Magazine article Information Management

Zubulake: The Real Issues

Magazine article Information Management

Zubulake: The Real Issues

Article excerpt

The Zubulake case shows that judges are becoming savvier about electronic discovery and data recovery, which means organizations may have difficulty claiming undue burden for discovery of poorly managed electronic records

In many ways the recent uproar evoked by Zubulake v. UBS Warburg is reminiscent of the one that arose in the legal world when the decision on client documents came down in Sage v. Proskauer Rose in 1997.

In both cases, a court was faced with defining the responsibility of a party to maintain and produce a body of (among other things) electronic data to another party. In both cases, the responding party asserted a defense to production that was dismissed more or less in its entirety by the court. In both cases, a large part of the interested public responded with horror: The conclusion generally drawn in both cases was that the courts had engaged in cutting-edge analysis and decision-making on the production (and by extension, the maintenance) of electronic records and data.

Who Should Pay?

Both the Zubulake and Sage cases involved relatively routine matters. In Zubulake, plaintiff Zubulake sued her former employer and during discovery requested production of all e-mail related to the dispute. In Sage, a former client sought to obtain all documents and information related to their representation after a dispute arose between them.

In Zubulake, the single real question before the court was one of apportionment of costs between the parties. Should the defendant, UBS Warburg, be required to bear the entire cost of going through an e-mail system, optical disks containing e-mail databases required by the securities and Exchange Commission, and 94 backup tapes looking for responsive e-mail, or should the plaintiff share in the cost?

In answering this question, the court examined something called the Rowe Test, a list developed by a court in a prior case (Rowe Entertainment Inc. v. William Morris Agency) to help determine whether cost-shifting is appropriate. That test, then only a year old and used in a handful of cases, considered eight factors:

1. the specificity of the discovery requests

2. the likelihood of discovering critical information

3. the availability of such information from other sources

4. the purposes for which the responding party maintains the requested data

5. the relative benefits to the parties of obtaining the information

6. the total cost associated with production

7. the relative ability of each party to control costs and its incentive to do so

8. the resources available to each party

The court analyzed this test, concluded it was flawed and tended to weigh excessively in favor of cost-shifting, and came up with a new test that considered the following factors:

1. the extent to which the request is specifically tailored to discover relevant information

2. the availability of such information from other sources

3. the total cost of production compared to the amount in controversy

4. the total cost of production compared to the resources available to each party

5. the relative ability of each party to control costs and its incentive to do so

6. the importance of the issues at stake in the litigation

7. the relative benefits to the parties of obtaining the information

The chief analytical difference between the two tests is that under the Rowe Test, the factors weigh equally, and an affirmative answer on any point tends to result in cost-shifting; the Zubulake court rejected this approach in favor of an outcome based on the total mix of circumstances.

In doing all this, the court engaged in an extensive analysis of electronic data discovery and its issues. It noted and rejected a tendency by earlier courts to assume that discovery of electronic records is necessarily more difficult than that of paper records and concluded that, in keeping with the longstanding requirements of the Rules of Civil Procedure and prior case precedent, cost-shifting, when appropriate at all, should be limited to those electronic items that are difficult to obtain, such as files on backup tapes requiring restoration, and not to items maintained online or in easily searchable repositories. …

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