A multinational corporation with offices in both the United States and Great Britain has filed suit in the United States against the American subsidiary of a French competitor. The general counsel is unsure how to compel the production of relevant data stored on the defendant's servers in the European Union and is seeking advice as to the appropriate mechanisms for obtaining evidence from foreign jurisdictions.
The same multinational corporation is a defendant in British proceedings brought by a British competitor. Aware that much of the data relevant to this litigation is stored on the multinational corporation's American servers, the general counsel seeks to understand the scope of its production obligations when a foreign plaintiff seeks to compel evidence located on American soil for use in foreign proceedings.
Obtaining Evidence from Abroad
Through the Federal Rules of Civil Procedure
Pretrial discovery in the United States is famously expansive, particularly by comparison to foreign civil law jurisdictions. Under the Federal Rules of Civil Procedure, any party to US federal litigation can compel the discovery of evidence located in a foreign jurisdiction so long as the evidence requested is in the responding party's "possession, custody, or control." American discovery emphasizes the importance of "truth-seeking" in pretrial disclosure, and it is in this spirit that US courts construe "control" broadly. Depending on where its US facilities are located and details of its organizational structure, a party may be deemed to have control if it has the legal right, authority and/or practical ability to obtain the materials.
Through the Hague Evidence Convention
US litigants may seek discovery from foreign entities through the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters ("Hague Evidence Convention"). This multilateral treaty (to which more than 50 countries, including the United States, are signatories) streamlines procedures for seeking evidence abroad by allowing US courts to request evidence directly from designated authorities within foreign states.
The extent to which parties to a US litigation are able to rely on the Hague Evidence Convention depends on the local discovery rules of the country in which discovery is sought. It is not unusual for contracting countries to limit the types of information that can be requested pursuant to the Convention, and thus, if possible, it is advisable for parties to pursue discovery through the Hague Evidence Convention in conjunction with other avenues of obtaining foreign evidence.
Through Letters Rogatory
In addition to the Hague Evidence Convention, letters rogatory provide a mechanism through which US parties may seek to compel the production of overseas evidence in US-based litigation. A letter rogatory is essentially a formal request from one court, in which an action is pending, to a foreign court, asking for assistance in performing a judicial act.
If a non-US jurisdiction isn't a signatory of the Hague Evidence Convention or some other treaty regarding judicial assistance, letters rogatory may be the only means by which a party can compel evidence from a foreign non-party, unless the foreign non-party is subject to the personal jurisdiction of the US court ordering discovery.
Unfortunately, obtaining documents by letters rogatory is costly, and it can take longer for parties to procure evidence through this method than via the Hague Evidence Convention.
Finally, US courts will compel the production of documents located abroad when the custodian of the documents is subject to the court's personal jurisdiction. Indeed, even a non-party foreign corporation may be compelled to produce evidence pursuant to a US court subpoena if that entity, or in some cases its corporate parent, is subject to the court's personal jurisdiction.
An Impediment: Blocking Statutes
Several European countries—most prominently, France—have enacted blocking statues intended to protect their sovereignty and prevent disclosure of their citizens' personal data during US pretrial discovery. Generally, US courts regard blocking statutes with the trademark skepticism reserved for foreign legislation seeking to limit the United States' power to bind the parties before them, and American courts often require production of relevant data regardless of a blocking statute.
It is important to note, however, that companies in violation of foreign blocking statutes may face serious consequences in those jurisdictions. The French blocking statute, for example, criminalizes the act of obtaining discovery from France for use in litigation or investigations outside of the country, unless the discovery is sought through the Hague Evidence Convention.
Obtaining Evidence Through 28 U.S.C. § 1782
28 U.S.C. § 1782 permits US district courts to order discovery in the United States for use in foreign proceedings. The potential scope of discovery under § 1782 is far-reaching: In order to avail itself of § 1782, the party seeking discovery must simply demonstrate that: (1) the request has been made either by "a foreign or international tribunal" or "any interested person"; (2) the request seeks evidence, whether an individual's "testimony or statement" or the production of "a document or other thing"; (3) the evidence is "for use in a proceeding in a foreign or international tribunal"; and (4) the person from whom discovery is sought resides or is found in the district of the United States District Court ruling on the application for assistance.
Though these requirements have been interpreted broadly by US courts across many different types of litigation, the law is not settled on whether § 1782 can reach documents within a US entity's "possession, custody, or control" if those documents are physically located overseas.
Judicial Discretion Applying 28 U.S.C. § 1782
Once each of these statutory requirements has been met, the court ordering discovery has discretion to determine how broad the discovery order will be. US courts tend to weigh multiple factors, including (1) whether the person from whom discovery is sought is a participant in the foreign proceeding, (2) how receptive the foreign government has been to US federal-court judicial assistance, (3) whether the discovery request conceals an attempt to circumvent otherwise applicable discovery restrictions and (4) whether the request is unduly intrusive or burdensome.
Tips for Parties Facing Cross-Border Litigation
- Obtaining evidence from abroad through the Hague Evidence Convention or letters rogatory can be a time-consuming, labyrinthine and expensive process. Early on in the discovery process, US counsel facing cross-border discovery should make the court and opposing counsel aware of the potential legal barriers and costs associated with collecting foreign data.
- Multinational corporations should be aware of the types and location of electronically stored information ("ESI") under their control, and develop cross-border discovery strategy (and discovery defense strategy) accordingly. For example, if a company's ESI is located in several European Union member states, each subject to the same data privacy framework, it may make sense to transfer the relevant data to one central location within the EU for storage and document review.
- Companies collecting foreign data relevant to a US litigation should consider conducting document review in the jurisdiction where the data is located or a jurisdiction to which it can be transferred without implicating local data protection laws. An on-site review, coupled with targeted collection procedures and narrowly defined requests for production, may significantly reduce the volume of data that has to be transferred to the United States and lighten the burden of complying with data privacy restrictions.
- Because US discovery laws require broader disclosure in the pretrial phase than corresponding discovery laws abroad, companies would be well advised to work with local counsel to avoid falling foul of a foreign jurisdiction's data privacy regulations and blocking statutes.
- International corporations should be aware that US discovery rules may directly conflict with foreign blocking statutes and data privacy regulations. Although US courts have shown greater deference to restrictions arising from data privacy laws than those arising from foreign blocking statues, companies must keep in mind the possibility that the failure to comply with US discovery obligations out of concern for foreign laws could lead to US courts imposing considerable sanctions.
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