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Judge Scheindlin Helps Demystify Foreign E-Discovery
Law Technology News
One of the most vexing problems for global companies and their lawyers is how to identify, collect, and use electronically stored information in e-discovery without ending up in jail or facing huge fines. The most obvious problem is that countries have very different laws about personal privacy, often developed in reaction to their unique histories especially if that history included repressive regimes where personal information was used to identify and kill dissidents.
At the Georgetown Advanced E-Discovery Institute Friday panel, "First Do No Harm: Preserving and Admitting Foreign ESI," panelists offered analysis and advice on this challenging topic, which becomes more difficult by the day as the world becomes increasingly "smaller" with the explosion of inexpensive mobile devices and communication options.
The panelists brought a rich range of experience to the discussion. Shira Scheindlin, a U.S. District Court judge in the Southern District of New York, previously worked as a prosecutor, commercial lawyer, and as a special master. Kenneth Rashbaum, an attorney and principal at Rashbaum Associate, moderated the 75-minute program, held at The Ritz-Carlton Tysons Corner, in metropolitan Washington, D.C. He previously worked at Fios Inc.; Sedgwick, Detert, Moran and Arnold; and as a Kings County District Attorney. London-based Jonathan Armstrong is a partner at Duane Morris, and a host of the firm's TechLaw10 podcast series. He previously was a partner at Eversheds. Matthew Knouff is general counsel and e-discovery counsel at Complete Discovery Source. Attorney Stephanie Mendelsohn is director of corporate records and e-discovery at Genentech, and formerly was a partner at Reed Smith. Fernando Pinguelo, is a trial lawyer and chair of Norris McLaughlin & Marcus' Cyber Security & Data Protection Group, and serves as an adjunct professor at Seton Hall University Law School, where he teaches an e-discovery course.
The stakes of international e-discovery are high, said Rashbaum, kicking off the discussion. But, he cautioned, failure to admit ESI that has cost millions of dollars to collect, review, and produce is most often "a self-inflicted wound," he said, quoting a statement recently made by then-Magistrate Judge Paul Grimm (who today will be elevated to full judge status in the Maryland U.S. District Court).
But Rashbaum was preaching to an educated choir when he polled the large audience, most raised their hands to indicate that they have been dealing with overseas ESI. At the heart of cross-border e-discovery challenges is the reality that personal data is viewed differently from country to country, and "personal data has a value in Europe that is protected by law," explained Armstrong. While there are different litigation systems worldwide, the practice areas that currently generate e-discovery quandaries usually boil down to three: employment, data privacy, and data protection. Complicating matters even more, when it comes to privacy laws, there is "different enforcement, even within Europe," in addition to the "contrasting approaches" taken by Europe and the U.S. Fueling the challenge, he said, is the "increased militancy of defendants and subjects."
Culture and history are key to understanding these agendas, the panelists explained. "Data privacy laws change after revolutions," said Armstrong. "Europe is a quilt of different nations with different histories. Broadly, people feel strongly when they come from a country that has a history of repression." For example, France, he said, is particularly wary of privacy regarding political sentiment; and Switzerland is queasy about data export. Hungary fiercely protects medical records privacy, because in its past, dental records were used by the Kremlin to identify dissidents, track them down, and kill them. The U.K., however, hasn't experienced that level of repression, Armstrong noted, also observing that sensitivities change as generations change.
There is an increasingly resistance of data regulators to broad investigations, he noted, and a spike in whistleblowers who report improper use of data. In 1996, the European Union has created an "Article 29 Working Party," comprised of one member from each country, that provides advice and opinions on data privacy, Armstrong noted. "It is like a frat club for data regulators."
The biggest issue facing international litigants dealing with e-discovery, said Scheindlin, is defining the trigger when parties must start saving potentially relevant data. Specifically, when does the reasonable anticipation of litigation apply when it comes to the decision to initiate a legal hold. That issue is right in Scheindlin's wheelhouse she wrote landmark opinions on this question that shaped the early development of e-discovery, including Zubulake v. UBS Warburg.
Said Scheindlin: "Preservation is not simple, even in the U.S. We don't have a statute on preservation; we have been talking about writing one, to be added to the Federal Rules of Civil Procedure, but haven't." But she noted, there is guidance from existing case law "preservation principals found in sanction cases, where people didn't do it right." But, she noted, "legal holds beyond U.S. borders [are] an alien concept."
Genentech's Mendelsohn offered some practical ways to address cross-border e-discovery. "First, and most important, start to sensitize your clients both internal and external about legal holds and what they mean.
Knouff reminded the audience that jurisdictions vary on what can be admitted, and that in many countries, there is no pre-trial discovery at all.
A major challenge arises in multi-country litigation when countries have mutually-exclusive requirements, the panelists noted. "Dealing with jurisdictions where companies are compelled to destroy personal information can be difficult," said Pinguelo. And "exception to hearsay" rules, limits on legal holds, and attempts to consider proportionality as a factor can create havoc, the panelists noted.
But moderator Rashbaum assured the audience that "there are ways around these problems and conundrums." Offered Mendelsohn: "Records management and retention and email policies help." Be sure employees understand legal holds, and understand their responsibilities, she said. Make sure employees know how long to keep documents, especially for sensitive information. "Leverage your in-house and in-country people and tools." Companies, she said, should consider in advance how you will process and cull data, depending on the risk and the volume.
A strong message resonated through several comments: lawyers should act swiftly. "Approach adversaries early," advised Pinguelo. Scheindlin urged the audience to be proactive with the court. "It's your job to educate the judges," she said. "We on the judiciary are blissfully unaware of these problems. Many judge have no experience with foreign laws."
Litigators, Scheindlin suggested, should focus on the parties, rather than non-parties. Judges, she said, can make demands on parties. And if different rules and jurisdictions are at play, "it's your job to raise the issues" to the court. And "raise the issue quickly at the Rule 16 conference," said Scheindlin, referring to pre-trial meetings required by the Federal Rules of Civil Procedure. "It's all about education and raising the issue early."
Scheindlin acknowledged that some countries' rules will not sit well with American litigators, especially privacy requirements that allow employees to review and remove personal data. "We don't like that," she said, citing as an example how a supervisor accused of harassment could expunge emails that would substantiate the allegation.
The panel wrapped up the discussion with a quick overview of foundational elements, including authenticity, reliability, hearsay exceptions, and the best evidence rule. Scheindlin offered a very pragmatic piece of advice: "Review the Federal Rules of Evidence before the hearings," she suggested, advising that even she does so before hearings to stay fresh on its nuances.
Monica Bay is editor-in-chief of Law Technology News and a member of the California bar. Twitter: @lawtechnews @LTNMonicaBay.