May 2011

Where U.S. litigation discovery obligations were argued to be in conflict with foreign civil and criminal privacy statutes, many recent opinions found that discovery should proceed under the Federal Rules over the protest of the foreign data custodians. However, in SEC v. Stanford International Bank Ltd, the court departed from this pattern in finding that discovery should first proceed under the Hague convention in the interest of comity. While it is unclear the extent to which this approach will be followed by other courts in the future, the Stanford opinion illustrates that it is possible for litigants and third parties to successfully navigate cross border discovery conflicts even where privacy interests are at stake.

On May 12, 2011, the Obama Administration released its legislative proposal concerning cybersecurity. The stated focus of the proposal is to shore up cybersecurity measures to protect the American people, the Nation’s critical infrastructure, and the Federal Government’s networks and computers while providing a framework for safeguarding individual privacy and civil liberties.

Playdom, Inc., an online game company owned by Disney, and Playdom’s CEO, Howard Marks, agreed to pay $3 million to settle charges brought by the FTC that they violated COPPA by collecting, using and disclosing the personal information of children under the age of 13 without their parents’ prior, verifiable consent. The $3 million settlement is the largest civil penalty ever for a COPPA violation.