Cross-border discovery disputes arise when documents that reside in one country are subject to production in another country. More often than not, the types of cases involving cross-border disputes are cases in the U.S. in which a party is trying to get documents from a party whose documents reside in Europe. It is often a “Catch-22” situation in which the need to gather relevant information in Europe for production in the U.S. conflicts with data privacy regulations, and sometimes even statutes in Europe that restrict or prohibit such discovery.
Part of the conflict in U.S. and European cross-border discovery disputes is a result of differing notions of what is reasonable and appropriate discovery. U.S. courts tend to have a very broad notion of discovery. The Federal Rules of Civil Procedure and state procedural rules generally provide that documents and data are discoverable if they are reasonably calculated to lead to the discovery of admissible information. European courts, conversely, tend to have a much narrower view of discovery. Countries in continental Europe generally prohibit disclosure of evidence beyond what is obviously needed for trial.
In the U.S., while the Supreme Court has recognized the need to respect foreign data privacy laws, the Federal Rules of Civil Procedure are not preempted by foreign privacy regulations. Therefore, in practice, U.S. courts often default to allowing broad discovery despite the risk to litigants subject to foreign privacy laws. For example, in Strauss v. Credit Lyonnais, the court ordered the defendant to produce documents in accordance with the Federal Rules of Civil Procedure, over the defendant’s objections that doing so would subject the defendant to penalties under French privacy law. After the defendant complied, French authorities levied criminal penalties and fined counsel €10,000 for conducting discovery for U.S. litigation in violation of the French blocking statutes. In re Advocat “Christopher X.”
Similarly, in Accessdata Corporation v. ALSTE Technologies GmbH, a German company refused to produce documents regarding customer complaints in a breach of contract action on the grounds that disclosure of such information would reveal third parties’ identities and violate the German Data Protection Law and the German Constitution. The court ordered the German company to produce the documents, relying on Societe National Industrielle Aerospatiale v. United States District Court for the principle that blocking statutes, such as the German Data Protection Law, do not deprive U.S. courts of the power to order a party to produce evidence even though the party may violate a foreign statute.