Smart Strategies for International Discovery

Multinational companies involved in litigation frequently find themselves seeking documents or information located in another country. The requesting party may, for example, be seeking documents that are held by the company (or an affiliate) outside the United States. Or the requesting party may want to depose an employee who works in another country. In any such case, the company should have a clear understanding of its rights and obligations before agreeing (or not agreeing) to provide the requested discovery.

Obtaining Documents Located Outside the U.S.

Parties (typically plaintiffs) frequently argue that a multinational company has relevant documents outside the U.S. These documents are typically held by a corporate subsidiary or affiliate. That fact, however, is not dispositive. Many courts have held that a company is obligated to produce documents even when they are held by a foreign entity. The important question is whether those documents are within the company’s “possession, custody, or control.” If so, the company will likely be obligated to obtain and produce them.

To decide this issue, courts consider a variety of factors, including whether the defendant has the “practical ability” to obtain the documents. For example, if the company demanded the documents from the foreign subsidiary for its own purposes, would it be able to obtain them? Generally speaking, courts will conclude that a company has the ability to obtain documents from a wholly owned subsidiary. Whether the company has the same ability to obtain documents from an affiliate in which the company is merely a shareholder is less certain. Regardless of the specific situation, however, the company should analyze the relevant law in the jurisdiction and evaluate whether it can argue that documents held outside the U.S. are within its possession, custody, or control.

Depending on where the documents are located, there may also be local laws that affect the company’s ability to produce them. U.S. pre-trial document discovery is much broader than what is available in most countries, and many countries have enacted laws commonly referred to as “blocking statutes.” Such laws may address the production of documents in general or certain types of documents in particular, and may carry significant penalties. Thus, it is important to consult with counsel to determine whether such laws exist or apply to a particular situation. Importantly, courts in the United States (including the U.S. Supreme Court) have held that such statutes do not affect a party’s obligation to produce documents in U.S. litigation (although they may be relevant to a court’s determination as to whether a party should be sanctioned for failing to comply with its discovery obligations).

Obtaining Documents Located in the U.S. for Foreign Litigation