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FEDERAL JUDGE WON’T PUNISH UBS WARBURG NEW YORK — An investment bank defending against a multimillion-dollar gender discrimination lawsuit was grossly negligent in allowing electronic evidence to be destroyed, but that evidence will not be construed against it, a Manhattan federal judge ruled Wednesday. Southern District Judge Shira Scheindlin declined to issue an adverse inference instruction as a sanction against UBS Warburg for the destruction of backup e-mail tapes. If the instruction had been issued, the jury would have been told that it could infer that had the destroyed evidence been available, it would have helped the plaintiff’s case. Such an instruction often ends litigation, since it becomes too difficult a hurdle for the party that destroyed the evidence to overcome. The decision, Zubulake v. UBS Warburg, 02 Civ. 1243, is the fourth opinion resolving discovery disputes in the case. It comes on the heels of a July ruling that received a lot of attention as the first application of a modified formula developed by Judge Scheindlin for evaluating cost-shifting in electronic discovery cases. There, Judge Scheindlin found that the plaintiff, fired equities trader Laura Zubulake, must bear 25 percent of an estimated $164,000 it would cost to restore, search and produce the bank’s backup tapes that she hoped would support her case. In the restoration effort that followed, the parties discovered that certain backup tapes were missing and e-mails deleted. Zubulake moved for evidentiary and monetary sanctions against UBS Warburg for its failure to preserve the missing tapes and e-mails. In Wednesday’s ruling, the court rebuffed Zubulake on all but one request, ordering the bank to pay for the cost of re-examining certain witnesses about newly discovered e-mails. — The New York Law Journal N.Y. SMOKING BAN WINS ONE CHALLENGE NEW YORK — New York’s controversial new indoor-smoking ban withstood its first constitutional challenge Tuesday, when a federal judge suggested that if the tough law is overly burdensome, it is the fault and problem of local governments and perhaps the state Health Department, but not the state Legislature. Northern District Judge Lawrence Kahn said the legislation enacted March 26 is not necessarily as Draconian as opponents claim, but that localities should assume the burden placed upon them and establish reasonable enforcement criteria. So far no locality has done that, and Senate Majority Leader Joseph Bruno, R-Rensselaer County, has come under intense criticism for championing the new law. On Monday, Kahn suggested that criticism is misdirected. Empire State Restaurant and Tavern Association v. New York State tested the constitutionality of Chapter 13 of the Laws of 2003, which regulates smoking in bars, restaurants, workplaces and many other indoor locations, including bingo halls and company-owned cars and trucks. The challenge contended that the law was unconstitutionally vague and pre-empted by federal law. Judge Kahn rejected both arguments. — The New York Law Journal

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