District Court Orders Section 1782 Discovery for Peru Bribery Cases

 

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28 U.S.C. § 1782 authorizes federal courts to order discovery for use in foreign or international tribunals. A recent decision in the Southern District of New York (SDNY), In re Brookfield Infrastructure Partners L.P., shows how § 1782 works, while raising interesting questions about discovery from banks and law firms.

Highway Bribery

In 2012, Metropolitan Municipality of Lima (MML) awarded a concession contract to a consortium of companies owned by Odebrecht, S.A., a Brazilian conglomerate, to build and maintain highways in Lima, Peru. The consortium was later incorporated as Rutas de Lima. In 2016, Brookfield Infrastructure Partners acquired a 57% stake in Rutas.

In the meantime, the U.S. Department of Justice charged Odebrecht with bribery. In 2016, the company entered a plea agreement, admitting to bribes on four projects in Peru, though not the Rutas concession. In ICSID arbitration, MML argued that the concession contract was void because Odebrecht had bribed local officials, but two arbitral tribunals ruled against MML, awarding Rutas $196 million in damages.

Four criminal proceeding are pending or contemplated in Peru in connection with the concession contract: (1) a bribery and money laundering case against the former mayor of Lima and other MML officials, which has reached the trial stage; (2) a money laundering case against the former president of Peru and others, which has reached the accusation stage; (3) a corruption case against the former mayor and others for overvaluing construction work, which has reached the preparatory stage; and (4) a money laundering investigation of Brookfield’s acquisition of its stake in Rutas, which is still at the preliminary stage.

In November 2024, MML filed a motion under § 1782 to obtain evidence for use in these criminal proceedings. Judge Lewis J. Liman ultimately denied the motion on the ground that MML was not an “interested person” under § 1782 because it was not an aggrieved party in any of the foreign proceedings and lacked the right to submit evidence. Judge Liman also held that the fourth potential proceeding—the Brookfield money laundering investigation—was not sufficiently advanced to qualify.

In June 2025, an ad hoc public attorney representing Peru filed a new motion for discovery under § 1782. Three of the discovery targets objected to the motion—Brookfield Asset Management Ltd. (“BAM”), Cahill Gordon & Reindel LLP (“Cahill”), and The Bank of Nova Scotia, Scotia Capital (USA) Inc. (“Scotiabank”).

Section 1782

Section 1782 provides:

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.

A request for discovery may be made by the foreign or international tribunal itself or “by any interested person.” However, “[a] person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.”

Like other circuits, the Second Circuit has distilled three required, statutory factors from § 1782’s text: (1) the person from whom discovery is sought must reside or be found in the district; (2) the discovery must be for use in a proceeding before a foreign or international tribunal; and (3) the application must be made by a foreign or international tribunal or any interested person.

Discovery under § 1782 is discretionary, however. In exercising their discretion, district courts consider an additional four factor that the Supreme Court articulated in Intel Corp. v. Advanced Micro Devices, Inc. (2004): (1) whether the person from whom discovery is sought is a participant in the foreign proceeding, in which case the foreign court could order discovery itself; (2) the receptivity of the foreign court to U.S. judicial assistance; (3) whether the discovery request seeks to circumvent foreign restrictions on discovery; and (4) whether the request is unduly intrusive or burdensome.

Statutory Factors

Judge Liman found that § 1782’s statutory factors were met for the first three criminal proceedings, but not for the Brookfield money laundering investigation. Judge Liman found that, unlike MML, Peru (acting through its ad hoc public attorney) is an “interested person” because it has the right to submit evidence in all the proceedings and to seek civil damages in all but the Brookfield investigation.

He also concluded that BAM, Cahill, and Scotiabank were “found” in the SDNY because they were subject to general jurisdiction there. The Second Circuit has held that § 1782’s “resides or is found” language “extends to the limits of personal jurisdiction consistent with due process.”

BAM, Cahill, and Scotiabank did not dispute that the first three criminal actions were proceedings before a foreign tribunal. But they argued that the Brookfield money laundering investigation was not, and Judge Liman agreed. Although § 1782 expressly extends to “criminal investigations conducted before formal accusation,” the investigation must still be before a “tribunal.” The district court noted that the investigation had not been assigned to a judge and that the public prosecutor was not akin to an investigating magistrate. Although § 1782 allows discovery if a foreign proceeding is “within reasonable contemplation,” the ad hoc public attorney has no right to initiate a proceeding and there was no solid evidence that the public prosecutor would decide to do so. Judge Liman therefore sustained the objections to discovery with respect to the Brookfield money laundering investigation.

Privilege

In addition to the three required, statutory factors, § 1782 provides that “[a] person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.” Scotiabank argued that some information it was asked to produce was protected by bank secrecy laws. Judge Liman concluded that Peru’s bank secrecy laws applied, rather than those of the United States, because the documents in question were held by a Peruvian bank and concerned a transaction governed by Peruvian law. He found that some of the documents that Peru sought from Scotiabank were privileged under Peruvian law and held that Scotiabank was entitled to withhold them.

Discretionary Factors

BAM

With respect to Intel’s discretionary factors, BAM made several arguments that Peru could get the requested document some other way. First, BAM argued that one of its affiliated entities was subject to the Brookfield money laundering investigation, which could order discovery. But this was no reason, Judge Liman reasoned, to deny Peru’s requests with respect to the other three proceedings.

Second, BAM argued that it did not actually possess the requested documents, but Judge Liman noted that only control is required under § 1782. “[I]t is fair to presume that if BAM wanted any of the subpoenaed documents for its business purposes, it would be able to obtain such documents,” he concluded, and that was sufficient.

Third, BAM argued that was improper to ask it to get documents from foreign affiliates that were already cooperating with requests for information from Canadian authorities under a Mutual Legal Assistance Treaty (MLAT). Judge Liman, however, concluded that producing documents held by its foreign affiliates would not be unduly burdensome for BAM and that the existence of an MLAT request did not preclude using § 1782.

BAM also argued that Peru would use the evidence in proceedings not covered by § 1782. But Judge Liman was willing to take Peru at its word that it wanted the documents for the three criminal proceedings and would not use them otherwise.

Scotiabank

Scotiabank argued that because the requested documents were in the possession of its Peruvian affiliate, they could be obtained by the public prosecutor in Peru. As Judge Liman noted, however, an applicant need not ask a foreign tribunal to order production before seeking the assistance of a U.S. court under § 1782. Moreover, the court emphasized that Peru has rights in the foreign proceedings that are independent of the public prosecutor and should not have to depend to the public prosecutor for the evidence it wants.

Cahill

Judge Liman was more sympathetic to arguments from Cahill, which served as Brookfield’s lawyers during the Rutas acquisition. Relying on the Second Circuit’s decision in Kiobel v. Cravath, Swaine & Moore (2018), he noted that “[a] court must proceed with care before granting a Section 1782 request directed to a law firm for communications between the firm and its clients.”

Cahill did not claim that the documents sought were entitled to attorney-client privilege. But Judge Liman worried nevertheless that ordering law firms to turn over documents that they possessed simply as a result of their legal representation might affect such firms’ document retention policies or even discourage foreign clients from retaining U.S. firms in the first place.

Judge Liman also noted that Peru was seeking the same documents from BAM that it was seeking from Cahill. He denied Peru’s request for discovery from Cahill without prejudice, stating that “[t]he motion may be renewed if Peru can proffer reason to believe that Cahill has responsive non-privileged documents in its possession, custody and control that are not produced by BAM.”

Conclusion

Brookfield is not a typical 1782 case. For one thing, several of the discovery targets appeared to object to the request, which is unusual in these cases (although it is worth noting that other targets did not object). Hearing arguments from both sides invariably leads to better decisions than when an application is decided ex parte.

Brookfield is also notable because it sought discovery from a bank and a law firm. Such applications often raise issues of privilege. Section 1782 expressly permits a party to withhold evidence that is privileged, which is why Scotiabank was able to avoid producing certain documents under Peru’s bank secrecy laws. And even when there is no issue of privilege, courts seem to be reluctant to order discovery from law firms under § 1782. In short, banks and law firms remain hard nuts to crack.