ZF Automotive US, Inc. v. Luxshare, Ltd.

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Supreme Court of the United States
ZF Automotive US, Inc. v. Luxshare, Ltd.
Term: 2021
Important Dates
Argued: March 23, 2022
Decided: June 13, 2022
Outcome
Reversed
Vote
9-0
Majority
Amy Coney Barrett • Chief Justice John Roberts • Clarence Thomas • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh

ZF Automotive US, Inc. v. Luxshare, Ltd. is a case that was decided by the Supreme Court of the United States on June 13, 2022, during the court's October 2021-2022 term. The case was argued before the court on March 23, 2022. It was consolidated with AlixPartners, LLC v. Fund for Protection of Investor Rights in Foreign States, to be argued together before the court.[1][2]

The court reversed the decision of the United States District Court for the Eastern District of Michigan in a 9-0 ruling, holding the "adjudicative bodies in these cases are not governmental or intergovernmental tribunals that fall within §1782."[3] Justice Amy Coney Barrett delivered the court's majority opinion. Click here for more information about the ruling.

HIGHLIGHTS
  • The issue: The consolidated cases concerned arbitration proceedings. Specifically, U.S. district courts' authority to compel parties to produce evidentiary details in private arbitration for foreign or international tribunals. Click here to learn more about the case's background.
  • The questions presented: "Whether 28 U.S.C. § 1782(a), which permits litigants to invoke the authority of United States courts to render assistance in gathering evidence for use in “a foreign or international tribunal,” encompasses private commercial arbitral tribunals, as the U.S. Courts of Appeals for the Fourth and Sixth Circuits have held, or excludes such tribunals, as the U.S. Courts of Appeals for the Second, Fifth, and Seventh Circuits have held."[4]
  • The outcome: The court reversed the decision of the United States District Court for the Eastern District of Michigan in a 9-0 ruling, holding the "adjudicative bodies in these cases are not governmental or intergovernmental tribunals that fall within §1782."[3]


    • ZF Automotive came on a writ of certiorari to the United States District Court for the Eastern District of Michigan. To review the lower court's opinion, click here.[5]

    AlixPartners, LLC came on a writ of certiorari to the United States Court of Appeals for the Second Circuit. To review the lower court's opinion, click here.[6]

    Timeline

    The following timeline details key events in the case ZF Automotive US, Inc. v. Luxshare, Ltd.:

    • June 13, 2022: The U.S. Supreme Court reversed the United States District Court for the Eastern District of Michigan's ruling.
    • March 23, 2022: The U.S. Supreme Court heard oral argument.
    • December 10, 2021: The U.S. Supreme Court agreed to hear the case, consolidated with AlixPartners, LLC v. Fund for Protection of Investor Rights in Foreign States.
    • September 10, 2021: ZF Automotive US, Inc. et al. appealed to the U.S. Supreme Court.
    • July 1, 2021: The U.S. District Court for the Eastern District of Michigan overruled objections to the magistrate judge's order granting in part and denying in part the respondents' motion to quash, and ordered discovery.

    The following timeline details key events in the case AlixPartners, LLC v. Fund for Protection of Investor Rights in Foreign States:

    Background

    The consolidated cases concerned the same legal question raised in the case Servotronics, Inc. v. Rolls-Royce PLC, whether U.S. district courts may compel parties to provide testimony or discovery for a foreign or international tribunal in private arbitration. SCOTUS granted review in Servotronics on March 22, 2021, but the case was dismissed on September 29, 2021, after both parties settled the case prior to oral arguments. Click here to learn more about the case.

    ZF Automotive US, Inc. v. Luxshare, Ltd.

    Luxshare, Ltd., collectively known as "Luxshare", sought to initiate arbitration proceedings in Munich, Germany against ZF Automotive US, Inc. ("ZF") related to a business dispute. Luxshare sought discovery from ZF in the United States District Court for the Eastern District of Michigan. Federal magistrate judge Anthony Patti conducted a hearing, a supplemental briefing, and ordered discovery with a limited scope relative to Luxshare's original request. Luxshare objected to the order, and the court overruled the objections.

    ZF filed an appeal with the U.S. Supreme Court on September 10, 2021, before the United States Court of Appeals for the Sixth Circuit could issue a ruling in the case, seeking to reverse the Eastern District of Michigan's discovery order.[4] ZF asked the court to review whether the district court could require discovery in private arbitration proceedings to occur in an international tribunal. SCOTUS granted the petition on December 10, 2021. The court consolidated the case with AlixPartners, LLC v. Fund for Protection of Investor Rights in Foreign States to be argued together during the 2021-2022 term.

    AlixPartners, LLC v. Fund for Protection of Investor Rights in Foreign States

    The Fund for Protection of Investor Rights in Foreign States ("The Fund"), a corporation based in Russia, requested the U.S. District Court for the Southern District of New York to compel discovery from consulting firm AlixPartners, LLC ("AlixPartners"), based in New York, New York, for use in arbitration proceedings in Lithuania filed against the Republica of Lithuania.[6][7]

    In 2011, Lithuanian private bank AB bankas SNORAS ("Snoras") was nationalized following a regulatory investigation and Simon Freakley was appointed as the bank's temporary administrator. Freakley determined that the bank's liabilities were greater than its assets and a court declared that Snoras was bankrupt. The Fund sought to recover compensation from the bank. During that process, The Fund sought discovery in the Southern District of New York from AlixPartners, since Simon Freakley is the firm's CEO, related to the Snoras bankruptcy and his role as temporary administrator. The court granted the request and ordered discovery. AlixPartners asked the court to reconsider and the court rejected the request.[6][7]

    On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court's orders compelling discovery. AlixPartners filed an appeal with the U.S. Supreme Court on October 5, 2021, and presented the following question:[7]

    “ Whether an ad hoc arbitration to resolve a commercial dispute between two parties is a “foreign or international tribunal” under 28 U.S.C. § 1782(a) where the arbitral panel does not exercise any governmental or quasi-governmental authority.[8] ”

    SCOTUS granted the petition on December 10, 2021. The court consolidated the case with ZF Automotive US, Inc. v. Luxshare, Ltd. to be argued together during the 2021-2022 term.

    Questions presented

    The petitioner presented the following questions to the court:[4]

    Questions presented:
    “ Whether 28 U.S.C. § 1782(a), which permits litigants to invoke the authority of United States courts to render assistance in gathering evidence for use in “a foreign or international tribunal,” encompasses private commercial arbitral tribunals, as the U.S. Courts of Appeals for the Fourth and Sixth Circuits have held, or excludes such tribunals, as the U.S. Courts of Appeals for the Second, Fifth, and Seventh Circuits have held.[8] ”

    Oral argument

    Audio

    Audio of oral argument:[9]



    Transcript

    Transcript of oral argument:[10]

    Outcome

    In a unanimous opinion, the court reversed the judgment of the U.S. District Court for the Eastern District of Michigan, holding "adjudicative bodies in these cases are not governmental or intergovernmental tribunals that fall within §1782."[3] Justice Amy Coney Barrett delivered the opinion of the court.

    Opinion

    In the court's majority opinion, Justice Barrett wrote:[3]

    “

    Congress has long allowed federal courts to assist foreign or international adjudicative bodies in evidence gathering. The current statute, 28 U. S. C. §1782, permits district courts to order testimony or the production of evidence “for use in a proceeding in a foreign or international tribunal.” These consolidated cases require us to decide whether private adjudicatory bodies count as “foreign or international tribunals.” They do not. The statute reaches only governmental or intergovernmental adjudicative bodies, and neither of the arbitral panels involved in these cases fits that bill. ...

    So understood, “foreign tribunal” and “international tribunal” complement one another; the former is a tribunal imbued with governmental authority by one nation, and the latter is a tribunal imbued with governmental authority by multiple nations. ... Extending §1782 to include private bodies would also be in significant tension with the FAA, which governs domestic arbitration, because §1782 permits much broader discovery than the FAA allows. ...

    In sum, we hold that §1782 requires a “foreign or international tribunal” to be governmental or intergovernmental. Thus, a “foreign tribunal” is one that exercises governmental authority conferred by a single nation, and an “international tribunal” is one that exercises governmental authority conferred by two or more nations. Private adjudicatory bodies do not fall within §1782. ... Neither the private commercial arbitral panel in the first case nor the ad hoc arbitration panel in the second case qualifies.[8]

    		”
    —Justice Amy Coney Barrett

    Text of the opinion

    Read the full opinion here.

    October term 2021-2022

    See also: Supreme Court cases, October term 2021-2022

    The Supreme Court began hearing cases for the term on October 4, 2021. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[11]

    The court agreed to hear 68 cases during its 2021-2022 term.[12] Four cases were dismissed and one case was removed from the argument calendar.[13]

    The court issued decisions in 66 cases during its 2021-2022 term. Three cases were decided without argument. Between 2007 and 2021, SCOTUS released opinions in 1,128 cases, averaging 75 cases per year.


    See also

    External links

    Footnotes

    1. ↑ Because the Court has consolidated these cases for briefing and oral argument, future filings and activity in the cases were reflected on the docket of No. 21-401.
    2. ↑ U.S. Supreme Court, "No. 21-401, Title: ZF Automotive US, Inc., et al., Petitioners v. Luxshare, Ltd.," accessed December 13, 2021
    3. ↑ 3.0 3.1 3.2 3.3 Supreme Court of the United States, ZF Automotive US, Inc. v. Luxshare, Ltd., decided June 13, 2022
    4. ↑ 4.0 4.1 4.2 U.S. Supreme Court, "ZF Automotive US, Inc. v. Luxshare, Ltd., ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT," accessed December 10, 2021
    5. ↑ U.S. District Court for the Eastern District of Michigan, Luxshare, Ltd. v. ZF Auto. US, Inc., decided July 1, 2021
    6. ↑ 6.0 6.1 6.2 U.S. District Court of Appeals for the Second Circuit, Application of Fund For Protection of Investor Rights In Foreign States Pursuant To 28 U.S.C. § 1782 For An Order Granting Leave To Obtain Discovery For Use In A Foreign Proceeding v. Alixpartners, LLP, decided July 15, 2021
    7. ↑ 7.0 7.1 7.2 U.S. Supreme Court, "AlixPartners, LLP et al., v. The Fund for Protection of Investor Rights in Foreign States, ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT," accessed December 13, 2021
    8. ↑ 8.0 8.1 8.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    9. ↑ Supreme Court of the United States, "Oral Argument - Audio," argued March 23, 2022
    10. ↑ Supreme Court of the United States, "Oral Argument - Transcript," argued March 23, 2022
    11. ↑ SupremeCourt.gov, "The Supreme Court at Work: The Term and Caseload," accessed February 4, 2021
    12. ↑ Consolidated cases are counted as one case for purposes of this number.
    13. ↑ U.S. Supreme Court, "Order List: 593 U.S.," May 17, 2021
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