How Savvy U.S. Courts Decide to Order Cross-Border Discovery

Foreign “blocking statutes” refer generally to the laws of one jurisdiction intended to hinder the application of certain laws of another jurisdiction.[1] Many countries have enacted laws that expressly restrict or prohibit the cross-border transfer and production of documents or information for the purpose of complying with U.S. discovery.[2] It’s important to note that the scope, mechanisms, and enforcement of such foreign blocking statutes vary widely across jurisdictions.[3]

The bottom line, however, is that foreign blocking statutes do not prevent discovery. In the 1987 landmark decision of Société Nationale Industrielle Aerospatiale v. U.S. District Court for the Southern District of Iowa (“Aerospatiale”), the U.S. Supreme Court held that blocking statutes of foreign jurisdictions do not unilaterally “deprive an American court of the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute.”[4]

Instead, the Court created a balancing test that weighed the U.S. common law right of access during discovery and the demands of international comity.[5] The test considered the following factors: the importance of the information requested; the degree of specificity of the request; whether the information requested originated in the U.S.; the availability of alternative means of securing the information; and the extent to which compliance or noncompliance with the requests would undermine important interests of the U.S.[6] 

U.S. courts have since applied variations of the multi-factor balancing test.[7] When a court decides to defer to the blocking statute of a foreign jurisdiction, it can order cross-border discovery through recognized legal avenues for gathering evidence created by international agreements or treaties, such as the Hague Evidence Convention.[8] This is usually more time-consuming and expensive for litigants. Alternatively, courts may order cross-border discovery pursuant to their  traditional domestic authority, but devise the collection and production of documents and information to still comply with foreign blocking statutes. At least one U.S. court has ordered redaction of personal information protected by foreign privacy laws. In Securities and Exchange Commission v. Telegram Group Inc. et al, the Southern District of New York allowed defendants to redact personal bank records to comply with foreign privacy laws.[9]

U.S. courts also ordered cross-border discovery that directly conflicts with a foreign blocking statute. Parties subject to such an order must decide which jurisdiction’s law to comply with and which to violate. Because U.S. courts are more likely to order discovery if the blocking statute has a history of weak enforcement, foreign jurisdictions should consider whether they would prosecute a violation of the blocking statute.[10] In Aerospatiale, the French blocking statute, as amended in 1980, is a particularly aggressive criminal legislation that bans all communication of documents and information relating to “economic, commercial, industrial, financial or technical matters” for the purpose of producing evidence in a foreign jurisdiction. Violators are subject to a six-month imprisonment and/or a fine of up to €18,000 for individuals and €90,000 for legal entities.[11]

Despite the breadth and severity of the French blocking statute’s language, French courts did not vigorously prosecute violations of the statute until 2007 in a case publicly known as Christopher X.[12]  In Christopher X, the French Supreme Court upheld the criminal conviction of a French lawyer who informally obtained information from a French insurance company while working for an American law firm that represented the California Department of Insurance in a lawsuit in U.S. federal court.[13] The French Christopher X decision has been deemed by legal experts as an outlier due to its unique facts and circumstances and, in the U.S., courts continue to routinely order discovery despite clear conflicts with the French blocking statute.[14] There have been attempts among French legislature to pass a bills that roll back the scope of the French blocking statute due to its ineffectiveness.[15]

More recently, several U.S. federal courts have acknowledged the conflict between U.S. discovery and the EU General Data Protection Regulation (GDPR), which took effect in 2018. Nonetheless, U.S. federal courts have ordered the production of documents containing personal information of EU citizens under a protective order.[16]

In sum, U.S. courts have the authority to customize discovery orders to comply with foreign blocking statutes to a degree judged to be appropriate according to international comity and do not shy away from discovery sanctions. When asserting control over discoverable documents and information in U.S. litigation, foreign jurisdictions should also consider to what extent they are prepared to enforce their blocking statutes.

Lauren Park is a staff member of Fordham International Law Journal Volume XLV.

This is a student blog post and in no way represents the views of the Fordham International Law Journal.
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[1] See e.g., Kelly Austin et al., China’s “Blocking Statute” – New Chinese Rules to Counter the Application of Extraterritorial Foreign Laws, Gibson Dunn 1-5 (Jan. 13, 2021), https://www.gibsondunn.com/wp-ontent/uploads/2021/01/chinas-blocking-statute-new-chinese-rules-to-counter-the-application-of-extraterritorial-foreign-laws.pdf.

[2] See M.J. Hoda, Note, The Aérospatiale Dilemma: Why U.S. Courts Ignore Blocking Statutes and What Foreign States Can Do About It, 106 Cal. L. Rev. 231, 234 (2018).

[3] See id. at 238-39; see also Blocking Statutes Chart: Overview, Thomson Reuters Prac. L., https://uk.practicallaw.thomsonreuters.com/w-018-9687 (May 27, 2021).

[4] See Société Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522, 544 n.29 (1987).

[5] See In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 484 F. Supp. 3d 249, 267 (E.D. Pa. 2020).

[6] See Société Nationale Industrielle, 482 U.S. at 544 n.28.

[7] See Lionel M. Lavenue et al., GDPR, BDSG, & Discovery in U.S. Courts Under Hague Evidence Convention, Bloomberg Law 2 (Oct. 2021), https://www.finnegan.com/a/web/rPQTC9Kqn5unbbin3x5SBV/published-bloomberg-law-gdpr-bdsg-and-discovery-in-us-courts-under-hague-evidence-convention-lml-rbc-ma-102521.pdf.

[8] See supra note 4 at 546.

[9] See Lavenue et al., supra note 7, at 3.

[10] See Hoda, supra note 2, at 248-51.

[11]See Thomas Rouhette & Ela Barda, The French Blocking Statute and Cross-Border Discovery, 84 Def. Couns. J. 1, -5 (2020).

[12] See id. at 6-7.

[13]See Joanne Wojcik, One Defendant in ELIC Trial as MAAF Defaults, Bus. Ins. (Feb. 20, 2005), https://www.businessinsurance.com/article/20050220/story/100016255/one-defendant-in-elic-trial-as-maaf-defaults. 

[14] See Rouhette & Barda supra note 11, at 6-7.

[15] See id. at 6-8.

[16] See Lavenue et al., supra note 7, at 3.