E-Discovery World Wars: The Privacy Menace

Descriptions of the art of litigation are ingrained in ancient history, from Greek scrolls yellowed with age to stone hieroglyphs engraved into the pyramid walls of the Egyptians. But these early insular legal systems did not have to deal with what is becoming one of the more daunting aspects of e-discovery: international boundaries. Today, the overseas offices of many United States corporations have been dragged into the painstaking, and often painful, process of e-discovery. Many more corporations, based entirely in foreign countries, have found themselves subject to e-discovery requests from the United States as well.

When requesting e-discovery internationally, foreign information privacy laws must be respected. The dilemma is that foreign countries have placed restrictions on the international transmission of data that can present high, sometimes insurmountable, barriers to United States e-discovery.  

European nations, having experienced first-hand the horrors related to invasions of privacy and release of personal information in World War II, are more protective of individual privacy than the United States to begin with. To compound matters, United States discovery obligations are more demanding -- by far -- than those in virtually every other jurisdiction in the world.  In response, foreign nations have scrambled to protect their citizens' privacy by placing stringent legislative restrictions on the transmission of electronic data.  French privacy “blocking statutes" (as observed by numerous courts) were designed solely for "frustrating the jurisdiction of the United States" and "provid[ing foreigners] with tactical weapons and bargaining chips" in U.S. courts.  Other countries have enacted similar legislation. 

The resulting differences between U.S. and non-U.S. discovery limits are considerable. For example, when a domestic corporation is required to submit to discovery obligations within the United States, e-mails sent to and received by that corporation's employees can be fair game. But under the European Union Privacy Directive, the privacy of employees is sacred, and electronic transmission of information across international borders can be prohibited without the express consent of the subject of the communication. Because the subordinate nature of the employer-employee relationship may render any such consent inherently coerced, it can be impossible to obtain the required consent of an E.U. corporation's employees in order to produce company e-mails and documents. While the U.S. enjoys a "safe harbor" of sorts with the E.U., this is not a fail-safe solution. The Directive, which has been adopted by numerous countries, is not the only impediment. Recently, China considered similar legislation. At times, U.S. e-discovery has also been threatened by privacy and secrecy laws in Japan, France, Switzerland, Belgium, Germany and Spain.

Surprisingly, there are few court decisions on overseas e-discovery. As a general rule, courts consider a variety of factors in weighing U.S. discovery requests against the stringent privacy requirements of foreign nations. These include: (1) the importance of the documents to the litigation; (2) the respective interests of the United States and the foreign national where the information is located; (3) the degree of specificity in the request; (4) whether the information originated in the United States; (5) the availability of alternate means to obtain the information; (6) the hardship of the foreign party or witness in complying with the discovery requests; and (7) the good faith of the foreign party or witness resisting discovery.

Going forward, corporations and their attorneys should be aware that even an in-depth knowledge of U.S. e-discovery rules is often not enough when requesting e-documents and information from overseas.  As international e-discovery gains traction, a key issue is when and whether the interest of a United States court or litigant is important enough to override the very real foreign state interest presented by foreign privacy legislation.  Courts will have to continue to be mindful of the tension between broad U.S. discovery rules and the restrictive privacy laws of foreign nations.

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Benjamin Wright - February 24, 2009 8:59 PM

E-discovery reflects the natural collision of technology and legal practice. As an enterprise creates an ever-growing mountain of records, adversaries of course want access to it. Knowing that litigation and e-discovery are inevitable, an enterprise can use technology proactively to make records more benign. What do you think? --Ben

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