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.

U.S. Courts Teach Europe the True Meaning of Christmas

Litigation slows around the holidays as all of us, men and women, associate and partner, plaintiff and defendant, join together in the spirit of the season and take some time to remind ourselves why there are some cousins we just don't keep in touch with. But before we bid good riddance to those interminable weeks of peace on earth and good will toward men and look forward to the comfort of acrimonious discovery disputes ahead, let us take a moment to reflect one last time on the true meaning of Christmas, as perhaps first taught us by the U.S. Supreme Court in Societe Nationale Industrielle Aerospatiale v. United States Dist. Ct. for the Southern Dist. of Iowa, 482 U.S. 522 (1987):

It is better to give than to receive sanctions for violating a U.S. discovery order.

This is a universal message, as explained by Peter Selvin and Jed Lowenthal here. Just as Santa may distribute coal to naughty children without regard for the governing statutes of those children's home jurisdictions (many of which contain strict emissions standards which exclude coal from the list of acceptable gift fuels), U.S. courts may distribute sanctions for violations of discovery orders regardless of whether the non-U.S. parties' compliance with those orders would expose the parties to civil or even criminal sanctions in their home jurisdictions. In fact, as Mssrs. Selvin and Lowenthal note, one may not even need to be a party to the litigation to be subject to a discovery order; foreign affiliates of U.S. litigants may be fair game, too, if the court determines that the litigant has control over the information held by the affiliate.

So, if you are a non-U.S. party and are ordered to disclose your discoverable electronically stored information, you will likely be obliged to give that information up. Even if the information is stored on servers in Europe. Even if you aren't a party to the litigation. Even if disclosure would expose you to sanctions back home. Even if you really, really don't want to.

But take heart, non-U.S. readers; things could be worse. For example, this post was only inches away from being titled "U.S. Courts Crash European 'Block' Parties."