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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 l.jpg

Zubulake v. UBS Warburg LLCZubulake V

United States District Court for the

Southern District of New York , 2004

District Justice Scheindlin


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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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