This case arose out of a dispute between Intervenors-Appellants Yves Bouvier and MEI Invest Ltd. (collectively, “Bouvier”) and Petitioners-Appellees Accent Delight International Ltd. and Xitrans Finance Ltd. (collectively, “Petitioners”) over the sales to Petitioners of thirty-eight works of art, including paintings by Picasso and van Gogh, for a total of approximately $2 billion. Petitioners ultimately initiated criminal and civil proceedings against Bouvier in Monaco, France and Singapore on the grounds of fraud. Petitioners filed a 28 U.S.C. § 1782 application in the District Court for the Southern District of New York claiming that Sotheby’s was involved in relevant acquisitions by Bouvier. Petitioners requested discovery of documents relevant to all thirty-eight artworks involved in the alleged fraud. The district court granted the discovery application with respect to the French proceedings and denied Bouvier’s request for a protective order limiting the discovery to be used in the Monaco proceeding.
On appeal, the first issue was whether discovery was “for use in a proceeding in a foreign or international tribunal” for the purposes Section 1782, where the applicant is a crime victim authorized to submit the discovery to the foreign tribunal, but where the applicant is not making a claim for damages. On this issue, the Court held in the affirmative. The Court rejected Bouvier’s argument that the statute’s “for use” clause was limited to cases where monetary relief was sought. Specifically, the Court reasoned that “Section 1782 explicitly permits district courts to grant discovery in aid of ‘criminal investigations conducted before formal accusation,’ which are among the cases least likely to feature claims by private litigants for money damages notwithstanding the considerable variation in procedural rules across countries (including those involved in this appeal).” As to the second issue on appeal, whether an applicant that lawfully has obtained discovery under Section 1782 as to one foreign proceeding may use that discovery in another foreign proceeding, the Court held that Section 1782 permits such use, absent an order to the contrary by the district court. In so finding, the Court “s[aw] no reason why the number or identity of the foreign proceedings in which a successful applicant may use discovery produced pursuant to the statute would fall outside that discretionary grant” and reasoned that “Section 1782 leaves to the district courts’ discretion both the decision to grant discovery and to ‘prescribe the practice and procedure’ for its production.”
In a related summary order, the Court addressed the remaining issues on appeal. It found that the district court did not abuse its discretion in dismissing Bouvier’s argument that the district court failed to properly consider the third Intel factor, whether the Section 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions. In addition, the Court declined to resolved a district court split as to whether Section 1782 permits discovery of documents located outside the United States. The Court affirmed the lower court’s decision in its entirety. Bouvier v. Adelson, Case No. 16-3655 (2d Cir. Aug. 28, 2017) ( at Dkt. 131 & at Dkt. 132).