United States District Court for the Southern District of New York, 2004 District Justice Scheindlin Zubulake v. UBS Warburg LLC Zubulake V.
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United States District Court for the Southern District of New York , 2004District Justice Scheindlin
Zubulake v. UBS Warburg LLCZubulake V
Parties Parties to the suit:
Laura ZubulakeUBS Warburg, LLC
Also relevant to this decision: Attorneys for UBS
In-House CounselOutside Counsel
Employees of UBS Supervisors and Co-Workers of ZubulakeHuman Resources Personnel
Procedural HistoryZubulake I
UBS ordered to pay for restoration of sample of back up tapes
Zubulake IIIUBS ordered to pay for restoration of 16 tapesZubulake showed UBS failed to maintain all relevant
information in active files During restoration, back up tapes missingFound emails on tapes missing from active files
Zubulake IVZubulake sought sanctions for UBS’s failure to preserve
back up tapes and because of deletion of relevant emails
Without evidence that lost tapes favorable to Zubulake, Court ordered additional depositions conducted at UBS expense for questioning regarding emails discovered on back up tapes
Relevant FactsZubulake was employee of UBS
Alleges gender discrimination
Certain UBS employees on notice of potential suitApril, 2001
Zubulake brought EEOC claimAugust 16, 2001
Zubulake instituted suit against UBS February 15, 2002
UBS Counsel Action
August, 2001 (when EEOC claim filed)UBS In-House counsel gave verbal instructions
to UBS employees not to destroy or delete potentially relevant material“Preserve and turn over to counsel” Included electronic and hard copy filesNot specifically mention back up tapes
UBS Outside counsel met with “key players” in litigationReiterated In-House counsel instructionsEmails specifically mentioned as documents to be
preserved
UBS Counsel Action February 22, 2002 and September 25, 2002
After Federal suit instituted In-House counsel sent reminder emails
regarding destruction and deletion of documents
August, 2002After Zubulake requested information stored
on back up tapesOutside counsel instructed UBS IT personnel
to stop recycling back up tapes
UBS Employee ActionMultiple Employees deleted relevant emails
Some emails retrieved from back up tapesAt least one email lost completely
Deleted after warnings issued by counsel to retain relevant documents
Back up tapes missingSome retained documents, not produced
Kim was never asked to produce files to counsel
Tong’s “archive” files were misunderstood and not produced
Produced after Zubulake IV depositions
Rules at IssueFederal R.C.P. 26
Duty to DiscloseFederal R.C.P. 30
Depositions Federal R.C.P. 34
Producing Documents and ESIFederal R.C.P. 37
Failure to Disclose/CooperateSanctions to be Imposed
Spoilation
Destruction or alteration of evidenceFailure to preserve property for another’s
use as evidence in pending or reasonably foreseeable litigation
Can support an inference that evidence would have been unfavorable to party responsible for destructionAdverse Inference- what Zubulake seeks in
this case
Adverse InferenceTo get adverse inference instruction, party must
show: Party with control of evidence had obligation to
preserve it at time it was destroyedEstablished duty in Zubulake IV
Records were destroyed with “culpable state of mind” In NY, include ordinary negligence
Destroyed evidence was “relevant” to party’s claimDefinition of relevant in this instance includes assumption
that evidence destroyed would have been favorable to party seeking inference
If destruction was done negligently, must prove relevanceIf destruction was done in bad faith, relevance assumed
Analysis Did UBS and Counsel take all necessary steps to
ensure relevant data was preserved and produced? If not, did UBS act willfully when deleted/ failed to
produce?Preservation Obligations:
Litigation holdCounsel must oversee compliance Counsel must become fully familiar with client’s
data retention policies/procedures Counsel must ensure preservation
NOT enough to simply explain to client, must actually oversee
AnalysisPreservation Obligations
Counsel has continuing dutyRequirement reasonable Client must bear responsibility at some point for failure to
preserve
Steps for Counsel to TakeIssue litigation hold (when litigation reasonably
anticipated)Communicate directly with key players in
litigationDirect all employees produce copies of relevant
active files Includes ensuring back up media identified and safe
AnalysisUnder standards existing at the time, counsel
acted reasonably when instructing UBS However, counsel did not communicate
effectively Hold not issued to all necessary employeesNot all employees asked to produce documentsFailed to protect back up tapes
UBS employees acted in contravention of instructionsDeleted emails AFTER instructed to saveRecycled back up tapes prematurely
Ultimately…
Duty to preserve/produce is UBS’s
Counsel gave instructions, UBS acted against instructions
UBS acted willfully when destroyed information Lost information presumed relevant
Sanctions
Goal: restore Zubulake to position would have been in if UBS had acted in accordance with rules
SanctionsJury will be given an adverse inference
instruction regarding emails deleted after August, 2001 and emails irretrievably lost when back up tapes recycled
UBS must pay for depositions required by late production
UBS must pay for costs of motion
Conclusion
Counsel has certain obligations to discharge production duties during discovery phase
Once Counsel has completed steps, party that acts contrary to instructions acts at its own peril
QuestionsDoes this opinion shift the
discovery/production burdens inappropriately to the attorneys, as opposed to the parties?
Should there be a difference in the obligations placed on In-House counsel as opposed to Outside counsel?
Will technology training become a CLE requirement for attorneys practicing under the Federal Rules of Civil Procedure?
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