On March 8, 2010 the U.S. District Court for the Southern District of New York issued the latest opinion addressing the conflict between U.S. discovery laws and foreign blocking statutes.  In Gucci Amer., Inc. v. Curveal Fashion, No. 09 Civ. 8458, 2010 WL 808639 (S.D.N.Y. Mar. 8, 2010), the court compelled the third-party U.S. parent (the "U.S. Parent") of a foreign bank, to produce documents located at its subsidiary despite claims that such production was illegal under the Malaysian law.

The potential conflict between foreign blocking statutes and U.S. discovery laws is a well documented problem. See, e.g., Working Document 1/2009 on pre-trial discovery for cross border civil litigation (European Commission, Working Document No.WP 158, 2009). When considering whether to order production despite the applicability of foreign law, Courts in the U.S. apply the test set forth in the Restatement (Third) of Foreign Relations Law of the United States, which includes consideration of:

[T]he importance of the documents or information requested to the litigation; (2) the degree of specificity of the request; (3) whether the information originated in the United States; (4) the availability of alternative means of retrieving 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 the important interests of the state where the information is located.

Gucci, 2010 WL 808639, at *2.  Further, in the Second Circuit, two additional factors are considered, “the hardship of compliance on the party or witness from whom discovery is sought [and] the good faith of the party resisting discovery.” Id.

In Gucci, the Plaintiff sought certain documents and information regarding Defendants’ Malaysian bank accounts by serving a subpoena on the U.S. Parent’s New York Agency in midtown Manhattan. Id. at *1. The U.S. Parent took the position that complying with the subpoena would violate banking secrecy laws in Malaysia. Id. After consideration of the Restatement and Second Circuit factors, the court ordered the production of the sought after records because:

[T]he documents are vital to the litigation, the requests are direct and specific, the documents are not easily obtained through alternative means, the interest of the United States outweighs that of Malaysia under the circumstances, and the likelihood that [the New York branch] would face civil or criminal penalties is speculative. Although [it] has acted in good faith, and the documents are located abroad, this is insufficient to overcome those factors weighing in favor of disclosure.

Id. at *8.

Putting aside the question of whether the court’s analysis was correct, there are two wrinkles to this case that are worthy of note.

First, the U.S. Parent was a third party, and courts are generally less willing to impose burden on third parties during discovery than they are parties. The Gucci court considered the U.S. Parent’s third-party status during its analysis of the “hardship factor,” but determined that this factor did not outweigh the Restatement factors favoring of production. Id. at *7.

Finally, with regard to the importance of the documents sought, it is worth noting that the requested documents were not relevant to a claim or defense, but were instead directed toward the enforcement of a judgment. The court noted that in the absence of the requested discovery, “Plaintiffs are left without a remedy and it cannot be said that the matter has been ‘fully and fairly adjudicated.’” Id. at *5.

This opinion illustrates the no-win situation that foreign corporations continue to be placed in by the tension between U.S. courts and foreign law, and underscores the importance of raising foreign-law based discovery objections as early and in as detailed a manner as possible in order to maximize the chances of successfully navigating this conflict.

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Photo of Nolan Goldberg Nolan Goldberg

Nolan M. Goldberg is a partner in the Litigation Department, co-head of the Data Privacy and Cybersecurity Litigation Group, and a member of the Patent Law Group. His practice focuses on technology-centric litigation, arbitration (including international arbitrations), investigations and counseling, covering a range…

Nolan M. Goldberg is a partner in the Litigation Department, co-head of the Data Privacy and Cybersecurity Litigation Group, and a member of the Patent Law Group. His practice focuses on technology-centric litigation, arbitration (including international arbitrations), investigations and counseling, covering a range of types of disputes, including cybersecurity, intellectual property, and commercial.  Nolan’s understanding of technology allows him to develop defenses and strategies that might otherwise be overlooked or less effective and enhances the “story telling” that is critical to bringing a dispute to a successful conclusion.

Nolan is a registered patent attorney before the U.S. Patent & Trademark Office; and an International Association of Privacy Professionals (IAPP) Certified Information Privacy Professional, United States (US CIPP) and Certified Information Privacy Technologist (US CIPT).


Nolan’s electrical engineering background, coupled with a litigation and risk management-centric focus, allows him to assist companies in all phases of incident response. Nolan often acts as a bridge between the technical and legal response teams (both inside and outside forensic consultants). Nolan uses this deep familiarity with the company and its systems to defend the company in litigations, arbitrations and regulatory investigations, including before the Federal Communications Commission (FCC); Federal Trade Commission (FTC) and before various State’s Attorneys General, including Multi-State investigations.

Nolan has worked on incidents that range from simple phishing attacks on e-mail accounts by cyber-criminals to intrusions by (formerly) trusted inside employees to complex technical breaches of hosted systems by state-sponsored advanced persistent threats (APTs). These incidents have involved both client systems, and systems of a vendor of a client that hosted its data.

It is often the case (both in response to an incident and for other reasons) that a company will want to undertake an assessment of its security posture, but has concerns about the discoverability of any such analysis.  Accordingly, Nolan also frequently assists companies’ scope and conduct privileged security assessments, including “dual purpose” assessments where privileged analysis are also used for ordinary-course purposes.

Commercial Disputes

Nolan also assists companies with commercial disputes, particularly in cases where there is a technology component, including disputes arising from hosted software agreements; outsourcing and managed services agreements; software and technology development agreements and the dissolution of joint ventures.  When these disputes cannot be amicably resolved, Nolan has litigated them in State and Federal Court and in arbitrations, including international arbitrations.

Intellectual Property

Nolan’s work has included numerous patent and trade secret litigations and negotiations, primarily in cases involving computer and network-related technologies. In particular, the litigations have involved at least the following technologies: hosted software; telecommunications, computer networking; network and computer-related security hardware and software; microprocessors, voice-over Internet protocol (“VoIP”); bar code scanners  financial business methods and software, including securities settlement, fail management and trade execution and reporting software; data compression; handheld computers; pharmaceuticals; cardiac electro-stimulatory devices and prosthetics.

Nolan also has experience prosecuting patent applications before the U.S. Patent and Trademark Office in encryption, CMOS, HDTV, virtual private networks (“VPN”), e-commerce, XML/XSL, financial instruments, semiconductor electronics, medical device technology, inventory control and analysis, cellular communications, Check 21 and business methods. Nolan also has conducted numerous freedom-to-operate searches, written opinions, and counseled clients in the areas of bar code scanners, imaging, book publishing, computer networking, business methods, Power Over Ethernet (“PoE”), and digital content distribution.

He has assisted in evaluating patents for inclusion in patent pools involving large consumer electronics and entertainment companies concerning CD and DVD technology.

Computer Forensics and Electronic Discovery

Nolan is often called upon to develop e-discovery strategies to be used in all types of litigations, with a particular focus on selecting appropriate tools, developing proportionate discovery plans, cross border electronic discovery, managing the overall burden and cost of the electronic discovery process, and obtaining often overlooked electronic evidence, including computer forensics. He also assists clients to develop and implement information management programs to reduce expense and risk, meet compliance obligations, and tame e-discovery burdens.

Thought Leadership

Nolan has authored numerous articles and given numerous presentations on emerging issues and trends in both technology and law, and has often been called upon to comment on various media outlets including Business Week, IPlaw360, IT Business Edge, CIO.com, Forbes, and The National Law Journal.

Prior to practicing law, Nolan was a computer specialist at Underwriters Laboratories (UL).