In a global economy, e-discovery is far from a purely technical issue. Alison Brecher untangles the legal complexities.
“Communication technologies that have fostered our global economy can wreak havoc when it comes to litigation”
-Alison Brecher, Marsh & McLennan
An email can travel just as quickly from New York to Miami as it can from New York to Paris. Yet, these communication technologies that have fostered our global economy can wreak havoc when it comes to litigation. That’s because data protection laws in some countries prohibit the transfer of certain data to the United States.
Take the following not-so-hypothetical situation and it is easy to understand why companies that have not yet encountered the issue will likely do so soon. An employee of Megacorp, a financial services company based in Germany, relocates to Megacorp’s New York office. He then sues Megacorp in the Southern District of New York alleging that he was discriminated against on the basis of his country of origin. Megacorp, in order to defend the action, wants to obtain emails from the plaintiff’s supervisor and co-workers who are based in Germany and other EU member states and the plaintiff’s performance reviews which are stored on servers located outside of London.
The Federal Rules of Civil Procedure clearly requires parties to preserve the performance reviews, email and compensation, but the law in some other countries is equally clear that preserving or collecting that data and transferring it to the United States – even if used solely to defend the litigation – may violate international data protection laws. These laws impose financial and, in some instances, criminal sanctions for transporting certain data to the United States.
Unfortunately, the relatively few published opinions are of little assistance in navigating between this rock and a hard place. Some courts found that data must be produced in the litigation notwithstanding the international laws (in one reported decision, the court ordered the production even though the French statute at issue allowed for the imposition of criminal sanctions) and other courts ruling that the conflicting international law presents an undue burden so as to relieve the party of having to produce the data. Generally, courts invoke a balancing test to determine the reasonableness of compelling foreign discovery by considering several factors such as the importance of the data to the litigation, whether alternative means exist to obtain the information, and the hardship of compliance.
Rather than risk being compelled to produce foreign data in the US in violation of international law, counsel has a few options. If the organization is regulated by the United States Department of Commerce, it can get certified pursuant to the Department’s Safe Harbor program which examines whether the organization has adequate safeguards to transport foreign data securely to the United States.
Financial services companies are generally not regulated by the Department of Commerce, but other alternatives are available. Data protection laws in some countries allow data to be processed and transported to the United States when consent has been obtained from the individual whose data is sought. Obtaining the consent can be tricky. Each country usually has slightly different laws or interpretations of them, so consider retaining local counsel for advice on how to draft a proper consent form. Local law may also require notice to the individual and regulatory authority about the data collection. In some countries there is considerable debate about whether consent can ever be freely given when the request is made by the individual’s employer. As a practical matter, it is usually best to involve the individuals whose data could be subject to production in the United States as early in the litigation as possible to allow them time to consider how to respond to the request for consent. Also, consider contacting the international regulator. The European Commission recently developed a series of model contracts that allow for the transport of data to the United States for use in litigation.
Even after figuring out a way to navigate the legal conflict between international privacy laws and document preservations obligations, there are additional logistical issues. First, since the documents may be in one or more languages, your selection of an e-discovery vendor could be affected. Many software tools and vendors only support documents using ASCII, which does not recognize special characters of some languages. Instead, look for a vendor or software that supports Unicode. Unicode recognizes more than one million possible characters and easily accommodates symbol-based languages like Hebrew and Japanese. Also, some languages like Japanese and Thai do not have spaces between words. The vendor should be capable of reading not just the characters, but also the context of foreign languages.
Then there is the logistical issue of translating the documents into English and converting them into a standard format that can searched using the attorney’s preferred review tool. In general, translating documents is expensive and the strategy is usually to limit the number of documents that has to be manually translated. To that end, counsel can use software to automate the translation of documents during the first pass review stage; the software will produce a far less than perfect translation, but one that is adequate enough to identify which documents are privileged or relevant so as to be reviewed further.
Keeping track of relevant metadata is especially important in international data collections. Certain characters in other languages may not function properly on a US-based operating system. For instance, emails in HTML cannot always be viewed accurately. Consider sending your e-discovery vendor a sample set of data in multiple languages so that any glitches can be identified and resolved as soon as possible. The time lost will be more than made up for in speedier review.
International e-discovery presents a host of issues. It is best to raise all of them during the Rule 16 conference. Even the smallest detail can cause major (and expensive) disputes later on in the litigation.
Counting the costs
Alison Brecher is experienced commercial litigation attorney, having served as lead counsel in over 35 bench and jury trials and taken/defended hundreds of fact and expert witness depositions. She joined Marsh & McLennan, a Fortune 200 financial services company, in 2002. Brecher was one of the first in-house counsel in the country promoted to manage electronic discovery activities. Since 2006, she has managed all aspects of MMC’s e-discovery for litigation and investigations involving more than 50,000 employees in over 100 countries. In partnership with our IT and other business functions, I developed and implemented global corporate policies and procedures around new technologies, including voicemail, instant messaging, VOIP, unified messaging, e-mail retention, data privacy, and related compliance issues.