United States District Court, D. South Carolina, Charleston Division
C. NORTON UNITED STATES DISTRICT JUDGE.
matter is before the court on SERVOTRONICS, INC.'s
(“SERVOTRONICS”) ex parte application for an
order pursuant to 28 U.S.C. § 1782 to take discovery for
use in a foreign proceeding, ECF No. 1. For the reasons set
forth below, the court denies the application.
application arises out of an arbitration related to a fire at
Boeing's facilities in Charleston, South Carolina. On
January 16, 2016, Boeing was conducting testing on a plane
when a tailpipe fire occurred in the plane's engine. The
engine was manufactured by Rolls-Royce, and it contained a
valve manufactured by SERVOTRONICS. During testing, a piece
of metal got lodged in the valve, which affected the engine
fuel flow. As a result, the Boeing ground crew began
troubleshooting the engine, and subsequently the fire
occurred. The fire damaged both the engine and the plane.
sought compensation for the damage from Rolls-Royce, and
Rolls-Royce settled the claim. Then Rolls-Royce demanded
indemnity from SERVOTRONICS, which SERVOTRONICS refused.
Rolls-Royce and SERVOTRONICS had previously signed a
Long-term Agreement (“LTA”) that requires the use
of arbitration to resolve any disputes. The LTA states:
[T]he dispute shall be referred to and finally resolved by
arbitration in Birmingham, England, under the rules of the
Chartered Institute of Arbitrators, and these Rules are
deemed to be incorporated by reference into this clause.
ECF No. 1-1 at 3. Rolls-Royce served a notice of arbitration
on SERVOTRONICS seeking approximately $12.8 million from
SERVOTRONICS. The parties have agreed to arbitrate in London
instead of Birmingham as a matter of convenience.
SERVOTRONICS does not explicitly allege that arbitration
under the rules of the Chartered Institute of Arbitrators is
a private arbitration, as opposed to a state-sponsored
arbitration, but SERVOTRONICS's legal argument makes it
clear that the arbitration at issue here is a private one, or
that they consider it to be a private one.
maintains that it is not liable for the fire or the damage
caused by the fire, and it claims that fault lies with
Rolls-Royce and Boeing. SERVOTRONICS is seeking testimony
from three Boeing employees to be used in the arbitration in
support of SERVOTRONICS's defenses. The first two
employees, Terrance Shifley and Alan Sharkshna, are employees
who participated in troubleshooting the plane's engine.
The third employee, Scott Walston, was the chairperson of the
Boeing Incident Review Board that investigated the fire.
Because the arbitration is set to take place in London,
England, SERVOTRONICS requests that the court issue an order
allowing SERVOTRONICS to serve subpoenas on the three Boeing
employees. In the alternative, SERVOTRONICS asks that the
court issue an order to show cause why the application should
not be granted.
1782 allows a district court to order a person who resides in
the court's district to provide testimony or documents to
be used in a proceeding in a foreign tribunal. 28 U.S.C.
§ 1782(a). This statute “affords the district
courts wide discretion in responding to requests for
assistance in proceedings before foreign tribunals.”
Al Fayed v. United States, 210 F.3d 421, 424 (4th
Cir. 2000). When considering a discovery application under
§ 1782, the district court should keep in mind the
statute's “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.” In re Letter of Request from Amtsgericht
Ingolstadt, Fed. Republic of Germany, 82 F.3d 590, 592
(4th Cir. 1996) (internal quotation omitted).
presented with a § 1782 discovery application, a
district court must engage in two inquiries. First, it must
determine if it has the authority to grant the application.
Intel Corp. v. Advanced Micro Devices, Inc., 542
U.S. 241, 264 (2004). Courts have such authority when (1)
“the person from whom discovery is sought reside[s] (or
[can] be found) in the district of the district court to
which the application is made”; (2) “the
discovery be for use in a proceeding before a foreign
tribunal”; and (3) “the application be made by a
foreign or international tribunal or any interested
person.” Application of Esses, 101 F.3d 873,
875 (2d Cir. 1996) (internal quotations omitted).
court determines that it has authority under § 1782, it
then must decide whether to exercise its discretion to grant
the application. Intel, 542 U.S. at 264.
“[T]he Supreme Court laid out four discretionary
factors to guide the courts in ruling on a § 1782
application: (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. court assistance; (3) whether the § 1782
application is an attempt to ‘circumvent foreign
proof-gathering restrictions'; and (4) whether the
documents and testimony sought are ‘unduly intrusive or
burdensome.'” In re Chevron Corp., 2010 WL
4883111, at *2 (W.D. Va. Nov. 24, 2010) (quoting
Intel, 524 U.S. at 264-65).
first to whether the court has the authority to grant
SERVOTRONICS's application, the first and third
requirements are clearly met here. SERVOTRONICS alleges that
all three Boeing employees it seeks to depose live in South
Carolina, and SERVOTRONICS is an interested party because it
is a party to the arbitration. However, whether the second
requirement-that the evidence be used “in a proceeding
before a foreign tribunal”-is met is not as
issue presented here is whether the private arbitral body
conducting the arbitration qualifies as a
“tribunal” for the purposes of § 1782. The
Second and Fifth Circuits have held that private arbitral
bodies do not fall within the ambit of § 1782. After
these two cases were decided, the U.S. Supreme Court
interpreted § 1782 in the seminal case Intel Corp.
v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004).
Lower courts have subsequently disagreed on how
Intel affects § 1782 on the issue of private
arbitration. For reasons discussed below, the court holds