Cooper Walinski, LPA

In an October 2003 decision in Zubulake v. UBS Warburg LLC, a federal district court in the Southern District of New York explained the preservation obligation that exists for entities that reasonably anticipate litigation.

In August 2002, Zubulake filed a lawsuit in federal court, alleging various employment discrimination claims against UBS Warburg. She initially filed an EEOC charge against the company in August 2001; however, as early as April 2001, several employees who were instrumental to the litigation feared or recognized that Zubulake might institute a lawsuit.

Zubulake made several requests for production of documents, but she consistently maintained that the evidence needed, which was in the form of email correspondence or backup data, was either lost, destroyed, or deleted by UBS Warburg. Hence, she argued that she would be unable to prove her claims without the evidence sought.

The court explained that UBS Warburg’s duty to preserve evidence “when [it] ha[d] notice that the evidence [was] relevant to litigation or when [it] should have known that the evidence [might] be relevant to future litigation.” It noted that since the “key players” in the litigation foresaw the possibility of litigation as early as April 2001, “[t]he duty to preserve attached at the time that litigation was reasonably anticipated.”

The court then discussed measures that should have been followed in that case. It focused on placing a “litigation hold” on all potentially relevant evidence once an entity reasonably anticipates litigation. The “litigation hold” is used to preserve relevant documents and replaces all regular document retention/destruction policies.

In July 2004, Zubulake moved for sanctions against UBS Warburg and was awarded them. These sanctions included an adverse inference instruction to the jury which allowed it to infer that the irretrievable documents would have been detrimental to the company; and payment of the costs of re-deposition of “key” personnel “and payment of all reasonable expenses, including attorneys’ fees” related to Zubulake’s motion for sanctions.

When litigation is reasonably anticipated, employers must develop new procedures that will help shield them from sanctions for negligent handling of relevant documents. Those procedures require a consistently monitored “litigation hold” of all documents relevant to future litigation, including email correspondence and backup data; ensuring that all employees in the company, specifically those who might be instrumental to the anticipated litigation, are given a guide that will outline the “litigation hold” procedures; and ensuring that all employees attend training sessions or seminars concerning the procedures.

For complete details, please refer to: Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003), and Zubulake v. UBS Warburg LLC, 02 Civ. 1243, 2004 U.S. Dist. LEXIS 13574 (S.D.N.Y. Jul. 20, 2004). Subsequent opinions in this currently pending case are also at 231 F.R.D. 159 (S.D.N.Y. 2005) and, 382 F.Supp.2d 536 (S.D. N.Y. 2005).

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