In today's global economy, with litigation involving foreign companies, American courts increasingly face choice-of-law questions implicating the laws of foreign nations. Particularly sensitive situations arise when foreign attorney-client communications become relevant to litigation in the U.S.

For example, if a document is created in another country, will an American court analyzing claims of attorney-client privilege and work-product protection apply American law, which recognizes those doctrines, or foreign law, which might apply a different analysis or not even recognize those doctrines?

Such a situation recently arose in the U.S. District Court for the Central District of California in the trademark action of Hyundai Motor Company v. Hyundai Technology Group Inc.¹

There, the plaintiffs withheld certain emails they claimed were privileged under the common interest doctrine, which protects attorney-client communications disclosed to third parties who share a common legal interest with the represented party.

The defendants responded, in part, that the common interest asserted by the plaintiffs concerned legal proceedings in Korea, and so the court should apply Korean law with respect to privilege, which does not recognize the common interest doctrine.²

The court instead applied U.S. privilege law, finding that the communications at issue discussed legal actions in the U.S., among other countries.³

U.S. courts facing situations like this one generally apply what is known as the "touch base" framework, which seeks to apply the privilege law of the country that has the strongest interest in whether the document should remain confidential.

The subject matter of the document carries substantial weight, such that if the communication concerns legal issues or proceedings in a given country, that country's privilege law will often apply.

Furthermore, when the choice-of-law question involves countries with fundamentally different legal systems, such as a civil law country that does not recognize American court-created privileges, U.S. courts may account for such differences in the interest of comity and fairness.

Ultimately, the issue of whose law applies to a question of privilege depends on the countries involved, the subject matter of the document in question, the nature of the alleged attorney-client relationship, and the jurisdiction where the issue is litigated.

The "Touch Base" Framework

Originating in a long line of federal patent cases, the touch base framework is sometimes described as a traditional choice-of-law contacts analysis. District courts in the First,⁴ Second,⁵ Third⁶ and Ninth⁷ Circuits have adopted the touch base approach in patent cases, with federal courts in New York applying it in other contexts, as well.⁸ The U.S. Court of Appeals for the Second Circuit's 2013 opinion in Wultz v. Bank of China provides a typical formulation of the touch base standard:

In determining which country's law applies to claims of privilege involving foreign documents, courts in the Second Circuit have adopted the "touch base" approach. … Under this analysis, the Court applies the law of the country that has the predominant or the most direct and compelling interest in whether the communications should remain confidential, unless that foreign law is contrary to the public policy of this forum. The country with the predominant interest is either the place where the allegedly privileged relationship was entered into or the place in which that relationship was centered at the time the communication was sent.⁹

A court applying the touch base framework may find that documents created in a foreign country by non-U.S. attorneys are nonetheless covered by American attorney-client or work-product protections. In Wultz, plaintiffs sought to compel the defendant, the Bank of China, to produce documents that the BOC argued were protected by attorney-client privilege and the work-product doctrine.

The plaintiffs argued that because the documents were "located in China and were sent to and from Chinese personnel at a Chinese state bank," the BOC's claims of privilege were governed by Chinese law, which does not recognize the attorney-client or work-product protections.¹⁰

The BOC argued that some of the documents concerned litigation in an American court related to claims under American law, and should therefore be governed by American privilege law.¹¹

Applying the touch base framework, the court applied American privilege law to the documents that concerned the litigation in America and applied Chinese law to the documents that did not.¹²

Wultz also illustrates that U.S. courts will not equate the American attorney-client or work-product protections with attorneys' duties of confidentiality under foreign law.

In Wultz, the parties agreed that while Chinese law does not recognize the attorney-client privilege or work-product doctrine, it does recognize a duty of confidentiality.¹³

But while "violations of the duty of confidentiality may trigger certain sanctions under Chinese law … the duty of confidentiality is an ethical obligation and not an evidentiary protection analogous to the attorney-client privilege or work-product doctrine."¹⁴ Therefore, the court ordered the BOC to produce the documents it identified were governed by Chinese law.¹⁵

In order for a document to touch base with U.S. law, it must have a more than incidental connection with the U.S.¹⁶ In patent litigation, for example, merely being involved in a lawsuit in the U.S.¹⁷ or holding a U.S. patent application¹⁸ concerning intellectual property that is also the subject of a foreign patent application does not provide a sufficient connection to U.S. law if the communications only include legal advice pertaining to the patent law of the foreign country.

A more-than-incidental connection to the law of a given country is a necessary, but not sufficient, condition to applying that country's privilege law in a U.S. proceeding.¹⁹

For example, in Veleron Holding B.V. v. BNP Paribas SA, the parties disputed whether Russian and Dutch law, on the one hand, or British and Canadian law, on the other, should govern a set of communications regarding certain contracts to which Veleron was a party.²⁰

Morgan Stanley, a codefendant of BNP Paribas SA, argued that because the communications occurred in Russia and the Netherlands, between Veleron's Russian and Dutch executives and counsel, the privileged relationships were entered into in those countries and centered there at the time the communications were made, and thus the law of Russia and the Netherlands should apply.²¹

Veleron responded that the substance of the communications was the controlling factor, and since the communications related to contracts that included British and Canadian choice-of-law clauses, those countries' privilege laws should apply.²²

Quoting Wultz in its 2014 Veleron opinion, the U.S. District Court for the Southern District of New York stressed that "the applicable privilege law should be of those countries that have the predominant interest in whether those communications should remain confidential, which are the nations where the allegedly privileged relationship was entered into."²³

The court concluded that Russia and the Netherlands had the predominate interest and applied their privilege laws, reasoning that this interest was unlike that of Britain and Canada, whose only connections to the communications at issue were choice-of-law clauses: "Russia and the Netherlands have a strong interest in the uniform application of attorney client privilege law for Russian and Dutch attorneys and for communications that occur in their respective countries."²⁴

Veleron is instructive in that it locates the nub of the touch base analysis not in the content of the allegedly privileged communication, but in the nature of the alleged attorney-client relationship. This is consistent with the underlying goal of courts applying the touch base framework, which is to respect norms of comity by applying the law of the country with the predominate interest in whether the document should remain confidential.

However, the persuasive value of Veleron could be limited, not only because it is an unreported case, but because the court in Veleron was not asked to choose between American law and foreign law, but between different sets of foreign laws.

Courts faced with the former dilemma often note, as did the Southern District of New York in its 2015 decision in Anwar v. Fairfield Greenwich Ltd., that "American law typically applies to communications concerning legal proceedings in the United States or advice regarding American law, while communications relating to foreign legal proceedings or foreign law are generally governed by foreign privilege law."²⁵

Indeed, in the Hyundai case discussed above, the court did not conduct any analysis into whether the U.S. or some other country had the predominate interest in whether certain emails should remain confidential. Instead, after reciting the touch base standard, the court found that the emails had a "more than incidental connection" to the U.S. because the emails concerned trademark actions "in various jurisdictions, including the United States."²⁶

For that reason alone, the court applied U.S. privilege law to the emails. It also applied the common interest exception, rendering the emails privileged despite their prior disclosure to third parties, and so denied the motion to compel their production.²⁷

Application of the Touch Base Framework to Fundamentally Different Legal Systems

As noted above, some countries do not recognize the attorney-client privilege or work product doctrine. An example is the civil-law country of South Korea. If analysis under the touch base approach would result in the application of Korean law, an American court might still decline to require production of documents if such documents (1) would be protected from disclosure under American law, and (2) would not be discoverable under Korean law.²⁸

This question arose in 2002 in Astra Aktiebolag v. Andrx Pharmacies Inc.²⁹ In that case, the Southern District of New York, applying the touch base framework, determined that different sets of documents should be governed by the privilege laws of Germany, Korea and the U.S., respectively.

The court also determined that, given Korea's lack of comparable attorney-client or work product protections, the documents governed by Korean privilege law — which is really about an attorney's duty of confidentiality — could not be shielded from production on those bases alone.³⁰

However, the court also determined that the documents in question "would not be subject to production, whether through a discovery process or by court order, in a Korean civil lawsuit."³¹

According to the court's analysis, the Korean Code of Civil Procedure recognizes only three justifications for compelled document production: (1) the document is cited in the opponent's legal proceedings; (2) the proponent has an independent right to the document under Korean law; or (3) the document evidences a legal relationship between the parties that entitles the proponent to demand delivery or inspection of the document.³²

In considering Korea's civil procedure statutes, the court was careful to note that the Korean documents were governed by the more liberal discovery law of the U.S. Federal Rules of Civil Procedure.³³ However, the court held that ordering production of the Korean documents in their entirety "would violate principles of comity and would offend the public policy of this forum."³⁴

The court explained:

[T]o apply Korean privilege law, or the lack thereof, in a vacuum­ — without taking account of the very limited discovery provided in Korean civil cases — would offend the very principles of comity that choice-of-law rules were intended to protect. … Contrary to the policies of upholding or expanding privilege to protect documents whenever they would be protected in other countries … application of foreign privilege law in this case would require disclosure of many documents (1) that are protected from disclosure under American law and (2) that would not be discoverable under Korean law.³⁵

Thus, the court held that it would apply American privilege law to the Korean documents, "even though the communications do not 'touch base' with the United States."³⁶

Astra's reasoning will apply only in situations where foreign law prevents compelled production of the documents in question. This is in contrast with situations such as the one confronted by the court in Wultz, discussed above, which involved consideration of Chinese law.

In Wultz, the BOC initially argued that the court should apply U.S. privilege law, rather than Chinese law, to all the documents in question because "in practice, no Chinese court would order an attorney to divulge such confidences and compelling the production in an American court would violate the principles of comity and public policy mentioned in Astra."³⁷

The Wultz court rejected this argument, noting that the "critical inquiry in Astra is not whether the disclosure of attorney-client communications would happen, but rather whether it could happen" and that "nothing in Chinese law prevents the disclosure of these documents in the same way that Korean law prevented the disclosure of the documents in question in Astra."³⁸

Therefore, Astra applies only to the extent that a document would be (1) covered by the U.S. attorney-client or work-product protections, and (2) equally nondiscoverable under the foreign law.

Jurisdictional Considerations

In theory, different jurisdictions' approaches to choice-of-law questions might yield different outcomes regarding the application of American privilege law to a foreign document. So far, however, nearly all the American courts that have addressed this question are federal courts applying federal choice-of-law principles.

Under Rule 501 of the Federal Rules of Evidence, federal common law governs questions of privilege, including choice-of-law questions, for a court exercising federal-question jurisdiction.³⁹  As noted above, federal courts in multiple circuits have adopted the touch base framework; no other approach seems to exist. Therefore, if a party is asked to produce a foreign document in litigation where the court is exercising federal question jurisdiction, the touch base framework will most likely apply.

Rule 501 also provides that federal courts exercising diversity jurisdiction must apply the forum state's choice-of-law principles to issues of privilege.⁴⁰

For example, in the 1979 decision in Petruska v. Johns Mansville, the U.S. District Court for the Eastern District of Pennsylvania had to determine whether American or Canadian law would govern a question of doctor-patient privilege.⁴¹ Noting that the Pennsylvania Supreme Court had adopted a modern approach to choice of law, the court inferred that a Pennsylvania state court would look to the privilege law of Quebec, where the relevant doctor-patient relationships arose.⁴²

Petruska appears to be the only case applying state law to a question of privilege regarding communications made outside the U.S. However, if an international entity finds itself litigating in a federal diversity action, or in state court, the choice-of-law analysis regarding privilege will likely be made according to the law of the forum state.

Given the prevalence of the touch base analysis in federal-question cases, it is likely, but not certain, that the same analysis would be adopted in diversity or state court cases.

Conclusion

The determination of which country's law governs privilege questions in American litigation can be influenced by multiple factors, including the contents of the documents, the nature of the attorney-client relationship, and the jurisdictions involved.

As globalization continues to manifest itself in disputes over foreign-created documents, attorneys in the U.S. and abroad must bear in mind the nuances of the touch base framework and the implications of foreign evidentiary protections, or lack thereof, in U.S. proceedings.

---

1. Civil Minutes – General, Hyundai Motor Company et al. v. Hyundai Technology Group, Inc. et al. , No. SA CV 23-01709 (C.D. Cal. Sept. 10, 2024).

2. Id. at 3–4.

3. Id. at 4–5.

4. Philips N. Am. LLC v. Fitbit LLC , 583 F. Supp. 3d 251, 260 (D. Mass. 2022).

5. Golden Trade, S.r.L. v. Lee Apparel Co. , 143 F.R.D. 514, 520 (S.D.N.Y. 1992).

6. Tulip Computers Int'l, B.V. v. Dell Computer Corp. , 210 F.R.D. 100, 104 (D. Del. 2002).

7. Cadence Pharms., Inc. v. Fresenius Kabi USA, LLC , 996 F. Supp. 2d 1015, 1019 (S.D. Cal. 2014).

8. See, e.g., Mangouras v. Squire Patton Boggs , 980 F.3d 88, 99 (2d Cir. 2020) (adopting the "touch base" framework for purposes of determining which privileges are "legally applicable" under 28 U.S.C. § 1782). See also Anwar v. Fairfield Greenwich Ltd. , 306 F.R.D. 117, 119 (S.D.N.Y.) (Madoff investment scandal); Wultz v. Bank of China Ltd. , 979 F. Supp. 2d 479, 489 (S.D.N.Y. 2013) (international terrorism); Veleron Holding, B.V. v. BNP Paribas SA , No. 12-CV-5966 CM RLE, 2014 WL 4184806, at *4 (S.D.N.Y. Aug. 22, 2014) (securities fraud); In re China Med. Techs., Inc. , 539 B.R. 643, 652 (S.D.N.Y. 2015) (Rule 2004 examination preliminary to adversary proceeding in bankruptcy).

9. Wultz, 979 F. Supp. 2d at 489 (internal quotations removed).

10. Id. at 488.

11. Id. at 491–92.

12. Id.

13. Id. at 492.

14. Id. at 492–93.

15. Id. at 493.

16. Gucci Am., Inc. v. Guess?, Inc. , 271 F.R.D. 58, 67 (S.D.N.Y. 2010).

17. Cadence Pharms., Inc., 996 F. Supp. 2d at 1019 (citing Golden Trade, 143 F.R.D. at 520–21); See also Philips N. Am. LLC v. Fitbit LLC , 583 F. Supp. 3d 251, 260–61 (D. Mass. 2022).

18. AstraZeneca LP v. Breath Ltd. , No. CIV. 08-1512 (RMB/AM, 2011 WL 1421800, at *5 (D.N.J. Mar. 31, 2011).

19. Philips N. Am. LLC v. Fitbit LLC , 583 F. Supp. 3d 251, 260 (D. Mass. 2022) (quoting VLT Corp. v. Unitrode Corp. , 194 F.R.D. 8, 16 (D. Mass. 2000) ("If . . . a communication has nothing to do with the United States or ... only an incidental connection to this country, the privilege issue will be determined by the law of the foreign nation. If, however, the communication has more than an incidental connection to the United States, the court will undertake a more traditional analysis and defer to the law of privilege of the nation having the most direct and compelling interest in the communication or, at least, that part of the communication which mentions the United States.").

20. Veleron Holding, B.V. v. BNP Paribas SA , No. 12-CV-5966 CM RLE, 2014 WL 4184806 (S.D.N.Y. Aug. 22, 2014) (internal quotes removed).

21. Id. at *5.

22. Id.

23. Id. (quoting Wultz, 979 F. Supp. 2d at 486).

24. Id.

25. Anwar, 306 F.R.D. at 119 (S.D.N.Y.) (quoting Gucci America, 271 F.R.D. at 65).

26. Civil Minutes – General at 4–5, Hyundai Motor Company et al. v. Hyundai Technology Group, Inc. et al., No. SA CV 23-01709 (C.D. Cal. Sept. 10, 2024).

27. Id. at 3, 7.

28. See Astra Aktiebolag v. Andrx Pharms., Inc. , 208 F.R.D. 92, 102 (S.D.N.Y. 2002).

29. Id. at 97–99.

30. Id. at 101.

31. Id.

32. Id. at 101–02.

33. Id. at 102 ("Andrx correctly points out, however, that this court should not apply the Korean law of discovery, since law regarding document disclosure is procedural . . . . Courts use choice-of-law rules to determine whether to apply another forum's substantive law but always use their own procedural rules.").

34. Id. at 102.

35. Id.

36. Id.

37. Wultz, 979 F. Supp. 2d at 490 (emphasis added) (internal quotations removed).

38. Wultz, 979 F. Supp. 2d at 490–91.

39. Fed. R. Evid. 501; Golden Trade, S.r.L. v. Lee Apparel Co. , 143 F.R.D. 514, 521 (S.D.N.Y. 1992) ("[Rule 501] instructs that if the issue of law to which the disputed communication is relevant is an issue as to which federal law supplies the rule of decision, the privilege claim 'shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience.'"); Astra Aktiebolag, 208 F.R.D. at 97 ("The 'common law' applied under Rule 501 includes 'choice of law' questions.").

40. Fed. R. Evid. 501; Petruska v. Johns-Manville , 83 F.R.D. 32, 35 (E.D. Pa. 1979).

41. Petruska, 83 F.R.D. at 35.

42. Id. The "modern approach" alluded to by the district court refers to Pennsylvania's rejection of the "place of injury" rule for choice of law in torts. Griffith v. United Air Lines, Inc. , 416 Pa. 1, 12 (1964).