Law Bites

Nova Scotia startup seeks to build on privacy law advantage

Law Bites — Sun, 30 Nov 2008 12:08:21 +0000

A client company, Bastionhost Ltd., held a mini-summit earlier this week seeking to expand its vision of building data centres in Nova Scotia. A key part of its value proposition is the regulatory climate in Canada, paticularly its privacy laws that are deemed adequate under European Data Protection law and alow millisecond access to American markets without having the data accessible under laws like the USA Patriot Act.

Here’s the press release for the event

PRESS RELEASE: FOR IMMEDIATE RELEASE
Monday, December 1st, 2008

IT start-up Bastionhost announces initiative to attract business to Atlantic Canada
Dataville, Canada

This economic downturn could provide an unprecedented opportunity for the Nova Scotia information technology sector, a technology entrepreneur told a Leadership and Innovation Mini-Summit held at the Halifax Club last week. The current economic crisis presents the Atlantic region with a unique business advantage, said Anton E. Self, founder and CEO of Halifax-based IT startup Bastionhost.

Self unveiled an ambitious strategy he calls “Creating Dataville” to develop a data centre industry in the province. Data centres are a fast-growing sector as corporations and governments struggle to store the massive amounts of information that underlie much of the economy.

“Massive losses stemming from the mortgage loan crisis have driven major financial institutions and enterprises with offices in both New York and London to look for ways to slash operating costs,” said Self. “Their losses can be Nova Scotia’s gain. Why pay millions to operate two backup data centres in North America and Europe, when one in Dataville will do?”

Self, announced his company’s project to put Nova Scotia on the technological map by establishing a system of data centres and digital media storage facilities in the province.

“We can build a new billion dollar industry right here in Nova Scotia,”
he said, highlighting the region’s dense and established infrastructure and relative affordability. “But we need to invest in improving and integrating our critical infrastructure here, now, if we are to seize the moment and realize our tremendous potential as a leading global data haven.”

He said that Nova Scotia’s location directly in-between New York City and London, England makes it an ideal location for catering to businesses on both continents from a single site, while taking advantage of multiple high speed fiber-optic cables already in place beneath the Atlantic Ocean.

The costs to build, maintain, and staff data centres in Nova Scotia are a fraction of those in most places in North America where this high-margin sector has taken hold, he said.

Nova Scotia’s share of global ICT is about 0.3%, Jason Powell, Chairman of the Information Technology Association of Nova Scotia, told the gathering. He suggested that with more co-operation among companies, Nova Scotia could increase its share to 0.5% or even 1%, which would make a huge impact on the province’s economy. “I know we’ve got the talent here,” he said “Why can’t our goal be to have IT be to Nova Scotia what energy is to Alberta?”

The province has all the tools to make this happen, he said, despite the fierce competition from low-cost countries such as India. “Innovation isn’t about technology but about creativity mixed with business thinking,” he said.

Privacy law expert David Fraser argued that Canada’s and Nova Scotia’s strong privacy laws offer another inherent advantage to the data centre sector, especially since the United States passed the USA Patriot Act in the wake of 9/11. He said, “we can become an information Switzerland.”

Self also said that as the local financial services and IT sectors grow, companies are having trouble finding up-to-date data centres in this region. “There’s a backlog of demand for adequate facilities, which is necessary infrastructure for attracting and retaining world-class companies. When our policymakers talk about the need to invest in Atlantic Gateway infrastructure, they mean transportation and shipping. But our most valuable commodity is data. To become a more significant global player we must integrate our technology assets and human resources and get the word out to our markets.”

////////////////////////////////////////////////////////

Also speaking as part of the mini-summit was April MacLeod, a student employment and placement expert. All four spoke of the advantages of doing business in the Atlantic region, and highlighting niche technology skills, a large student population and potential workforce, and top-notch privacy laws not available in the US, vital to international data storage.

The crowd of more than 60 people who gathered for the talk included prominent business people from the Butterfield Fulcrum Group, Flagstone, Nova Scotia Business Inc, Halifax Finance, The Greater Halifax Partnership, Eastlink, Aliant, Armour Group, McInnes Cooper and Nicom IT Solutions, among many others. Allan Shaw, of The Shaw Group and former Premier, now Senator, John Buchanan were also in the audience.

Self invited attendees to “create Dataville with us” by joining forces to develop business in cities like New York and London. “Working together as partners, allies and friends we can win some serious business,” he said. “As one Anton, I can only do so much heavy-lifting. But collaboratively, like 50 ants carrying a coconut, we can raise Nova Scotia to new heights.”

Media contacts:

Anton E. Self

Founder and Chief Executive, Bastionhost Ltd.

(902) 482-6466

Anton.self@bastionhost.com

http://www.bastionhost.com/

Jason Powell

Chairman, Information Technology Association of Nova Scotia

(902) 221-1973

jkpowell@usa.net

http://www.itans.ns.ca/

David T. S. Fraser

Chair, Privacy Law Practice Group, McInnes Cooper

(902) 444-8535

David.fraser@mcinnescooper.com

http://www.privacylawyer.ca/

David Holt

Secretary of the Board, Bastionhost, Ltd.

(902) 401-5226
David.holt@bastionhost.com

Other News

Slaw: New US air security rules may cause problems for Canadian passengers

Law Bites — Fri, 28 Nov 2008 17:44:38 +0000

Canadian Privacy Law Blog:

Just posted on Slaw.ca:

Slaw: New US air security rules may cause problems for Canadian passengers

The Canadian Press is reporting that the planned extension of US passenger screening is going ahead next year. Unlike existing rules, which require airlines to provide passenger information for flights headed to the US, the new rules will require them to provide this information even if the flight is only traversing US airspace. (See: The Canadian Press: New U.S. air security rules create turbulence in Canada.)

This raises a whole host of issues, particularly on the privacy front. The names are being scrubbed against the US no-fly list, which is notoriously of dubious quality. It has interfered with the travel plans of infants and a US Senators. It also includes the name of a certain Canadian who has been proven by a public inquiry to not be a terrorist. How many Canadians will be prevented from completing their travels to non-US destinations because they have a name similar to one on the no-fly list? I guarantee that no Canadian airline will change their route to avoid American airspace so that a passenger can be accommodated.

In addition, how is the information going to be used? Will it go into a massive database to be mined for future uses? Will US authorities force aircraft to land to arrest a passenger who is not a terrorist threat, but is otherwise wanted? Will there be a list of Canadians who regularly (and completely lawfully) travel to the embargoed island of Cuba?

This is a real conundrum. One can wave one’s arms in the air and yell about privacy, but the fact remains that the United States has sovereignty over its airspace and can refuse access for whatever reason it wants. It can put conditions on that access. At the end of the day, if you want to travel and your flight takes you through their airspace, this is one of those conditions.

Other News

November 27-28, 2008

Law Bites — Thu, 27 Nov 2008 22:28:11 +0000

Sutherland Asbill & Brennan LLP: LNGLawBlog will next update its Daily Headlines on December 1, 2008. Please contact LNGLawBlog if you have any questions.

Other News

New York Agencies Seek Judicial Review of FERC’s Approval of Broadwater LNG

Law Bites — Thu, 27 Nov 2008 22:28:10 +0000

Sutherland Asbill & Brennan LLP: The New York State Departments of State and Environmental Conservation have joined Suffolk County in petitioning the U.S. Court of Appeals for the Second Circuit seeking judicial review of FERC’s approval of the Broadwater LNG project. The Times Review (Suffolk, N.Y.) reports that the petition claims that FERC violated the federal Coastal Zone Management Act, the Clean Water Act, and the Natural Gas Act when the agency issued its conditional approval of the project.

Other News

Port Dolphin LNG Developers Examining Options for Alternative Gas Pipeline Route

Law Bites — Thu, 27 Nov 2008 22:28:09 +0000

Sutherland Asbill & Brennan LLP: The developers backing the Port Dolphin LNG deepwater port project will spend the next two weeks analyzing data from surveys of the ocean floor to help determine a new route for a proposed pipeline that will transport regasified natural gas 28 miles from the offshore project site to the Florida mainland. Port Dolphin needed to find a new path for the pipeline in part due to local opposition over possible impacts of the original route on a sand source that is used for local beach renourishment. The Bradenton Herald provides additional coverage.

Other News

Wood Mackenzie: U.S. LNG Imports Likely to Increase Despite Relatively Low Natural Gas Price

Law Bites — Thu, 27 Nov 2008 22:28:08 +0000

Sutherland Asbill & Brennan LLP: Jen Snyder, head of Wood Mackenzie North American Gas Research, told Platts LNG Daily that she expects LNG imports to the United States to continue to increase over the next several years because cargos under existing supply agreements are expensive to divert and LNG suppliers will send some gas to North America in order to keep LNG prices in Europe and Asia relatively high. [Subscription required]

Other News

Kitimat LNG Seeking Third-Party Interest for LNG Export Facility

Law Bites — Thu, 27 Nov 2008 22:28:03 +0000

Sutherland Asbill & Brennan LLP: Kitimat LNG announced yesterday that it is seeking formal expressions of interest from any entities interested in terminal capacity, off-take rights, or an equity position in its LNG export facility proposed for the West Coast of Canada.

Other News

Are successful female mediators unlikeable businesswoman?

Law Bites — Thu, 27 Nov 2008 13:12:25 +0000

mediator blah…blah…:

I am grateful to the many successful female mediators who read this blog and who I am lucky to count as friends and colleagues.

I wonder, if you are at the top of your game, do you ever feel your success at the mediation table has counted against you with mediation parties in what is often said to be a male dominated field?

Take a look at this article on juror reactions to successful female trial lawyers saying that research consistently finds that both males and females characterise woman who have been successful in male dominated fields as cold, unlikeable businesswoman… and if there are parallels I’d be interested in your thoughts.

[click on the title of this post to read more...]

Other News

Are successful female mediators unlikeable businesswoman?

Law Bites — Thu, 27 Nov 2008 13:12:24 +0000

mediator blah…blah…:

I am grateful to the many successful female mediators who read this blog and who I am lucky to count as friends and colleagues.

I wonder, if you are at the top of your game, do you ever feel your success at the mediation table has counted against you with mediation parties in what is often said to be a male dominated field?

[click on the title of this post to read more...]

Other News

Applying Evidence Rule 502 and Five Factor Test, Court Determines No Waiver

Law Bites — Thu, 27 Nov 2008 12:40:40 +0000

Electronic Discovery Law:

Rhoads Indus., Inc. v. Bldg. Materials Corp. of Am., 2008 WL 4916026 (E.D. Pa. Nov. 14, 2008)

In this breach of contract case, plaintiff Rhoads Industries, inadvertently produced over eight hundred privileged, electronic documents. Defendants filed a motion to deem the claim of privilege waived arguing that plaintiff’s production was careless, that its response in seeking the return of the documents was delayed, and that it failed to produce complete and accurate privilege logs as to those documents.

In February 2007, Rhoads began preparing for its anticipated litigation against Building Materials Corporation of America. Realizing the likelihood of extensive electronic discovery, Rhoads directed its IT consultant to research software to assist with the electronic discovery effort. The IT consultant eventually purchased Discovery Attender (or “Sherpa”) to perform the necessary electronic data searches. Shortly thereafter, the IT consultant and his team began work to identify locations of potentially relevant information.

Shortly after discovery began, Rhoads’s counsel met to discuss the scope of discovery and the search terms to be used. Using terms received from Rhoads’s attorneys, the IT consultant identified a large volume of potentially responsive documents. He then ran a keyword search intended to filter the privileged material and removed those documents from the group. The search was run a second time to verify its accuracy. The documents identified by the search were not placed on a privilege log.

Given the large volume of documents remaining even after removing materials hit by the privilege search, Rhoads’s counsel modified the original search terms and reduced the volume of potentially responsive documents to 78,000. Because of the prior privilege keyword search, Rhoads believed there were no privileged materials in that remaining group. Rhoads’s counsel then manually reviewed a separate group of emails from specific accounts, as well as 22 boxes of hard copy documents, to identify and remove privileged documents, which were then added to separate privilege logs.

On May 13, 2008 three hard drives of documents were produced to defendants, including the 78,000 documents identified by the Sherpa search. In response to a court order, Rhoads produced two separate privilege logs on June 6, 2008, one containing entries for the documents identified during the manual email review and one containing entries from the hard copy review.

On June 5, 2008, defense counsel notified Rhoads’s counsel that Rhoads had produced what appeared to be privileged documents. Rhoads responded that the production was inadvertent and asserted that no privilege had been waived. Rhoads then proceeded to conduct nine depositions and engage in motions practice over the next two and a half weeks before turning to the issues of privilege. Rhoads then re-reviewed the 78,000 documents and identified 812 privileged documents that it placed on a new privilege log. The log was produced to defendants on June 30, 2008. Nevertheless, the defendants thereafter sought an order finding the privilege had been waived.

At hearing on the issue of waiver, Rhoads revealed that the 2,000 privileged documents originally identified by the Sherpa search had not been entered on any privilege log. Rhoads’s counsel indicated though, that she believed her manual review of particular email accounts would have captured those documents and they would therefore have appeared on the log produced June 6th. The court ordered any documents not on a privilege log at the time of the hearing should be produced and took the issue of inadvertent production under advisement. At a second hearing to address Rhoads’s failure to properly log the 2,000 documents, the court once again affirmed that any privileged documents not placed on a privilege log as of June 30th should be produced.

In its written opinion, the court first acknowledged the applicability of recently enacted Evidence Rule 502 establishing standards for determining waiver by inadvertent disclosure. In its discussion, the court noted that the Committee Notes to the rule acknowledge the traditional factors commonly employed by a majority of courts in determining waiver but that the rule stops short of explicitly codifying any test in light of the need for flexibility. The traditional factors, were: 1) the reasonableness of the precautions taken to prevent inadvertent disclosure in view of the extent of the document production, 2) the number of inadvertent disclosures, 3) the extent of the disclosure, 4) any delay in measures taken to rectify the disclosure, and 5) whether the overriding interests of justice would be served by relieving the party of its errors. The court then turned to a discussion of those factors and their application by other courts.

In its ruling, the court indicated its belief that “the most appropriate approach is to first determine whether the producing party has at least minimally complied with the three factors stated in Rule 502, i.e., that the waiver was inadvertent, the party took reasonable steps to prevent disclosure, and attempted to rectify the error.” Acknowledging that the reasonableness of Rhoads’s review was the crux of the dispute, the court then concluded, “that once the producing party has shown at least minimal compliance with the three factors in Rule 502, but ‘reasonableness” is in dispute, the court should proceed to the traditional five factor test.”

The court found that the first four factors favored the defendants. Most significant, according to the court, was Rhoads’s failure to adequately prepare for the review of privileged documents in light of the inevitable production of a large volume of documents. The court stated: “An understandable desire to minimize costs of litigation and to be frugal in spending a client’s money cannot be an after the fact excuse for a failed screening of privileged documents…”

However, the fifth factor, the interest of justice, strongly favored Rhoads in light of the severity of the sanction of waiver. The court also determined that no prejudice would result where defendants had no expectation of receiving the privileged communications and because some of the documents would be produced anyway in light of the court’s ruling that Rhoads must produce any documents not appearing on a privilege log before June 30, 2008. Having also considered that the burden lay with the defendants, the court found that defendants had not met their burden as to any documents that had been appropriately logged prior to June 30, 2008 and entered its order accordingly.

A full copy of the decision is available here.