Zubulake v. UBS Warburg LLCZubulake v. UBS Warburg LLC“Zubulake IV”“Zubulake IV”

October 22, 2003.October 22, 2003.

S.D.N.YS.D.N.Y

VIPsVIPs((PartiesParties))

∏ ∏ - Laura Zubulake- Laura Zubulake Equities TraderEquities Trader

Salary $650 K/yrSalary $650 K/yr

∆ ∆ - - UBS Warburg LLCUBS Warburg LLC Global Financial Services FirmGlobal Financial Services Firm

Wealth ManagementWealth Management Investment BankingInvestment Banking Asset Management Asset Management Business BankingBusiness Banking

FactsFacts 44thth opinion resolving discovery issues stemming from Zubulake’s opinion resolving discovery issues stemming from Zubulake’s

EEOC claim filed August 16EEOC claim filed August 16th,th, 2001. 2001. Main Issue:Main Issue:

6 missing backup tapes 6 missing backup tapes Matthew Chapin – April, 2001.Matthew Chapin – April, 2001.

Zubulake’s SupervisorZubulake’s Supervisor Jeremy Hardisty – June, 2001.Jeremy Hardisty – June, 2001.

Chapin’s SupervisorChapin’s Supervisor Andrew Clarke & Vinay Datta – April, 2001.Andrew Clarke & Vinay Datta – April, 2001.

Zubulake’s coworkersZubulake’s coworkers Rose Tong – June (partial), July, August, and October, 2001.Rose Tong – June (partial), July, August, and October, 2001.

Human ResourcesHuman Resources August 2001, & 2002 UBS directed to save all relevant August 2001, & 2002 UBS directed to save all relevant

documents documents Zubulake is now seeking monetary and evidentiary sanctions for Zubulake is now seeking monetary and evidentiary sanctions for

the failure to preserve the missing tapesthe failure to preserve the missing tapes Some were not kept in accordance with regular business practiceSome were not kept in accordance with regular business practice

UBS document retention policy was 3 yearsUBS document retention policy was 3 years Some deletedSome deleted

Relevant RuleRelevant RuleFed. R. Civ. P. 26:Fed. R. Civ. P. 26: Duty To Disclose Duty To Disclose

Fed. R. Civ. P. 26 (a)(1)(A)(ii)Fed. R. Civ. P. 26 (a)(1)(A)(ii) Initial Disclosures. Initial Disclosures.

a copy — or a description by category and location — of a copy — or a description by category and location — of all documents, electronically stored information, and all documents, electronically stored information, and tangible things that the disclosing party has in its tangible things that the disclosing party has in its possession, custody, or control and may use to support possession, custody, or control and may use to support its claims or defenses, unless the use would be solely for its claims or defenses, unless the use would be solely for impeachment impeachment

Fed. R. Civ. P. 26 (b)(1)Fed. R. Civ. P. 26 (b)(1) Scope in General.Scope in General.

Parties may obtain discovery regarding any nonprivileged Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense — matter that is relevant to any party's claim or defense — including the existence, description, nature, custody, including the existence, description, nature, custody, condition, and location of any documents or other tangible condition, and location of any documents or other tangible things and the identity and location of persons who know of things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved discovery of any matter relevant to the subject matter involved in the action. in the action.

eDiscovery PerspectiveeDiscovery Perspective

UBS in-house email is the primary UBS in-house email is the primary source of evidence being soughtsource of evidence being sought

UBS policy for storing data requires UBS policy for storing data requires backup tapes for 3 years. backup tapes for 3 years.

Emails of “key players” should have Emails of “key players” should have been preservedbeen preserved

Issues regarding eDiscoveryIssues regarding eDiscovery Legal Standard Legal Standard

Spoilation- Spoilation- Destruction or significant alteration of evidence, or the failure Destruction or significant alteration of evidence, or the failure

to preserve property for anothers use as evidence in pending to preserve property for anothers use as evidence in pending or reasonably foreseeable litigationor reasonably foreseeable litigation

Remedied by negative inferenceRemedied by negative inference Duty To PreserveDuty To Preserve

Triggered when party has notice that evidence is Triggered when party has notice that evidence is relevant to litigation or when a party should know relevant to litigation or when a party should know that evidence could be relevant to future litigationthat evidence could be relevant to future litigation

Scope of PreservationScope of Preservation Not every shred of paperNot every shred of paper What the disclosing party knows, or reasonably What the disclosing party knows, or reasonably

should know, is relevant to the actionshould know, is relevant to the action

Issues Cont’dIssues Cont’d

Adverse Inference Jury InstructionAdverse Inference Jury Instruction Three Prong TestThree Prong Test

1.1. Party holding control over relevant Party holding control over relevant evidence had duty to preserve at the time evidence had duty to preserve at the time it was destroyedit was destroyed

2.2. The records were destroyed with culpable The records were destroyed with culpable state of mindstate of mind

3.3. Destroyed evidence was relevant to the Destroyed evidence was relevant to the party’s claim or defense such that a party’s claim or defense such that a reasonable trier of fact could find that it reasonable trier of fact could find that it would support that claim or defensewould support that claim or defense

ConclusionConclusion Negative Inference Negative Inference NOTNOT applicable applicable

Duty was breachedDuty was breached Attached at the latest August 16Attached at the latest August 16thth, 2001., 2001.

Failure to preserve 6 tapes amounted to negligenceFailure to preserve 6 tapes amounted to negligence Tong tapes exceed negligenceTong tapes exceed negligence Grossly Negligent, possibly recklessGrossly Negligent, possibly reckless

No evidence that lost tapes would support Zubulake’s No evidence that lost tapes would support Zubulake’s claimclaim

68 emails that Zubulake said were most relevant showed no 68 emails that Zubulake said were most relevant showed no evidence that Chapin disliked Zubulake based on genderevidence that Chapin disliked Zubulake based on gender

No reason to believe the lost tapes would support her claimNo reason to believe the lost tapes would support her claim UBS responsible for re-deposing witnesses UBS responsible for re-deposing witnesses

Limited purpose of inquiring into the issues raised by the Limited purpose of inquiring into the issues raised by the destruction of evidence and any newly discovered destruction of evidence and any newly discovered emails. emails.

Brain TeasersBrain Teasers

Is the Courts relevancy conclusion on Is the Courts relevancy conclusion on the six tapes of information justified?the six tapes of information justified?

Is it fair for Zubulake to have to Is it fair for Zubulake to have to prove the relevance of information prove the relevance of information she has never seen?she has never seen?