Federal Grand Juries’ Supremacy Over Foreign Data Privacy Laws

Data privacy has been at the forefront of recent foreign-policy conversations. After President Donald Trump issued an executive order in August 2020 expressing his concern that the Chinese government is harvesting U.S. data through TikTok, China responded with a global data security initiative. China’s eight-part initiative continues China’s push for data localization rules and includes, notably, the Chinese government’s purported pledge “not [to] ask Chinese companies to transfer overseas data to the [Chinese] government in breach of other countries’ laws.” While China’s new initiative ostensibly departs from the self-centeredness that characterizes most data privacy laws around the globe, it is more likely a continuation of China’s push for cyber sovereignty—nothing more than a wink and a nod at Chinese parties to continue sharing foreign data with Chinese government authorities.1

Thus, even with its new initiative, China seems poised to continue the self-centered focus of its data privacy laws. U.S. policy reflects that as well—as the U.S. made clear in its reaction to the Court of Justice of the European Union restricting the U.S.–E.U. data bridge in Schrems and Facebook Ireland v. Data Protection Commissioner (2020).

These recent events—especially China’s planned policy to no longer ask Chinese companies to disclose data to Chinese authorities in violation of foreign law—lead naturally to the interesting question of which disclosures U.S. federal courts can require that violate foreign data privacy laws. This issue is litigated relatively frequently in the civil discovery context. But in the criminal context, the Supreme Court has not answered this question directly, and few circuits have given it much thought. This leaves open the following criminal procedure question: What can and should a federal court do when a U.S. citizen who is abroad refuses to give subpoenaed grand jury testimony on the ground that disclosure would violate foreign law? This question is at the nexus of the foundational legal doctrine of federal jurisdiction and the cutting edge of data privacy and nondisclosure law. And resolving it implicates the practical limits of even the strictest foreign privacy protections.

I.   Federal Courts Can Exercise Extraterritorial Jurisdiction Over U.S. Citizens

To order someone to act (or to not act), a court must have the power to do so. And when interpreting a federal law, courts in this country presume that the law does not apply beyond America’s borders unless Congress clearly intended the contrary. The U.S. Supreme Court has called this canon of statutory construction “the presumption against extraterritoriality.”

The Supreme Court “has established a two-step framework for deciding questions of extraterritoriality. The first step asks ‘whether the presumption against extraterritoriality has been rebutted.’” For grand jury subpoenas, the answer is clearly yes: In 28 U.S.C. § 1783(a), Congress “affirmatively and unmistakably instructed that the statute” governing grand jury subpoenas has extraterritorial application by stating that a court may order a subpoena’s service on “a national or resident of the United States who is in a foreign country” (emphasis added). Because this text rebuts the presumption against extraterritoriality, the second step of the Supreme Court’s test—which asks “whether the case involves a domestic application of the statute”—need not be reached in any application of § 1783(a).

Additionally, federal courts have personal jurisdiction over U.S. citizens who are abroad. Having incorporated § 1783 into Federal Rule of Criminal Procedure 17(e)(2), the Supreme Court must not think it violates the Constitution’s personal jurisdiction requirements. Plus, the Second Circuit (quoting the First Circuit) has noted that “a criminal court ‘has personal jurisdiction over any party who appears before it, regardless of how his appearance was obtained.’” But even if the Constitution’s personal jurisdiction requirements in criminal proceedings are the same as they are in civil matters, the relevant connection for personal jurisdiction purposes, in the context of a grand jury subpoena of a witness who is abroad, is the witness’s connection to “the entire United States,” not to any particular state. And a witness’s U.S. citizenship establishes his connection to the entire United States, regardless of where the witness is domiciled.

Thus, a U.S. citizen has “minimum contacts” with the United States sufficient to satisfy “traditional notions of fair play and substantial justice.” Under current law, this means exercising personal jurisdiction over such a witness is consistent with due process. Because federal courts have personal jurisdiction under the minimum-contacts framework that applies in civil cases, they certainly have personal jurisdiction in criminal cases if—as some circuits have suggested—looser personal jurisdiction requirements apply there.

Exercising personal jurisdiction over a U.S. citizen abroad is also consistent with the “nationality principle of international law, [ ] [which] ‘permits a country to apply its statutes to extraterritorial acts of its own nationals’ without infringing on the other nation’s sovereignty.” As the Supreme Court made clear in 1932 in Blackmer v. United States, “the question of [legislation’s] application, so far as citizens of the United States in foreign countries are concerned, is one of construction, not of legislative power.” Therefore, if enforcing the subpoena against a witness meets 28 U.S.C. § 1783’s requirements,2 exercising personal jurisdiction over that witness by enforcing a grand jury subpoena extraterritorially is otherwise consistent with the authority recognized by the Constitution and international law.

II.  Foreign Data Privacy Laws Do Not Restrict Federal Court Authority

Federal courts have the power to compel the grand jury testimony of a presently abroad U.S. citizen, and foreign privacy rules must give way to a U.S. federal grand jury’s investigatory powers and the courts’ power to enforce them. Under the U.S. Constitution’s Supremacy Clause, federal law is “the supreme Law of the Land.” “[T]his Clause,” the Supreme Court has explained, “creates a rule of decision: Courts ‘shall’ regard the ‘Constitution,’ and all laws ‘made in Pursuance thereof,’ as ‘the supreme Law of the Land.’ They must not give effect to state laws that conflict with federal laws.”

Consistent with this pronouncement, federal courts have held federal law to prevail over state nondisclosure laws based on the Supremacy Clause. For example, in In re New York State Sales Tax Records (W.D.N.Y. 1974), the court held that “[t]he powers of the federal grand jury, because of Article 6, Clause 2 of the United States Constitution (the [S]upremacy [C]lause), must prevail over the nondisclosure provision of Section 1146(a) of the New York State Tax Law.” For its part, the Seventh Circuit has noted that “courts consistently have rejected the view that state records are privileged from disclosure . . . , even in cases in which state law prohibited the disclosure of the records.”

Although only federal supremacy over conflicting state laws is explicitly mentioned in the Supremacy Clause, the supremacy of U.S. federal law over foreign laws is a necessary consequence of the Constitution’s declaration that the U.S. Constitution, U.S. federal law, and U.S. treaties are “the supreme Law of the Land; and the Judges in every State shall be bound thereby.” Simply put, because U.S. federal law is supreme in this country, it must take precedence over foreign law in U.S. courts.

The nature of judicial power also indicates that foreign privacy law does not supplant domestic power and prevent a federal court from ordering the testimony of a presently abroad U.S. citizen. A court may validly enforce a subpoena for certain information if the witness controls the information and the court has jurisdiction over the witness.3 Courts have focused on jurisdiction over the subpoena recipient—rather than the location of the requested records—because, as the Second Circuit explained, “[t]he test for the production of documents is control, not location.” A witness is certainly in control of his own knowledge; and, as previously discussed, courts can validly exercise jurisdiction over U.S. citizens abroad.

Additionally, U.S. law governs because, while the order to compel grand jury testimony is served extraterritorially, the testimony is given before the grand jury within the United States. The required disclosure, therefore, happens within the United States. The mere fact that the information is currently abroad is no impediment to a court’s authority to order its production (an act that also occurs within the United States), an authority which also aligns with the principle that the United States has full authority over its citizens within the United States under the Supremacy Clause.

U.S. federal courts can exercise jurisdiction over U.S. citizens, issue valid orders pursuant thereto, and enforce those orders through further orders if necessary. Foreign law does not change those fundamental principles of judicial power. A court with jurisdiction can enforce a subpoena for grand jury testimony served on someone outside the United States because the witness controls the information. Foreign law should not be taken to inhibit U.S. federal courts’ power to make a U.S. citizen disclose information in the United States, especially when Congress has granted courts this authority through § 1783.

If the data privacy law at issue “frustrate[s] th[e] goal” of U.S. courts adjudicating “on the basis of the best possible information available,” then it is a foreign blocking statute that “need not be given the same deference by courts in the United States as differences in substantive rules of law.”4 As the Supreme Court noted in Societe Nationale Industrielle Aerospatiale v. U.S. District Court for the Southern District of Iowa (1987), allowing a foreign information-blocking statute to control “would appear to represent an extraordinary exercise of legislative jurisdiction by the Republic of France over a United States district judge, forbidding . . . even simple requests for admissions or interrogatories that the [French] party could respond to on the basis of personal knowledge.”

The Supreme Court noted in Aerospatiale that “[i]t is well settled that [foreign ‘blocking’] statutes do not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute.” But the Court has also made clear that in the “discretionary determination by the district court whether the discovery is warranted . . . [the court] may appropriately consider comity interests.” In Aerospatiale, the Court listed several factors to guide a court in deciding whether to order discovery in the face of a conflict with foreign laws, including:

(1) the importance to the . . . litigation of the documents or other information requested;

(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 with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located.

482 U.S. at 544 n.28.

In civil cases, U.S. courts considering these factors favor the broad discovery allowed by the Federal Rules of Civil Procedure over the narrow production limits in foreign data privacy laws. For example, in Royal Park Investments SA/NV v. HSBC Bank USA, N.A. (S.D.N.Y. Feb. 6, 2018), the court found “that the comity analysis weigh[ed] in favor of compelling” production of unredacted documents and ordered production despite an objection based on the Belgian Data Privacy Act. Similarly, in Laydon v. Mizuho Bank, Ltd. (S.D.N.Y. 2016), the court ordered discovery over the defendants’ objection that compliance might violate the United Kingdom’s Data Protection Act of 1998, the U.K.’s codification of the predecessor to the European Union’s General Data Protection Regulation (better known as the GDPR). After noting that the balancing of sovereign interests was the most important factor in the comity analysis, the court stated that privacy protection measures taken by the court can mitigate the foreign sovereign’s interest in nondisclosure. Grand jury secrecy rules are one such sufficient measure.

On the U.S.-interest side of the comity balancing, the Supreme Court has endorsed—in the civil context—the idea that courts should aim to adjudicate on the basis of the “best information available.” This principle animates the Ninth Circuit’s holding in Richmark Corp. v. Timber Falling Consultants (9th Cir. 1992) that the lack of an adequate alternative means of obtaining the information weighs in favor of compelling production. Because no other person can testify to a particular witness’s experiences and knowledge, there can never be an alternative means that is “‘substantially equivalent’ to the requested discovery.” This means that courts should tend to weigh the comity balancing in favor of compelling testimony.

The criminal context significantly strengthens the U.S. interest and bolsters the case for production of testimony within the comity test. The importance of grand juries weighs heavily in favor of requiring production because grand jury subpoenas represent a stronger interest than civil subpoenas. This can even be seen within the text of the relevant statute: Section 1783(a) provides that to order the extraterritorial subpoena, “in other than a criminal action or proceeding,” a court must find “that it is not possible to obtain [the witness’s] testimony in admissible form without his personal appearance or to obtain the production of the document or other thing in any other manner.” This language establishes a lower requirement for criminal subpoenas, implicitly acknowledging that a court may more readily order grand jury testimony than civil testimony.

It is particularly important that grand juries have full information. As the Eleventh Circuit put it in In re Grand Jury Proceedings Bank of Nova Scotia (11th Cir. 1984), “[u]nder our system of jurisprudence the grand jury’s function in investigating possible criminal violations is vital.” The Supreme Court explained in Branzburg v. Hayes (1972) that “the grand jury’s authority to subpoena witnesses is not only historic, . . . but essential to its task.” Therefore—as the Eleventh Circuit noted in Bank of Nova Scotia—because “the ability to obtain evidence is crucial to all criminal justice proceedings, courts have repeatedly allowed the grand jury wide discretion in seeking evidence.” The court also stated that “[i]t would be extremely unwise for [a court] to unduly restrict the broad investigatory powers of the grand jury by first requiring that the government show necessity or issue letters rogatory. Letters rogatory are not equivalent to a grand jury subpoena.” Many courts “have clearly stated that the government is not required to show the relevancy of the requested documents to a grand jury investigation.”

Even the First and Fifth Amendments do not entirely prohibit requiring testimonial disclosure to a grand jury. As the Supreme Court stated in Branzburg, “[c]itizens generally are not constitutionally immune from grand jury subpoenas; and neither the First Amendment nor any other constitutional provision protects the average citizen from disclosing to a grand jury information that he has received in confidence.” Plus, the Supreme Court stated that “[n]o pledge of privacy nor oath of secrecy can avail against demand for the truth in a court of justice.” This principle is powerful enough to compel members of the press to answer questions before the grand jury, even though the freedoms of speech and press are both expressly protected by the First Amendment. If the grand jury’s investigatory powers can overcome even those First Amendment rights, then they certainly can overcome foreign law.

A witness’s objection to grand jury testimony out of a fear of violating foreign law might also be styled as invoking the witness’s Fifth Amendment privilege against self-incrimination. But the Supreme Court has held that privilege does not extend to testimony withheld for fear of foreign prosecution.

Grand jury subpoenas are extremely important to effective enforcement of criminal laws. For that reason, courts have enforced grand jury subpoenas even in cases where constitutional amendments or conflicting foreign laws are implicated. It follows that in the case of foreign data privacy laws, the U.S. interest in obtaining subpoenaed grand jury testimony will, in most cases, outweigh any foreign interest in nondisclosure. With comity balancing pointing toward production, U.S. courts should generally compel a witness’s testimony over objections based on foreign data privacy laws.

Conclusion

Whether U.S. citizens living abroad can and should be compelled to testify in a grand jury in violation of foreign data privacy laws implicates the tension between the limits of Article III jurisdiction, the supremacy of the Constitution and other domestic legal powers over foreign law, and the goal of protecting U.S. citizens. Because federal courts have the power to compel compliance despite the U.S. citizen being located abroad and despite conflicting foreign laws and because it is generally “necessary in the interest of justice” to uphold the efficacy of grand juries, federal courts typically can and should order U.S. citizen witnesses to comply with grand jury subpoenas and testify.

Federal judges have discretion to decide that the “interest of justice” requires prioritizing the witness’s interests over the system-wide interests represented by grand juries. But doing so should be the exceptional case. Favoring the grand jury properly protects domestic sovereignty interests and is an appropriate tradeoff between protecting witnesses and protecting potential criminal defendants, given that a grand jury possessing full information should issue fewer indictments of innocent people. This balance does leave some risk of alienating the international community, but it also allows judges to consider shifts in U.S. national policy when they balance sovereign interests.

In any event, Congress and the executive branch are best suited to make these foreign policy choices regarding the conflict of laws. Because they are the branches of government most responsible for foreign relations and most sensitive to the People’s will, courts should defer to their judgment. In deciding to seek a witness’s testimony before a grand jury despite conflicting foreign law, “the Executive Branch—the arm of the government charged with primary responsibility for formulating and effectuating foreign policy—[has determined] that the adverse diplomatic consequences of the [ ] request . . . [are] outweighed by the benefits of disclosure.” Courts should respect that determination.

The intersection of data privacy law and governmental power will only increase in importance as the world becomes more globalized and digitized. But practitioners and courts should keep in mind that, while these data privacy laws are on the frontier of technology law, court-ordered testimony is still governed by the Constitution and classic principles of investigatory and discovery law. Technology and globalization may have changed our economy, but they have not changed that the United States is sovereign over its citizens.

• 1Last June, the U.S. Department of Defense declared that several Chinese companies operating in the United States are connected with the Chinese military; and last July, the Department of Justice charged two Chinese nationals for stealing terabytes of data—including the trade secrets of numerous high-technology companies—and sending them to China’s state security agency.
• 228 U.S.C. § 1783(a) states that a court “may order the issuance of a subpoena requiring . . . a national or resident of the United States who is in a foreign country” to “appear[ ] as a witness before it, or before a person or body designated by it” such as a grand jury, or produce “a specified document or other thing.” A court may do so “if the court finds that particular testimony or the production of the document or other thing by [the witness] is necessary in the interest of justice.”
• 3See 9A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2456, at 417 (3d ed. 2008) (“The case law clearly has established that even records kept beyond the territorial jurisdiction of the district court issuing the subpoena may be covered if they are controlled by someone subject to the court’s jurisdiction.”).
• 4Restatement (Fourth) of the Foreign Relations Law of the United States § 442 cmt. e (Am. Law Inst. 2018). Accord Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for the S. Dist. of Iowa, 482 U.S. 522, 544 n.29 (1987).