More Craziness

Here’s a great response to my post on the Gucci v Curveal case by Chris Dale of the E-Disclosure Information Project

The article by the respected US e-Discovery commentator Tom O’Connor Why the Rest of the World Thinks we are Crazy concerns an Opinion of the District Court of the Southern District of New York which orders a Malaysian bank, not party to the proceedings, to produce documents despite a Malaysian statute prohibiting them from doing so. I volunteer to speak on the half of “the Rest of the World”

I took part in an interview recently with Tom O’Connor and with Browning Marean of DLA Piper US. Amongst our subjects was the perpetual collision between US demands for documents (for FRCP and other purposes) and the data protection laws of other countries, particularly the EU. There are many aspects of US discovery which amaze the rest of the world, and not generally in a nice way, but it is your playground, and if you want to use it to fight in, that is up to you. It is not as if any of the rest of us claim to have got things right.

Where US discovery does impinge on the rest of us is when its demands for documents conflict with the privacy, data protection or, in this case, banking secrecy, laws of other countries. The playground bully marches into our yard, and expects us to follow his rules.

It is not in fact quite as simple as that, and it is wise for outsiders to avoid adverse commentary on whether an Opinion of a foreign court is correctly decided under its own law. This is, after all, S.D.N.Y., not some hick court from a flyover state where no one has a passport and no-one could find Malaysia in an atlas. There are lots of factors here going one way or the other: those who seek the benefits of US trade (and particularly its courts) must take its burdens; the US itself benefits from such trade and wants to encourage it in general if not in the case of this particular business; the existence of foreign restrictions on the use of personal data is not exactly a secret; there was already a default judgment against the original defendant; the protection of IP rights is to some extent a matter of national interest; the position under Malaysian law does not seem to be been argued with great thoroughness (though it would be quite fun to apply the same critical analysis to the logic of the Opinion as its author gave to the Malaysian affidavit); the party against whom discovery was sought was not in fact a party to the original dispute. All these factors muddy the waters, and I propose to ignore them all and focus instead on the words “the important interests of the United States” referred to in the Restatement (Third) of Foreign Relations Law of the United States which are set out in the Opinion.

To an outsider, the conclusion that “the interest of the United States outweighs that of Malaysia under the circumstances” implies an alignment between the interests of a private company (the Plaintiff) and the national interest. It reminds me of that splendid time in British imperial history when Lord Palmerston sent the British fleet to blockade Piraeus in 1848 because the Greek government had failed to pay compensation to Don Pacifico, a merchant of Portuguese Jewish birth, who had had the good fortune to have been born in Gibraltar. There were those who doubted that this was a proper use of British power and authority. Palmerston’s magnificent speech, with its evident disdain for any country but his own, might serve as a model for those drafting the Opinions of US courts in this context, as you can see from its famous closing lines:

whether, as the Roman, in days of old, held himself free from indignity, when he could say Civis Romanus sum; so also a British subject, in whatever land he may be, shall feel confident that the watchful eye and the strong arm of England, will protect him against injustice and wrong.

‘Just send in the Navy and teach these foreign chappies to show some respect’ was the attitude which gave “gunboat diplomacy” its name, and the Don Pacifico incident was its defining moment.

The US test, recited in the opinion, is “the extent to which non-compliance with the request would undermine important interests of the United States, or compliance with the request would undermine the important interests of the state where the information is located”.  My hesitation in treading into matters of US jurisprudence does not prevent me from wondering whether the reference to “important interests of the United States” applies narrowly to the facts of the case under consideration, or more widely (as the Opinion itself suggests) to the protection of US intellectual property interests, or whether it refers to the broadest interests of the US vis-à-vis the rest of the world in respect of data collections. I agree with Tom O’Connor that this Opinion, and those which it follows, can only encourage Germany, Italy or France to (as Tom puts it) “make it even harder for US courts to get their documents than they do now”. How will that serve US interests? What will you do? Perhaps you will simply sanction every party who is unable to produce documents. Or maybe you should, Palmerston-like, send round a gun-boat every time a foreign country presumes to raise its own laws in conflict with yours.


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