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By Peter Leung
March 2 — Elvis Presley Enterprises LLC's motion to secure an order to take discovery in the U.S. for a legal dispute in Germany was denied by the U.S. District Court for the Southern District of New York March 1.
EPE, which holds the rights to Elvis Presley's recordings, had moved for an order for discovery against Sony Music Entertainment and its affiliate Arista Music for use in a dispute in Germany regarding royalty payments. The request was made pursuant to 28 U.S.C. § 1782, a tool that international litigants sometimes use when litigating abroad, since most countries have more restrictive discovery procedures than the U.S.
The New York court rejected EPE's motion. Both parties agreed that the statute applies to this case. However, after applying the four-factor analysis provided by the Supreme Court in Intel Corp. v. Advanced Micro Devices. Inc., 542 U.S. 241, 71 U.S.P.Q.2d 1001 (U.S. 2004) ), the court declined to exercise its discretion to order discovery because three of the four factors weighed against doing so.
The first factor asks whether the party against whom discovery is sought is a participant in the foreign litigation. The court found that, since EPE is seeking evidence from an affiliate of a party to the German litigation, the information could have been requested through the German court; thus, this factor weighed against granting the motion. In addition, the court found that EPE's argument that German discovery laws are narrower in scope than U.S. law did not tilt the factor in its favor, as it did not address the fact that all the sought-after information is available to its opponent in the German proceeding.
The second factor looks at the nature of the foreign proceedings and whether the foreign court would be receptive to assistance from a U.S. court. The court pointed to the considerable progress of the German proceedings and EPE's delay in bringing the motion. It also noted that, despite EPE's claims that Arista's production in Germany was deficient in light of the court's order there, EPE did not take advantage of procedures in Germany to force Arista to fix the problem and was, instead, using the U.S. motion to accomplish that goal. Those issues led the court to find that the second factor also weighed against granting discovery.
The third factor—whether the discovery request is an attempt to circumvent foreign law—was neutral. Section 1782 does not require EPE to exhaust its remedies in Germany, nor does it require it to prove that the evidence sought is admissible or discoverable there.
The final factor—whether the request was overbroad and unduly burdensome—also weighed against granting the discovery motion. The court accepted Arista's argument that the information sought is only minimally relevant to the German proceedings.
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