IN RE: APPLICATION OF BIOMET ORTHOPAEDICS SWITZERLAND GMBH UNDER 28 U.S.C. 1782 FOR AN ORDER TO TAKE DISCOVERY FOR USE IN A FOREIGN PROCEEDING

Filing 22

MEMORANDUM OPINION. SIGNED BY HONORABLE CYNTHIA M. RUFE ON 11/21/2017. 11/22/2017 ENTERED AND COPIES MAILED TO COUNSEL AND E-MAILED.(amas)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
__________________________________________
IN RE: APPLICATION OF BIOMET
:
ORTHOPAEDICS SWITZERLAND GMBH
:
UNDER 28 U.S.C. § 1782 FOR AN ORDER TO :
MISC. ACTION NO. 17-0158
TAKE DISCOVERY FOR USE IN A
:
FOREIGN PROCEEDING
:
:
MEMORANDUM OPINION
Rufe, J.

November 21, 2017

Before the Court is Heraeus Medical GmbH’s motion to quash Biomet Orthopaedics
Switzerland’s subpoena. For reasons that follow, the motion will be granted.
I.

BACKGROUND
On September 12, 2017, Biomet filed an application under 28 U.S.C. § 1782 for an order

to take discovery for use in a foreign proceeding. 1 Biomet seeks production of Heraeus’
discovery in the possession of counsel for Esschem, Inc. before an appeal hearing in a criminal
proceeding against Biomet in Germany, which is scheduled to take place on November 24, 2017.
The discovery was produced pursuant to a protective order in the civil action captioned Heraeus
Medical GmbH v. Esschem, Inc., 2 pending before this Court.
Although Biomet noted in a cover letter that the application relates to the Esschem
litigation, the application initially was assigned through an administrative error to the Honorable
Jeffrey L. Schmehl, who granted the application. The subpoena issued as a result requires that
Esschem’s counsel produce Heraeus’ confidential discovery from the Esschem litigation for use
in the criminal proceeding against Biomet in Germany.
Esschem’s counsel then notified Heraeus’ counsel of the subpoena. After receiving this
1

As the Court has written at length about the facts underlying this application, the background section here is
limited to those facts that concern this motion.

2

See Civil Action No. 14-5619.

notice, Heraeus filed an unopposed motion to intervene and for reassignment of the § 1782
action. Judge Schmehl granted the motion to intervene. Because no parties or judges opposed
reassignment, the action was reassigned to this Court. Heraeus then filed a motion to stay the
enforcement of the subpoena, and a motion to quash the subpoena. The Court granted the
motion to stay the enforcement of the subpoena, and afforded the parties the opportunity to fully
brief the issue of whether the subpoena should be quashed. Having considered the arguments of
all parties, the motion to quash will be granted.
II.

STANDARD OF REVIEW
Section 1782 allows district courts to authorize litigants to obtain evidence for use in

foreign proceedings. 3 In considering such requests, a district court must determine whether the
statutory requirements under § 1782 are met, and then decide whether to exercise its discretion to
grant the application. 4 The statutory requirements are first, that the application seeks discovery
from a person or entity that resides in the district in which the application is filed, second, that
the discovery must be for use in proceedings before a foreign tribunal, and third, that the
application can be made by either the foreign tribunal or by an interested party. 5 If the statutory
requirements are met, the court has discretion to grant or deny the § 1782 application. 6
“[A] district court is not required to grant a § 1782 application simply because it has the
authority to do so.” 7 In Intel Corp. v. Advanced Micro Devices, Inc., the United States Supreme
Court set forth a non-exhaustive list of factors the district court may consider in choosing
whether to exercise its discretion:
3

28 U.S.C. § 1782(a).

4

In re O’Keeffe, 646 F. App’x 263, 265-66 (3d Cir. 2016).

5

Kulzer v. Esschem, Inc., 390 F. App’x 88, 91 (3d Cir. 2010) (citations omitted).

6

Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 264 (2004) (citation omitted).

7

Id.

2

(1) whether the discovery sought is within the foreign tribunal’s jurisdictional
reach and there accessible without aid under § 1782; (2) the nature of the foreign
litigation and the foreign jurisdiction’s receptivity to court assistance from the
United States; (3) whether the § 1782 request conceals an attempt to circumvent
foreign proof-gathering limits or other policies of the foreign country; and (4)
whether the subpoena includes unduly intrusive or overly burdensome requests. 8
Courts also must be mindful of the twin aims of § 1782: “providing efficient means of assistance
to participants in international litigation and encouraging federal countries by example to provide
similar assistance to our courts.” 9
III.

DISCUSSION
Biomet contends that the subpoena should be enforced to obtain Heraeus’ discovery from

Esschem’s counsel. Conversely, Heraeus argues that the subpoena should not be enforced
because the § 1782 statutory requirements have not been satisfied. Alternatively, even if the
statutory requirements were met, Heraeus argues that the discretionary Intel factors weigh
against enforcing the subpoena. Assuming without deciding that the statutory requirements have
been met, the Court concludes the discretionary Intel factors weigh against enforcing the
subpoena.
At the outset, the second Intel factor, which considers “the nature of the foreign litigation
and the foreign jurisdiction’s receptivity to court assistance from the United States,” 10 weighs
against enforcement of the subpoena. Here, Biomet filed its application in September seeking
thousands of pages of documents for use in a criminal appeal hearing, which is scheduled to take
place on November 24, 2017. However, these criminal proceedings began over eight years ago,
and a stay suspending the proceedings was lifted about fourteen months ago. Biomet’s delay in

8

In re Ex Parte Global Energy Horizons Corp., 647 F. App’x 83, 85 (3d Cir. 2016) (citing In re Chevron Corp., 633
F.3d 153, 162-64 (3d Cir. 2011); Intel Corp., 542 U.S. at 256-61).

9

Intel Corp., 542 U.S. at 252 (internal quotation marks and citation omitted).

10

In re Ex Parte Global Energy Horizons Corp., 647 at 85 (citations omitted).

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seeking a § 1782 application weighs against enforcing the subpoena now. 11 Biomet has not
shown any likelihood that the German court will be receptive to thousands of pages of discovery
on the eve of its appeal hearing, or even that the documents will be considered. Therefore, it
does not appear that enforcement of the subpoena would provide “efficient assistance” to the
resolution of these proceedings. 12 The second Intel factor weighs against enforcing the
subpoena.
Moreover, the fourth Intel factor, which looks to “whether the subpoena includes unduly
intrusive or overly burdensome requests,” 13 weighs against enforcement. Here, the requests are
unduly intrusive to Heraeus. The subpoena in this case requires the production of all Heraeus’
produced discovery that Esschem’s counsel currently possesses, which is subject to a protective
order in the Esschem litigation. Production of this discovery to Biomet would undermine the
very purpose of the protective order in the Esschem litigation, as it would allow Biomet to obtain
sensitive documents containing Heraeus’ proprietary information. The potential prejudice to
Heraeus is particularly acute where Biomet has already been found in Germany to have misused
Heraeus’ proprietary information.
Finally, with respect to the first and third Intel factors, the Court expresses concern that
enforcing the subpoena here will set a suspect precedent where a party can surreptitiously use a §
1782 application to demand that a law firm produce an opposing party’s documents. This use of
§ 1782 seems inherently improper, and may allow interested parties to collude to obtain an
opposing party’s confidential discovery through a § 1782 application, rather than attempting to
11

See, e.g., Aventis Pharma v. Wyeth, No. M-19-70, 2009 WL 3754191, at *1 (S.D.N.Y. Nov. 9, 2009) (granting
Aventis’ untimely § 1782 application would frustrate, rather than promote the aims of § 1782, as it would not
“provide efficient means of assistance to participants in the international litigation.”) (internal quotation marks and
citations omitted).
12

Intel Corp., 542 U.S. at 253 (internal quotation marks and citation omitted).

13

In re Ex Parte Global Energy Horizons Corp., 647 F. App’x at 85 (citations omitted).

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timely obtain discovery from the opposing party itself. 14 Particularly here, where Heraeus is a
German company and Biomet seeks to use the discovery in a German court, it is not appropriate
to use § 1782 to obtain the documents from an American law firm representing not Heraeus, but
Esschem, an opposing party in litigation pending in the United States. Although the subpoena in
this case purports to seek documents in the possession of Esschem’s counsel, the subpoena is
designed to obtain Heraeus’ discovery, not Esschem’s. Biomet should not be permitted to use
the § 1782 application to obtain Heraeus’ discovery from Esschem’s counsel in circumvention of
foreign discovery limits and procedures. 15 At best, this is an uncomfortable use of the § 1782
application. At worst, it is a manipulation of the § 1782 application to obtain untimely discovery
from an opposing party. Under the circumstances of this case, these factors weigh strongly
against enforcing the subpoena, which will be quashed.
IV.

CONCLUSION
For the foregoing reasons, Heraeus’ motion to quash the subpoena will be granted. An

appropriate Order follows.

14

See In re Cathode Ray Tube Antitrust Litig., MDL No. 1917, 2013 WL 183944, at *2 (N.D. Cal. Jan. 17, 2013)
(denying enforcement of a § 1782 application in part because the subpoena sought the defendants’ discovery
documents that were in the possession of a law firm that did not represent those defendants); see also In re Bank of
Cyprus Pub. Co. Ltd., No. 10 Misc. 23, 2011 WL 223168, at *2 (S.D.N.Y. Jan. 21, 2011) (explaining that the § 1782
subpoena, although directed at a law firm, was actually targeting the documents of trustees in bankruptcy, and not
the law firm).
15

See In re Cathode Ray Tube Antitrust Litig., MDL No. 1917, 2012 WL 6878989, at *2-3 (N.D. Cal. Oct. 22, 2012)
(explaining that “[t]he discovery that [the applicant] seeks in the subpoena are not really documents of [the law
firm], although in their possession, but are really information from the defendants” and that “enforcing the
subpoenas here could well be precedent in the future for parties who want information from one or more defendants
to instead use such subpoenas on plaintiffs’ . . . counsel for whatever records they have assembled.”).

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