E-Discovery
Court Confirms Hague Convention Not Mandatory for Foreign Discovery
Why This Alert Is Important
This ruling clarifies that federal courts are not required to utilize Hague Convention procedures for foreign discovery, emphasizing the flexibility of the Federal Rules of Civil Procedure over time-consuming international protocols.
Overview
Skillz Platform Inc. v. Papaya Gaming, Ltd., a dispute over claims of false advertising and deceptive practices, raised critical questions about foreign discovery rules. Plaintiff Skillz, a U.S.-based gaming platform, sought discovery from Defendant Papaya, an Israeli company that also operates a gaming platform. Defendant argued that Israeli data protection laws barred it from collecting and transferring nonpublic information to the United States and that the Hague Convention was the only permissible mechanism for obtaining nonpublic information. Defendant claimed that, without Israeli court approval through the Hague Convention, Israel’s Privacy Protection Law (PPL) prohibited transferring sensitive data, including employee emails and company records stored in the European Union.
Defendant initially avoided clarifying where its corporate records were stored but, under Court scrutiny, disclosed that its corporate records and employee email accounts are stored on Google Drive in servers located in the European Union. Plaintiff emphasized that critical data in Defendant's possession—such as gameplay logs, tournament details, statistics, source code (including bot codes), and internal communications about bots—was essential to the litigation. Furthermore, it noted that the Defendant had already identified its employees in its initial disclosures.
Ruling Summary
- The Hague Convention Not Mandatory. The court ruling explained, “Federal courts may, but are not required, to resort to the Hague Convention for conducting foreign discovery.” The Hague Convention procedures are one means to conduct foreign discovery, but not "exclusive and mandatory," and they are not necessarily appropriate given that they can be "unduly time consuming and expensive."
- "Just, Speedy, and Inexpensive." The Federal Rules of Civil Procedure prioritize the "just, speedy, and inexpensive determination" of legal proceedings, while Israel's PPL stresses the privacy of its citizens and the enforcement of its laws on consumer protection and data security. Given these priorities aren't necessarily in conflict, there may not be a need to resort to the Hague Convention. The Defendant's objection concerned the method of production, rather than a refusal to produce the requested materials entirely, suggesting a path to resolution.
- Lack of Conflict Found. Citing declarations from experts, the Court noted that the PPL safeguards data related to natural persons but does not extend its protections to corporate data. Therefore, the court found that Israeli law did not mandate the use of Hague Convention procedures for discovery involving Israeli companies engaged in foreign litigation, including cases within U.S. courts.
The Court provided a detailed analysis based on the factors listed in Societe Nationale to determine whether Hague Convention procedures must be used for discovery; but ultimately decided that, “[m]ost importantly,” the record did not reflect a true conflict between Israeli law and the discovery requested. Key to this decision was the Court’s reliance on expert declarations opining that nothing in Israel’s PPL required use of the Hague Convention procedures for discovery of Israeli companies in this case.
Case Law Tip
Federal Rules of Civil Procedure may outweigh international legal frameworks like the Hague Convention when resolving discovery disputes. Make sure you understand them with Exterro's guide to the FRCP.