Just as globalization has significantly increased, so has cross-border discovery. It is not unusual for information requested in U.S. discovery to be found outside the country. Much of this information is electronic – Electronically Stored Information or “ESI” – thus creating additional challenges. The collection, processing and production of ESI can be complicated and costly. And when the ESI is located beyond the borders of the U.S., the issues can get even more involved.
Discovery in other countries is fundamentally different than U.S. discovery. This can create conflict when discovery crosses the U.S. border.
On the one hand, we know that U.S. civil litigation is built on the premise of broad discovery. For instance, Federal Rule of Civil Procedure (FRCP) 26 (upon which many state court rules are based) liberally provides that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense.”
On the other hand, a significant example of contrast is Europe. Data privacy law in the European Union (EU) greatly restricts the production of personal information. For instance, Directive 95/46 of the European Parliament and Council on the Protection of the Individuals with Regard to the Processing of Personal Data and on the Free Movement of Such Data mandates the protection of the “right to privacy with respect to the processing of personal data.” “Personal data” is quite broadly defined to include “any information relating to an identified or identifiable natural person.”
So, how can litigants reconcile such basic conflicting principles? Two recent significant efforts to assist should be noted.
First, earlier this year, the ABA adopted Resolution 103 urging that, “where possible in the context of the proceedings before them, U.S., federal, state, territorial, tribal and local courts consider and respect, as appropriate, the data protection and privacy laws of any applicable foreign sovereign, and the interests of any person who is subject to or benefits from such laws, with regard to data sought in discovery in civil litigation.” The February 2012 report written in connection with the ABA Resolution begins by quoting Benjamin Franklin’s statement that “[c]ommerce among nations should be fair and equitable.” The report concludes by opining that “permitting broad discovery in disregard or even defiance of foreign protective legislation can ultimately impede global commerce, harm the interests of U.S. parties in foreign courts and provoke retaliatory measures.”
Interestingly, the original language of the ABA Resolution was watered down by adding the “where possible in the context of the proceedings” and “as appropriate” language. In at least one federal case, the quoted language was central to the discussion regarding the Resolution.
In Gucci America v. Weixing Li, 2011 WL 6156936 (SDNY August 23, 2011), reconsideration denied 2012 WL 1883352 (SDNY May 18, 2012), Judge Richard J. Sullivan of the Southern District of New York rejected the argument that the ABA Resolution should change his decision to order the Bank of China to disclose its Chinese account records. Judge Sullivan concluded there was not a viable alternative means for the plaintiffs to secure the records. More specifically, the judge disagreed with the Bank that the Hague Convention provided a viable alternative means. Judge Sullivan observed that his decision to order disclosure was consistent with the ABA Resolution’s approach of considering foreign privacy law “where possible” and “appropriate.”
Also earlier this year, as a second major effort , a working group of the well-known Sedona Conference issued six principles entitled “The Sedona Conference International Principles on Discovery, Disclosure and Data Protection.”
Summarized (rather than quoted), these principles are as follows:
Principle 1: Demonstrate due respect for other countries’ data protection laws.
Principle 2: Utilize a standard of good faith and reasonableness to resolve conflicts.
Principle 3: Utilize a standard of relevance and necessity for preservation and discovery.
Principle 4: Utilize stipulations and court orders to minimize conflict.
Principle 5: Demonstrate by a protocol document that preservation and discovery obligations have been addressed.
Principle 6: Retain information only so long as is necessary to satisfy legal and business needs.
The concepts of co-operation and efficiency are re-occurring throughout the six principles. Consistent with this theme, a detailed form of stipulated protective order and a detailed protocol document are appended to the report issued with the principles.
Cross-border discovery will only become more prevalent as time goes on. And the fundamental conflict between liberal U.S. discovery and the much more restrictive approach found elsewhere will continue to create issues for years to come. Adhering to principles of co-operation and efficiency as suggested by the Sedona Conference working group and the ABA can only help to minimize such issues.