In Giorgi Global Holdings, Inc. v. Smulski, No. 17-4416 (E.D. Pa. May 21, 2020), Pennsylvania District Judge Jeffrey L. Schmehl ruled that the defendant, “an American citizen sued in the United States, bears the burden of showing that the GDPR and/or Polish privacy law bar production of…relevant documents” which “he cannot do”.  As a result, Judge Schmehl ruled that the “GDPR and/or Polish privacy law does not bar Smulski’s production of relevant documents in this matter.”

Case Background

In this case against the defendants alleging civil violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), breach of contract, violations of the Computer Fraud & Abuse Act and unjust enrichment, the plaintiffs requested via letter that defendant Wieslaw Smulski be ordered to produce documents in compliance with the Federal Rules of Civil Procedure without regard to Polish law and/or the EU General Data Protection Regulation (GDPR).  Defendant Smulski claimed that he couldn’t produce otherwise discoverable documents in the case because the GDPR and/or Polish privacy law prohibit him from doing so.

Both parties produced expert reports that address their respective positions as to whether the GDPR applies to forbid defendant Smulski’s production of documents.

Judge’s Ruling

Judge Schmehl began his discussion of the issue by stating: “Although Defendant Wieslaw Smulski resides in Poland, he is a US citizen and subject to the jurisdiction of this Court, having been sued by several American companies here in the Eastern District of Pennsylvania.”  He also considered the multi-factor balancing test set forth in the Restatement (Third) of Foreign Relations Law § 442(1)(c), as follows:

1) the importance of the documents or other information requested to the litigation; 2) the degree of specificity of the request; 3) whether the information originated in the United States; 4) the availability of alternative means of securing the information; and 5) the extent to which noncompliance would undermine important interests of the United States.

As for the first factor, Judge Schmehl stated: “In this action, Plaintiffs seek documents regarding Mr. Smulski’s alleged asset-stripping/money laundering scheme and Can-Pack’s outsourcing and have received no such documents from Smulski to date. I find that there is a substantial likelihood that the documents Plaintiffs seek from Smulski will be important to Plaintiffs’ case; accordingly, this factor weighs in favor of production.”

With regard to factor two, Judge Schmehl stated: “A thorough reading of Plaintiffs’ requests for production of documents shows that they are sufficiently specific. Further, Mr. Smulski agreed to produce relevant documents in response to this discovery before he claimed the GDPR prevented him from doing so. Therefore, this factor also weighs in favor of production.”

With regard to factor three, Judge Schmehl stated: “Although Mr. Smulski is a U.S. citizen, it appears most of the documents Plaintiffs are seeking originated in Poland or elsewhere outside of the United States. Therefore, this factor weighs against Smulski’s production of documents.”

With regard to factor four, Judge Schmehl stated: “In this matter, Plaintiffs have produced an expert report that opines that Mr. Smulski deleted information from his Can-Pack computer in 2013 and 2014 and directed other Can-Pack employees to do the same. Accordingly, it is apparent that Smulski has, at a minimum, emails and other documents that are no longer in the possession of Can-Pack. As such, there is no alternative means for Plaintiffs to obtain this information, and this factor weighs in favor of production.”

With regard to factor five, Judge Schmehl stated: “The interest of the United States in adjudicating this matter is substantial and requires production of relevant discovery. It is true that Poland has an interest in protecting the personal data of its citizens, but the parties in this matter entered into a Protective Order and ESI Protocol that will protect the personal data of any Polish third parties…Therefore, this factor also weighs in favor of production.”

With four of five factors weighing in favor of production, Judge Schmehl concluded in ruling against the defendant: “As stated above, Defendant Smulski, an American citizen sued in the United States, bears the burden of showing that the GDPR and/or Polish privacy law bar production of these relevant documents. This he cannot do. Consideration of the Restatement factors above leads to the conclusion that production of relevant discoverable documents is warranted in this case.”

So, what do you think?  Did the Court make the proper ruling or should European residents have more protection against discovery requests?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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