No. A company can't just pass the bill to the other side just because finding computer files is expensive. For easy-to-get files (like emails on a server), the company has to pay to produce them, just like with paper documents. For hard-to-get files (like from backup tapes), a judge will decide if it's fair to make the other side pay by looking at a special 7-point checklist. To get real facts for this decision, the judge ordered the company to search a few of the backup tapes first, at its own cost, as a test to see how expensive it really is and what useful evidence might be there.

Yes, UBS should provide the electronic evidence because it's important for Zubulake's case. But the court needs to decide if it's fair to make UBS pay the full cost, especially for the backup tapes that are hard to access. I suggest a three-step process: (1) learn about UBS's computer system and how hard it is to get different types of data; (2) have UBS provide some sample backup tapes to see what's on them; and (3) analyze if costs should be shared using a fairness test I developed. For now, UBS must give Zubulake the emails from easy-to-access sources at its own expense, and some sample backup tapes she picks to help decide about cost sharing.

No. The potential expense of producing electronically stored information from inaccessible sources does not automatically warrant shifting discovery costs. Cost-shifting should only be considered when electronic data is in an inaccessible format, such as on backup tapes. For accessible data, like active server files or optical disks, the presumption that the responding party bears the cost of production remains. When data is inaccessible, courts should use a modified seven-factor balancing test to determine whether the discovery imposes an 'undue burden or expense' justifying a shift in costs. The court reasoned that automatically shifting costs for e-discovery would cripple the discovery process, particularly in discrimination cases against large corporations, and undermine the strong public policy of resolving disputes on their merits. To ensure the cost-shifting analysis is based on facts rather than speculation, the court may order the responding party to restore and produce a small sample of the inaccessible data at its own expense to gather concrete information about the costs and the likely benefits of a full-scale restoration.

Yes, discovery of UBS's electronic data should be permitted because it is relevant to Zubulake's claims. However, cost-shifting should only be considered when the production of electronic data imposes an undue burden or expense on the responding party. I propose a three-step analysis for determining whether cost-shifting is appropriate: (1) thoroughly understand the responding party's computer system and data accessibility; (2) determine what data may be found on inaccessible media by taking a sample; and (3) conduct a cost-shifting analysis using a modified seven-factor test that focuses on marginal utility and cost issues. UBS is ordered to produce all responsive e-mails from its accessible active and optical disk files at its own expense, and to produce a sample of five backup tapes selected by Zubulake to inform the cost-shifting analysis.

Zubulake v. UBS Warburg LLC (Zubulake I)

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