One of the first arguments in the Supreme Court’s October 2021 Term will be in Servotronics, Inc. v. Rolls-Royce PLC, No. 20-794, which asks the Court to resolve a circuit split over the role, if any, that federal courts should play in facilitating discovery in foreign arbitrations. In what looks like a simple matter of statutory interpretation—defining the term “tribunal”—the case may shed new light on how the current Court approaches traditional interpretive tools.
Servotronics arises out of a dispute over an engine fire that occurred in a Boeing 787 aircraft. Servotronics manufactured a valve used by Rolls-Royce to manufacture the engine. After settling claims from Boeing, Rolls-Royce sought arbitration in England over its claim for indemnification from Servotronics. Servotronics then sought discovery in the Northern District of Illinois from Boeing under 28 U.S.C. § 1782(a), which provides that a U.S. district court “may order a person residing or found in the district to give testimony or produce documents for use in a proceeding in a foreign or international tribunal … upon the application of any interested person.”
The question before the Supreme Court is whether § 1782(a) extends to private, foreign arbitration or is limited to government proceedings. The Seventh Circuit, joining the Second and Fifth Circuits, held that a foreign arbitration is not a “tribunal” within the meaning of the statute. In conflicting opinions, the Sixth Circuit and the Fourth Circuit—in Servotronics, Inc. v. Boeing Co., a case arising out of the same arbitration—interpreted “tribunal” to include foreign arbitration.
The Seventh Circuit affirmed a district court order quashing a subpoena to Boeing. Although it found the text of the statute ambiguous, it relied heavily on the statutory context. In 1964, when Congress amended § 1782 to adopt its current language, it also enacted statutes governing service of process in foreign litigation (28 U.S.C, §1696) and “letters rogatory” (28 U.S.C. §1781). Those statutes, like §1781(a) used the phrase “foreign or international tribunal.” Because service of process and letters rogatory measures “are matters of comity between governments,” the Seventh Circuit concluded that § 1782(a) must also be limited to government tribunals and does not extend to private arbitration.
Interpreting §1781(a) as the Seventh Circuit did also avoided a conflict with the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-15, which requires the arbitrator, not the parties, to decide to summon witnesses. The Seventh Circuit reasoned that extending § 1782(a) to foreign arbitrations would give parties in foreign arbitration greater access to discovery through federal courts than parties to domestic arbitration.
In its contrary reading of § 1782(a), the Sixth Circuit found: (1) the ordinary dictionary definition, and the meaning in particular in a legal context, of the word “tribunal” included arbitration; (2) Supreme Court dictum in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), seemingly supported the extension of § 1782(a) to international commericial arbitration; and (3) permitting federal courts to aid foreign arbitrations was consistent with the discretion given to courts to decide what judicial assistance should be provided under § 1782(a).
In their merits briefs, both sides argue that the plain language of the statute favors their interpretation of § 1782(a) and point to contemporaneous dictionary definitions of “tribunal” that support their interpretations. These arguments highlight the limitations of relying on contemporaneous dictionaries to ascertain the meaning of statutory terms. Because some dictionaries defined “tribunal” in a way that would include arbitrations, but others did not, the Seventh Circuit found the analysis of dictionaries “inconclusive.” Nonetheless, respondents—Rolls-Royce and Boeing—urge the Court to rely on definitions in dictionaries that support their views, dismissing any contrary definitions as “obviously inapt.”
Servotronics’ plain language argument also relies on cases that predate the adoption of the “tribunal” language in § 1782(a). It cites Supreme Court decisions dating back to 1898 that used the term “arbitration tribunal” and “tribunal of arbitration” as evidence that the ordinary meaning of “tribunal” includes arbitrations. It also cites cases from the 19th and early-20th century that employ similar language, although rarely, if ever, was the outcomes in these cases dependent on whether arbitration was a tribunal or not.
Respondents counter that significantly more cases use foreign or international tribunal to refer to courts, quasi-judicial agencies, or intergovernmental adjudicative bodies, not private arbitration. They also maintain that the petitioners’ expansive definition would lead to absurd results. If “tribunal” is given the broad meaning Servotronics claims, that could include all sorts of informal proceedings.
The rest of parties’ arguments raise competing principles of statutory interpretation. Respondents track the Seventh Circuit’s analysis. They emphasize the need to harmonize § 1782(a) with other statutes employing similar language and the alleged conflict that would exist between discovery limitations established by the FAA, which would provide more narrow discovery in domestic versus foreign proceedings if § 1782(a) applies to foreign arbitrations.
The latter argument would seem contrary to the Supreme Court’s holding in Intel. It rejected a similar argument about the need for consistency between foreign and domestic discovery under § 1782. Intel asked the Supreme Court to rule that district courts can order discovery under § 1782(a) only if the same discovery would be available under the rules governing the foreign proceeding. Intel, 542 U.S. at 260–61. The Court held that § 1782(a) does not “direct United States courts to engage in comparative analysis” of foreign and domestic discovery rules. Id. at 261. Parity and comity may inform a district court’s decisions under § 1782(a), but impose no requirement of parity.
Servotronics focuses on the legislative history of § 1782. Relying heavily on the Supreme Court’s analysis of that history in Intel, Servotronics explains that, before the statute was enacted, courts could only appoint commissioners to examine witnesses in response to letters rogatory from foreign courts forwarded through diplomatic channels and could do so only in cases in which a foreign government was a party or had an interest. In enacting § 1782, Congress eliminated the governmental party or interest restriction and allowed district courts to designate persons to preside at depositions to be used in “any civil action pending” in any court in a foreign country with which the United States is at peace.
The next year, Congress further broadened the scope of § 1782 by substituting “judicial proceeding” for “civil action.” In 1964, the statute was amended to its current form. Congress removed the reference to “judicial proceeding” and replaced it with “a proceeding in a foreign or international tribunal[.]” The accompanying Senate Report “explains that Congress introduced the word ‘tribunal’ to ensure that assistance is not confined to proceedings before conventional courts, but extends also to administrative and quasi-judicial proceedings.” Intel, 542 U.S. at 249 (internal quotations omitted). Articles by Columbia law professor Hans Smit, a leading author of the amendment expressed the view year after its enactment that “tribunal” included arbitrations.
Relying on this history, Intel held that Congress intended for the statute to apply “whether the foreign or international proceeding or investigation is of a criminal, civil, administrative or other nature.” Id. at 259. This, Servotronics contends, means the statute should be broadly construed to encompass foreign arbitrations, as the Fourth and Sixth Circuits held.
In response, Respondents argue the amendment was intended only to address the increase in “administrative and quasi-judicial proceedings[.]” Boeing points to specific references to “investigating magistrates” used in European criminal proceedings, claiming it demonstrates congressional intent to limit the scope of § 1782 to entities authorized by governments.
How the Supreme Court reconciles these arguments may provide significant guidance for future cases raising issues of statutory interpretation. Several Justices—most notably Justice Thomas—have criticized the use of legislative history. Will they simply eschew reliance on the nontextual sources altogether? Without them, how else will the Court ascertain the scope and purpose of the 1964 amendment? Will the Justices who favor a textualist approach reject the Seventh Circuit’s conclusion that dictionary definitions provide no clear answer or will they cherry-pick from among the dictionaries cited by the parties? To what extent will the Court look to Intel as a guide? To what extent does public policy fit in? Is it better or worse for the promotion of international commercial arbitration that the parties can resort to federal district courts for their prehearing discovery? Can the parties include provisions in their arbitration agreements precluding resort to § 1782?.
The Court could avoid these issues altogether. The English arbitration hearing concluded on May 21, 2021. Both Rolls-Royce and Boeing argue that the case is moot, though Servotronics contends that, until the arbitrators issue an opinion, additional evidence could be submitted and, even after an opinion issues, it could still be challenged in English courts. Servotronics also argues that the case falls within the exception to mootness for controversies capable of repetition yet evading review. Thus, the possibility exists that the Supreme Court could reject the petitioners’ argument on mootness grounds, leaving the conflict over § 1782(a) to be resolved in a future appeal.
Reprinted with permission from the August 3 issue date of the “New York Law Journal” © 2021 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.