A pair of recent decisions by federal district courts in New York illustrate the challenges involved when U.S. discovery rules conflict with foreign privacy laws and foreign “blocking statutes” (i.e., statutes designed to protect non-U.S. citizens from U.S. discovery).
In Gucci America v. Curveal Fashion, 2010 WL 808639, the Southern District of New York ordered a Malaysian bank, that was not party to the suit, to produce information about the defendant’s Malaysian bank accounts. The bank objected to the subpoena on the ground that Malaysian banking secrecy laws explicitly prohibited disclosure and that disclosure would violate Malaysian criminal law. The court nevertheless found that disclosure was justified, basing that conclusion on two factors: first, that the bank failed to produce evidence that it would actually be prosecuted and punished under Malaysian law, and second, that the Malaysian government itself had not voiced objections to disclosure.
In In re Air Cargo Shipping Services Antitrust Litigation, 2010 WL 1189341, the Eastern District of New York ordered Air France, a party in a multidistrict antitrust action, to produce several boxes of documents related to the litigation. Air France objected that the plaintiffs’ discovery request would have to comply with the procedures of the Hague Evidence Convention; otherwise, turning over the documents would cause it to violate a French blocking statute. That statute criminalized the production of evidence located in France for use in foreign legal proceedings without complying with the Hague Convention’s procedural requirements. The court rejected Air France’s argument on the ground that it faced no real threat of prosecution for producing the documents and that the U.S. interest in enforcement of its antitrust laws outweighed France’s interest in controlling access to information within its borders.
