College of Information Sciences & Technology
The Pennsylvania State University
IST 402: Portal Project
Zubulake v. UBS Warburg, LLC
Outline & Work plan
Presented To:
Professor Bagby
&
Erica Culler
March 2nd, 2006
Team #1
Steve Crisalli
sdc188@psu.edu
Damien Deantonio
dmd293@psu.edu
Pam Gorky
Jeff Yetter
psg117@psu.edu
jmy165@psu.edu
IST402 – Outline
March 2nd, 2006
Table of Contents
ABSTRACT ...................................................................................................................................................................3
OUTLINE .....................................................................................................................................................................4
INTRODUCTION ...........................................................................................................................................................4
HISTORY OF COST-SHIFTING ......................................................................................................................................5
BACKGROUND OF THE ZUBULAKE TRIAL.....................................................................................................................6
RELIANCE OF ZUBULAKE ON ROWE ............................................................................................................................8
CURRENT COST-SHIFTING......................................................................................................................................... 10
CONCLUSION & FUTURE OF COST-SHIFTING ............................................................................................................ 11
DETAILED WORK PLAN ......................................................................................................................................... 11
GRAPHICAL REPRESENTATION STRATEGY .................................................................................................... 13
BIBLIOGRAPHY ....................................................................................................................................................... 13
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I. Abstract
After careful consideration and investigation of all portal topics, our team chose to further
explore the Zubulake case and the effects it had on electronic data discovery cost. Because of the
growing significance of EDD in today’s business world, our team thought this would be a good
chance to see where the future is heading. The Zubulake case will be referenced as the precedent
of all litigation cases involving EDD. Within these cases of EDD, the issue of costs for retrieving
the data will become increasingly important as well and will be the focus of our portal.
Our group is especially interested in a topic of this magnitude because the effects and costs
it can have on corporations now and in the future. While doing research for our portal and looking
at the Zubulake case, we would like to learn when and how a corporation must preserve electronic
documentation, such as emails or backup tapes. In the past, some precautions were taken to help
preserve these documents, but with the outcome of the Zubulake case now known, organizations
are now more cautious with what they do. Currently, our group is not too familiar with this topic.
We know the basics of it from the preliminary research we did, but we are very interested in
learning more.
From initial research we did on the internet as well as in Westlaw, we were able to gain a
basic understanding of the details revolving around the trial. In a discrimination case between
Laura Zubulake and UBS Warburg, the issue of EDD costs came up at the time where there were
no clear-cut standards or criteria for dividing the discovery costs. Prior to this case, the issue of
EDD costs had come up, but not very frequently. One of the major cases before the Zubulake trial,
the Rowe case, served as the precedent of how corporations will proceed to act on this subject in
the future. We will refer to this case many times throughout the portal. During the Zubulake case,
the Rowe case played a significant role as the standards resulting from the Zubulake case were
directly derived from the Rowe case. The Zubulake case lead to the revised list of EDD cost
balancing criteria. The new list is what will be used to adjust the costs in regards to EDD cases.
With skills in webpage design, writing, chart development, and image editing, among other
things, our team is very diverse. We plan to employ all of these skills in every way possible.
Whenever appropriate, charts and other visuals will be used to help illustrate concepts within the
portal. These will most likely be flow charts and concepts maps, but this will be finalized after we
have completed our research.
Our team plans to put a substantial amount of effort into this portal throughout the whole
process. We have already found several valuable resources and will continue to do a great amount
of investigating. We are truly interested in how this trial has changed the issue of costs regarding
EDD and are anxious to share our knowledge with our classmates through our portal.
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II. OUTLINE
A. Introduction
 Cost Shifting in Electronic Data Discovery (EDD)
o
Electronic Commerce Has Led to Explosion of Data
o
Between the years 2002-2005, the world generated more data than all the data
generated on earth over the last 40,000 years.
 General presumption that responding party assumes its own cost of production
o
Changing rules, especially regarding production of electronic data
a)
Where is it stored?
b)
How easy is it to get?
c)
How much will it cost to get it?
 Who’s going to pay?
o
Document retention and storage = Costs in litigation
 General Presumption: “Producer Pays”
o
Compaq Computer Corp. v. Packard Bell Electronics, Inc., (N.D. Calif. 1995)
(more than 1,000 man-hours to retrieve)
o
United States v. Columbia Broadcasting Sys., Inc., (9th Cir. 1982)(required staff
of lawyers, paralegals, accountants, and clerks to review the thousands of boxes,
18 months to complete, at a cost of $2.3 million)
o
Williams v. City of Dallas, (N.D. Tex. 1998) (review of 30 boxes of documents,
including 210 files, 52 audio and video tapes, 23 trial research notebooks,
hundreds of newspaper articles)
 Zubulake v. UBS Warburg
o
Significant attention
o
Well-reasoned and careful opinion (J. Scheindlin)
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o
Respects the general presumption of “producer pays”
o
Useful framework for cost-shifting
o
Important because issue of cost-shifting is directly impacted by:
a)
accessibility of data
b)
cost of retrieval
B. History Of Cost-Shifting
 Prior to the Zubulake decisions, the most widely cited case addressing cost-shifting for
Electronic Data Discovery (EDD) was Rowe Entertainment Inc. v. William Morris Agency
Inc.
 Rowe established an eight point test to balance factors to determine which party should bear
the costs of EDD.
 Many courts have invoked Rowe on the question of cost-shifting.
 Zubulake relied on a modified version of Rowe and its predecessors, or if a new approach
will emerge based on Zubulake.
 The Rowe opinion, issued by a magistrate judge in the Southern District of New York, was
short-lived. About a year and a half after Rowe, the judge issued the first of five Zubulake
opinions.
 The judge found the Rowe test incomplete. In so doing, Zubulake announced three general
principles of electronic discovery.
o
First, it is not appropriate to shift the cost of electronic discovery where
information is sought from accessible, active, or near online data.
o
Second, cost-shifting is appropriate only where inaccessible data is sought.
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o
March 2nd, 2006
Third, where offline, inaccessible data is sought and cost-shifting may be
awarded, only the cost of restoring and searching the inaccessible data should be
shifted. The responding party must continue to bear the cost of reviewing and
producing the electronic information after it has been restored.
 At a minimum, Zubulake and Rowe highlight the critical need for litigators to consider many
aspects regarding EDD.
C. Background Of The Zubulake Trial
 Background
o
Laura Zubulake sued UBS Warburg LLC
a) Gender discrimination and retaliation
b) Six cases in total
c) “In addressing the plaintiff’s request for discovery of information contained
in backup tapes, the court had issued its first order and opinion establishing
a three-pronged analysis for deciding disputes regarding the scope and cost
of discovery of electronic data” (Ronan)
d) Problems occurred with missing information
i. not all emails were produced
ii. Zubulake believed more data existed
 Data production issues
o
Responsibility of production costs
a) “Before turning to whether sanctions for spoliation of evidence might be
appropriate, Judge Scheindlin first considered whether UBS had the duty to
preserve the evidence at issue, and, if so, when that duty attached” (Ronan)
i. court discussion of party’s duty to preserve data
1. “In this case, Judge Scheindlin determined that the duty to
preserve evidence would have arisen at the latest in August of
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2001, when Ms. Zubulake had filed her EEOC charge”
(Ronan)
b) Companies are not required to preserve all data, as it would be very difficult
for large companies. Instead, only when the company reasonably
anticipates litigation does it need to preserve backup tapes
c) The duty to preserve backup data
 Cost-shifting
o
Seven factors came out of Zubulake I:
1. Extent to which request is tailored to discover relevant
information
a. most heavily weighted; “marginal utility test”
2. Availability of information from other source
a. most heavily weighted; “marginal utility test”
3. Cost of production compared to amount in controversy
a. addresses cost issues
4. Cost of production compared to parties’ resources
a. addresses cost issues
5. Parties’ abilities and incentives to control costs
a. addresses cost issues
6. Importance of issues at stake in litigation
a. addresses importance of litigation
7. Relative benefits of parties in obtaining information
a. least important factor
o
Application of seven factors
a) Court said, where cost-shifting is appropriate, restoration and searching
costs should be shifted, no others should be shifted
b) Estimated costs totaled $237,000 including legal costs
a. court ordered Zubulake to pay 25% of searching costs
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i. In Zubulake IV, defendant had to bear all costs of “re-deposing
certain witnesses regarding issues raised by the destruction of
evidence and any newly discovered e-mails” (Foley)
ii. In Zubulake V, “the Court decided Plaintiff’s motion for sanctions
due to spoliation of evidence” (Foley)
a. critical emails were deleted
 Trial Outcome
o
The Verdict—April 5, 2005
c) $9 million in compensatory damages
d) $20 million in punitive damages
D. Reliance Of Zubulake On Rowe
 Rowe Entertainment, Inc. v The William Morris Agency, Inc.
o
Concert promoters claiming booking agency saying that black bands were
excluded from events with white bands.
o
The courts found that there was no justification preventing the discovery of emails
because of privacy issues to parties not involved.
o
However, with this finding, if the defendant wished to review emails, they would
do so at their own cost.
o
The list of requirements for cost shifting as provided by Rowe Case:
1. Specificity of discovery requests
2. Likelihood of discovering critical information
3. availability of information from other sources
4. purpose for which responding party maintains the requested
data
5. relative benefit to parties of obtaining the information
6. total cost associated with production
7. relative ability of each party to control costs and its incentive to
do so
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8. resources available to each party
o
If a party is maintaining data for use in the situation it must produce that data at
its own cost.
o
The requests for emails by William Morris were too broad and costs associated
were too high. “asked for any communication with any defendants related to
selection of concert promoters and bids to promote concerts.
 How case affected Zubulake
o
Rowe was what the basis for the determination of the 7 cost shifting factors that
were decided on in Zubulake.
o
Zubulake took the 8 criteria used by Rowe that were all given equal weight and
revised the list to seven criteria that were then weighted in importance
o
Updated Zubulake cost shifting factors:
1. Extent to which 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 amount in
controversy.
4. Total cost of production, compared to the resources available to
each party.
5. The relative ability of each party to control costs and its
incentives 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.
o
The reason that the list was revised and weighted was because the Rowe criteria
almost always favored cost shifting.
o
Having the items weighted decreased the likelihood that a company such as UBS
could get out of discovery by passing so much of the cost to the other party who
might not be able to afford it.
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E. Current Cost-Shifting
 Current Practices
o
Current cost sharing
a) Zubulake and Rowe cases are the major cases that set standards used for
deciding issues of cost sharing.
o
Effects of trial on cost sharing
b) Many cases in which the Zubulake case is referenced, some examples and
how Zubulake was applied:

Ferguson v. Lion Holding, Inc. (Zubulake I)

Hagemeyer N. America Inc. v. Gateway Data Scis. Corp
(Zubulake III)
o

E*Trade Sec. LLC v. Deutsche Bank AG (Zubulake IV)

Mosaid Taches. Inc. v. Samsung Electronics Co. (Zubulake V)
Breakdown of cost-sharing criteria
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
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F. Conclusion & Future Of Cost-Shifting
o
The future of cost sharing may not be exactly clear but what is clear is that the
amount of data on electronic media will only continue to increase and therefore
the issue of cost sharing will continue to play a part in litigation.
o
Zubulake will continue to impact the cost sharing process for years to come and
its importance cannot be over-looked.
III. Detailed Work Plan
The following is the breakdown on the pieces of the portal that each member will be
responsible for completing. Each member of the group was assigned a specific area of the project
to gather information on before a group collaboration period. During this collaboration period, our
group will pick out the different aspects of each area of the portal that we want to enter into the
final web portal. Once we have the information agreed upon we will create the portal during a
group session.
 Introduction – Jeff
o
A brief introduction into the main points of the Portal.
o
Discusses how cost-shifting became important in the last three years
o
What is “general presumption”?
o
Cases

Compaq Computer Corp. v. Packard Bell Electronics, Inc.

United States v. Columbia Broadcasting Sys., Inc.

Williams v. City of Dallas

Zubulake v. UBS Warburg

How Zubulake set up the “frame work” for cost-shifting
 Background – Pam
o
Background of Zubulake v. UBS Warburg LLC

Identification of importance to EDD
o
Data Production Issues
o
Cost Shifting
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
Criteria and importance in cases
 History of Cost Shifting – Jeff
o
Rowe v William Morris Agency

Rowe “was” the framework for cost-shifting

o
Rowe test “incomplete”
Highlights of Rowe and Zubulake that are critical to litigators today
 Development of Visual – Pam
 Zubulakes revisions to Rowe’s cost shifting criteria – Steve
o
Background on Rowe

o
8 Cost shifting factors developed by Rowe Case

o
Identification of the factors that were modified by Zubulake
Reasons for Zubulakes Revisions

o
How Rowe is related to Zubulake
Explanation as to why the changes were made to the cost shifting factors.
New 7 cost shifting evaluation
 Zubulakes cost shifting criteria applications – Damien
o
Explanation to where the criteria for cost shifting have been applied since the Zubulake
case
o
Write case briefs for the cases the following cases so a clear understanding of how
important the Zubulake case was to cost-sharing:
 Ferguson v. Lion Holding, Inc. (Zubulake I)
 Hagemeyer N. America Inc. v. Gateway Data Scis. Corp (Zubulake III)
 E*Trade Sec. LLC v. Deutsche Bank AG (Zubulake IV)
 Mosaid Taches. Inc. v. Samsung Electronics Co. (Zubulake V)
 Conclusion – Damien
o
The conclusion will tie everything together.
o
The conclusion will also discuss future implications the case will continue to have
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IV. Visual
V.
Bibliography
Sites:
http://www.krollontrack.co.uk/legalresources/zubulake.asp
http://www.krollontrack.com/newsletters/clu/oct04.pdf
http://www.lexisnexis.com/applieddiscovery/lawlibrary/focus_07.asp
http://www.pullcom.com/docs/ElectronicEvidence_TGR_May04.pdf
http://www.krollontrack.co.uk/legalresources/zubulake.asp
http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1122627913040
http://library.findlaw.com/2003/Sep/1/133036.html
http://www.foley.com/files/tbl_s88EventMaterials/FileUpload587/356/Pitfall
s.pdf
http://www.torys.com/publications/pdf/CM03-22N.pdf
http://library.findlaw.com/2003/Sep/1/133036.html
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Cases:
E*TRADE SECURITIES LLC, Plaintiff, v. DEUTSCHE BANK AG, et al., Defendants;
Nos 02-3711(RHK/AJB), 02-3682(RHK/AJB). April 18, 2005.
Robert D. FERGUSON and Ralph Milo, Plaintiffs, v. LION HOLDING, INC., Defendant;
No. 02Civ.4258(PKL)(JCF), 02Civ.4261(PKL)(JCF). May 23, 2005.
HAGEMEYER NORTH AMERICA, INC., n/k/a Hagemeyer (N.A.) Holdings, Inc., Plaintiff, v.
GATEWAY DATA SCIENCES CORPORATION a/k/a Brownshire Holdings, Inc., Defendant.
No. 97-C-635. Aug. 12, 2004.
MOSAID TECHNOLOGIES INCORPORATED, Plaintiff, v. SAMSUNG ELECTRONICS
CO., LTD., Samsung Electronics America, Inc., Samsung, Defendants.
No. 01-CV-4340 (WJM). Dec. 7, 2004.
ROWE ENTERTAINMENT, INC, Plaintiffs, v. THE WILLIAM MORRIS AGENCY, INC. No.
98 Civ. 8272 RPP JCF., Jan. 16, 2002.
United States District Court, S.D. New York. Laura ZUBULAKE, Plaintiff, v. UBS WARBURG
LLC, UBS Warburg, and UBS AG, Defendants. No. 02 Civ. 1243(SAS). May 13, 2003.
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