Cross-Border Discovery – Federal Judge makes a monkey of the cheese-eaters

The collision between US discovery requirements and EU privacy and data protection laws is a long-running story of mutual incomprehension on which the formal conflict of laws is merely an overlay. US courts and regulators expect every last document to be produced according to a test of “relevance” which is cast as widely as possible, unconstrained (to European eyes, at least) by any sense of proportionality or necessity, even before you reach privacy, data protection and specific restrictions such as French blocking statutes.

There is a yet deeper layer of mutual antipathy, at some levels at least, between France and the US, derived in part from differing recollections of the country’s respective contributions to the outcome of the Second World War, and to the position taken by France in various subsequent conflicts including their attitude to NATO during the Cold War, the bombing of Libya in 1986 and, most recently, the invasion of Iraq.  Given the matters of high diplomatic importance which give rise to this US picture of the French, it is perhaps curious that the American view should find its most eloquent expression in words uttered by Groundskeeper Willie in a 1995 episode of The Simpsons; forced to multitask as a French teacher, he hailed his class with “Bonjour, you cheese-eating surrender monkeys.” The expression caught on, exacerbating the idea that the French may talk a lot but rarely defend their position. This extends, in US eyes, to the enforcement of their Blocking Statute.

The Trueposition case

I was reminded of Groundskeeper Willie’s Gallic antipathy on reading a Federal Judge’s Memorandum made on a Motion by European Telecommunications Standards Institute (“ETSI”) for a protective order in respect of documents located in France and sought in US proceedings Trueposition, Inc. v. LM Ericsson Tel. Co., 2012 WL 707012, at *4 (E.D. Pa. Mar. 6, 2012). The case itself relates to alleged anti-competitive conduct of major players in the international telecommunications market in violation, so it is said, of US anti-trust law. What the judge referred to as “limited jurisdictional discovery” was needed to establish whether the US court had jurisdiction, and it is this which gave rise to a dispute in a fairly standard form as to whether discovery should be secured through the The Hague Convention on Taking Evidence Abroad in Civil or Commercial Matters, or under the Federal Rules of Civil Procedure.

The judge sets out reasonably clearly, from the bottom of page 3 of his Memorandum, what factors the court must consider stemming from the decision in Societe Nationale Industrielle Aérospatiale v. United States District Court for the Southern District of Iowa, 482 U.S. 522, 524 (1987) and in the subsequent cases which cited it. The Hague Convention, those cases concluded, “was intended to establish optional procedures that would facilitate the taking of evidence abroad”, and does not provide “exclusive procedures” for obtaining documents from a foreign country nor deprive the US Court of its jurisdiction to order the production of evidence.

What is required under Aérospatiale is a “comity analysis” which balances respect for other countries’ judicial sovereignty against the US discovery requirements. Five factors are to be considered, namely

(1) the importance of the documents or information requested to the litigation; (2) the degree of specificity of the requests; (3) whether the information originated in the United States; (4) the availability of alternative means of securing the information; and (5) the extent to which noncompliance with the requests would undermine important interests of the United States, or compliance of the requests would undermine important interests of the state where the information is located.

My rather cynical view on this reference to “important interests of the United States” is that they too often seem to come down to “the interests of the American party in the litigation”, which is not what the Aérospatiale court had in mind.

Two additional factors to be considered are  (1) the good faith of the party resisting discovery; and (2) the hardship of compliance on the party or witness from whom discovery is sought.

The ABA and Sedona Conference Recommendations

Let us leave the District Court and the facts of this particular case for a moment and turn to recent developments at a higher level. The beginning of 2012 brought a strong indication, in the form of a draft Regulation, that the EU commission intends to tighten the restrictions on the use of personally-identifiable information and to increase the penalties for breach. We also saw recommendations by both the American Bar Association and the Sedona Conference to the effect that US courts ought to pay more attention to the rights of foreign sovereign states in making orders for discovery.

Sedona’s recommendations, the International Principles on Discovery, Disclosure & Data Protection: Best Practices, Recommendations & Principles for Addressing the Preservation & Discovery of Protected Data in U.S. Litigation to give its full name, set out six principles which ought to govern such decision-making, including the demonstration of “due respect to the Data Protection Laws of any foreign sovereign”, and a standard of good faith and reasonableness in the event of conflict.

These aspirational suggestions are backed by more practical ones: discovery of Protected Data should be limited in scope to that which is relevant and necessary; in case of conflict, a stipulation or court order should be employed to protect Protected Data and minimise the conflict; Data Controllers should be able to demonstrate compliance with obligations, and should keep data only for as long as needed, and subject to appropriate safeguards.

The ABA Report and Resolution 103 of February 2012 similarly urges US courts to “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.”

Attaching due weight to the comity recommendations

Recommendations, however authoritative their source, are no more than recommendations. Nevertheless, the views of Sedona and the ABA ought to carry some weight, you would think, in a comity analysis being made so soon after the publication of the recommendations. Perhaps not. Well, a judge hearing a Motion about cross-border discovery a few weeks after these weighty papers appeared would at least mention them, would he not? Nope. Has he read them? There is no evidence that he did. Did the learned attorneys in front of him draw them to his attention? Apparently not, or if they did, they are missing from a Memorandum which, whatever one thinks of its conclusion, is scrupulous in the recital of the sources.

The French Blocking Statute

Amongst those sources was the French Blocking Statute. The Memorandum sets out Article 1A of the French Penal Code Law No 80 538 which describes the offence: “[I]t is prohibited for anyone to request, look for, or transmit in writing, orally or in any other form, any document or information… for the purpose of gathering evidence in view of foreign civil or administrative proceedings or in the framework of said proceedings”. Article 3 says that infringement shall be punishable by six months in prison and / or a fine of €18,000 “subject to heavier penalties provided under the law”.

Here then is the collision – defy a US discovery ruling and risk sanctions or comply with it and risk spending six months in the Bastille. The last of the factors to be weighed by the court in deciding whether or not to order FRCP discovery is the hardship of compliance on the party or witness from whom discovery is sought. Six months in prison and a steep fine perhaps look more daunting to a Frenchman on his home territory than to a US judge in the safety of his court room.

In considering these potential consequences, it is perhaps relevant to consider the likelihood that the French will act to enforce the blocking statute. I say “perhaps relevant” because I am not entirely convinced that the “due respect to the data protection laws of any foreign sovereign” lies in the pragmatic assessment that the French will not react. One can illustrate my point this way: a combination of resource cuts and an attachment to their cosy, warm police stations means that the chances of an English policeman arresting a burglar are pretty slim – the actual statistics are the source of much debate and deliberate, self-serving obfuscation, but a career in burglary is fairly risk-free in the UK.  You would not, I think, find a US judge willing to approve of UK burglary on the basis that the police are unlikely to do anything about it.

That, however, seems to be the logic behind the common conclusion that the French blocking statute can be ignored because the French are unlikely to enforce it. The standard form here is to recite the case of Christopher X, the only case  (from 2007) in which an attorney was fined €10,000 for blocking statute violation; US judges generally claim to distinguish that case from the one before their court, and conclude that the risk of French punishment is too small to weigh against the interests of the party seeking discovery.

The standard form recital goes something like this (I paraphrase):

The cheese-eating surrender monkeys are very unlikely to get out of bed (the bed, no doubt, of their neighbour’s wife in true French style)  to do anything about a breach of their blocking statute. Even if they did, it would be a French citizen who copped it, not an American. Just look at the French economy / habits / president / food / language / history / culture / baseball team and try telling me that their interests matter at all compared with those of a fine upstanding American company.

The judge in the Trueposition case did not, of course, put it like that. He did distinguish the Christopher X case, although not on grounds which the blocking statute would recognise, and said:

ETSI has presented no evidence showing that the French blocking statute has ever been enforced in the context of a federal suit… Other courts have held that ‘the French blocking statute does not subject defendant to a realistic risk of prosecution’…Numerous courts have discounted the fear of criminal prosecution in light of the ruling in Christopher X as the basis for permitting French litigants to invoke the Hague Evidence Convention…. weak national interest of France…… The French sovereign interest..pales in comparison to the interests at stake for the United States.

That is completely different. Isn’t it?

Conclusion

Let us be clear that there are circumstances in which a party to US litigation must confront the choice between disobedience towards a US civil court and breach of an EU criminal statute.  Be clear also that many if not most EU jurisdictions (the UK is an exception) are terminally slow in dealing with Hague Convention requests. The judge in the Trueposition case did weigh the Aérospatiale factors, and had satisfied himself (we cannot say with what justification) that the request was narrowly framed, at least by US standards.

Against that, his distinction between jurisdictional discovery and discovery for any other purpose seems artificial when judged by the words of the Blocking Statute, and it seems odd in the extreme not to at least mention the ABA and Sedona initiatives, if only to show that he knew of them and felt that he was complying with their spirit.

Lest you think that I am just taking a prickly EU position here, let me refer you to an article on Gibbons eDiscovery Law Alert headed Show Some Respect: International Privacy and Comity Concerns May Become More Important in Foreign E-Discovery Disputes. It  refers to the warning in Aérospatiale about “any special problem” which may arise in respect of other sovereign interests and says:

And for the last twenty-five years, courts generally have not heeded that advice, giving short-shrift to the idea that foreign privacy or data protection laws must be enforced if the result is to limit discovery of relevant information. At the urging of lawyers and several influential organizations, that could finally be changing.

The article is a good guide to the changing views within the US, ending up with this:

Balancing such competing interests, however, is critical to fostering a global economy, avoiding unnecessary international tension, and maintaining reasonable limits on the gathering and production of ESI. Now, 25 years after Aérospatiale, courts may be ready to listen.

It is a pity that the first US judicial Opinion out of the box after the publication of the ABA and Sedona Conference recommendations should show little sign of listening.

I am obliged to Nigel Murray of Huron Legal in London, for drawing my attention to this case. Nigel moderated a major panel at LegalTech on the subject of cross-border discovery which I wrote about in an article called Huron eDiscovery Panel at LegalTech as the cross-border climate begins to change.

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