Groundbreaking Court Opinions are Establishing
E-Discovery Standards

In August 2001, Laura Zubulake filed a discrimination suit against her former employer, UBS Warburg. The presiding judge for the case, Judge Shira A. Scheindlin has issued five groundbreaking opinions that are establishing the definitive standards for electronic records management and electronic discovery.

In Zubulake V, Judge Scheindlin’s fifth written opinion in the case, the judge examined UBS’s destruction of e-mail messages during litigation and production of other relevant e-mail messages two years after they should have been produced. The court found that UBS failed in its obligations and imposed sanctions, ordered the firm to pay costs and to restore additional backup tapes. 

The court found the deletion of e-mails, and the late production of other relevant e-mail material, warranted severe sanctions. The sanction: Should the case go to trial, the jury will hear an “adverse inference” instruction, permitting it to infer that the missing e-mails would have been unfavorable to UBS. The court ordered UBS to pay the costs of any depositions or re-depositions required by the late production of other e-mails, as well as the costs of plaintiff’s motion for sanctions. Also, the court ordered UBS to pay for the restoration of the remaining requested backup tapes.

Judge Scheindlin has consistently engaged in extensive analysis of electronic records management, electronic discovery and data recovery. Her written opinions are playing a key role in establishing electronic discovery standards. In Zubulake V, Judge Scheindlin made it clear that it is not enough for lawyers to merely to instruct a client to preserve e-mail and other relevant evidence once litigation is reasonably anticipated. The judge attributed much of destruction and delayed discovery response to poor lawyer-client communications, but she concluded, “the duty to preserve and produce documents rests on the party [the company]”.   The lawyers and the company must take “affirmative steps” to ensure that employees preserve electronic evidence. These steps are

• “Identify sources of discoverable information”
• “Put in place a litigation hold and make that known to all relevant employees by communicating with them directly”
• “Monitor compliance so that all sources of discoverable information are identified and retained on a continuing basis”
• “Call for employees to produce copies of relevant electronic evidence”
• “Arrange for the segregation and safeguarding of any archival media (e.g., back-up tapes) that the [company] has a duty to preserve” (ie. take relevant backup tapes out of tape rotation)
• “Regularly” communicate the litigation hold instructions

With the Zubulake V, companies now have clear guidance on litigation holds for electronic records. Given Judge Scheindlin’s growing reputation for e-discovery expertise, these standards will most likely be widely adopted by other courts. Companies that fail to act on Judge Scheindlin’s guidance for electronic records management, do so at their own risk.