At the end of 2019, the Second Circuit finally weighed in on an issue that has divided federal courts considering applications for discovery pursuant to 28 U.S.C. § 1782, through which a litigant can obtain an order from a federal court for discovery to be used in a foreign proceeding. (You can read more about Section 1782 here and here). Federal courts have split over whether Section 1782 allows a party to obtain documents controlled by an entity in the United States but that are held overseas—for example, records held in the London office of a corporation headquartered in New York.1 In a pair of recent decisions, the Court of Appeals for the Second Circuit joined the Eleventh Circuit in holding that Section 1782 does permit discovery of documents held outside the United States and that are within the control of a US individual or entity.
Continue Reading Second Circuit Weighs in on the Extraterritorial Application of 28 U.S.C. § 1782

In a much-anticipated opinion, Judge George B. Daniels of the United States District Court for the Southern District of New York recently affirmed the decision of a magistrate judge regarding the scope of discovery in aid of a foreign litigation pursuant to 28 U.S.C. § 1782.  (You can read more about Section 1782 and the magistrate judge’s underlying decision in our prior blog post, here).  Briefly, Magistrate Judge Gabriel W. Gorenstein grappled with an issue that has divided federal courts: whether Section 1782 can be used to compel the production of documents maintained outside the United States.[1]  Magistrate Judge Gorenstein held that the fact that documents were maintained overseas did not bar the discovery sought so long as the documents were within the control of a discovery target located in the U.S.—in this case, a New York-based law firm with a branch office in Russia. 
Continue Reading New Decision Regarding Discovery in Aid of Foreign Litigation

Picture your client telling you they were considering starting a litigation, but that they did not yet have all the facts needed for you to prepare a pleading.  Now add the wrinkle that the action would need to be forumed in a foreign country, one with discovery rules narrower than those in the United States, and then the kicker, that some of the relevant documents are held by third parties outside of the planned litigation forum.  Although your initial reaction might be that your client is out of luck, 28 U.S.C. § 1782, which allows foreign litigants (or soon-to-be litigants) to obtain discovery in the United States, under U.S. discovery rules, for use in a pending or contemplated foreign proceeding, might offer some help.

Under Section 1782, a federal courts can grant an application for discovery in aid of a foreign proceeding (or planned proceeding) if the applicant: (a) has an interest in the foreign proceeding; (b) the discovery will be used in that foreign proceeding; and (c) the target of the discovery request resides in the judicial district where the request is made.[1]  However, federal courts can deny the discovery request, even when those statutory factors are met, based on purely discretionary factors such as whether the target is a party to the litigation, whether the applicant is attempting to circumvent either U.S. or foreign proof gathering restrictions, and whether the requests are found “unduly burdensome.”[2]  Although one might think that overworked federal courts would often use those discretionary factors to deny discovery requests in support of litigation pending in a far-flung forum, federal courts routinely grant Section 1782 applications.  Two recent decisions—one granting and one denying a Section 1782 application—show just how broad discovery under Section 1782 can be.
Continue Reading The Broad Scope of 28 U.S.C. Section 1782

One benefit of living in the digital age is that we no longer need to travel to our attorney’s office to place a wet signature on an important contract or mortgage document. Parties now regularly execute multi-million dollar real estate transactions, non-competition agreements, and stock purchases, among other agreements, using digital signature applications. The most often used application, DocuSign, boasts that its solution enables you to electronically sign while meeting the requirements of the ESIGN Act and the Uniform Electronic Transactions Act in the United States, in addition to complying with most other laws in countries where electronic signatures are recognized.

As trial lawyers who often encounter these agreements after a deal has soured, we now have an additional evidentiary burden as we lay a foundation in court and authenticate these documents which the parties “signed” digitally. As with traditional wet signatures, we can anticipate that in some instances we will need to prove that the obligee digitally “signed” the document after he or she denies doing so.

DocuSign offers multiple levels of security and authentication that allow a sender to determine how thoroughly a signer must identify him or herself, including using email, access codes, SMS, phone, and knowledge based identity checks. In these cases, reviewing the authentication data is the digital equivalent of hiring a handwriting expert to authenticate a contract signature.
Continue Reading Authenticating Digital Signatures at Trial

On January 4, 2019, the California Court of Appeal, First Appellate District issued an opinion reminding us that under California law, tax returns are privileged and improper disclosure of them can even potentially rise to tortious invasion of privacy claims in overturning a demurrer as to that claim. Strawn v. Morris, Polich & Purdy, LLP, No. A150562, 2019 Cal. App. LEXIS 9 (Ct. App. Jan. 4, 2019).

Federal and state tax returns have been held to be privileged from disclosure under California law. Id at *13; Wilson v. Superior Court, 63 Cal. App. 3rd 825, 828 (1976); Webb v. Standard Oil Co., 49 Cal. 2nd 509, 512-513 (1957).  As highlighted by the opinion, the purpose of the privilege “is to encourage voluntary filing of tax returns and truthful reporting of income, and thus to facilitate tax collection.” Strawn at *13; Weingarten v. Superior Court, 102 Cal. App. 4th 268, 274 (2002); Webb at 513. 
Continue Reading The Privileged Nature of Tax Returns in California

Court Denies Plaintiff’s Motion to Compel

In Mirmina v. Genpact LLC, 2017 BL 260425, D. Conn., Civil No. 3:16CV00614 (AWT), the Court denied Plaintiff’s motion to compel additional responsive electronic communications despite the fact that an individual directly involved in the underlying claims of the suit “self-identified” potentially responsive emails.  The Court based its

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The Eleventh Circuit recently refused to set aside a bank fraud conviction, rejecting defendant’s argument that advances in technology should change the way court’s adjudicate alleged violations of attorney-client privilege.  While the appellate court agreed that defendant’s attorney-client privilege was breached by federal prosecutors, the court refused to overturn defendant’s 78-month sentence because he had failed to meet his burden to show he was prejudiced by the privilege breach.

The defendant, Stephen DeLuca, the president and sole shareholder of Delco Oil, Inc. in Florida, was convicted (after a mistrial) of fraudulently submitting false statement to lending institutions regarding the company’s accounts receivable and inventory and obtaining loans on reliance on the fraudulent information.

When the FBI raided Defendant’s office and seized computers and hard drives prior to his indictment, DeLuca notified the government that the data included privileged communications. The government offered, and DeLuca signed, a stipulation providing a procedure to exclude privileged communications from the investigation.  It provided that an FBI computer analyst would segregate any communications to or from DeLuca’s attorneys based on a list of attorneys provided by DeLuca.  These segregated communications would then go to an FBI “filter team” who were not members of the prosecution team, who would notify DeLuca if it believed any communications were not privileged, or that the privilege had been waived.  DeLuca could then dispute the determination, and the communications at issue would not be provided to the prosecution team until a magistrate judge ruled as to privilege.
Continue Reading Eleventh Circuit Rejects Criminal Defendant’s Claim That Digital Technology Requires Increased Scrutiny Of Federal Prosecutors’ Improper Review of Privileged Emails

In Hyles v. New York City, 10 Civ. 3119 (AT)(AJP) (S.D.N.Y. Aug. 1, 2016), the court addressed the question of whether the City could be “forced” to use technology assisted review (predictive coding) to identify discoverable information when the City itself preferred to use keyword searching. “The short answer [was] a decisive ‘NO.’”

After consulting with an e-discovery vendor, Plaintiff’s counsel in this case “proposed that the City should use TAR as a ‘more cost-effective and efficient method of obtaining ESI from Defendants.’” “The City declined, both because of cost and concerns that the parties, based on their history of scope negotiations, would not be able to collaborate to develop the seed set for a TAR process.”  The issue was referred to U.S. Magistrate Judge Andrew Peck for resolution.
Continue Reading Judge Peck Won’t Force Use of TAR