JAMES L. COTT, United States Magistrate Judge.
In this action, Plaintiff Lantheus Medical Imaging, Inc. ("Lantheus") seeks declaratory relief and money damages arising from Defendant Zurich American Insurance Company's ("Zurich") alleged breach of its contractual obligation to indemnify Lantheus for financial loss
The central issue in this litigation is whether the contingent business interruption losses Lantheus sustained as a result of the shutdown of the nuclear reactor at Chalk River Laboratories in Ontario, Canada (the "NRU Reactor") — and for which it seeks coverage from Zurich — were caused by either "covered" or "excluded" perils. (Memorandum of Law in Support of Plaintiff's Motion for Issuance of Amended Letters Rogatory, dated August 29, 2011 ("Pl.'s Mem.") (Dkt. No. 36), at 2). The NRU Reactor, which is owned and operated by AECL, was shut down for 15 months in 2009 and 2010 because of damage to the reactor's vessel. (Id. at 2). During the shutdown, the NRU Reactor ceased production of molybdenum-99 ("Moly-99"), causing the shortage of a "critical raw ingredient" that Lantheus relies on to manufacture radiopharmaceutical products. (Id.). To establish that its losses resulted from "covered" perils in its suit against Zurich, Lantheus seeks evidence from AECL that will clarify both the "sequence of events leading to the NRU Reactor shutdown and the causes of the damage to its aluminum alloy reactor vessel[,]" such as operator error, corrosion, or improper maintenance. (Pl.'s Mem. at 3-4; Declaration of Rukesh A. Korde in Support of Plaintiff's Motion, dated August 29, 2011 ("Korde Decl.") (Dkt. No. 37), ¶¶ 4-11 and the exhibits cited therein).
Lantheus' application is the most recent of several attempts to obtain information from AECL. Beginning in as early as May, 2010, Lantheus contacted AECL in an effort to obtain discovery material from AECL informally. (Declaration of Anna St. John in Support of Plaintiff's Motion, dated August 29, 2011 ("St. John Decl.") (Dkt. No. 39), ¶ 3). However, according to Lantheus, despite AECL's initial willingness to provide information voluntarily, Lantheus' repeated efforts to meet with AECL technical personnel or executives were futile; its requests for voluntary production ignored, or answered with mostly irrelevant or heavily redacted material; and its requests for information pursuant
After additional efforts to achieve a compromise failed, the Ontario Court dismissed Lantheus' application for enforcement of the letters rogatory without prejudice in an oral decision on July 27, 2011. (Reasons for Judgment, Lantheus Med. Imaging, Inc. v. Atomic Energy of Canada Ltd., (2011), CV-11-00427161 (Can.Ont.Super.Ct. J.) ("Ontario Court Decision"), attached to the Korde Decl. as Exhibit 26, at 10; see also Pl.'s Mem. at 6-7; Korde Decl. ¶¶ 37-55). The Ontario Court's dismissal was premised on a concern that this Court was not a court of "competent jurisdiction," or one "with the powers to issue Letters Rogatory," as required by the Ontario Evidence Act § 60(1). (Ontario Court Decision at 8). According to the Ontario Court, that question turns on the larger issue — which the Ontario Court deferred to this Court for resolution — as to whether the U.S. Foreign Sovereign Immunities Act ("FSIA" or the "Act"), 28 U.S.C. §§ 1330, 1602 et seq., applies to letters rogatory. (Ontario Court Decision at 8). The Ontario Court reasoned that if the FSIA did shield a foreign sovereign from discovery — including discovery obtained by letters rogatory — then this Court would not be a court of "competent jurisdiction." Id. The Ontario Court concluded that this Court had not considered AECL's status as a foreign sovereign — and thus had not considered the applicability of the FSIA — because "[t]here [wa]s nothing in the order [issuing the letters rogatory] which indicate[d] that the court was aware of or that it considered the question of whether it had jurisdiction to make the order that it did by reason of the provisions of the FSIA." (Id. at 5). Accordingly, the Ontario Court ruled that, "in deference to the U.S. Court that was not given the opportunity to consider the issue, it [would be] improper for [it] to grant this request [to enforce the letters rogatory] before the U.S. Court ha[d] been given the relevant information" concerning AECL's status as a foreign sovereign. (Id. at 10). The Ontario Court's dismissal of Lantheus' application was ordered "without prejudice to its rights to make a further application to [that] court which demonstrates that the U.S. Court had the opportunity to consider the issue of the applicability of the FSIA." (Id. at 11).
By letter dated August 4, 2011, Lantheus requested leave from this Court to file a motion for the issuance of amended letters rogatory, which Judge Swain granted that day. (Dkt. No. 32).
On September 7, 2011, the Court granted AECL's application for leave to appear as amicus curiae without prejudice to an application from Lantheus challenging that status if AECL included in its opposition papers factual material beyond the legal arguments concerning the FSIA and the implications of the letters rogatory on Canadian law. (Dkt. No. 42). The Court also reserved the right to disregard any factual material that had not been subject to discovery or, alternatively, to give Lantheus permission to move to take limited discovery and require AECL to move to intervene. (Dkt. No. 42). After the issue was fully submitted to the Court for its consideration, by letters dated November 21 and 29, and December 1, 2011 (see Dkt. Nos. 59-60, 62), the parties raised additional arguments to reflect recent communications with the Canadian government concerning Lantheus' requests for information under the Access to Information Act, On December 9, 2011, the Court held oral argument on the motion and reserved decision, (See Transcript of Oral Argument, dated December 9, 2011 ("Tr.")).
The threshold question raised by the Ontario Court Decision — and thus by Lantheus' renewed application for amended letters rogatory — is whether the FSIA prevents this Court from issuing the letters rogatory.
In opposition to Lantheus' application, AECL also relies on a logical framework. It reasons that if it "were present in the United States, it would be immune from the discovery sought by Lantheus under the [FSIA]" so that issuing the amended letters rogatory without consideration of the FSIA would "permit Lantheus to circumvent the [Act] and the principles it embodies simply because AECL happens not to have any offices or facilities in [the United States]." (Amicus Curiae Atomic Energy of Canada Limited's Memorandum of Law in Response to Plaintiff's Motion for Issuance of Amended Letters Rogatory, dated September 16, 2011 ("AECL Mem.") (Dkt. No. 48), at 1). AECL premises this argument on two legal conclusions: first, that a party is entitled to obtain discovery from a foreign party using letters rogatory only if it would be entitled to that discovery in the United States (id. at 3-4), and, second, that the FSIA protects AECL from discovery in the United States, (Id. at 4-6). Thus, AECL concludes, because the FSIA would protect it from Lantheus' discovery attempts were AECL in the United States, Lantheus is not entitled to the issuance of letters rogatory to obtain discovery in Canada. (Id. at 5-6). A determination to the contrary, AECL argues, would lead to the illogical result that "when parties to private litigation pending in the United States wish to seek evidence from a foreign sovereign, they have a greater right to obtain it if the foreign sovereign is not present within the court's territorial jurisdiction than they do if the sovereign is" and thus subject to the Court's subpoena power. (AECL's Mem. at 4 (emphasis in original)).
As the Court views the parties' respective positions, their dispute centers on the function of letters rogatory and the effect, if any, of the FSIA on their issuance. In the interest of clarity, the Court will therefore provide an overview of both letters rogatory and the FSIA before considering the merits of each party's arguments.
Simply stated, a letter rogatory is a "document issued by one court to a foreign court[.]" Black's Law Dictionary 778 (9th ed. abridged 2009).
In the United States, Congress has empowered federal courts to issue and to enforce letters rogatory. Rule 28(b) of the Federal Rules of Civil Procedure and 28 U.S.C. § 1781(b)(2) authorize federal courts to issue letters rogatory that enable a U.S. litigant to obtain non-party discovery from a foreign entity. See O'Donnell v. Club Mediterranee S.A., No. 05 Civ. 610(ARR), 2008 WL 794975, at *13 (E.D.N.Y. Mar. 24, 2008); Netherby Ltd. v. Jones Apparel Group. Inc., No. 04 Civ. 7028(GEL), 2005 WL 1214345, at *1 (S.D.N.Y. May 18, 2005) ("Netherby"); DBMS Consultants Ltd. v. Computer Assocs. Int'l, Inc., 131 F.R.D. 367, 369 (D.Mass.1990) ("It is settled that the courts have inherent authority to issue letters rogatory.") (citation omitted). Rule 28(b) provides that a deposition may be taken in a foreign country pursuant to a letter rogatory issued "on appropriate terms after an application and notice of it." Fed.R.Civ.P. 28(b)(2)(A). Likewise, Section 1781 of Title 28, which authorizes the State Department to accept letters rogatory issued by foreign tribunals, allows for "the transmittal of a letter rogatory or request directly from a tribunal in the United States to the foreign or international tribunal, officer, or agency to whom it is addressed and its return in the same manner." 28 U.S.C. § 1781(b)(2). See Netherby, 2005 WL 1214345, at *1 (granting motion for issuance of letters rogatory to permit movant to take third-party discovery in Canada); see generally 23 Am. Jur.2d Depositions and Discovery § 17 (2011) ("Issuance and enforcement of letter rogatory or request"). Likewise, pursuant to 28 U.S.C. § 1782, federal courts may enforce letters rogatory issued by foreign courts "as a means of improving assistance by our courts to participants in international litigation and encouraging foreign countries by example to provide similar means of assistance to our courts." See In re Application for an Order Permitting Metallgesellschaft AG to take Discovery, 121 F.3d 77, 80 (2d Cir.1997) ("Metallgesellschaft").
In considering the issuance of letters rogatory, U.S. courts apply the discovery principles contained in Rule 26. See, e.g., Asis Internet Servs. v. Optin Global, Inc., No. C-05-05124 JCS, 2007 WL 1880369, at *3 (N.D.Cal. June 29, 2007) (explaining intersection of Rule 28(b) and Rule 26(c)) (citing cases); see 8 Charles Alan Wright, et al., Federal Practice and Procedure § 2005.1 at 70 (3d ed. 2010) (district court should issue letters rogatory "whenever it is determined on a case-by-case basis that their use will facilitate discovery"). For example, U.S. courts have considered whether "the movant makes a reasonable showing that the evidence sought may be material or may lead to the discovery of material evidence[,]" Netherby Ltd., 2005 WL 1214345, at *1 (citation omitted), and other arguments as to breadth, relevance, and the availability of the information sought from other sources. See, e.g., id.; Elliott Assocs. v. Peru, No. 96 Civ.
Where U.S. courts issue and then transmit letters rogatory directly to foreign courts for enforcement, courts in the receiving country enforce the letters rogatory pursuant to domestic statute or common law, or through bilateral treaties with the United States. See generally Restatement (Third) of the Foreign Relations Law of the United States (1987) ("Restatement") § 473 Reporters' Note 1. For example, the Canada Evidence Act provides that a court outside of Canada may serve letters rogatory upon a Canadian court. See Asis Internet Servs., 2007 WL 1880369, at *3 (citing Canada Evidence Act, R.S.C.1985, c. C-5, § 46); In re Nat'l Energy & Gas Transmission, Inc., Nos. 03-30459(PM), 03-30461(PM) through 03-30464, 03-30686(PM) through 03-30687(PM), 2006 WL 5779475, at *1 (Bankr.D.Md. Jan. 4, 2006) (same). Where a foreign litigant seeks to enforce letters rogatory in the province of Ontario, Canada, Section 60(1) of the Ontario Evidence Act also governs enforcement by the Canadian court. See Revised Statutes of Ontario ("R.S.O.") 1990, c. E.23, § 60(1); 2000, c. 26, Sched. A, s. 7(2);
Both the issuance and enforcement of letters rogatory by U.S. and foreign courts "rest entirely upon the comity of courts toward each other, and customarily embody a promise of reciprocity." 22 C.F.R. § 92.54; see Metallgesellschaft, 121 F.3d at 79 (noting "the twin aims" of 28 U.S.C. § 1782, to "`provid[e] efficient means of assistance to participants in international litigation in our federal courts and encourag[e] foreign countries by example to provide similar means of assistance to our courts ...'") (quoting In re Application of Malev Hungarian Airlines, 964 F.2d 97, 100 (2d Cir.1992)); In re Premises, 634 F.3d at 563 (citations omitted) ("By providing broad assistance to foreign nations and tribunals via § 1782 the United States encourages foreign nations and tribunals to do the same, which benefits the United
The FSIA provides that a foreign sovereign shall be immune from the jurisdiction of federal and state courts, subject to the exceptions specified in the Act. 28 U.S.C. § 1604; see 28 U.S.C. §§ 1605-07 (providing exceptions to immunity). Accordingly, unless a specified exception to the FSIA applies, a U.S. court lacks both subject-matter jurisdiction over claims against a foreign sovereign and personal jurisdiction over that sovereign. See Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 485 n. 5, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983) ("The District Court's conclusion that none of the exceptions to the Act applied therefore signified an absence of both competence [i.e., subject-matter jurisdiction] and personal jurisdiction."); see also Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989) (the FSIA "provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country"). The exceptions to immunity provided by the FSIA codify the "restrictive theory" of sovereign immunity that developed in the mid-twentieth century, superseding the complete, or "absolute," immunity that previously existed. See Samantar v. Yousuf, ___ U.S. ___, 130 S.Ct. 2278, 2284-86, 176 L.Ed.2d 1047 (2010) (outlining evolution of foreign sovereign immunity principles). For example, under this restrictive theory, immunity applies where a foreign sovereign acts in its public or governmental capacity but does not extend to its private or commercial acts. See Republic of Argentina v. Weltover, 504 U.S. 607, 614, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992) ("Weltover II") ("[W]hen a foreign government acts, not as regulator of a market, but in the manner of a private player within it, the foreign sovereign's actions are `commercial' within the meaning of the FSIA.").
The FSIA's legislative history suggests that it was not meant "to deal with questions of discovery." H.R. Rep., 94-1487, at 17 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6621 ("House Report"); see also Restatement § 451 cmt. c ("Neither the Foreign Sovereign Immunities Act of the United States nor corresponding legislation in other states addresses the issue of discovery against foreign states."). One possible reason for this omission was Congress' belief that "[e]xisting law [was] adequate in this area" and could thus be used either to protect a foreign sovereign from discovery or, conversely, to compel discovery from an unwilling sovereign that was a party to litigation. House Report at 17, 1976 U.S.C.C.A.N. at 6621. "For example, if a private plaintiff sought the production of sensitive governmental documents of a foreign state, concepts of governmental privilege would apply. Or if a plaintiff sought to depose a diplomat in the United States or a high-ranking official of a foreign government, diplomatic and official immunity would apply." Id. (citation omitted). Likewise, "appropriate remedies would be available under Rule 37, F.R. Civ. P., for an unjustifiable failure to make discovery" if the foreign sovereign was obligated to engage in discovery. Id., 1976 U.S.C.C.A.N. at 6621-22. This latter principle
However, despite this authority that the FSIA does not provide immunity from discovery, some courts have invoked the Act to limit or deny discovery requests. These courts reason that "the FSIA's immunity provisions aim to protect foreign sovereigns from the burdens of litigation, including the cost and aggravation of discovery." Thai Lao Lignite (Thailand) Co., Ltd. v. Government of the Lao People's Democratic Republic, No. 10 Civ. 5256(KMW), 2011 WL 4111504, at *3 (S.D.N.Y. Sept. 13, 2011) (citations omitted); see also Dole Food Co. v. Patrickson, 538 U.S. 468, 479, 123 S.Ct. 1655, 155 L.Ed.2d 643 (2003) (foreign sovereign immunity intended "to give foreign states and their instrumentalities some protection from the inconvenience of suit as a gesture of comity between the United States and other sovereigns") (citing Verlinden B.V., 461 U.S. at 486, 103 S.Ct. 1962); Robinson v. Government of Malaysia, 269 F.3d 133, 141 (2d Cir.2001) ("Sovereign immunity under the FSIA is immunity from suit, not just from liability.") (internal quotation omitted).
For example, when a party seeks jurisdictional discovery to assess whether an exception to the FSIA exists, courts require "a delicate balancing `between permitting discovery to substantiate exceptions to statutory foreign sovereign immunity and protecting a sovereign's or sovereign agency's legitimate claim to immunity from discovery.'" First City, Texas-Houston, N.A. v. Rafidain Bank, 150 F.3d 172, 176 (2d Cir.1998) (quoting Arriba Ltd. v. Petroleos Mexicanos, 962 F.2d 528, 534 (5th Cir.1992)); see also Compania del Bajo Caroni (Caromin) v. Bolivarian Republic of Venezuela, 556 F.Supp.2d 272, 282 (S.D.N.Y.2008) (jurisdictional discovery "must be circumscribed to account for comity concerns" or else "the discovery obligations imposed on the sovereign would ineluctably frustrate the significance; and benefit of entitlement to immunity from suit") (citations and internal quotation marks omitted). Importantly, where courts compel jurisdictional discovery over a foreign sovereign's immunity objections, there is a possibility that an exception to the FSIA exists and jurisdiction would thus be proper, which would negate the foreign sovereign's immunity objections. See id. ("The propriety of jurisdictional discovery may turn on whether, for example... the requests are `reasonably calculated to elucidate whether an FSIA jurisdictional exception applies.'") (quoting Millicom Int'l Cellular v. Republic of Costa Rica, No. Civ. A. 96-315(RMU), 1997 WL 527340 (D.D.C. Aug. 18, 1997)). In other words, the jurisdictional discovery may reveal that the foreign sovereign is a properly named party to a lawsuit in U.S. courts, and the court thus would have jurisdiction over the sovereign for all purposes including discovery. See Olympic Chartering, S.A. v. Ministry of Industry & Trade of Jordan, 134 F.Supp.2d 528, 535 (S.D.N.Y.2001) ("After extensive research, this Court has not found any case where discovery was permitted once an entity was found to be immune.") (citation omitted).
However, the Court is not aware of any decision other than the Second Circuit's in Peninsula that has analyzed the propriety of non-party discovery where the non-party is a foreign sovereign. Comment c to § 451 of the Restatement goes so far as to suggest that "[d]iscovery from a foreign state that is not a party to a proceeding has apparently not been attempted in international practice and is not provided for in either the FSIA or the corresponding laws of other states."
While these basic principles underlying the issuance of letters rogatory and the application of the FSIA are generally well-established, their interplay in the context of non-party discovery involving a foreign sovereign appears to be unexplored.
At the heart of Lantheus' position is its contention that letters rogatory, by their very terms, are used "to obtain discovery from a source of information beyond the jurisdiction of the United States court[,]" so that their issuance necessarily involves no jurisdictional considerations under the FSIA. (Pl.'s Mem. at 9 (citing Krishna, 105 F.R.D. at 445). If the party from whom discovery was sought was subject to the jurisdiction of the U.S. courts, Lantheus argues, letters rogatory would be unnecessary because the court could compel discovery. (Id. (citing Krishna, 105 F.R.D. at 445 ("[W]hen the discovery was sought from another litigant ... the jurisdiction of the United States court ensured that the litigant could be compelled to produce the information or suffer sanctions under the federal rules.") (alterations added)))).
Lantheus is correct that if a U.S. court has jurisdiction over the source of information from which discovery is sought, the party seeking that discovery could obtain it using the discovery devices provided for in the Federal Rules of Civil Procedure. For example, "a Rule 45 subpoena is typically used to obtain the production of documents and/or testimony from a non-party to an action ... whereas Rules 26-37 provide simpler means for obtaining the same from a party...." First City, Texas-Houston, N.A. v. Rafidain Bank, 197 F.R.D. 250, 255 n. 5 (S.D.N.Y.2000), aff'd, 281 F.3d 48 (2d Cir.2002), Therefore, if one party to a lawsuit seeks discovery from another party (even a foreign party), a federal court may exert its "authority to compel [the receiving] party to provide relevant discovery pursuant to the normal procedures outlined in the federal rules, both civil and criminal, regardless of where the information is actually located." Krishna, 105 F.R.D. at 445. Likewise, if a party to a lawsuit seeks discovery from a non-party who is present in the United States (even a foreign party), the party seeking the discovery could obtain information using a subpoena pursuant to Rule 45 of the Federal Rules of Civil Procedure. See, e.g., Tiffany (NJ) LLC v. Qi Andrew, 276 F.R.D. 143, 147 (S.D.N.Y.2011) (considering whether to compel non-party discovery under Rule 45 from Chinese bank that maintains branches in United States based on consideration of New York branches' custody and control of documents).
Lantheus is also correct that letters rogatory are typically used when the party from whom discovery is sought is "beyond the jurisdiction" of the court and thus the party seeking the discovery is unable to take advantage of the discovery devices provides for in Rules 26 to 37 and 45. (Pl.'s Mem. at 9 & n. 3 and the cases cited therein). While issuing letters rogatory because a party is beyond a U.S. court's jurisdiction may be the norm, Lantheus' reliance on this generality does not, however, establish that letters rogatory are appropriate only where the issuing court lacks jurisdiction over a receiving party. This argument overlooks the cases when U.S. courts may direct a party to obtain
The Court finds this distinction between letters rogatory and Rule 45 subpoenas to be the key factor in resolving the question raised by the Ontario Court in Lantheus' favor. As counsel for Lantheus put it concisely at oral argument, letters rogatory are not "backed up by ... this court's power to compel. There is no threat of sanction from this court if AECL doesn't comply." (Tr. 6:23-25). Rather, letters rogatory in this instance are "simply a request to the Canadian courts to say[,] will you help Lantheus obtain this information that's crucial to the case[?]" (Tr. 7:1-3). Phrased this way, Lantheus' description of letters rogatory comports with the definition of letters rogatory as "the medium, in effect, whereby one country, speaking through one of its courts, requests another country, acting through its own courts and by methods of court procedure peculiar thereto and entirely within the latter's control, to assist the administration of justice in the former country[,]" The Signe, 37 F.Supp. at 820 (emphasis added), a definition that has been adopted by both state and federal courts in New York. See, e.g., Krishna, 105 F.R.D. at 438 n. 3 (quoting The Signe, 37 F.Supp. at 820); Application of District Attorney of Queens Cnty., 132 Misc.2d 506, 505 N.Y.S.2d 293, 294 (N.Y.Sup.Ct.1986) (applying same). The issuing court does not need jurisdiction over the party from whom discovery is sought because it cannot compel compliance with the letters rogatory. Instead, it makes a request of the foreign court, which maintains the authority to enforce the letters rogatory or not. Cf. In re Westinghouse Elec. Corp. Uranium Contracts Litig., 563 F.2d 992, 995 (10th Cir. 1977) (noting that Supreme Court of Ontario previously denied enforcement of letters rogatory because it "would cause a violation of the Uranium Information Security Regulations"). It follows therefore that the FSIA, a statute outlining the scope and applicability of jurisdiction over foreign sovereigns, is not relevant to the Court's review of Lantheus' application for letters rogatory.
AECL's arguments in opposition to Lantheus' application do not warrant a contrary result. Relying on Peninsula and Comment c to § 451 of the Restatement, AECL seeks to prove that "[w]here a federal court lacks jurisdiction over a foreign sovereign entity, it also lacks the power to issue a non-party subpoena purporting to compel discovery from such an entity." (AECL Mem. at 5). This principle, however,
On first blush, AECL's argument that U.S. courts may only issue letters rogatory under the framework outlined by Weisberg and the similar reasoning in Netherby is appealing. Indeed, this framing of letters rogatory appears to have become so commonplace that in Lantheus' motion for issuance of the original letters rogatory, it stated that the information sought from AECL was "subject to discovery by letters rogatory" because it "would be discoverable by a simple subpoena if AECL were subject to process within the United States." (Memorandum of Law in Support of Plaintiffs Unopposed Motion for Issuance of Letters Rogatory, dated May 10, 2011 (Dkt. No. 25), at 8-9 (citing Netherby, 2005 WL 1214345, at *1)). However, the language in Weisberg cannot be the governing rule here because it ignores the fundamental difference between letters rogatory and a "simple subpoena." Lantheus and AECL both acknowledge that where the FSIA applies, a U.S. court lacks jurisdiction to "compel[ ]" the foreign sovereign "to produce the information or suffer sanctions under the federal rules." Krishna, 105 F.R.D. at 445. Yet, in the context of letters rogatory, the U.S. court is neither compelling discovery nor threatening the imposition of sanctions. If the U.S. court could compel discovery from the foreign sovereign, it would have no need for the foreign court, which, in the context of letters rogatory, maintains the ultimate "control" as to whether and how it will "assist the administration of justice" sought by the U.S. courts. The Signe, 37 F.Supp. at 820. Thus, what distinguishes letters rogatory from subpoenas and other discovery devices obtained under the Federal Rules is also what proves Weisberg's limitation. For all of these reasons, the Court concludes that it may issue the amended letters rogatory without regard to the applicability of the FSIA.
As an alternative argument in support of its application for issuance of the amended letters rogatory, Lantheus contends that even if the FSIA applied here, "the limited available facts do not establish that AECL enjoys FSIA immunity from direct discovery enforceable through this Court[,]" because "its activities in supplying a critical raw ingredient used in medical imaging procedures throughout the United States appear to fall within the `commercial activity exception' to FSIA immunity," (Plaintiff's Reply in Further Support of Motion for Issuance of Amended Letters Rogatory ("Pl.'s Reply Mem.") (Dkt. No. 52), at 6). Because the Ontario Court specifically framed the issue as "whether [this Court] had jurisdiction to [issue the amended letters rogatory] by reason of the provisions of the FSIA" (Ontario Court Decision at 5), the Court addresses that question and concludes that AECL's conduct falls within the FSIA's commercial activity exception. Thus, this exception provides an additional basis for granting Lantheus' application and issuing the amended letters rogatory.
In its September 7, 2011 Order (Dkt. No. 42), the Court granted AECL's application for leave to appear as amicus curiae to file papers in opposition to Lantheus' motion for issuance of letters rogatory, but it did so without prejudice to Lantheus challenging this status or moving to take jurisdictional discovery and require AECL to move to intervene. In addition, the Court reserved the right to disregard any factual material that has not been subject to discovery. (Id.). Invoking this language, Lantheus had requested that, "if the Court for some reason were to find that the FSIA is implicated here," it order jurisdictional discovery to determine whether AECL's operations trigger the commercial activity exception. (Pl.'s Mem. at 8). However, at oral argument, counsel for Lantheus stated that if the Court determines there is "sufficient information [in the record] to rule that the commercial activity exception applies," then no further discovery would be necessary. (Tr.: 16:15-16). Likewise, counsel for AECL offered its "view ... that the record is more than sufficient to reach a conclusion based on the nature of AECL's reactor and the operation of it in Canada as well as the existence of the intermediary Nordion which is undisputed.... [W]e don't believe it would be fruitful for discovery. The court has the information it needs to determine whether the commercial activity exception applies here." (Tr.: 41:11-22).
Given these statements by the parties, and given that the Court finds that AECL has not raised any untested factual arguments in support of its arguments that have any bearing on the Court's opinion (AECL Mem. at 8),
The FSIA states, in relevant part, that a foreign state is not immune where the action is based upon either: (1) "a commercial activity carried on in the United States by the foreign state"; (2) "an act performed in the United States in connection with a commercial activity of the foreign state elsewhere"; or (3) upon "an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States." 28 U.S.C. § 1605(a)(2). Of the three clauses that provide the basis for the commercial activity exception, only the third is relevant to AECL's operations of the NRU Reactor in Ontario, Canada. For the Court to find that issuance of the amended letters rogatory as to AECL is proper, assuming the FSIA otherwise applies, this third factor requires the Court to determine both that AECL's conduct in Canada was commercial in nature and that it caused a direct effect in the United States.
The Court begins its "commercial activity" inquiry "by identifying the particular conduct on which" Lantheus' claim that the commercial activity exception applies is based. Saudi Arabia v. Nelson, 507 U.S. 349, 356-57, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993) (citing Texas Trading & Milling Corp. v. Fed. Republic of Nigeria, 647 F.2d 300, 308 (2d Cir.1981)). "In denoting conduct that forms the `basis,' or `foundation,' for a claim, the phrase is read most naturally to mean those elements of a claim that, if proven, would entitle a plaintiff to relief under his theory of the case." Id. at 357, 113 S.Ct. 1471 (citing authority); see also Hanil Bank v. PT. Bank Negara Indonesia (Persero), 148 F.3d 127, 131 (2d Cir.1998) (acts of foreign sovereign deemed "in connection with" commercial activity when there is "substantive connection" or "causal link" between acts and commercial activity). In the more typical context in which a U.S. litigant seeks to establish the applicability of the commercial activity exception, the court would consider the foreign sovereign's activity giving rise to the U.S. litigant's cause of action, meaning the elements of that claim that, "if proven, would entitle [plaintiff] to relief under [its] theory of the case." Nelson, 507 U.S. at 357, 113 S.Ct. 1471; see also Weltover, Inc. v. Republic of Argentina, 941 F.2d 145, 150 (2d Cir.1991) ("Weltover I") (noting that courts must "isolate the specific conduct that underlies the suit, rather than focusing on `the broad program or policy of which the individual transaction is a part'" and warning that under an "overbroad" definition of relevant conduct, "the activity would almost inevitably be characterized as sovereign in nature") (citation omitted), aff'd, Weltover II, 504 U.S. 607, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992).
While this more common application of the commercial activity exception looks to the conduct of the foreign sovereign giving
Under the FSIA, "[t]he commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose." 28 U.S.C. § 1603(d). The reasoning underlying this exception — and thus informing the Court's inquiry — is that a foreign sovereign has forfeited its immunity if it has "act[ed], not as regulator of a market, but in the manner of a private player within it." Weltover II, 504 U.S. at 614, 112 S.Ct. 2160. Accordingly, "the question is not whether the foreign government is acting with a profit motive or instead with the aim of fulfilling uniquely sovereign objectives. Rather, the issue is whether the particular actions that the foreign state performs (whatever the motive behind them) are the type of actions by which a private party engages in `trade and traffic or commerce.'" Id. (citations omitted) (emphasis in original). For example, "a foreign government's issuance of regulations limiting foreign currency exchange is a sovereign activity, because such authoritative control of commerce cannot be exercised by a private party; whereas a contract to buy army boots or even bullets is a `commercial' activity, because private companies can similarly use sales contracts to acquire goods." Id.; see also Harris v. VAO Intourist, Moscow, 481 F.Supp. 1056, 1064 (E.D.N.Y.1979) ("`[C]ommercial activity' is meant to distinguish activity which results from what in our society would be termed governmental, public or sovereign enterprises e.g., running police departments or parks from those resulting from the acts of foreign state agencies or instrumentalities acting in what we would deem a commercial capacity e.g., operating hotels or cruise ships.") (citation omitted).
Weltover provides a useful illustration of the distinction between the commercial nature of an act (the operative consideration) and the sovereign purpose for engaging in that act (which is not dispositive). In Weltover, Argentina had issued certain
Whether AECL operated the NRU Reactor as an exercise of its uniquely sovereign power or as a traditionally commercial endeavor thus raises the question of whether operating a nuclear reactor under circumstances such as these is inherently a sovereign function. This is an issue that courts have dealt with only indirectly. The seminal case is MOL, Inc. v. Peoples Republic of Bangladesh, 736 F.2d 1326, 1329 (9th Cir.1984) ("MOL"). In MOL, the Ninth Circuit determined that Bangladesh's grant of a license to a U.S. company to capture and export rhesus monkeys for scientific experimentation was not a commercial activity because the agreement at issue in the litigation "concerned Bangladesh's right to regulate its natural resources,... a uniquely sovereign function." 736 F.2d at 1329, Several cases have adopted MOL for the proposition that a state's regulation or exploitation of a natural resource is an inherently sovereign function. See, e.g., RSM Prod. Corp. v. Fridman, 643 F.Supp.2d 382, 399 (S.D.N.Y.2009) (former deputy prime minister of Grenada acted in official capacity as sovereign agent in denying plaintiffs' application for license to conduct oil and gas exploration off coast of Grenada); Rush-Presbyterian-St. Luke's Med. Ctr. v. Hellenic Republic, 877 F.2d 574, 578 (7th Cir.1989) ("[A] contract whereby a foreign state grants a private party a license to exploit the state's natural resources is not a commercial activity [under the FSIA], since natural resources, to the extent they are `affected with a public interest,' are goods in which only the sovereign may deal.") (emphasis in original).
However, other cases have distinguished MOL and its progeny by limiting MOL's holding to the narrow issue of commercial export and import regulation, which they concede is an inherently sovereign function. In Globe Nuclear Services and Supply (GNSS), Ltd. v. AO Techsnabexport, for example, the Fourth Circuit read MOL and the cases adopting it "to stand not for the overly broad proposition that all contracts involving `natural resources' or their derivative products constitute sovereign activity, but for the narrower and much sounder principle that the grant of a license to operate within sovereign territory and to extract natural resources from within that territory is sovereign activity." 376 F.3d 282, 291 (4th Cir.2004) ("Globe"). See also Honduras Aircraft Registry Ltd. v. Gov't of Honduras, 119 F.3d 1530, 1537 (11th Cir.1997) ("The basis of [MOL] was not the alleged breach of the government contract for the sale of monkeys, but its revocation of the export license. That was part of the sovereign's right to regulate its exports and was therefore immune.").
In Globe, the plaintiff, a U.S. corporation, sought an injunction that would require a Russian company wholly owned by the Russian Federation to perform under a contract to supply the plaintiff with uranium hexafluoride extracted from nuclear weapons. The Fourth Circuit determined that the Russian company's activities fell within the commercial activity exception, even though (1) the Russian Federation
Likewise, in Connecticut Bank of Commerce v. Republic of Congo, 309 F.3d 240, 263-64 (5th Cir.2002) (Dennis, J. concurring in result), a concurring opinion differentiated the activity of the defendant, the Republic of Congo, from Bangladesh's conduct in regulating the export of monkeys in MOL by noting:
Id. at 264 (citing Weltover II, 504 U.S. at 607, 112 S.Ct. 2160; Weltover I, 941 F.2d at 151 ("[O]nce a sovereign enters the marketplace as a commercial actor, it should be subject to all the rules of the marketplace.")).
As these courts have acknowledged, a sovereign entity's control of a natural resource like uranium is a sovereign function only to the extent it governs the ability of other actors to use that resource, as in the context of regulating export and import procedures. AECL has marketed itself as a leader in research and development of nuclear energy, and as a commercial enterprise that supplies a large portion of the worldwide need for medical isotopes. (See Excerpt of the Official Report of the December 11, 2007 Canadian House of Commons Debate, attached as Exhibit 2 to Supplemental Declaration of Rukesh A. Korde in Further Support of Plaintiff's Motion for Issuance of Amended Letters Rogatory (Dkt. No. 53-2) ("House Debate"), at 2067, Testimony of Mr. David F. Torgerson ("NRU is a huge producer of medical isotopes.... People in the early days of Chalk River developed the [medical isotope] business, which is now a worldwide business.")).
The debate between AECL and a Canadian regulatory body demonstrates that AECL was subject to nuclear safety regulations just as a company in the private sector would be, and that it did not receive preferential treatment because of its status as a sovereign entity but, instead, drew legislative attention because of its importance as a commercial supplier in meeting the needs of the medical community in Canada and elsewhere. (Id. at 2067, Testimony of Mr. David F. Torgerson ("I am confident that when we are operating again, we can supply all the isotope that is required in Canada and a lot of the isotope that is required in the United States.")). Moreover, testimony on behalf of AECL before the House of Commons indicates that AECL's contractual obligations would determine the supply of medical isotopes once they became available to enable Canadian and U.S. medical providers alike to request orders for the product. (See id. at 2066-67, Testimony of Hon. Tony Clement). This activity resembles the conduct of a private entity operating in the marketplace, which determines its allotment of a commodity based on contractual obligations rather than national interest, as opposed to the conduct of a sovereign entity, operating in a uniquely governmental capacity. Accordingly, the Court finds AECL's operation of the NRU Reactor to be commercial in nature. Under the FSIA, the next inquiry is whether this conduct had a "direct effect" in the United States.
To be "direct," an activity need not be substantial or foreseeable, but it must follow "`as an immediate consequence'" of the foreign sovereign's activity. Weltover II, 504 U.S. at 617-18, 112 S.Ct. 2160 (quoting Weltover I, 941 F.2d at 152). The immediacy requirement "ensures that jurisdiction may not be predicated on purely trivial effects in the United States." Id. at 618, 112 S.Ct. 2160; see Pons v. People's Republic of China, 666 F.Supp.2d 406, 412 (S.D.N.Y.2009) ("`Congress did not intend to provide jurisdiction whenever the ripples caused by an overseas transaction manage eventually to reach the shores of the United States.'") (quoting United World Trade, Inc. v. Mangyshlakneft Oil Prod. Ass'n, 33 F.3d 1232, 1238 (10th Cir. 1994)). The Second Circuit has defined "immediate" to mean that, "between the foreign state's commercial activity and the effect, there was no `intervening element.'" Guirlando v. T.C. Ziraat Bankasi A.S., 602 F.3d 69, 74 (2d Cir.2010) (quoting Weltover I, 941 F.2d at 152); see also Martin v. Republic of South Africa, 836 F.2d 91, 95 (2d Cir.1987) ("The common sense interpretation of a `direct effect' ... is one which has no intervening element,
On this point, AECL argues that because it sold raw radioactive isotopes to third party Ontario-based Nordion, Inc., and then Nordion processed and refined the raw isotopes into finished isotopes before sale, the effect that AECL's operations had on Lantheus in the United States is not direct. (AECL's Mem. at 7-8). However, although Nordion may have changed the nature of the isotopes (and its involvement would perhaps be relevant if Lantheus had brought suit against AECL for a flaw in the isotope's composition or failure to function that Nordion may have caused), in this instance, Nordion played no role in the detrimental effect that AECL's operation and ultimate shutdown of the NRU Reactor had in the United States. In other words, the extent of financial losses Lantheus suffered as a result of the shutdown did not "depend[ ] crucially" on any action by Nordion. Virtual Countries, 300 F.3d at 238. Rather, the causal link between AECL's decision to shut down the NRU Reactor and the lack of available Moly-99 was direct, and the detrimental effect immediate. Thus, AECL's conduct had a "direct effect" in the United States. Consequently, the Court must now determine whether that direct effect is sufficient to meet the Second Circuit's "legally significant act" test.
The Second Circuit has articulated something of a heightened "direct effect" test, which has been termed the "legally significant act" test and is designed to assess "whether the direct impact of a foreign state's foreign commercial activity was felt `in the United States,'" Guirlando, 602 F.3d at 75. This inquiry is intended to confirm not only that the commercial activity of a foreign sovereign had a direct impact — as opposed to an incidental or ancillary one — but also that the impact was felt within the United States, meaning the location of the impact was the United States. See id. at 75-79 (dismissing claim that U.S. citizen brought against Turkish bank for misrepresentations and for permitting improper withdrawals by Turkish citizen from Turkish bank account located in Turkey). The test thus seeks to differentiate between a direct effect felt in the United States and a scenario in which "a foreign state's commercial activity outside of the United States caused physical or financial injury to a United States citizen[.]" Id. at 78.
To assess the location of the effect, courts first identify the "legally significant act," meaning the act that gave rise to the lawsuit. See Gosain v. State Bank of India, 414 Fed.Appx. 311, 313 (2d Cir.2011) (summary order) ("[T]he requisite `direct effect' may be established if the plaintiff's cause of action is based upon a denial of payment to be made in the United States[.]"); Virtual Countries, Inc., 300 F.3d at 241 ("[E]ven if the complaint detailed legally significant acts, the district court would have been correct to dismiss
Further complicating the application of the legally significant test in this case is the fact that Lantheus is only seeking discovery from AECL, a non-party, not legal redress as if AECL was a named defendant. Given that every apparent application of the "legally significant act" test involves an action against a foreign sovereign, no courts appear to have considered whether a foreign sovereign's conduct was legally significant in the context of non-party discovery. With no guiding precedent as to how the legally significant test would be applied under these circumstances, the Court will consider by analogy the actions giving rise to Lantheus' need for discovery and the lawsuit against Zurich; AECL's operation of, and decision to shut down, the NRU Reactor.
While concluding that issuance of letters rogatory does not require consideration of the FSIA in the first instance, and alternatively that the commercial activity exception to the FSIA applies here, the Court is nonetheless mindful of the comity issues raised by Lantheus' application. The Court therefore follows the directive
Restatement § 442(1)(c). In Societe Nationale Industrielle Aerospatiale v. U.S. District Court for Southern District of Iowa, the U.S. Supreme Court adopted the consideration of these factors and cautioned that "in supervising pretrial proceedings... American courts should ... take care to demonstrate due respect for any special problem confronted by the foreign litigant on account of its nationality or the location of its operations, and for any sovereign interest expressed by a foreign state." 482 U.S. 522, 544 n. 28, 546, 107 S.Ct. 2542, 96 L.Ed.2d 461 (1987) (citing Tent. Draft No. 7 of the Restatement, 1986) (approved May 14, 1986) ("Aerospatiale"). While the Aerospatiale Court recognized that the five factors contained within the Restatement "may not represent a consensus of international views on the scope of the district court's power to order foreign discovery in the face of objections by foreign states," it nevertheless found the factors "relevant to any comity analysis[.]" Id. at 544 n. 28, 107 S.Ct. 2542 (conducting comity analysis in relation to U.S. litigant's invocation of Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, 23 U.S.T. 2555, T.I.A.S. No. 7444 ("Hague Convention")); see also Hilton v. Guyot, 159 U.S. 113, 163-64, 16 S.Ct. 139, 40 L.Ed. 95 (1895) (defining "comity" as "the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws"); see, e.g., Seoul Semiconductor Co. Ltd. v. Nichia Corp., 590 F.Supp.2d 832, 834 (E.D.Tex.2008) (acknowledging the need to "exercise special vigilance to protect foreign litigants from the danger that unnecessary, or unduly burdensome, discovery may place them in a disadvantageous position") (quoting Aerospatiale, 482 U.S. at 546, 107 S.Ct. 2542). These comity considerations are particularly appropriate where, as here, the party seeking protection from discovery is a foreign sovereign.
Central to the determination that comity favors the issuance of letters rogatory is the first factor, the importance of the information requested. Although there is some dispute as to whether the information must be "vital" to the litigation or simply "relevant," Milliken & Co. v. Bank of China, 758 F.Supp.2d 238, 246-47 (S.D.N.Y.2010) (citations omitted), the Court need not make a determination on this point because the information Lantheus seeks is vital. Here, the cause of the water leak that prompted AECL to shut down the NRU Reactor is a significant,
The second factor, concerning the specificity of Lantheus' Requests, supports the application as well. The Requests are tailored to the specific theories of the water leak in the NRU Reactor that Lantheus will need to prove or disprove. In particular, the Requests seek information as to the possible external causes for the water leak (Requests, Schedule A (Revised) (Dkt. No. 35-1 at 6-8) ¶ 1 (radiation); ¶¶ 2-3 (nitric acid); ¶¶ 4-5 (carbon dioxide); ¶ 10 (defective fuel); ¶ 11 (chemicals, desiccants, or impurities)); as well as the specific investigations that were conducted or the reports that were issued after the leak. (Id., ¶ 8 (coupon tests); ¶¶ 9, 12 (depictions of specific damage at time of shutdown); ¶ 14 (metallurgical or chemical analysis)). Moreover, several of the Requests are tailored to a particular location within, or component of, the reactor. (Id. ¶¶ 2-6, 11 (Annulus); ¶¶ 7, 9 (reactor vessel); ¶ 8 (Annulus and reactor vessel); ¶ 14 (wall of reactor vessel or Annulus)). Finally, where applicable, the Requests specify that they seek only information that is not otherwise available in unredacted form on the AECL or Canadian Nuclear Safety Commission websites. (Id. ¶ 13).
The documents Lantheus seeks are located in Canada. (See Requests (Dkt. No. 35-1 at 4)). This consideration thus weighs in favor of AECL. However, where "the information cannot be easily obtained through alternative means," the origin of the information can be "counterbalance[d]" by the inability to obtain the information through an alternative means, thus favoring disclosure. Gucci Am., Inc. v. Curveal Fashion, No. 09 Civ. 8458(RJS)(THK), 2010 WL 808639, at *3 (S.D.N.Y. Mar. 8, 2010) (citations omitted) (emphasis in original).
In weighing this factor, courts note that "the mere fact [of] an alternative method for obtaining the documents is not proof that it is necessarily an effective, or efficient, method for doing so in this case." In re Air Cargo Shipping Servs. Antitrust Litig., 278 F.R.D. 51, 53, 2010 WL 1189341, at *2 (E.D.N.Y.2010); see also In re Air Cargo Shipping Servs. Antitrust Litig., No. 06 MD 1775, 2010 WL 2976220, at *2 (E.D.N.Y. July 23, 2010) (finding no viable alternative means of discovery where response to request under Hague Convention dependant on approval from ministry of foreign state); see, e.g., Milliken, 758 F.Supp.2d at 248 (finding in favor of requesting party where its "requests would not necessarily be honored, but would only be taken `seriously' by Chinese authorities"); Gucci Am., Inc., 2010 WL 808639, at *5 (finding in favor of requesting party where "the only alternative means by which [the p]laintiffs might receive the bank records ... is the commencement of an action in Malaysian courts against [the defendant] and securing a judgment, in order to" obtain discovery). Lantheus' efforts to obtain discovery without resort to seeking issuance of amended letters rogatory began as early as May, 2010 with counsel for Lantheus seeking to obtain information from AECL through informal requests (which were largely unsuccessful) before seeking to obtain information through Canada's Access
AECL relies heavily on the fifth factor, which requires the Court to balance the interests of Canada against the interests of the United States. (AECL Mem. at 12-14). It asserts three main arguments in opposition to Lantheus' motion: (1) comity favors protecting foreign sovereigns from the burden of discovery; (2) the Canadian government has a national interest in controlling the disclosure of nuclear information; and (3) the United States may not reciprocate the request for information sought by Lantheus' proposed amended letters rogatory. (Id.). The Court has already considered the first of these arguments in determining that it may issue letters rogatory, a discovery device rooted in comity, and alternatively that AECL's conduct falls within the commercial activity exception to the FSIA, a statute which created "a comprehensive framework for determining whether a court in this country ... may exercise jurisdiction over a foreign state." Weltover II, 504 U.S. at 610, 112 S.Ct. 2160. According to this framework, a foreign sovereign has forfeited its immunity protections — including its interest in avoiding the burdens of foreign discovery — when it engages in commercial activity. Id. at 610-11, 112 S.Ct. 2160.
As to AECL's second argument concerning Canada's interest in controlling the disclosure of nuclear information (AECL Mem. at 13-14), the exceptional nature of letters rogatory provide the foreign litigant with the protections that the foreign sovereign lacks when an American court compels it to engage in jurisdictional discovery as a would-be defendant. Just as an American court enforcing letters rogatory issued in a foreign court may limit enforcement of the order, see In re Premises, 634 F.3d at 563, foreign courts charged with enforcing letters rogatory may limit enforcement of the discovery device where appropriate. See, e.g., SEC v. Tourre, No. 10 Civ. 3229(BSJ)(MHD), 2011 WL 350286, at *1 (S.D.N.Y. Jan. 31, 2011) ("Suffice it to say, we leave to the German authorities the decision whether to honor all, some or none of these requests.") (citing Aerospatiale, 482 U.S. at 544 n. 29, 545, 107 S.Ct. 2542 (discussing the "demands of comity in suits involving foreign states, either as parties or as sovereigns with a coordinate interest in the litigation")); Metso Minerals v. Powerscreen Int'l Distrib. Ltd., No. CV 06-1446(ADS)(ETB), 2007 WL 1875560, at *3 (E.D.N.Y. June 25, 2007) ("Whether the Letter of Request will ultimately be executed in light of the United Kingdom's reservation under Article 23 [of the Hague Convention] ... is unknown. Such a decision is best left to the judicial authorities in the United Kingdom.") (citations omitted). The Ontario Court Decision indicated
AECL's final argument as to the competing national interests between Canada and the United States raises the question of whether the U.S. government would, as a matter of reciprocity, provide discovery sought via letters rogatory to a Canadian commercial entity. (AECL Mem. at 14). AECL relies on United Kingdom v. United States, 238 F.3d 1312, 1324 n. 12 (11th Cir.2001), for the proposition that the U.S. government has unequivocally "taken the position that it is immune from enforcement of foreign letters rogatory seeking non-party discovery from the government or its instrumentalities." (AECL Mem. at 14). Lantheus, in turn, relies on the case Matter of Kevork, 788 F.2d 566, 568 (9th Cir.1986), as an example of a U.S. court granting the "sort[ ] of transnational request[ ]" that has become "routine in light of the growing reach of international commerce." (Pl.'s Mem. at 13). While Lantheus may well be correct that transnational discovery requests are increasing due to the global nature of "international commerce," Kevork does not state that fact as much as it focuses on the Foreign Intelligence Surveillance Act ("FISA"), a statute aimed at combating crime, which is certainly not at issue here or central to litigation regarding "international commerce" generally, 788 F.2d at 567-68 (considering whether "FISA prohibits use or disclosure of evidence, obtained pursuant to its requirements, in a foreign criminal prosecution").
United Kingdom is no more persuasive of the point for which AECL cites it than Kevork is for the proposition for which Lantheus cites that decision. In United Kingdom, the Eleventh Circuit recognized that "[t]he applicability of sovereign immunity principles to proceedings under § 1782 [concerning the enforcement of letters rogatory issued by a foreign court] is a substantial and largely unexplored question that has not been sufficiently briefed by the parties." 238 F.3d at 1324 n. 12. Accordingly, the Court does not read United Kingdom to stand for the proposition that U.S. courts would necessarily deny enforcement of letters rogatory issued by a foreign court in a hypothetical scenario so as to prohibit any attempt to seek reciprocal enforcement here. Weighed against the interest of the United States in "`fully and fairly adjudicating matters before its courts[,]'" Milliken, 758 F.Supp.2d at 248 (citing Strauss v. Credit Lyonnais, S.A., 249 F.R.D. 429, 443 (E.D.N.Y.2008)), the Court is therefore not persuaded that the interests of the Canadian government so outweigh those of the U.S. government as to bar the issuance of amended letters rogatory here.
District courts in the Second Circuit have considered, and AECL has emphasized, two additional factors to a comity inquiry under Aerospatiale: "any hardship the responding party would suffer if it complied with the discovery demands" and "whether the responding party has proceeded in good faith." Milliken & Co., 758 F.Supp.2d at 246; see, e.g., In re Grand Jury Subpoena dated August 9, 2000, 218 F.Supp.2d 544, 554 (S.D.N.Y.2002), aff'd., 318 F.3d 379 (2d Cir.2003); see generally Minpeco, S.A. v. Conticommodity Servs.,
As to the first additional factor in the context of a comity analysis, the "hardship" that courts seek to avoid is the hardship posed by ordering "`the production of information or documents located abroad where such production would violate the law of the state in which the documents are located.'" Minpeco, 116 F.R.D. at 522 (quoting United States v. Davis, 767 F.2d 1025, 1033-34 (2d Cir.1985) (citing subpoena cases)). In enforcing the amended letters rogatory, the Ontario Court — which, as noted, is the judicial body in the best position to determine the reach of Canadian laws that may restrict AECL's production — may limit the enforcement of the letters rogatory to those Requests that do not violate Canadian law. Likewise, the Federal Rules of Civil Procedure permit Lantheus to seek a protective order from this Court as to any "trade secret or other confidential research, development, or commercial information." Fed. R. Civ. 26(c)(1)(G). Thus, the hardship prong does not weigh against issuing the letters rogatory nor does it change the Court's application of the Aerospatiale factors.
Finally, Lantheus and AECL disagree as to the good faith that AECL has shown in considering Lantheus' discovery attempts. Although Lantheus characterizes its attempts to obtain the information it seeks over the past year and a half as being largely unsuccessful due to "AECL's obstruction, delays and refusal to cooperate" (Pl.'s Reply Mem. at 17 (citing Korde Decl. ¶¶ 17-29, 39-49)), AECL contends that this argument is "off the mark." (AECL's Mem. at 19). However, AECL objects only to one instance of delay Lantheus cites, specifically the delay in contesting the issuance of letters rogatory in June, 2011. (Id. (citing Pl.'s Mem. at 6)). Additionally, AECL misreads Lantheus' reference to this delay. Lantheus described AECL's delay not in terms of the three weeks that passed between the Court's issuance of the letters rogatory in May, 2011 and AECL's objection in June, 2011; rather, Lantheus notes that AECL did not raise its concerns as to the protection of foreign sovereign immunity for more than a year after Lantheus first sought informal discovery. (Pl.'s Mem. at 6 (citing Korde Decl. ¶ 36)). This delay — coupled with AECL's failure to engage with counsel for Lantheus over several months (Pl.'s Mem. at 4-5 (and citations therein)) — does not support AECL's position, whether it is characterized as evidence of bad faith or not. Reviewing this factor with the other Aerospatiale factors, the Court is unconvinced that comity considerations demand a reversal of its earlier findings that the amended letters rogatory should issue.
For all of these reasons, Lantheus' motion for the issuance of amended letters rogatory is granted. In accordance with this Opinion, the Court shall issue the amended letters rogatory seeking the assistance of the Canadian courts in obtaining the production of the documents from AECL and in taking the deposition testimony upon oral examination of AECL as a witness in this action. Lantheus shall promptly submit for Court approval a proposed order and the appropriate forms of the amended letters rogatory that are consistent with this Opinion, and that also
