U.S. White Paper on 'Schrems II': Emperor still clothed

A new U.S. white paper on data protection means favorably to supplement the record on U.S. surveillance practices that, in part, fueled the European Court of Justice (ECJ) decision in "Schrems II," in July, rejecting the adequacy of the Privacy Shield Framework to secure EU-to-US data transfers.

From the U.S. Department of Commerce, Department of Justice, and Office of the Director of National Intelligence, the white paper suggests that the ECJ ruling was interim in nature, pending investigation of U.S. national security practices to better understand whether they comport with EU General Data Protection Regulation norms, such as data minimization, which means collecting only data necessary to the legitimate purpose at hand.  The paper states:

A wide range of information about privacy protections in current U.S. law and practice relating to government access to data for national security purposes is publicly available.  The United States government has prepared this White Paper to provide a detailed discussion of that information, focusing in particular on the issues that appear to have concerned the ECJ in Schrems II, for consideration by companies transferring personal data from the EU to the United States. The White Paper provides an up-to-date and contextualized discussion of this complex area of U.S. law and practice, as well as citations to source documents providing additional relevant information. It also provides some initial observations concerning the relevance of this area of U.S. law and practice that may bear on many companies’ analyses. The White Paper is not intended to provide companies guidance about EU law or what positions to take before European courts or regulators. 

Armed with this additional information, then, the message to the private sector seems to be, Keep Calm and Carry On, using the very same "standard contractual clauses" (SCCs) that the ECJ invalidated.  Yet if the information featured in the white paper has been publicly available, why assume that the ECJ was ill informed?  (Read more about SCC revisions under way, and their likely shortcomings, at IAPP.)

Unfortunately for the U.S. position, the ECJ opinion was not, to my reading, in any way temporary, or malleable, pending further development of the record.  The white paper comes off as another installment in the now quarter-century-old U.S. policy that the emperor is fully clothed.

I hope this white paper is only a stop-gap.  As I said in a Boston Bar CLE recently, no privacy bill now pending in Congress will bridge the divide between the continents on the subject of U.S. security surveillance.  A political negotiation, which might involve some give from the American side at least in transparency, seems now to be our only way forward.

The white paper is Information on U.S. Privacy Safeguards Relevant to SCCs and Other EU Legal Bases for EU-U.S. Data Transfers after Schrems II (Sept. 2020).

'Breakaway state' of Transnistria might model new Russian sphere of influence

Transnistria (Perconte CC BY-SA 2.0)

Vladimir Putin is known for multi-tasking foreign policy; that is, he manages bilateral relationships with specifically fitted policy solutions and doesn't lose sleep over inconsistency across the board.  At the same time, his variable approaches add up to a coherent strategy, which is essentially the restoration of Russia to its superpower legacy, if not the reconstruction of a loose union akin to the old USSR.

Last week I got a close-up look at what might be a model of Russian territorial expansion in the 21st century, the semi-autonomous state of Transnistria.  To the United Nations, Transnistria is part of Moldova, the eastern European nation that declared its independence from the Soviet Union in 1991.  But going to Transnistria requires a passport, and the border crossing is no joke.

Transnistria occupies a 1,600-square mile strip of land east of the Dniester River from Moldova and along the border with Ukraine, not far from Odessa.  In 1992, only months after the end of the Moldovan Soviet Socialist Republic, Transnistria fought a war with Moldova for close to four months.  Prominent monuments to the fallen can be found on both sides of the border today, in Chișinău and Tiraspol. An uneasy truce resulted in which Transnistria regards itself as an independent nation, and it operates with near autonomy within Moldova's internationally recognized borders.

Sign at Border Crossing (CC BY-SA 4.0)

On the way in and out of Transnistria, one passes Russian military checkpoints that duplicate the Transnistrian military presence at the border crossings.  For years after the 1992 war, this was a hard border, not easy even for Moldovans to cross, and out of the question for foreigners.  Tensions eased over the years, and the border yielded some, but it's still restrictive.  My visa, issued at the border, allowed a visit for only a matter of hours.  I could have managed an overnight, but I would have needed to provide details about my stay and intentions.

Near autonomy does not fully describe Transnistria's situation, because the breakaway state depends on Russia for unofficial political recognition and essential economic support.  Economic aid keeps prices shockingly low in the markets.  A big part of border security is interdiction of smuggling, especially for precious taxable commodities such as liquor.

Sheriff FC Billboard
(CC BY-SA 4.0, no claim to underlying work)

Within Transnistria, Russian-style oligarchic control of key market sectors is evident, even amid modest economic liberalization.  The company "Sheriff" (Шериф) is ubiquitous, its name splashed across supermarkets, petrol stations, and the well funded Tiraspol soccer club and athletic facilities.  Sheriff has close ties to the Transnistrian and Russian governments.  Antitrust law is not a thing.  Transnistria has its own currency, and even Moldovan lei must be changed to make a purchase.  Market control and currency help to buttress Transnistrian independence, even while the cost of small-run currency is now seeing low-value coins replaced by plastic chits.

A Sheriff Supermarket (CC BY-SA 4.0)

Reinforced politically and economically, Transnistria's social allegiance to Russia remains strong, a near nostalgia for the USSR.  Soviet monuments, including the obligatory Lenins, abound, and Russian language is pervasive.  A guide told me that Transnistrians are given Russian passports.  That's a subtly important strategic maneuver on Russia's part.  When Transnistrian youth look for economic opportunity, the passport puts Russian higher education and jobs within easier reach than the West.  And if Transnistrian independence is ever threatened (or if Russia itches for expansion?), Russia can claim its interest on behalf of Russian citizens in the territory.  From cultural affinity to political identity, these are the very interests that Russia asserted in the invasion of Crimea.

And those ties to Russia help, I think, to illustrate Putin's strategy for a new kind of Russian union.  The Crimean peninsula essentially is Russia, Putin has argued, a minority Russian population being marginalized by a Ukrainian majority.  Russia is still fighting to extend this Crimean buffer zone into mainland Ukraine.  Move just a bit counterclockwise around the Black Sea coast and one comes to the prized port of Odessa, then shortly to the Dniester River mouth, leading to Transnistria.

Me and Lenin in Tiraspol (CC BY-SA 4.0)

Russia does not actually have to possess this territory to control it.  In fact, possession might incur unwanted responsibility.  Better that this Black Sea perimeter region looks to Russia for economic and political legitimacy and for cultural primacy.  The new USSR is not an integrated, hard-bordered political bloc, but a gravitational sphere of cultural influence.  After all, that was the very model of Western social organization that defeated the Soviet Union in the Cold War.  Students and scholars from around the world looked to western Europe and the United States for intellectual leadership, and the West dominated popular culture.  The global balance of power will shift eastward if Moscow becomes a capital of letters.

For now, the hearts and minds of Transnistria are not yet committed.  Notwithstanding ubiquitous Cyrillic script and an unexpected Russian military presence this far west of Sochi, people in Transnistria, like in Moldova or anywhere else, just want security and opportunity.  The subsidized subsistence of Transnistria is a Potemkin Village—a curiously appropriate term, as related in origin to Russia's historic annexation of Crimea—not a thriving economy.

However, reinvigorated American isolationism and stalled European expansion eastward can't presently compete with what Putin has on offer.  Transnistria now looks like an idiosyncratic outlier among European neighbors.  One day Transnistria might prove to have been a bellwether.

To visit Transnistria or explore elsewhere in Moldova, I recommend Voyages Moldavie.  The website is in French, but contact guide Andrian Gurdis for English-speaking tourism, too.  For long-haul taxi services in Moldova, turn to Corneliu Scurtu and his business, Carpoint (Facebook). Read more about Transnistria at Wired (2016), The Bohemian Blog (2013), and The Wall Street Journal (2011).  There's a deeper dive, which I've not read (pay wall), into the Crimea comparison in Adrian Rogstad, The Next Crimea?, 65:1 Problems of Post-Communism 49-64 (2018).

Expert on Polish judicial crisis speaks to law class

Prof. Wortham

Professor Leah Wortham joined Dean Peltz-Steele and my Comparative Law class on Wednesday to discuss the crisis of judicial independence in Poland (latest).  Professor Emerita of the Columbus School of Law at the Catholic University of America (CUA), Wortham is a recipient of, among other honors, the Plus ratio quam medal of Jagiellonian University (JU) in Krakow.

With JU Professor Fryderyk Zoll, Professor Wortham authored Judicial Independence and Accountability: Withstanding Political Stress, recently published at 42 Fordham International Law Journal 875 (2019).  Here is the abstract.

For democracy and the rule of law to function and flourish, important actors in the justice system need sufficient independence from politicians in power to act under rule of law rather than political pressure. The court system must offer a place where government action can be reviewed, challenged, and, when necessary, limited to protect constitutional and legal bounds, safeguard internationally-recognized human rights, and prevent departures from a fair and impartial system of law enforcement and dispute resolution. Courts also should offer a place where government officials can be held accountable. People within and outside a country need faith that court decisions will be made fairly and under law. Because the Council of Europe’s Group of States against Corruption (“GRECO”) deems judicial independence critical to fighting corruption, GRECO makes a detailed analysis of their members’ judicial system part of their member review process. This Article is a case study of the performance of Poland’s mechanisms for judicial independence and accountability since 2015, a time of extreme political stress in that country. Readers will see parallels to comparable historical and current events around the world.

In discussion with the class, Professor Wortham remarked on parallels between the Polish judicial crisis and threats to the legitimacy of the courts in the United States.  She referenced recent remarks by U.S. District Judge Paul Friedman to the American Law Institute, in which Judge Friedman distinguished denigration and personal attacks on the judiciary from disagreement with judicial decisions accompanied by respect for a co-equal branch of government (ALI, CNN).  The class discussion about Poland also treated the recent decision of the Irish Supreme Court to order extradition of a Polish man wanted for drug trafficking offenses, despite concerns about judicial independence in Poland (Irish Times).

CUA offers summer study abroad opportunities for U.S. law students and, in cooperation with JU, an LL.M. program in Comparative and International Law.

Dublin City's Brexit Institute tracks all things Brexit

If you're like me, Brexit is a lot to keep up with.  How do you find out the latest developments, when all of your news channels are around-the-clock impeachment hearings?  It's quite the chore for the responsible global citizen.

Let the Brexit Institute alleviate your anxiety.  Since 2016, the good people at Dublin City University have been tracking all things Brexit.  You can follow the institute through its excellent blog, newsletter, or Twitter feed.  IAMCRers will remember DCU from our excellent 2013 conference.

Unrelated to the institute, but while on the subject of Brexit, a shout out to one of my favorite Twitter feeds, The Irish Border, which earned mention in The Guardian last year.

Earlier this week, my Comparative Law class was privileged to host via Zoom a guest from the Brexit Institute, post-doc Professor Giovanni Zaccaroni.  Extra thanks that he stayed up late to join us from GMT.  Prof. Zaccaroni walked us through an intense short course on EU treaty exit article 50, the U.K. Supreme Court decision voiding prorogation, and the proposed Irish border protocol.


Prof. Zaccaroni answered students' questions on those issues and more, explaining the cultural, political, and historical sensitivity around the Irish border question, as well as the relationship between Brexit and potential eastward growth of the European Union—spoiler alert: don't hold your breath, for many reasons, Brexit besides.

Honduran law dean joins UMass comparative law class

Speaking from UNITEC in Tegucigalpa, Dean Castro Valle explained how her 2018 English-language article on comparative tort law (featured) fit into her broader dissertation project on regional class actions for environmental justice in Central America.

#ComparativeLaw @UMassLaw (me & @PeltzSteele) today had privilege of a brilliant Zoom guest to educate us on Honduran/Central Am. civil law, as compared with EU and with US common law, and on harmonization in Central America. THANK YOU @cmcastrovalle! https://t.co/eHmGLwgMwy

— RJ Peltz-Steele (@RJPeltzSteele) October 9, 2019

UMass Law comparative law students asked about legal harmonization in Central America and asked Dean Castro Valle to assess the prospect of a supranational entity in the region, akin to the European Union, that might advance economic development. She said such a project has been in the works since the 1950s. Pointing to present discontent with President Ortega in Nicaragua, for example, she explained that not enough states have been stable and interested in pursuing the project at the same time. Meanwhile she and other legal scholars are working to harmonize civil codes and arbitration process to increase legal certainty sufficiently to attract investment from transnational business.

Info reg round-up: French feud, global injunction, foreign discovery, and literal grains of paradise

I've lately been swamped by developments in global information regulation.  Here's a round-up of highlights with links to read more.

Google-France feud.  Fresh on the heels of Google v. CNIL (read more), tensions are heating up again between Google and France, as Google refuses to play ball with France's new copyright law.  The 2019 EU Directive on Copyright in the Digital Single Market aimed, inter alia, to protect publishers from the scraping of their news product for aggregators' clips and snippets without compensation.  France was the first country, and only so far, to transpose the directive's article 15 (né draft article 11) into national law.  Effective this month, the French law would compel an aggregator such as Google to pay news publishers for the content that appears in Google search results.  How much money Google makes from Google News is disputed, but it's a lot.  Google contends that news providers are well compensated by traffic driven to their websites.  The news industry doesn't feel that way and blames aggregators for killing the business model of news, public interest journalism along with it.  Now Google has said that search results in France will exclude content that would require payment under the new copyright law.  The News Media Alliance, a U.S. industry association, has called Google's move "extortion."

Eva Glawischnig-Piesczek, Austrian Green

EU: Global injunction of one country's "defamation."  The European Union (EU) continues to amp up internet service provider (ISP) accountability.  A chamber of the Court of Justice of the EU (CJEU) ruled that European law—including EU information market directive, the Treaty on the Functioning of the EU, and the freedom of expression—does not preclude a member state from issuing a global injunction to take down unlawful content.

The facts reveal the problematic scope of the state power implicated, as the case arose from a Facebook post disparaging, e.g., "traitor," an Austrian politician.  The disparagement was regarded as defamation in the Austrian courts, but would be protected as core political commentary or hyperbolic opinion in the United States and many other countries.  The prospect of a state order with global reach was raised by the recent CJEU decision in Google v. CNIL.  Slate's take took no prisoners: "In so ruling, the court demonstrated a shocking ignorance of the technology involved and set the stage for the most censor-prone country to set global speech rules."

The case is Glawischnig-Piesczek v. Facebook Ireland Ltd., No. C-18/18 (Oct. 3, 2019).

US: Extraterritorial discovery.  The Second Circuit meanwhile published an opinion that pushes outward against the territorial bounds of U.S. law.  The court ruled that statutory civil procedure under 28 U.S.C. § 1782 may reach records held outside the United States and is co-extensive in scope with the maximum long-arm personal jurisdiction of constitutional due process.

The case arose from Banco Santander's acquisition of Banco Popular Español (BPE) after a criminal investigation and government-forced sale of the latter.  Mexican nationals and investors opposing the acquisition sought discovery in the U.S. District Court in New York against Santander and its New York-based affiliate, Santander Investment Securities (SIS), under § 1782.  The law compels discovery against a person or legal entity that "resides or is found" in the U.S. jurisdiction.

Santander New York (© Google Earth)

The court rejected Santander's contention, supported by academic opinion, that the language could not reach a mere "sojourner" in the jurisdiction.  The court furthermore held that the presumption against extraterritoriality of statutory interpretation does not apply to a jurisdictional statute, and even if it did, the design of the Federal Rules of Civil Procedure, with which the statute fits, plainly and expressly encompasses extraterritorial reach.

However, the court held, only SIS, not Santander, was within the reach of long-arm personal jurisdiction.  SIS was subject to general jurisdiction, but was not meaningfully involved in the BPE acquisition.  Santander had hired New York consultants to contemplate an acquisition of BPE, which could subject Santander to specific jurisdiction, but that was an entirely different transaction, prior to the government-forced sale of BPE.

Though the case deals with conventional discovery, it has important implications for transnational business in the age of e-discovery.  Expansive U.S. discovery practice is incompatible with more restrictive norms in much of the world, Europe included.  Section 1782 is a potentially powerful tool for savvy litigants to get their hands on opponents' materials when foreign courts won't allow it.  That's bound to rub transnational business and foreign regulators the wrong way.

The case is In re Del Valle Ruiz, No. 18-3226 (2d Cir. Oct. 7, 2019).  Hat tip to New York attorney Ken Rashbaum, at Barton LLP, who telephonically visited my Comparative Law class and referenced the case, and will be writing more about it soon. 

Gin labeling and grains of paradise.  OK, this is more about misinformation than information, and it is globally important.  Law and gin, two great international cultural forces and loves of my life, come together in a recently filed lawsuit over grains of paradise.  You can't make up stuff this dry yet thirst-quenching.

Bombay Sapphire Bottle (by @Justintoxicate)

In a class-action complaint removed to the U.S. Southern District of Florida in mid-September, plaintiffs accuse Bacardi USA, maker of Bombay Sapphire Gin, and Winn-Dixie supermarkets of selling "adulterated" product, because Bombay gin contains a botanical literally called "grains of paradise."  According to the complaint, grains of paradise, scientific name Aframomum melegueta, "is an herbaceous perennial plant native to swampy habitats along the West African coast."  Turns out, it's illegal under Florida law, section 562.455.

The ABA Journal explained: "The 150-year-old Florida law was passed when people thought grains of paradise was a poisonous drug. The misconception likely arose when home distillers added other, dangerous ingredients to gin to 'mask the awful distilling and make more money,' according to Olivier Ward, a British gin expert and consultant who spoke with the Miami Herald."  Bacardi is not hiding anything and maintains that its products comply with all health and safety regulations.  The complaint itself states that grains of paradise are listed in the ingredients and actually etched on the gin's blue bottle.

The case is Marrache v. Bacardi, U.S.A., Inc., No. 1:19-cv-23856 (S.D. Fla. docketed Sept. 16, 2019).

EU court rules for Google, narrows French 'right to be forgotten' order to Europe

In the latest battle of the feud between Google and the French data protection authority (CNIL), the Court of Justice of the European Union ruled that the CNIL's "right to be forgotten" order should be limited to internet users in Europe.  However, the court did not rule out the possibility of a worldwide order if the facts warrant.

The court wrote:

[T]he right to the protection of personal data is not an absolute right, but must be considered in relation to its function in society and be balanced against other fundamental rights, in accordance with the principle of proportionality....  Furthermore, the balance between the right to privacy and the protection of personal data, on the one hand, and the freedom of information of internet users, on the other, is likely to vary significantly around the world. 

While the EU legislature has, in Article 17(3)(a) of Regulation 2016/679 [GDPR], struck a balance between that right and that freedom so far as the Union is concerned ... it must be found that, by contrast, it has not, to date, struck such a balance as regards the scope of a de-referencing outside the Union.

"Proportionality" is a core principle of EU human rights law when regulation collides with individual rights, or, as here, state power is implicated to favor one individual's rights over those of others.  The same principle also constrains supra-national authority over member states.

The case arose from a CNIL fine of Google.  The French authority had ordered Google to de-list search results to protect certain individuals' privacy under the "right to be forgotten," or "right to erasure," when those individuals were searched by name.  "De-listing" or "de-referencing" search results is the front line of right-to-erasure court challenges today, though the specter of erasure orders that reach content providers directly looms on the horizon.

Google complied with the CNIL order only for European domains, such as "google.fr" for France, and not across Google domains worldwide.  Google employs geo-blocking to prevent European users from subverting de-listing simply by searching at "google.com" (United States) or "google.com.br" (Brazil).  Determined users still can beat geo-blocking with sly technocraft, so CNIL was dissatisfied with the efficacy of Google's solution.  Undoubtedly, a dispute will arise yet in which the CNIL or another European data protection authority tests its might with a more persuasive case for global de-listing.

The case is Google, LLC v. Commission Nationale de L’informatique et des Libertés (CNIL), No. C-507/17 (E.C.J.), Sept. 24, 2019.  Several free speech and digital rights NGOs intervened on behalf of Google, including Article 19, the Internet Freedom Foundation, the Reporters Committee for Freedom of the Press, and the Wikimedia Foundation, as well as Microsoft Corp.  The case arose initially under the 1995 EU Data Protection Directive, but carries over to the new regime of the General Data Protection Regulation (GDPR).