Written by Attorneys Craig A. Cohen and G. Frank 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.

On April 6, 2005, a jury awarded $29.2 million to Laura Zubulake, a former equities salesperson, in her gender discrimination lawsuit against her former employer, UBS Warburg. The Zubulake case is well known for its rulings on electronic discovery; Judge Shira A. Shiendlin delivered no fewer than six opinions on the subject. One of those opinions sanctioned UBS with an adverse inference instruction for willfully destroying potentially relevant emails. According to counsel for Zubulake, electronic evidence played a significant role in the outcome of the case. During discovery, plaintiff’s counsel uncovered emails from senior management seeking to discharge Zubulake just days after she contacted the Equal Employment Opportunity Commission. The discovery sanctions against UBS for its mass destruction of emails placed a significant burden on its counsel’s efforts to persuade the jury to its side.

The Zubulake opinions date back as far as May 13, 2003, when Judge Shiendlin first ruled that UBS was obligated to produce accessible data on its active servers and optical drives. The Judge also ruled that UBS was further obligated to produce a sample of emails stored on its backup tapes to determine if the plaintiff should bear some of the costs to retrieve this information based on the burden imposed upon UBS. Later rulings by the Court focused on apportioning costs between the parties and monitoring compliance with its earlier orders. After learning that UBS failed to retain potentially relevant emails on backup tapes despite numerous requests that it do so, the Court ruled that UBS would be subject to an adverse inference instruction at trial relating to the contents of the destroyed information.

The jury’s $29.2 million verdict in favor of Zubulake, one of the largest to be awarded to an individual plaintiff in an employment discrimination case, should remind corporate defendants to take seriously their responsibility to preserve and produce email and other electronic files. As discovery increasingly shifts toward electronic formats, litigants must be prepared to deal with the additional complexities such discovery creates. The importance of thoughtful, well-implemented policies and procedures for electronic discovery should not be underestimated.