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Zubulake IV [Trigger Date]

Zubulake IV [Trigger Date]. Zubulake v. UBS WarBurg LLC 220 F.R.D. 212 (S.D.N.Y. 2003). Date and Jurisdiction. July 24, 2003 United States District Court for the Southern District of New York Scheindlin , District Judge. Parties. Plaintiff: Laura Zubulake

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Zubulake IV [Trigger Date]

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  1. Zubulake IV[Trigger Date] Zubulake v. UBS WarBurg LLC 220 F.R.D. 212 (S.D.N.Y. 2003)

  2. Date and Jurisdiction • July 24, 2003 • United States District Court for the Southern District of New York • Scheindlin, District Judge

  3. Parties • Plaintiff: • Laura Zubulake • Equities trader ($650,000/year) for UBS • Suing for Gender discrimination, failure to promote, and retaliation under federal, state, and city law • Defendant: • UBS Warburg LLC • Financial services company, allegedly deleted relevant e-mail correstpondence

  4. Missing Tapes

  5. Facts • Certain isolate e-mails were deleted from UBS’s system • After UBS ordered employees to retain all relevant documents • UBS told technology personnel to stop recycling backup tapes

  6. Facts • UBS attorneys cautioned employees to retain all documents, e-mails, backup tapes potentially relevant to litigation • E-mails pertaining to Zubulake(showing duty to preserve) • “UBS Attorney Client Privilege” • No attorney copied on e-mail and not of legal nature • Chapin admitted he feared litigation

  7. Facts • August 2002 • Backup tapes existed because of UBS’s document retention policy, requiring retention for three years • Employees instructed to maintain active electronic documents pertaining to Zubulake in separate files • UBS employees did not comply with instructions • Tapes were lost which should have been retained • No explanation on part of UBS

  8. Issues Regarding eDiscovery • “Documents create a paper reality we call proof” • It is easier to destroy/delete proof, or change it when dealing with electronic documents • This does not always happen on purpose • There are consequences for destruction of relevant documents • Spoliation – “destruction of significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation” • Appropriate Sanctions

  9. eDiscovery Legal Framework • DUTY – to preserve evidence • SCOPE – of what must be preserved • REMEDY – appropriate sanction

  10. DUTY • Notice evidence is relevant to litigation • OR • Should have known evidence may be relevant to future litigation

  11. DUTY • WHEN does duty attach? • Definitely when a claim is filed • Maybe even before complaint is filed • Zubulake argued that UBS should have known evidence was relevant to future litigation • 2 reasons: • “UBS Attorney Client Privilege” e-mail • Chapin admitting fear of litigation • “Merely because one or two employees contemplate the possibility that a fellow employee might sue does not generally impose a firm-wide duty to preserve.” • “But in this case, it appears that almost everyone associated with Zubulake recognized the possibility that she might sue.” • “Thus, the relevant people at UBS anticipated litigation in April 2001.”

  12. SCOPE • Problem with the reasonably calculated to be relevant or requested… • Too much discretion? Do normal employees know what would or should be requested in preparation for trial? • There is so much information, how should firm know what to keep and what not to keep? • System of backup information might not make this easy

  13. SCOPE • How much should be preserved? • Everything? NO! • Not even everything when litigation is reasonably anticipated • General Rule: • Parties or anticipated parties to lawsuit must not destroy – unique, relevant evidence which might be useful to an adversary • Preserve what party knows or should reasonably know is relevant – reasonably calculated to lead to discovery of admissible evidence or reasonably likely to be requested

  14. SCOPE • “Key players” • Duty extends to documents likely to be used in support of claims or defenses • Readily identified documents (“to” filed in e-mails) • “relevant to the subject matter involved in the action” • All relevant documents in existence at time duty to preserve attaches and anything created after duty attaches must be preserved

  15. SCOPE • “Litigation hold” • Ensures preservation of relevant documents • Does not apply to inaccessible backup tapes • EXCEPTION – “key players” documents must be preserved on all backup tapes (accessible or not)

  16. REMEDY • Zubulake wants Adverse Inference Instruction • Adverse inference instruction to jury usually ends litigation because it is too high of a hurdle to overcome – EXTREME SANCTION!

  17. REMEDY • 3 factor spoliation test for Adverse Inference Instruction • Party having control over evidence had obligation to preserve at time it was destroyed • Records were destroyed with a “culpable state of mind” • Destroyed evidence was “relevant” to party’s claim or defense such that reasonable trier of fact could find that it would support that claim or defense

  18. REMEDY • Already established, UBS had duty to preserve and first prong is satisfied • After that is satisfied, any destruction = at least negligence • In this case – not everything was destroyed, only some • UBS failure to preserve all potentially relevant backup tapes was merely negligent (not gross negligence or reckless)

  19. REMEDY • Backup tapes of Tong – grossly negligent or maybe reckless • UBS – unquestionably on notice of duty to preserve • Tong was directly related and tapes should have been preserved • So, Zubulake satisfied second prong

  20. REMEDY • Two factors to show for Relevance prong: • UBS destroyed relevant evidence (as that term is ordinarily understood) • AND • Destroyed evidence would have been favorable to Zubulake

  21. REMEDY • Corroboration requirement more necessary when merely negligent than when gross negligent or reckless • Merely negligent • Cannot infer conduct of spoliator that evidence would have been harmful to him • Gross negligent or Reckless • Same standard until willful spoliation • Willful spoliation • Spoliator’s mental culpability itself is evidence of the relevance of the documents which were destroyed

  22. REMEDY • Judge thought there is “no reason to believe that the lost e-mails would be any more likely to support her claims.” • Low relevance of information from the lost tapes • Tong’s August 2001 tape has most likely chance of being relevant • But majority of e-mails are preserved on September 2001 tape • So, no reason to believe peculiarly unfavorable evidence is only on the missing tapes • Zubulake cannot get adverse inference instruction because it “has not sufficiently [been] demonstrated that the lost tapes contained relevant information.”

  23. Conclusion • UBS had a duty to preserve the e-mails • UBS had requisite culpability • Zubulake did not satisfy the 3rd prong of the test • Failed to show relevance • No adverse inference instruction to jury • UBS pays costs of additional depositions as well as costs of re-deposing

  24. Questions • At what point should the duty to preserve attach? • Any time something might possibly come up in the future? • How long should this evidence be stored? • What should be the appropriate penalty? • Was there a culpable state of mind? • Was the information relevant? • Should the judge have given an adverse inference instruction to the jury? • When is an adverse inference instruction appropriate?

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