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Zubulake v. UBS WarBurg LLC220 F.R.D. 212 (S.D.N.Y. 2003)Zubulake IV[Trigger Date]1Date and JurisdictionJuly 24, 2003

United States District Court for the Southern District of New York

Scheindlin, District Judge2PartiesPlaintiff:Laura ZubulakeEquities trader ($650,000/year) for UBSSuing for Gender discrimination, failure to promote, and retaliation under federal, state, and city lawDefendant:UBS Warburg LLCFinancial services company, allegedly deleted relevant e-mail correstpondence3Missing TapesMissing Monthly Backup TapesMatthew Chapin (Zubulakes immediate supervisor)April 2001Jeremy Hardisty (Chapins supervisor)June 2001Andrew Clarke and Vinay Datta (Zubulakes coworkers)April 2001Rose Tong (human resources)Part of June 2001, July 2001, August 2001, and October 20014FactsCertain isolate e-mails were deleted from UBSs systemAfter UBS ordered employees to retain all relevant documentsUBS told technology personnel to stop recycling backup tapes5FactsUBS attorneys cautioned employees to retain all documents, e-mails, backup tapes potentially relevant to litigationE-mails pertaining to Zubulake (showing duty to preserve)UBS Attorney Client PrivilegeNo attorney copied on e-mail and not of legal natureChapin admitted he feared litigation6FactsAugust 2002Backup tapes existed because of UBSs document retention policy, requiring retention for three yearsEmployees instructed to maintain active electronic documents pertaining to Zubulake in separate filesUBS employees did not comply with instructionsTapes were lost which should have been retainedNo explanation on part of UBS7Issues Regarding eDiscoveryDocuments create a paper reality we call proofIt is easier to destroy/delete proof, or change it when dealing with electronic documentsThis does not always happen on purposeThere are consequences for destruction of relevant documentsSpoliation destruction of significant alteration of evidence, or the failure to preserve property for anothers use as evidence in pending or reasonably foreseeable litigationAppropriate Sanctions8eDiscovery Legal FrameworkDUTY to preserve evidence

SCOPE of what must be preserved

REMEDY appropriate sanctionNo specific rule numbers focus on DUTY, SCOPE, and REMEDY9DUTYNotice evidence is relevant to litigation

OR

Should have known evidence may be relevant to future litigation10DUTYWHEN does duty attach?Definitely when a claim is filedMaybe even before complaint is filedZubulake argued that UBS should have known evidence was relevant to future litigation2 reasons:UBS Attorney Client Privilege e-mailChapin admitting fear of litigationMerely 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.Duty attached when relevant people REASONABLY ANTICIPATED litigation.11SCOPEProblem with the reasonably calculated to be relevant or requestedToo 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 easyMy thoughts12SCOPEHow much should be preserved?Everything? NO!Not even everything when litigation is reasonably anticipatedGeneral Rule:Parties or anticipated parties to lawsuit must not destroy unique, relevant evidence which might be useful to an adversaryPreserve what party knows or should reasonably know is relevant reasonably calculated to lead to discovery of admissible evidence or reasonably likely to be requested13SCOPEKey playersDuty extends to documents likely to be used in support of claims or defensesReadily identified documents (to filed in e-mails)relevant to the subject matter involved in the actionAll relevant documents in existence at time duty to preserve attaches and anything created after duty attaches must be preserved14SCOPELitigation holdEnsures preservation of relevant documentsDoes not apply to inaccessible backup tapesEXCEPTION key players documents must be preserved on all backup tapes (accessible or not)15REMEDYZubulake wants Adverse Inference Instruction

Adverse inference instruction to jury usually ends litigation because it is too high of a hurdle to overcome EXTREME SANCTION!

16REMEDY3 factor spoliation test for Adverse Inference InstructionParty having control over evidence had obligation to preserve at time it was destroyedRecords were destroyed with a culpable state of mindDestroyed evidence was relevant to partys claim or defense such that reasonable trier of fact could find that it would support that claim or defense17REMEDYAlready established, UBS had duty to preserve and first prong is satisfiedAfter that is satisfied, any destruction = at least negligenceIn this case not everything was destroyed, only someUBS failure to preserve all potentially relevant backup tapes was merely negligent (not gross negligence or reckless)18REMEDYBackup tapes of Tong grossly negligent or maybe recklessUBS unquestionably on notice of duty to preserveTong was directly related and tapes should have been preservedSo, Zubulake satisfied second prong19REMEDYTwo factors to show for Relevance prong:UBS destroyed relevant evidence (as that term is ordinarily understood)

AND

Destroyed evidence would have been favorable to Zubulake20REMEDYCorroboration requirement more necessary when merely negligent than when gross negligent or recklessMerely negligentCannot infer conduct of spoliator that evidence would have been harmful to himGross negligent or RecklessSame standard until willful spoliationWillful spoliationSpoliators mental culpability itself is evidence of the relevance of the documents which were destroyed21REMEDYJudge 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 tapesTongs August 2001 tape has most likely chance of being relevantBut majority of e-mails are preserved on September 2001 tapeSo, no reason to believe peculiarly unfavorable evidence is only on the missing tapesZubulake cannot get adverse inference instruction because it has not sufficiently [been] demonstrated that the lost tapes contained relevant information.22ConclusionUBS had a duty to preserve the e-mailsUBS had requisite culpabilityZubulake did not satisfy the 3rd prong of the testFailed to show relevanceNo adverse inference instruction to juryUBS pays costs of additional depositions as well as costs of re-deposing23QuestionsAt 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?24