By Sean M.

Georges

Zubulake and e-discovery: Did you get your wake-up call?

Now that the key issues have been addressed and national standards are developing, parties and their counsel are fully on notice of their responsibility to preserve and produce electronically stored information.1

hus wrote Judge Shira A. Scheindlin of the Southern District of New York, in the fifth of a series of influential decisions in the case of Zubulake v. UBS Warburg, LLC.2 Zubulake ? What could this case possibly mean to you? Whether you are aware of it or not, Zubulake has already had an impact on you and your clients obligations with respect to a myriad of critical issues relating to electronic discovery. Zubulake should be viewed as nothing less than a serious wake-up call to counsel and clients across the country, as it attempts to clarify some of the many difficult issues concerning the obligation to preserve, maintain and produce discoverable electronic records, including e-mail.3 Whether you are plaintiff or defense counsel, in-house counsel or an IT manager or company president, you are well advised to familiarize yourself with the rulings and analysis in this leading case. Zubulake holds critical lessons in electronic discovery and litigation management for all to heed.

centered on defendants failure to preserve and produce certain relevant e-mail communications. The record indicated that the defendant willfully and negligently destroyed potentially relevant e-mails, failed to preserve backup tapes containing discoverable e-mails, and otherwise failed to preserve and produce discoverable electronic documents. In light of these numerous e-discovery failures by the defendant, which resulted in the spoliation of evidence, and with a finger pointing squarely at its counsel, Judge Scheindlin observed: What is true in love is equally true at law: Lawyers and their clients need to communicate clearly and effectively with one another to ensure that litigation proceeds efficiently. When communication between counsel and client breaks down, conversation becomes just crossfire, and there are usually casualties.4 The most significant casualty may have been the defendant, UBS Warburg, in light of the jury award of $9.1 million in compensatory damages and $20.1 million in punitive damages.

guard backup tapes that might have contained some of the deleted e-mails, and which would have mitigated the damage done by UBSs destruction of those e-mails.6 Unfortunately, the litigation hold instructions did not have the intended effect, as certain key employees negligently or willfully destroyed potentially discoverable e-mail. The failure to properly preserve and store backup tapes also resulted in the loss of potentially discoverable electronic data. Once litigation is reasonably anticipated in a particular matter, the normal document retention and destruction policy must be suspended, and a litigation hold must be established.7 Zubulake makes clear that counsel may not rest on the assumption that discovery obligations are satisfied at the point a litigation hold is communicated. The burden is far greater than that. Counsel must take an active leadership role to ensure electronic discovery obligations are met, and must effectively supervise and manage the preservation and production process.

On litigation holds, retention policies and backup tapes

In Zubulake, outside defense counsel and in-house counsel did attempt to timely (defined as that point when the defendant may be held to reasonably anticipate litigation) and repeatedly communicate the obligation to preserve and protect all relevant e-mail.5 However, the court emphasized counsels obligations, noting that they failed in several important ways: Counsel ... failed to request retained information from one key employee and to give the litigation hold instructions to another. They also failed to adequately communicate with another employee about how she maintained her computer files. Counsel also failed to safe-

Defense counsel must actively monitor preservation and production

Spoliation of electronic evidence is a very real danger that counsel must actively and effectively work to avoid.8 As noted above, preservation and production obligations do not end with issuance of a litigation hold.9 This is merely the beginning of a continuing process requiring counsels active involvement:
Counsel must oversee compliance with the litigation hold, monitoring the partys efforts to retain and produce the relevant documents. Proper communication between a party and her lawyer will ensure (1) that all relevant information (or at least all

Background
Zubulake actually began life in 2002 as a relatively routine employment discrimination dispute. The plaintiff, a female equities trader with UBS, filed suit against her former employer, alleging gender discrimination, failure to promote, and retaliation under city, state and federal law. However, as the case unfolded, complex discovery issues came to the fore, and In-house Counsel & a pitched battle on Vice President those issues waged for of Human Resources more than two years. Shoe Carnival, Inc. The discovery conflict
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sources of relevant information) is discovered; (2) that relevant information is retained on a continuing basis; and (3) that relevant non-privileged material is produced to the opposing counsel.10

To meet this burden, counsel must become fully familiar with her clients document retention policies, as well as the clients data retention architecture.11 Data retention architecture? Document retention policies? Are you serious? Yes. One thing is crystal clear. There are no longer any excuses for the technologically challenged among us. Counsel must seek and obtain a solid grasp on the inner mechanics of the clients data retention architecture, including the electronic files backup systems, and must come to a full understanding of the clients retention policies, practices and procedures. This can only be accomplished through diligent effort and involvement, and must include detailed discussions with IT personnel and with key members of management. In Zubulake, counsels failure to clearly understand the clients policy and practice of archiving e-mails led to a flawed assumption that certain practices were being followed. This misunderstanding resulted in the loss of potentially discoverable material, which led to sanctions against the defendant at trial.

to ensure all employees are reminded of the obligation; 2. Communicate preservation obligations to key players. Clearly communicate the obligation to preserve discoverable information directly to the litigations key players (those employees likely to have relevant information), using whatever methods are necessary; and 3. Manage production. Instruct all of clients employees to produce electronic copies of relevant active files, ensuring retention and protection of all backup media.12

meeting its e-discovery obligations. While recognizing that the client is nominally responsible for a failure to effectively preserve and produce discoverable evidence, Judge Scheindlin noted that it is chiefly counsels responsibility to ensure compliance with the Rule 26 obligation to supplement discovery responses.14

Clarifying counsels e-discovery obligations

The court shed further light on the extent of counsels management obligations by outlining how UBSs defense counsel fell short. They included the following: 1. Failure to effectively and repeatedly communicate the litigation hold to each and every one of the clients key players; 2. Failure to determine the precise nature of the unique document management processes involved (through discussions with IT personnel and the individual key players), so that all discoverable information could be identified, retained and produced; (continued on page 14)

Who is most responsible?

A lawyer cannot be obliged to monitor her client like a parent watching a child. At some point, the client must bear responsibility for a failure to preserve. At the same time, counsel is more conscious of the contours of the preservation obligation; a party cannot reasonably be trusted to receive the litigation hold instruction once and to fully comply with it without the active supervision of counsel.13

One of the compelling learning points in Zubulake is that counsel bears a significant responsibility to coordinate the clients efforts in

Precautionary steps necessary to meet preservation requirement

Judge Scheindlin delineated three key precautionary steps counsel must take to meet its preservation obligations: 1. Issue and reissue a litigation hold. Issue a litigation hold at the outset of litigation (when litigation is reasonably anticipated) and periodically reissue the litigation hold
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3. Failure to mitigate the damage caused by the clients actions (deletions/destruction of e-mail) through diligent monitoring and management of discovery; and 4. Failure to be as cooperative as possible in continuing to respond to discovery.15 for the restoration and production of relevant e-mails from certain backup tapes.17 The outcome of the case itself may have been significantly impacted as a result of these sanctions.
1. Zubulake v. UBS Warburg, LLC, 229 F.R.D. 422, 440 (S.D.N.Y. 2004). 2. A series of seven separate decisions have been issued by the court in Zubulake. 3. See, for example, Tantivy Communications, Inc. v. Lucent Technologies, Inc., 2005 WL 2860976 (E.D.Tex.). 4. Zubulake V, 229 F.R.D. at 424. 5. See Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212, 217, S.D.N.Y. (2003), where the court noted that UBS should have anticipated litigation as early as four months prior to the plaintiffs filing a charge with the EEOC: Thus, the relevant people at UBS anticipated litigation in April 2001. The duty to preserve attached at the time that litigation was reasonably anticipated. 6. Zubulake V, 229 F.R.D. at 424. 7. Zubulake IV, 220 F.R.D. at 218. 8. The court defined spoliation as the destruction or significant alteration of evidence, or the failure to preserve property for anothers use as evidence in pending or reasonably foreseeable litigation. Zubulake V, 229 F.R.D. at 430, quoting West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999). 9. Zubulake V, 229 F.R.D. at 432. 10. Id. 11. Id. 12. Id. at 433-434. 13. Id. at 433. 14. Id. 15. Id. at 435-436. 16. Id. at 424. 17. Id. at 439-440: If you find that UBS could have produced this evidence, and that the evidence was within its control, and that the evidence would have been material in deciding facts in dispute in this case, you are permitted, but not required, to infer that the evidence would have been unfavorable to UBS. 18. See the Proposed Federal Rules of Civil Procedure (adopted by the U.S. Supreme Court on April 12, 2006, and set to go into effect on Dec. 1, 2006) and The Sedona Principles Addressing Electronic Document Production, July 2005.

Lessons to learn?
As outlined above, Zubulake holds many critical lessons for counsel and their clients. Issues relating to electronic discovery are developing at the same rapid rate of speed as changes in information technology. Fortunately, the legal community is now moving in significant ways to stay on top of these changes.18 In addition to the fundamental issues raised by Zubulake, counsel may face numerous issues in virtually any case concerning the scope and cost of electronic discovery. Various methodologies and analytical approaches have been developed by the courts to assist in resolving these difficult issues. Zubulake makes clear that counsel can no longer remain blissfully ignorant of the technical aspects of their clients document retention policies, electronic information systems, and information retention practices. Nor can counsel hope to rely solely on general written communications and litigation holds to clients at the outset of a dispute. The new reality is that a much more active management role is required of us.

Severe sanctions for spoliation

In deciding that spoliation sanctions were appropriate, Judge Scheindlin wrote: The conduct of both counsel and client thus calls to mind the now-famous words of the prison captain in Cool Hand Luke: What weve got here is a failure to communicate. Because of this failure by both UBS and its counsel, Zubulake has been prejudiced. As a result, sanctions are warranted.16 In light of the defendants numerous discovery failures and the spoliation of discoverable email, with resulting prejudice to the plaintiff, the court ordered serious sanctions. These included an adverse inference instruction to the jury regarding e-mails deleted after the EEOC complaint was filed; an order that the employer pay the costs of additional depositions or re-depositions required by the late production of e-mails; an order that the employer pay the costs of the motion to include attorney fees; and an order that the employer pay

Sean M. Georges, J.D., LL.M., currently serves as in-house counsel and vice president of human resources for Shoe Carnival, Inc., at its headquarters in Evansville, Ind. Sean is a graduate (with distinction) of the United States Naval Academy at Annapolis, Md. He received his Juris Doctorate degree from the University of Illinois College of Law and his Master of Laws degree from the Judge Advocate Generals School of the Army at the University of Virginia. He served on active duty as a Marine Corps Officer for 13 years (and as a Marine Corps Judge Advocate for 10 of those years).
Editors Note: An earlier version of this article first appeared in The Workplace Lawyer, fall 2005, periodic newsletter of the ISBA Employment & Labor Law Section.

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