to U.S. judicial assistance; (3) whether
the § 1782 application is an attempt to
“circumvent foreign proof-gathering
restrictions”; and (4) whether the documents sought are
“unduly intrusive or burdensome.” Intel,
542 U.S. at 264. While each discretionary factor
“bear[s] consideration” and is balanced against
the request, no factor is dispositive. Id.
“Foreign International Tribunal”
to the facts here, the Court concluded that the Arbitration
and Mediation Center of Brazil-Canada Chamber
(“CAM-CCBC”) where CMPC is involved in
arbitration proceedings against Mapfre is a “foreign or
international tribunal” for purposes of 28 U.S.C.
§ 1782. FM Global and Mapfre rely on the Fifth
Circuit's holding in Republic of Kazakhstan that
private international arbitrations do not qualify as
“foreign or international tribunals.” 168 F.3d at
882. Congress directly contradicted this holding by
broadening the language of the statute in a 1964 amendment.
The Supreme Court in Intel provides a lengthy
discussion of the statute's legislative history. 542 U.S.
at 258. The Court highlighted that in the 1964 amendment,
Congress changed the statutory language from “any
judicial proceeding” to “any foreign or
international tribunal.” Id. The term
“tribunal” thus broadened the statute to include
“administrative and quasi-judicial proceedings.”
Id. The Court also quoted a principal drafter of the
amendment who defined “tribunal” as including
“investigating magistrates, administrative and arbitral
bodies.” Id.; see also In re Babcock
Borsig AG, 583 F.Supp.2d 233, 239 (D. Mass. 2008)
(“Although this quotation in Intel is as a
formal matter dicta, its considered inclusion offers
meaningful insight regarding the Supreme Court's view of
arbitral bodies in the context of § 1782(a).”).
Intel, numerous courts in this circuit have agreed
that Congress added the term “tribunal” to
broaden the scope of the statute and that the term “is
commonly used and understood to describe arbitral
bodies.” Babcock, 583 F.Supp.2d at 238; In
re Republic of Ecuador v. Douglas, 153 F.Supp.3d 484,
487 (D. Mass. 2015); see also Chevron Corp. v.
Shefftz, 754 F.Supp.2d 254, 260 (D. Mass.
2010)(“[I]nternational arbitral bodies operating under
UNCITRAL rules constitute 'foreign tribunals' for
purposes of § 1782.”). Even if the CAM-CCBC was
not a “foreign or international tribunal, ” the
Addvalora litigation alone would provide a sufficient basis
to grant CMPC's § 1782 petition. Accord
Gov't of Ghana v. ProEnergy Servs., LLC, No.
11-9002-MC-SOW, 2011 WL 2652755, at *3 (W.D. Mo. June 6,
2011) (concluding that even if an arbitral tribunal were not
a proceeding under Section 1782, the existence of litigation
alone would provide a sufficient basis to grant the
petitioner's Section 1782 petition). Indeed, the United
States District Court for the Western District of Louisiana
held in In re CMPC Celulose Riograndense LTDA that
although the foreign arbitral in question here is not a
“foreign or international tribunal” according to
Fifth Circuit precedent, it does not “preclude the
application of § 1782 here” because the pending
civil litigation against Addvalora is sufficient under §
1782. Mem. & Order (“Mem. & Order”) at 7,
In re CMPC Celulose Riograndense LTDA v. Boiler ...