Zubulake v. UBS Warburg LLP

Brief Fact Summary.

Plaintiff sued Defendant, alleging gender discrimination, failure to promote, and retaliation under federal, state, and city law. Plaintiff sought access to emails that were stored and archived by Defendant. Some of the backup tapes were missing. Plaintiff sought sanctions against Defendant for its failure to preserve the missing backup tapes and deleted emails. She also sought costs for the restoration of the backup tapes, an adverse inference instruction, and costs for re-depositions.

Synopsis of Rule of Law.

If a party has violated his duty to preserve evidence, the trial judge has the discretion to craft a sanction that addresses the party’s violation and the resulting injury to the other party. Sanctions for spoliation must be determined on a case-by-case basis and may include an adverse inference instruction. The party seeking this adverse inference instruction must prove that (1) the party that destroyed the evidence had a duty to preserve it at the time it was destroyed, (2) the party acted with a culpable mental state (including ordinary negligence), and (3) the destroyed evidence was relevant to the party’s claim or defense.

Facts.

Plaintiff was hired in 1999 as a senior salesperson for Defendant. Plaintiff was passed over for a promotion, and the person who ended up with the job proceeded to harass Plaintiff. Plaintiff filed a charge of gender discrimination with the EEOC, and she was fired shortly thereafter. Plaintiff sued Defendant for gender discrimination, failure to promote, and retaliation. In response to Plaintiff‘s claim that all her allegations could be proven by email correspondence sent to Defendant‘s employees, the judge ordered the parties to share the costs of restoring Defendant‘s backup tapes containing the emails. Defendant accordingly ordered its employees to preserve information stored on backup tapes. However, several backup tapes were discovered to be missing. Plaintiff moved for sanctions against Defendant for failure to preserve the missing tapes, and the emails contained on those tapes, in federal district court.

Issue.

Does spoliation by the defendant warrant adverse inference instruction?

Held.

No.

Discussion.

If a party has violated his duty to preserve evidence, the trial judge may craft a sanction that addresses the party’s violation and the resulting injury to the other party. Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a litigation hold to ensure the preservation of relevant documents. As a general rule, that litigation hold does not apply to inaccessible backup tapes (e.g., those typically maintained solely for the purpose of disaster recovery), which may continue to be recycled on the schedule set forth in the company’s policy. On the other hand, if backup tapes are accessible (i.e., actively used for information retrieval), then such tapes would likely be subject to the litigation hold. However, if a company can identify where particular employee documents are stored on backup tapes, then the tapes storing the documents of key players to the existing or threatened litigation should be preserved if the information contained on those tapes is not otherwise available. This exception applies to all backup tapes. Sanctions for spoliation must be determined on a case-by-case basis and may include an adverse inference instruction. The party seeking this adverse inference instruction must prove that (1) the party that destroyed the evidence had a duty to preserve it at the time it was destroyed, (2) the party acted with a culpable mental state (including ordinary negligence), and (3) the destroyed evidence was relevant to the party’s claim or defense.

Here, the duty to preserve the missing tapes arose when the relevant people at Defendant anticipated litigation, four months before Plaintiff filed her EEOC charge. Because Defendant was negligent, and possibly reckless, Plaintiff satisfied her burden with respect to the first two prongs of the spoliation test. However, Plaintiff failed to show that the lost tapes contained emails that would have been favorable to her. None of the emails Plaintiff has produced so far in the litigation supports an inference of gender discrimination, and it is similarly unlikely that the missing emails support her claims. Because the emails would not have been favorable to her case, the evidence was not relevant. Therefore, Plaintiff is not entitled to an adverse-inference instruction. However, Defendant‘s failure to produce the requested emails means Plaintiff had to re-depose witnesses in connection with the emails. Accordingly, Defendant should bear the costs for Plaintiff to re-depose these witnesses.