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The Catch 22 of Cross Border eDiscovery
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The Catch 22 of Cross Border eDiscovery



Cross-Border eDiscovery is a hot topic this year. Globalization of businesses and mass mergers and acquisitions has caused an increase in the need for an understanding of how eDiscovery should be ...

Cross-Border eDiscovery is a hot topic this year. Globalization of businesses and mass mergers and acquisitions has caused an increase in the need for an understanding of how eDiscovery should be handled in other countries. All over the world, courts and local governments have instituted new rules for how parties will engage in discovery related to digital evidence. These new rules have been causing issues between the attorneys required by the US discovery rules to discover digital evidence for their cases and the various governments outside the US and across the world.

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. In this seminar, you will learn the updates in the local discovery and privacy rules of the top trade partners of the U.S. so that you will be able to handle overseas eDiscovery requirements with greater ease and more knowledge.



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The Catch 22 of Cross Border eDiscovery The Catch 22 of Cross Border eDiscovery Presentation Transcript

  • 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:
    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)
  • Where is the Money?: Top Billionaires in 2010
    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
  • Where is the Money?: Top Billionaires in 2010
    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.
  • Where is the Money?: Top Billionaires in 2010
    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.
  • Cross Border Litigation
    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.
  • Cross Border Litigation
    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.
  • Cross Border Litigation
    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
    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.“
    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
    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
    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
    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
    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.
    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?
    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?
    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
    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.
  • 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
  • Next Steps
    Best practices white papers, analyst papers and more…
    Information Governance
    Upcoming events
    Masters Conference – Use code: EMC11
    EMC eGRC Seminar Series - throughout North and Latin America
    Best Practices eDiscovery webcasts (EMC+MastersConf)