Two Methods To Obtain Discovery
From A Foreign Affiliate
• Federal Rules of Civil Procedure
–
A party may serve on any other party a request . . . :
(1) to produce and permit the requesting party or its representative to inspect, copy, test, or
sample the following items in the responding party's possession, custody, or control

Fed. R. Civ. P. 34(a)(1)
• Hague Convention – Chapter 1 – Letters of Request
–
In civil or commercial matters a judicial authority of a Contracting State may, in accordance
with the provisions of the law of that State, request the competent authority of another
Contracting State, by means of a Letter of Request, to obtain evidence, or to perform some
other judicial act.

Convention adopted at the Eleventh Session of The Hague Conference on Private International Law
October 26, 1968; T.I.A.S. No. 7444, 23 U.S.T. 2555, 1972 WL 122493, (U.S. Treaty), October 07, 1972
2012 OFII General Counsel Conference
Washington, D.C.
1
Hague Convention Is A “Supplement”
To Federal Rules of Civil Procedure
• [T]he Convention was intended as a permissive supplement, not a
pre-emptive replacement, for other means of obtaining evidence
located abroad.
–
Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Court for S. Dist. of Iowa, 482 U.S.
522, 536 (1987)
• If the Hague Convention were the exclusive means for obtaining
evidence located abroad, every American court hearing a case
involving an international entity would be subject to the internal laws
of the foreign country.
–
Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Court for S. Dist. of Iowa, 482 U.S.
522, 539 (1987)
2012 OFII General Counsel Conference
Washington, D.C.
2
“Control” Of Documents Possessed
by Foreign, Non-Party Affiliates
•
Under Rule 34, “control” does not require that the party have legal ownership
or actual physical possession of the documents at issue [but] when that party
has the right, authority, or practical ability to obtain the documents from a
non-party to the action.
–
•
In re NTL, Inc. Sec. Litig., 244 F.R.D. 179, 195 (S.D.N.Y.) aff'd sub nom. Gordon Partners v. Blumenthal, 02
CIV 7377 LAK, 2007 WL 1518632 (S.D.N.Y. May 17, 2007) (internal quotations & citation omitted)
[I]issue of control is more a question of fact than of law, and it rests on a
determination of whether the defendant has practical and actual managerial
control over, or shares such control with, its affiliate, regardless of the
formalities of corporate organization.
–
In re Uranium Antitrust Litig., 480 F. Supp. 1138, 1145 (N.D. Ill. 1979)
2012 OFII General Counsel Conference
Washington, D.C.
3
“Control” Of Documents Possessed
by Foreign, Non-Party Affiliates
• The test to determine whether a corporation has custody
and control over documents located with an overseas
affiliate is not limited to whether the corporation has a
legal right to those documents. … Rather, the test
focuses on whether the corporation has “access to the
documents” and “ability to obtain the documents.”
– Hunter Douglas, Inc. v. Comfortex Corp., CIV. A. M8-85 (WHP), 1999 WL 14007,
at *3 (S.D.N.Y. Jan. 11, 1999) (quoting Addamax Corp. v. Open Software
Found.,Inc., 148 F.R.D. 462, 467 (D. Mass. 1993)).
2012 OFII General Counsel Conference
Washington, D.C.
4
Factors To Determine “Control”
•
[D]ocuments in the possession of one corporation may be deemed under
control of another corporation … [t]hese factors focus on the other
corporation's actual control or inferred control, including any “complicity” in
storing or withholding documents. They include:
(a) commonality of ownership,
(b) exchange or intermingling of directors, officers or employees of the two
corporations,
(c) exchange of documents between the corporations in the ordinary course of
business,
(d) any benefit or involvement by the non-party corporation in the transaction, and
(e) involvement of the non-party corporation in the litigation.
Uniden Am. Corp. v. Ericsson Inc., 181 F.R.D. 302, 306 (M.D.N.C. 1998)
2012 OFII General Counsel Conference
Washington, D.C.
5
The Intercorporate Relationship
•
Close Relationship / Overlapping Board
– In addition to being a wholly owned subsidiary, KMC's [defendant U.S. subsidiary]
Board consists of upper echelon KMAG [non-party German parent] employees who
have substantial oversight responsibility in that corporation. Key decisions regarding
this litigation … were made by a KMAG employee [and] KMAG has provided
documents at the request of KMC, demonstrating that the requested items are within
KMC's reach. The intercorporate relationship balances in favor of finding that KMC has
control of the requested documents.
 Afros S.P.A. v. Krauss-Maffei Corp., 113 F.R.D. 127, 132 (D. Del. 1986)
•
Separate Entities
– Other than shared membership in the common association of Ernst & Young
International, Ernst & Young LLP, Ernst & Young Singapore, and Ernst & Young
Thailand are separate entities.
• Goh v. Baldor Electric Co., No. 3:98-MC-064-T, 1999 WL 20943, at *3 (N.D. Tex.
Jan. 13, 1999)
2012 OFII General Counsel Conference
Washington, D.C.
6
Motions To Compel
• The party seeking to compel a subsidiary to produce the
documents of its foreign parent has the burden of showing that
the documents are within the local subsidiary's control.
– Linde v. Arab Bank, PLC, 262 F.R.D. 136, 141 (E.D.N.Y. 2009)
• When the order compelling documents is not based on actual
control, but on the inferred control and complicity prong, the
court will more likely tie the scope of the request to the extent
of the complicity. This should help regulate concerns over
unfairness and burdensomeness when actual legal ability to
control is not present.
– Uniden Am. Corp. v. Ericsson Inc., 181 F.R.D. 302, 307-308 (M.D.N.C. 1998)
2012 OFII General Counsel Conference
Washington, D.C.
7
International Comity
(1) (a) A court or agency in the United States, when authorized by statute or rule
of court, may order a person subject to its jurisdiction to produce documents,
objects, or other information relevant to an action or investigation, even if the
information or the person in possession of the information is outside the
United States. ….
(c) In deciding whether to issue an order directing production of information
located abroad, and in framing such an order, a court or agency in the United
States should take into account:
–
–
–
–
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.
Restatement (Third) of Foreign Relations Law § 442(c) (1987)
2012 OFII General Counsel Conference
Washington, D.C.
8
Sanctions
• While inability to comply must be taken into
account in assessing the sanction of dismissal,
even inability does not preclude lesser sanctions,
such as adverse inferences or exclusion of
evidence. ... [Non-Party’s] refusal to produce
documents will not necessarily absolve [Party]
and free it from the threat of any sanction.
– Uniden Am. Corp. v. Ericsson Inc., 181 F.R.D. 302, 308 (M.D.N.C. 1998)
2012 OFII General Counsel Conference
Washington, D.C.
9
Conflicting Demands of US and Home
Country Laws: The China Example
2012 OFII General Counsel Conference
Washington, D.C.
10
Conflicting Demands of US and Home
Country Laws
•
•
•
•
•
•
State Secrets and Sensitive Information
Data Privacy
Sovereignty
US Civil Litigation
US Regulators
Home Country Regulators
2012 OFII General Counsel Conference
Washington, D.C.
U.S. Civil Litigation
• Societe Nationale Industrielle Aerospatiale v.
U.S. Dist. Court
• International Comity Factors
• Bank of China Cases
–
–
–
–
–
Tiffany (NJ) LLC v. Forbse, 2012 WL 1918866 (S.D.N.Y. 2012)
Gucci America, Inc. v. Weixing Li, 2011 WL 615936 (S.D.N.Y. 2011)
Tiffany (NJ) LLC v. Qi Andrew, 276 F.R.D. 143 (S.D.N.Y. 2011)
Gucci America v. Curveal Fashion, 2010 WL 808639 (S.D.N.Y. 2010)
Milliken & Co. v. Bank of China, 758 F.Supp.2d 238 (S.D.N.Y. 2010)
2012 OFII General Counsel Conference
Washington, D.C.
12
U.S. Regulators
2012 OFII General Counsel Conference
Washington, D.C.
13
Home Country Regulators
2012 OFII General Counsel Conference
Washington, D.C.
14
E-Discovery:
The Cloud & Technology
Possession,
custody and
control
Contractual
language/rights
Jurisdiction
Server location
Subpoena
Access without
notice
Foreign data
privacy
2012 OFII General Counsel Conference
Preservation and
collection
Response time
30(b)(6)
witness/testimony
Local storage
Document
review/predictive
coding
Confidentiality
Security
Washington, D.C.