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Proof: Pre-Trial Discovery and Evidentiary Privileges in International Controversies

  • I. Introduction

    • A. Proof in international disputes

      1. We take up here the two most common issues arise in connection with evidentiary hearings and trials, at least in the U.S., of an international controversy:  pre-hearing or pre-trial discovery and evidentiary privileges.

      2. In both areas the issues that arise in international disputes can be quite different from those that occur in purely domestic controversies.

  • II. Pre-Trial Discovery

    • A. How different are the rules?

      1. With several important exceptions, discovery of persons or entities in a U.S. proceeding works generally the same way as in a purely domestic suit.

      2. We take up the most significant exception here:  28 U.S.C. § 1782.  We next address whether discovery in the U.S., in particular e-discovery, is affecting international litigation differently than the litigation of domestic disputes.

    • B. 28 U.S.C. § 1782

      1. In relevant part this statute provides that: “The district court of the district in which a person resides or is found may order him to give testimony or statement or to produce a document or other thing for use in a proceeding or international tribunal, including criminal investigations conducted before formal accusation.

      2. The statute has been read broadly, to fulfill the “twin aims” that have been stated for it:

        1. “providing efficient means of assistance to participants in international litigation in our federal” courts

        2. “encouraging foreign countries by example to provide similar means of assistance to our courts”.  In re Application of Maley Hungarian Airlines, 964 F.2d 97, 100 (2d Cir. 1992); accord Metallgesellschaft v. Hodapp, 121 F.3d 77, 79 (2d Cir. 1997).

    • C. The Hague Convention

      1. This convention contains many provisions relating to the taking of evidence for use in international proceedings.

      2. But in the first instance, it is important to observe that the U.S. Supreme Court has not required parties in U.S. federal court litigation to comply with the Hague Convention rather than the Federal Rules of Civil Procedure.  Societe Nationale Industrielle Aerospatiale. v U.S. District Court, 482 U.S. 522 (1987), declined to hold "as a blanket matter that comity requires resort to the Hague Evidence Convention procedures without prior scrutiny in each case of the particular facts, sovereign interests, and likelihood that resort to those procedures will prove effective".  Defendants bear the burden to persuade the court that Hague Convention procedures were appropriate.

      3. The cases are many and varied concerning how to balance the interests of comity in deciding whether to seek and obtain discovery using the federal rules or the Hague Convention.

    • D. Discovery in International Litigation

      1. Because the rules of discovery essentially apply equivalently irrespective of whether a dispute is international or domestic, the areas of discovery most implicated by the international nature of a litigation seem to be (i) where the interests of the U.S. are in tension with other U.S. interests, and (ii) where U.S. interests in the even-handed application of discovery are in tension with non-U.S. laws, for example, privacy laws of non-U.S. jurisdictions.  Let us briefly look at an example of each:

      2. Intra-U.S. Interests in Tension.  Mohamed, et al. v. Jeppesen Dataplan, Inc., No. 08-15693 (9th Cir. 8 Sept. 2010) [], exhaustively treats the case where the “fundamental principles” of “liberty, including justice, transparency, and accountability” are pitted against “national security”.

        1. At issue in Jeppensen were allegations that the CIA, working in concert with other government agencies and officials of non-U.S. governments, “operated an extraordinary rendition program to gather intelligence by apprehending foreign nationals suspected of involvement in terrorist activities and transferring them in secret to foreign countries for detention and interrogation by United States or foreign officials”.  The allegations of the complaint, taken as true, were specific, detailed, and lurid.  The claims against Jeppensen were that Jeppensen provided flight planning and logistical support to the aircraft and crew on all the flights transporting each of the five plaintiffs.  The claims by the plaintiffs were under the Alien Tort Statute, 28 U.S.C. § 1350.

        2. The Court of Appeals “reluctantly” invoked the “rare” doctrine of an irreconcilable conflict between these two sets of principles and concludes that the case must be dismissed on the basis of U.S. v. Reynolds, 345 U.S. 1 (1953).  The Court of Appeals decision did not dismiss the claims by reason of the distance between the plaintiffs and the defendant.  Instead, it felt it needed to address the clash between transparency and national security.

        3. The Court of Appeals distinguished between the two types of immunity available under the general rubric of the State Action Doctrine:  on the one hand The “Totten Bar”, after the 1876 U.S. Supreme Court decision, Totten v. U.S., 92 U.S. 105 (1876), holding that public policy forbids the maintenance of any suit where the trial “would inevitably lead to the disclosure of matters which the law itself regards as confidential”; and, on the other hand, the evidentiary privilege adumbrated in the Reynolds, which the Court included the privilege against revealing military [or state] secrets.  While the Totten Bar has been read to foreclose cases where the very subject matter of the action is a matter of state secret, Reynolds is broader but ostensibly just an evidentiary privilege — and therefore not easily invoked at the beginning of an action and not usually sufficient to call for dismissal of the entire suit.

        4. The Court of Appeals was unwilling to embrace Totten and instead found Reynolds sufficient to warrant pre-discovery dismissal of the entire suit.  This ruling, however, was based on evidence that the court could not share with the decision-reading public – “lest we jeopardize the secrets we are bound to protect.”

      3. International Interests in Tension.  Here the recent cases exhibit more or less deference to non-U.S. rules and principles, for example, of privacy, when pitted against U.S. discovery practice.

        1. Permitting discovery.  In Devon Robotics v. DeViedma, No. 09-cv-3552, 2010 WL 3985877 (E.D. Pa. 8 Oct. 2010), the Court granted discovery, in particular the discovery of electronically stored information, over an objection that such discovery would violated Italian law.

        2. Permitting discovery despite reliance on blocking statute.  In In re Air Cargo Shipping Services Antitrust Litig., No. 06-MD-1775, 2010 WL 2976220 (E.D.N.Y. 23 July 23 2010), the Magistrate Judge granted a motion to compel discovery, finding that U.S. policy in favor of vigorous enforcement of U.S. antitrust laws outweighed a speculative contention that South Africa had a keen interest in enforcing its blocking statute).

        3. Denying discovery based on non-U.S. privacy interests and the dictates of comity.  In In re Payment Card Interchange Fee & Merchant Discount Antitrust Litigation, No. 05-MD-1720 (E.D.N.Y. 27 Aug. 27 2010), it was the European Commission itself that objected to the disclosure of documents created in connection with an investigation by the EC.  In a friend of the court filing, the EC complained that disclosure was unwarranted because of confidentiality under European law.  The district court ruled that the litigant’s interest in discovery was outweighed by the EC’s interest in protecting the confidentiality of its own investigative and adjudicative process.

  • III. Evidentiary Privileges – The Attorney Client Privilege

    • A. Introduction

      1. How does the most standard privilege, i.e., the lawyer-client privilege, differ in the resolution of international disputes?

    • B. Application

      1. Documents and other communications that fall within attorney-client privilege are immune from discovery.  This protection is intended to encourage complete disclosure of information between the attorney and client and to further the interest of justice. UpJohn Co. v. United States, 449 U.S. 383, 389 (1981).

      2. Many non-U.S. jurisdictions have some parallel mechanism for the protection of communications between attorney and client.  However, the scope and quality of these protections can vary greatly depending on the specifics of the international dispute.  Some of the most important differences are listed below.

      3. Who is considered a client:  Because cross-border litigation often involves large corporate entities, the issue becomes which agents of these entities are afforded the privilege in their communications with legal counsel.  Within the U.S., courts disagree about how far down the corporate chain the privilege extends.  Some courts have held that the privilege extends only to communications between attorneys and employees who have actual control over legal decisions.  This has been termed the “control group” test.  See Diversified Indus., Inc. v. Meredith, 572 F. 2d 596, 608 (8th Cir. 1978).  Other courts have held that the privilege extends to any corporate agent so long as the agent’s communication with legal counsel is under the direction of his superiors and the communication is made in the course of the agent’s duties as an employee.  See Harper & Row Publishers, Inc. v. Decker 423 F. 2d 487, 492 (7th Cir. 1970).

        1. Courts in Canada, for example, have afforded protection to communications between corporate employees and legal counsel, regardless of the employee’s position in the corporate hierarchy.  The privilege has also been extended to employees of subsidiary companies.

        2. In the United Kingdom, however, courts have allowed only a narrow set of corporate employees to be considered clients for purposes of asserting the privilege.  Those employees who do not consult with legal counsel on a regular basis are treated as third parties to the litigation and are therefore not entitled to assert a privilege for their communications with legal counsel.

        3. When engaging in legal communications with multiple agents of a corporate entity in multiple jurisdictions, it would be wise to determine the physical location of each agent and the treatment of legal communications with corporate agents in each relevant jurisdiction.

      4. Who is considered the attorney – the treatment of in-house counsel:  In the U.S., the confidential communications of in-house corporate counsel are generally afforded the same protection from discovery as those of outside independent counsel.  In many non-U.S. jurisdictions, particularly across Europe, there is a wide variation in the legal treatment of communications between businesses and their in-house counsel.

        1. In some European countries, in-house counsel are not permitted to join their national bar organization because of the nature of their occupation as in-house, as opposed to independent, counsel.  See generally Josephine Carr, “Are Your International Communications Protected?” 14 No. 6 ACCA Docket 32 (November/December 1996).  Since they are not subject to the ethical standards required of membership in a national bar association, in-house counsel in these countries are apparently not considered to possess the necessary independence and obligation to enforce the law which would entitle them to the legal protection of their communications with clients.

        2. Above the national level, the European Union seemingly does not extend the privilege to in-house counsel, treating their communications in the same way that it treats communications between all other agents of a business.  In Australian Mining & Smelting Europe (AM&S) v. Commission of the European Communities, 1982 EUECJ C-155/79, 1982 E.C.R. 1575, the European Court of Justice found that in-house counsel’s lack of independence from their employers was fatal to their assertion of privilege.  In Akzo Nobel Chemicals Limited and Akcros Chemicals Limited v. Commission of the European Communities, 2007 EUECJ T‑125/03, the Court went further to find that this lack of independence could not be cured despite the ability of in-house counsel in some countries to gain membership to their national bar organization.  See generally Kristen M. Angus & J. Tripplet Mackintosh, Conflict in Confidentiality: How E.U. Laws Leave In-House Counsel Outside the Privilege, 38 Int’l Law. 35 (2002).

        3. This lack of recognition has gotten more pronounced.  In September 2010, the EU's highest court confirmed the absence of privilege for in-house counsel acting as such -- counsel with an employment relationship with the party claiming the privilege.   Akzo Nobel Chemicals, Ltd, et al. v. The Commission, et al., C-550/07 P (Grand Chamber) (European Court of Justice Sept. 14, 2010).  See the discussion of this case in our OneWorld blog post of 9/15/10.

        4. These decisions become important in the context of a European Community Law dispute, which could lead to an investigation by the European Commission.  In the event of such a government investigation, documents produced by in-house counsel would be subject to the same scrutiny as documents produced by any other agents of the business.  Even marking a document as “privileged” and filing it separately from normal business documents is no guarantee that it will be left untouched.

        5. Businesses with multiple European branch offices must be cognizant of the rules in each country where they communicate between corporate branches.  Documents sent from one jurisdiction where they would be privileged may lose that privilege if they are sent to a jurisdiction that does not recognize a privilege for in-house counsel. See generally Josephine Carr, “Are Your International Communications Protected?”  14 No. 6 ACCA Docket 32 (November/December 1996).

          1. If a business has offices located in a state that does not recognize an in-house privilege, it would be wise for corporate counsel to visit those offices in person as opposed to communicating through written or electronic documents; to the extent possible, all legal documents should be stored at offices in states that do recognize an in‑house privilege.  Id. at 33.

          2. Any communications by in-house counsel that must be delivered to the business in written form should be sent through outside counsel as an intermediary.  All such documents should be produced on the outside firm’s letterhead.  Id. at 34.

          3. If outside counsel is employed to overcome privilege obstacles, in-house counsel should not add internal comments or notes to those communications, as this could destroy the privilege.

          4. All sensitive internal investigations should be conducted orally or through an external lawyer.  Id. at 37.

        6. In a ruling concerning intra-U.S. attorney-client relations, but with implications to international disputes as well in our view, Magistrate Judge Cott in the Southern District of New York addressed the question whether the attorney-client privilege protected the communications with an in-house U.S. counsel who was an inactive member of the California bar.  Gucci America, Inc. v. Guess?, Inc. et al., 09 Civ. 4373 (SAS)(JLC) (S.D.N.Y. 6/29/10).  In this case, the Court detemined not only that an inactive bar member was not "authorized" to engage in the practice of law; in addition, the Court found that the Company did not act reasonably in failing to determine the lapse of the active status -- hence the Company could not rely on the "apparent" authority of its own employee, who held titles of "legal counsel", "director of legal services", and "Vice President, Director of Legal and Real Estate".
          1. Guicci should be instructive in the context of international litigations, for example, in cases where non-U.S. in-house counsel are authorized to practice law.

  • IV. Traditional Choice of Law Analysis Determines Which Privilege Laws Apply

    • A. “Touch base” test of Golden Trade

      “Touch base” test of Golden Trade:  In deciding which nation’s privilege laws should be applied, courts have held that considerations of comity should be balanced against the interests of preserving jurisdictional laws.  In Golden Trade S.r.L. v. Lee Apparel Co., 143 F.R.D. 514, 520 (S.D.N.Y. 1992), the court applied these principles in holding that “any communications touching base with the United States will be governed by the federal discovery rules while any communications related to matters solely involving a foreign country will be governed by the applicable foreign statute.”  In Golden Trade, the plaintiff had licensed a third party, Istituto Guido Donegani (IGD), to use the patent at issue.  The defendant moved to require the plaintiff to obtain, through IGD, any files held by IGD’s foreign patent agents concerning the prosecution of foreign patents corresponding to the patent being litigated.  The documents in question were between IGD, an Italian corporation and not a party to the suit, and patent agents located in various foreign countries; the documents concerned the processing of patents in these countries.  In applying this “touch base” analysis, the court found that the countries in which the patent agents worked had the dominant interest in determining whether the communications should be treated as confidential and so applied the privilege laws of those jurisdictions.

      1. The principles of comity and preservation of jurisdictional law animating the decision in Golden Trade have been followed in subsequent decisions.  See Stryker Corp. v. Intermedics Orthopedics, Inc., 145 F.R.D. 298 (E.D.N.Y. 1992) (applying British privilege law to protect communications between British patent agent and plaintiff corporation regarding execution of a European patent); In re: Philip Services Corp. Securities Litigation, 2005 WL 2482494 (S.D.N.Y.) (applying American privilege law to protect communications sent to a Canadian corporation regarding a public offering in the U.S.).

      2. Some courts have found that a more sophisticated analysis is required in order to activate the motivating principles behind the Golden Trade test.  In VLT Corporation v. Unitrode Corporation, 194 F.R.D. 8, 16 (D. Mass. 2000), the court found that the “touch base” test should be analyzed as a traditional balancing test and consider such factors as the subject matter at issue, the parties to the communication and whether they are parties to the lawsuit.  Also, courts should consider which sovereign has the “most direct and compelling interest” in the issue and defer to the law of that sovereign “unless that law is clearly inconsistent with important policies embodied in federal law.”  Id.

      3. Unpredictability of the “touch base” test:  Generally speaking, the United States employs broad and permissive discovery rules which surpass the scope of discovery found in many non-U.S. jurisdictions.  In order to counterbalance these strong discovery rules, American privilege laws are correspondingly quite strong, creating a fair amount of certainty with regards to communications between clients and counsel within the U.S.  When choice of law analysis results in the application of foreign privilege laws within the confines of the broad discovery of a lawsuit in a U.S. court, judges are cognizant of the fact that the delicate balance between the scope of privilege and discovery can be disrupted.  This imbalance can weigh heavily on their choice of law analysis.  For example, in Astra Aktiebolag v. Andrx Pharmaceuticals Inc., 208 F.R.D. 92 (S.D.N.Y. 2002) the court refused to apply Korean law to assess plaintiff’s assertion of privilege over communications between it and a Korean patent agent regarding a Korean patent application.  Because Korean law had such restrictive discovery rules to complement its corresponding lack of privilege protections for attorney-client communications, the court held it to be against American policy interests to use Korean privilege laws in conjunction with the liberal discovery rules of American jurisprudence.  Id.

    • B. Strategic Considerations

      Given the variation across jurisdictions as well as across individual cases of the application of choice of law analysis to privilege issues, it would be wise not to expect to maintain your own domestic privilege laws when engaging in business transactions and legal communications internationally.  Below are some actions that could be taken to help preserve one's domestic privilege laws.

      1. Businesses may want to consider inserting language that specifies choice of law in the dispute resolution section of their transactional documents.  These documents could state that in the event of a dispute, persons acting in the capacity of counsel will be accorded the highest form of privilege and immunity that is available to any party to the deal.

      2. It may be beneficial for non-U.S. companies, or U.S. companies with non-U.S. offices or subsidiaries, to include this type of language in their policy manuals as well as in documents given to prospective business parties.

      3. Businesses could employ American counsel as much as possible in cross-border communications.  This would make a court more likely to find that these communications “touch base” with the U.S.

      4. If trying to avoid non-U.S. privilege laws (or a lack thereof), be sure to carefully analyze the policy implications of employing those laws in U.S. litigation.  This is an important element of the choice of law balance and should be given close attention.  See Astra Aktiebolag v. Andrx Pharmaceuticals Inc., 208 F.R.D. 92 (S.D.N.Y. 2002).

  • V. When U.S. Courts Recognize a Privilege that the Law of the Non-US Entity does not

    • A. Implying a privilege when none exists in a non-U.S. forum

      A.     Implying a privilege when none exists in a non-U.S. forum:  If a court chooses to apply non-U.S. law to its privilege analysis, the way in which it interprets this law can have a tremendous impact on the outcome of a case.

      1. Common law jurisdictions versus civil law jurisdictions:

        1. The existence and scope of privilege laws varies greatly depending upon the underlying legal regime that exists in a non-U.S. jurisdiction.

        2. Generally speaking, civil law countries employ laws that prohibit an attorney from disclosing information about his client, whereas common law countries employ laws that seek to protect the specific communications between an attorney and his client.

        3. For example, in Germany the relationship between a lawyer and his client is protected by regulations that prohibit a lawyer from divulging any confidential information or documents obtained in the course of his professional activities.  However, it is not that the communication between attorney and client itself is privileged, but that the lawyer is under a duty not to disclose the information in it.  See generally Diana Good, et al., Privilege: A World Tour, PLC Cross Border Quarterly, vol. IX (Dec./Jan. 2004), available at  The penalty for violating this duty of confidentiality is usually imposed through the foreign jurisdiction’s equivalent of a bar association, and can even result in criminal penalties.

        4. However, laws requiring confidentiality often do not extend to protect documents in the hands of the client.  This limitation corresponds to the equally limited scope of discovery permitted in those jurisdictions.  In many of these countries, there is no formal process by which a party to a lawsuit may be compelled to disclose information in its possession for the benefit of the opposing party; they must produce only the exhibits that they intend to use to present their case.  Id.

      2. The distinction between the laws of confidentiality of many civil law jurisdictions and the privilege laws of many common law jurisdictions become more pronounced when these confidentiality laws are interpreted and applied by an American court.  It appears that courts incorporate the same concerns of comity and preserving jurisdictional policy interests in interpreting non-U.S. laws as they do when performing their choice of law analysis.  This complicated balancing of competing interests has led to a variation across cases in the interpretation of non-U.S. laws.

        1. For example, in Alpex Computer Corp. v. Nintendo Co., 1992 WL 51534 (S.D.N.Y.), the court declined to interpret Japanese law as containing a privilege which would protect communications with a Japanese patent agent (or “Benrishi”) since no such protection was specifically provided for in the relevant Japanese statutes.  Acknowledging that “American Judges issue opinions that change the law because they see the court as a vehicle to do so,” the court went on to note that “rarely, if ever, would a Japanese Judge agree with this view.”  Id. at 2.  The court held that communications between agents at Nintendo and a Japanese Benrishi did not come within the ambit of the United States attorney-client privilege because Japanese law protects only the right of the Benrishi to refuse to testify regarding information that he obtains in the course of his duties.

        2. By contrast, the court in VLT Corp. v. Unitrode Corp., 194 F.R.D. 8 (D. Mass. 2000) held that Japanese law protected communications between a Benrishi and a client from American discovery.  The court found that Japanese law should treat communications from Benrishi similarly to how American law treats communications from attorneys because Benrishi perform very similar functions as American attorneys.  Id. at 17.  The court found that the protection afforded by the Japanese statutes “arises out of an implied, if not, an actual privilege.”  Id. at 17 n.5.

        3. In Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 1998 WL 158958 (S.D.N.Y.) the court held that French confidentiality rules did not rise to the level of an evidentiary privilege sufficient to protect the communications between a French patent agent and the defendant.  The court found that “the fact that a statute requires a party to keep clients' affairs secret does not mean that a privilege exists.”  Id. at 3.

        4. However, the court in Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146 (S.D.S.Car. 1979) found that French secrecy statutes did protect communications with a patent agent from discovery in a U.S. court.  The court looked at Article 378 of the French Penal Code, the same article which was analyzed in the Bristol-Myers Squibb Co. case.  The court found that because this article required French patent agents to “preserve the secrecy of certain confidential communications from clients,” it would therefore afford an attorney client privilege to those communications.  Id. at 1170.

        5. In Golden Trade S.r.L. v. Lee Apparel Co., 143 F.R.D. 514, 520 (S.D.N.Y. 1992) the court applied German, Norwegian, and Israeli law to the communications between patent agents of those respective countries.  In finding that the documents in question would be protected from discovery under the law of each country and that ‘such protection would not offend any serious policy interests of this jurisdiction,” the court held that these documents would likewise be protected from discovery under American law.  Id.

    • B. The Hague Convention

      1. Under the Convention, privileges are respected, essentially if they exist under U.S. or the other applicable country’s laws.

      2. The important judicial decision in this area is Renfield Corp. v. E. Remy Martin & Co., 98 F.R.D. 442 (D. Del. 1982).  There, the court interpreted the Evidence Convention to mean, in the context of documents located in France, that privilege would be respected if recognized under either French or U.S. law.

      3. In Renfield, the communications at issue were between the defendants and their French in-house counsel.  French in-house counsel are not allowed to become members of their national bar association, a typical requirement to qualify attorney communications as privileged under U.S. law.  See Re Grand Jury Investigations, 599 F.2d 1224, 1233 (3d Cir. 1979).

      4. However, the court determined that because the French in-house attorneys served in the same capacity as an American attorney, they would be considered the functional equivalent of a qualified attorney for purposes of asserting privilege.  Renfield 98 F.R.D. at 444.

      5. The Renfield court’s “functional equivalence” analysis, has not been followed by subsequent decisions.  See Louis Vuitton Malletier v. Doone & Bourke, Inc., 2006 U.S. Dist. LEXIS 87096 (S.D.N.Y.) (rejecting the Renfield “functional equivalence” test and noting that the Third Circuit had also declined to follow it); Honeywell, Inc. v. Minolta Camera Co., Ltd., 1990 U.S. Dist LEXIS 5954 (D. N.J.) (rejecting the Renfield “functional equivalence” test and adopting a test that looked at the attorney’s legal credentials and certification).

      6. In Louis Vuitton Malletier v. Doone & Bourke, Inc., 2006 U.S. Dist. LEXIS 87096, the court declined to extend the protection of U.S. attorney-client privilege to plaintiff’s French in-house counsel despite the applicability of the Hague Evidence Convention.  The court found that the plaintiff waived the privilege since there was “no reason to believe that there was any expectation by the participants that confidentiality could be maintained in the face of French law,” which does not extend a privilege to in-house counsel.  Id. at 58.

      7. The court in Renfield explicitly rejects this argument, noting that the policy of the Hague Evidence Convention was to preserve jurisdictional privileges as opposed to limiting them.  98 F.R.D. at 444.  However, a litigant in the U.S. trying to compel the discovery of documents could use the Louis Vuitton Malletier decision to argue that U.S. privilege was waived on the ground that communications made in the non-U.S. jurisdiction were made without an expectation of privacy.

    • C. Protecting against and creating leverage with disparities in privilege laws:

      1. It may be possible, through effective use of the disparities between privilege laws in the U.S. and other countries, to convince a court to compel discovery of documents that would normally be barred from discovery in litigation taking place in the jurisdiction that the communication took place.  Likewise, an unwitting litigant could be subject to this same kind of intrusive discovery of his own internal communications.

      2. To protect against this kind of intrusive discovery, businesses should be aware of all the relevant privilege laws in the jurisdictions in which they interact as well as the way that those laws may complement or contradict one another.

      3. Further, it is important to employ communication strategies which would preserve privilege in all possible avenues of litigation.  For example, while confidential advice on U.S. law given by U.S. counsel to a European company would normally be protected from discovery in an American court, this communication may not be afforded protection in connection with a proceeding in the European Union since the privilege there is extended only to members of a European national bar association.

    • D. Practically, what to do?

      1. Learn the laws relating to attorney-client communications in all the jurisdictions in which your company conducts its business.  It may be helpful to establish different policies for communicating with legal counsel in the different jurisdictions that would account for any differences in privilege laws.

      2. Potential non-U.S. litigants may want to bring suit in the U.S. in order to take advantage of its broad discovery rules.  But they should be equally familiar with the U.S.’s correspondingly broad protection afforded to litigants by the attorney-client privilege and work product doctrine.

      3. Although in most instances it would be most beneficial to have American privilege law apply to one’s communications with legal counsel, that is not always the case.  Cross-border litigation often arises in the context of patent litigation.  While U.S. law generally does not extend the attorney-client privilege to communications made to patent agents, Benckiser G. m. b. H. v. Hygrade Food Products Corp., 253 F. Supp. 999 (D.N.J. 1966), the law of some non-U.S. jurisdictions does.  See Duplan Corp., 397 F. Supp. at 1170.  When communicating with foreign patent agents, it may therefore be wise to separate these communications from American legal counsel or American patent agents to the extent possible in order to preserve the privilege of the foreign jurisdiction.

      4. Include a choice of law provision in all transactional documents – this is not an option in the context of a government investigation, however.

      5. Mark all communications as confidential and privileged; separate them from regular business correspondence and specify that they are being produced exclusively for legal decision-making.  These procedures would be evidence of an expectation of privacy for these communications and may persuade an American court to imply a privilege from non-U.S. law.

      6. Even if non-U.S. laws requiring attorney secrecy and confidentiality do not amount to a privilege for purposes of discovery in a U.S. court, these laws could be employed as an alternative means of protecting communications.  It may be possible to keep legal documents from being subject to American discovery proceedings by leaving them in the possession of a non-U.S. attorney who is required to obey these laws of secrecy and confidentiality.

  • VI. Fifth Amendment Rights of Resident and Non-Resident Aliens

    • A. Overview

      1. The Fifth Amendment provides, among other things, that a witness has the right to refuse to disclose any information which the witness believes could be used against him in a criminal proceeding or could lead to other incriminating evidence.  Courts have consistently held that resident and non-resident aliens are within the protection of the Fifth Amendment.

    • B. Resident Aliens

      1. A resident alien may invoke Fifth Amendment rights in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory.  See Kwon Hal Chew v. Colding, 344 U.S. 590 (1953).

    • C. Non-resident aliens questioned before criminal proceedings in the United States

      1. The Second Circuit ruled that statements given abroad to U.S. law enforcement personnel must be preceded by a recitation of the individual’s Fifth Amendment rights.  United States v. Odeh (2d Cir. 2008) (statements admissible when the U.S. law enforcement officials apprised the defendant of his Fifth Amendment rights while abroad).  See also U.S. v. Bin Laden, 132 F. Supp. 2d 168, 181 (S.D.N.Y. 2001).

    • D. Non-resident aliens appearing in U.S. civil proceeding

      1. Courts have narrowly interpreted decisions such as Odeh and Bin Laden and have not extended their protections to non-resident aliens in civil cases.  To illustrate, in Bear Stearns & Co. v. Wyler, 182 F. Supp. 2d 679 (N.D. Ill. 2002), the court upheld the issuance of a subpoena upon a Dutch businessman that required the production of bank, wire transfer, and phone records.  The court noted in dictum that it “was not self-evident that the Fifth Amendment’s privilege against self-incrimination is available to non-resident aliens.”  Wyler, 182 F. Supp. 2d at 680-81.

    • E. Fifth Amendment inapplicable where there is fear of prosecution in another country.

      1. In United States v. Balsys, the Supreme Court decided there was no Fifth Amendment protection for aliens who feared being prosecuted in another country.  524 U.S. at 672 (1998).  The Supreme Court found that the phrase “any criminal proceeding” in the compelled self-incrimination clause only protects a witness “when reasonably fearing prosecution by the government whose power the Clause limits, but not otherwise.”  Accordingly, a witness fearing prosecution by a non-U.S. government will be compelled to testify where such witness is granted immunity from prosecution in the United States.  See also United States v. Gecas, 120 F.3d 1419, (11th Cir. 1997).  Yet in dictum the Court held out the possibility that someday “cooperative conduct between the United States and other nations could develop to a point at which a claim could be made for recognizing fear of prosecution.”