In the late June rush to adjournment, some Supreme Court decisions that would get attention in slower times get short shrift. With key rulings on imposition of the death penalty, on the First Amendment, and on labor law handed down June 15, there was little focus on an interpretation of an international treaty on how litigants in commercial cases should gather up evidence in other countries.
But the 5-to-4 ruling in Aerospatiale v. U.S. District Court is going to generate intense, angry response from U.S. trading partners. It will have immediate impact on foreign companies that operate in the United States, and may in time cause problems for U.S. companies as well if the foreign governments translate their anger into new restrictions.
In the late 1960s, diplomats from the industrial countries got together to hammer out a new agreement that would minimize the friction between the kind of wide-ranging searching of company files and questioning of company officials allowed by U.S. courts in preparation for a trial and the much more limited and controlled discovery practiced in most European countries. The resulting Hague treaty has since been signed by 17 countries, including the United States, France, Britain, West Germany and Italy. The agreement says that in most cases a court trying a case involving documents that are located in another country will issue a "letter of request" to the court in the other country, asking that it obtain the papers. The foreign court may turn down the request, but only if it involves privileged information or if making the demand is contrary to that nation's laws. In that case, the foreign government must act promptly.
For many litigants, the system has been working: In the past eight years Germany, for instance, has received almost 200 letters of request from the United States. But the text of the treaty never makes clear just what role it is to play in ongoing litigation. Its procedures are not mandatory, so it doesn't supplant the discovery methods of the country where the lawsuit is lodged. It is up to national interpretation just how binding the treaty should be.
The three U.S. courts of appeals that have ruled on the matter all found the treaty procedures are merely one option available among many. The high court majority has now agreed with that interpretation.
That worries the Europeans because if U.S. judges issue their own discovery orders, they are likely to be burdensome far beyond anything their local courts would tolerate. "The reason that such nations react vehemently to U.S.-style discovery of information located within their borders is that it undermines long-established procedural principles protecting persons and businesses within their borders from what those nations regard as undue intrusions upon privacy and business secrecy," explained James S. Campbell, who lead a group of lawyers presenting the views of German manufacturers in the Supreme Court case. That dispute began with an Aug. 19, 1980, crash in Iowa of a short takeoff and landing airplane, the Rallye, manufacturered by Societe Nationale Industrielle Aerospatiale, a holding of the French government. The injured pilot and passenger sued the firm, claiming that it negligently turned out a faulty vehicle. As the case moved toward trial, the plaintiffs submitted a group of questions to officials of the plane maker, and the company refused to answer them unless they were submitted through the procedures outlined in the evidence treaty. Forcing a sovereign U.S. authority to bow to the whims of another country seemed to distress the Supreme Court justices. "An interpretation of the Hague Convention as the exclusive means for obtaining evidence located abroad would effectively subject every American court hearing a case involving a national of a contracting state to the internal laws of that state," fumed Justice John Paul Stevens in the majority opinion.
The high court ruling doesn't mean that a trial court judge can entirely ignore the treaty. The Stevens opinion tells judges to consider international comity when looking at the individualized facts of each case. But he makes clear that if following treaty procedures will add to the expenses or delay things or "are less certain to produce needed evidence" -- in other words, in the instances when a U.S. party will want to ignore the treaty provisions -- it is okay to issue a direct order to the overseas company instead.
Moskowitz covers legal affairs for McGraw-Hill World News