DOCUMENT Magazine - June 2008 - (Page 8) compl THE DISCOVERY OF MULTI-NATIONAL PRIVACY BALANCING E-DISCOVERY AND EU PRIVACY LAWS | BY EDWIN M. LARKIN In December 2006, the Federal Rules of Civil Procedure (FRCP) were amended to specifically incorporate electronically stored information (ESI). Although ESI had been around for several years prior to the FRCP amendments, once the amendments became effective, every litigant in federal court was required to address ESI with their adversary at the very earliest stages of the case. Under the FRCP, the scope of what may be required to be produced to your adversary, be it in electronic or paper form, is exceedingly broad, and corporate litigants with multi-national operations may find themselves being asked to produce documents or information from operations, subsidiaries or even affiliated third parties located outside the US. Unfortunately, such requests for the cross-border transfer of information, even in the context of litigation, presents a trap for the unwary because many nations, particularly those of the European Union (EU), have very different notions of privacy versus the free exchange of information in litigation. These differing notions of privacy could present the multi-national litigant with the Hobson’s choice of facing sanctions in the US for failing to comply with an adversary’s discovery requests or facing civil, or even criminal, penalties in the EU for violating a member country’s privacy Directive. the s PHILOSOPHICAL DIFFERENCES The US takes a sectionalized approach to privacy. Certain areas of information, such as medical and credit information, are given a certain measure of protection from public disclosure. Without specific statutory protection, however, many types of sensitive information could be subject to discovery in a civil litigation pending in a state or federal court in the US. Moreover, absent an agreement between the parties or an order from the court requiring that the information produced in the context of the litigation be kept confidential, documents produced during a litigation, even confidential or sensitive documents, could be made publicly available. The rationale for this is the strong public policy that, absent exceptional circumstances, legal proceedings in the US should be open to the public. In contrast, in many countries, especially in the EU, individual privacy is viewed as a fundamental human right. As a result, the EU has a much more comprehensive approach to privacy. In 1995, the EU member nations issued the EU Data Protection Directive 95/46 (the Directive), requiring member nations to implement laws to restrict all manner of “processing” of “personal data.” The Directive defined personal 8 document june.08 www.DOCUMENTmedia.com data extremely broadly as being “any information relating to an identified or identifiable natural person.” The Directive prohibits, with certain limited exceptions, the transfer of data outside the EU unless the country to which it is transferred provides “adequate protection” of personal data. The US is generally viewed as not providing such adequate protection of personal data; thus, processing or transfers of personal information to the US could be viewed as violating the Directive. The Directive also required each member nation to enact legislation to enforce the Directive and to establish Data Protection Authorities to interpret and apply its own data privacy rules. Thus, while all of the EU member nations interpret their data privacy rules restrictively, compared to the US, interpretations of what is permissible or not can vary from country to country. Violations of EU data privacy laws can result in a variety of sanctions, from enforcement by the Data Protection Authority to an individual private right of action, to, in some instances, criminal penalties. COURTS CONFRONT A NEW ITERATION OF AN OLD PROBLEM Litigants looking for information from foreign sources is nothing new to courts in the US; however, the advent of ESI and the increasing globalization of the world economy means that information relevant to a civil lawsuit pending in the US could literally be anywhere in the world. Unfortunately, US courts generally are not very sympathetic to the plight of the multi-national http://www.DOCUMENTmedia.com
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