The Long Arm of E-Discovery Stretches Overseas

May 20, 2014 conduentblogs

Earlier this year, Kazuaki Fujitani, the general manager of a Japanese company’s sales division, pled guilty to obstruction of justice for destroying numerous e-mails and other documents in a federal investigation by the DOJ’s Antitrust Division and FBI into price fixing, bid rigging, and other anticompetitive conduct in the automotive parts industry.

Fujitani deleted emails and other documents, which included pricing discussions about heater control panels with competitors, when he learned that the FBI had executed a search warrant on the company’s U.S. subsidiary. The maximum penalty for the destruction and concealment of records and documents is 20 years in prison and a criminal fine of up to $250,000. As part of the plea agreement, Fujitani agreed to serve 366 days in U.S. prison.

The Antitrust Division has pledged to “vigorously prosecute individuals who destroy evidence in an attempt to conceal their participation in illegal conspiracies.” Therefore, civil litigants—particularly those subject to regulatory investigations—should pay close attention; evidence of data spoliation in a civil matter will serve as a direct invitation for the government to commence a parallel criminal investigation and open the door to crippling penalties, including hefty fines and jail time.

Organizations can take a number of steps to avoid inviting government scrutiny of their information governance practices. First, records retention programs should address differences in foreign privacy law and offer the name of a knowledgeable contact who can resolve conflicts and answer questions. In addition, organizations should take great pains to educate—and then periodically remind—potential custodians of the penalties for spoliation. IT personnel in foreign offices should also be informed of their role in protecting the company’s information assets. Finally, if litigation or a regulatory investigation is anticipated, the company should promptly issue a legal hold with detailed explanations of custodians’ obligations and follow up with foreign custodians to ensure they understand and will follow the provisions in the legal hold. Thereafter, the company should send periodic reminders of the duty to preserve evidence, run detailed reports summarizing all communications and efforts to comply with the law, and create audit trails to support its compliance efforts.

Sheila Mackay is vice president at Conduent. She can be reached at info@conduent.com.

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