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Posted by byteandswitch.com on May 9, 2009
The second of a six-part series on e-discovery from the Taneja Group .
There is a cautionary tale for storage managers in the court case known as Zubulake vs. UBS Warburg.
Most people know about the multibillion-dollar judgment against Morgan Stanley for poor e-discovery practices. Another classic example of the risks of poor discovery is the infamous Zubulake case, which should have been a routine employee discrimination case. But as e-discovery continued, the court found that the defendant failed to produce evidence from backup tapes in a timely manner and, worse, overwrote entire backup tapes when the original data should have been placed under litigation hold. The court slapped sanctions and costs on the defendant for their missteps. Even worse for the defendant, the judge instructed the jury that it was free to infer that the missing tapes would have been unfavorable to UBS. The judge was careful to say that the jury was not required to do so, but was clearly permitted to draw that inference. Of course, the jury did just that. The result was a $29.3 million judgment against hapless USB.
Compliant and consistent data retention policies would have saved USB millions of dollars in sanctions, attorney costs and judgments. And USB is not alone. Most businesses with $100 million or more in annual revenue are involved in some type of active litigation, and large corporations handle hundreds of active cases. This level of active litigation makes the e-discovery process ongoing and expensive in terms of time and resources. One common estimate is that manual e-discovery procedures average $2,000 per Gbyte of reviewed data. Keeping in mind that a single e-discovery procedure can easily involve multiple terabytes of data, $2,000 per Gbyte is an expensive proposition.
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