R-E-S-P-E-C-T, Cross-Border E-discovery


Litigants navigating the conflict between U.S. discovery obligations and foreign data protection laws have a new ally, the American Bar Association (“the ABA”). The ABA recently passed Resolution 103, which “urges” that:

[W]here possible in the context of the proceedings before them, U.S. federal, state, territorial, tribal and local courts 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.

The full text of the resolution and accompanying report (the “Report”) can be found here.   In supporting its resolution, the ABA noted that “[l]itigants often face a Hobson’s Choice: violate foreign law and expose themselves to enforcement proceedings that have included criminal prosecution, or choose noncompliance with a U.S. discovery order and risk U.S. sanctions ranging from monetary costs to adverse inference jury instructions to default judgments.” Report at p. 2.   As “U.S. law already provides a clear and workable standard for resolving the conflict” the ABA believes that Courts should give more consideration “to the national interests behind the non-U.S. laws” such that the comity factors are weighed and applied “in a manner that demonstrates respect for those laws and the principles of international comity.” Report at p. 17.

The ABA’s involvement with this issue is particularly timely, as it has recently become apparent that new data analytic technologies have weakened the effectiveness and reliability of anonymization, one of the primary mechanisms available to litigants to navigate cross border discovery conflicts. See e.g., The Practice of Law in the Age of Big Data, Nat. L. J., April 11, 2011.

Despite the apparent strength of this Resolution, it is worth noting that the ABA appears to have watered down the original intended language, restricting its statement to data that is “sought,” i.e. affirmatively requested by an opposing litigant, as compared to the original language, which applied broadly to “data that is subject to preservation, disclosure, or discovery.” The intent of this change is unclear, as the ABA continues to acknowledge that preservation related-activities can, by themselves, run afoul of foreign data protection obligations, even in the absence of actual production or cross-border transfer. Report at p. 12. For example, the European Data Protection Directive, defines regulated “processing” to include mere “storage,” and further provides that data shall be “kept in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the data were collected.” See Directive 95/46/EC, Articles 1 and 6. Such restrictions can be inconsistent with broad U.S. preservation obligations, and non-compliance would seem to present many of the same risks that are a concern when it comes to cross border data transfer.

Regardless of any limited intent, it is hoped that the ABA’s position will be taken to heart by the judiciary, as litigants in possession of protected data should not have to unnecessarily fear litigating in U.S. Courts.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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