Post Process

Everything to do with E-discovery & ESI

Electronic Discovery viewed from a Global Perspective

Posted by rjbiii on September 26, 2007

Law.com has posted an article examining the effects wrought by the emergence of electronic discovery processes on global corporate entities.

Both lawyers and their clients have an obligation to adjust their respective practices to respond to the consequences of these legal developments. For a multinational corporation, the challenge of implementing policies to ensure compliance is twofold: First, the corporation must determine whether and to what extent its foreign affiliates should also establish compliance policies in light of the broad scope of U.S. discovery. Second, the corporation must ascertain which forms of electronic information should be considered when developing these policies and how they can be implemented to strike a balance between legal considerations and effective business practices.

One quick note on that second point. Corporations will do well to leave it to courts to “ascertain which forms of ESI should be considered in developing” their policies, rather than relying on their own expertise and judgement. An analysis of recent case law will confirm that company’s decisions are often in contrast to judicial expectations, and that is hardly the position in which an executive wants to find him(her)self. Formulate the policies with an eye to case law and the FRCP, state, and international rules. A complex calculation based on a series often ambiguous templates, I admit.

The article continues by examining the test for “control” of digital evidence with respect to multinationals:

To determine whether information sought from a corporate party’s foreign affiliate is within the party’s control, the decisive factor is the transactional relationship between the parties. A parent-subsidiary relationship between a U.S. corporation and its foreign affiliate is the clearest example of a relationship that would bring information held by the affiliate within the scope of Rule 34. See Middle District of North Carolina’s Uniden American Corp. v. Ericsson Inc., states, “[A] litigating parent corporation has control over the documents in the physical possession of its subsidiary corporation where the subsidiary is wholly owned or controlled by the parent corporation.”

The article also looks at what data is “reasonably accessible,” while discussing the Zubulake I categories of accessibility.

The Southern District of New York set forth a series of landmark rulings addressing this issue in Zubulake v. UBS Warburg LLC. In Zubulake I, the court established a framework for determining the accessibility of electronic information, recognizing that “whether electronic data is accessible or inaccessible turns largely on the media on which it is stored.” The court then set forth five categories of data listed in order from most accessible to least accessible. These categories are as follows:

Active-online data;

Near-line data;

Offline storage/archives;

Backup tapes; and

Erased, fragmented or damaged data.

Of these categories, the court identified the first three categories as accessible and the last two as inaccessible.

We’ve already noted in one post that back-up tapes aren’t always considered inaccessible data. How the tape system is used is a big factor in the determination. Furthermore, if you use tape to preserve data that you know is relevant to an ongoing dispute, and that data is found nowhere else, it is quite possible you will have to produce it at your own cost. Of course, ultimately a company can only show that it is making a reasonable effort. Perfection is not required.

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