U.S. District Court Southern District of New York 229 F.R.D. 422 (S.D.N.Y. 2004)

 PLAINTIFF: Laura Zubulake  Bringing sexual discrimination suit against former employer.  Requsting adverse instructions on spoliated information.  DEFENDANT: UBS Warburg, LLC  Supervisors and Co-Workers of Zubulake accused of discrimination.  Represented by In-house and Outside Counsel

April 2001August 2001February 2002 Zubulake alleges gender discrimination Zubulake brought EEOC claim Zubulake instituted suit against UBS  UBS In-house counsel gave verbal instructions to preserve and turn over relevant material (electronic & hard copy files), Outside counsel met with “key players” & reiterated, incl. s. In-house counsel sent reminder s not to destroy or delete. August 2002 Zubulake requested information on back-up tapes  Outside counsel instructed UBS to stop recycling back up tapes. Not all backup tapes were preserved. UBS on notice to preserve Zubulake I- Addressed claims that relevant s had been deleted and existed in “inaccessible” archival media. UBS ordered to pay for restoration of back up tapes Zubulake III- Zubulake demonstrated back up tapes were missing during restoration, some s found on tapes missing from active files. 16 tapes restored, suspicions confirmed. Zubulake IV- Zubulake sought sanctions for UBS’s failure to preserve and deletion or relevant s. Court ordered re-depositions at UBS’s expense regarding relevancy of s on back-up tapes. Lacking evidence that lost and deleted tapes were favorable to Zubulake. ZUBULAKE V- Issue arose over re-depositions that revealed more deleted s and about the existence of preserved s on UBS’s active servers which were never produced.

 (1) Counsel’s obligation to ensure that relevant information is preserved by giving clear instructions to the client to preserve such information.  (2) A Client’s obligation to heed those instructions.  (3) Where fault for spoliation falls.

 Federal R.C.P. 26: DUTY TO DISCLOSE  Federal R.C.P. 30: DEPOSITIONS  Federal R.C.P 34: PRODUCING DOCUMENTS & ESI  Federal R.C.P 37: FAILURE TO DISCLOSE/COOPERATE  Sanctions to be Imposed.

 Adverse Instruction Legal Standard: 3 Elements ▪ 1. Controlling party HAD OBLIGATION TO PRESERVE it at the time ▪ 2. Records were destroyed with a “CULPABLE STATE OF MIND”  Negligence- relevancy must be proven by party seeking sanctions  Bad Faith- sufficient to demonstrate relevancy ▪ 3. Destroyed evidence was “RELEVANT” to the party’s claim or defense such that a reasonable trier of fact would find it would support that claim or defense  * Only willful spoliation gives rise to presumption of relevance  Counsel’s Duty to Monitor Compliance and Locate Relevant Information  Must oversee compliance and monitor party’s efforts  Become familiar with document retention policies  Communicate with “Key Players” and talk with technology personnel  * In Short: Not sufficient to notify all employees of litigation hold ▪ MUST TAKE AFFIRMATIVE STEPS

 1. Issue litigation hold at the outset of litigation or whenever it is anticipated.  2. Communicate directly with “key players” in litigation  Periodically remind key players  3. Instruct all employees to produce electronic copies of their relevant active files.  Make sure all backup media required is identified and stored in a safe place to safeguard.

 UBS- Clearly failed to follow counsel’s instructions  Counsel complied with existing standards  COUNSEL- Failed to oversee UBS  Didn’t adequately communicate with Tong about how data was stored and what “archive” meant.  COUNSEL: Failed to make sure relevant data was retained  1. Neither counsel communicated litigation hold instruction to Senior human resources employee Mike Davies  2. No one asked Kim to produce her files.  3. Didn’t protect relevant backup tapes which may have enable Zubulake to recover some deleted s.

 UBS MAINLY AT FAULT  WHY? Once duty is communicated, party has notice and responsibility falls mainly on UBS  Counsel Partially Responsible  WHY? UBS personnel’s s and copies were lost or belatedly produced as a result of counsel’s failures ▪ FAILURE OF COMMUNICATION  Falls on BOTH counsel and client ▪ Counsel failed to communicate the litigation hold to all key players  Failed to ascertain each of their document management habits

 1. Adverse Inference- For s after August 2001, and ones irretrievably lost.  Court concluded content would have been similar or more favorable  2. UBS ordered to pay costs of re-deposing witnesses about late produced s  3. UBS ordered to pay costs of the motion.

 How can counsel ensure relevant documents are retained when it is not feasible to speak with all key players in a litigation action, given the size of a company of scope of a lawsuit? ( Hint page 88)  If the court had found the spoliation was a result of negligence, would the result have differed and how?

 1. Run a system wide keyword search and preserve a copy of each hit. Create a broad list of search terms, run a search for a limited time frame, and segregate responsive documents.  2. Zubulake would have had to show that the spoliated information was relevant. She most likely could have done so with UBS depositions.