Judge Sanctions UBS For Missing or Late E-Mails

A federal judge has sanctioned UBS AG for destroying or failing to produce in a timely manner e-mails in a gender-discrimination lawsuit. U.S. District Judge Shira Scheindlin faulted the investment bank for disobeying its own lawyers' instructions to preserve evidence and faulted the lawyers themselves for not adequately communicating the need to preserve and locate documents. The opinion was the fifth in a series of increasingly sternly worded opinions in which the judge has rebuked UBS for failing to preserve and discover electronic evidence.

The judge found that UBS personnel deleted relevant e-mails, some of which were recovered from backup tapes and some of which were lost altogether. Further, some documents weren't produced until recently, depriving the plaintiff of crucial evidence for nearly two years after she filed suit.

The case involves Laura Zubulake, a former UBS equities trader who filed suit in 2002, accusing the company of failing to promote her because of her gender. In a statement Tuesday, UBS said it was "disappointed with the decision" but underscored the fact that it addresses only the issues surrounding the production of evidence, not the underlying merits of the case.

Unlike many computer-forensics cases, which involve information stored on PC hard drives, the UBS case addresses information stored on backup tapes and whether companies need to rethink policies for routinely recycling, or erasing, such tapes, especially if they might contain evidence in a legal proceeding.

"If UBS had policies in place that established protocols and lines of communication for preserving backup tapes when they become relevant in a litigation, they could have avoided a lot of grief," says Adam Cohen, attorney and co-author of Electronic Discovery: Law And Practice.

The opinion not only sends a clear signal on the need to preserve evidence but also lays out a road map for lawyers, compliance officers, and IT execs to follow in the murky terrain where the law meets technology. Expressing her exasperation at the time and resources wasted on retrieving and combing through electronic evidence, the judge cited "a flood of recent opinions" and guidance from judiciary groups that have helped clarify issues surrounding the discovery of electronically stored information. Especially promising, she noted, are revisions to the Federal Rules of Civil Procedure that would codify many of these more-recent opinions; the revisions are due to be released next month for public comment.