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Article: January 2018: Class Action Litigation Update

Business Litigation Reports

Discoverability in U.S. Class Actions of Submissions in Foreign Government Investigations. Activities giving rise to class actions in the U.S. are frequently the target of investigations by foreign governments— indeed, these investigations are increasingly the genesis of the U.S. litigation. In response to such investigations, companies often provide foreign agencies with candid and detailed narrative descriptions of the underlying events, as well as key documents. Such submissions regularly sit atop the wish list of U.S. class action plaintiffs. Decisions concerning the discoverability of these materials are intensely fact-specific, but defendants have powerful arguments to shield production.

In the U.S., different rules apply to the discoverability of submissions to foreign governments than to the discoverability of submissions to the U.S. government. Absent objection from the U.S. government, relevant materials a litigant produces to U.S. agencies are typically discoverable under Rule 26’s broad provisions. See, e.g., In re Pac. Pictures Corp., 679 F.3d at 1126–31; Burden-Meeks v. Welch, 319 F.3d 897, 901 (7th Cir. 2003); In re Columbia/ HCA Healthcare, 293 F.3d 289, 291 (6th Cir. 2002). However, submissions to foreign governmental agencies, such as the European Commission (“EC”), are subject to a different consideration—international comity. The Supreme Court established a five-factor test in Societé Nationale Industrielle Aérospatiale v. United States District Court for the Southern District of Iowa for assessing international comity concerns in document-production scenarios:

  1. the importance to the .  .  . litigation of the documents or other information requested;
  2. the degree of specificity of the request;
  3. whether the information originated in the United States;
  4. the availability of alternative means of securing the information; and
  5. the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located.

482 U.S. 522, 545 n.28 (1987) (quoting Restatement of Foreign Relations Law § 437). If a court finds comity considerations paramount, submissions to a foreign investigatory body are not discoverable. This protection will not prohibit discovery of underlying, non-privileged information simply by virtue of its provision to the foreign government, but it does shield disclosure of the materials “as packaged” in connection with the foreign investigation.

U.S. case law does not provide any bright-line guidance on whether confidential materials submitted to foreign governmental bodies are discoverable in U.S. litigation. In In re Vitamins Antitrust Litigation, the plaintiffs sought a corporate immunity statement made by the defendants to the EC. No. MDL 1285, 2002 WL 34499542 (D.D.C. Dec. 18, 2002). Despite the Directorate General for Competition of the EC appearing as amicus curiae and requesting the District Court shield the immunity statement under principles of international comity, the district court found the EC’s concerns to be insufficient to prevent discovery of the materials. Moreover, the district court found that the defendants’ submissions to the EC were not covered by either work product or investigatory privileges. 2002 WL 34499542, at *9.

However, multiple district courts have reached the opposite conclusion and held that similar submissions to foreign agencies are not discoverable in U.S. litigation. In In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, the Eastern District of New York denied the plaintiff’s motion to compel discovery of an EC oral hearing tape and statement of objections. No. 05–MD–1720, 2010 WL 3420517 (E.D.N.Y. Aug. 27, 2010). The Court applied the Aérospatiale factors to find that “the Commission’s interest in confidentiality outweighs the plaintiffs’ interest in discovery of the European litigation documents”. WL 3420517, at *9 (E.D.N.Y. Aug. 27, 2010). Similarly, the Northern District of California has shielded confidential materials submitted to foreign agencies from production in a series of decisions. In re Methionine Antitrust Litigation No. 00-1311, (N.D. Cal. June 17, 2002) (denying production of unredacted EC immunity application where plaintiffs had access to a redacted version and lack of access to unredacted application did not impede plaintiffs in their discovery); In re Cathode Ray Tube (CRT) Antitrust Litigation, 2014 U.S. Dist. LEXIS 41275, at *74 (N.D. Cal. Mar. 26, 2014) (protecting confidential version of EC decision; plaintiffs did not seek underlying investigative materials); and In re Rubber Chemicals Antitrust Litigation, 486 F. Supp. 2d 1078 (N.D. Cal. 2007) (order denying plaintiff’s motion to compel discovery).

The courts’ findings in the above cases are all context-dependent. Important elements in decisions shielding documents from production are: (i) the foreign investigatory body having a strong interest in the nonproduction of the materials and directly requesting the court to prevent production, and (ii) plaintiffs having discovery of the materials underlying the submissions to the foreign agency. In In re Vitamins—where the D.C. district court ordered confidential submissions to be produced—the court had found that the defendants had “assiduously avoided keeping records of their activities or destroyed what records existed and went to great lengths to hide their activities and meetings from others.” In re Vitamins Antitrust Litig., Misc. No. 99–197(TFH), 2002 U.S. Dist. LEXIS 26490 at *127 (D.D.C. Jan. 23, 2002) (Special Master’s Report).