A recovering upstate economy and our region’s close proximity to Canada have resulted in an upsurge in international commerce. With new business comes not just economic opportunity, but the potential for fraud as well. Potential clients have enough on their minds when faced with criminal sanctions and civil liability for fraud, but these concerns become even greater when key evidence or witnesses are located in Canada. It is an attorney’s duty to use all tools available to obtain information that is favorable to a client’s claims and defenses. Below is a discussion of the procedures available in federal court to obtain evidence and testimony north of the border.
Obtaining evidence/witness testimony for use in criminal proceedings
Fraud cases involving financial transactions often involve witnesses with insider information helpful to a client’s case. When such witnesses are uncooperative, the Federal Rules of Criminal Procedure may allow for the witness to be deposed and the ensuing testimony to be used at trial, even when the witness resides in Canada.
Federal Rule of Criminal Procedure 15(a)(1) provides district courts with discretion to order witnesses to submit to depositions “because of exceptional circumstances and in the interest of justice.” The party seeking to depose the witness must first show that it “has made a good-faith effort to produce the person to testify at trial,” United States v. Johnpoll, 739 F. 2d 702, 708 (2d Cir. 1984). Courts have authorized depositions of Canadian witnesses who refuse to come to the United States, United States v. Grossman, 2005 WL 486735, at *2 (SDNY Mar. 2, 2005) (authorizing deposition of defense witness in Canada who stated “‘unequivocally, that he would not voluntarily appear in New York at the trial of [defendant],’ despite defense counsel’s offer to pay for [witness’s] flight, lodging, and incidental expenses”).
Once a court authorizes the deposition of a Canadian witness under Federal Rule of Criminal Procedure15, the court must issue a letter of request – known as a “letter rogatory” – to a Canadian court for assistance in compelling the witness to appear for a deposition. This process regarding obtaining testimony from foreign witnesses in civil proceedings is outlined below.
Following the deposition of a witness in a criminal proceeding, the testimony may be admitted at trial if the witness remains unavailable, Fed. R. Crim. P. 15(f) (referring to definition of unavailability in Fed. R. Evid. 804(a)). The deposition itself must also meet all the requirements of the “former testimony” exception to the prohibition against hearsay in Fed. R. Evid. 804(b)(1): e.g., under oath and with an opportunity for cross-examination.
Regarding physical evidence, a subpoena may be issued for evidence in possession of “a national or resident of the United States” in Canada pursuant to 28 U.S.C. § 1783(a). For evidence in possession of Canadian nationals and residents, the party seeking such evidence must again move the district court to issue a letter rogatory to a Canadian court to assist it in obtaining the sought-after evidence, as discussed below.
Obtaining evidence/witness testimony for use in civil proceedings
For every criminal fraud case there is often related civil litigation. Whether representing the target of a fraud action or a victim (i.e., an investor, business partner etc.), the necessary witnesses and evidence may be located in Canada.
Unlike the United States, Canada is not a party to the 1970 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, which codifies procedures for obtaining evidence in foreign jurisdictions. In the absence of an evidence convention, attorneys here can only obtain evidence from unwilling individuals in Canada by first applying to American courts for letters rogatory to a Canadian court to compel testimony or production of documents. Under federal law, Federal Rule of Civil Procedure 28(b) applies to the issuance of letters rogatory.
A party opposing an application for a letter rogatory “must show ‘good reason’ why such letter should not issue,” Sec. Ins. Co. of Hartford v. Trustmark Ins. Co., 218 F.R.D. 24, 26-27 (D. Conn. 2003). Courts, in considering letter rogatory applications, should not weigh the evidence sought or “predict whether such evidence will ultimately be obtained through discovery,” Id. at 27.
Once a federal court issues a letter rogatory, an application must be brought (usually by Canadian co-counsel) to enforce the letter in the relevant Canadian superior court (e.g., Superior Court of Justice, Ontario). Canadian courts will enforce letters rogatory issued by American courts pursuant to the standards set forth in the Canada Evidence Act (which has been adopted by most Canadian provinces and territories), R.S.C. 1985, c C-5.
The Canada Evidence Act requires that letters rogatory seek evidence (1) for which a Canadian court could likewise issue letters rogatory if the evidence existed outside Canada and (2) which is within the jurisdiction of the Canadian court. The Canada Evidence Act also requires that letters rogatory be issued by a foreign court or tribunal of competent jurisdiction, which is generally satisfied if a letter states that the issuing court is ready and willing to assist the Canadian court if a similar request is made upon it.
Canadian courts may also look at whether the evidence sought is relevant, necessary for discovery and/or trial, or otherwise available. For all these reasons, the submission of letters rogatory to Canadian courts should generally be accompanied by an affidavit from American counsel detailing the issues in the case and reasons why the evidence sought is necessary and material.
In conclusion, federal rules of procedure provide mechanisms to obtain evidence and testimony from witnesses in Canada for use in both criminal and civil proceedings. In representing clients in fraud cases with Canadian connections, a full assessment should be made early on regarding the existence of important evidence and witnesses in Canada.
Alan J. Bozer is a partner with Phillips Lytle LLP and is co-chair of the Firm’s White Collar Criminal Defense and Government Investigations Practice Team. He is active in trying criminal and civil cases, and handles appellate and arbitration work as well. He can be reached at firstname.lastname@example.org or (716) 504-5700. Michael L. McCabe is an attorney with Phillips Lytle LLP where he focuses his practice on White Collar Criminal Defense & Government Investigations as well as Business Litigation. He can be reached at (716) 504-5729 or email@example.com.