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Salt River Project Agricultural Improvement v. Trench France SAS

United States District Court, D. Arizona

March 19, 2018

Salt River Project Agricultural Improvement and Power District, Plaintiff,
v.
Trench France SAS, et al., Defendants.

          ORDER

          David G. Campbell United States District Judge

         Plaintiff Salt River Project (“SRP”) sued Defendants Trench France, S.A.S (“Trench-France”) and Trench Limited (“Trench-Canada”) alleging negligence and strict products liability for failure to warn of risks associated with electrical bushings, resulting in a May 2015 explosion at SRP's Santan Generating Station. Doc. 1. The parties are currently engaged in discovery. Trench-France, a French corporation with its principal place of business in France, has filed a motion to appoint a commissioner pursuant to Article 17 of Chapter II of the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (the “Hague Convention”), opened for signature March 18, 1970, 28 U.S.T. 2555, T.I.A.S. No. 7444. Doc. 78. Trench-France asks the Court to order that all documents and electronically stored information (“ESI”) it produces in this suit be produced pursuant to the procedures in Chapter II of the Hague Convention. Id. SRP opposes the motion. Doc. 84. The Court will grant the motion.

         I. The French Blocking Statute and the Hague Convention.

         French law states that, “[s]ubject to treaties or international agreements and applicable laws and regulations, it is forbidden for any person, to request, search or communicate under written, oral, or any other form, documents or information of an economic, commercial, industrial, financial, or technical nature for the purpose of constituting evidence for or in the context of foreign judicial or administrative proceedings.” Doc. 78 at 5 (quoting Article 1 bis of Law No. 80-538). This law is commonly referred to as the “French Blocking Statute.” See Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Court for S. Dist. of Iowa (“Aerospatiale”), 482 U.S. 522, 526 n.6 & 544 n.29 (1987); Connex R.R. LLC v. AXA Corp. Sols. Assurance, No. CV1602368ODWRAOX, 2017 WL 3433542, at *5 (C.D. Cal. Feb. 22, 2017). Violators of the statute may face up to six months imprisonment and a fine of up to €90, 000. Doc. 78 at 5-6 (citing Article 3 of Law No. 80-538).

         Because both France and the United States are signatories of the Hague Convention, producing evidence pursuant to the Hague Convention's procedures does not violate the French Blocking Statute. The Convention outlines two distinct procedures.

         Chapter I involves “Letters of Request, ” whereby the Court would send a letter of request to French authorities and a French judge would oversee discovery in France. See Hague Convention arts. 1-14; Doc. 78 at 41 ¶ 12. Courts have noted that this procedure can be “unduly time consuming and expensive.” Aerospatiale, 482 U.S. at 542.

         Chapter II allows for the appointment of a private attorney in France to serve as “commissioner” and oversee production in France. See Hague Convention art. 17; Doc. 78 at 41 ¶ 13. Under this procedure, the Court appoints a commissioner and seeks formal authorization from the French Ministry of Justice for the appointment. Id. Trench-France asserts that authorization generally takes about 60 days, after which the process moves swiftly. Doc. 78 at 42-44 ¶¶ 15-20. Trench-France also asserts that the procedure is unlikely to impose any substantive limit on the scope of discoverable information. Doc. 78 at 43 ¶¶ 18-19. Trench-France seeks to use the Chapter II procedure. It has identified Mr. Christian Curtil, an independent French attorney, as its proposed commissioner, and has submitted a formal request form, which it will translate to French and submit to the appropriate office of the French Ministry if the Court approves. See Doc. 78 at 44 ¶¶ 21-22; Doc. 78-1 at 5-9. Trench-France will bear the costs associated with this process. Doc. 78 at 2.

         II. Discoverable Information in France.

         This suit is subject to the Mandatory Initial Discovery Pilot (“MIDP”) project, which requires the parties to produce documents and ESI that “may be relevant to any party's claims or defenses.” See Doc. 5 at 7. Trench-France asserts that it maintains documents and ESI in France that it is obligated to produce under the MIDP. Doc. 78 at 4. Trench-Canada, a Canadian corporation affiliated with Trench-France, maintains many of the same documents and ESI in Canada. Id. Trench-Canada will produce these documents without issue, as it is not subject to the French Blocking Statute, but Trench-France states that there are at least some documents and ESI which are held solely by Trench-France in France. Doc. 78 at 5, 20. Trench-France argues that it would violate the French Blocking Statute if it produced these documents and ESI outside of Hague Convention procedures. See Doc. 78 at 5, 39-41. Trench-France has consistently maintained this position, raising the need for the appointment of a commissioner at the parties' Rule 26(f) conference, the Rule 16 scheduling conference, and in its initial MIDP response. See Doc. 67 at 7; Doc. 79 at 22-26; Doc. 78 at 29-30. SRP has consistently objected.

         III. Legal Standard.

         The Supreme Court has explained that use of Hague Procedures is “optional, ” and that “the Hague Convention did not deprive the District Court of the jurisdiction it otherwise possesse[s] to order a foreign national party before it to produce evidence physically located within a signatory nation.” Aerospatiale, 482 U.S. at 539-40. Even where ordering the foreign party to produce discovery will potentially cause the party to violate a blocking statute in its home country, use of Hague procedures is not mandatory. Id.; see also Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1471 (9th Cir. 1992).

         To determine whether to utilize Hague Procedures, federal courts must conduct a “particularized analysis” of the “particular facts, sovereign interests, and likelihood that resort to those procedures will prove effective.” Aerospatiale, 482 U.S. at 543-44. The Ninth Circuit considers the factors contained in the Restatement (Third) of Foreign Relations Law § 442(1)(c):

the importance to the investigation or litigation of the documents or other information requested; the degree of specificity of the request; whether the information originated in the United States; the availability of alternative means of securing the information; and 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.

Richmark, 959 F.2d at 1475 (citing Aerospatiale, 482 U.S. at 2556 n.28). The Ninth Circuit also considers “the extent and the nature of the hardship that inconsistent enforcement would impose upon the” foreign national, and “the extent to which enforcement by action of either state can reasonably be expected to achieve compliance with the rule prescribed by that state.” Richmark, 959 ...


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