Posted On: February 26, 2010

Pension Committee case offers e-discovery blueprint

In what is being called a “bombshell decision”, Judge Shira A. Scheindlin of the U.S. Southern District of New York has issued a harshly worded order reminding litigants and attorneys of their duty to preserve electronic documents as soon as they reasonably expect litigation to commence. Lawyer Michael Hoenig has a helpful piece in this week's New York Law Journal about the case, Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC.

Scheindlin, an expert in electronic evidence, ushered in a new era several years ago with a set of rulings known as the Zubulake line of decisions, which set forth guidelines concerning the protection and availability of electronic evidence during discovery. In her new ruling, the judge has penalized litigants, criticizing their failure to follow proper procedures, and offering a blueprint for how lawyers should deal with issues pertaining to the protection of electronic evidence.

In particular, Scheindlin’s ruling addresses the issue of spoliation, as several documents were either lost or destroyed. The case involved 13 plaintiffs, all of whom were found to be negligent in meeting their electronic discovery obligations and were punished with monetary sanctions. Additionally the judge ruled that six of these plaintiffs had engaged in grossly negligent actions, with the result that these six plaintiffs were subjected to an "adverse inference instruction," under which the jury will be instructed to presume that the destroyed documents would have harmed the plaintiffs' case had they been made available. Scheindlin acknowledged that giving an adverse inference instruction was a serious blow, but concluded it was warranted because the failure to comply with the obligations established under Zubulake were so pervasive as to rise to the level of gross negligence.

Hoenig predicts that "Pension Committee, initially, will likely be viewed by many as a burden-imposing treatise, intrusive in the breadth and scope of the obligations spelled out by the court. Yet, because of its declarative clarity, the decision can be used by responsible lawyers to help fashion a reasonable template for proceeding to litigate in the electronic records era."

Bookmark and Share