14‐2807‐cv
In Re Application for an Order
In the
United States Court of Appeals
For the Second Circuit
________
AUGUST TERM, 2014
No. 14‐2807‐cv
IN RE APPLICATION FOR AN ORDER PURSUANT TO 28 U.S.C. § 1782 TO
CONDUCT DISCOVERY FOR USE IN FOREIGN PROCEEDINGS
________
OPTIMAL INVESTMENT SERVICES, S.A., HUNTON & WILLIAMS LLP,
Movants‐Appellants,
v.
FRANCK BERLAMONT,
Appellee.1
________
Appeal from the United States District Court
for the Southern District of New York.
No. 14 MC 190 ― Jed S. Rakoff, Judge
________
ARGUED: OCTOBER 24, 2014
DECIDED: DECEMBER 12, 2014
________
1
The Clerk of Court is directed to amend the official case caption to conform with the
caption above.
2 No. 14‐2807‐cv
Before: WALKER, CABRANES, CARNEY, Circuit Judges.
________
The question presented is one of first impression in this
Court—whether 28 U.S.C. § 1782, which authorizes federal courts to
order document production for use in certain foreign proceedings,
permits discovery for use in a foreign criminal investigation
conducted by a foreign investigating magistrate.
Franck Berlamont (“Berlamont”), a Swiss criminal
complainant, seeks from appellants the production of documents
relating to the examination of Rajiv Jaitly (“Jaitly Documents”) to
provide to a Swiss investigating magistrate overseeing a criminal
inquiry into a Bernard Madoff “feeder fund” in Switzerland. The
Jaitly Documents were part of the discovery obtained in a case
formerly pending before the United States District Court for the
Southern District of New York, Rembaum v. Banco Santander, S.A.,
No. 10 Civ. 4095 (S.D.N.Y.). The District Court (Paul G. Gardephe,
Judge) ordered discovery pursuant to 28 U.S.C. § 1782, which
permits federal courts to order document production “for use in a
proceeding in a foreign or international tribunal, including criminal
investigations conducted before formal accusation.” After
Berlamont’s ex parte § 1782 application was granted, appellants
moved to vacate the order and quash the subpoena or, in the
alternative, for a protective order. The District Court (Jed S. Rakoff,
Judge) denied the motions.
3 No. 14‐2807‐cv
We hold, based on the plain reading of § 1782, as well the
law’s legislative history, that the statute applies to a foreign criminal
investigation involving an investigating magistrate seeking
documents in the United States.
Accordingly, we AFFIRM the order of the District Court.
________
THOMAS R. JULIN, Hunton & Williams LLP,
Miami, FL, Shawn Patrick Regan, Hunton &
Williams LLP, New York, NY, for Movants‐
Appellants.
O. ANDREW F. WILSON, Samuel Shapiro, Emery
Celli Brinckerhoff & Abady LLP, New York, NY,
for Appellee.
________
JOSÉ A. CABRANES, Circuit Judge:
The question presented is one of first impression 2 in this
Court—whether 28 U.S.C. § 1782, which authorizes federal courts to
2 Section 1782 of Title 28 reads, in relevant part, as follows:
The district court of the district in which a person resides or is found
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, including criminal investigations conducted
before formal accusation.
28 U.S.C. § 1782(a).
4 No. 14‐2807‐cv
order document production for use in certain foreign proceedings,
permits discovery for use in a foreign criminal investigation
conducted by a foreign investigating magistrate.3
Franck Berlamont (“Berlamont”), a Swiss criminal
complainant, seeks from appellants the production of documents
relating to the examination of Rajiv Jaitly (“Jaitly Documents”) to
provide to a Swiss investigating magistrate overseeing a criminal
inquiry related to a Bernard Madoff “feeder fund” in Switzerland.
The Jaitly Documents were part of the discovery obtained in a case
formerly pending before the United States District Court for the
Southern District of New York, Rembaum v. Banco Santander, S.A.,
No. 10 Civ. 4095 (S.D.N.Y.). The District Court (Paul G. Gardephe,
Judge) ordered discovery pursuant to 28 U.S.C. § 1782, which
permits federal courts to order document production “for use in a
While we have analyzed § 1782’s applicability to numerous different types of
foreign proceedings, we have yet to rule squarely on the statute’s applicability to a
foreign criminal investigation conducted by a foreign investigating magistrate. See, e.g.,
In re Letters Rogatory Issued by Dir. of Inspection of Govʹt of India, 385 F.2d 1017 (2d Cir.
1967) (holding § 1782 inapplicable to discovery requested by an Indian income‐tax
officer).
3 Although the record is sparse as to the specific institutional responsibilities of
the Swiss investigating official, we adopt the terminology of the District Court, which
referred to him as an “investigating magistrate.” In re Application of Franck Berlamont for
an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in Foreign Proceedings,
No. 14 Misc. 190, 2014 WL 3893953, at *1 (S.D.N.Y. Aug. 4, 2014). The investigating
magistrate is a prominent feature of the European inquisitorial system. See generally
Morris Ploscowe, The Investigating Magistrate (Juge DʹInstruction) In European Criminal
Procedure, 33 Mich. L. Rev. 1010, 1010 (1935) (“On the Continent all the functions which
American law entrusts to police, prosecutors, coroners, grand jury, committing
magistrate and defense attorney are concentrated in the hands of the [investigating
magistrate].”).
5 No. 14‐2807‐cv
proceeding in a foreign or international tribunal, including criminal
investigations conducted before formal accusation.” After
Berlamont’s ex parte § 1782 application was granted, appellants
moved to vacate the order and quash the subpoena or, in the
alternative, for a protective order. The District Court (Jed S. Rakoff,
Judge) denied the motions.
We hold, based on the plain reading of § 1782, as well the
law’s legislative history, that the statute applies to a foreign criminal
investigation involving an investigating magistrate seeking
documents in the United States.
Accordingly, we AFFIRM the order of the District Court.
BACKGROUND
This case arises out of the Bernard Madoff (“Madoff”) Ponzi
scheme. Franck Berlamont is the President and CEO of Geneva
Partners, an investment firm in Switzerland that invested in a fund
managed by Optimal Investment Services, S.A. (“OIS”), a subsidiary
of Banco Santander, S.A. OIS, in turn, had invested significant funds
with Madoff.
In June 2009, Berlamont commenced a criminal proceeding in
Switzerland (the “Swiss proceeding”) accusing OIS and its former
Director General, Manuel Echeverría (“Echeverría”), of making
misrepresentations concerning its investments with Madoff. 4
4
In many European jurisdictions, private citizens can initiate criminal
proceedings. While in the United States, “a private citizen lacks a judicially cognizable
6 No. 14‐2807‐cv
Thereafter, a Swiss investigating magistrate opened a criminal
investigation against Mr. Echeverría on the suspicion of “unlawful
management.”
In support of the criminal proceeding in Switzerland,
Berlamont seeks the production of certain documents relating to an
examination of Rajiv Jaitly (“Jaitly”), a former Chief Risk Officer for
OIS. The Jaitly Documents were a product of discovery in a case
formerly pending before the United States District Court for the
Southern District of New York, Rembaum v. Banco Santander, S.A.,
No. 10 Civ. 4095 (S.D.N.Y. 2010).
The plaintiffs in the Rembaum case were a group of OIS’s
investors who brought civil claims in New York similar to those of
Berlamont in the current Swiss criminal proceeding. Knowing that
Jaitly held a management position at OIS from 2005 to 2007, the
parties sought to examine him regarding OIS’s conduct with respect
to its Madoff investments. On May 3, 2012, the Rembaum Court
issued a Letter Rogatory to the English High Court of Justice
requesting that Jaitly’s examination be ordered and conducted in
London. The English High Court granted the application and
ordered the examination of Jaitly. On July 16, 2012, Jaitly was
interest in the prosecution or nonprosecution of another,” Linda R.S. v. Richard D., 410
U.S. 614, 619 (1973), European courts have a long tradition of tolerating private
prosecutions. See generally Morris Ploscowe, The Development of Present‐Day Criminal
Procedures in Europe and America, 48 Harv. L. Rev. 433, 437 (1935) (“The Germanic
procedure of Charlemagne and the Anglo‐Saxon procedure of nearly the same period
still looked upon the redress of most crimes as a private matter . . . . Since crime was in
general treated as a private injury, there was no distinction between civil and criminal
proceedings.”).
7 No. 14‐2807‐cv
examined in London and a transcript was produced. Thereafter, on
August 10, 2012, the District Court (Shira A. Scheindlin, Judge)
dismissed the Rembaum action on forum non conveniens grounds,
holding that Switzerland was the appropriate alternative forum.
Berlamont is now seeking the Jaitly transcript and
accompanying exhibits, pursuant to 28 U.S.C. § 1782, a statute that
permits federal courts to order document production “for use in a
proceeding in a foreign or international tribunal, including criminal
investigations conducted before formal accusation.” On June 20,
2014, Judge Gardephe approved Berlamont’s ex parte application
and granted Berlamont leave to subpoena the documents from OIS’s
counsel in the United States, Hunton & Williams LLP (“H&W”).
OIS and H&W moved on June 30, 2014 to vacate the ex parte
order and quash the subpoena or, in the alternative, for a protective
order. After oral argument on July 11, 2014, Berlamont submitted to
the District Court a letter addressed to him from the Swiss
magistrate investigating Mr. Echeverría, which stated that the Jaitly
Documents would be “of great usefulness” to the Swiss proceeding.
On August 4, 2014, Judge Rakoff denied appellants’ motions,
holding that Berlamont’s application satisfied the requirements of
§ 1782 because, among other things, “[a] complaining witness’s
presentation of evidence to an investigating magistrate satisfies the
‘for use’ prong of § 1782.” In re Application of Franck Berlamont for an
Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in
8 No. 14‐2807‐cv
Foreign Proceedings, No. 14 Misc. 190, 2014 WL 3893953, at *1
(S.D.N.Y. Aug. 4, 2014).
On appeal, appellants challenge the lower court’s decision on
a variety of grounds. They contend that (1) Berlamont’s claim does
not meet the requirements of § 1782 because, according to
appellants, a Swiss investigating magistrate is not a “foreign or
international tribunal” within the meaning of § 1782, and that (2) the
District Court should have denied Berlamont’s application pursuant
to the Convention on the Taking of Evidence Abroad in Civil or
Commercial Matters, July 27, 1970, 23 U.S.T. 2555, 847 U.N.T.S. 231
(referred to in the District Court’s memorandum order as the
“Hague Convention”), international comity, and Swiss attorney‐
client privilege. In this opinion, we address appellants’ § 1782 claim;
finding no error, we affirm the District Court’s order granting § 1782
discovery. We also affirm the District Court’s order with regard to
appellants’ other challenges for substantially the reasons outlined in
its well‐reasoned memorandum order. See In re Application, 2014 WL
3893953, at *2.
II. DISCUSSION
Our review of a District Court decision granting § 1782
discovery involves two inquiries: whether “(1) as a matter of law, . . .
the District Court erred in its interpretation of the language of the
statute; and (2) if not, whether the District Court’s decision to grant
discovery on the facts before it was in excess of its discretion.”
Brandi‐Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76, 79 (2d
9 No. 14‐2807‐cv
Cir. 2012). 5 A district court is said to “abuse its discretion” if it
“base[s] its ruling on an erroneous view of the law or on a clearly
erroneous assessment of the evidence, or rendered a decision that
cannot be located within the range of permissible decisions.” In re
Sims, 534 F.3d 117, 132 (2d Cir. 2008) (citations and internal
quotation marks omitted).
A district court is authorized to grant a § 1782 request where:
(1) the person from whom discovery is sought resides (or is found)
in the district of the district court to which the application is made,
(2) the discovery is for use in a proceeding before a foreign or
international tribunal, and (3) the application is made by a foreign or
international tribunal or any interested person. See Schmitz v.
Bernstein Liebhard & Lifshitz LLP, 376 F.3d 79, 83 (2d Cir. 2004). “Once
the statutory requirements are met, a district court is free to grant
discovery in its discretion.” Id. at 83–84 (alterations and internal
quotation marks omitted).
Appellants argue that Berlamont’s discovery request does not
meet the requirements of § 1782. They do not dispute that
Berlamont’s application satisfies the first and third requirements
noted above, but they claim that the second—the “for use in a
proceeding in a foreign or international tribunal”—requirement of
5 Although our review of a district court’s § 1782 ruling is generally a two‐step
process, the focus of this opinion—and the issue of first impression in this Court—is on
step one: whether the District Court erred in interpreting the statute to apply to a foreign
criminal investigation conducted by an investigating magistrate.
10 No. 14‐2807‐cv
§ 1782 was not met here because, according to them, a Swiss
investigating magistrate is not a “foreign or international tribunal.”
The plain language and legislative history of § 1782 contradict
appellants’ argument. Section 1782 of Title 28 reads, in pertinent
part, as follows:
The district court of the district in which a
person resides or is found 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, including criminal investigations
conducted before formal accusation.
28 U.S.C. § 1782(a) (emphasis supplied).
The statute is the product of Congress’s efforts, over the past
160 years, to provide judicial assistance in gathering evidence for
use in foreign tribunals. See Intel Corp. v. Advanced Micro Devices, Inc.,
542 U.S. 241, 247 (2004). The goals of the law are to provide
“equitable and efficacious” discovery procedures in American
courts “for the benefit of tribunals and litigants involved in litigation
with international aspects” while “encourag[ing] foreign countries
by example to provide similar means of assistance to our courts.”
Lancaster Factoring Co. v. Mangone, 90 F.3d 38, 41 (2d Cir. 1996)
(internal quotation marks omitted).
11 No. 14‐2807‐cv
The statute’s precise scope—as well as its text—has evolved
over time. Earlier versions of the statute authorized district courts to
allow discovery in a “suit for the recovery of money or property
depending in any court in any foreign country,” then “in any civil
action pending in any court in a foreign country,” and later “in any
judicial proceeding pending in any court in a foreign country.” In re
Letters Rogatory, 385 F.2d at 1018 (Friendly, J.) (internal quotation
marks omitted) (chronicling the changes made to the foreign
discovery statute in 1863, 1948, and 1949, respectively).
In 1964, Congress modified the law’s scope once more by
replacing the words “in any judicial proceeding pending in any
court in a foreign country” with the phrase “in a proceeding in a
foreign or international tribunal.” Intel Corp., 542 U.S. at 248–49. The
accompanying Senate Report makes clear that Congress used the
word “tribunal” to expand the reach of the law beyond just
providing assistance to “proceedings before conventional courts,”
but also to allow district courts to aid foreign “administrative and
quasi‐judicial proceedings.” Id. (quoting S. Rep. No. 88–1580, at 7
(1964)). The Report specifically highlighted Congress’s intention to
allow federal courts to “have discretion to grant assistance when
proceedings are pending before investigating magistrates in foreign
countries.” S. Rep. No. 88–1580, at 7 (1964).6
6 In expanding the applicability of § 1782 to encompass investigating magistrates,
Congress was implicitly recognizing the differing roles of judges and prosecutors in
foreign jurisdictions, particularly in Europe. See S. Union Co. v. United States, 132 S. Ct.
2344, 2371 (2012) (“The prosecutor/adjudicator plays an important role in many
12 No. 14‐2807‐cv
Congress’s most recent textual change, in 1996, cemented the
statute’s applicability to foreign criminal investigations. The
amended statute explicitly covered “criminal investigations
conducted before formal accusation.” National Defense
Authorization Act for Fiscal Year 1996, Pub. L. No. 104–106,
§ 1342(b), 110 Stat. 186.7 Commenting on the added language, the
Supreme Court in Intel noted that “[n]othing suggests that this
amendment was an endeavor to rein in, rather than to confirm, by
way of example, the broad range of discovery authorized in 1964.”
Intel Corp., 542 U.S. at 259 (citing S. Rep. No. 88–1580, at 7 (1964)).
The Intel Court then made clear, “[w]hen Congress acts to amend a
statute, we presume it intends its amendment to have real and
substantial effect.” Id. at 258–59 (internal quotation marks omitted).
The Swiss criminal investigation in the instant case is exactly
the type of proceeding that the 1996 amendments to the statute were
intended to reach. The criminal inquiry is a “proceeding” and an
‘European inquisitorial’ systems. But those prosecutors, unlike ours, typically are trained
formally to be more like neutral adjudicators than advocates.”); see also Ploscowe, supra
note 4, at 433 (“In Europe . . . a criminal proceeding is a judicial inquiry. It is the duty of
judges to ferret out the facts. They do not wait for the truth to emerge from the
contentions of the opposing parties. An investigating magistrate dominates the
preliminary stages in the most serious criminal cases. He is expected to make the
thorough investigations necessary to bring out the truth and prepare the case for trial.”).
7 By adding this clause, Congress formalized the application of § 1782 to
investigating magistrates that our Circuit had recognized since the statute was amended
in 1964. See, e.g., In re Letters Rogatory, 385 F.2d at 1019 (reviewing the legislative history
of the 1964 amendment to § 1782 to conclude that district courts have discretion to grant
assistance where proceedings are pending before investigative magistrates in foreign
countries).
13 No. 14‐2807‐cv
“investigation” being conducted by a Swiss magistrate. 8 The
defendant, Mr. Echeverría, has already been charged. And the
investigating magistrate has explicitly stated that the Jaitly
Documents would be “of great usefulness to [his] inquiry.” Thus,
the District Court did not err in finding that the Jaitly Documents are
“for use in a proceeding in a foreign or international tribunal” as
required by § 1782.
Having concluded that the District Court did not err in its
interpretation of the language of the statute, we also hold that
appellants’ remaining arguments are without merit substantially for
the reasons given by the District Court.
CONCLUSION
To summarize: we hold that 28 U.S.C. § 1782 permits district
courts to order the production of discovery for use in a foreign
criminal investigation being conducted by an investigating
magistrate.
8 We note that investigating magistrates or public prosecutors, as they are
sometimes called, serve an impartial role in the Swiss criminal justice system. See
Gwladys Gilliéron, Wrongful Convictions in Switzerland: A Problem of Summary Proceedings,
80 U. Cin. L. Rev. 1145, 1147 (2012) (“[The Swiss public prosecutor] is obliged to
investigate in an objective and neutral way and must therefore take into account both the
incriminating and the exculpatory circumstances.”). Accordingly, the Swiss investigating
magistrate or public prosecutor is akin to the French juges dʹinstruction, which Judge
Friendly held out as the paradigmatic example of a “tribunal” for the purposes of § 1782,
principally because “his aim is simply to ensure that justice is done.” In re Letters
Rogatory, 385 F.2d at 1020 (internal quotation marks omitted).
14 No. 14‐2807‐cv
For the reasons stated above, we AFFIRM the August 4, 2014
order of the District Court denying appellants’ motion to vacate the
discovery order and quash the subpoena.