LegalTech Cross Border Disputes

The Corporate Reality ofCross-Border Disputes in the Global Business Market
Legal Tech New York
February 1, 2011

Panel Introductions
Brendan M. Schulman, Esq.
E-Discovery Counsel, Kramer Levin Naftalis & Frankel LLP
David Bryant Isbell
Senior Litigation Specialist, Baker & McKenzie LLP
Cynthia B. Bateman
Director, Forensic Technology Services, KPMG LLP
Heidi Maher, Esq.
Principal - Compliance & eDiscovery Practice, EMC Corporation

Agenda
Legal Background – US/Non-US Differentiators
Practical Considerations and Process Recommendations
Organizational Policy and Compliance

Legal Background & US/Non-US Differentiators

American-Style Discovery
F.R.C.P. 26(b)(1)
“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense -- including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity of persons who know of any discoverable matter”

F.R.C.P. 26(b)(1)
Discovery requests need only be “reasonably calculated to lead to the discovery of admissible evidence.”

Discovery rules enable the parties "to obtain the fullest possible knowledgeof the issues and facts before trial.“Hickman v. Taylor, 329 U.S. 495, 501 (1947)
"Exceptions to the demand for every man's evidence are not lightly created nor expansively construed, for they are in derogation of the search for the truth."
U.S. v. Nixon, 418 U.S. 683, 709 (1974)

Conflict with Foreign Framework
“[T]he transfer to a third country of personal data which are undergoing processing or are intended for processing after transfer may take place only if . . . the third country in question ensures an adequate level of protection”
EU Data Protection Directive
Article 25

Conflict with Foreign Framework
“There is a tension between the disclosure obligations under US litigation or regulatory rules and the application of the data protection requirements of the EU. . . . an obligation imposed by a foreign statute or regulation may not qualify as a legal obligation by virtue of which data processing in the EU would be made legitimate.”
E.U. Article 29 Working Party Report 158

Hague Convention
Hague Convention Article 23
“A Contracting State may at the time of signature, ratification or accession, declare that it will not execute Letters of Request issued for the purpose of obtaining pre-trial discovery of documents as known in Common Law countries.”

Aerospatiale case
Aerospatiale case
Societe Nationale Industrielle Aerospatiale v. US District Court for the Southern District of Iowa, 482 U.S. 522 (1987)
Hague Convention is not exclusive means for US litigants to obtain evidence abroad
District Court possesses jurisdiction "to order a foreign national party before it to produce evidence physically located within a signatory nation"
Hague Convention is not the first resort because it is "unduly time consuming and expensive, as well as less certain to produce needed evidence than direct use of the Federal Rules."

Aerospatiale case - Application
Aerospatiale case - Application
“Many courts are simply discarding the [Hague Convention] as an unnecessary hassle” and do not “exercise the ‘special vigilance’ to protect foreign litigants’ that the Supreme Court anticipated.”
In re Automotive Refinishing Paint Antitrust Litigation, 358 F.3d 288 (3d Cir. 2004)

Blocking Statutes
French blocking statute:
Criminal penalties for “communicating ... to foreign public authorities, economic, commercial, industrial, financial, or technical documents or information, the communication of which [would] infringe upon the sovereignty, security or essential economic interests of France or upon the public order.”

Blocking Statutes
U.S. Courts generally do not heed
Minpeco, S.A. v. Conticommodity Servs., Inc., 116 F.R.D. 517 (S.D.N.Y. 1987)
In re Vivendi Universal, S.A. Secs. Litig., No. 02 Civ. 5571 (RJH), 2006 WL 3378115 (S.D.N.Y. 2006);

Getting into trouble
Strauss v. Credit Lyonnais S.A., 242 F.R.D. 199, 221 (E.D.N.Y. 2007)
French Corporation is ordered to produce documents located in France.

In Re Advocat “Christopher X” (Supreme Court) Criminal Section, Appeal No. 07-83228 (January 16, 2008)
U.S. Counsel request to French local counsel
French lawyer convicted and fined € 10,000

Lyondell-Citgo Refining, LP v. Petroleos de Venezuela, S.A, 2005 WL 1026461 (S.D.N.Y. 2005).
Adverse-inference instruction.

eDiscovery Process - Practical Considerations

Safety Concerns/Investigative Services
Assessing travel and safety concerns for your legal team and third party vendors
Assessing the need for investigative services to evaluate safety concerns and information and fact gathering.
Cultural sensitivity and understanding

Custodial Interviews, Collection and Chain of Custody
Pre-Collection IT meeting and assessment of client infrastructure.
Consulting with client on collections. When do you use client resources versus a third party collections vendor?
Understanding and addressing potential DPA issues and assessing the need for Safe Harbor.
Preparing for and conducting document custodial interviews, staffing needs and key questions for custodians.
Are forensic accounting services required and factors to consider for collection?
Importance of maintaining chain of custody and documentation including collection logs
Regular process auditing and QC

Data Processing and E-Discovery Tools
Factors to consider post collection for data processing and hosting.
Selection of an e-Discovery Platform
Safe Harbor Certification
Foreign language review and Unicode compliance
Data encryption concerns
Global De-Duplication vs Custodial De-De-Duplication
Time zone processing
Data culling and search terms. Factors to consider when developing search terms, including foreign language.

Document Review, Production, Cost Control
On-shoring vs Off-shoring, what are my best options for review?
Considering DPA concerns when staffing a document review team.
Putting controls around your document review and QC.
Harnessing Technology – when and how to implement advanced analytical tools in the document review process
Production Concerns and Organization – Producing to multiple regulatory agencies.
Concerns over cost control and coping with the high cost of e-discovery and review.
Production costs

Organizational Considerations

Organizational Considerations
Internal Organizational Considerations
Collaboration Among Legal, Information Technology, Information Security, RIM, and Overall Corporate Compliance Functions
Personal Data Policies and Procedures
Records Management and Information Governance
Third-Party Relationships
Compliance Audits

Questions?

LegalTech Cross Border Disputes

by J. David Morris

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