City Bar Offers Best Practices for Cross-Border E-Discovery

In a report by its E-Discovery Working Group, the New York City Bar Association offers best practices for overcoming one of the most complex obstacles to an efficient discovery process in modern litigation: when documents that are potentially within the scope of a party’s production obligations reside in a foreign jurisdiction that prohibits the transfer of those documents to the United States.

As businesses continue to transcend national borders at unprecedented rates, “it is increasingly rare to represent a purely ‘domestic’ corporate client,” the report states. “At the same time, foreign data privacy laws and other blocking statutes that prohibit the wholesale transfer of foreign documents to the United States are proliferating on a global basis. The result is a ‘catch-22′ pitting domestic discovery obligations against foreign data transfer restrictions. Only through proper foresight and planning can the savvy practitioner mitigate, if not entirely overcome, this conflict of laws.”

The report points out that even disputes that appear on their face to be entirely domestic – e.g., New York parties in a New York court applying New York law to New York conduct – can trigger transnational discovery obligations when potentially relevant documents happen to reside abroad. This could be because a New York business might maintain its electronically stored information on a “cloud” platform that resides on physical servers located abroad, or because a party’s foreign parent, affiliate or subsidiary company might possess potentially relevant documents.

The report examines in detail circumstances triggering cross-border discovery in New York, the rules governing cross-border discovery, foreign laws restricting discovery of documents located abroad, representative case law regarding blocking statutes, and privilege law as it relates to cross-border e-discovery.

Finally, the report offers best practices and guidelines to navigate foreign laws during domestic discovery to minimize the conflict that occurs when documents within the scope of a client’s discovery obligations reside in a foreign jurisdiction that prohibits transferring them to the United States. These include:

• “Plan Early, Plan Often,” including inquiring with the client’s IT department whether any corporate data sources that may contain potentially responsive materials reside on foreign servers (e.g., if the client utilizes “cloud” platforms, counsel should assess the physical location of the underlying servers). Likewise, counsel should review the client’s organizational structure to assess whether any corporate divisions, affiliates, parents or subsidiaries that exist abroad may possess relevant documents.
• “Be Transparent and Cooperative” in addressing cross-border discovery issues in meet-and-confers and the resulting confidentiality order and/or discovery stipulation.
• Choose a service provider with foreign infrastructure and services in the jurisdiction where the data is located, and with data privacy consulting expertise.
• Use emerging technology, for example, “regular expression scripting” software that enables one to automate searches for certain types of personal information with the data set. Once identified, such data can be set aside for a separate privacy review, redaction or approval from data subjects or foreign regulators. Meanwhile, the remainder of the data set that does not contain personal data can be transferred immediately to the U.S. for a traditional discovery workflow and rolling production.

Read the report here: http://bit.ly/2Nk9tzr

About the Association
The mission of the New York City Bar Association, which was founded in 1870 and has 24,000 members, is to equip and mobilize the legal profession to practice with excellence, promote reform of the law, and uphold the rule of law and access to justice in support of a fair society and the public interest in our community, our nation, and throughout the world. www.nycbar.org