WHAT S IN STORE FOR E-DISCOVERY IN 2015? TOP 4 TRENDS TO WATCH

Transcription

1 WHAT S IN STORE FOR E-DISCOVERY IN 2015? TOP 4 TRENDS TO WATCH 1

2 Exclusive News and Analysis Monthly Members-Only Webcasts Networking with CEDS, Members On-Demand Training Resources Jobs Board bits + bytes Newsletter Affinity Partner Discounts ACEDS provides an excellent, much needed forum to train, network and stay current on critical information. Kimarie Stratos, General Counsel, Memorial Health Systems, Ft. Lauderdale Join Today! aceds.org/join 2

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4 Presenters Stephanie L. Giammarco, CPA/CITP, CFE, CEDS Partner, BDO Consulting Daniel S. Meyers Partner, Bracewell & Giuliani Direct: Direct: Stephanie L. Giammarco leads BDO s Forensic Technology Services practice with more than 20 years of experience and a background in accounting, information technology and criminology. Having worked on some of the largest financial frauds to date, she has led teams creating databases of millions of records, performed advanced data analytics and provided testimony pertaining to damages and electronically stored information. Stephanie provides litigation and consulting services to organizations and their counsel, including data analytics, computer forensics and e-discovery services related to domestic and international matters involving product liability, financial statement fraud, class action lawsuits, internal investigations, securities fraud, employee and vendor schemes, and breach of contract. She is skilled in the collection, preservation and analysis of electronic evidence, as well as the implementation of various e-discovery tools. She has been deposed as a Rule 30(b)6 e-discovery witness and testified before the Judicial Arbitration Services on the calculation of damages in contract disputes. Stephanie has published and presented on a range of computer forensics and e-discovery topics, including before the Securities and Exchange Commission, Security Industry Authority and National Futures Association. Dan Meyers is a partner in Bracewell's New York office and a member of Bracewell's Litigation Section. He has experience representing private investment funds, financial institutions and energy companies in a wide range of complex commercial disputes before federal and state courts. Dan's practice focuses on ediscovery and information governance. Dan assists clients in developing their ediscovery policies and procedures, implementing those policies in specific cases and ensuring that his clients regulatory and dispute-based preservation obligations are satisfied in a cost-effective and fully-defensible manner. Dan's practice areas also include corporate governance disputes (including breach of fiduciary duty claims and shareholder disputes), federal bankruptcy claims (including fraudulent transfer and valuation disputes), securities claims, and state law contract and business tort actions. He also has experience defending parent corporations against claims of derivative liability for the alleged debts of their subsidiaries or affiliates, whether under common law theories of alter ego and veil piercing liability or statutory bases for derivative corporate liability. 4

5 Trend #1 Litigation readiness 5

6 Litigation Readiness 6

7 The Spoliation Sanctions Gotcha Game Judge Shira Scheindlin: e-discovery sanctions need limits, lest litigation become a gotcha game rather than a full and fair opportunity to air the merits of a dispute. Pension Committee, 685 F. Supp. 2d 456 (S.D.N.Y. 2010) 7

8 But a Gotcha Game is Exactly What Has Occurred Sanctions for e-discovery Violations: By the Numbers, Duke L.J. (2010) Electronic Discovery Year-End Update (2012), Gibson Dunn 8

9 The Proliferation of Sanctions Motions Continues In 2014, companies reported a 42% rise in cases in which they have had to defend their preservation practices -- Legal Hold Pro, Legal Hold & Data Preservation Benchmark Survey

10 Common Types of Sanctions Monetary fines: u Philip Morris sanctioned $2,750,000 for failing to preserve s. U.S. v. Philip Morris (D.C. 2004) u Pharmaceutical companies sanctioned $931,500 for failing to preserve text messages. In re Praxada (S.D.Ill. Dec. 2013) Adverse Inference Instructions: u In practice, an adverse inference instruction often ends litigation it is too difficult a hurdle for the spoliator to overcome. The in terrorem effect of an adverse inference is obvious. When a jury is instructed that it may infer that the party who destroyed potentially relevant evidence did so out of a realization that the evidence was unfavorable, the party suffering this instruction will be hardpressed to prevail on the merits. Zubulake, 220 F.R.D. at

11 Preserve Everything is Not the Answer u It s too expensive. Companies spend millions preserving ESI when litigation is threatened, but never actually filed And even when litigation is filed, the cost of collecting, processing and reviewing is compounded by large troves of legacy data u It s too risky. The more you store, the greater your exposure to a cyber attack 11

12 The Amended Federal Rules are an Incomplete and Unknown Answer u They are not effective until December 2015 u It will be years before we know how the federal bench will interpret and apply the new provisions u Judges may end run the new restrictions through their inherent power to sanction for spoliation u The rules do not apply in state court proceedings, so businesses still will not have uniform judicial standards against which to measure their conduct 12

13 The Best Defense: a Litigation Readiness and Document Preservation Plan u A party seeking sanctions for the spoliation of ESI must demonstrate that the data was lost with a culpable state of mind (i.e., negligence, recklessness or willfulness) u Maintaining a comprehensive standard document preservation policy is a robust defense to any allegation of culpability -- Research Fund. of SUNY v. Nektar Ther. (S.D.N.Y. 2013) u The proposed federal amendments only bolster reliance on a Litigation Readiness and Document Preservation Plan because it will be very difficult to prove that a company maintaining and following such a plan failed to take reasonable steps and/or acted with intent to deprive their adversary of the ESI 13

14 Anatomy of a Litigation Readiness Plan u Audit of litigation and regulatory retention obligations u Data map of the sources and locations of data u Customizable form litigation hold letters For custodians, IT, HR and third parties u Interview forms u Standard release notices u Centralized tracking of hold status 14

15 Trend # 2 Data analytics and visualization 15

16 Data Analytics and Visualization 16

17 Data Analytics and Visualization The 4 V s of Big Data VOLUME VELOCITY VARIETY VERACITY 17

18 Data Analytics and Visualization The 4 A s of E-Discovery Impact ANALYTICS ASSESSMENT ACCELERATION ASSISTED REVIEW 18

19 Data Analytics and Visualization u The results Increased planning / more prepared Increased efficiency Decreased Cost 19

20 Data Analytics and Visualization 20

21 Data Analytics and Visualization 21

22 Trend # 3 Cross-border e-discovery 22

23 Relevance of Foreign Privacy and Other Blocking Statutes to U.S. E-Discovery Scenario One: You are served with a document request seeking data that you store on a foreign server located in a jurisdiction that prohibits the processing or the cross-border transfer of that data. What do you do? Scenario Two: Your adversary is trying to evade your document requests by claiming that the relevant data is on a foreign server located in a jurisdiction that prohibits the processing or the cross-border transfer of that data. What can you do? 23

24 Content of Foreign Privacy Laws u Every jurisdiction is different. The red flag takeaway is to exercise caution whenever production is sought of documents stored in a foreign jurisdiction u EU Privacy Directive Sets a floor that member states must adopt in their national laws Scope of personal data Prohibits the processing of data and also the transferring of data to non-eu countries Permits exceptions, which should be reviewed carefully 24

25 How U.S. Courts Address Foreign Obstacles to Production The factors that US courts consider are: 1) the importance to the litigation of the documents or other information requested; 2) the degree of specificity of the request; 3) whether the information originated in the United States; 4) the availability of alternative means of securing the information; and 5) the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located. Societe Nationale Industrielle Aerospatiale v. United States Dist. Court, 482 U.S. 522 (1987) Where the Money Goes 2014 RAND Report 25

26 Trend #4 Mobile data challenges 26

27 The Challenges of Preserving, Collecting and Processing Mobile Data 27

28 The Challenges of Preserving, Collecting and Processing Mobile Data 28

29 The Challenges of Preserving, Collecting and Processing Mobile Data 29

30 The Challenges of Preserving, Collecting and Processing Mobile Data 30

31 The Challenges of Preserving, Collecting and Processing Mobile Data u The results IDENTIFY all sources of potentially relevant data/reduce risk of spoliation EMPLOY appropriate tools and software UNDERSTAND what data is available UTILIZE the information appropriately 31

32 Q & A Stephanie L. Giammarco Partner, BDO Consulting sgiammarco@bdo.com Direct: Daniel S. Meyers Partner, Bracewell & Giuliani daniel.meyers@bgllp.com Direct: