ACEDS-BDO slides

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

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Presenters
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.
Stephanie L. Giammarco, CPA/CITP, CFE, CEDS
Partner, BDO Consulting
sgiammarco@bdo.com
Direct: 212-885-7439
Daniel S. Meyers
Partner, Bracewell & Giuliani
daniel.meyers@bgllp.com
Direct: 212-508-6107

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Trend #1
Litigation readiness

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What’s in store for e-discovery in 2015?
Litigation Readiness

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What’s in store for e-discovery in 2015?
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)

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What’s in store for e-discovery in 2015?
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

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What’s in store for e-discovery in 2015?
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 2014

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What’s in store for e-discovery in 2015?
Common Types of Sanctions
Monetary fines:
 Philip Morris sanctioned $2,750,000 for failing to preserve emails. U.S. v. Philip
Morris (D.C. 2004)
 Pharmaceutical companies sanctioned $931,500 for failing to preserve text
messages. In re Praxada (S.D.Ill. Dec. 2013)
Adverse Inference Instructions:
 “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 hard-
pressed to prevail on the merits.” Zubulake, 220 F.R.D. at 219-220

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What’s in store for e-discovery in 2015?
“Preserve Everything” is Not the Answer
 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
 It’s too risky. The more you store, the greater your exposure to a cyber
attack

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

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What’s in store for e-discovery in 2015?
The Best Defense: a Litigation Readiness and Document Preservation
Plan
 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)
 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)
 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

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What’s in store for e-discovery in 2015?
Anatomy of a Litigation Readiness Plan
 Audit of litigation and regulatory retention obligations
 Data map of the sources and locations of data
 Customizable form litigation hold letters
– For custodians, IT, HR and third parties
 Interview forms
 Standard release notices
 Centralized tracking of hold status

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Trend # 2
Data analytics and visualization

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What’s in store for e-discovery in 2015?
Data Analytics and Visualization

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Data Analytics and Visualization
What’s in store for e-discovery in 2015?
The 4 V’s of Big Data
VOLUME VELOCITY VARIETY VERACITY

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Data Analytics and Visualization
What’s in store for e-discovery in 2015?
The 4 A’s of E-Discovery Impact
ANALYTICS ASSESSMENT ACCELERATION ASSISTED
REVIEW

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What’s in store for e-discovery in 2015?
Data Analytics and Visualization
 The results…
Increased
planning /
more
prepared
Increased
efficiency
Decreased
Cost

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What’s in store for e-discovery in 2015?
Data Analytics and Visualization

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What’s in store for e-discovery in 2015?
Data Analytics and Visualization

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Trend # 3
Cross-border e-discovery

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What’s in store for e-discovery in 2015?
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?

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What’s in store for e-discovery in 2015?
Content of Foreign Privacy Laws
 Every jurisdiction is different. The “red flag” takeaway is to
exercise caution whenever production is sought of documents
stored in a foreign jurisdiction
 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

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What’s in store for e-discovery in 2015?
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

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Trend #4
Mobile data challenges

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What’s in store for e-discovery in 2015?
The Challenges of Preserving, Collecting and Processing Mobile Data

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What’s in store for e-discovery in 2015?
The Challenges of Preserving, Collecting and Processing Mobile Data

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What’s in store for e-discovery in 2015?
The Challenges of Preserving, Collecting and Processing Mobile Data

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What’s in store for e-discovery in 2015?
The Challenges of Preserving, Collecting and Processing Mobile Data

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What’s in store for e-discovery in 2015?
The Challenges of Preserving, Collecting and Processing Mobile Data
 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

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Q & A
Stephanie L. Giammarco
Partner, BDO Consulting
sgiammarco@bdo.com
Direct: 212-885-7439
Daniel S. Meyers
Partner, Bracewell & Giuliani
daniel.meyers@bgllp.com
Direct: 212-508-6107