In re Activision Blizzard, Inc.
86 A.3d 531
Del. Ch.2014Background
- Pacchia alleges Activision and a Vivendi-controlled slate of directors breached fiduciary duties in the 2013 Restructuring that gave Kotick, Kelly, and ASAC control and liquidity.
- Vivendi objected to discovery located in France, invoking the Blocking Statute and the French Data Protection Act, claiming discovery must follow the Hague Evidence Convention and French law.
- Plaintiff moved to compel production under Delaware Court of Chancery Rules, seeking US-based depositions and worldwide document production without French-law constraints.
- The courtframes the dispute around whether American discovery may proceed notwithstanding foreign-law protections and how comity should govern.
- The court analyzes the Blocking Statute, the Evidence Convention, and the Data Protection Act, applying Restatement guidance to balance Delaware interests against French sovereignty.
- The court ultimately authorizes limited discovery under Chancery Rules with good-faith French-authority searches and a two-tier confidentiality order to address Data Protection Act concerns.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Blocking Statute bars discovery | Plaintiff argues Delaware may compel discovery notwithstanding Blocking Statute. | Vivendi contends Blocking Statute requires compliance with French/EU procedures and the Evidence Convention. | Court rejects total Blocking-Statute exclusion; allow mixed framework. |
| Whether discovery should be conducted under Evidence Convention first | Discovery should proceed under Court of Chancery Rules without mandatory Hague procedures. | Discovery should proceed primarily through the Evidence Convention. | Court declines mandatory first resort to the Evidence Convention; permits mixed approach. |
| How Data Protection Act considerations affect production | Data Protection Act should be satisfied with redactions and protective orders; production should not be blocked. | Data Protection Act imposes privacy-based limits on disclosures and may require special handling. | Two-tier confidentiality order and protocols to redact/pseudonymize data are approved. |
| What framework governs the court’s balancing when foreign law applies | Delaware forum should enforce discovery without overbearing foreign-law defenses. | Blocking Statute and comity require careful weighing against foreign sovereign interests. | Court adopts Restatement §442 factors and permits a tailored, comity-aware discovery plan. |
| Depositions location and method for French-resident witnesses | Depositions should occur in the United States where possible. | Some witnesses should be deposed in France via commissioner methods as permitted. | France-resident witnesses should sit in the United States; others may be deposed in France with permission; otherwise using Evidence Convention. |
Key Cases Cited
- Aérospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522 (U.S. 1987) (Evidence Convention is a permissive supplement, not mandatory replacement)
- Société Nationale Industre lle Aerospatiale v. U.S. Dist. Ct., 482 U.S. 522 (U.S. 1987) (permissive approach to Convention procedures; comity is key)
- Société Nationale pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197 (U.S. 1958) (courts may compel discovery notwithstanding foreign law; comity balancing required)
- In re Asbestos Litig., 623 A.2d 546 (Del. Super. Ct. 1992) (Delaware discovery decisions acknowledging foreign-law issues and Restatement principles)
- Armstrong v. Pomerance, 423 A.2d 174 (Del. 1980) (Delaware interest in overseeing fiduciaries to shareholders)
- King v. VeriFone Hldgs., Inc., 994 A.2d 354 (Del. Ch. 2010) (recognizes private shareholder litigation as protective governance mechanism)