In previous blogs (here and here), the case of Soriano v Forensic News LLC and others has been discussed.
To summarise, this is an action brought against the Defendants in respect of alleged libellous comments made about the Claimant largely about corruption and other alleged criminal conduct. The Defendant filed a defence pleading the defences of the truth and public interest. Prior to disclosure taking place, the Claimant applied to strike out the defences of the truth and public interest. Before that application could be heard, the Defendants applied to District Court for the Southern District of New York (DCSDNY) pursuant to 28 USC §1782 seeking two very broad categories of banking documents relating to the Claimant’s business affairs. Section 1782 confirms:
“[t]he district court … may order [a person] to … produce a document or other thing for use in a proceeding in a foreign … tribunal”, and “[t]he order may be made … upon the application of any interested person”.
The Claimant sought an anti-suit injunction in England to prevent the Defendants from enforcing the order that they had obtained pursuant to the 1782 on the grounds that: “it was vexatious, oppressive and unconscionable and would interfere with the efficient conduct of these proceedings, and (ii) on 20 January 2023, he sought to intervene before the DCSDNY in the 1782 application”.
The Judge at first instance did not agree and refused the application for an injunction. The Claimant appealed. Given the pending application for strike out made by the Claimant, the Court agreed to expedite the appeal and held a combined permission and appeal hearing.
The Claimant was allowed permission to appeal but dismissed the appeal after full consideration of the same confirmed:
“21. These two cases [referred to in the preceding paragraphs] demonstrate the factual nature of the evaluation that the English court will undertake on an application such as this. The facts of those cases were very different from those in this case. The judge had here to determine whether, in all the circumstances of this case, the 1782 application was unconscionable, abusive or vexatious on one of several grounds including specifically whether it would interfere with the proper conduct of these proceedings. He decided that it was not. This court will always be slow to interfere with such a factual assessment unless the judge has made a legal error. That is no doubt why Mr Soriano seeks to elevate the decision in Yorkshire Provident into a principle that is generally applicable at least to all libel actions.
- As we have said, we do not think that evidence gathering in libel actions is affected by legal principles that are different from any other actions. It may be abusive to bring 1782 proceedings and it may not. It will depend on all the circumstances. It may depend also on the purpose for which the 1782 application is brought.
- Against this background, there are five reasons why we do not think the judge fell into error.
- First, the decisions in Yorkshire Provident and the similar, but later, case of Arnold & Butler v. Bottomley [1908] 2 KB 151 say nothing about evidence gathering. They go to the narrower question of what disclosure is available in libel actions in support of a defence of truth.
- Secondly, whilst it is true that the 1782 application as presently framed is far broader than any third-party disclosure order this court would make, its breadth is primarily a matter for the DCSDNY. In Intel Corp v. Advanced Micro Devices, Inc (2004) 542 U.S. 241, Justice Ruth Bader Ginsburg, giving the opinion of the majority of the US Supreme Court, acknowledged that the 1782 procedure was to assist the foreign court… She said at [9]-[10] that “a court presented with a §1782(a) request may take into account the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign … court … to U.S. federal-court judicial assistance”. Moreover, she said specifically that “a district court could consider whether the §1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions”, that “unduly intrusive or burdensome requests may be rejected or trimmed”, and that the district court might consider “appropriate measures, if needed, to protect the confidentiality of materials”. No reasons have been advanced as to why the DCSDNY is, in this case, unable to apply these principles appropriately.
- Thirdly, there is nothing inherently objectionable from a domestic perspective, as Mr Soriano seems to suggest by calling the application an intrusion, about seeking evidence in an appropriate case from a party’s bankers or from the bankers to the corporate entities in which the party has an interest…
- Fourthly, the cases on which Mr Soriano relies (Flood v. Times Newspapers Ltd[2009] EWHC 411 (QB), [2009] EMLR 18 and Taranissi v. BBC [2008] EWHC 2486 (QB)) to support a general principle prohibiting “fishing expeditions” relate to the scope of disclosure available from parties or third parties in an English libel action. They do not purport to restrict a defendant’s lawful evidence gathering activities more generally. Indeed, the general rule is that the defences of truth and honest opinion “form part of the framework by which free speech is protected. It is therefore important that no unnecessary barriers to the use of these defences are erected” (see McDonald’s Corp v. Steel [1995] EMLR 527 at page 535 per Neill LJ).
- Fifthly, in our judgment, in this case the judge considered all the relevant facts before concluding at [56] that the 1782 application was not “oppressive, vexatious or otherwise unconscionable”.
- In these circumstances, we do not think it appropriate to interfere with the judge’s evaluation that the 1782 application was not abusive, and we will dismiss this ground of appeal.”
Comment
This is useful guidance. Whilst the Court refused to make a rule inhibiting the general discretion of Judges when deciding applications regarding the use of foreign jurisdictions to gather evidence, the Judge made it abundantly clear that, where accusations of abuse of process are levelled at a party to litigation, it is not sufficient to simply point to the fact that they are using collateral legal jurisdictions to advance their cause. An applicant seeking an anti-suit injunction alleging abuse of process must demonstrate how there has been prejudice to the Applicant from improper conduct of the Respondent.
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Kevin Modiri is a Partner in our expert Dispute Resolution team.
If you have any questions concerning the subjects discussed in this article, please do not hesitate to contact Kevin or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
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