Eastman Kodak Company v. The Goldman Sachs Group, Inc.

Background

Eastman Kodak Company had been an individual plaintiff in the aluminum-warehousing multidistrict litigation since August 2014. The defendants had produced millions of pages of documents and participated in numerous depositions. Discovery was governed by a May 22, 2014 protective order, whose paragraph 2 limited use of discovery produced in the action to prosecuting or defending that action, including an appeal.

Kodak and its affiliates later filed a parallel action in the English High Court against the defendants and their affiliates. Kodak represented that the U.K. action was analogous to and largely overlapped with the U.S. litigation. Because of the protective order, Kodak could not use the multidistrict-litigation discovery record in the U.K. case. Kodak therefore moved for an order allowing it to use the discovery materials in the foreign action.

Kodak’s Request

Kodak proposed obtaining relief under 28 U.S.C. § 1782, a statute that permits federal-court assistance in gathering evidence for use in foreign proceedings, and/or by modifying the protective order. Kodak sought wholesale permission to use the entire discovery record that its counsel already possessed.

The court observed that Kodak had not addressed the demanding standards for modifying the protective order. Because the defendants had relied on that order when producing documents and making witnesses available, modification generally required a showing that the order had been improvidently issued, or that an extraordinary circumstance or compelling need justified modification. The court found that Kodak had not made that showing.

Court’s Analysis

The court explained that § 1782 permits a district court to order testimony or production of documents for use in a foreign proceeding when the statutory requirements are met. Among other things, the person from whom discovery is sought must reside or be found in the district, the discovery must be for use in a foreign proceeding, and the application must be made by a foreign or international tribunal or an interested person.

After jurisdiction is established, the court has discretion to decide whether to grant relief. The court considered the Supreme Court’s factors, including whether the target is a participant in the foreign proceeding, the nature and receptivity of the foreign tribunal, whether the request seeks to evade foreign or U.S. proof-gathering restrictions, and whether the request is unduly intrusive or burdensome.

The court concluded that § 1782 addresses the production of documents or testimony, not blanket permission to transfer an entire discovery record from pending U.S. litigation to a foreign action. The court relied on decisions rejecting similarly broad requests in other multidistrict litigation and on a Second Circuit decision warning that such relief could undermine confidence in protective orders.

The court also held that the request could not be granted without examining which particular defendants reside or are found in the district and connecting particular documents or document categories to particular defendants. The court rejected Kodak’s argument that the presence of at least one defendant and the discovery record in the Southern District of New York resolved the jurisdictional issue. It stated that § 1407(b), which concerns the authority of a multidistrict-litigation court over pretrial proceedings, could not simply be extended to give the court nationwide authority over collateral § 1782 applications.

Disposition

The court denied, without prejudice to Kodak’s right to make a tailored application or applications under § 1782, Kodak’s motion for wholesale export of the discovery record through modification of the protective order or an order under § 1782. Kodak was permitted to file proper applications with proposed subpoenas seeking specified discovery from specified defendants who reside or are found in the district where the application is filed.

The court directed that any later applications permit a particularized analysis of the statutory and discretionary § 1782 factors. It stated that, if Kodak prevailed as to designated documents or categories, Kodak could use its existing discovery database for those materials only and solely to prosecute the U.K. action. The court also directed Kodak and the defendants to meet and confer to narrow the disputed document categories before any such applications were filed, and directed the clerk to close the pending motion.