The continuing trend of globalization and the steady expansion of multinational corporations increases the likelihood that businesses will have to respond to an adversarial proceeding in the United States that requires the collection, review and possible production of materials located abroad. For attorneys used to practicing under the Federal Rules of Civil Procedure (FRCP), this may seem like a clear enough task. However, multinational corporations dealing with information located in jurisdictions outside the United States must also be mindful of data privacy laws and other requirements in the foreign jurisdictions. In fact, there is a seemingly irresolvable conflict between broad U.S.-based discovery rules and EU member states’ privacy and data protection directives. This article looks at some recent developments that show that the conflict is not close to being resolved.

U.S. Approach to Discovery

In the United States, the Federal Rules of Civil Procedure dictate that parties to pending or reasonably anticipated litigation must collect, preserve and produce all relevant records within their possession or control, including any records existing in electronic format. This obligation can extend to foreign subsidiaries or affiliates of the companies involved in the litigation, and courts can order persons subject to their jurisdiction to produce evidence even if the information is not located in the United States. Failure to comply with these disclosure requirements can result in sanctions in a civil suit (even dismissal or a judgment) and may even constitute a criminal offense in the case of a federal investigation.

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