Worldwide: Obtaining Discovery From EU After GDPR's Passage

In April 2016, the European Union (EU) adopted a major overhaul of its data privacy laws to better address new technologies and provide a more coherent approach across different EU Member States. The new law, known as the General Data Protection Regulation (EU) 2016/679 (GDPR) takes effect on May 24, 2018. It will replace the patchwork of national laws created under the old Directive 95/46/EC with a more unified law directly binding each Member State and threatening significant fines amounting to 4 percent of a company's global turnover for non-compliance.

Significantly, the GDPR includes new provisions addressing litigation-related international data transfers. These new provisions create both new perils and opportunities when personal data must be transferred from the EU to the United States for use in discovery.

Article 48: The Good and Bad

When drafting the GDPR, EU legislators recognized the pressure U.S. authorities often place on companies subject to EU data privacy laws and wanted to send a clear signal that companies should resist such pressure and better respect EU privacy restrictions. The result was Article 48, which notes that "any judgment of a court or tribunal and any decision of an administrative authority of a third country requiring [an entity holding EU data] to transfer or disclose personal data may only be recognizable or enforceable ... if based on an international agreement, such as a mutual legal assistance treaty (MLAT) ... ." The provision presents an obstacle because most Member States do not have MLATs with the U.S., and even those that exist often do not always cover U.S. pretrial discovery. Article 48 further notes that it is without prejudice to other grounds for international transfers set forth in Chapter V of the GDPR.

Grounds for Transfers

Although Chapter V lists several options for legitimizing international data transfers, Articles 46 and 49 will likely provide the most useful mechanisms for transfers to the United States during discovery. This includes:

  • Standard Contractual Clauses (Article 46(3)(a)): The EU's Standard Contractual Clauses (SCCs) offer a way to facilitate data transfers on an as needed basis for smaller companies or one-off data transfers. Indeed, because it is possible for multiple entities to enter into SCC agreements, they are particularly well suited for data transfers related to litigation where a variety of U.S.-based entities may need access to the data, such as an e-discovery vendor, a document review provider, contract attorneys, or multiple law firms. The main limitation to using SCCs is that they can only be used if data is being transferred for reasons considered legitimate under the GDPR. Any such use must therefore be assessed within the context of the GDPR's general principles for data transfers and the limitations set forth in Chapter V. For example, a transfer undertaken for national security reasons would not be acceptable unless there were other legal permissions which either standing-alone or in combination with the SCC permitted the transfer.
  • Transfer for the Establishment, Exercise or Defense of Legal Claims (Article 49(1)(e)): In U.S. civil proceedings, including pretrial discovery, this provision may in many instances offer the best justification for data transfers. While under 26(1)(d) of the old directive, Member States such as Germany passed national implementing legislation that narrowly limited the 'legal claims' justification to legal matters pending before a court—thereby excluding pre-trial discovery because it was considered to be between the parties and not truly before the court. Since the GDPR does not need to be implemented by separate national legislation, Article 49(1)(e) will apply directly within each Member State and it doesn't contain any such restriction. As a result, German or other European parties to U.S. discovery requests may be able to use this provision.
  • Transfer for Important Reasons of Public Interest (Article 49(1)(d)): While this alternative will not apply to data transfers in a civil proceeding, it could apply to U.S. law enforcement requests. However, the scope is not unlimited. According to Article 49(4), the "important reason" cited must be acknowledged by either the EU or the Member States' laws. Examples where data transfers might be in the interest of both U.S. and EU laws would be transfers needed to combat money laundering; for antitrust proceedings; for requests by financial supervisory authorities; or for the purpose of public health.

    The transfer of data for national security interests is not likely to be covered because the GDPR doesn't address the use of personal data for national security. In addition, a mere abstract acknowledgment of a public interest is unlikely to be sufficient. The GDPR sets high thresholds for meeting the principle of proportionality.
  • Transfer Based on Consent (Article 49(1)(a)): Consent can justify a transfer of personal data for use in discovery. However, attorneys should be aware of the following limitations:

    • Consent must be obtained from the data subject, not merely the entity holding the data.
    • Article 49(1)(a) requires that consent be explicit, informed and voluntary. Implied consent is not sufficient. Nor are pre-checked boxes or general consents obtained in the abstract.
    • Employee consents are often seen as coerced because employees may not feel free to refuse an employer's request. Only where one can document that the transfer cannot harm the employee and where the employee can truly give voluntarily consent without fear of retaliation will employee consent be an option.
    • Consent will be hard to obtain where a company does not have direct relationships with customers or third parties whose data will be transferred.
    • Consent is not an option where full disclosure regarding the purpose of the transfer can't be given to the data subject, such as in internal investigations.

      Thus, while consent is viable in certain situations, in practice there will be many scenarios where it can't be used.
  • Limited Transfer of Individual Data in Case of Compelling Legitimate Interests of the Data Transferring Party (Article 49(1)(2)): If all other means noted above for legitimizing a transfer fail, this provision can be used if the following criteria are met:

    • the transfer is not repetitive and concerns only a limited number of data subjects;
    • the transfer is necessary for compelling, legitimate interests of the data transferring entity that are not overridden by the interests or rights and freedoms of the data subject;
    • the transferring entity has assessed all the circumstances surrounding the data transfer and has provided suitable safeguards;
    • the relevant data protection authority has been informed of the transfer; and
    • the data subjects have been informed of the intended data transfer.

The scope of this exception is not entirely clear and its meaning cannot be discerned by interpreting existing statutes or case law. As a result, use of this provision may entail significant risk for the transferring entity.

While many of these methods for legitimizing a data transfer will seem familiar to experienced practitioners, the GDPR has fundamentally changed the implementation of these procedures, opening new possibilities for their use in discovery and wiping the slate clean of localized interpretations of their predecessors under the old directive. Of course, useful guidance issued under the old directive is also no longer binding, so practitioners must be careful not to assume what worked under the directive still works under the GDPR.

In addition, none of these provisions, including Article 49(1)(e), provide carte blanche permission to transfer data irrespective of how broad the request is or what measures are taken to protect the data. Appropriate measures must still be put in place, and the amount of data transferred should be the minimum necessary to achieve the purpose for which the data is being transferred. Among other things, this means that when a transfer is needed for response to a discovery request or subpoena, the scope of the request will almost certainly need to be narrowed. European law does not accept the broad concept of responsiveness used in U.S. discovery. Requests must be tightly focused on only the information and custodians directly relevant and critical to the matter in question.

What Should Companies Do?

In light of the draconian fines possible under the GDPR, companies should make a careful case-by-case assessment of the basis for transferring data discussed above before transferring any data to the United States for use in discovery, law enforcement matters or internal investigations. One size does not fit all.

Companies should also follow the measures recommended by the Sedona Conference and the EU Article 29 Working Party. These will include, among other things, using international treaties for justifying transfers (if so available), entering into the SCCs proposed by the EU Commission, minimizing the amount of data actually transferred, redacting or anonymizing personal data wherever feasible, entering into a strong protective order with provisions directly addressing documents subject to EU data privacy laws, processing and hosting the data in the country of origin if possible, or at the very least, filtering the data heavily in the country of origin before transferring it, and meticulously documenting any steps taken to protect the data subjects' privacy.

Finally, companies must be prepared to accept that there is no such thing as a risk-free data transfer from the EU to the United States. While taking appropriate measures can substantially reduce the risk, particularly of a large fine, the GDPR is new and much about the law's implementation remains unclear. Only time will provide more concrete guidance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Renee B. Phillips
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.