Zubulake v. UBS Warburg (Zubulake III)
217 F.R.D. 309 (2003)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
When discovery of inaccessible electronically stored information is sought, a court may shift the costs of restoration to the requesting party using a seven-factor balancing test, but the responding party must always bear the costs of reviewing and producing the restored data.
Facts:
- Laura Zubulake was an equities trader at UBS, where she earned approximately $650,000 per year.
- Zubulake's immediate supervisor was Matthew Chapin, the alleged primary discriminator.
- Zubulake complained about Chapin's alleged gender discrimination to Chapin's supervisor, Jeremy Hardisty, and a human resources representative.
- In August 2001, Zubulake filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC).
- UBS terminated Zubulake's employment in the first week of October 2001.
- Zubulake sought emails to or from five UBS employees that were stored on backup tapes, believing they contained evidence for her claims, including some that may have been deliberately deleted.
Procedural Posture:
- Laura Zubulake sued UBS Warburg LLC in the U.S. District Court for the Southern District of New York, alleging gender discrimination, failure to promote, and retaliation.
- During discovery, Zubulake requested that UBS produce relevant emails that were stored on inaccessible backup tapes.
- UBS objected to the request, arguing that the cost of restoring the data was unduly burdensome.
- In a prior ruling (Zubulake I), the court ordered UBS to restore a sample of five of the ninety-four backup tapes at its own expense so the court could gather facts for a cost-shifting analysis.
- Following the sample restoration, Zubulake filed a motion to compel UBS to restore and produce all remaining backup emails at UBS's expense.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the significant cost of restoring electronically stored, inaccessible data from backup tapes warrant shifting the entire cost of production, including restoration and attorney review, from the responding party to the requesting party under the Federal Rules of Civil Procedure?
Opinions:
Majority - Scheindlin, District Judge.
No, the significant cost of restoring inaccessible data does not warrant shifting the entire cost of production to the requesting party; rather, a partial shifting of only restoration and search costs is appropriate based on a seven-factor test, while the costs of attorney review remain with the responding party. The presumption is that the responding party bears discovery costs. However, for inaccessible data like backup tapes, fairness may require the requesting party to share the expense. The court applied its seven-factor test and found that factors such as the tailored nature of the request, the high amount in controversy, and UBS's vast resources weighed against shifting the full cost. However, the speculative nature of finding dispositive evidence and the primary benefit to Zubulake made a partial shift appropriate. The court allocated 75% of the restoration and search costs to UBS and 25% to Zubulake, reasoning that the responding party must always bear the subsequent costs of reviewing documents for privilege and responsiveness, as those costs are within its exclusive control.
Analysis:
This opinion is a landmark decision in the field of electronic discovery, establishing one of the most influential frameworks for analyzing cost-shifting for inaccessible data. The seven-factor 'Zubulake test' provided courts with a nuanced alternative to the more producer-friendly 'Rowe' test, reinforcing the general principle that the producing party pays while creating a clear standard for when deviation is justified. The critical distinction between shifting 'restoration' costs and not shifting 'review' costs became a bedrock principle, preventing parties from using the high cost of privilege review as a shield against producing relevant but inaccessible information. This decision heavily shaped the 2006 amendments to the Federal Rules of Civil Procedure concerning e-discovery and remains a foundational case for all subsequent e-discovery jurisprudence.
Unlock the full brief for Zubulake v. UBS Warburg (Zubulake III)