In the
United States Court of Appeals
For the Seventh Circuit
Nos. 09-2858, 10-2639
A PPLICATIONS OF H ERAEUS K ULZER, G MBH,
FOR O RDERS C OMPELLING D ISCOVERY FOR
U SE IN A F OREIGN P ROCEEDING,
Applicant-Appellant,
v.
B IOMET, INC., et al.,
Respondents-Appellees.
Appeals from the United States District Court
for the Northern District of Indiana, South Bend Division.
Nos. 09-CV-183, 09-CV-530—Robert L. Miller, Jr., Judge.
A RGUED D ECEMBER 1, 2010—D ECIDED JANUARY 24, 2011
BeforeB AUER and P OSNER, Circuit Judges, and
P ALLMEYER, District Judge.
P OSNER, Circuit Judge. This is an appeal from orders
by the district court denying applications to compel
discovery for use in a lawsuit pending in a foreign court.
Hon. Rebecca R. Pallmeyer, of the Northern District of Illinois,
sitting by designation.
2 Nos. 09-2858, 10-2639
(To simplify, we’ll pretend there was one application
and one order.) Although orders granting or denying
motions to compel discovery normally are nonfinal and
therefore appealable only in extraordinary circumstances,
the orders in this case are final because there is no
pending litigation in the district court. The court is
finished with the matter—as the only matter is discov-
ery—and when no further proceedings are contemplated,
the court’s last order, even if it is a discovery order, is
an appealable final order. E.g., Kestrel Coal Pty. Ltd. v. Joy
Global, Inc., 362 F.3d 401, 403 (7th Cir. 2004); Bayer AG v.
Betachem, Inc., 173 F.3d 188, 189-90 and n. 1 (3d Cir. 1999);
In re Letters Rogatory from Tokyo District Prosecutor’s
Office, 16 F.3d 1016, 1018 n. 1 (9th Cir. 1994); cf. Wiwa v.
Royal Dutch Petroleum Co., 392 F.3d 812, 815-17 and n. 14
(5th Cir. 2004).
Heraeus Kulzer, a German company that has sued
Biomet, Inc. and its affiliates in a German court for theft
of trade secrets, is seeking discovery in a federal district
court in Indiana pursuant to 28 U.S.C. § 1782, which so
far as relates to this case authorizes the federal district
court “of the district in which a person resides or is
found [to] order him . . . to produce a document or other
thing for use in a proceeding in a foreign . . . tribunal . . . .
The order may be made . . . upon the application of any
interested person.” The order “may prescribe the prac-
tice and procedure [for the production], which may be
in whole or part the practice and procedure of the
foreign country”; but unless otherwise provided in the
order, the production shall be “in accordance with the
Federal Rules of Civil Procedure.” So a party to litiga-
Nos. 09-2858, 10-2639 3
tion in a foreign country can seek discovery relating to
that litigation in a federal district court, and, in the discre-
tion of that court, Kestrel Coal Pty. Ltd. v. Joy Global, Inc.,
supra, 362 F.3d at 406; Schmitz v. Bernstein Liebhard &
Lifshitz, LLP, 376 F.3d 79, 83-84 (2d Cir. 2004); Four Pillars
Enterprises Co. v. Avery Dennison Corp., 308 F.3d 1075, 1078
(9th Cir. 2002), can obtain as much discovery as it could
if the lawsuit had been brought in that court rather
than abroad.
Discovery in the federal court system is far broader
than in most (maybe all) foreign countries, and it may
seem odd that Congress would have wanted foreign
litigants to be able to take advantage of our generous
discovery provisions. The stated reason was by setting
an example to encourage foreign countries to enlarge
discovery rights in their own legal systems. Euromepa S.A.
v. R. Esmerian, Inc., 51 F.3d 1095, 1097 (2d Cir. 1995);
In re Application of Malev Hungarian Airlines, 964 F.2d 97, 99-
100 (2d Cir. 1992); S. Rep. No. 1580, 88th Cong., 2d Sess. 2
(1964); Hans Smit, “Recent Developments in Interna-
tional Litigation,” 35 S. Tex. L. Rev. 215, 235 (1994). That
might benefit U.S. litigants in those countries. And since
the foreign court could always exclude the fruits of U.S.
discovery, it seemed that allowing such discovery could
only help, and not hurt, the foreign tribunal, see id. at 235-
36, though this point requires qualification, as we’ll
see. Maybe a further, unstated aim of the statute was
to increase the business of American lawyers, but this is
just a conjecture.
No matter. The law is clear. But district courts must be
alert for potential abuses that would warrant a denial of
4 Nos. 09-2858, 10-2639
an application to be allowed to take such discovery.
One abuse would be for a party to seek discovery in a
federal district court that it could obtain in the foreign
jurisdiction, thus gratuitously forcing his opponent to
proceed in two separate court systems; the inference
would be that the party seeking U.S. discovery was
trying to harass his opponent. Cf. Intel Corp. v. Advanced
Micro Devices, Inc., 542 U.S. 241, 264 (2004). Another
abuse would be to seek discovery of documents or other
materials that the foreign court would not admit
into evidence, see id.; and again the inference would be
that the party seeking discovery was trying to harass
the defendant rather than to obtain evidence for use in a
trial (and likewise if the foreign suit was frivolous).
A related abuse could arise from the fact that foreign
courts, because they almost never use juries in civil cases,
have, compared to American courts, loose, permis-
sive—sometimes even no—standards (other than privi-
lege) for limiting the admissibility of evidence. See, e.g.,
Peter L. Murray & Rolf Stürner, German Civil Justice 269-70
(2004); Kenneth Williams, “Do We Really Need the
Federal Rules of Evidence?,” 74 N.D. L. Rev. 1, 14 (1998)
(“in contrast to common law systems, there are virtually
no exclusionary rules of evidence” in civil law systems,
such as that of Germany); Mirjan R. Damaška, Evidence
Law Adrift 14-25 (1997). There is thus a danger of
swamping a foreign court with fruits of American dis-
covery that would be inadmissible in an American
court because admissibility is not a criterion of dis-
coverability in our system. A discovery demand in our
courts might yield a haul of 30 million emails, few of
Nos. 09-2858, 10-2639 5
which would be admissible in evidence. A litigant in a
foreign court who had obtained such a haul would be
unlikely to dump the whole mass of emails on that
court, but if he did try to overwhelm the court with
documentation the court might not be well equipped by
its procedures to stem the flow. Judge Jacobs has warned
against “clog[ging] the French appeals court with the
random harvest of the American discovery,” Euromepa S.A.
v. R. Esmerian, Inc., supra, 51 F.3d at 1105 (dissenting
opinion), and the same danger would be presented if
the court were German rather than French.
Still another potential abuse would be a party’s seeking
discovery that the foreign court would disapprove of
because it would impose on his opponent, or perhaps on
a third party, what the foreign court would regard as an
undue expense of responding to American discovery
demands; for that expense can be enormous, especially
now that we’re deep into the age of electronic discovery.
Regan-Touhy v. Walgreen Co., 526 F.3d 641, 649 (10th Cir.
2008); Charles A. Wright & Arthur R. Miller, 9A Federal
Practice and Procedure § 2459, pp. 456-62 (3d ed. 2008);
Steven C. Bennett, “Records Management: The Next
Frontier in E-Discovery?,” 41 Texas Tech L. Rev. 519, 519
(2009). Other things to watch out for are a forum-
selection clause in a contract, which might indicate the
parties’ preference for a court system that doesn’t con-
template the level of compulsory process available in
America; and a party’s effort to combine the substan-
tive law of a foreign country with the expansive dis-
covery opportunities available in the United States—
a clue would be that the plaintiff had sued in an incon-
6 Nos. 09-2858, 10-2639
venient forum while seeking discovery in the United
States. Neither is a factor in this case.
A final abuse is proposed by Biomet under the rubric
of “parity” (“reciprocity” might be an apter term): if
Heraeus is able to use broad U.S. discovery procedures
but Biomet is confined to the narrow German procedures,
Heraeus may have an arbitrary advantage in preparing
its case, though generally and probably in this case
the plaintiff in a trade secret case needs more discovery
than the defendant.
We shall see that none of these abuses has been shown
to be a likely motive for, or effect of, the discovery
sought by Heraeus. The discovery sought may be exces-
sive, but excessive under the discovery standards set
forth in the Federal Rules of Civil Procedure rather than
under section 1782. As indicated in one of the passages
we quoted from the statute, discovery sought under
section 1782 must (in the absence of a contrary order by
the district court) comply with Rule 26 and the other
rules governing discovery in federal courts.
Heraeus makes bone cement (basically just Plexi-
glas—polymethyl methacrylate), which is used in orthope-
dic surgery. “Bone Cement,” http://en.wikipedia.org/wiki/
Bone_cement (visited on Jan. 18, 2011, as were all the
websites cited in this opinion). It sued the defendants,
affiliated companies that we’re calling Biomet, in 2008,
and a month later it applied to the federal district court
for the district in which the Biomet corporate family,
which is international, has its headquarters, to be permit-
ted by section 1782 to conduct discovery of materials
Nos. 09-2858, 10-2639 7
in Biomet’s possession. So far as we can determine, the
German suit has not progressed to a point at which
any facts have been determined or claims ruled on.
The suit makes the following allegations (we recite
them; we do not vouch for their accuracy). Until 2005
Heraeus was the world’s leading producer of bone cement.
See “I’m Feeling Good Again!: Palacos® Bone Cement from
Heraeus Has Set Standards in Hip Prosthesis for Almost
50 Years,” http://corporate.heraeus.com/en/innovation/
technologyreport_1/palacos_39168.html. In the early seven-
ties Heraeus made a contract with another German com-
pany, Merck KGaA, whereby Merck agreed to distrib-
ute Heraeus’s bone cement. Pursuant to the contract,
Heraeus provided Merck with a great deal of confidential
information about its product in order to enable Merck
to obtain necessary regulatory approvals.
In 1998 Merck entered into a joint venture with
Biomet, a competitor of Heraeus in the manufacture of
bone cement. See “Biomet History,” www.biomet.com/
corporate/biometHistory.cfm; “Welcome to Biomet Ce-
menting Technologies AB,” www.bonecement.com/
home. Heraeus was concerned that confidential infor-
mation that it had supplied to Merck would flow to
Biomet and reveal trade secrets that would enable
Biomet to compete more effectively against Heraeus
in the bone-cement market. And sure enough, in 2005
Biomet began making a bone cement that was a close
substitute for Heraeus’s product; Heraeus contends
that Biomet’s product incorporates Heraeus’s trade
secrets without authorization. Heraeus seeks hundreds
of millions of dollars in damages, and other relief.
8 Nos. 09-2858, 10-2639
Heraeus’s case preparation will require a great deal of
discovery, going back at least as far as the formation of
the joint venture between Biomet and Merck. That dis-
covery is unobtainable in the German legal system,
which does not authorize discovery in the sense of
Rule 26 of the Federal Rules of Civil Procedure. A party
to a German lawsuit cannot demand categories of docu-
ments from his opponent. All he can demand are docu-
ments that he is able to identify specifically—individually,
not by category. German Commercial Code & Code of
Civil Procedure in English 300-01 (Charles E. Stewart
trans. 2001) (translating Zivilprozeßordnung §§ 420-30). “The
request for an order of production must identify the
document requested with reasonable specificity, describe
its relevance to some fact in issue, and set forth the
basis for the belief that it is in the possession or con-
trol of the opponent.” Murray & Stürner, supra, at 277. So
Heraeus can ask the German court to order production
of “the contract between Biomet and Merck concerning
disclosure of bone-cement specifications, dated April 4,
2000,” but not production of “all emails and notes of
telephone conversations relating to discussions of bone-
cement ingredients between Biomet and Merck during
the years 1997 through 2005.”
The importance of American-style discovery to
Heraeus’s ability to prove misappropriation of its trade
secrets by Biomet is undeniable. But potential for abuse?
We don’t see it. Heraeus cannot obtain the discovery it
needs in the legal system in which it sued. And there is
no indication that the German court in which Heraeus’s
suit against Biomet is pending would refuse to admit evi-
Nos. 09-2858, 10-2639 9
dence that Heraeus obtained through U.S. discovery
and could not have obtained by utilizing the procedures
of German law for evidence gathering; no indication
that the German court is worried about being swamped
by Heraeus’s submitting excessive discovery fruits to it;
and no indication that the German court believes that
Heraeus’s discovery requests if allowed would impose
an undue burden on Biomet.
Were there any merit to these points, Biomet, a sophisti-
cated global corporation, would have asked the German
court for a ruling that would bar or limit Heraeus’s
U.S. discovery. Compare Kestrel Coal Pty. Ltd. v. Joy Global,
Inc., supra, 362 F.3d at 402-03; Schmitz v. Bernstein Liebhard
& Lifshitz, LLP, supra, 376 F.3d at 83-84; In re Microsoft
Corp., 428 F. Supp. 2d 188 (S.D.N.Y. 2006); Advanced Micro
Devices v. Intel Corp., 2004 WL 2282320, at *2 (N.D. Cal.
2004). It’s had plenty of time to do so; the case has been
pending in that court for two years. It does not contend
that German procedure would forbid the German court
to issue such a ruling. As for want of reciprocity, which
it stresses, Biomet could have asked the district court
to condition granting Heraeus’s application to take dis-
covery on Heraeus’s consenting to reciprocal discovery
by Biomet. Biomet didn’t do that either and hasn’t indi-
cated that there is anything in Heraeus’s files that would
help the defense. The measures that Biomet has not
taken in this discovery dispute are eloquent testimonials
to the weakness of its position.
In denying Heraeus’s application the district court
committed two serious legal errors that vitiate its
10 Nos. 09-2858, 10-2639
exercise of discretion in applying section 1782. The
first was to conclude that Heraeus was seeking to cir-
cumvent German law. At times the district court (we
treat the court’s decision as a unity, though actually
there were two decisions each by the magistrate judge,
to whom the district judge referred Heraeus’s requests,
and the district judge—a total of 43 pages of opinions)
suggested that Heraeus could get all the discovery it
needed by invoking German discovery procedures, and
at times the court suggested, contradicting the first sug-
gestion, that by seeking more discovery than those pro-
cedures allow, Heraeus was affronting the German legal
system. Both suggestions are incorrect. Heraeus cannot
obtain even remotely comparable discovery by utilizing
German procedures and there is nothing to suggest that
the German court would be affronted by Heraeus’s re-
course to U.S. discovery or would refuse to admit any
evidence, or at least any probative evidence (German
judges can disregard evidence that would waste the
court’s time), that the discovery produced. Once a sec-
tion 1782 applicant demonstrates a need for extensive
discovery for aid in a foreign lawsuit, the burden shifts
to the opposing litigant to demonstrate, by more than
angry rhetoric, that allowing the discovery sought (or a
truncated version of it) would disserve the statutory
objectives.
In a proceeding in another federal district, Heraeus
sought discovery for use in its German suit from
Biomet’s U.S.-based supplier of bone-cement ingredients.
In reversing the denial of its petition, the Third Circuit
said that Heraeus had presented “arguably . . . a textbook
Nos. 09-2858, 10-2639 11
predicate for a successful § 1782 petition.” Heraeus Kulzer
GmbH v. Esschem, Inc., 390 Fed. App’x 88, 92 (3d Cir.
2010). That is an even more apt characterization of the
present case, for here there is no ground for “arguably.”
The district court’s second error was to turn down
Heraeus’s discovery request flat, on the ground that
compliance would be unduly burdensome to Biomet,
without requiring Biomet to negotiate with Heraeus over
cutting down the request to eliminate excessive burden
and failing that to ask the district court to limit the
scope of discovery. The second error is unrelated to
section 1782. The section 1782 screen—the judicial
inquiry that the statute requires—is designed for pre-
venting abuses of the right to conduct discovery in a
federal district court for use in a foreign court. Once the
court has determined that such abuses are unlikely, the
ordinary tools of discovery management, including
Rule 26, come into play; and with objections based on
the fact that discovery is being sought for use in a
foreign court cleared away, section 1782 drops out. See
Ecuadorean Plaintiffs v. Chevron Corp., 619 F.3d 373, 377-78
(5th Cir. 2010); Weber v. Finker, 554 F.3d 1379, 1384-85 (11th
Cir. 2009).
Heraeus’s discovery demands are broad, in part be-
cause they reach back fifteen years, to before the joint
venture between Biomet and Merck. For all we know,
they are too broad. But if so, it doesn’t follow that
Heraeus is not entitled to any discovery. It’s not as if
its demands were frivolous; it obviously needs a good
deal of discovery in order to prepare its case against
12 Nos. 09-2858, 10-2639
Biomet. If it’s asking for too much, the district court can
and should cut down its request, but not to nothing, as
it did. That was unreasonable, and therefore reversible.
See Olivieri v. Rodriguez, 122 F.3d 406, 409-10 (7th Cir.
1997); Deitchman v. E.R. Squibb & Sons, Inc., 740 F.2d 556,
563-64 (7th Cir. 1984); Wiwa v. Royal Dutch Petroleum Co.,
supra, 392 F.3d at 818-19; Linder v. National Security Agency,
94 F.3d 693, 698 (D.C. Cir. 1996); Northrop Corp. v.
McDonnell Douglas Corp., 751 F.2d 395, 403-04 (D.C. Cir.
1984); Wright & Miller, supra, § 2459, pp. 456-62.
It was all the more unreasonable because Biomet had
refused to meet with Heraeus to negotiate a reduction
in the amount of discovery sought, a procedure that
although not required by the federal rules in a case such
as this in which the discovery proceeding is ancillary
to a proceeding in another court, Fed. R. Civ. P.
26(a)(1)(B)(viii), (f)(1); see also N.D. Ind. Local Rule
16.1(b), is strongly recommended for any complex dis-
covery proceeding. Seventh Circuit Electronic Dis-
covery Committee, Seventh Circuit Electronic Discovery
Pilot Program 11-12, Oct. 1, 2009, www.7thcircuitbar.org/
associations/1507/files/Statement1.pdf; Tina B. Solis, “A
Discussion of the Seventh Circuit’s Electronic Discovery
Pilot Program and Its Impact on Early Case Assessment,”
30 N. Ill. U. L. Rev. 563, 567 (2010); Lee H. Rosenthal, “From
Rules of Procedure to How Lawyers Litigate: ‘Twixt
the Cup and the Lip,” 87 Denver U. L. Rev. 227, 236-37
(2010); Thomas A. Cooper, Comment, “Jurisdictional,
Procedural, and Economic Considerations for Non-party
Electronic Discovery,” 59 Emory L.J. 1339, 1343-44 (2010).
Biomet’s refusal to cooperate is another example of its
stonewalling.
Nos. 09-2858, 10-2639 13
As is its refusal to present any evidence of the burdens
that granting Heraeus’s discovery request would impose.
It could have given the district court an estimate of the
number of documents that it would be required to
provide Heraeus in order to comply with the request,
the number of hours of work by lawyers and paralegals
required, and the expense. A specific showing of burden
is commonly required by district judges faced with ob-
jections to the scope of discovery. See Gregg v. Local 305
Ibew, 2009 WL 1325103, at *8 (N.D. Ind. May 13, 2009);
Sofaer Global Hedge Fund v. Brightpoint, Inc., 2010 WL
4701419, at *1 (S.D. Ind. Nov. 12, 2010); Jones v. McNeese,
2010 WL 4024755, at *2 (D. Neb. Oct. 13, 2010); Country
Mutual Ins. Co. v. Wade, 2010 WL 3239105, at *1 (E.D. Mo.
Aug. 13, 2010); Major Tours, Inc. v. Colorel, 2009 WL
3446761, at *2-3 (D.N.J. Oct. 20, 2009); Black & Veatch Int’l
Co. v. Foster Wheeler Energy Corp., 2001 WL 1718295, at *5
(D. Kan. Dec. 28, 2001); Schaap v. Executive Industries, Inc.,
130 F.R.D. 384, 387 (N.D. Ill. 1990); see generally Fed. R.
Civ. P. 26(b)(2)(C). It should have been required here,
given the prima facie reasonableness of a broad discovery
demand in a case such as this. Rough estimates would
have sufficed; none, rough or polished, was offered.
Biomet’s refusal to lay any empirical foundation for its
contention of undue burden, like its refusal to request an
order from the German court regarding U.S. discovery
and its refusal to meet with Heraeus to negotiate a
reduced scope of discovery, is evidence that its objections
to the discovery demands are indeed spurious. See
Livingston v. Associates Finance, Inc., 339 F.3d 553, 557
(7th Cir. 2003); aaiPharma, Inc. v. Kremers Urban Develop-
14 Nos. 09-2858, 10-2639
ment Co., 361 F. Supp. 2d 770, 777-78 (N.D. Ill. 2005);
Compsource Oklahoma v. BNY Mellon, N.A., 2010 WL
3063225, at *2 (E.D. Okla. Aug. 4, 2010).
The district court’s decision must be reversed and the
matter returned to that court for consideration of
Heraeus’s discovery demands under Rule 26 and any other
pertinent rules governing discovery in federal district
courts. The district court need not bother itself with
section 1782 any longer but is to consider Heraeus’s
requests as it would any other discovery request in a
complex case, and to do so in accordance with the dis-
cussion in this opinion.
R EVERSED AND R EMANDED.
1-24-11