Last week, the American Bar Association adopted a rule calling on U.S. courts to “consider and respect, as appropriate, the data protection and privacy laws of any applicable foreign sovereign . . . with regard to data sought in discovery in civil litigation.” In an extensive report accompanying the new rule, the ABA detailed the tensions that exist between the liberal discovery standards under the Federal Rules of Civil Procedure and the strict data protection regimes in many foreign countries.
As the Association explains, the increase in the global reach of corporations has made cross-border discovery an increasingly urgent issue, often forcing companies to choose between the consequences of refusing to comply with discovery obligations in the U.S. on the one hand and enforcement proceedings (including possible criminal prosecution) for violating data protection law on the other. The report notes that “the current state of jurisprudence [in this area] is inconsistent with promotion of rule of law, as it facilitates violation of law, either abroad or here.”
The Association does not recommend a specific approach that U.S. courts should take when called upon to adjudicate a discovery dispute involving foreign data protection law; rather, the report suggests that current law provides the necessary guidance courts need to deal with the conflicts that may arise. The guidance is mostly contained in the Supreme Court’s 1987 Aerospatiale v. District Court of Iowa decision, where the Court advised that
American courts, in supervising pretrial proceedings, should exercise special vigilance to protect foreign litigants from the danger that unnecessary, or unduly burdensome, discovery may place them in a disadvantageous position. . . . In addition, we have long recognized the demands of comity in suits involving foreign states, either as parties or as sovereigns with a coordinate interest in the litigation. . . . . American courts should therefore take care to demonstrate due respect for any special problem confronted by the foreign litigant on account of its nationality or the location of its operations, and for any sovereign interest expressed by a foreign state.
The Aerospatiale decision identified the considerations set out in § 437(1)(c) Restatement of Foreign Relations Law as a suitable starting point for the comity analysis. Those considerations, include:
- The importance to the litigation of the information requested;
- the specificity of the request;
- whether the information originated in the United States;
- whether alternative means exist to obtain the information; and
- whether the interests of the United States outweigh the interests of the foreign jurisdictions in maintaining confidentiality.
(The report also notes that some courts have applied an additional factor to address the potential hardship that a producing party might suffer from compliance with the discovery requests.)
Despite the existence of this guidance, however, the Association found that few courts actually have limited the production pursuant to the discovery request under the Federal Rules. The Association’s new rule urges courts to give due regard to the Aerospatiale factors.
It of course remains to be seen whether courts will respond to the ABA’s call. But in any case, the Association has done much to bring awareness to this increasingly important issue.