Product Liability 2009 - Arnold & Porter LLP

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International Electronic Discovery Carroll, Burdick & McDonough International
the United Kingdom, both in its detailed analysis of backup tapes and
search terms, and due to its finding that counsel has a legal duty to
affirmatively manage e-Discovery in litigation. Courts in England and
Wales have already started citing Digicel and requiring that parties
conduct reasonable due diligence into their client’s electronic systems
and ESI prior to mandatory meet and confer sessions.
For example, citing the DigiCel case, the court in Abela v. Hammonds
Suddards, et al., [2008] Claim No. HC07C00250 (Ch), held that the
standard under Civil Procedure Rule 31 is “not that no stone must be
left unturned” but that a “reasonable search” is conducted. Ultimately,
the court decides what is reasonable, “not the disclosing solicitor…”.
The starting point, however, for defining the scope of a “reasonable
search … must be an accurate account of what data or data sets are
available, on what media they are stored, in what format or formats
they are stored, how the information is organised, and what the overall
quantities of data are”. In that case, the respondent (Hammond)
argued that the recovery of 21 months of backup tapes was unduly
burdensome and would possibly cost up to GBP 150,000. Deputy
Judge Paul Girolami QC indicated that while he may not agree with
the respondent’s estimate of the costs and burdens involved, a party
giving disclosure is ultimately not required to reduce the other parties’
burden in reviewing extensive disclosures by additionally and
separately listing documents which supported his own case and
documents which supported the other party’s case.
Australian courts are also beginning to issue severe sanctions for e-
Discovery errors. In a recent case, an Australian court struck out key
evidence from the plaintiffs’ case because it was obtained in a manner
inconsistent with the agreed search protocol - and therefore in
violation of Australian law. Australian Securities and Investments
Commission v. Macdonald (No. 5), [2008] NSWSC 1169 (04
November 2008).
These and other cases in common law jurisdictions show that litigants
nee not only take US e-Discovery law into consideration, but that they
are also facing new challenges in litigation around the globe.
b. International e-Discovery Considerations
US e-Discovery can potentially reach international corporations when
the entity is a direct party to an action, and it can also in theory reach
non-US parent and subsidiary corporations and affiliates not directly
involved in the litigation as well. Though international choice of law
and evidence-gathering treaty restrictions apply, some attorneys are
arguing (sometimes successfully) that e-Discovery requests can and
do reach beyond US borders.
For example, in the Kingdom of Spain’s appeal of a federal magistrate
judge’s imposition of discovery sanctions due to Spain’s failure to
meet its obligations under the US Federal Rules to preserve and
produce electronic documents and e-mail, the District Court found that
the plaintiff had received adequate notice regarding its preservation
duties and spoliation issues. The court upheld the award of attorneys’
fees as a reasonable sanction for the plaintiff’s negligent failure to
preserve electronic evidence. See Reino de Espana v. Am. Bureau of
Shipping, 2006 WL 3208579 (S.D.N.Y. Nov. 3, 2006), affirmed 2008
WL 3851957 (S.D.N.Y. Aug. 18, 2008). The Reino De Espana
decision shows that litigants - even foreign governments - must be
prepared to address the preservation and potential discovery of e-mail
and other ESI, not just during discovery, but perhaps well before
litigation actually commences, regardless of where the discoverable
information might be found.
Non-US companies doing business in the US, as well as overseas
dependencies of US corporations may well be subject to the new e-
Discovery rules and standards should they be hailed in front of US
courts. In the past, US courts have actively imposed the burden of
global discovery on international litigants coming before them, despite
fundamental opposition from both governments outside the US and
their constituent companies. On the other hand, for the foreign
corporate defendant, ensuring that day-to-day business can continue
uninterrupted and without undue burden is necessarily tantamount to
their obligations related to discovery in a US product liability case.
Unfortunately, international corporations would be ill-advised to
simply ignore this new challenge.
Generally, opposition to global discovery is often based on legal and
cultural differences that global practitioners and clients faced with the
new, even more intrusive US e-Discovery regime must take into
consideration. For example, the role of the judge and lawyer are often
starkly different in common law versus civil law jurisdictions. In
common law jurisdictions, the judge acts as a neutral referee, and the
attorneys take a more adversarial and proactive role in developing the
case and moving it forward. In civil law countries, by contrast, one or
more judges are often active in a case, determining what is
discoverable and necessary for the prosecution of that particular case.
In addition, a number of civil law jurisdictions have privacy laws or
even specific blocking statutes that prevent the transfer of certain
information out of the jurisdiction - and to the US. Regardless of these
statutes, many US courts still expect and demand global discovery
from internationally-acting parties to US litigation. In the past, US
courts often based their analysis on the lack of enforcement of foreign
blocking statutes. However, the recent prosecution of a French
attorney gathering information for discovery in a US case shows that
the tide is slowly turning: In the case In Re Advocat “Christopher X”,
Court of Cassation (Supreme Court) Criminal Section, Appeal No. 07-
83228 (January 16, 2008), a French attorney was criminally
prosecuted and fined €10,000 for violation of the French blocking
statute.
The practitioner must therefore attempt the often difficult task of
ensuring that US obligations are met in a product liability claim while
at the same time not violating the laws of the place the discovery is
sought. This may require the personal consent of the author of emails,
for example, or extensive filing and liaising with governmental
agencies to ensure the proper and confidential treatment of “personal”
data - which is, for example, often liberally construed by non-US
courts to include any data identifying the person or his location.
Presently, no concrete, binding methods exist for obtaining e-
Discovery outside of the US for use in US litigation. One potential
method for obtaining discovery internationally is via the Hague
Convention of March 18, 1970 on the Taking of Evidence Abroad in
Civil or Commercial Matters, which provides the rules and procedures
for obtaining evidence outside of one’s home jurisdiction. A threshold
questions is, of course, whether the country from which you are
seeking discovery is a signatory to the Convention. If so, the
requesting party must strictly follow the specific procedures provided
in order to request discovery via diplomatic channels. In addition, the
requests must also strictly comply with local discovery rules, which
may limit the information available, regardless of whether or not the
country is a signatory. Further, there are no direct methods of
enforcement.
In addition to the Hague Convention on Evidence, the international
practitioner must also take into consideration privacy issues. For
example, European Directive 95/46/EC prohibits the transfer of
personal information outside of the EU unless the country receiving
the information provides an “adequate level of protection” for
individuals in the processing of personal information. The US is
presently not considered to provide adequate privacy protections.
These and other regulations may bar making a mirror-image of your
non-US client’s ESI and taking it to the US for segregation,
preservation, review, and production. Often times, offering redaction
may overcome privacy issues - but, for example, only if the affected
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