A Primer on Transnational Discovery
February 22, 2023
Discovery is a formal process in which each party gathers information relevant to its case. Transnational discovery may be necessary to obtain information located abroad for use in U.S. courts or to obtain information located in the United States for use in foreign courts. As a general matter, courts may order parties subject to their personal jurisdiction to produced discovery, may ask a foreign court to order discovery through a letter rogatory, or may use the procedures of an international treaty like the Hague Evidence Convention.
Some other countries have adopted “blocking statutes” that limit or forbid the production of evidence for use in foreign courts. Bank secrecy and data protection laws may similarly limit discovery. Faced with such statutes, a court must first decide whether to order discovery regardless and, if the order is not complied with, must additionally decide what sanctions to impose. The United States, rather than blocking discovery requests from abroad, has adopted a law, 28 U.S.C. § 1782, authorizing U.S. courts to order discovery for use in foreign and international tribunals.
Scope of U.S. Discovery Rules
U.S. discovery rules are broad, and both parties and U.S. judges prefer using them in transnational disputes. But doing so requires the court to have personal jurisdiction over the person from whom discovery is sought, which may make it difficult to order discovery from non-parties.
Federal Rule of Civil Procedure 26(b) authorizes discovery “regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” It states explicitly that “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.” U.S. discovery techniques include depositions, interrogatories, the production of documents, and requests for admission.
U.S. courts have repeatedly held that they have authority to order the production of documents or other materials located abroad. In deciding whether to compel production of materials abroad, courts typically weigh the factors set forth in Section 442 of the Restatement (Third) of Foreign Relations Law (1987) and endorsed by the U.S. Supreme Court in Société Nationale Inustrielle Aérospatiale v. U.S. District Court (1987). Although Aérospatiale focused on whether to require use of the Hague Evidence Convention (discussed below), courtshave relied on the same factors in cases not involving the Convention. Those factors are:
the importance to the investigation or litigation of the documents or other information requested; the degree of specificity of the request; whether the information originated in the United States; the availability of alternative means of securing the information; and the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located.
If a person ordered to produce discovery does not comply, the court may impose sanctions under Rule 37, including drawing adverse inferences, striking the pleadings, dismissing the action, entering default judgment, and contempt.
Discovery from Non-Parties
If a non-party to the litigation refuses to produce discovery to which a party is entitled, a court may issue a subpoena to compel its production. Federal Rule 45 authorizes subpoenas to non-parties located within the United States to produce documents or to attend a deposition or trial. It also permits service of subpoenas on U.S. nationals and residents who are located outside the United States, pursuant to 28 U.S.C. § 1783.
The person to whom the subpoena is addressed must be subject to the personal jurisdiction of the court. Since the Supreme Court in Daimler limited general personal jurisdiction to the forum where a person or entity is “at home,” lower courts have found it more difficult to obtain evidence from foreign non-parties, for example from U.S. branches of foreign banks.
Another possibility for obtaining discovery from parties and non-parties is a letter rogatory. Letters rogatory are requests from courts in one country to the courts of another country, generally for taking evidence or serving process. Using letters rogatory to obtain discovery can be cumbersome and slow.
The United States is party to the Inter-American Convention on Letters Rogatory but applies it only to service of process and only with respect to those countries that have joined the Convention’s Additional Protocol. Therefore, the Inter-American Convention may not be used for purposes of discovery.
The Hague Evidence Convention
The 1970 Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, commonly known as the Hague Evidence Convention, provides additional means of obtaining discovery abroad. The Convention (to which 65 countries including the United States are parties) requires each country to designate a Central Authority to receive and execute letters of request for evidence from the other countries. The United States has designated the Office of International Judicial Assistance in the Department of Justice for such purposes.
Although the receiving country generally follows its own procedures in complying with the request, it should follow requests for special methods (like a deposition taken under oath) unless impractical or incompatible with its own law. The Convention provides that an unwilling person may be compelled to provide evidence, although under Article 11 a person may invoke any privilege under the laws of either country.
Under Article 23, countries may declare that they will not execute letters for the pre-trial discovery of documents “as known in Common Law countries,” a provision intended to limit U.S.-style discovery. Most countries have made some declaration limiting the production of documents under Article 23.
As an alternative to going through a country’s Central Authority, the Convention allows diplomatic or consular officers to take evidence, as well as commissioners appointed by a court of the requesting state. Such officers may administer oaths and follow other procedures of the requesting state. However, they generally lack authority to compel unwilling persons to provide evidence.
In Société Nationale Inustrielle Aérospatiale v. U.S. District Court (1987), the Supreme Court held that use of the Convention by courts in the United States is optional—that is, a court may order discovery under the Federal Rules to compel discovery of information located in countries that are party to the Convention. The Court instructed lower courts to decide whether to use the Convention’s procedures on a case-by-case basis, applying the factors noted above. Studies have found that lower courts rarely require use of the Convention’s procedures to obtain evidence from the parties to litigation. U.S. courts do, however, turn to the Convention to obtain evidence from non-parties over whom they lack personal jurisdiction as the Convention is then the only practical means of obtaining discovery.
Foreign Blocking Statutes
Many countries have adopted “blocking statutes” that limit the production of evidence for use in foreign courts. France prohibits discovery for use in foreign courts except in compliance with a treaty like the Hague Evidence Convention. During the 1980s, in response to U.S. antitrust litigation, the United Kingdom, Australia, and Canada passed statutes authorizing their governments to block discovery requests. Switzerland and many other countries have bank secrecy laws that may prevent compliance with U.S. discovery requests. More recently, the European Union and other countries have enacted data privacy laws that may similarly conflict with discovery orders. China has several statutes that may limit access to discovery, including the 1988 Guarding State Secrets Law, the 2017 Cybersecurity Law, the 2021 Personal Information Protection Law, and the 2021 Data Security Law.
In Société Internationale pour Participations Industrielles et Commerciales, S. A. v. Rogers (1958), the Supreme Court held that a Swiss blocking statute did not deprive a party of “control” over documents and therefore did not deprive a U.S. court of the authority to order their production. And in Aérospatiale, the Court gave little weight to the French blocking statute requiring use of the Hague Evidence Convention. Lower courtsfrequently order production notwithstanding foreign blocking statutes, discounting the government interests behind the statutes and finding the risk of prosecution under them to be minimal. Some have argued, however, that data protection laws should carry more weight.
As noted above, Federal Rule 37 provides a range of sanctions that judges may impose for non-production of discovery to which a party is entitled. In Rogers, the Supreme Court held that dismissing a party’s claim was too great a sanction when production was prohibited by foreign criminal law, but it noted that the lower court might nevertheless draw adverse inferences against the non-producing party.
Courts have limited sanctions under the doctrine of foreign state compulsion when the person in question is likely to suffer severe consequences for failing to follow foreign law and has tried in good faith to avoid the conflict, for example by requesting permission to disclose documents. Discovery sanctions should aim not to punish non-producers, but rather to even the playing field in light of the non-production.
Discovery for Use in Foreign Courts and Tribunals
The United States provides extensive assistance to foreign courts and parties seeking discovery of information located within the United States. A federal statute, 28 U.S.C. § 1782, provides that “the district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal.” This provision applies to quasi-judicial proceedings, like antitrust investigations by the European Commission, but not to most international arbitrations.
In Intel Corp. v. Advanced Micro Devices, Inc. (2004), the Supreme Court held that any interested person, not just the parties to foreign litigation, may seek discovery under Section 1782. It also held that the foreign proceedings need not yet be underway and that the evidence sought need not be discoverable under foreign law. Lower courts have held that Section 1782 allows them to order parties located within their districts to produce evidence even if the evidence is located outside the United States.
Intel articulated four factors for a district court to consider in deciding whether to order discovery for use in foreign proceedings: (1) whether the person from whom discovery is sought is a participant in the foreign proceeding, in which case the foreign court could order discovery itself; (2) the receptivity of the foreign court to U.S. judicial assistance; (3) whether the discovery request seeks to circumvent foreign restrictions on discovery; and (4) whether the request is unduly intrusive or burdensome.
Since the Supreme Court’s 2004 decision in Intel, the number of Section 1782 petitions has increased substantially. U.S. courts grant such petitions at a high rate and, since the petitions are often made ex parte, often without hearing argument on the other side.
The broad U.S. approach to discovery applies in transnational cases as well as domestic ones. U.S. courts regularly order parties and non-parties to produce discovery located abroad, even when it violates foreign blocking statutes. U.S. courts rarely resort to the Hague Evidence Convention. But U.S. courts also stand ready to assist foreign courts by ordering discovery in the United States for use in foreign tribunals.