Amicus Curiae Brief — Rutgerswerke AG v. Bettis

MOTION FILED

NOV 21 1994

Gr)

No. 94-865

In the

Supreme Court of the United States

October Term, 1994

Riitgerswerke AG,

Petitioner,

V.

Kay Bettis, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

MOTION FOR LEAVE TO FILE BRIEF

AMICUS CURIAE AND BRIEF FOR THE FEDERAL

REPUBLIC OF GERMANY AS AMICUS CURIAE IN

SUPPORT OF PETITIONER

Peter Heidenberger

Counsel of Record

Thomas G. Corcoran, Jr.

BERLINER, CORCORAN & ROWE

1101 Seventeenth Street, NW

Suite 1004

Washington, D.C. 20036

(202) 293-5555

OF COUNSEL: Attorneys for the Federal

Bruno A. Ristau Republic of Germany

RISTAU & ABBELL

1101 30th Street, N.W.

Washington, D.C. 20007

November 21, 1994

CASILLAS PRESS, INC., 1717 K STREET, N.W., WASHINGTON, D.C. 20036

a ee rE oe

TABLE OF CONTENTS

Page

pe, Ee iii

MOTION FOR LEAVE TO FILE BRIEF

Pe I te hee cede ckcelvces 1

INTEREST OF THE AMICUS CURIAE..................

ee ee a eb ba-wle S04 euvivdeacade, 2

a ee 6

FRE SIINS n EAM SL gs a Le ie 8

I. Amicus Respectfully Urges The Court To

Reexamine The Maijority’s Holding In

Aerospatiale, Since Experience Now Teaches

That The Majority’s Guidelines Are Inade-

quate And As A Result The Lower Courts Do

Not Properly Balance The Interests Of The

Litigants And The Foreign Governments ......... 8

A. Aerospatiale Requires That In Making

Discovery Rulings Courts Consider The

Foreign State’s General Sovereign In-

terest, Which, In Germany’s Case, In-

cludes Reserving The Taking Of

Evidence To Judicial Authorities And

Showing Greater Respect For Confiden-

tiality Than Is The Case In The United

eee eee, kus évaws 8

B. Experience Teaches That Lower Federal

And State Courts Do Not Respect The

General Sovereign Interest Of Foreign

States And Improperly Place On The

Foreign Litigant The Burden Of Show-

ing That The Procedures Of The Con-

WONG TUDE TP WI. oo ccc ccce ccsescces )

Il. That the 1993 Amendments To The Federal

Rules Will Add To The Confrontation Between

The Civil And Common Law Systems Is

Another Reason To Favor Use Of The Con-

CO se bbc d area bweer dew ov cccas 16

III. Amicus Is Of The View That The Aerospatiale

Decision Does Not, In Any Event, Conform

With Accepted Principles Of Treaty Inter-

pretation, And That The Court’s Decision

RT PO oe ee eee 17

COPA AAMUEN ce ctccessdusresthvedbidaebiveberseteens 20

SEVER 6 0c siscedsnatassaseveekearaaduetabetes teens la

Exhibit A — Letter Requesting Consent To Ffile

RE Pee Pee Pe? 2 ae la

Exhibit B — Letter Refusing Consent To File

PO Sirsa Pai ee bees ONO e TNF eccenven 2a

TABLE OF AUTHORITIES

Cases: Page

38 BVerfGE [Decisions of the German Federal

Constitutional Court] 105 (1975)................... 10, 16

Benton Graphics v. Uddeholm Corp.,

ee Re Bl 13, 15

Doster v. Carl Schenk A.G.,

oe PS RF, 88 Fe | 11, 15

Erbach Fin. Corp. v. Royal Bank of Canada,

605 N.Y.S. 2d 52 (N.Y. App. Div. 1993)........... 14, 15

Haynes v. Kleinwefers & Lembo Corp.,

pp RE Ae eo 10, 15

Hudson v. Pfauter,

Bae eee MI ROOD nic cc ccs ceccdocvevces< 12

In re Asbestos Litigation,

623 A.2d 546 (Del. Super. 1992)................... 14, 15

In re Bedford Computer Corp.,

ee Ee es 13, 15

In re Perrier Bottled Water Litigation,

136 F.A.D. 306 @. Comm. 1901) ...............06: 14, 15

Knight v. Ford Motor Co.,

615 A.2d 297 (N.J. Super. 1992)................... 12, 15

Moake v. Source Intl. Corp., 11

634 A.2d 263 (N.J. Super. App. Div. 1993)............. 11

Rich v. Kis California, Inc.,

igh P.E.D. 200 GOD.N.C. 1968) ........... 25000: 13, 15

iv

Page

Sandsend Financial Con. v. Wood,

(co eS Ae & ae) a | ee 13

Scarminach v. Goldwell GmbH,

531 N.Y.S. 24 186 Gup. Ct. N.Y. 1968)............ 10, 15

Societe Nationale Industrielle Aerospatiale v.

United States District Court,

ie FB PE TTT PCT TOr TT Cree TS passim

The Schooner Exchange v. McFadden,

2S Oe Ee a ae Ce ab ca ahd oo va dened cones 19

Statutes/Rules:

Federal Rules of Civil Procedure, Rule 26(a)(1)............ 16

Rules of the Supreme Court, Rule 37.2................... 1

Miscellaneous:

Circular Diplomatic Note of the U.S. Department of

ee nS AE, o's 1 b:0s E5404 6 ase ee cee 2

Hague Convention on the Taking of Evidence Abroad

in Civil or Commercial Matters, opened for

signature March 18, 1970, 23 U.S.T. 2555,

Fe ee Sala a Fi ie vib ee ve passim

Heck: Federal Republic of Germany and the EEC,

Fe gt? Oe. SUL OL er Tee eee 9

Message of the President of the United States

Transmitting the Convention on the Taking of

Evidence Abroad in Civil or Commercial Matters,

S. Exec. A, 92d Cong., 2d Sess. at 11 (1972)........... 17

In the

Supreme Court of the United States

October Term, 1994

No. 94-865

Riitgerswerke AG,

Petitioner,

v.

Kay Bettis, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

MOTION FOR LEAVE TO FILE BRIEF

AMICUS CURIAE AND BRIEF FOR THE FEDERAL

REPUBLIC OF GERMANY AS AMICUS CURIAE IN

SUPPORT OF PETITIONER

MOTION FOR LEAVE TO FILE BRIEF

AMICUS CURIAE

The Federal Republic of Germany (‘‘Federal Republic’’)

hereby moves for leave to file a brief as amicus curiae in sup-

port of petitioner Riitgerswerke AG pursuant to Sup. Ct. R.

37.2. The consent of the petitioner has been filed with the

Clerk of this Court. Respondents Kay Bettis, et al., have refus-

ed their consent to the filing of this amicus cunae brief. At-

tached as Exhibit A are the Federal Republic’s letter to

respondents and respondents’ response declining its ‘‘invita-

tion to consent”’ to the filing of this brief.

2

In 1978 this Court directed the Clerk of this Court to re-

quest the U.S. Department of State to inform foreign govern-

ments to make their views known to the Court in any case

in which they have an interest by filing amicus briefs. In a cir-

cular diplomatic note dated August 17, 1978, the U.S. Depart-

ment of State advised all Chiefs of Mission in Washington that

The United States will consent to such a[n amicus]

filing in any case in which it is a party. Jn the unltke-

ly event that any other party should decline consent,

the Supreme Court will almost certainly grant the mo-

tion of a foreign government for leave to file a bref.

(emphasis added).’

Respondents’ refusal to consent to the Federal Republic’s

presentation of its views to the Court lacks any justification.

The Federal Republic respectfully requests permission to file

this brief so that the Court may have the benefit of the Federal

Republic’s views on the interpretation of this important

multilateral treaty dealing with international judicial assistance

to which the Federal Republic and the United States of America

are parties. The Federal Republic believes that it is in a strong

position to comment on the issues tendered to the Court in

the petition.

INTEREST OF THE AMICUS CURIAE

The Federal Republic is a member of the Hague Conference

on Private International Law and actively participated in the

negotiation of the Hague Convention on the Taking of Evidence

Abroad in Civil or Commercial Matters, opened for signature

March 18, 1970, 23 U.S.T. 2555, T.I.A.S. No. 7444 (the

‘Evidence Convention’’ or ‘‘Convention’’). The Federal

Republic ratified the Convention on April 27, 1979, and the

Convention is now in force between the Federal Republic and

24 states, including the United States of America. The

signatories agreed in this Convention on the methods to be

'Repnnted in 73 Am. J. Int’] L. 124 (1979).

3

used in complying with requests for legal assistance to take

evidence abroad recognizing the differences between the legal

systems of the common law and civil law nations. The Federal

Republic has a vital interest in the implementation of the Con-

vention by other member states. It views with grave concern

the manner in which the obligations undertaken by the United

States under the Convention have been misinterpreted by the

courts of the United States as a result of this Court’s majori-

ty decision in Soctete Nationale Industrielle Aerospatiale v.

United States District Court, 482 U.S. 522 (1987) (hereinafter

‘‘Aerospatiale’’).

This Court alone has the authority and competence to foster

the noble experiment embodied in the Evidence Convention.

In a world where the flow of capital, goods and services

transcends national borders and transnational litigtion has

become commonplace, the states following the common law

must find means to bridge the differences between their legal

institutions and the civil tradition.

STATEMENT OF FACTS

Invoking the district court’s federal question and diversity

jurisdiction, the respondents brought a class action suit against

petitioner’s wholly-owned subsidiary, Ruetgers-Nease Chem-

ical Co., Inc. (‘‘Ruetgers-Nease’’) and one of Ruetgers-

Nease’s predecessor companies, Nease Chemical Co., Inc.

(‘‘Nease’’). The original complaint sought compensation for

environmental damage claimed to have been caused to

respondents’ properties abutting a plant site now owned by

Ruetgers-Nease in Salem, Ohio. Plaintiffs subsequently add-

ed petitioner, as Ruetgers-Nease’s corporate parent, as a

defendant, and in their second amended and supplemental com-

plaint respondents asserted claims against petitioner for $100

million dollars on respondeat superior and alter ego theories.

Petitioner, Riitgerswerke AG, is a German corporation with

its principal place of business in Germany and did not own the

plant site that caused the alleged environmental damage at the

4

time. Petitioner acquired the properties of Nease and incor-

porated its subsidiary Ruetgers-Nease long after the plant

causing the claimed environmental damage was closed.

Shortly after petitioner was joined to the action, respondents

served on the petitioner their first discovery reque:is: 35 in-

terrogatories, 43 document requests and a notice to depose

a retired member of petitioner’s board who resided in Ger-

many. The discovery was stayed by the designated Magistrate

Judge pending a ruling by the district court on petitioner’s

challenge to the court’s personal jurisdiction over it.? In January

1992, while the stay was in effect, respondents served on peti-

tioner a revised document request, almost trebling the number

of categories of documents demanded (to 117). Some four

months later, respondents served a third version of their docu-

ment request, increasing the number of documents sought to

134 and a revised set of interrogatories numbering 49.

On three occasions petitioner sought protective orders from

the Magistrate Judge supervising the discovery, and asked that

respondents be required to employ the machinery of the

Evidence Convention to obtain the information from Germany.

The Magistrate Judge declined to enter such an order and

directed that discovery proceed under the Federal Rules,

stating that the question of the reasonableness of particular

discovery requests would be addressed ‘‘if and/or when a mo-

tion to compel came for ruling the parameters [sic] of the

discovery to be allowed.’’ (Magistrate Judge’s Memorandum

Opinion and Order, May 6, 1994, Pet. App. at B-1). With on-

ly a passing reference to the Evidence Convention and the

three-prong balancing test established by the Aerospatiale

Court, the Magistrate Judge ruled that ‘‘the Federal Rules

of Civil Procedure provide the preferable mode of discovery

?The district court subsequently denied petitioner’s motion to dismiss

the suit against it for lack of personal jurisdiction, but noted that plaintiffs

had made out only a prima facie case for jurisdiction and will bear thé burden

of proof on this issue at trial.

5

herein,’’ based on ‘‘the nature of the claim asserted .. . and

the nature of the evidence which the [respondents] must ad-

duce to establish their claim.’’ (Jd. at B-2).

The district court denied petitioner’s appeal from the

Magistrate Judge’s Order.

The Defendant correctly asserted that the

Magistrate Judge did not use all the Societe criteria.

However, modification of the Magistrate Judge’s

order is not necessary as long as it is not clearly er-

roneous or contrary to law.

Pet. App. at B-6.

Petitioner’s application to the court below for a writ of man-

damus was denied. The Court of Appeals ruled in relevant

part —

In the instant case, the law is clear that the terms

of the Hague Convention on the Taking of Evidence

are optional. [citing Aerospatiale.] The Supreme

Court has not articulated specific guidelines for the

application of the Hague Convention, but has in-

dicated that the trial court must determine in each

case based on the factors present in that case

whether discovery against a foreign party shall pro-

ceed under the Hague Convention or the federal civil

rules . . . The district court has made that deter-

mination in the instant case, and Riitgerswerke’s

petition does not establish a clear and indisputable

right to relief in mandamus as a result of the district

court’s decision.

Pet. App. at A-2.

6

SUMMARY OF ARGUMENT

I.

In the view of the Federal Republic, the guidelines establish-

ed by Aerospatiale have not had the intended effect of requir-

ing the lower courts to balance the various interests and should

be reexamined by the Court. The majority of this Court ruled

in Aerospatiale that the Evidence Convention does not pro-

vide the exclusive or mandatory procedures for obtaining

evidence physically located in the territory of other member

states. It further held that international comity does not re-

quire that U.S. courts first resort to the Convention’s pro-

cedures before allowing discovery under the Federal Rules.

The majority, however, set out specific guidelines to be follow-

ed by lower courts in determining whether to resort to the

Convention: to scrutinize the particular facts in each case, the

sovereign interests of the state in whose territory the evidence

is to be gathered, and the likelihood that such resort will prove

effective. The Federal Republic’s sovereign interest includes

its interest in judicial sovereignty and the sphere of privacy

guaranteed by its Constitution and domestic laws.

The practical results of the majority’s decision can now be

discerned through an analysis of the cases that have applied

the Court’s approach. To amicus’ knowledge, of the fourteen

cases that have been reported to date, only three have shown

regard for the sovereign’s interests in foreign court-ordered

discovery on its own soil; the remaining cases have uniformly

demonstrated hostility toward the Convention.? Those cases

fail properly to address the issue of the foreign state’s

sovereign interest and improperly avoid use of the Conven-

tion by placing the burden of proof on the proponent of the

Convention procedures. The instant case follows this improper

practice and should be reversed.

3The cases are summarized, infra, at pp. 10 et seq.

7

For these reasons, Aerospatiale should be reconsidered and

its guidelines clarified to assure that a foreign state’s sovereign

interests are addressed and given appropriate weight, and that

the burden of proof not be placed on the proponent of the use

of the Convention.

II.

The 1993 Amendments to the Federal Rules add the re-

quirement that discovery be provided without demand. These

amendments can be adopted in full or in part by the district

courts. Forum-shopping to the deteriment of foreign litigants

will result. For this additional reason, the procedures of the

Convention should be preferred.

II.

The Federal Republic subscribes to the original intent of the

Convention, which was to devise a system that was both

‘tolerable’ in the State of execution and ‘‘utilizable’’ in the

forum where the action was pending. The Federal Republic

cannot view the matter as tolerable when a U.S. court com-

pels a party to give evidence within its territory that violates

its laws. The theory proffered to justify this practice, that

judicial jurisdiction over evidence is determined not by loca-

tion of the evidence but by personal jurisdiction over a party

with control over the evidence, does not comport with the

Convention. In any event, absent resort to the Convention,

the United States lacks the consent of the Federal Republic

to compel activities within its borders.

8

ARGUMENT

I. AMICUS RESPECTFULLY URGES THE COURT

TO REEXAMINE THE MAJORITY’S HOLDING

IN AEROSPATIALE, SINCE EXPERIENCE

NOW TEACHES THAT THE MAJORITY’S

GUIDELINES ARE INADEQUATE AND AS

A RESULT THE LOWER COURTS DO NOT

PROPERLY BALANCE THE INTERESTS OF

THE LITIGANTS AND THE FOREIGN

GOVERNMENTS.

A. Aerospatiale Requires That In Making Discovery

Rulings Courts Consider The Foreign State’s

General Sovereign Interest, Which, In Ger-

many’s Case, Includes Reserving The Taking

Of Evidence To Judicial Authorities And Show-

ing Greater Respect For Confidentiality Than

Is The Case In The United States

The Aerospatiale Court’s instructions to lower courts bear

repeating:

American courts, in supervising pretrial proceedings,

should exercise special vigilance to protect foreign

litigants from the danger that unnecessary, or un-

duly burdensome, discovery may place them in a

disadvantageous position. Judicial supervision of

discovery should always seek to minimize its costs

and inconvenience and to prevent improper uses of

discovery requests. In addition, we have long

recognized the demands of comity in suits involving

foreign states, either as parties or as sovereigns with

a coordinate interest in the litigation. See Hilton v.

Guyot, 159 U.S. 113 (1895). American courts should

therefore take care to demonstrate due respect for

any special problem confronted by the foreign litigant

on account of its nationality or the location of its

operations, and for any sovereign interest express-

ed by a foreign state.

482 U.S. at 546.

While the Aerospatiale Court rejected the argument that

comity required first use of the Convention, the Court never-

theless stated:

Moreover, the concept of international comity re-

quires in this context a more particularized analysis

of the respective interests of the foreign nation and

the requesting nation than petitioners’ proposed

general rule would generate. We therefore decline

to hold as a blanket matter that comity requires

resort to Hague Evidence Convention procedures

without prior scrutiny in each case of the particular

facts, sovereign interests, and likelihood that resort

to those procedures will prove effective.

482 U.S. at 543-544, footnotes omitted.

The Federal Republic understands these instructions to

mean that the courts must consider a foreign state’s general

sovereign interest, that is, its interest in protecting its judicial

sovereignty and preserving the societal values embodied in

its laws, and not just the interests of the parties to a particular

litigation. The protection provided by the laws of the Federal

Republic to personal privacy and business confidentiality is

evidenced by the deeply rooted practice of reserving the tak-

ing of all evidence to judicial authorities. Three particular

aspects of German procedure ensure that the judge, in exer-

cising this authority, will not intrude on the constitutionally

protected interests of the parties. First, German courts will

not permit the taking of evidence that is not designed to

‘‘prov[e] plausible facts, but is rather designed to produce such

facts.’"* Second, among the Constitutional and statutory

privileges recognized by German law is the right to decline

to testify about business secrets, professional confidences,

‘Heck, Federal Republic of Germany and the EEC. 18 Int'l Law. 793,

794 n. 25 (1984).

10

and matters that might implicate the rights of strangers to the

proceedings. Third, German law narrowly circumscribes the

occasions when a German court will compel the disclosure of

documents. The ultimate source of the limits imposed on the

scope of evidence taking is the German Constitutional princi-

ple of proportionality which mandates that ‘‘’the witness’

sphere of privacy and other personal rights guaranteed under

Art. 2, para. 1 together with Art. 1, para. 1 of the Basic Law

[the Federal Constitution] may not be abridged by procedural

law and its application by parties to a proceeding.’ 38 BVerfGE

[Decisions of the Federal Constitutional Court] 105, 114

(1975).

B. Experience Teaches That Lower Federal And

State Courts Do Not Respect The General

Sovereign Interest of Foreign States And Im-

properly Place On The Foreign Litigant The

Burden Of Showing That The Procedures Of

The Convention Should Be Used.

Most of the reported post-Aerospatiale cases involving Ger-

man defendants have given little or no weight to the Federal

Republic’s general sovereign interests. Thus, in Haynes v.

Kleinwefers & Lembo Corp.,5 the district court made no men-

tion of the Federal Republic’s sovereign concerns.® In Scar-

minach v. Goldwell GmbH,’ a New York State court demanded

that the German manufacturer show how a ‘‘specific’’

sovereign interest of the Federal Republic was implicated.®

5119 F.R.D. 335 (E.D.N.Y. 1988)

6The court in Kletnwefers, supra, found that the interrogatories and pro-

duction requests were not burdensome and denied Kleinwefers’ motions

that discovery be conducted under the Convention. Kleinwefers, supra,

at 338-339.

7531 N.Y.S. 2d 188 (Sup. Ct. N.Y. 1988).

8The court concluded that the Convention did not preclude use of New

York’s discovery provisions. The court imposed on the German manufac-

turer, Goldwell, the burden of proof to show that resort to Convention

11

And in Doster v. Carl Schenk A.G.,9 another district court re-

quired the German manufacturer to show how the ‘‘specific’’

discovery compromised German sovereign interests.!° A New

Jersey state court in Moake v. Source Intl. Corp.,'' found no

evidence in the record that the discovery requests would

‘“generally’’ violate German sovereignty or that the Conven-

tion procedures would be a ‘‘more effective’ means of ob-

taining the information. !2

We wish to point out to the Court that requests for

assistance to the United States from Germany outnumber re-

quests from the United States to Germany by a factor of almost

eight to one. See n. 28, infra. However, to our knowledge,

there is no reported case where a German court has ordered

a litigant to disregard U.S. judicial sovereignty or required

a U.S. entity doing business in Germany to violate U.S. law

by ordering that evidence be taken in accordance with the Ger-

man law of procedure.

procedures should be required. According to the court, Goldwell had failed

to show how the discovery sought by plaintiff implicated a specific sovereign

interest of West Germany. Jd. at 190-191.

9141 F.R.D. 50 (M.D.N.C. 1991).

‘0The district court held in Schenk, supra, that the proponent of the Con-

vention was in the better position to have the knowledge of any special

sovereign interest and the benefits versus the problems of foreign

discovery procedures. Without a showing of such interests or benefits,

there was no reason why a U.S. court should compel a plaintiff to use

the less liberal discovery procedures of a foreign country, thereby creating

an unequal situation without good cause. Jd., at 51, n. 3.

1634 A.2d 263 (N.J.Super.App.Div. 1993).

2Moake, supra, at 461. The court reasoned (1) that it would create an

inequitable asymmetry if the domestic party was required to answer in-

terrogatories under local rules while a foreign party from a Convention

state could take advantage of the more onerous provisions of the Con-

vention, (2) that Aerospatiale did not interpret comity to subordinate the

interests of American courts to a foreign nation whenever a discovery con-

flict arose, and (3) that the record contained no proof that the discovery

generally would violate the sovereignty of the Federal Republic or that

the Convention procedures would be more effective. Moake, supra, at

457-460.

12

In contrast, only two reported cases involving German

defendants have required first use of the Convention. Both

of these cases favored the Aerospatiale minority opinion over

the majority opinion. The first case was Hudson v. Pfauter,'4

where a district court granted the German company’s motion

for a protective order and required the American plaintiffs to

utilize Convention procedures to obtain answers to inter-

rogatories. The court reasoned that the major obstacle to the

use of the Convention was unfamiliarity with its procedures

and noted that discovery under the Federal Rules was often

wasteful. !4

In the second case, Knight v. Ford Motor Co.,° a New

Jersey state court granted a motion to add Siemens AG, a Ger-

man corporation, as a defendant and ordered that discovery

against Siemens proceed first under the Convention. The court

took note that following the Aerospatiale Court’s decision a

Special Commission of the Hague Conference had supported

giving the Convention priority over other procedures when

evidence located abroad was sought. The Commission also

acknowledged that a number of member states had limited their

reservations with respect to the discovery of documents. '®

Emphasizing comity and the ‘‘special difficulties that may arise

for foreign litigants in providing discovery under our U.S.

domestic procedures,’’ the court required use of Convention

procedures until such time as the proponent of discovery could

show that reasonable requests under the Convention were not

being met with adequate response in a timely manner. In the

Federal Republic’s view, this is a minimum that Aerospatiale

requires.

Cases involving German defendants have constituted a

plurality (six out of 14) of the cases weighing the sovereign

13117 F.R.D. 33 (N.D.N.Y. 1987).

4]d., at 34, 38.

15615 A.2d 297 (N.J. Super. 1992).

'6Kmight, at 301 and n. 5.

13

interest in discovery disputes following Aerospatiale. It is fair

to say that the sovereign interests of other states have re-

ceived similar short shrift. See Benton Graphics v. Uddeholm

Corp.'” (no showing how a ‘‘specific’’ sovereign interest of

Sweden was implicated); Sandsend Financial Con.v. Wood'®

(expressing ‘‘feeling’’ that discovery under Convention in

Great Britain’s Channel Island might be inadequate); Rich v.

Kts California, Inc.'* (French blocking statute imposing crim-

inal sanctions entitled to little deference); In re Bedford Com-

puter Corp.” (only effect of Convention’s use in Israel was

'7118 F.R.D. 386 (D.N.J. 1987). An American company charged that

a Swedish specialty steel manufacturer had fraudulently substituted an in-

ferior grade of steel for the steel contractually specified. The court inter-

preted Aerospatiale to place the burden of establishing which discovery

procedure to utilize on the party advocating use of the Convention. Ud-

deholm, supra, at 389. Uddeholm’s proffer as to Sweden’s sovereign in-

terest did not explain how any of the ‘‘specific’’ discovery sought by Benton

inplicated any ‘‘specific’’ sovereign interest of Sweden. The court granted

Benton’s motion compelling responses to interrogatories and document

requests pursuant to the Federal Rules. Jd., at 389-392.

18734 S.W. 2d 364 (Tex. App. 1988). The Texas appellate court denied

a writ of mandamus seeking to require use of the Convention to obtain

discovery in the Channel Islands of the United Kingdom. The trial court

had explained its decision not to use the Convention as follows:

I read the Supreme Court opinion with care, and there are ob-

viously reasons the Court can feel that discovery needs to be

expeditious, I need to go forward and that there might not be vi-

able discovery from other procedures. That’s exactly how I feel.

Id., at 366.

9121 F.R.D. 254 (M.D.N.C. 1988). The issue in Rich was whether a

French corporation would be required to answer ten interrogatories relating

to personal jurisdiction. The court cited Aerospatiale, “96 L.Ed.2d at 486,”’

for the proposition that the proponent of using the Convention’s procedures

bears the burden of demonstrating the ‘‘necessity’’ for using those pro-

cedures, Rich, at 257.

20114 Bankr. 2 (Bkr.C.D.N.H.1990). There, an Israeli government in-

strumentality challenged the court’s personal jurisdiction over it. The court

cited Rich and adopted its reasoning. It substantially limited the requested

discovery, found that the Israeli instrumentality had not shown that use of

the Convention procedures would be “more effective’ and that the only

effect of using the Convention would be to delay the proceedings, and

ordered that Federal Rules discovery be used. Jd., at 5-6.

14

delay); In re Asbestos Litigation?’ (Finnish affront at violation

of its judicial sovereignty entitle to little weight because

discovery under Federal rules more efficient); Erbach Corp.

v. Royal Bank of Canada?2 (French blocking statute does not

demonstrate a significant sovereign interest).

In re Perner Bottled Water Litigation,?3 is the only non-

German case known to us where use of the Convention pro-

cedures was ordered. The court found that France’s prohibi-

tion of foreign discovery on French soil without resort to the

Convention signified a strong sovereign interest in the use of

the Convention’s procedures and that there was no evidence

in the record showing that Convention procedures would be

ineffective. The court concluded that, should the procedures

of the Convention prove unavailing, it would consider modify-

ing its order.24 — Again, the Federal Republic considers this

aS a minimum requirement of the Convention.

In the Federal Republic’s view, the primary error that leads

to the results in these cases is the lower courts’ placing the

burden of proof to show the sovereign interest on the propo-

71623 A.2d 546 (Del. Super.1992). That case involved review of an

Asbestos Master’s discovery ruling. Partek, a Finnish corporation, objected

to an order to produce documents under the Federal Rules rather than under

the Convention on the grounds that the Master had addressed only one

of the three factors required by Aerospatiale to be considered based on a

general statement of Finland’s sovereign interest submitted by a former

Finnish judge. The court ruled that Aerospatiale’s three factors constituted

neither ‘‘minimal requirements’’ nor ‘‘the entire universe of relevant con-

siderations,’’ Asbestos, at 549-550, and affirmed the Master’s decision as

not clearly erroneous.

22605 N.Y.S.2d 52 (N.Y.App.Div. 1993). The appellate court, in a three

paragraph opinion, affirmed the trial court’s order that Banque Paribas pro-

duce documents located in France on the grounds that the French blocking

statute had not “‘proved”’ to be a significant sovereign interest, citing Rich,

n. 18 supra, and that resort to the Convention would frustrate prompt

disposition of the matter made necessary by plaintiff's advanced age.

23138 F.R.D. 248 (D. Conn. 1991).

*41d., at 354-354.

15

nent of the use of the Convention. E.g., Uddeholm Corp.,

supra; Haynes v. Kleinwefers, supra; Scarminach v. Goldwell

GmbH, supra; In re Bedford Computer Corp., supra; In re Per-

ner Bottled Water Litigation, supra; Doster v. Carl Schenk A.G.,

supra; In re Asbestos Litigation, supra; and Erbach Fin. Corp.

v. Royal Bank of Canada, supra. Indeed in Rich v. Kis Califor-

nia, Inc., supra, the court demanded that the proponent of the

Convention show the ““necessity’’ for its use.25 Contra, Knight

v. Ford Motor Co., (rejecting the ‘‘rigorous’’ requirements of

Uddeholm).?6

This approach finds no support in the Convention, and not

even in the majority’s decision in Aerospatiale. The Court there

required a balancing of factors, including the general sovereign

interest, without any mention of the burden of proof. It may

be reasonable to require the proponent to show how a par-

ticular discovery request implicates a sovereign interest of a

foreign state, but the general sovereign interest should be a

matter of judicial notice based on Aerospatiale’ s teaching and

the principle of international comity.2” There should be no re-

quirement that the foreign state intervene in each case and par-

ticularize its sovereign interests. For these reasons, we

respectfully submit that Aerospatiale should be reconsidered

and that lower courts be instructed that the general sovereign

interest be specifically addressed and given great weight when

a court is ruling on requests for discovery to be taken in a State

that is a party to the Convention, and, in addition, that the

burden of proof that the Convention be used not be placed on

the foreign litigant.

The lower courts’ decision in the instant case illustrates the

advisability of reconsidering the Aerospatiale guidelines. Extraor-

dinarily intrusive discovery designed to probe petitioner’s

25615 A.2d, at 258.

6/d., at 257.

*"See the concurring and dissenting opinion of Blackmun, J., in

Aerospatiale, 482 U.S. at 547.

16

decision-making process in Germany was authorized to be taken

in Germany without judicial intervention. No reference was

made in any of the courts’ rulings to Germany’s general in-

terest in judicial sovereignty or the ‘‘sphere of privacy or per-

sonal right’’ (38 BVerfGE, supra) that is guaranteed by the

German Constitution. Rather, the burden of showing that the

procedures of the Convention be used was placed on the peti-

tioner. Germany respectfully submits that the result was in-

consistent with the teachings of Aerospatiale, and a fortiori’, with

the Convention.

II. THAT THE 1993 AMENDMENTS TO THE

FEDERAL RULES WILL ADD TO THE

CONFRONTATION BETWEEN THE CIVIL

AND COMMON LAW SYSTEMS IS ANOTHER

REASON TO FAVOR USE OF THE

CONVENTION’S PROCEDURES.

The Court should also note that the 1993 Amendments to

the Federal Rules of Civil Procedure are bound to have a

substantial impact on discovery against foreign parties. The

obligation imposed by new Rule 26(a)(1), Fed.R.Civ.P., to

disclose to the opposing party, without even awaiting a request

for discovery, the names of witnesses and to provide copies of

documents relevant to disputed facts, may prove yet another

affront to the civil law tradition. In civil law countries, a party

is required to disclose the evidentiary materials on which it in-

tends to rely only to the court, not to the opposing party, and

certainly not without a request.

The 1993 Rule amendments give to the district courts the

option to adopt these new amendments in full or in part, or

to reject them. Notes of Advisory Committee on Rules, 1993

Amendment to Rule 26, subdivision (a), paragraph (1). As

observed by one German commentator, courts in the United

States will now differ not only with respect to how and when

to apply the Aerospatiale guidelines, but also as to whether they

should follow the 1993 amendments. This, it is feared, will result

17

in chaotic forum-shopping to the detriment of foreign litigants.

Reimann, Beyond Fishing-Weitreichende Neuerungen im

amenkanischen Discovery-Verfahren [Extensive Innovations in

American Discovery Proceedings], IPRax 1994, No. 2, at 155.

III. AMICUS IS OF THE VIEW THAT THE AERO-

SPATIALE DECISION DOES NOT, IN ANY

EVENT, CONFORM TO ACCEPTED PRIN-

CIPLES OF TREATY INTERPRETATION, AND

THAT THE COURT’S DECISION SHOULD BE

OVERRULED

The Federal Republic subscribes to the original intent of the

negotiators of the Convention — an intent shared by the United

States negotiators — that ‘‘[a]ny system of obtaining evidence

or securing the performance of other judicial acts internationally

must be ‘tolerable’ in the State of execution and must also be

‘utilizable’ in the forum of the State of origin where the action

is pending.’’ Message of the President of the United States

Transmitting the Convention on the Taking of Evidence Abroad

in Civil or Commercial Matters, S. Exec. A, 92d Cong., 2d

Sess. at 11 (1972). If evidence is requested through the pro-

cedures agreed upon in the Convention, the procedure is

“‘tolerable’’ in the Federal Republic because the evidence will

be collected under the auspices of German courts, as mandated

by the Federal Republic’s domestic legal order. Consequent-

ly, where evidence is to be gathered or obtained in the ter-

ritory of the Federal Republic, the Convention’s use will benefit

U.S. interests by providing the needed evidence, and will pro-

tect the Federal Republic’s interests by avoiding intrusions upon

its sovereignty. In this regard, the Federal Republic affirms

its intent to construe the provisions of the Convention liberal-

ly in providing judicial assistance to the United States and the

other member states of the Convention.?8

During the eight-year period from 1986-1993, 1,368 requests for judicial

assistance were sent from Germany to the United States; during the same

period, United States courts and litigants transmitted 184 requests to the

Federal Republic. (Statistical data supplied by the Federal Ministry of

Justice.)

18

One of the principal purposes of the Evidence Convention

was to provide a bridge between national legal systems that

would permit the production of needed evidence while eliminat-

ing intrusions of sovereignty and avoiding intergovernmental

conflicts. A violation of the sovereignty of the Federal Republic

occurs when a U.S. court compels a party, on pain of poten-

tially severe sanctions, to take actions within the territory of

the Federal Republic that violate its sovereignty and other pro-

visions of its Constitution and its laws.

The Federal Republic cannot subscribe to the view that when

a party is ordered to produce evidence from abroad, the

discovery takes place only in the United States and not in the

state where the evidence is located. The theory that judicial

jurisdiction over evidence is determined nct by the location of

the evidence, but by the existence of personal jurisdiction over

the party having control over the evidence, is inconsistent with

the established German legal order and accepted principles of

international law.

It can hardly be disputed that when evidence is sought from

the territory of a foreign state for use in a United States court,

activities within the foreign state will be required to prepare

the evidence for transmission. That is the chief reason that the

Convention was negotiated. Documents may need to be sear-

ched for, reviewed and photocopied, persons interviewed, and

written responses prepared, all within the state where the

evidence is sought. The view that the Federal Republic has

no interest in activities within its borders preparatory to pro-

duction of evidence in the United States is irreconcilable with

the principle of territorial jurisdiction. As this Court so aptly

stated early in its history that —

The jurisdiction of the nation within its own territory

ts necessarily exclusive and absolute. It is susceptible

of no limitation not imposed by itself. Any restrictions

upon it, deriving validity from an external source,

would imply a diminution of its sovereignty to the ex-

19

tent of the restriction, and an investment of that

sovereignty to the same extent in that power which

could impose such restrictions. All exceptions,

therefore, to the full and complete power of a na-

tion within its own territories, must be traced up to

the consent of the nation itself.

The Schooner Exchange v. McFadden, 11 U.S. (7 Cranch) 116,

136 (1812), emphasis added. Absent resort to the Conven-

tion, the Federal Republic considers that the United States

lacks ‘‘the consent of the [Federal Republic] itself’’ to com-

pel activities within its borders.

The majority opinion in Aerospatiale has effectively abrogated

the duties of the United States not only to the Federal

Republic, but to all countries that are members of the Con-

vention. The Federal Republic is of the view that under the

fundamental rule of pacta sunt servanda, the United States,

including its courts, is required to employ the procedures

agreed upon in the Convention. To do otherwise is to breach

the obligations of the United States as a nation, and risk en-

dangering the viability of the Convention as a whole.

20

CONCLUSION

The failure by the courts below to order the use of the Con-

vention procedures in obtaining evidence located in the Federal

Republic is inconsistent with the obligations assumed by the

United States when it ratified the Convention. Accordingly,

the Federal Republic urges the Court to grant the instant peti-

tion for certiorari and to reexamine the majority’s decision in

Aerospatiale in light of the accumulated evidence that the vast

majority of U.S. courts, in reliance on that decision, avoid

resorting to the salutary provisions of the Evidence

Convention.

Respectfully submitted,

Peter Heidenberger

Counsel of Record

Thomas G. Corcoran, Jr.

BERLINER, CORCORAN &

ROWE

Attorneys for the Federal

Republic of Germany

OF COUNSEL:

Bruno A; Ristau

RISTAU & ABBELL

November 21, 1994

la

APPENDIX A

LAW OFFICES

BERLINER, CORCORAN & ROWE

1101 SEVENTEENTH STREET, N.W.

SUITE 1004 “

WASHINGTON, D.C. 20036-4798

(202) 293-5555

October 3, 1994

Dennis E. Murray, Sr., Esquire

Murray & Murray

300 Central Avenue

Sandusky, Ohio 44871-0019

Re: In re Rutgersweke AG, Petition for Certiorari in

the Supreme Court

Dear Mr. Murray:

We represent the Federal Republic of Germany which has

requested that we file an amicus brief supporting the position

of Rutgerswerke AG in its petition for certiorari to the

Supreme Court. Pursuant to Supreme Court Rule 37, we ask

your consent to the filing of such an amicus brief.

Sincerely

s/s Peter Heidenberger

Peter Heidenberger

2a

MURRAY & MURRAY

A LEGAL PROFESSIONAL ASSOCIATION

ATTORNEYS AT LAW

111 EAST SHORELINE DRIVE

SANDUSKY, OHIO 44871-0019

(410) 624-3000

October 10, 1994

Peter Heidenberger, Esq.

BERLINER, CORCORAN & ROWE

1101 Seventeenth Street, N.W.

Suite 1004

Washington, D.C. 20036-4798

Re: Rutgerswerke AG, Petition for Certiorari in the

Supreme Court

Dear Mr. Heidenberger:

Our clients decline your invitation to consent to the filing

of an amicus brief by the Federal Republic of Germany on

behalf of Rutgerswerke AG in connection with Rutgerswerke’s

petition for certiorari to the Supreme Court.

Pursuant to Supreme Court Rule 37.2, consent is refused.

If you advise us in writing that your client would like us to

articulate the reasons supporting this position, we would be

pleased to provide those grounds for your client’s considera-

tion and, perhaps, benefit. Please direct all future cor-

respondence to our new address at 111 East Shoreline Drive.

Very truly yours,

MURRAY & MURRAY CO., L.P.A.

s/s

KJDB:mrf By: Kirk J. Belli Bovi