E-Discovery Basics: Zubulake V

The fifth and final decision of the Zubulake case was released in the summer of 2004, and it was a shocker.
(For background on Zubulake, please see my discussion in these four earlier posts.)

Zubulake had an effect on my world - it didn't exactly rock it, but it changed the way many legal departments viewed electronic discovery, including the department where I worked at Bear, Stearns & Co.
Some personal background: in early 2003, I had started working in the litigation group of the Bear Stearns Legal Department, just as the Zubulake decisions were being released. We read the Zubulake decisions as the judge issued them. The fifth Zubulake ruling worried a whole lot of people.
Why?
Well, the "adverse inference instruction" is why - the atomic bomb of the litigation world.
What happened here?

When Zubulake's legal team re-deposed certain UBS employees, as ordered by the judge in Zubulake IV, they found out about many more emails: emails that were improperly deleted and emails that were supposed to have been given to Zubulake almost two years earlier.
Even worse for UBS, the depositions showed that the deleted emails were important to the case, and they had been lost, forever. The back-up tapes that held copies of these emails were gone too.
The depositions also revealed that UBS had other emails important to Zubulake's case, but never turned them over to her.
Zubulake asked the judge for an adverse inference instruction to the jury. For the judge to grant this request, UBS had to have an obligation to preserve relevant evidence which was lost or destroyed, and it had to do so with a "culpable state of mind". In the court's jurisdiction, a "culpable state of mind" included not only willful or reckless behavior, but also negligence (although Zubulake then had to prove that the evidence lost was relevant to her case).

Ultimately, the judge found that UBS counsel did not do everything it should have done to preserve evidence, and that UBS employees also ignored much of the advice given to them by their counsel. Therefore, the judge decided that UBS willfully lost the evidence, and that under the legal standard, the lost information was presumed to be not only relevant to the Zubulake case, but favorable to Zubulake. The jury was instructed of this decision by the judge.

How did the case end? The jury awarded Zubulake almost $30 million in damages for her gender discrimination claim: about $10 million in compensatory damages, and about $20 million in punitive damages. A nice outcome for Zubulake, and not so nice for UBS.

Next week, I'll talk about my reactions to the Zubulake case, and some of the lessons learned...

(Zubulake V is cited as: Zubulake v. UBS Warburg, 229 F.R.D. 422 (S.D.N.Y. 2004))