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Zubulake v. UBS Warburg LLC Zubulake V

Zubulake v. UBS Warburg LLC Zubulake V. United States District Court for the Southern District of New York , 2004 District Justice Scheindlin. Parties . Parties to the suit: Laura Zubulake UBS Warburg, LLC Also relevant to this decision: Attorneys for UBS In-House Counsel

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Zubulake v. UBS Warburg LLC Zubulake V

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  1. Zubulake v. UBS Warburg LLCZubulake V United States District Court for the Southern District of New York , 2004 District Justice Scheindlin

  2. Parties • Parties to the suit: • Laura Zubulake • UBS Warburg, LLC • Also relevant to this decision: • Attorneys for UBS • In-House Counsel • Outside Counsel • Employees of UBS • Supervisors and Co-Workers of Zubulake • Human Resources Personnel

  3. Procedural History • Zubulake I • UBS ordered to pay for restoration of sample of back up tapes • Zubulake III • UBS ordered to pay for restoration of 16 tapes • Zubulake showed UBS failed to maintain all relevant information in active files • During restoration, back up tapes missing • Found emails on tapes missing from active files • Zubulake IV • Zubulake 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

  4. Relevant Facts • Zubulake was employee of UBS • Alleges gender discrimination • Certain UBS employees on notice of potential suit • April, 2001 • Zubulake brought EEOC claim • August 16, 2001 • Zubulake instituted suit against UBS • February 15, 2002

  5. 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 files • Not specifically mention back up tapes • UBS Outside counsel met with “key players” in litigation • Reiterated In-House counsel instructions • Emails specifically mentioned as documents to be preserved

  6. 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, 2002 • After Zubulake requested information stored on back up tapes • Outside counsel instructed UBS IT personnel to stop recycling back up tapes

  7. UBS Employee Action • Multiple Employees deleted relevant emails • Some emails retrieved from back up tapes • At least one email lost completely • Deleted after warnings issued by counsel to retain relevant documents • Back up tapes missing • Some 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

  8. Rules at Issue • Federal R.C.P. 26 • Duty to Disclose • Federal R.C.P. 30 • Depositions • Federal R.C.P. 34 • Producing Documents and ESI • Federal R.C.P. 37 • Failure to Disclose/Cooperate • Sanctions to be Imposed

  9. Spoilation • Destruction or alteration of evidence • Failure 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 destruction • Adverse Inference- what Zubulake seeks in this case

  10. Adverse Inference • To get adverse inference instruction, party must show: • Party with control of evidence had obligation to preserve it at time it was destroyed • Established duty in Zubulake IV • Records were destroyed with “culpable state of mind” • In NY, include ordinary negligence • Destroyed evidence was “relevant” to party’s claim • Definition 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 relevance • If destruction was done in bad faith, relevance assumed

  11. 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 hold • Counsel 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

  12. Analysis • Preservation Obligations • Counsel has continuing duty • Requirement reasonable • Client must bear responsibility at some point for failure to preserve • Steps for Counsel to Take • Issue litigation hold (when litigation reasonably anticipated) • Communicate directly with key players in litigation • Direct all employees produce copies of relevant active files • Includes ensuring back up media identified and safe

  13. Analysis • Under standards existing at the time, counsel acted reasonably when instructing UBS • However, counsel did not communicate effectively • Hold not issued to all necessary employees • Not all employees asked to produce documents • Failed to protect back up tapes • UBS employees acted in contravention of instructions • Deleted emails AFTER instructed to save • Recycled back up tapes prematurely

  14. 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

  15. Sanctions • Goal: restore Zubulake to position would have been in if UBS had acted in accordance with rules • Sanctions • Jury 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

  16. 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

  17. Questions • Does 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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