Written by Attorneys Robert T. Horst and Gilbert Franklin McKnight, IV

Note: This article is an interpretation of current law and is offered for informational purposes only. This material is not legal advice and should not be construed or used as a substitute for the advice of an attorney.

Again addressing the matter of electronic discovery, the United States District Court for the Southern District of New York held last week that the defendant’s negligent destruction of backup tapes neither required it to reconsider its earlier cost-shifting order nor issue an adverse instruction to the jury regarding the destruction of those tapes. In Zubulake v. UBS Warburg, No. 02 Civ. 1243 (SAS) 2003 WL 22410619 (S.D.N.Y. Oct. 22, 2003), the Court rejected plaintiff’s arguments advocating the above measures, but agreed that UBS should be required to pay the costs for re-deposing the witnesses whose backup tapes were destroyed. The Court held that the additional depositions would be “for the limited purpose of inquiring into issues raised by the destruction of evidence and any newly discovered e-mails.”

Looking to the circumstances surrounding the destruction of the backup tapes, the Court found that UBS’s behavior, while negligent and possibly reckless, did not warrant reconsideration of its earlier cost-shifting order or an adverse inference instruction to the jury, but instead required only that UBS be required to bear Zubulake’s costs for re-deposing those witnesses whose e-mails were located on the destroyed backup tapes. The Court noted that it was well aware when making the cost-shifting order that certain backup tapes were missing and that evidence of the missing tapes played a role in its decision. As for the adverse inference instruction, the Court found that while UBS had an obligation to preserve the backup tapes and acted negligently by destroying them, Zubulake could not show that destruction of the tapes was willful or that the lost e-mails on those tapes would be “any more likely to support her claims” than e-mails already in her possession.

By avoiding the extreme measure of an adverse instruction for seemly negligent, and at worst, reckless spoliation of evidence, and refusing to permit a spoliation claim from undoing a prior order where the same facts were taken into account, the Court’s decision balances the need for sanctions against the rights of the parties in litigating the overall issues.