{"id":100,"date":"2023-03-22T15:49:29","date_gmt":"2023-03-22T19:49:29","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/?p=100"},"modified":"2023-03-27T17:21:38","modified_gmt":"2023-03-27T21:21:38","slug":"court-interprets-chinas-pipl-as-containing-exceptions-for-discovery-in-cryptocurrency-class-action","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/2023\/03\/22\/court-interprets-chinas-pipl-as-containing-exceptions-for-discovery-in-cryptocurrency-class-action\/","title":{"rendered":"Court Interprets China\u2019s PIPL As Containing Exceptions for Discovery in Cryptocurrency Class Action\u00a0"},"content":{"rendered":"

\"\"<\/a>By Jessica Priselac<\/a><\/u><\/b><\/p>\n

Duane Morris Takeaway:<\/em><\/strong> While very few courts have been faced with interpreting China\u2019s Personal Information Protection Law (\u201cPIPL\u201d), two judges have now held that there is no conflict between China\u2019s PIPL and U.S. law with respect to a litigant\u2019s compliance with discovery obligations in the U.S.\u00a0 Although these two initial decisions are not binding on other courts, the dearth of case law on this issue makes it likely that both decisions will influence future interpretations of PIPL in U.S. litigation.<\/p>\n

China\u2019s Personal Information Protection Law (\u201cPIPL\u201d) came into effect on November 1, 2021, and is the country\u2019s first comprehensive statute regulating the protection of personal information.\u00a0 While the legislation has generated significant attention from the media and companies seeking to ensure compliance with the law in their day to day operations, the statute also has important implications for discovery in U.S. litigation.\u00a0 A recent decision in Owen v. Elastos Foundation<\/a><\/em>\u00a0by Magistrate Judge Barbara Moses of the Southern District of New York provides insight into how U.S. courts may interpret PIPL in the context of discovery disputes.<\/p>\n

Owen<\/em> is a putative class action in which plaintiffs claim that defendant Elastos Foundation failed to register the cryptocurrency it created and sold in the United States.\u00a0 Although defendants initially agreed to collect and produce data from 19 custodians, defendants later informed plaintiffs that PIPL prevented the collection and production of data belonging to certain custodians because it contained the personal information of individuals located in China.\u00a0 Plaintiffs then filed a motion to compel the production of documents that had not been produced by defendants on the basis of PIPL.<\/p>\n

As outlined by the court, PIPL prohibits accessing or handling the personal information of individuals located in China.\u00a0 Exceptions to this prohibition include obtaining the individual\u2019s consent, as well as certain other exceptions outlined in Article 13 of the statute.\u00a0 In support of their respective positions, the parties submitted competing expert reports as to the correct interpretation of PIPL, including whether any of the statute\u2019s exceptions applied in the context of the parties\u2019 discovery dispute.<\/p>\n

With respect to the first category of data at issue, which was located outside<\/em> of China but contained personal information related to individuals located in China, Judge Moses held that PIPL did not apply.\u00a0 In reaching this conclusion, she interpreted the statute as applying to data located outside of China only under certain circumstances set forth in Article 3 of PIPL, such as when data is being handled or processed to track or analyze the behavior of persons located in China for marketing purposes.\u00a0 She held that none of those enumerated circumstances applied in the discovery context, and compelled the production of data located outside of China.<\/p>\n

As to the second category of data, all of which was stored inside<\/em> of China, Judge Moses turned to the text of the statute, and held that processing and producing data located in China for the purpose of complying with U.S. law does not conflict with PIPL.\u00a0 Specifically, she relied on Sections 3 and 7 of Article 13 of PIPL, which permit the processing of personal information if \u201cthe processing is necessary for the performance of statutory duties or obligations,\u201d or under \u201cother circumstances provided bylaws or administrative regulations.\u201d\u00a0 PIPL Art. 13, \u00a7\u00a7 3, 7.\u00a0 While defendants argued that these exceptions only applied to compliance with Chinese laws, Judge Moses rejected defendants\u2019 argument and emphasized that the text of the statute did not support defendants\u2019 interpretation.<\/p>\n

In relying on exceptions to PIPL that are grounded in compliance with other laws and regulations, Judge Moses cited another opinion interpreting PIPL, Cadence Design Systems, Inc. v. Syntronic AB<\/a><\/em>.\u00a0 In that case, Chief Magistrate Judge Joseph C. Spero of the Northern District of California similarly relied on Article 13 of PIPL in holding that there was no conflict between U.S. law and PIPL as it pertained to compliance with one of his discovery orders.<\/p>\n

As two of the first opinions interpreting PIPL, the opinion of Judge Moses in Owen<\/em> <\/a>and that of Judge Spero in Cadence Systems <\/em><\/a>are likely to influence future decisions regarding the application of PIPL in the context of discovery.\u00a0 Accordingly, those who are inclined to assert PIPL in opposition to a motion to compel must be prepared to grapple with the question of whether it presents a conflict with U.S. law.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Jessica Priselac Duane Morris Takeaway: While very few courts have been faced with interpreting China\u2019s Personal Information Protection Law (\u201cPIPL\u201d), two judges have now held that there is no conflict between China\u2019s PIPL and U.S. law with respect to a litigant\u2019s compliance with discovery obligations in the U.S.\u00a0 Although these two initial decisions are … <\/p>\n

Continue reading “Court Interprets China\u2019s PIPL As Containing Exceptions for Discovery in Cryptocurrency Class Action\u00a0“<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[5],"class_list":["post-100","post","type-post","status-publish","format-standard","hentry","category-general"],"authors":[{"term_id":5,"user_id":6,"is_guest":0,"slug":"duanemorris3","display_name":"Duane Morris","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/843ff6e7a8fe5fc92109b47a45f34b6cf0ea499e6e788db23456c838b0ae6747?s=96&d=blank&r=g","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/posts\/100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/comments?post=100"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/posts\/100\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/media?parent=100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/categories?post=100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/tags?post=100"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/discoverystrategy\/wp-json\/wp\/v2\/ppma_author?post=100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}