Facts
- Laura Zubulake, a former UBS equities trader, sued UBS for gender discrimination, failure to promote, and retaliation under federal, state, and local law.
- Zubulake asserted that key proof existed in employee email stored on UBS’s computer systems.
- Prior discovery rulings addressed restoration and search of emails on backup tapes and allocation of restoration costs.
- Zubulake moved for sanctions, alleging UBS failed to preserve potentially relevant electronic evidence, including backup tapes containing emails of important custodians.
- UBS continued certain routine practices (including recycling or loss of some backup tapes and deletion of some emails) after litigation was reasonably anticipated, resulting in missing ESI.
Issues
- When does a party’s duty to preserve electronic evidence arise, and what is the scope of that duty as to emails and backup tapes?
- What sanctions are appropriate for spoliation based on UBS’s failure to preserve certain emails and backup tapes, including whether an adverse inference instruction is warranted?
- Whether the court should revisit prior cost-shifting rulings concerning backup-tape restoration.
Decision
- The court held UBS had a duty to preserve relevant ESI once litigation was reasonably anticipated, including certain backup tapes containing unique, potentially relevant emails of key employees that were not otherwise available.
- The court declined to reconsider earlier cost-shifting rulings regarding restoration of backup tapes.
- The court found spoliation concerns but declined, on the record then developed, to impose an adverse inference instruction at that stage.
- The court granted sanctions in part, imposing cost-related remedies tied to UBS’s preservation failures.
Legal Principles
- Spoliation is the destruction or significant alteration of evidence, or failure to preserve evidence for use in pending or reasonably foreseeable litigation.
- Authority to sanction spoliation arises under the Federal Rules of Civil Procedure and the court’s inherent power; the sanction choice rests in the trial court’s discretion on a case-by-case basis.
- The duty to preserve arises when a party has notice that evidence is relevant to litigation or should know it may be relevant to future litigation.
- A party anticipating litigation must suspend routine destruction of unique, relevant evidence that may be useful to an adversary.
- As a general rule, a party need not preserve all email backup tapes upon anticipating litigation, but must preserve tapes reasonably likely to contain unique, relevant information, especially for key custodians when the information is not otherwise available.
- In assessing severe sanctions such as an adverse inference instruction, courts consider the spoliating party’s culpability and the prejudice to the opponent, including whether the missing evidence was relevant and likely unfavorable.
Conclusion
The court clarified that once litigation is reasonably foreseeable, parties must preserve unique, relevant ESI and, in appropriate circumstances, specific backup tapes for key custodians, while retaining discretion to tailor sanctions; it imposed partial, cost-related sanctions and deferred an adverse inference instruction on the record then presented.