E-Discovery Basics: Zubulake Part Two

Last week, I started to talk about one of the most important and influential electronic discovery cases of the past decade: Zubulake v. UBS Warburg. I'll pick up my discussion of this 2003 case where I left off...

Laura Zubulake had sued UBS, her employer, claiming gender discrimination. She asked UBS for emails relevant to her case. UBS said it did not have these emails, and that the costs of restoring its back-up tapes to recover the Zubulake emails would be very high (in the hundreds of thousands of dollars). UBS asked the court to consider first whether UBS had to give the emails to Zubulake, and if so, who had to pay the costs of getting the emails from storage on the back-up tapes.

Judge Shira Scheindlin looked to the Federal Rules of Civil Procedure, which allowed Zubulake to ask UBS for emails related to her case. The Rules presumed that UBS would have to pay the cost of recovering the emails from back-up tapes, but also gave the court the discretion to shift some or all the costs to the party asking for the emails (in this case, Zubulake).

This is the point where the case becomes very interesting to the electronic discovery world. Judge Scheindlin pointed out that in many cases involving restoring emails from a back-up tape, the party that is supposed to produce the emails argued that it would be far too expensive to recover the emails. In other words, why ask someone to pay $100,000 to find emails relevant to a case, when the case involves only $10,000? This was the argument made by many companies when they were asked for emails.

Judge Scheindlin noted that many courts had automatically assumed that electronic evidence meant much higher costs, and would deny email requests. This often ended the case, as a plaintiff couldn't get access to necessary evidence. Judge Scheindlin recognized that electronic data could be searched much more cheaply than paper documents could be read and reviewed - an office computer using a search engine could find something in seconds.

The judge created a three-step analysis:

First, how is the data stored? Is it accessible, or inaccessible?
The judge said 'accessible data' means data that is readily usable, and doesn't have to be restored. Examples include data stored on hard drives, CDs, DVDs, etc.
'Inaccessible data' means data that is on backup tapes, or has been erased or damaged. This data is inaccessible because something has to be done to it before it can be accessed. That "something" will cost time and money.
When faced with inaccessible data, the judge said that courts should consider shifting the restoration and production costs to the party asking for the data.

Second, in order to analyze whether to shift costs, the court needs to know what is in the inaccessible data. The judge suggested restoring a small sample of the requested inaccessible data to find out what is there.

Third, the judge developed a seven-step cost-shifting analysis:
1. How specifically is the request tailored to find relevant information? In other words, has the request been written so that it will discover documents relevant to the case?
2. Is this information already available from other sources?
3. What's the total cost of production, compared to the amount of the case?
4. What's the total cost of production, compared to each party's resources? (Does one party have deep pockets?)
5. Can each party control costs, and does each one want to?
6. How important are the issues at stake in the case?
7. What are the benefits to the parties of restoring the data?

The judge stressed that these seven factors are not a check-list and they don't have equal weight with each other. The first factors on the list are the most important, and they are less important as the list goes down.

The judge summarized the central questions of the seven-factor cost-shifting test as: 'does the request impose an "undue burden or expense" on the responding party?' and "how important is the sought-after evidence in comparison to the cost of production?"
In other words, "is it an undue expense?" and "is the data important enough to be worth the cost?"

Judge Scheindlin decided that UBS must produce accessible data, as UBS could do this quickly and cheaply.
The judge also decided that UBS must restore responsive emails from five back-up tapes so that the court could look at the data and begin its cost-shifting analysis.

And so ended the first Zubulake decision (known as Zubulake I). The story continues in Zubulake III! (The Zubulake II decision didn't address anything related to electronic discovery, so I won't talk about it.)