I. INTRODUCTION
The global economy is now a reality. With the increasing
globalization and diversification of commerce and human interaction
comes a concomitant globalization and diversification of legal
proceedings. In this age of growing international economic interaction,
discovery driven document production often involves corporations with
offices overseas. Because of resistance to American style discovery in
some foreign jurisdictions, attempts to obtain information essential to
litigation are sometimes frustrated by foreign blocking statutes.(1)
Blocking statutes, laws of foreign countries that impose criminal
penalties upon parties within their jurisdiction who disclose specified
documents, are so named because of their effect upon American style
discovery.(2) The tension created by these statutes has led commentators
to assert that no aspect of extending the U.S. legal system abroad has
given rise to more friction than discovery of materials associated with
investigation and litigation in the United States.(3)
Balancing the need for production of vital information with the
possibility that its discovery orders will lead to criminal liability
for the producing party, a U.S. court must determine whether to grant a
motion compelling production.(4) Further, if the motion to compel
production is not complied with, the court must decide whether to impose
sanctions through Rule 37 of the Federal Rules of Civil Procedure.(5)
Gaining compliance with a production order can mean the difference
between winning or losing a multi-million dollar verdict for one's
client.(6) Partly because the stakes are so high, courts have had
trouble agreeing on a uniform standard.(7) In Societe Internationale,
the Supreme Court affirmed a district court's power to order a
party to produce documents kept in a foreign country despite the fact
that such production may subject the party to criminal sanctions in the
foreign country.(8) Following this decision, courts have differed in
their assessment of which factors to use in arriving at the decision to
compel production.(9) Because issues of national sovereignty and respect
for duly enacted legislation of foreign countries arise whenever U.S.
courts attempt to compel discovery in foreign jurisdictions, it behooves
U.S. courts to arrive at a consistent comity analysis when determining
under what circumstances to compel.(10) This Comment suggests a
consistent comity analysis to be applied to the determination of whether
to compel production of documents when illegality is raised as an
excuse. By so doing, this analysis addresses a significant question left
open ever since the Societe Internationale decision in 1958.(11)
II. FOREIGN BLOCKING STATUTES
The foundational principles upon which civil law countries have
developed render them ill suited for the American style discovery
assault.(12) There, the discovery process is shepherded by the judge,
who alone has power to investigate facts.(13) The civil law tradition
rejects the idea that such a vital function should be placed within the
purview of the parties themselves.(14)
Given this predisposition in some foreign forums, it should not be
surprising that American style discovery is met with a less than
enthusiastic reception abroad.(15) Even where the forum shares the U.S.
adversarial judicial system, the natural instinct to protect one's
own interests produces antipathy in some nations toward U.S. antitrust
and securities regulations.(16) This antipathy is sometimes expressed in
the form of legislation aimed at thwarting the efforts of U.S. courts to
pursue their jurisdictional privileges through discovery in foreign
forums.(17) Accordingly, the taking of otherwise available evidence may
be impossible if that evidence is subject to the reach of a foreign
blocking statute.(18)
III. THE ROLE OF THE HAGUE EVIDENCE CONVENTION
A. General Provisions
Before addressing the issue of whether to order production of
documents subject to a foreign blocking statute, a U.S. court must first
determine whether to proceed with discovery under the Federal Rules of
Civil Procedure or the Hague Convention on the Taking of Evidence Abroad
in Civil or Commercial Matters (Hague Convention).(19) The Hague
Convention is a multilateral agreement that prescribes procedures by
which litigants involved in civil and commercial matters may obtain
evidence abroad.(20) It was initially adopted in October 1968 to provide
a uniform system for the transmission and execution of requests for
gathering evidence in foreign jurisdictions.(21) There are now forty
signatories to the Hague Convention, including most major Western
trading nations.(22) Because of widely perceived difficulties with
existing methods of transnational discovery, the United States became a
signatory to the Hague Convention in 1972.(23)
A primary objective of the Hague Convention was to provide an
effective method for taking evidence abroad.(24) A particular concern
was ensuring that the taking of evidence on foreign soil would be
consistent with the laws of that country, while nevertheless providing
useful results for the litigants involved.(25) Therefore, the Hague
Convention's drafters were scrupulous to include local judicial or
government officials in most evidence gathering functions allowed under
the Convention's terms.(26) The practical result of this
operational philosophy is that U.S. litigants are usually able to obtain
only the discovery which litigants in the country where the documents
are located would be able to obtain.(27)
The main means of evidence gathering under the Hague Convention is
through the Letter of Request procedure.(28) Under article 2 of the
Hague Convention, all signatory states are required to establish
"Central Authorities" comprised of governmental agencies
responsible for receiving incoming Letters of Request from other
signatory nations and overseeing their execution.(29) Thus, the process
begins when a litigant in a signatory state requests the domestic court
where his action is pending to issue a Letter of Request seeking
production of specified documents or the taking of testimony from a
particular witness.(30) The designated Central Authority in the country
where the evidence is located receives the Letter of Request and
transmits it to the court in the jurisdiction where the evidence is
located.(31) The foreign court then conducts an evidentiary proceeding
and transmits the results directly back to the court that first issued
the Letter of Request.(32)
Signatory nations are required to cooperate in executing the
Letters of Request from other signatory nations.(33) However, Article 23
provides an often-utilized limitation to this requirement for countries
opposed to American style discovery.(34) Member states may declare that
they "will not execute Letters of Request issued for the purpose of
obtaining pre-trial discovery of documents as known in Common Law
countries."(35) Of the forty nations that are signatories to the
Hague Convention, only the United States, Czechoslovakia, Barbados, and
Israel have not limited pre-trial discovery through some type of Article
23 preclusion.(36) It is this significant limitation that has provoked
much of the resistance to the Convention's use in the United
States.(37)
B. The U.S. Supreme Court's Aerospatiale Decision
The Hague Convention is the subject of frequent litigation in the
United States.(38) The principle issue litigants face is determining
what role the Hague Convention will play when a U.S. court has
jurisdiction over a foreign party and discovery is sought abroad from
that party in a pending U.S. suit.(39) Before the Supreme Court's
Aerospatiale decision, lower courts had reached a variety of different
conclusions regarding the role of the Hague Convention.(40) One court
suggested that the Convention was the exclusive means of obtaining
discovery from a signatory nation.(41) Other courts adopted a rule that
the Convention should be used as a first recourse before resorting to
discovery under the Federal Rules of Civil Procedure if the
Convention's procedures proved to be ineffective.(42) Some courts
have held that the Hague Convention's procedures were not
appropriate when the country producing the discovery had to transmit it
to the United States rather than to foreign soil.(43)
In Aerospatiale, the Court held that the Hague Convention was not
the exclusive means of discovering evidence located in a signatory
state.(44) Although district courts are free to use U.S. discovery
methods, the Supreme Court has observed:
American courts, in supervising pretrial proceedings, should exercise
special vigilance to protect foreign litigants from the danger that
unnecessary, or unduly burdensome, discovery may place them in a
disadvantageous position. Judicial supervision of discovery should always
seek to minimize its costs and inconvenience and to prevent improper uses
of discovery requests. When it is necessary to seek evidence abroad,
however, the district court must supervise pretrial proceedings
particularly closely to prevent discovery abuses. For example, the
additional cost of transportation of documents or witnesses to or from
foreign locations may increase the danger that discovery may be sought for
the improper purpose of motivating settlement, rather than finding relevant
and probative evidence. Objections to "abusive" discovery that foreign
litigants advance should therefore receive the most careful consideration.
In addition, we have long recognized the demands of comity in suits
involving foreign states, either as parties or as sovereigns with a
coordinate interest in the litigation. American courts should therefore
take care to demonstrate due respect for any special problem confronted by
the foreign litigant on account of its nationality or the location of its
operations, and for any sovereign interest expressed by a foreign state. We
do not articulate specific rules to guide this delicate task of
adjudication.(45)
In the same way that the Supreme Court rejected the notion that the
Hague Convention was the sole method by which U.S. courts could obtain
discovery abroad, it also cautioned courts from running roughshod over
the jurisprudential system of the foreign sovereign.(46) According to
the Court, the circumstances in which the Convention procedures must be
used depend upon the principle of international comity, which the Court
defined as "the spirit of cooperation in which a domestic tribunal
approaches the resolution of cases touching the laws and interests of
other sovereign states."(47)
IV. THE IMPORTANCE OF INTERNATIONAL COMITY
A. Comity's Significance
United States judicial policy has traditionally been supportive of
the notion of comity, presuming its applicability and its necessity to
the functioning of the international legal system.(48) The D.C. Circuit
has described the essential nature of this principle as "the mortar
which cements together a brick house."(49) Also, the Supreme Court
has noted:
"Comity," in the legal sense, is neither a matter of absolute obligation,
on the one hand, nor of mere courtesy and good will, upon the other. But it
is the recognition which one nation allows within its territory to the
legislative, executive or judicial acts of another nation, having due
regard both to international duty and convenience, and to the rights of its
own citizens or of other persons who are under the protection of its
laws.(50)
The doctrine of comity is necessarily implicated whenever
international commercial disputes arise.(51) However, although United
States and foreign courts stress the importance of adhering to this
doctrine with vigor, they are deficient at applying comity with any
consistency.(52) The inherent difficulty in following such an amorphous,
voluntary policy of noninterference with other sovereign forums lies in
its essential character as a balancing act of politics, courtesy, and
good faith between nations.(53) In order to facilitate the resolution of
international discovery disputes that impede U.S. litigation, U.S.
courts should adopt a consistent means of comity analysis. A critical
question that must be answered is whether the behavior of the party
resisting discovery should be analyzed as a part of the decision to
compel production, or whether this analysis is better deferred until
consideration of sanctions for disobeying the court's order to
compel.(54)
B. Early U.S. Attempts at Comity in the Context of International
Antitrust Litigation
Litigation in the United States operates on the premise that
wide-open discovery, like freedom of speech, is an essential aspect of
finding truth.(55) This is especially the case in increasingly
complicated commercial suits in which discovery is absolutely essential
to adequate fact finding.(56) In a world with perfect comity between
sovereign states, there would be no difficulty when documents vital to a
plaintiffs case happened to be housed in a multinational
corporation's foreign office. So long as the U.S. court possessed
personal jurisdiction over the defendant, the court could force that
party to produce materials under the party's control, wherever
those materials were located.(57)
This rather rosy scenario is complicated greatly by the antipathy
some foreign jurisdictions have for American style discovery.(58) The
U.S. Supreme Court has spoken only once on the standard that U.S. courts
should apply when faced with the excuse of foreign illegality for
nonproduction, and its voice was somewhat faltering.(59)
1. Societe Internationale v. Rogers (1958)
In Societe Internationale v. Rogers, a Swiss holding company
brought suit under the Trading with the Enemy Act to recover assets that
the U.S. government had seized during World War II.(60) Early in the
litigation the government moved under Rule 34 of the Federal Rules of
Civil Procedure for an order requiring the holding company to produce
documents held by its bank in Switzerland.(61) The plaintiff sought
relief from production on the ground that disclosure of the required
bank records would violate Swiss penal laws on bank secrecy and subject
those responsible for disclosure to criminal sanctions.(62) When the
plaintiff failed to comply with the awarded production order, the
district court dismissed the plaintiffs case, holding that the plaintiff
had control over the bank records, that the records might prove a
deciding factor in the suit and that Swiss law did not provide an
adequate excuse for noncompliance.(63)
The Supreme Court affirmed the issuance of the production order,
but reversed the dismissal of the action.(64) The Court utilized three
factors that influenced its decision and have since become the backbone
of current analysis of the suitability of production orders for foreign
evidence.(65) First, a court should consider and facilitate the strength
of the American interests underlying the statute that gives rise to the
cause of action.(66) Second, a court should replace the normal discovery
standard of being "reasonably calculated to lead to the discovery
of admissible evidence"(67) with a higher standard that inquires
into whether the requested documents are crucial to the resolution of a
key issue in the litigation.(68) Third, the Court indicated that a
party's good faith attempt to timely comply with a production
order, to obtain a waiver, or otherwise to achieve compliance, is
important when determining whether sanctions are appropriate for
nonproduction.(69)
If the Societe Internationale opinion had stopped at that, then
lower courts would have had a consistent analysis to apply to later
comity concerns when determining whether to compel production in the
face of a foreign blocking statute. Unfortunately, the Societe
Internationale Court went on to explicitly limit its ruling to the
instant case, limiting the precedential value of its three-pronged
analytical framework.(70) The Court also indicated that the propriety of
issuing a production order should depend not only upon the factors it
identified, but also upon "the exigencies of the particular
litigation" and "the circumstances of the given
case."(71) This open ended analysis left lower courts to speculate
broadly regarding the correct comity analysis to apply when determining
whether to order production of documents subject to a foreign blocking
statute.(72)
Furthermore, the Supreme Court's acknowledgment that "the
fear of criminal prosecution constitutes a weighty excuse for
nonproduction"(73) has served in the years since Societe
Internationale to foster a climate in which foreign governments are
encouraged to provide cover for their country's corporations by
enacting nondisclosure statutes.(74) If foreign governments are
persuaded that U.S. courts will not compel discovery when production
will subject a party to criminal penalties abroad, then those
governments will be likely to exploit their advantage and pursue such
legislation vigorously.(75) This phenomenon accounts for the growth of
nondisclosure statutes abroad in the years since the Societe
Internationale decision.(76)
There is a strong incentive for multinational corporations to
collude with foreign governments in secreting documents beyond the reach
of U.S. courts.(77) The nonproducing party is able to raise the issue of
foreign illegality as an excuse when arguing that the court should not
grant her opponent's motion to compel production.(78) If the court
should go ahead and issue the order compelling production, the
nonproducing party may still be unable--or simply unwilling--to comply.
In that case the nonproducing party may attempt to avoid Rule 37
sanctions on the grounds that foreign illegality made compliance
impossible.(79) Courts have weighed the foreign illegality defense
against the need for discovery of documents at both the order and
sanctions phases of the litigation.(80) This encourages those seeking to
create "information havens" abroad to exploit this advantage
in thwarting, or at the least delaying, U.S. litigation.(81) Courts have
proposed a number of approaches to both stages in the process, but those
proposals still lack consistency regarding which standards to apply and
at which stage to apply them.(82)
2. Early Second Circuit Decisions
One line of Second Circuit cases decided in the years immediately
following the Supreme Court's decision in Societe International
held that foreign law prohibitions on disclosure act as a bar to
ordering production of documents.(83)
In Chase Manhattan a grand jury request for Chase Manhattan
documents located in Panama was greeted by a Panamanian law, which made
disclosure of the very documents sought by the court a criminal
offense.(84) The Second Circuit Court capitulated, deferring to
"fundamental principles of international comity" and refusing
to order production.(85) Particularly striking was the fact that on
January 30, 1961, the very day that Chase was ordered to show cause for
why an already issued subpoena should not be modified to include
documents Chase had secreted in Panama, the president of Panama signed
Law No. 17.(86) The president and the legislature had hurriedly enacted
the law the previous day.(87) The Second Circuit based its order denying
the U.S. government's request for an order compelling production in
part upon the Panamanian law. Citing an earlier decision, the court
asserted that "if in fact production of branch records located in
Panama `would require action by personnel in Panama in violation of laws
of Panama ... production ... should not be ordered' by the courts
of this country."(88) In ruling upon the government's
assertion that compliance with production would not necessitate illegal
action because the subpoena is directed only to the head of Chase's
office in New York rather than to Panamanian personnel, the court
replied, "[T]his would be nothing more than an attempt to
circumvent the Panamanian law."(89) According to the court,
"such a maneuver scarcely reflects the kind of respect which we
should accord to the laws of a friendly foreign sovereign
state."(90)
The precedent for the court's ruling in Chase Manhattan had
been set in an earlier Second Circuit decision, Ings v. Ferguson.(91) In
Ings, New York branches of a Canadian bank were allowed to secret
documents necessary to establish the case against the Canadian bank.(92)
The court based its reasoning upon the assertion that:
An elementary principle of jurisdiction is that the processes of the courts
of any sovereign state cannot cross international boundary lines and be
enforced in a foreign country. Thus service of a United States District
Court subpoena by a United States Marshal upon a Montreal branch of a
Canadian bank would not be enforceable. However, amongst civilized nations,
between which international comity exists, procedures have long been
established whereby the requests of litigants in other countries seeking
testimony and records are honored. Such reciprocity is evidenced by the
laws which each of the sovereign states has enacted to enable this purpose
to be achieved. Each state nevertheless by the very definition of
sovereignty is entitled to declare its own national policy with respect to
such limitations upon the production of records as its lawmakers may choose
to enact.(93)
By allowing multinational corporations headquartered in the United
States (like Chase Manhattan Bank) and outside the United States (like
the Canadian bank in Ings) to exploit the opportunity to secret
documents abroad, these early Second Circuit cases demonstrate the
futility of attempting to adhere too scrupulously to a pure comity
approach.(94) This extremely deferential, almost reverential, treatment
of foreign blocking statutes provided incentive to foreign governments
to expand the scope and number of laws imposing criminal sanctions upon
those who disclose documents allegedly important to some specified
national interest.(95) Another approach was needed that would not
unjustly punish the party seeking production simply because the
materials sought were conveniently located in a jurisdiction hostile to
American style discovery, commercial interests, or both.(96)
3. The Tenth Circuit's Decision in Arthur Andersen
The Tenth Circuit adopted a somewhat different approach than did
the Second Circuit when confronted with a defendant claiming the
protection of Swiss secrecy laws as shelter from a discovery
request.(97) The state of Ohio sued Arthur Andersen in the U.S. District
Court for the Southern District of Ohio. At issue in Andersen was
whether the district court usurped its power in entering discovery
orders that required the accounting firm to produce certain documents,
even though production of those documents would allegedly violate
nondisclosure laws in Switzerland.(98) The Andersen court interpreted
Societe Internationale to imply that consideration of foreign law in a
discovery context is required only in determining whether sanctions
should be imposed for disobeying an order to compel, not in deciding
whether the discovery order should be issued in the first place.(99) The
Andersen court refused to resort to overblown notions of comity in
deciding whether to order document production, holding that foreign law
cannot control local law and cannot invalidate an order which local law
authorizes.(100)
The Tenth Circuit had an opportunity to solidify its holding in the
first Andersen ruling when the accounting giant appealed the trial
court's ruling imposing Rule 37.(101) The court cited the Supreme
Court's Societe Internationale decision, distinguishing between
"inability to comply and willful or bad faith
noncompliance."(102) In light of Andersen's "dilatory
response to [the trial court's] December 16, 1975 order,"(103)
the Tenth Circuit ruled that the preclusionary and monetary sanctions
imposed by the trial court were "just and authorized by the
Rule."(104)
While the early Second Circuit decisions discussed above seemed to
give undue deference to notions of international comity, the Tenth
Circuit in its Andersen decisions disregarded comity considerations
altogether.(105) Andersen v. Finesilver could even be regarded as
dismissive toward the importance of comity considerations:
We are not impressed by Andersen's contention that international comity
prevents a domestic court from ordering action which violates foreign law.
If the problem involves a breach of friendly relations between two nations,
Andersen should call the matter to the attention of those officers and
agencies of the United States charged with the conduct of foreign affairs,
and they could make such representation to the court as they deemed
suitable. Andersen has not taken this action. Instead, it purports to speak
for the United States.(106)
Nevertheless, as other Tenth Circuit decisions reveal, there is an
appropriate place for considerations of international comity by the
courts.(107) Determining the appropriate place, and giving the
appropriate weight to interests of comity, however, has proven to be a
difficult task.(108)
C. The Middle Ground: Balancing Tests
A compromise has been struck in recent court decisions between the
extremes of undue reverence for foreign blocking statutes and outright
disregard for comity sensitivities.(109) While these recent decisions
acknowledge that they must balance competing national interests in
determining whether foreign illegality should preclude the issuance of a
production order, no consensus has yet been reached as to the balancing
test to be utilized.(110)
1. Minpeco v. Conticommodity Services
The Minpeco decision reflects the analysis of those courts that
have developed a four-part test incorporating elements of Section 40 of
the Restatement (Second) of the Foreign Relations Law with various
elements of the Societe Internationale decision.(111)
In Minpeco, the plaintiffs in three related cases moved for an
order compelling production of documents by defendant Banque Populaire
Suisse (BPS).(112) Charged with violations of antitrust, racketeering,
and securities laws, BPS opposed discovery, claiming the protection of
Swiss banking secrecy laws.(113) Acknowledging BPS's argument that
earlier Second Circuit decisions held that foreign law prohibitions on
disclosure act as a bar to ordering production of documents, the Minpeco
court nonetheless pointed to more recent decisions in which the Second
Circuit had moved to a more flexible position.(114) The court then
relied heavily upon the Restatement (Second) of the Foreign Relations
Law to establish a balancing test incorporating both comity and good
faith concerns.(115)
Without explaining why, the Minpeco court asserted that the Second
Circuit has treated the first two Section 40 factors--the competing
interests of the countries involved and the hardship imposed by
compliance--as far more important than the last three.(116) The court
then combined these two factors with two of the considerations
identified by the Supreme Court in Societe Internationale.(117) The
first consideration was the importance of the documents requested.(118)
The second additional factor was the good or bad faith of the party
resisting discovery.(119) To summarize, according to the Minpeco court,
the principle factors to consider in deciding a motion to compel in the
face of a foreign blocking statute are: (1) the competing interests of
the nations whose laws are in conflict; (2) the hardship of compliance
on the party or witness from whom discovery is sought; (3) the
importance to the litigation of the information and documents requested;
and (4) the good faith of the party resisting discovery.(120)
In the end, the Minpeco court crafted a hybrid balancing test that
proved very demanding on the courts attempting to apply it.(121)
Reflecting the Second Circuit's profound regard for international
comity and good faith, the trial court in Minpeco made no distinction
between applying this cumbersome test at the production stage of the
litigation or at the sanctions stage, should that determination become
necessary.(122) On the contrary, the Minpeco court asserted that the
Second Circuit has applied concerns of good faith and comity both when
determining whether production should go forward in the face of a
foreign blocking statute and later when attempting to decide whether
sanctions should be imposed for failing to comply with the court's
production order.(123) This "doubling up" of comity and good
faith analyses is both unfair and inefficient as it often leads to
confusion and delay for all participants and a lack of remedy to the
party seeking production.(124)
2. In re Uranium
A better line of reasoning is reflected in In re Uranium Antitrust
Litigation, which adheres more closely to the original three-part comity
analysis suggested by the Supreme Court in Societe Internationale.(125)
In In re Uranium, the U.S. District Court for the Northern District of
Illinois, described these three factors as follows:
Societe teaches that the decision whether to [compel production of
materials subject to a foreign blocking statute] is a discretionary one
which is informed by three main factors: 1) the importance of the policies
underlying the United States statute which forms the basis for the
plaintiffs' claims; 2) the importance of the requested documents in
illuminating key elements of the claims; and 3) the degree of flexibility
in the foreign nation's application of its nondisclosure laws.(126)
The critical distinction between the three-part analysis of In re
Uranium and the four-part analysis of Minpeco is the greater weight In
re Uranium places upon discerning the strength of American interests and
its deferral of any good faith analysis to the decision regarding Rule
37 sanctions for noncompliance with the court's discovery
order.(127)
The facts surrounding the In re Uranium case are compelling.
Westinghouse Corporation was the victim of a price fixing scheme enacted
by a worldwide uranium cartel, organized with the intent of putting
Westinghouse out of the uranium/nuclear power business.(128) When
Westinghouse, which had enacted contracts with uranium producers
worldwide, saw its price for uranium ore jump from $10-$15 per metric
ton to over $40 per metric ton in under one year, it had no choice but
to stop delivery on its shipments of enriched uranium to various
electric utilities that were dependant upon nuclear power to supply
their customers.(129) These utilities brought suit against Westinghouse
for breach of contract, which Westinghouse unsuccessfully defended on
the legal theory of commercial impracticability.(130) Faced with the
possibility of bankruptcy, Westinghouse decided to sue its suppliers of
uranium ore, some of which were U.S. companies, for antitrust
violations, misrepresentation, and fraud.(131) Critical to
Westinghouse's case was the ability to obtain discovery of
inculpatory documents that several defendants had conveniently stored in
foreign jurisdictions.(132)
Not surprisingly, foreign governments were quite susceptible to
pressure from major corporations headquartered within their borders to
prevent disclosure of embarrassing, and potentially illegal, secrets
regarding the existence and operation of a worldwide cartel engaging in
price fixing on a grand scale.(133) Canadian, Australian, and South
African lawmakers responded by enacting statutes for the express purpose
of impairing the power of U.S. courts to extend their jurisdiction
abroad.(134)
The In re Uranium Court responded by crafting a simplified and more
manageable balancing test using the key factors identified by the
Supreme Court in its Societe Internationale decision.(135) The court
reasoned that by emphasizing the important congressional policy
reflected in enacting antitrust legislation, the Supreme Court in
Societe Internationale intended that American interests be adequately
protected in the face of foreign blocking statutes.(136) Further,
because the Supreme Court gave no hint that the disclosure policies of
the American statute should be balanced against the secrecy laws of
Switzerland, the district court concluded that the only pertinent
inquiry was the strength of the American interests reflected in the
legislation that gave rise to the cause of action.(137) The district
court decision correctly asserts that the Supreme Court in Societe
Internationale reserves certain factors for consideration solely at the
sanctions phase of the enforcement process.(138)
Chief among these factors is any assessment of the good or bad
faith of the party resisting disclosure,(139) As the Supreme Court
pointed out in Societe Internationale, such an analysis is relevant only
after compelled production has not been performed.(140)
V. THE LIMITATIONS OF COMITY
The discussion above points out not only the essential nature of
the comity analysis to any litigation involving foreign courts, it also
highlights the limitations of the comity analysis in the context of
foreign blocking statutes.(141) Seeking definitive boundaries for a
doctrine comprising the interplay of politics, courtesy, and good faith
among nations is demanding under the best of circumstances.(142) United
States courts have found some guidance in the notion of reciprocity, so
that they generally enforce final judgments of foreign courts of
competent jurisdiction in a manner similar to the regard given U.S.
courts in the foreign jurisdiction in question.(143) Although a good
general rule, in practice the doctrine of reciprocity becomes not only
difficult to enforce, but unfair as well.(144)
A. The Importance of Protecting U.S. Interests From Opportunistic
Foreign Legislation
1. The Principle of Reciprocity
The principle of reciprocity works well when all parties involved
are determined to place international comity ahead of national
interest.(145) However, this is not always the case. The common law
"parallel proceedings rule" serves as a prime example of the
type of protective practices that undermine international comity.(146)
United States case law establishes that where an in personam judgment is
sought and both a U.S. court and a foreign court have concurrent
jurisdiction, each court may proceed until a judgment is reached in one
court which may then be recognized as res judicata in the other.(147)
Because of the parallel proceedings rule, U.S. courts are reluctant to
issue restraining orders preventing parties from bringing the same suit
in a foreign court.(148) This policy serves the interest of
international comity by discouraging interference in the legal
proceedings of other nations.(149) However, it backfires on U.S.
plaintiffs when a foreign defendant convinces the courts of its nation
to issue a declaratory judgment in its favor despite the litigation
pending in a U.S. court.(150) In such an instance, the U.S. court's
adherence to principles of comity--by allowing the defendant to proceed
with litigation in the foreign jurisdiction--has allowed a foreign
defendant to thwart the valid jurisdiction of U.S. cour