Federal court says French must play by American rules

Michael P. Tremoglie Mar. 14, 2012, 9:40am


PHILADELPHIA (Legal Newsline) - Philadelphia's federal court ruled March 6 that a French firm cannot obtain a protective order it requested in accordance with the Hague Convention.

An American firm has sued French entities in federal court for violations of the Sherman Antitrust Act. TruePosition -- a Berwyn, Pa., company that provides location technology -- sued LM Ericsson Telephone CO., Qualcomm, INC., Alcatel-Lucent USA, INC., European Telecomunnications Standards Institute and Third Generation Partnership.

The last two are "Standard Setting Organizations." Trueposition alleges that the corporations acted in concert with the SSO's to engage in anticompetitive conduct.

Specifically, they violated American antitrust law by attempting to exclude Trueposition's technology. Trueposition cites Section 1 and 2 of the Sherman Act. The Section 1 claim was against all defendants. The Section 2 claim was only against Ericsson and Acatel.

Trueposition made a discovery motion. ETSI moved for a protective order in response to the discovery motion. ETSI said jurisdictional discovery between the parties must be secured through the Hague Convention.

The federal court denied the protective order motion stating, "(T)he Hague Evidence Convention is not mandatory and "was intended to establish optional procedures that would facilitate the taking of evidence abroad... It does not provide exclusive procedures for obtaining documents and information located in a foreign signatory nation's territory."

The court noted, "(T)he Convention does not deprive the District Court of its jurisdiction to order, under the Federal Rules of Civil Procedure, a foreign national party to the proceeding to produce evidence physically located within its territory."

But a European judge differs with the federal judge. Rosa Anna Tremoglie, a trial judge in Italy, maintains that the purpose of the Hague Convention was to reconcile the differences in the discovery rules between the very broad American rules and the more restrictive European laws.

"The issue before the District Court is to find a reason not to apply the Hague Convention on Taking Evidence Abroad in Civil or Commercial Matters, which the Americans wanted in order to build a bridge between the common law and civil law countries' traditions of taking of evidence," she said.

According to Tremoglie, there are tremendous differences between the two systems. The difference pertinent to this case is that there exists a general obligation in American common law to disclose the documents relevant to the action (according to the Federal Rules of Civil Procedure), she says. But disclosure in the French civil law procedure knows only limited obligations, imposed by the court, to produce specific documents, she says.

"Because of these differences in 1980 both France and England enacted the blocking statutes," Judge Tremoglie added.

The French statute forbids discovery of information or documents from a French national. But, as is the case here, American courts have determined the French statute does not apply.

Ronald Rotunda, a professor of jurisprudence at Chapman University law schoolin Orange, Calif., referred to a 1987 Supreme Court case.

The leading case is Societe Nationale Industrielle Aerospatiale v. U.S. District Court for Southern District of Iowa, he said.

Rotunda said the court held that, "The Hague Evidence Convention did not provide exclusive and mandatory procedure for obtaining documents and information located within territorial foreign signatory; first resort to Hague Convention was not required; and the Hague Convention did not deprive district court of jurisdiction it otherwise possessed to order foreign national party before it to produce evidence physically located within a foreign signatory nation."

This is essentially what the district court ruled. Whether this will be appealed has yet to be determined.

However, according to Tremoglie, "The only reason to apply the Federal Rules is to prove that the matter is not within the Convention."

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