For litigants in foreign courts, 28 U.S.C. § 1782 has long been a promising, if finicky, tool to access discoverable materials by filing an ex parte application in U.S. federal district court. The statute provides certain protections to preserve foreign privileges, but courts have struggled to determine whether a party seeking to defeat Section 1782 discovery bears a burden to establish the existence of a foreign privilege. In a recent decision, the Fourth Circuit joined three other circuits in assigning such a burden but demurred on whether to join the Second and Fifth Circuits in requiring that burden to be satisfied by “authoritative proof.” See In re Banco Mercantil del Norte, S.A., 126 F.4th 926, 933-34 (4th Cir. 2025) (“Banorte”). The decision sets up a circuit split with practical consequences to targets of Section 1782 discovery seeking to rely on foreign privileges.
Section 1782
In considering Section 1782 applications, courts first evaluate whether the applicant has satisfied the statutory requirements—that is, whether the application was (1) filed in the appropriate forum, (2) by an “interested person,” and (3) seeks evidence, which is (4) “for use” in a proceeding in a foreign tribunal. Where the four statutory requirements are met, a district court must then weigh four discretionary factors, set forth in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), in determining whether to grant the application. The discretionary factors ask: (1) whether the target of discovery is a participant in the foreign proceedings; (2) the nature of the foreign tribunal, character of the foreign proceedings, and the receptivity of the foreign tribunal to judicial assistance from a U.S. court; (3) whether the Section 1782 application “conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States”; and (4) whether the application is “unduly burdensome or intrusive.” Id. at 264-65.
Background
Banorte concerned an application for Section 1782 discovery filed by a group of five related Mexican financial entities, which the court referred to collectively as “Banorte.” In 2018 and 2019, Banorte lent millions of dollars to a cardboard products manufacturer, Cartograf S.A. de C.V. (“Cartograf Mexico”). Cartograf Mexico’s sole representative, Jose Paramo Riestra, was jointly and severally obligated for the debt. According to the allegations in Banorte’s Section 1782 application, although the parties had agreed to a complex repayment scheme, Paramo allegedly did not repay Banorte, instead transferring the assets to other entities and fleeing to Texas. In 2021, Banorte brought a civil suit in Mexico against Cartograf Mexico, alleging default and fraudulent concealment. The civil proceedings have resulted in injunctive relief freezing the company’s assets and piercing the corporate veil, and Banorte continues to seek to enforce the promissory notes and obtain contract damages. At some point, Banorte also filed a criminal fraud complaint with Mexican authorities.
In July 2023, Banorte filed an ex parte application for discovery under Section 1782 seeking documents and testimony for use in the Mexican civil proceedings. Banorte sought Section 1782 discovery from, among others, Cartograf USA, Inc., a Virginia-based packaging company for which Paramo is an officer, director, and ultimate beneficiary. While Banorte’s application gave detailed explanation of the civil proceedings for which it sought discovery under Section 1782, it gave only a brief reference to the criminal complaint Banorte had filed with Mexican authorities. The district court granted the application and Banorte served Cartograf USA with a subpoena. Cartograf USA moved to quash the subpoena, arguing, among other things, that it could withhold discovery on account of a privilege against self-incrimination under Mexican law. As evidence of this asserted privilege, Cartograf USA included an independent legal opinion from a Mexican attorney. While Cartograf USA grounded its argument in the statutory text of Section 1782, the district court addressed it under the second Intel factor insofar as it pertained to the potential receptivity of the Mexican court to the requested discovery. See In re Application of Banco Mercantil de Norte, S.A., 2023 WL 6690708, at *7 (E.D. Va. Oct. 12, 2023). The district court rejected the argument, concluding that the Mexican legal opinion failed to provide “authoritative proof” of the existence of the privilege. Id. Accordingly, the district court denied the motion to quash and Cartograf USA subsequently appealed to the Fourth Circuit.
The Fourth Circuit’s Banorte decision
Before the Fourth Circuit, Cartograf USA renewed its statutory argument that it was entitled to withhold discovery on account of the asserted Mexican privilege, and that the district court had erred in assigning a burden to either party. Although Cartograf USA grounded its arguments in the plain language of Section 1782(a)’s privilege exception (“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.”), the Fourth Circuit followed the district court’s approach and treated the privilege argument under the second Intel factor. That proved consequential, as it allowed the Fourth Circuit to confine its review to abuse of discretion.
That the application of the privilege exception in Section 1782(a) might be discretionary for a district court would seem to be in some tension with the statutory text, and the matter is further confounded because the leading case on the privilege exception, Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095 (2d Cir. 1995), predates the current framework for Section 1782 applications set out in Intel. Nevertheless, by addressing the assertion of a foreign privilege under the second Intel factor, the Fourth Circuit (and the district court below) followed the example of its sister circuits—and added to an unsettled circuit split in the process.
The crux of the circuit split on the second Intel factor is whether a party attempting to defeat Section 1782 discovery by asserting the existence of a foreign privilege (which would, in turn, render the foreign court not “receptive” to U.S. discovery) has a burden to prove the existence of such a privilege or whether the four Intel factors are burden-neutral tools to guide a district court’s exercise of discretion. With Banorte, the Fourth Circuit joins the Second, Third, and Fifth Circuits in imposing a burden to establish the existence of an applicable privilege on the party attempting to defeat discovery. By contrast, the First, Seventh, and Eleventh Circuits have declined to do so.
Further adding to the inter-circuit complexity, among the circuits that impose a burden, there is division as to what that burden entails. In the Second and Fifth Circuits, a discovery opponent must put forth “authoritative proof” of the existence of an applicable foreign privilege drawn from a limited set of acceptable legal authorities. The Third Circuit has not imposed such a heightened standard, and in Banorte, the Fourth Circuit did not reach the question.
Conclusion
For parties litigating Section 1782 applications, Banorte should come more as a reminder than a watershed. As ever, the landscape for Section 1782 applications is a patchwork across the country and approaches to Section 1782 applications may need to vary significantly between circuits and districts. Where a foreign privilege might bear on a Section 1782 application, litigants should understand their burdens and plan how to meet them. While Section 1782 may be a powerful tool for litigants in foreign courts seeking discovery in the U.S., a Section 1782 application or opposition requires careful strategy and attention to the particularities of Section 1782 practice.
