In Skillz Platform Inc. v. Papaya Gaming, Ltd., No. 24cv1646 (DLC) (S.D.N.Y. Oct. 11, 2024), New York District Judge Denise Cote overruled Defendant’s objection to producing discoverable materials outside of the Hague Convention, stating: “Federal courts may, but are not required, to resort to the Hague Convention for conducting foreign discovery.”

Case Discussion and Judge’s Ruling

In this case involving claims of false advertising and deceptive practices against an Israeli corporation over “bots” to simulate human players in a gaming platform, a dispute arose over whether Plaintiff must adhere to the Hague Convention to obtain discovery from Defendant.

In response to the vast majority of Plaintiff’s requests, Defendant lodged objections and did not agree to search for or produce information. In its general responses and objections, Defendant asserted that Israel’s data protection laws Israeli data protection law (“Privacy Protection Law” or “PPL”) “bar Defendant from collecting and transferring a significant portion of the nonpublic responsive documents and information to the United States absent an Israeli court order.” The Court directed the parties to each submit letters explaining their positions on this objection.

In its September 13 submission, Defendant maintained that the Hague Convention was the “sole mechanism” Plaintiff could use “to obtain [nonpublic] evidence from Defendant in this matter.” It argued that Israeli privacy law restricted the “collection, review, and transfer” of materials containing “personal information” of its customers and employees, “defined broadly to encompass virtually any identifying characteristics of an individual, including an email address.” Defendant did not initially explain where the servers containing its corporate records were located, but when pressed by the Court, revealed that the corporate records, including its employees’ company-provided email accounts, are stored on Google Drive in servers residing in the European Union.

In its September 20 submission regarding foreign discovery, Plaintiff revealed that Defendant had refused to disclose the location of its servers and databases, taking the position that the location was irrelevant. Plaintiff explained that the data in Defendant’s possession, specifically “gameplay logs, tournament information, statistics, source code, including bot codes, and Defendant’s internal communications acknowledging the presence of bots on its platform,” were critical to the litigation. It noted that Defendant had already disclosed its employees’ identities in its initial disclosures.

Ultimately, the dispute was narrowed down to company documents relevant to Plaintiff’s claims, including emails of its employees, stored on servers located in the European Union.

In considering the dispute, Judge Cote stated: “Federal courts may, but are not required, to resort to the Hague Convention for conducting foreign discovery. The United States and Israel are both signatories of the Hague Convention, which ‘prescribes certain procedures by which a judicial authority in one contracting state may request evidence located in another contracting state.’…Those procedures include a process for sending “Letters of Request,” whereby a judicial authority in one state sends a request to a designated central authority in another state, which then executes the request in accordance with the receiving state’s internal law. Hague Convention arts. 2-14.”

Continuing, she said: “The Hague Convention procedures are merely a ‘permissive supplement’ to other means of foreign discovery, not ‘exclusive and mandatory.’…Nor are litigants required to use them as a ‘first resort,’ because the procedures would in some cases be ‘unduly time consuming and expensive, as well as less certain to produce needed evidence than direct use of the Federal Rules.’”

In evaluating competing interests of the US and Israel, Judge Cote stated: “As articulated in the Federal Rules, the United States has an interest in the “just, speedy, and inexpensive determination of every action and proceeding” in its courts…Israel has an interest in the privacy of its citizens and of effecting its legislature’s chosen policies on consumer protection, data security, and the like through its national law… But the existence of any competing interests rests primarily on whether U.S. and Israeli laws are actually in conflict, which the parties dispute… A lack of actual conflict between the Federal Rules and Israeli law would imply that, at least for present purposes, both countries’ interests can be accommodated. After all, Defendant’s objection at issue here is not to ever producing the materials at issue, but rather to producing them outside of the Hague Convention procedures.”

After considering expert testimony, Judge Cote stated: “Based on these experts’ declarations, the Court finds that Israeli law does not require that discovery of Israeli companies that are parties to a proceeding before a foreign court, including litigation filed in a United States court, use the Hague Convention procedures… The PPL confers protection only on data concerning natural persons, not on data pertaining to corporations.” So, Judge Cote overruled Defendant’s objection to producing discoverable materials outside of the Hague Convention.

So, what do you think? Do you think the Hague Convention should be required for conducting foreign discovery? Please share any comments you might have or if you’d like to know more about a particular topic.

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