July 2024 marks the 20th anniversary of the final Zubulake v. UBS Warburg opinion out of the Southern District of New York. The Zubulake line of cases, authored by Hon. Shira A. Scheindlin, provided much of the foundation that still supports e-discovery jurisprudence today. Federal and state rules of civil procedure have since been adopted and amended to account for electronically stored information, previously limited to traditional physical paper documents. 

Zubulake Opinions Revisited

Zubulake I & III posed the question - is data that is not reasonably accessible discoverable and, if so, who should bear the cost of discovery? Judge Scheindlin proposed a seven-factor test for evaluating cost-shifting, resulting in an order that Defendant pay 75% of the costs to restore and produce requested information from backup tapes, while shifting 25% of the costs to Plaintiff. Additionally, Judge Scheindlin distinguished between accessible and inaccessible data—the latter being reclassified as “not reasonably accessible” data pursuant to the 2006 Federal Rules Amendments. 

Zubulake IV-V further discussed cost-shifting, spoliation, and sanctions where a party fails to preserve relevant information after litigation is reasonably anticipated. Zubulake’s motion for an adverse inference instruction was initially denied, but later granted in Zubulake V after a finding of willful spoliation of evidence and tardy production. The jury was “permitted, but not required” to apply the inference. The Jury awarded $29.2 million in damages, including $20.1 million in punitive damages. The parties subsequently settled on confidential terms while the case was pending appeal. 

Significant Amendments to Rule 26(b)(1) and Rule 37(e)

In 2006, and again in 2015, the Federal Rules of Civil Procedure were amended to better address certain e-discovery issues. The most significant rule amendments in 2015 included:

Rule 26(b)(1): Because electronic data is not always “reasonably accessible” and can be costly to restore, the scope of discovery set forth in Rule 26(b)(1) was limited not just to what is “relevant to any party’s claim or defense” but also “proportional to the needs of the case.” Factors for assessing proportionality include the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.

Rule 37(e): Considering unintentional deletion of electronic information, the 2015 amendment to Rule 37(e) limits unfavorable presumptions and jury instructions, and dismissal or default, by requiring a finding of “intent to deprive” a party’s use of information in litigation before such severe remedies may be imposed. Notably, the word “sanctions” does not appear in the new rule. Judge Scheindlin noted in Sekisui Am. Corp. v. Hart, F. Supp. 2d 494, n. 51 (S.D.N.Y. 2013) that, under the new Rules, sanctions for negligent, grossly negligent, or reckless destruction of information are now limited to “remedial curative measures.” 

The Advisory Committee also noted that Rule 37(e) “forecloses reliance on inherent authority or state law” in evaluating when and which sanctions may be imposed. See also MGA Ent., Inc. v. Harris, No. 2:20-cv-11548-JVS-AGR, 2023 U.S. Dist. LEXIS 52931 at *8-10 (C.D. Cal. 2023), finding that “negligence or even gross negligence…is insufficient to support an adverse-inference instruction” under new Rule 37(e).

Short of finding “intent,” but upon a finding of “prejudice,” a court may “order measures no greater than necessary to cure the prejudice.” The 2015 Advisory Committee Notes explain that, while Rule 37(e) does not require proving or disproving prejudice, there may be certain instances where it is reasonable to “require” the party seeking curative measures to prove prejudice when the lost information is “fairly evident,” “appear to be unimportant,” or the “preserved information” is “sufficient to meet the needs of all parties.” 

The common-law duty to preserve relevant information when litigation is “reasonably foreseeable” does not apply when “information is lost before a duty to preserve arises,” Advisory Committee Notes explain. However, the question of when the duty to preserve arises is, as Judge Scheindlin pointed out during a recent “fireside chat” with Reed Smith partner David Cohen, something that “lawyers are grappling with today.” The fireside chat, part of the free Reed Smith Records & E-Discovery group CLE webinar series, is available on demand.