Zubulake v. UBS Warburg LLC (Zubulake IV)
217 F.R.D. 309 (2003)
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Rule of Law:
A party's duty to preserve relevant evidence, including electronic data on backup tapes for key players, arises when litigation is reasonably anticipated. To receive an adverse inference instruction for spoliation, the moving party must prove (1) a duty to preserve, (2) destruction with a culpable state of mind, and (3) that the destroyed evidence was relevant and would have been favorable to its case.
Facts:
- Laura Zubulake was an equities trader at UBS.
- In April 2001, several of Zubulake's supervisors and coworkers began anticipating she might sue and exchanged emails about her, some of which were labeled 'UBS Attorney Client Privilege' even though no attorney was copied.
- Matthew Chapin, Zubulake's supervisor, admitted in a deposition that he feared litigation as early as April 2001.
- Zubulake filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) on August 16, 2001.
- After the EEOC charge was filed, UBS orally instructed employees to retain all relevant documents.
- Despite these instructions, several backup tapes from April 2001, June 2001, August 2001, and October 2001 containing emails of key employees (Chapin, Hardisty, Clarke, Datta, and Tong) went missing.
- Additionally, certain relevant emails created after the preservation duty attached were deleted from UBS's active system and existed only on backup tapes, some of which were among those missing.
Procedural Posture:
- Laura Zubulake filed a charge of gender discrimination and retaliation against UBS with the EEOC on August 16, 2001.
- Zubulake (plaintiff) filed a lawsuit against UBS (defendant) in the U.S. District Court for the Southern District of New York on February 14, 2002.
- During discovery, the court issued several opinions, including one ordering the parties to share the cost of restoring certain backup tapes containing relevant emails.
- After discovering that certain backup tapes were missing and some emails had been deleted, Zubulake filed a motion for sanctions against UBS.
- Zubulake's motion requested: (a) an order requiring UBS to pay the full costs of restoring remaining backup tapes, (b) an adverse inference instruction against UBS, and (c) an order for UBS to pay for re-deposing certain witnesses.
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Issue:
Does a party's negligent or grossly negligent destruction of potentially relevant electronic evidence, without extrinsic proof that the lost evidence would have been favorable to the moving party, warrant an adverse inference instruction sanction?
Opinions:
Majority - Judge Scheindlin
No. A party's negligent or grossly negligent destruction of evidence does not warrant an adverse inference instruction sanction unless the moving party proves that the lost evidence was relevant and would have been favorable to its claims. Here, UBS had a duty to preserve the backup tapes from the moment it reasonably anticipated litigation in April 2001, and it breached that duty by destroying the tapes with a culpable state of mind ranging from negligence to gross negligence. However, an adverse inference instruction is an extreme sanction. When destruction is not willful, relevance is not presumed. Zubulake failed to produce any extrinsic evidence to demonstrate that the information on the lost tapes would have been favorable to her gender discrimination claims. Without such proof, the court cannot infer that the lost evidence would have harmed UBS, and therefore the severe sanction of an adverse inference instruction is inappropriate.
Analysis:
This opinion is a landmark decision in the field of electronic discovery, establishing key principles for the preservation of electronic evidence. It clarifies that the duty to preserve attaches not just upon the filing of a lawsuit, but as soon as litigation is 'reasonably anticipated.' The decision provides crucial guidance on the scope of a 'litigation hold,' distinguishing between inaccessible backup tapes (generally not subject to the hold) and accessible data or backup tapes of 'key players,' which must be preserved. By articulating a clear, multi-factor test for spoliation sanctions, the court created a framework that balances the need to punish the destruction of evidence against the high prejudice of an adverse inference instruction, heavily influencing corporate document retention policies and e-discovery practices.
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