§1782 Discovery Against U.S. Law Firms: No Foreign-Discoverability Bar; Privilege and Burden Policed Post-Grant Under the Federal Rules

Introduction

In In Re: Ex Parte Application of SBK ART LLC, the U.S. Court of Appeals for the Second Circuit affirmed an order from the Southern District of New York granting limited discovery under 28 U.S.C. §1782 against a U.S. law firm, Akin Gump Strauss Hauer & Feld LLP (“Akin”). The petitioner, SBK ART LLC (“SBK”), sought documents and deposition testimony for use in (i) an annulment action challenging EU sanctions in the General Court of the European Union (the “EU Action”), (ii) a damages action in the Malta Civil Court (the “Malta Action”), and (iii) anticipated litigation in the Netherlands or elsewhere.

The dispute arose from Fortenova Grupa d.d.’s restructuring after SBK—formerly owned by Russia’s Sberbank—became sanction-tainted in the wake of Russia’s invasion of Ukraine. Central to SBK’s theory was an Akin memorandum (the “Akin Opinion”) assessing KYC and sanctions compliance issues regarding SBK’s sale to an Emirati investor. SBK alleged that Fortenova/Open Pass used the Akin Opinion and related conduct to support sanctions and corporate actions that ultimately diluted or eliminated SBK’s ownership stake.

On appeal, Akin’s principal contention was narrow but significant: that it is an abuse of discretion to allow §1782 discovery from a U.S. law firm when the requested materials would not be discoverable from the firm’s foreign client in the foreign jurisdictions. Akin relied heavily on Kiobel by Samkalden v. Cravath, Swaine & Moore LLP.

Summary of the Opinion

The Second Circuit held that the district court did not abuse its discretion in granting SBK’s §1782 application (as narrowed by the magistrate judge and adopted by the district judge) without first determining whether the sought materials were discoverable from the client abroad. The Court clarified that:

  • Kiobel by Samkalden v. Cravath, Swaine & Moore LLP does not create a categorical “foreign discoverability” bar for §1782 discovery directed to U.S. law firms.
  • Section 1782 contains no foreign-discoverability requirement (consistent with Intel Corp. v. Advanced Micro Devices, Inc.).
  • Policy concerns about attorney-client relationships, privilege, and burden generally should be managed after the §1782 “gate” is opened—through ordinary discovery tools under the Federal Rules of Civil Procedure (e.g., Rules 26 and 45), not by denying §1782 relief wholesale.

The Court also rejected Akin’s alternative request for a remand premised on “extraterritoriality” concerns, finding no requirement (under Banoka S.à.r.l. v. Elliot Mgmt. Corp. or otherwise) that district courts must consider particular foreign-location factors in every case, and noting that the district court had, in any event, considered burden/proportionality and sharply limited the discovery.

Analysis

Precedents Cited

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

Intel supplies both the modern interpretive framework for §1782 and the four discretionary factors (often called the “Intel factors”). Critically here, Intel rejected a categorical “foreign-discoverability” prerequisite, holding that §1782 does not require the applicant to show that the material would be discoverable in the foreign proceeding. The SBK panel treated this as controlling: whatever role “foreign discoverability” may play as a discretionary consideration in particular cases, it cannot be converted into an across-the-board threshold rule—especially not a special rule targeted at law firms.

2) Kiobel by Samkalden v. Cravath, Swaine & Moore LLP, 895 F.3d 238 (2d Cir. 2018)

Akin argued Kiobel effectively bars §1782 discovery from a U.S. law firm holding documents for a foreign client when the documents would be unavailable abroad. The Court rejected that reading and carefully narrowed Kiobel to its facts:

  • Intel-factor weighting mattered: in Kiobel, the first factor (real target was a participant, Shell) and the third factor (circumvention of Dutch proof-gathering) weighed against discovery.
  • A confidentiality order was dispositive: the Kiobel court stressed the “extraordinary, and possibly unique” posture created by altering a confidentiality regime without the client’s participation, concluding it “mandate[d] reversal.” SBK had no comparable confidentiality-order problem.
  • No categorical bar: Kiobel was framed as an application of discretion, not a rewrite of §1782.

3) Banoka S.à.r.l. v. Elliot Mgmt. Corp., 148 F.4th 54 (2d Cir. 2025)

Akin invoked Banoka to argue district courts must consider “extraterritoriality factors” (foreign location of documents/custodians). The SBK panel treated Banoka as reaffirming discretion, not imposing a mandatory checklist. Banoka approved a district court’s consideration of foreign-location burdens under the fourth Intel factor (undue burden), but did not require that such considerations compel denial in other cases—particularly where discovery is narrowly tailored and proportional.

4) Second Circuit §1782 fundamentals: statutory elements, discretion, and “no extra-statutory barriers”

  • Mangouras v. Squire Patton Boggs, 980 F.3d 88 (2d Cir. 2020): clarified review standards (de novo for statutory elements; abuse of discretion for Intel-factor application).
  • Fed. Republic of Nigeria v. VR Advisory Servs., Ltd., 27 F.4th 136 (2d Cir. 2022): reiterated the statutory elements and Intel-factor framework.
  • Mees v. Buiter, 793 F.3d 291 (2d Cir. 2015): emphasized “twin aims” of §1782 and cautioned against over-weighting foreign availability.
  • In re Metallgesellschaft, 121 F.3d 77 (2d Cir. 1997): warned against using foreign discoverability as a “blunt instrument.”
  • In re Gianoli Aldunate, 3 F.3d 54 (2d Cir. 1993): early, influential rejection of an implied foreign-discoverability requirement, later approved in Intel.
  • Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095 (2d Cir. 1995), and In re Malev Hungarian Airlines, 964 F.2d 97 (2d Cir. 1992): endorsed “closely tailored” discovery orders and conditions rather than outright denial, and cautioned against extra-statutory barriers.
  • In re Accent Delight Int'l Ltd., 869 F.3d 121 (2d Cir. 2017): stressed the district court’s gatekeeping role and abuse-prevention function.

5) The “law firm custodian” line: In re Sarrio, S.A. and Ratliff v. Davis Polk & Wardwell

The panel used these cases to explain why Akin’s “law firm” argument could not be converted into a categorical rule:

  • In re Sarrio, S.A., 119 F.3d 143 (2d Cir. 1997): raised (in dicta) a policy concern that attorney-client communications could be chilled if documents unreachable abroad became reachable merely because sent to U.S. counsel; however, it did not decide the issue (mootness).
  • Ratliff v. Davis Polk & Wardwell, 354 F.3d 165 (2d Cir. 2003): reversed denial of a subpoena where any arguable “Sarrio protection” was lost by voluntary disclosure to a third party (SEC). The SBK panel highlighted that neither case established the categorical limitation Akin sought, and both fit more naturally within privilege/waiver and discretionary tailoring, not a statutory bar.

6) “§1782 is a gate; the Federal Rules then govern”

The opinion leaned on the conceptual separation between granting §1782 authority and managing particular discovery requests:

  • In re Edelman, 295 F.3d 171 (2d Cir. 2002): illustrated that a §1782 order can be proper even if a later Rule 45 motion would bar a particular deposition; Rules 26 and 45 remain available for burden/overbreadth.
  • Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d 591 (7th Cir. 2011): quoted for the proposition that once the §1782 screen clears abuse concerns, “section 1782 drops out” and ordinary discovery management takes over.
  • Gov't of Ghana v. ProEnergy Servs., LLC, 677 F.3d 340 (8th Cir. 2012), and Banco Pueyo SA v. Lone Star Fund IX (US), L.P., 55 F.4th 469 (5th Cir. 2022): similarly recognized that post-authorization disputes are handled under the Federal Rules.

Legal Reasoning

1) The Court framed the appeal as a narrow “discretion” question, not a jurisdictional one

Akin did not contest that §1782’s statutory prerequisites were met (person “found” in the district; for use in a foreign proceeding; application by an “interested person”). The real fight was whether discretion was abused by allowing discovery from counsel absent a finding of foreign discoverability from the client. That posture mattered: the panel treated Akin’s argument as an attempted extra-statutory barrier and evaluated it against Intel and Second Circuit doctrine forbidding categorical additions.

2) The Court refused to transform policy concerns into an across-the-board limitation

The opinion acknowledged the legitimacy of concerns about disturbing attorney-client relationships, but treated them as issues to be managed through:

  • Tailoring at the §1782 stage (narrow topics, time window, non-privileged materials, “uniquely possessed” or shared with third parties), and
  • Rule-based management after the grant (motions to quash, protective orders, proportionality limits, privilege logs, etc.).

This preserves §1782’s “twin aims” (efficient assistance; reciprocity encouragement) while reducing risk of abuse—without contradicting Intel’s rejection of a foreign-discoverability requirement.

3) Kiobel was treated as fact-bound, not rulemaking

The panel identified three key reasons Kiobel did not control:

  • Different Intel-factor balance: in Kiobel, the first and third factors cut against discovery; in SBK, Akin did not challenge the district court’s Intel-factor balancing and only one factor weighed against discovery.
  • No confidentiality-order disruption: Kiobel turned on altering a confidentiality order without the client’s participation; SBK involved no analogous maneuver.
  • Doctrinal compatibility with Intel: any reading of Kiobel that created a special foreign-discoverability bar for law firms would conflict with Intel and Second Circuit precedent.

4) The “gatekeeping” model did the heavy lifting

The panel conceptualized §1782 as a threshold screen to prevent abuse, not as the proceeding in which all downstream discovery disputes must be decided. Once the gate is opened, ordinary discovery law governs. This reasoning supplied the Court’s answer to Akin’s practical objection that privilege/burden review would be tedious and expensive: those are the familiar costs of discovery, and the Federal Rules provide the mechanisms to constrain them.

Impact

1) Clarifies the reach of §1782 against U.S. counsel

The decision strengthens the proposition that §1782 discovery may proceed against U.S. law firms holding client-related materials even when those materials may be unobtainable from the client in the foreign forum—rejecting attempts to create a law-firm-specific foreign-discoverability bar.

2) Narrows aggressive readings of Kiobel

Litigants often cite Kiobel by Samkalden v. Cravath, Swaine & Moore LLP to argue for categorical protection of law firms as custodians. SBK limits Kiobel to its exceptional confidentiality-order posture and its specific Intel-factor findings, signaling that Kiobel is not a general safe harbor for counsel.

3) Shifts tactical battles to Rule 26/45 practice

By emphasizing that privilege, undue burden, overbreadth, proportionality, and protective-order issues should be resolved through standard discovery motions after a §1782 grant, the opinion encourages more granular litigation over specific requests rather than threshold fights over categorical bars.

4) Encourages “tailored grant” orders

The case also reinforces a pragmatic template: courts may grant §1782 applications but narrow them sharply by topic, time, and custodial uniqueness—consistent with Euromepa S.A. v. R. Esmerian, Inc. and In re Malev Hungarian Airlines.

Complex Concepts Simplified

  • 28 U.S.C. §1782: A federal statute allowing U.S. courts to order U.S.-based discovery (documents/testimony) to help with proceedings in foreign or international tribunals.
  • Statutory (jurisdictional) prerequisites vs. discretionary factors: Courts first confirm §1782’s basic requirements are met (who, where, and for what foreign proceeding). If yes, they then decide whether to allow discovery using discretionary considerations, chiefly the Intel factors.
  • The Intel factors: (1) whether the target is a participant abroad; (2) the foreign tribunal’s receptivity; (3) circumvention of foreign/U.S. policies; (4) undue burden/intrusion.
  • “Foreign discoverability”: Whether the same information could be obtained through discovery mechanisms in the foreign proceeding. U.S. law does not make that a strict prerequisite to §1782 relief.
  • “Gatekeeping” under §1782: The §1782 decision is a threshold authorization. Once granted, ordinary discovery rules (especially Rule 26 proportionality and Rule 45 subpoena limits) govern what must actually be produced.
  • Privilege and work product: §1782 cannot compel production that violates “any legally applicable privilege.” Disputes about whether specific materials are privileged are typically resolved through privilege logs, motion practice, and protective orders under the Federal Rules.

Conclusion

In Re: Ex Parte Application of SBK ART LLC establishes a clear Second Circuit statement that district courts are not barred from granting §1782 discovery against U.S. law firms merely because the requested materials may be undiscoverable from the foreign client abroad. The Court distinguishes Kiobel by Samkalden v. Cravath, Swaine & Moore LLP as fact-specific (especially due to a dispositive confidentiality-order problem) and reaffirms Intel Corp. v. Advanced Micro Devices, Inc.’s rejection of a foreign-discoverability prerequisite. The practical lesson is procedural: §1782 opens the door, but the Federal Rules of Civil Procedure—particularly Rules 26 and 45—supply the principal safeguards against overbreadth, undue burden, and improper intrusion into attorney-client relationships.