IN RE DIDI GLOBAL INC. SECURITIES LITIGATION

Background

Plaintiffs alleged that DiDi moved forward with a U.S. initial public offering and New York Stock Exchange listing despite directions from China’s Cyberspace Administration of China to postpone the offering until DiDi completed a cybersecurity-related self-inspection. During discovery, DiDi withheld documents based on Chinese laws restricting the transfer of certain information outside China. It also withheld or redacted documents based on attorney-client privilege and work-product protection, which generally protect certain confidential legal communications and materials prepared for litigation.

The court had previously required DiDi to provide a more detailed withholding log and allowed plaintiffs to renew their request for specific documents. Plaintiffs then filed two motions: one seeking documents withheld under Chinese blocking laws and another seeking documents withheld or redacted based on privilege or work-product protection.

Motion Concerning Chinese Blocking Laws

The court applied a two-step analysis. First, it considered whether Chinese law prohibited disclosure. Second, it considered whether discovery should nevertheless be ordered under principles of international comity, which require consideration of the competing interests of the United States and the foreign country. The relevant factors included the documents’ importance to the litigation, the specificity of the requests, where the information originated, the availability of alternative ways to obtain it, and the balance of national interests. The court also considered DiDi’s good faith and the potential hardship of compliance.

The court concluded that Chinese law likely prohibited disclosure of the documents at issue. However, the court found that DiDi had not adequately explained the process by which Chinese authorities approved or rejected production, including why 492 previously withheld documents were later produced. The court therefore found China’s interest in withholding the documents unclear and provisional on the record before it.

The court found the 912 Cybersecurity Review Documents important because they could provide evidence about DiDi’s pre-offering compliance with Chinese cybersecurity laws and alleged regulatory directions. The court also found plausible importance in 73 Self-Inspection Documents concerning an antitrust inquiry because DiDi’s related self-inspection included information about personal-information and data-security policies. Plaintiffs did not provide enough information to show that the remaining Self-Inspection Documents or the Security Documents were important to the claims. The court rejected DiDi’s argument that depositions and interrogatory answers were adequate substitutes for document discovery.

Privilege and Work-Product Motion

The court held that DiDi waived attorney-client privilege and work-product protection for 954 documents because DiDi initially listed them as withheld under Chinese blocking laws without asserting privilege, then raised privilege claims later. The court concluded that the delay resulted from deficient withholding logs and that the discovery rules did not allow DiDi to add privilege claims in successive stages.

For five documents identified as involving legal advice from in-house counsel, DiDi failed to show who the relevant person was, whether that person was a licensed attorney, or whether that person provided the legal advice. DiDi therefore did not establish privilege for those documents. The court also held that attorney-client privilege did not protect 20 documents exchanged with auditor PricewaterhouseCoopers Zhong Tian LLP because DiDi did not assert work-product protection for them and did not identify authority supporting attorney-client privilege for documents shared with auditors.

Disposition

The court granted plaintiffs’ motions to compel to the following extent: DiDi must produce the 912 Cybersecurity Review Documents, the 73 Self-Inspection Documents related to the antitrust inquiry, the 20 documents involving communications with PricewaterhouseCoopers Zhong Tian LLP, documents numbered 33–36 and 40 on the First Supplemental Privilege Withhold Log, and 105 documents on the Amended Second Supplemental Privilege Withholding Log that were no longer being withheld under Chinese blocking laws. The motions otherwise were denied.