964 F.2d 97 (2nd Cir. 1992), 665, Malev Hungarian Airlines, Application of

Docket Nº:665, Docket 91-7949.
Citation:964 F.2d 97
Case Date:May 05, 1992
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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964 F.2d 97 (2nd Cir. 1992)

In the Matter of the Application of MALEV HUNGARIAN

AIRLINES, Plaintiff.





No. 665, Docket 91-7949.

United States Court of Appeals, Second Circuit

May 5, 1992

Argued Nov. 25, 1991.

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Robert C. Bata, New York City (Jay P. Mayesh, Stroock & Stroock & Lavan, New York City, Neil P. Coughlan, Reid & Reige, Hartford, Conn., Barry H. Garfinkel, Marco E. Schnabl, Skadden, Arps, Slate, Meagher & Flom, New York City, of counsel), for plaintiff-appellant.

Scott P. Moser, Hartford, Conn. (Day, Berry & Howard, Hartford, Conn., Richard F. Ziegler, Cleary, Gottlieb, Steen & Hamilton, New York City, of counsel), for defendant-appellee.

Before OAKES, Chief Judge, FEINBERG and WALKER, Circuit Judges.

OAKES, Chief Judge:

Malev Hungarian Airlines ("Malev") appeals from an order entered in the United States District Court for the District of Connecticut on September 30, 1991, T. Emmet Clarie, Judge, denying Malev's request to take discovery from United Technologies International, Inc., Pratt & Whitney Commercial Engine Business ("Pratt & Whitney"), pursuant to 28 U.S.C. § 1782 (1988), for use in proceedings before a Hungarian court. Because the district court relied on improper factors in denying Malev's discovery request, we reverse and remand.


On July 23, 1991, Pratt & Whitney, an airplane engine manufacturer, filed a complaint in the Municipal Court of Budapest, Hungary against Malev, the Hungarian national airline. In the complaint, Pratt & Whitney seeks specific performance of an alleged multi-million dollar December 1990 agreement by Malev to purchase a number of PW4000 jet engines from Pratt & Whitney in connection with the modernization of Malev's fleet of aircraft.

On September 16, 1991, four days after Malev filed its answer in the Hungarian court, Malev initiated this action in the United States District Court for the District of Connecticut. Malev requested that the district court enter an order pursuant to 28 U.S.C. § 1782 permitting discovery of Pratt & Whitney by Malev in the United States. In particular, Malev seeks to depose

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a number of individuals located in Connecticut who hold various positions with Pratt & Whitney and to obtain eighteen groups of documents purportedly relevant to the litigation in Hungary.

On July 30, 1991, following a hearing on the matter, the district court entered an order denying Malev's request for discovery under 28 U.S.C. § 1782.

We review the district court's decision to deny Malev's request for assistance for an abuse of discretion. See Lo Ka Chun v. Lo To, 858 F.2d 1564, 1565-66 (11th Cir.1988); In re Request for Judicial Assistance from the Seoul District Criminal Court, Seoul, Korea, 555 F.2d 720, 723-24 (9th Cir.1977).



The genesis of 28 U.S.C. § 1782 (1988) 1 sheds light on the policy aims which Congress sought to effectuate by enacting the legislation. In 1958, Congress created the Commission on International Rules of Judicial Procedure and instructed it to "investigate and study existing practices of judicial assistance and cooperation between the United States and foreign countries with a view to achieving improvements." Pub.L. No. 85-906, 72 Stat. 1743 (1958). The Commission was further told to use that investigation and study as a basis upon which to "draft and recommend to the President any necessary legislation" to render "more readily ascertainable, efficient, economical, and expeditious" the "procedures of our State and Federal tribunals for the rendering of assistance to foreign courts and quasi-judicial agencies." Id.

On May 28, 1963, the Commission transmitted a proposed bill to the Speaker of the House of Representatives and the President of the Senate, following approval by the Administration, which included a provision to amend 28 U.S.C. § 1782 to its current version. In the transmittal letter, which the Senate Judiciary Committee included in its report on the bill, the Chairman of the Commission explained its hope that enactment of the proposed legislation would provide efficient means of assistance in our federal courts for litigants involved in international litigation and would prompt foreign courts to follow our generous example and provide similar assistance to our court systems. S.Rep. No. 1580, 88th Cong., 2d Sess. (1964), reprinted in 1964 U.S.C.C.A.N. 3782, 3792-94; 2 see also In re Letter Rogatory from the Justice Court, Dist. of Montreal, Canada, 523 F.2d 562, 564-66 (6th Cir.1975).

The Senate Judiciary Committee agreed with the Commission's understanding of the intent behind the legislation and explained in its report:

Until recently, the United States has not engaged itself fully in efforts to improve practices of international cooperation in litigation. The steadily growing involvement of the United States in international intercourse and the resulting increase in litigation with international aspects have demonstrated the necessity for statutory improvements and other devices to facilitate the conduct of such litigation. Enactment of the bill into law will constitute a major step in bringing the United

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States to the forefront of nations adjusting their procedures to those of sister nations and thereby providing equitable and efficacious procedures for the benefit of tribunals and litigants involved in litigation with international aspects.

It is hoped that the initiative taken by the United States in improving its procedures will invite foreign countries similarly to adjust their procedures.

Id. at 3783; see also Hans Smit, International Litigation Under the United States Code, 65 Colum.L.Rev. 1015, 1017-19 (1965) (author, who was Reporter of the Commission on International Rules of Judicial Procedure, explaining his view of the purposes behind the legislation in virtually identical terms).

These twin aims of providing efficient means of assistance to participants in international litigation in our federal courts and encouraging foreign countries by example to provide similar means of assistance to our courts must inform our analysis of whether the district court abused its discretion by denying Malev's request for assistance in the pending litigation before the Hungarian court. To that task, we now turn.


In denying Malev's request for discovery, the district court found that Malev's request was "premature and unnecessary" because Malev "never made a formal discovery request upon Pratt & Whitney before the Hungarian court." The district court concluded that discovery procedures are "fully available" to litigants in Hungary and that Malev should have first sought the requested discovery from the Hungarian court.

We find nothing in the text of 28 U.S.C. § 1782 which would support a quasi-exhaustion requirement of the sort imposed by the district court. To the contrary, the plain language of 28 U.S.C. § 1782(a) states that "upon the application of any interested person," the district court where the person from whom discovery is sought resides "may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal."

Furthermore, requiring an interested person first to seek discovery from the foreign or international tribunal is at odds with the twin purposes of 28 U.S.C. § 1782 as articulated in the legislative history. It would undermine the policy of improving procedures for assistance to foreign and international tribunals by imposing an additional burden on persons seeking assistance from our federal courts for matters relating to international litigation. Additionally, it would undermine the policy of prompting foreign courts to act similarly based on our own generous example.

Finally, as far as we can discern, no other federal court has denied a direct request by a private foreign litigant for discovery pursuant to 28 U.S.C. § 1782 because the party seeking discovery has not first sought the information through the foreign or international tribunal. See, e.g. John Deere Ltd. v. Sperry Corp., 754 F.2d 132, 134 (3d Cir.1985) (granting direct request for discovery from private foreign litigant where discovery had not first been sought from Canadian court).

We appreciate the district court's concern, which was expressed repeatedly during the hearing on Malev's application, that making discovery available through United States district courts to interested persons before foreign and international tribunals could potentially impose heavy burdens on our federal courts. But we are not at liberty to second-guess the policy choices of our Congress. However, we note that district courts issuing discovery orders pursuant to 28 U.S.C. § 1782 may impose conditions to minimize the compliance burdens, so long as those conditions do not impose extra-statutory barriers to obtaining discovery such as an exhaustion requirement. See S.Rep. No. 1580, 88th Cong., 2d. Sess. (1964), reprinted in 1964 U.S.C.C.A.N. 3782, 3788 ("[28 U.S.C. § 1782] leaves the issuance of an appropriate order to the discretion of the court which, in proper cases, may refuse to issue an order or may impose conditions it deems desirable."); see also Section III, infra.

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Therefore, to the extent the district court rested its decision to deny discovery to Malev because a request for discovery from Pratt & Whitney had not first been made to the Hungarian court in Budapest, we conclude that the district court abused its discretion. See Independent Oil & Chem. Workers v. Procter & Gamble, 864 F.2d 927, 929 (1st Cir.1988) ("Judicial discretion is necessarily broad--but it is not absolute. Abuse occurs ... when an improper factor is relied upon....").

The district court also indicated that "...

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