The Catch 22 of Cross Border eDiscovery

The Catch 22 of Cross-Border eDiscovery
Best Practice eDiscovery Webinar sponsored by EMC SourceOne eDiscovery – Kazeon and Masters Conference
Guest Speaker: Shawnna Childress

Cross Border eDiscoveryby Shawnna Childress, P.I.

Agenda
Cross Border eDiscovery
Key Drivers:
Globalization
Cross Border Litigation
Key Concerns:
Working with the Rules
International Evidence Collection
Blocking Statutes
Foreign Judgment Enforceability
Data Protection and Privacy
Managing Information Globally
Cloud Computing

Key Drivers of Cross Border eDiscovery
Global Economy
Cross border businesses
Cross border business dealings
Cross border communications
Boom in corporate mergers, acquisitions and collapses
Dell-Perot Systems $3.9 billion
Cisco-Tandberg $3.4 billion
Cisco-Starent Networks $2.9 billion
HP-3Com $2.7 billion
EMC-Data Domain $2.1 billion

Key Global Economic Drivers
Common for a mid-size company to be a subsidiary of a:
Complex, multi-jurisdictional corporate structure
Financial Markets
Subprime Mortgage Crisis
Global Credit Crunch
World-wide Banking
Trade Markets

Key Global Economic Drivers
Common for a mid-size company to be a subsidiary of a:
Complex, multi-jurisdictional corporate structure
Financial Markets
Subprime Mortgage Crisis
Global Credit Crunch
World-wide Banking
Trade Markets
Where is the Cross-Border
eDiscovery located?

Exports & Imports
What are the 15 top countries the US trades with?

U.S. Total Trade (Goods)

U.S. Exports (Goods)

U.S. Imports (Goods)

Exports & Imports
Where is the world’s money?

2010 New Billionaires
The world’s billionaires have an average net worth of $3.5 billion (up $500 million in 12 months).
The world has 1,011 10-figure titans, up from 793 a year ago.
US billionaires account for 40% of the world’s billionaires, down from 45% a year ago.
In 2010, of the new billionaires, only 16% are from the U.S.
In 2010, Asia added 104 new billionaires.
In 2010, NEW to the top rankings is China with 27 new billionaires.
For the FIRST TIME, second to the US, China has the most new billionaires.
Russia has 62 billionaires on the list, 28 of them returnees who HAD fallen off the list in 2009 amid a meltdown in commodities.

Meet my Billionaires!

Where is the Money?: Top Billionaires in 2010
MEXICO Carlos Slim Helu $53.5 billion – Telecom
Telecom tycoon who pounced on the privatization of Mexico’s national telephone company in the 90’s. Net worth up $18.5 billion in 2010. Received Regulatory approval to merge his fixed-line assets into American Movil.
U.S. Bill Gates $53 billion – Microsoft
Net worth up $13 billion in 2010 as Microsoft shares rose 50% in 12 months.
More than 60% of fortune held outside Microsoft (Four Seasons hotel, Televisa & Auto Nation)

INDIA MukeshAmbani $29 billion – Oil & Gas
Global ambitions: His Reliance Industries, India’s most valuable company, recently bid $2 billion for 65% stake in troubled Canadian oil sands outfit Value Creations.
UK/INDIA LakshmiMittal $28.7 billion – Steel
London’s richest resident. Sits on board of Goldman Sachs. Daughter in-law recently bought insolvent German fashion house Escada.
FRANCE Bernard Arnault $27.5 billion – Luxury Goods
Developing upscale Shanghai commercial property

BRAZIL Eike Batista $27 billion – Mining & Oil
2/3 of his fortune comes from relatively new source, OGX Petróleo e Gas Participações, the oil-and-gas exploration company he founded in 2007 and took public a year later. UK/INDIA LakshmiMittal $28.7 billion – Steel
GERMANY Karl Albrecht $23.5 billion – Supermarkets
Owns one of Germany (and Europes’)dominant grocers plus over 1k stores in the US across 29 states.
SWEDEN Ingvar Kamprad $23 billion – Ikea
Ikea's reputation under fire. In Russia company fired two top managers for allowing bribes to a power supplier. In France firm is facing an extended workers' strike.

HONG KONG Li Ka-shing $21 billion
Has a large holding in Canadian oil firm Husky Energy, which recently announced its third discovery in South China Sea.
SAUDI ARABIA Prince Alsaud $19.4 billion
Two-thirds of his fortune is held in his 95% stake in Saudi-listed investment vehicle, Kingdom Holding.
In the five weeks leading up to Forbes' stock valuation date, Kingdom shares jumped 49%.
Alwaleed and Kingdom Holding together own a 3.5% stake in Citigroup. As the bank's largest individual investor, he has been vocal in his support of its chief executive VikramPandit.

75 of the Global 100 law firms are based in the U.S.
The rest of the world is not as litigious as the U.S.

It seems ironic that our global economy is fueled by advanced communications technology but those same communications can wreak havoc when it comes to litigation involving cross-border transactions.

The Catch-22 of Cross Border eDiscovery
While the law in the United States makes it clear that parties to a litigation must preserve documents and electronically stored information, laws in other countries make it equally clear that preserving or collecting that data may violate their data protection laws.

Discovery, including the availability of depositions and interrogatories, is RARE and at the court’s discretion in most countries. (Europe, Japan, China, etc)
Many traditional “litigation friendly” common law jurisdictions are introducing reforms to reduce the burdens
Scope, time, cost of discovery

Where the issues arise?
Differences in the body of law for different countries
Democracy
Socialism
Tyranny
Communism
Example Miranda Rights

Key Concerns: Local Legal Systems
BLUE = Civil law
MAROON = Common law
BROWN = Bijuridical, sistemahíbrido (civil and common law)
BLACK = Customary law
YELLOW = Fiqh

Key Concerns
Local Jurisdiction
Common Law
Law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action. Based on the principle that it is unfair to treat similar facts differently on different occasions.
Civil Law
It holds legislation as the primary source of law, and the court system is usually inquisitorial, unbound by precedent, and composed of specially trained judicial officers with a limited authority to interpret law.
Custom Law
The established pattern of behavior that can be objectively verified within a particular social setting. A claim can be carried out in defense of "what has always been done and accepted by law.“
Fiqh
Islamis jurisprudence. Fiqh is an expansion of the Sharia Islamic law—based directly on the Quran and Sunnah—that complements Sharia with evolving rulings/interpretations of Islamic jurists.

Data Protection Laws Around the World

Differences- Personal Data Definitions
US Personal Data
Medical Records
SSN
Banking Info
EU – Directive 95/46/EC
“Everyone has the right to respect for his private and family life, his home and his correspondence.” ~European Convention for the Protection of Human Rights and Fundamental Freedoms
All above plus anything personal sent or received
Requires all member countries to put into law a requirement which requires consent to use personal data
Communist Country (e.g. China)
Whatever they deem necessary at that moment
Criminal penalties

Emails
An email within an organization can just as easily be sent… from Florida to Paris as it can go from Florida to New York

World-wide Internet Censorship

Data Protection & Privacy
In many civil law jurisdictions, particularly the EU, protection of personal information is perceived as a fundamental human right.

Complications
Complications:
How discovery friendly are the jurisdictions in which the defendants have known assets?
What resources are there to proceed with litigation in that jurisdiction?
Time & Cost, eDiscovery Assistance, Trusted Legal Rep.
Judgment enforceability
Prospects for success & settlement
Possible lack of company policies
Custodian objections
“tipping off” employees may impair investigations
Answers:
Consulting with qualified local counsel
Evaluate company’s policies regarding access to the data
Evaluate binding corporate rules to provide for data access and transfers

Foreign Judgment Enforceability
World-wide
Hague Convention
European Union
Council Reguation (EC) No. 44/2001 (except Denmark who opted out)
Safe Harbor Provision

Key Concern: Cross Border Evidence Collection
US to Rest of World
Hague Convention
Party may request the Court to send a Letter Rogatory (request letter) to the Central Authority within a participating foreign country to compel production of evidence.
http://www.hcch.net/index_en.php?act=conventions.status&cid=82
From US to Americas
Inter-American Convention on Letters Rogatory
Within European Union
Council Regulation (EC) No. 1206/2001
If the above doesn’t work, use Letters Rogatory

Blocking Statutes
Some countries have blocking statutes which effectively make it illegal (criminal/financial penalties) for an entity within that country to comply with a foreign request for discovery
Criminal Impact of Blocking Statutes
French Penal Law No. 80-538 (1980)
Offensive Use of Blocking Statutes
Accepting an Adverse Inference: Lyondell-Citgo Refining v. Petroleos de Venezuela (SDNY May 2, 2005)
The jury can infer the evidence would have been adverse to the defendant.
Discovery Obligations and Blocking Statutes
Does not excuse obligation: Enron v. JP Morgan Secur, Inc.
Discovery ordered, even after Court acknowledgement of French Blocking Statute violation: Aeropspatiele
Court must balance the production of documents from a foreign party with their good faith effort: Restatement (Third) of Foreign Relations Law 442(1)(c); SocieteInternationale v Rogers

Blocking Statutes - Rejection
Intel Corp. v Advanced Micro Devices, Inc., 542 U.S. 241 (2004)Complaint filed by AMD against Intel before Directorate-General for Competition of the European Commission
AMD recommended that the Commission request discovery of documents previously produced by Intel in a private antitrust law suit in the United States
Court upheld request and rejected ‘showing of foreign discoverability’ argument

InformedConsent by Custodians
Must be acquired before access is granted to data collector to collect the data
Data collector will need to specify and disclose the purpose of the data collection (or access)
Written consent from custodians before data can be collected

Once you get access to the data, then what?
Legal
Technical
Project Management

Data Processing & Hosting
Where will the data be processed?
Onsite
Taken offsite, but kept in-country
Taken offsite, out of country
What processing software can handle the languages identified through custodian interviews and sampling collection?
Where will the data be hosted?
Onsite
Taken offsite, but kept in-country
Taken offsite, out of country

Data Processing & Hosting
Use data collector to perform the following activities:
Develop filtering criteria and keyword searches in multiple languages
Determine (and get a WRITTEN agreement with opposing counsel) as to what data is relevant to the investigation/case
Perform local data collections
Consider the use of network data acquisition methods
Consider arranging for transfer of relevant material to central location
Implement protocols to protect data such as use of encrypted media and establish secure data rooms in appropriate regions
Process on-site
Host on-site

Foreign Languages
How will you handle the multiple foreign languages?
Example: Chinese Dialects
Gan - 赣语/贛語31 million
Guan (Mandarin) - 官话/官話836 million
Hui - 徽語3.2 million
Jin - 晋语/晉語45 million
Kejia (Hakka) - 客家話34 million
Min - 閩語/闽语60 million
Wu - 吴语/吳語77 million
Xiang - 湘语/湘語/湖南话/湖南話36 million
Yue - 粵語/粤语71 million
Unclassified not determined

Local Unique Challenges
State Secret data in China
1989 “Law on Guarding State Secrets”
It’s a crime to release state secret data.
Major policy decisions on state affairs;
The building of national defense and in the activities of the armed forces;
Diplomatic activities and in activities related to foreign countries and those to be maintained as commitments to foreign countries;
National economic and social development;
Science and technology;
Activities for preserving state security and the investigation of criminal offences; and
Any other matters classified as "state secrets" by the national State Secrets Bureau.

China’s Well-Known State Secret Case
Rio Tinto espionage case
Accused to having industry data crucial to the negotiations (too detailed to have been obtained legally)
Arrests cam shortly after Rio Tinto declined to sell part of the company to the Chinese state-owned company Chinalco.
Rio Tinto accused of causing 100 billion USD worth of damage to the Chinese Economy over a 6 year period.
Hu sentenced to 10 years in jail
Accuser later admitted to fabricating data

Case Scenario
Example scenario
US multi-national with operations in U.S., Europe and Asia
Allegations of product failure
Approach
Assess company policies and local country rules
Obtain copies of company policies and validate existing agreements
Consult with law firms within each region with local ediscovery/edisclosure experience
Implement legal hold
Define roles for the data collector(s)
Acquire written custodian informed consent approval
Acquire local government approval (if needed)

Little Decisions Cost Big $
Business decision by a multi-jurisdictional corporation made to close two data centers
Increased storage capacity to local PSTs on desktops and laptops of employees
CIO Savings $2 Million
GC Cost $10+ Million

Cloud Computing & Web 2.0

Web 2.0
The term Web 2.0 is commonly associated with web applications that facilitate interactive information sharing and collaboration on the web.
The term Web 2.0 was coined in 1999 by Darcy DiNucci in her article “Fragmented Future”.

Cloud Computing
Cloud computing is internet based computing, whereby shared software and information are provided to computers and other devices on-demand like the electricity grid.
Everything is set up on virtual sources.
Most cloud computing infrastructure consists of services delivered through data centers and built on servers.

Web 2.0

Clouds are Local (and NOT)
…and so are their implications.
While clouds definitely deliver fast access to resources and can allow rapid deployment of new applications along with speed and dynamic scaling, this may come with substantial legal risks. IT & Legal professionals should keep in mind:
Where your customers are determines what rules apply.
Disparate regulatory environments complicate compliance management.
Cross-border data flow further increases complexity.
Some countries are a worse place to be than others.

Do you know where your data is in the cloud?
Country-specific regulations governing privacy and data protection vary greatly.
http://www.forrester.com/cloudprivacyheatmap

What can we do?
Safe Harbor Provisions & Certifications
Hague Convention – Ask the court to invoke the Hague Convention for the taking of evidence abroad in civil and commercial matters. It establishes a set of uniform procedures where a court of one country can request assistance from the court of another country. (The likelihood of success is slim.)
Meet with the country’s local government official and be as transparent as possible regarding what data you will be taking with you and get written approval.
Prepare a written discovery plan and get consent.

For more information
www.BrecherChildress.com

Next Steps
Best practices white papers, analyst papers and more…
eDiscovery
kazeon.com
emc.com/ediscovery
Information Governance
emc.com/informationgovernance
emc.com/SourceOneCity
Upcoming events
Masters Conference – Use code: EMC11
themastersconference.com
EMC eGRC Seminar Series - throughout North and Latin America
emc.com/egrcseminar
Best Practices eDiscovery webcasts (EMC+MastersConf)
kazeon.com/newsroom2/webinars.php

The Catch 22 of Cross Border eDiscovery

by J. David Morris on May 14, 2011

Accessibility

Categories

Tags

Upload Details

Usage Rights

2 Embeds 35

Statistics

The Catch 22 of Cross Border eDiscovery — Presentation Transcript

http://www.kazeon.com	34
url_unknown	1