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  1. Tales From the Litigation War Room: High Stakes in Information Governance John W. Bagby Prof. Info. Sci. & Tech. Pennsylvania State University

  2. Overview • Crisis Tests Practice • Conformity with Well-Designed Standards Reduces Litigation Risk • Crisis Management Most Effective if Well Prepared

  3. Crisis/Catastrophe Litigation “When looking for an effective test of an organization’s preparedness, there is really nothing quite like a crisis that triggers high stakes litigation.”

  4. Stakes Attracts Investment • Crisis often unexpected, potentially severe • Crisis mismanagement raises risks of failure • Scale of Catastrophe Implies Large Groups • Share community of interest • EX: affinity group members, shareholders, clients, employees, alumni, geographic neighbors, supply chain participants • Consequences uncertain & unpredictable • Prepared & Nimble Organizations/Verticals • Pivot Quickly to Respond Effectively • But if Caught Off Guard & Flat-footed • response capabilities, contingency planning, backup

  5. Litigation Surprise

  6. Crisis Readiness: Law & Economics • Crisis Readiness Fails Traditional Investment Criteria • High Stakes Combine with Low Readiness • Result: High Contingent Liability Risk • Irregularity of Catastrophic Events Engenders Ignorance • Catastrophic Events Blindside the Unprepared

  7. Preparedness Investment Fails ROI Readiness Market Disciplines Less Convincing • Market Incentives often Insufficient to spur Readiness • High, Near-Term Costs, Uncertain Delayed Benefits • Avoidance of Unquantifiable & Unpredictable Future Losses, • Not Traditional Upbeat Positive Cash Flows (e.g., Sales) • The NPV Compounding Problem • Severe when Interest Rates are Higher than today • Other Analytics Are Needed to Assess Litigation Readiness in Catastrophic Cases • So Need Familiarity with Litigation & Regulation

  8. Some Litigation Preparedness Investment Satisfies ROI Screen • publicly-traded companies & financial firms – securities litigation • sellers of goods – product liability • manufacturing, chemical, transportation, mineral extraction/processing firms - environmental • service providers - malpractice • all firms not-fors & govt agencies- employment

  9. Preparation • Prepare for Investigations • Regulatory, Criminal, Self-regulatory organization (SRO), Internal • In-house counsel familiar with operations & personnel; • Ongoing experience & good relations with external litigation counsel; • Employee Training in Legal Process & recurring regulatory enforcers • Siege-Survival Skills: Avoiding Inadvertent Disclosures, Press Relations; Evidence Preservation; Defensible Records Management Regime

  10. Document Preservation • Form of Readiness: “the” essential conundrum • Records Destruction Risks Spoliation, Obstruction, Regulatory Sanctions • Records Retention Has Plausible Utility • Smoking Gun Production Risks Liability • Records Mgt Standardization - Some Defense • Generally Accepted Recordkeeping Principles • ISO 15,489 • COBIT • EDRM • Litigation Holds: Planning, Dry Runs, ESI Teams • And there Will be Litigation War Rooms

  11. Churchill’s Second World War Rooms

  12. Modern War Room Origins • Derived from actual war time hostilities • Originally Centralized Physical Location • Information Gathering • Expertise Applied for “Sense-Making” • Enables Strategic Planning • Expert Analysts Findings • Informs Decision-Makers • Traditional Physical War Room Features • Walls project images, maps, data • Informs Analysis & Planning

  13. Cold War Room

  14. Modern Electronic War Room • Invest in war room facilities, training & readiness • Justified for high stakes campaign • Concentration of information, hypotheses, testing assertions, debate, command & control decision-making • Transaction & communication costs reduced • Public Policy Derivations • Adapted to litigation, pre-trial discovery, political campaigns & crisis management • Crisis particularly useful organizing principles • Document Repositories • Provide easy access to: robust literature, primary/secondary docs • Selective Availability to defined group(s) • Strategic choice: publicly accessibility

  15. Virtual War Rooms • Various Locations: Security Defense & Cost • Dispersed Actors • Connected Electronically to Info Respositories • Public Internet connections vs. secure lines • Communications nerve center(s), • eDiscovery “in the Cloud” • What is the Cloud’s Street Address Again? • That’s an “in rem” lawyer’s joke • Closed systems preserve confidentiality • Open systems trade-off confidentiality • May Destroy Confidentiality & Privacy

  16. Litigation WaRoom • EXs in Instruction & Outside Litigation: • Enron War Room – electronic repository of litigation docs • Political Campaign war room • Deep Water Horizon War Room - repository of BP Litigation documents Gulf Oil Spill • Often Powerful • Crowd Source Enabled • leads, interpretation, documents, video, participant recruiting, leadership

  17. CrowdSource Investigations • Online Collaboration Lowers Costs/Barriers • Access many people, each performs subset of tasks • Crowd Source Scholars May Argue: • 1st Central authority organizes, sets narrow task, vets before decision-making • Here, grassroots impetus is eventually focused • Independent Investigative Journalism • Cite to D.Tapscott; A.D.Williams; P.Bradshaw • Derived from social networks (SN) & wikis • Website encourages crowdsource content mgt • Ward Cunningham: "simplest online database” • Design options: • Confidentiality; group expertise, size & dedication; raw data vs. deep analysis through Sense Making

  18. SenseMaking in General • Follow-on & interative with investigation • HCI, Information & Organization Sciences • Decidedly Interdisciplinary • Simultaneous Data Gathering & Framing: • Retrospection, Social Interaction, Ongoing, Cues/Clues Discovery, Plausibility trumps Accuracy • Narrative(s) Hypothesize & Summarize “Findings” • Cite to: K.Weick; B.Dervin

  19. SenseMaking in Crisis CrowdSource Investigations • Stakeholders both apparent, self-appointed • Incentives derived from info. scarcity, complexity, contradiction, uncertainty, equivocality, ambiguity, confusion, disbelief, rumormongering • Process: • Key nodes & relationships (links) ID’d • Cognitive mapping: network graphs, time-lines • Scandal clue detection engine(s) deployed • Informant (virtual) network emerges • Driven by rumors, tips, news, knowledge, suspicion • Central repository (WaRoom) deployed, managed • Crowd analyzes, hypothesizes, investigates, reports

  20. Enact or create meaning to justify actions • Action drives intrusion • into environment Meaning guides scanning behavior - Belief–driven scanning Structure drives and guides action SCANNING • Conditional Viewing • Unconditional Viewing • Directed Viewing • Undirected Viewing INTERPRETATION ACTIONv STRUCTURE S. Clark’s SenseMaking Enterprise • Beliefs • Assumptions • Values • Meaning • Technology • Policy/Standards • Procedures/Processes • Organization • Formal Goals • Defend • Prospect Gather information to create meaning • Satisfice • Simplify • Bracketing Translate meaning into action • Implementation • Pursue objectives Action becomes patterned and routinized

  21. Defining Standard Terms • Self-Regulatory Organizations (SROs) • Regulate their members, set standards • May Reduce Govt's Intervention • SDO-Standards Development Organization • Presumes contributions from various players • SDA-Standards Development Activity • Presumes substantial design component & std anticipates (precedes) compliant objects of std • Develops Voluntary Consensus Std (VCS)

  22. Standards ARE Important! • Standards Impact Nearly All Fields • SDA Participants,Affected Parties, Int’l Orgs, Gov’t Agencies, SROs, NGOs, SDOs • eCommerce & Internet largely dependant on Stds: • EX: html, http, 802.11, x.25 packet switching … • Standards May Embody Considerable Innovation • SDA have Innovation Life Cycle Independent of Products/Services Compliant w/ Std • Stds Innovation Occurs in Various Venues • Inside innovating firms, inherent in many products, Inside technical domain groups (trade assoc. professional societies, indus. consortia) • Standards Increasingly Embody Patents • EX: Apple v. Samsung - Standards Essential Patent(s)

  23. Standard Impacts of Standards • Standards May Have Economic Impact • Open Markets, Create Professionalism (Guilds) • Suppress Competitive Alternatives: Barriers to Entry • Monopolize: Lock-in • Increasingly perceived to favor particular nations, industries, identifiable groups & individual firms • Standards May Have Legal Impact • Set legal duties • Guide compliance • Mere minimum floor for activities • Exonerate • Obligate royalty payments • Monopolize (again)

  24. Why are Standards Important? • Stds Increasingly an Emerging Source of Policy • L.Lessig’s Code cited for IT trend: • Public policy imbedded in s/w. f/w. h/w & ICT stds • Do SDA Approximate Traditional Policymaking? • SDA’s impact on public’s consideration/deliberation? • SDA transparency? • Downstream impact so embodied w/in code or technical compatibility details so obscured from public review? • SDA Participants Use Non-Gov’t Venues • Forum Shopping may be Widespread • Classic “Race to the Bottom”

  25. Standards Development Activities (SDA) • SDA are collaborative processes • Infused with technical design • Largely by self-selected groups of interested constituents who assume standard roles (avitars) • Participants must have foresight & resources to engage in protracted, frustrating political processes • General Disadvantages of Standardization • Lock in old/obsolete technology • Resists favorable evolution or adaptation • Favors particular groups & disfavors particular groups

  26. Traditional Standards Taxonomy: Origins • de Jure • Emanate from authorized source (statute, regulation, caselaw, accredited SDO) • Best when de Facto or VCSB rigor unlikely • Policy risks: inadequate, ineffectual, inefficient • EX: determine acceptable risks, sete protection level, balance risk-cost-tech feasibility @ FCC, EPA • de Facto • Generally Not directly endorsed by govt or SDO • Achieve critical mass in market • EX: OS (Windows), content interoperability (VHS) • Less multi-participant coordination & delay, natural result of competition, liberty, flexibility

  27. Traditional Standards Taxonomy: Origins, Accreditation & Certification • Voluntary Consensus Standards Body (VCSB) • NGO, consortia, private-sector venue • Source of most crucial electrical, electronic, Communications & Internet protocols, building/construction, petroleum/fuels, testing methods • Enhances Liberty • Generally OK if Due Process remains strong • Am.Nat.Stds.Inst. (ANSI) • Participates in int’l coordination of standardization • Certifies American National Standards produced by independent SDOs • Nat’l.Inst.Stds. & Tech. (NIST) • Coordinates U.S. Govt.’s stds strategy from statutes, funding, appropriations & by Dept. of Comm. Cite to: J.W.Bagby, Ch.49 in Bidgoli’s Tech.Mgt. (Wiley ’09)

  28. Taxonomy: Autonomy, Specificity, Precision in Implementation • Breadth of variance in compliance • Rules-based standards (precise, most specific) • Most ICT stds & HIPAA security rules • EX: Results of FTC caselaw interpreting G/L/B privacy • Principles-based standards (middle-ground) • FTC privacy security rule • EX: Expected result of SEC pressure on some acctg stds • Principles-only standards (vague, interpretable) • SEC’s G/L/B CyberSecurity stds Reg.SP • IFRS (formerly IAS) issued by IASC

  29. Various Due Process Constraints on SDA Processes • ANSI “Essential” Due Process Requirements • (1) openness (2) lack of dominance (3) balance (4) notification (5) consideration (6) consensus (7) appeals (8) written procedures • OMB Circular No. A-119 • (i) openness, (ii) balance of interest, (iii) due process, (vi) an appeals process, (v) consensus • Standards Development Organization Advancement Act (SDOAA) • Requires Due Processes: Notice of particular SDA to affected parties; Opportunity to participate in SDA; Balancing interests to avoid SDA domination by any single group; Ready access to proposals and final standards; Consideration of all views and objections; Substantial agreement on all material points before reaching final standards; Right to express positions in SDA; Right to consideration of positions by SDO; Right to appeal adverse SDO decisions

  30. Applying the Standards Regime to Records Management Standards • S.Ct. AA case OK’d Routine Doc. Destruction Plan • Spoliation • Adverse Inference • Severity • Obstruction • Criminal Intent • Litigation Holds in Civil Pre-Trial Discovery • Scope • Timing Trigger • Regulatory Retention, Submission, Disclosure • Enforcement Penalties

  31. Financial Crises • LIBOR • Chartered-MoneyLaundering • Value transfer • 2008 Financial Crisis • Derivatives • Capital Reserves • Trading Mechanisms • “On” the table rather than “under the counter” • Some of the Primary Standards Applicable • Accounting, Auditing, Creditworthiness, Financial Market Operations, Ratings, Recordkeeping • ex post: • Regulation Intrudes on Private Decisionmaking • Public Expose Builds Pressure to make the Recordkeeping Regime More Stringent

  32. Environmental Disasters • Varied Types • Agricultural, Health, Industrial, Resource Extraction/Transportation, Nuclear, Natural • Existing Governmental Regulation & Self-Regulatory Regimes Scrutinized • ex post: • Physical Controls, ex ante Studies • Public Expose Builds Pressure to make the Recordkeeping Regime More Stringent • Remediation/Reactions are Culturally Biased

  33. Abuse Scandals • Targets: • Catholic Church • Boy Scouts • Native American Tribes • Ivory Towers • Venues: • State vs. Federal, Criminal, Civil Liability, various Regulatory Regimes, SROs, Internal • ex post: • Reputation, Goodwill Impacts • Public Expose Builds Pressure to make the Recordkeeping Regime More Stringent

  34. Standards Embody IP • Looming Patent Thicket • Complex Web of Inter-Related IP • Both Records Mgt & eDiscovery • EXs Issued Patents: • Predictive Coding • Near De-Dupe • Dozens Adaptable from Info Process, Search, etc • Dozens More Pat. Applications @ PTO & EPO • Large Concentration by a Few Notable Applicants