District Court Orders Discovery Pursuant to Federal Rules of Civil Procedure in Lieu of the Hague Evidence Convention

Date: Mar 29, 2012

On March 6, 2012, the U.S. District Court for the Eastern District of Pennsylvania ruled that a French organization must comply with the Federal Rules of Civil Procedure, not the Hague Convention on Taking Evidence Abroad in Civil or Commercial Matters ("Hague Evidence Convention"). The case is TruePosition, Inc. v. LM Ericsson Telephone Co.[1] TruePosition develops positioning technology that operates over cellular telecommunications networks. The company filed suit in 2011, alleging that the conduct of major players in the international telecommunications market violated U.S. antitrust laws under the Sherman Act.

One of the defendants, European Telecommunications Standards Institute ("ETSI"), filed a motion to dismiss based on lack of personal jurisdiction. The court allowed jurisdictional discovery to proceed. ETSI then filed a motion for a protective order on the premise that discovery should adhere to the Hague Evidence Convention. TruePostion argued that discovery should proceed under the Federal Rules of Civil Procedure.

In its ruling, the court relied heavily on the U.S. Supreme Court opinion in Societe Nationale Industrielle Aerospatiale v. United States District Court for the Southern District of Iowa. Citing Aerospatiale, the court noted that the Hague Evidence Convention is not mandatory and "does not provide exclusive procedures for obtaining documents and information located in a foreign signatory nation's territory." Therefore, the Convention does not deprive the District Court of jurisdiction to order discovery under the Federal Rules of Civil Procedure.

In Aerospatiale, the U.S. Supreme Court identified five factors that courts should consider in a comity analysis to determine whether to use the Federal Rules of Civil Procedure or the Hague Evidence Convention. These factors include:

  • the importance of the information requested to litigation;
  • the degree of specificity of the requests;
  • whether the information originated in the U.S.;
  • the availability of alternative means of securing the information; and
  • national interests of both the U.S. and the country where the information is located.

Courts interpreting Aerospatiale have indicated that good faith of the party opposing discovery and any potential hardship involved with compliance thereto are also important factors. The court primarily focused on the national interests involved in the case.

The court determined that "there is a strong national interest in enforcing the policies of free market competition that underlie the Sherman Act." Conversely, the French are interested in managing access to information located in the country. The court found France's interests weak when compared to the United States' interests.

ETSI prefaced its argument on a French Blocking Statute, French Penal Code Law No. 80-538. The French criminal statute prescribes sanctions for French nationals who disclose information during foreign discovery without using the Hague Evidence Convention procedures. However, the court noted that ETSI presented no evidence that the French Blocking Statute had ever been enforced in a federal suit regarding jurisdictional discovery.

Based on the lack of enforcement of the blocking statute, as well as the comity analysis favoring the national interests of the United States and the Sherman Act, the court denied the protective order and mandated that discovery proceed under the Federal Rules of Civil Procedure.

This decision must be considered when relying upon the Hague Convention as a shield against discovery in cross-border litigation. The nature the subject of the litigation, in this case alleged violation of U.S. competition laws versus a "private" dispute (e.g. breach of contract), may be a significant factor in determining the extent of this decision.

For more information, please contact Jean Savigny in Brussels at
(+32 (2) 645 5071, savigny@khlaw.be).

[1] The decision can be found at: http://dvsis69lhye2t.cloudfront.net/wp-content/uploads/2012/03/trueposition.pdf.