NATIONALLY RECOGNIZED FEDERAL LAWYERS
Understanding Federal Subpoena Power Over Foreign Companies
|Last Updated on: 2nd October 2023, 05:52 pm
Understanding Federal Subpoena Power Over Foreign Companies
When it comes to legal disputes in the U.S., companies based abroad aren’t immune from the reach of federal subpoenas. But navigating international laws and treaties make this area complicated. This article breaks down how federal subpoena power works with foreign companies.
What is a subpoena?
A subpoena is a writ ordering someone to appear in court or produce evidence. There are two main types:
- A subpoena ad testificandum orders someone to testify in court.
- A subpoena duces tecum orders someone to produce documents or other evidence.
In civil litigation, subpoenas are governed by Rule 45 of the Federal Rules of Civil Procedure[1]. The court where the lawsuit is filed issues the subpoena. But it can be served anywhere in the U.S. or to a U.S. national abroad.
Subpoena vs. discovery request
Discovery requests are only between parties to a lawsuit. Subpoenas involve non-parties. Say Company A sues Company B. Company A can’t subpoena Company B because they are opposing parties. But Company A can subpoena Company C for relevant information, even if Company C isn’t involved in the dispute.
Subpoenaing companies vs. individuals
The same subpoena rules apply whether targeting a company or an individual. But organizations tend to have more resources to object. They usually hire attorneys to protect privileges and confidential info[2].
Subpoenaing foreign companies
U.S. courts can subpoena foreign companies under Rule 45. But enforcement depends on international laws and treaties[3]. Let’s break it down:
Hague Evidence Convention
The Hague Evidence Convention established procedures for obtaining evidence between member countries. That includes taking testimony, accessing documents, and examining property[3]. Signatories must follow set channels like diplomatic officers and consular agents. The Convention promotes international cooperation. But critics argue it’s time-consuming and ineffective[3].
Bilateral treaties
The U.S. has separate mutual legal assistance treaties (MLATs) with over 60 countries[3]. These outline specific procedures for obtaining evidence. MLATs often let parties bypass the Hague Convention. But the process is still cumbersome.
Letters rogatory
When no treaty applies, courts use letters rogatory. These are formal requests to foreign courts asking for assistance. The other country can choose whether to help. Letters rogatory are time-consuming and unreliable[3].
Walsh Act
For U.S. citizens and residents abroad, courts can use the Walsh Act[3]. This federal law allows subpoenas if the evidence is “necessary in the interest of justice.” But parties must show they can’t obtain it any other way.
Practical challenges
Beyond treaties and laws, subpoenaing foreign companies raises logistical issues:
- Language barriers
- Different data privacy rules
- Records inaccessible to U.S. attorneys
- Time zone differences obstructing depositions
Parties may need to hire local counsel abroad to bridge these gaps. The costs pile up quickly.
Objections foreign companies can raise
Foreign companies can challenge U.S. subpoenas on several grounds:
Overbreadth
They may argue the subpoena is overbroad or seeks irrelevant material. Courts balance relevance against burden[2]. They’ll quash or modify overbroad subpoenas.
Undue burden
Foreign companies can claim complying would be unduly expensive or time-consuming. But courts expect some burden with discovery. Companies must show it’s excessive.
Foreign law
If a subpoena violates another country’s law, companies can object. For example, European privacy laws often conflict with U.S. discovery rules. Courts then weigh national interests.
Privilege
Like U.S. companies, foreign companies can invoke privileges like attorney-client privilege or work product protection.
What if a foreign company ignores a subpoena?
If a foreign company ignores a subpoena, the court can hold it in contempt. But without jurisdiction abroad, enforcement is difficult. Fines or arrest warrants don’t cross borders. Instead, courts often impose preclusive sanctions. For example, banning that company from submitting related evidence or dismissing claims involving it[3].
Subpoena defense tips for foreign companies
If your foreign company is served with a U.S. subpoena, consider these steps:
- Hire a U.S. attorney to represent you
- Act fast – objections are time-sensitive
- Evaluate scope and burden of requests
- Consider negotiating with opposing counsel
- Research whether foreign laws prohibit compliance
- Gather key documents to support objections
- Prepare corporate witnesses for depositions
Navigating international subpoena disputes is complex. But with prompt action, foreign companies can protect their rights.
The bottom line
Federal courts have subpoena power over foreign companies. But treaties, foreign laws, and geographic barriers limit enforcement. Foreign companies served with U.S. subpoenas need experienced counsel to guide their response.