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January 13, 2010

Zubulake Revisted

EXTRA Whatever the new media version of "EXTRA! EXTRA!" READ ALL ABOUT IT!" might be, imagine me doing it.  Federal Judge Shira Scheindlin, famously of the Zubulake decisions that were the crucible of modern e-discovery practice, has done it again.  In the course of an 87-page opinion and order, Her Honor invokes the only line anyone ever remembers from George Santayana and sanctions 13 plaintiffs for negligence and gross negligence in connection with their--ahem--'lackluster' preservation of and search for ESI. 

The Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities, LLC, et al., U.S. District Court, Southern District of New York, January 10, 2010)

It's a decison that will ruffle feathers in high places.  E.g., Her Honor observes: "[T]he admitted failure to preserve some records or search at all for others...leads inexorably to the conclusion that relevant records have been lost or destroyed." (at 35). 

Also, while Judge Scheindlin isn't the first to state that the failure to issue a written legal hold notice is "gross negligence," she seems to afford no quarter to effectuating a defensible hold any other way.  It appears a face-to-face meeting, phone call, voice mail or course of dealing won't suffice to deflect a determination of gross negligence.  Too, that written hold notice had better be a strong, unambiguous directive to find, preserve and collect, coupled with close supervision of the effort.  Total reliance on an employee to search and select won't cut it in Judge Scheindlin's court.
The decision puts a nail in the coffin of custodial-delegated holds and persuades me that, at least in the SDNY, no nabob should delegate preservation and search to minions, and certainly no lawyer should leave search to clients alone.  The opinion prompts further resignation to keep everything--especially all e-mail--and cease rotating tapes ahould someone so much as whisper the word "lawsuit."  

Make no mistake: the plaintiffs were no models of probity and diligence.  But, reading the particulars of their misconduct, I was struck less by the gravity of their negligence than by how unremarkable their sleepy, sloppy conduct sounded.  Granted, they brought the suit and were duty bound to make production, but think about it: These folks had already lost $550 million to botched investments.  Can't you imagine how thrilled they must have been to devote more time and money to answering discovery requests from the folks that (allegedly) flushed their fortunes away?   

They say the rich are different.  But not when it comes to e-discovery.  They botch it, too!

A hat tip of thanks to Jonathan Redgrave for furnishing the midnight, no less.


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