Knowledge is power. In civil litigation, knowledge about your adversary is gained through discovery. During the civil discovery process, each side learns about the strengths and weaknesses of the opponent’s case, such as the use of depositions and the ability to obtain documents relating to the dispute. These discovery mechanisms typically can be triggered only once litigation has been initiated. In the ordinary course of business, companies cannot demand a competitor’s data or e-mails, nor can it force depositions under oath of another company’s key employees.
However, there is a potentially significant exception to this rule. Under federal law, a person or company that might be involved in a proceeding outside of the United States may obtain formal discovery here, even without any litigation having been initiated in the United States or elsewhere. This can be a powerful weapon in obtaining knowledge (and gaining leverage) even before a formal dispute mechanism is triggered. Inside counsel whose organizations have operations outside of the United States, or who deal with foreign entities, should be aware of this significant legal device.