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Litigation: The interplay of residency requirements and subpoenas in aid of foreign litigation

Different interpretations of Rule 45 residency requirements can affect Section 1782 subpoenas

While many foreign jurisdictions do not permit the plenary discovery afforded to litigants in U.S. courts, an increasing number of foreign litigants are taking advantage of a liberal discovery regime implemented by Congress to aid foreign litigations. Specifically, under 28 U.S.C. § 1782(a), a foreign litigant may make an ex parte application to a federal district court for an order directing a witness “found” in the U.S. to give testimony or to produce documents or other physical evidence in connection with a foreign litigation. The subjects of the application often receive no notice in advance of receiving the subpoena and can thus be taken by surprise to learn of their obligation to respond to a subpoena in aid of a foreign litigation that they may or may not have an interest in. 

U.S. parties have several tools at their disposal to support a motion to quash a Section 1782 subpoena, including arguments addressing the oft-cited Intel factors. Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 260-61 (2004). Even if a petitioner satisfies the facial requirements of Section 1782, a federal district court must ensure that the subpoena complies with the requirements of the Federal Rules of Civil Procedure.

One potential trump card in the pockets of defense counsel is a challenge based on the “residency” requirement of Rule 45, which requires a court to quash or modify a subpoena if it “requires a person who is neither a party nor a party’s officer to travel more than 100 miles from where that person resides, is employed, or transacts business in person.” Fed. R. Civ. P. 45(c)(3)(A)(ii).

One recent case illustrates how Rule 45 can impact a Section 1782 subpoena. In In re Application of Yukos Hydrocarbons Investments Ltd., No. 5:09-MC-0078, 2009 WL 5216951 (N.D.N.Y. Dec. 30, 2009) (Yukos), petitioner Yukos Hydrocarbons sought discovery from a U.S. national living and working in Russia with family ties to New York State. The target of the subpoena was “tagged” with a Section 1782 subpoena while visiting upstate New York. By “finding” the target of the subpoena in the Northern District of New York, Yukos Hydrocarbons established its prima facie case for a Section 1782 subpoena.

However, the federal district court granted a motion to quash the subpoena on the basis that, at the time the testimony was scheduled to be given, the target of the subpoena would not be a “resident” of the Northern District as required by Rule 45(c)(3)(A)(ii). Id. at *4. The target’s contacts, including owning property within the district, did not establish “residence” under Rule 45, and the Yukos court (interpreting New York law) explained that because the target of the subpoena intended to return to Russia in the near future, he was not a “resident” of the district. Id. at * 6.

The lesson from Yukos is that U.S. nationals working abroad (and U.S. companies conducting business abroad) should be mindful of their U.S. contacts and cognizant of federal district court subpoena power when traveling back to the U.S., in order to avoid the time and expense associated with responding to a Section 1782 subpoena.

In addition, U.S. parties should be aware that an interpretation of the term “resides” under state law—and a corresponding fact-intensive inquiry by the federal district court—could affect the Rule 45 analysis. In this regard, the court in Yukos noted that New York law did not provide clear guidance on the meaning of the term “resides,” and a federal district court in another state faced with a similar set of facts could very well reach a different conclusion.

As a result, companies with U.S. nationals working and living abroad should have clear policies regarding an employee’s residency requirements in order to limit the chance of employees finding themselves subject to a Section 1782 subpoena.

Contributing Author

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Peter Altman

Peter I. Altman is counsel in Akin Gump’s New York office. His practice focuses on white collar criminal defense, securities and commodities enforcement matters, internal...

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Contributing Author

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Andrew Newman

Andrew F. Newman’s practice focuses on commercial litigation matters. He is an associate in Akin Gump’s Dallas office. Mr. Newman has experience representing companies and...

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