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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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Presentation on theme: "United States District Court for the Southern District of New York, 2004 District Justice Scheindlin Zubulake v. UBS Warburg LLC Zubulake V."— Presentation transcript:

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

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 s on tapes missing from active files Zubulake IV Zubulake sought sanctions for UBSs failure to preserve back up tapes and because of deletion of relevant s Without evidence that lost tapes favorable to Zubulake, Court ordered additional depositions conducted at UBS expense for questioning regarding s 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 s 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 s 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 s Some s retrieved from back up tapes At least one 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 Tongs 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 anothers 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 partys 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 clients 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 s AFTER instructed to save Recycled back up tapes prematurely

14 Ultimately… Duty to preserve/produce is UBSs 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 s deleted after August, 2001 and s 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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