1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 EUREKA DIVISION 7 8 PROOFPOINT, INC., et al., Case No. 19-cv-04238-MMC (RMI)
9 Plaintiffs, ORDER 10 v. Re: Dkt. Nos. 78, 91, 92, 93 11 VADE SECURE, INCORPORATED, et al., 12 Defendants.
13 14 Now pending before the court are a series of discovery disputes presented through three 15 jointly filed letter briefs (dkts. 91, 92, 93). Previously, Plaintiffs filed a Motion to Compel (dkt. 16 78) production of documents and interrogatory responses which had been the subject of an 17 objection by Defendants based on French law; thereafter, the matter was referred to the 18 undersigned and the Parties were instructed to proceed by letter brief (dkt. 79). As described 19 below, and for the reasons stated on the record, the relief sought in the motion to compel and the 20 three letters briefs is granted in part and denied in part. 21 In the first letter brief (dkt. 91), Plaintiffs seek an order compelling Defendants to produce 22 documents that are responsive to Plaintiffs’ requests, as well as to provide substantive responses to 23 Plaintiffs’ interrogatories. Id. at 2, 3-5. Defendants had objected to tendering this information, 24 arguing that for information originating in France, a provision of French law prohibits the 25 communication of any economic, industrial, financial, or technical information for use in foreign 26 judicial proceedings, subject to treaties or international agreements governing the procedures for 27 the exchange of such information for use in non-French court proceedings. Id. at 5-7. 1 may arise in relation to documents sought in a United States court which might be subject to 2 protection by foreign law. See Societe Internationale Pour Participations Industrielles et 3 Commerciales v. Rogers, 357 U.S. 197, 208 (1958); see also Richmark Corp. v. Timber Falling 4 Consultants, 959 F.2d 1468, 1474-75 (9th Cir. 1992). Instead, courts are directed to consider a 5 number of factors in determining whether or not a foreign law may operate to excuse 6 noncompliance with the discovery orders of a court of the United States. See generally Societe 7 Nationale Industrielle Aerospatiale v. United States Dist. Court for S. Dist., 482 U.S. 522 (1987). 8 Those factors include: (1) the importance of the documents or other information requested to the 9 litigation; (2) the degree of specificity of the request; (3) whether or not the information originated 10 in the United States; (4) the availability of alternative means of securing the information; and (5) 11 the extent to which noncompliance with the request would undermine important interests of the 12 United States, or the extent to which compliance with the request would undermine important 13 interests of the state where the information is located. Id. at 544 n.28. The Aerospatiale list is not 14 exhaustive, the Court of Appeals for the Ninth Circuit has also considered “the extent and the 15 nature of the hardship that inconsistent enforcement would impose upon the person . . . [and] the 16 extent to which enforcement by action of either state can reasonably be expected to achieve 17 compliance with the rule prescribed by that state.” United States v. Vetco, Inc., 691 F.2d 1281, 18 1287 (9th Cir. 1981); see also Richmark, 959 F.2d at 1475; see also In re Cathode Ray Tube 19 (CRT) Antitrust Litig., No. c-07-5944-SC 2014 WL5462496 at *3 (N.D. Cal. Oct. 23, 2014). 20 When making a determination as to whether any documents or information at issue might 21 be protected from disclosure under French and European Union law, it is important to note that 22 “[t]he party relying on foreign law has the burden of showing such law bars production [of 23 documents or information].” In re Air Crash at Taipei, Taiwan on Oct. 31, 2000, 211 F.R.D. 374, 24 377 (C.D. Cal. 2002). However, it should also not go without mention that “it is well settled that 25 such [foreign] statutes do not deprive an American court of the power to order a party subject to its 26 jurisdiction to produce evidence even though the act of production may violate that [foreign] 27 statute.” Societe Nationale Industrielle Aerospatiale, 482 U.S. at 544 n.29 (citing Societe 1 this reason, courts have been instructed to employ the above-described multi-factor balancing test, 2 as set forth in the Restatement (Third) of Foreign Relations Law, Section 442(1)(c), in order to 3 evaluate the respective interests of the United States and of the party seeking the discovery, in 4 comparison to the foreign state’s interest in secrecy. Aerospatiale, 482 U.S. at 543-44 n.28; see 5 also BrightEdge Techs., Inc. v. Searchmetrics, GmbH, No. 14-cv-01009-WHO (MEJ), 2014 WL 6 3965062 at *2 (N.D. Cal. Aug. 13, 2014). 7 The court finds that the majority of these factors weigh in favor of proceeding with 8 discovery under the Federal Rules of Civil Procedure in this case rather than the employment of 9 Hague Convention procedures. First, it is far from clear just how much of the information sought 10 in discovery “originated” in France. At oral argument, counsel for Defendants at one point 11 suggested that some of the information sought in discovery originated in France, but at another 12 point suggested that it all originated in France. Meanwhile, Plaintiffs submitted that Defendant 13 Vade Secure, Inc. and Defendant Olivier Lemarie are based in the United States, while Defendant 14 Vade Secure SASU (a foreign corporation) does business in the United States and is subject to the 15 jurisdiction of this court in this matter. As Plaintiffs put it, “[g]iven Defendants domestic 16 activities, most of the information sought by the [d]iscovery [r]equests is located in the U.S. and 17 from U.S. entities.” Letter Br. (dkt. 91) at 4. While Defendants expressed generalized 18 disagreement with this assertion, the court finds that Defendants’ general disagreement, by itself, 19 was insufficient to meet their burden in demonstrating that French or European law clearly bars 20 the production of the information sought in these proceedings. 21 “Where the outcome of litigation ‘does not stand or fall on the present discovery order,’ or 22 where the evidence sought is cumulative of existing evidence, courts have generally been 23 unwilling to override foreign secrecy laws,” however, “[w]here the evidence is directly relevant,” 24 this factor weighs against utilizing Hague procedures. Richmark, 959 F.2d at 1475. Plaintiffs have 25 complained that they have thus far not received any discovery whatsoever, and therefore the court 26 also finds that the discovery presently sought is vital to Plaintiffs’ case, and that the requests have 27 been formulated with the requisite degree of specificity in that they are narrowly tailored to target 1 location of the information and the parties, the court finds that two of the three named Defendants 2 are located in this district, and that any information kept by Defendant Vade Secure SASU is 3 either accessible from this district or easily transmitted or transported here. There is also Plaintiffs’ 4 assertion that much of the information it seeks is already in this district. As to the availability of an 5 alternative means of securing this information, the court agrees with Plaintiffs that the increased 6 costs and added delays associated with proceeding under the Hague Convention and involving the 7 French judiciary (or a private French Commissioner) in the discovery process of this case would 8 be unduly expensive and time consuming under the circumstances.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 EUREKA DIVISION 7 8 PROOFPOINT, INC., et al., Case No. 19-cv-04238-MMC (RMI)
9 Plaintiffs, ORDER 10 v. Re: Dkt. Nos. 78, 91, 92, 93 11 VADE SECURE, INCORPORATED, et al., 12 Defendants.
13 14 Now pending before the court are a series of discovery disputes presented through three 15 jointly filed letter briefs (dkts. 91, 92, 93). Previously, Plaintiffs filed a Motion to Compel (dkt. 16 78) production of documents and interrogatory responses which had been the subject of an 17 objection by Defendants based on French law; thereafter, the matter was referred to the 18 undersigned and the Parties were instructed to proceed by letter brief (dkt. 79). As described 19 below, and for the reasons stated on the record, the relief sought in the motion to compel and the 20 three letters briefs is granted in part and denied in part. 21 In the first letter brief (dkt. 91), Plaintiffs seek an order compelling Defendants to produce 22 documents that are responsive to Plaintiffs’ requests, as well as to provide substantive responses to 23 Plaintiffs’ interrogatories. Id. at 2, 3-5. Defendants had objected to tendering this information, 24 arguing that for information originating in France, a provision of French law prohibits the 25 communication of any economic, industrial, financial, or technical information for use in foreign 26 judicial proceedings, subject to treaties or international agreements governing the procedures for 27 the exchange of such information for use in non-French court proceedings. Id. at 5-7. 1 may arise in relation to documents sought in a United States court which might be subject to 2 protection by foreign law. See Societe Internationale Pour Participations Industrielles et 3 Commerciales v. Rogers, 357 U.S. 197, 208 (1958); see also Richmark Corp. v. Timber Falling 4 Consultants, 959 F.2d 1468, 1474-75 (9th Cir. 1992). Instead, courts are directed to consider a 5 number of factors in determining whether or not a foreign law may operate to excuse 6 noncompliance with the discovery orders of a court of the United States. See generally Societe 7 Nationale Industrielle Aerospatiale v. United States Dist. Court for S. Dist., 482 U.S. 522 (1987). 8 Those factors include: (1) the importance of the documents or other information requested to the 9 litigation; (2) the degree of specificity of the request; (3) whether or not the information originated 10 in the United States; (4) the availability of alternative means of securing the information; and (5) 11 the extent to which noncompliance with the request would undermine important interests of the 12 United States, or the extent to which compliance with the request would undermine important 13 interests of the state where the information is located. Id. at 544 n.28. The Aerospatiale list is not 14 exhaustive, the Court of Appeals for the Ninth Circuit has also considered “the extent and the 15 nature of the hardship that inconsistent enforcement would impose upon the person . . . [and] the 16 extent to which enforcement by action of either state can reasonably be expected to achieve 17 compliance with the rule prescribed by that state.” United States v. Vetco, Inc., 691 F.2d 1281, 18 1287 (9th Cir. 1981); see also Richmark, 959 F.2d at 1475; see also In re Cathode Ray Tube 19 (CRT) Antitrust Litig., No. c-07-5944-SC 2014 WL5462496 at *3 (N.D. Cal. Oct. 23, 2014). 20 When making a determination as to whether any documents or information at issue might 21 be protected from disclosure under French and European Union law, it is important to note that 22 “[t]he party relying on foreign law has the burden of showing such law bars production [of 23 documents or information].” In re Air Crash at Taipei, Taiwan on Oct. 31, 2000, 211 F.R.D. 374, 24 377 (C.D. Cal. 2002). However, it should also not go without mention that “it is well settled that 25 such [foreign] statutes do not deprive an American court of the power to order a party subject to its 26 jurisdiction to produce evidence even though the act of production may violate that [foreign] 27 statute.” Societe Nationale Industrielle Aerospatiale, 482 U.S. at 544 n.29 (citing Societe 1 this reason, courts have been instructed to employ the above-described multi-factor balancing test, 2 as set forth in the Restatement (Third) of Foreign Relations Law, Section 442(1)(c), in order to 3 evaluate the respective interests of the United States and of the party seeking the discovery, in 4 comparison to the foreign state’s interest in secrecy. Aerospatiale, 482 U.S. at 543-44 n.28; see 5 also BrightEdge Techs., Inc. v. Searchmetrics, GmbH, No. 14-cv-01009-WHO (MEJ), 2014 WL 6 3965062 at *2 (N.D. Cal. Aug. 13, 2014). 7 The court finds that the majority of these factors weigh in favor of proceeding with 8 discovery under the Federal Rules of Civil Procedure in this case rather than the employment of 9 Hague Convention procedures. First, it is far from clear just how much of the information sought 10 in discovery “originated” in France. At oral argument, counsel for Defendants at one point 11 suggested that some of the information sought in discovery originated in France, but at another 12 point suggested that it all originated in France. Meanwhile, Plaintiffs submitted that Defendant 13 Vade Secure, Inc. and Defendant Olivier Lemarie are based in the United States, while Defendant 14 Vade Secure SASU (a foreign corporation) does business in the United States and is subject to the 15 jurisdiction of this court in this matter. As Plaintiffs put it, “[g]iven Defendants domestic 16 activities, most of the information sought by the [d]iscovery [r]equests is located in the U.S. and 17 from U.S. entities.” Letter Br. (dkt. 91) at 4. While Defendants expressed generalized 18 disagreement with this assertion, the court finds that Defendants’ general disagreement, by itself, 19 was insufficient to meet their burden in demonstrating that French or European law clearly bars 20 the production of the information sought in these proceedings. 21 “Where the outcome of litigation ‘does not stand or fall on the present discovery order,’ or 22 where the evidence sought is cumulative of existing evidence, courts have generally been 23 unwilling to override foreign secrecy laws,” however, “[w]here the evidence is directly relevant,” 24 this factor weighs against utilizing Hague procedures. Richmark, 959 F.2d at 1475. Plaintiffs have 25 complained that they have thus far not received any discovery whatsoever, and therefore the court 26 also finds that the discovery presently sought is vital to Plaintiffs’ case, and that the requests have 27 been formulated with the requisite degree of specificity in that they are narrowly tailored to target 1 location of the information and the parties, the court finds that two of the three named Defendants 2 are located in this district, and that any information kept by Defendant Vade Secure SASU is 3 either accessible from this district or easily transmitted or transported here. There is also Plaintiffs’ 4 assertion that much of the information it seeks is already in this district. As to the availability of an 5 alternative means of securing this information, the court agrees with Plaintiffs that the increased 6 costs and added delays associated with proceeding under the Hague Convention and involving the 7 French judiciary (or a private French Commissioner) in the discovery process of this case would 8 be unduly expensive and time consuming under the circumstances. Regarding the assessment of 9 each nation’s interest in the matter, this factor requires the court to evaluate the interests of each 10 nation in requiring or prohibiting disclosure, and to determine whether or not disclosure would 11 affect important substantive policies or interests of either the United States or France. Richmark, 12 959 F.2d at 1476. Here, the United States has an interest in “vindicating the rights of American 13 plaintiffs” and in preserving fairness in litigation by requiring equal disclosure from the parties. 14 See Aerospatiale, 482 U.S. at 540 n.25; Richmark, 959 F.2d at 1477. While these interests may not 15 be very seriously impaired by using Hague procedures in some cases, the court finds merit in 16 Plaintiffs’ arguments about the added expense and associated delays with the employment of those 17 procedures in this case. The court finds that this factor does not weigh heavily in either direction 18 given that both nations have strong interests here: secrecy for France and fairness in litigation for 19 the United States. Lastly, it should be noted that “[i]f a discovery order is likely to be 20 unenforceable, and therefore to have no practical effect, that factor counsels against requiring 21 compliance with the order.” Richmark, 959 F.2d at 1478. Here, Defendants have given no 22 indication that they will refuse to comply, or that the discovery orders of this court would be 23 unenforceable outside the Hague Convention procedures; accordingly, this factor also weighs in 24 Plaintiffs’ favor. Having found that the majority of factors weigh in favor of proceeding under the 25 Federal Rules of Civil Procedure rather than utilizing Hague Convention procedures, Plaintiffs’ 26 Motion to Compel (dkts. 78, 91) is GRANTED. 27 As to the disputes presented in the Parties second letter brief (dkt. 92), Defendants’ request 1 General Data Protection Regulation of the European Union is GRANTED. Defendants’ request to 2 || include their proposed language in the forthcoming proposed ESI order pertaining to the French 3 blocking law described above is DENIED. Regarding the number of custodians that would be 4 subject to email production requests, it is ORDERED that there shall be up to 15 such custodians 5 from Defendants and up to 8 such custodians from Plaintiffs. 6 Regarding the disputes presented in the Parties third letter brief (dkt. 93), Defendants’ 7 request to include their proposed language in the forthcoming proposed protective order pertaining 8 to the General Data Protection Regulation of the European Union is GRANTED. Defendants’ 9 || request to include their proposed language in the forthcoming proposed protective order pertaining 10 || to the French blocking law described above is DENIED. Plaintiffs’ requests (1) to modify the 11 standard protective order as to the location for inspection of information subject to the protective 12 || order, and (2) to modify the standard protective order regarding the installation of particular 5 13 software for evaluating information subject to the protective order, are DENIED. Lastly, it is 14 || herewith ORDERED that under the parties’ forthcoming proposed protective order, a producing 3 15 party shall provide requested source code printouts within 10 days of any request by the receiving A 16 party.
= 17 IT IS SO ORDERED. 18 Dated: January 31, 2020 19 Ml Z 20 ROBERT M. ILLMAN 21 United States Magistrate Judge 22 23 24 25 26 27 28