Civil Rules Roundtable: No Time to Relax

Tuesday, December 1, 2015 - 20:46

The 2015 amendment to Rule 37(e) strives to provide a more standardized approach for remedies available by a court when ESI is not properly preserved. Essentially, the amendments provide for a three-part “test” that a court can apply in determining whether ESI was properly preserved and, if not, the penalties available. These are:

-  ESI that “should have been preserved in the anticipation or conduct of litigation,” is lost,

-  because the party “failed to take reasonable steps” to preserve it and 

-  the loss cannot be remediated through “additional discovery” that would replace or restore the ESI.

If these three conditions are met, then the court needs to determine if there is intent to deprive a party of that ESI. If intent is found, then grave remedies apply: adverse inference as part of a jury instruction, dismissal or default judgment. If there is prejudice but no “intent,” then the court will apply a lesser remedy by ordering “measures no greater than necessary to cure.”

The effect of this amendment should not be interpreted in a way such that the result would deprive either party of important evidentiary materials. In fact, there are highly beneficial results that will provide for potential remedies that will allow for cases to move forward even if there is an “unintended” loss and, as a result, ensures that the discovery process will not be bogged down by these issues. The language “through additional discovery” in fact provides for the ability of the court to order the producing parties to find duplicates of requested ESI through other sources, i.e., backup tapes. The only serious remedies are in relation to “intentional” acts. 

A “relaxed” approach should definitely not be a takeaway from this amendment; rather, confirmation that an appropriate but relevant preservation effort should be undertaken if not already in place. The amendment reflects that there is a recognition of the volume. Corporations may take some comfort in preserving more “proportionately” because the severe sanctions are now reserved for only the most egregious abuses.

The amendment is designed to reflect the challenge around the exponential growth of ESI and to provide for a more standard and uniform application of the rule. Additionally the focus is around reasonableness, important again, due to the fact that the volume of data being accumulated is getting to be incomprehensible.  

The amended rule is accompanied by the official Committee Advisory Notes that are commonly used to interpret the FRCP. These Notes include the following, which support the “reasonableness” approach that should benefit organizations in understanding their preservation requirements:

Another factor in evaluating the reasonableness of preservation efforts is proportionality. 

The court should be sensitive to party resources; aggressive preservation efforts can be extremely costly, and parties (including governmental parties) may have limited staff and resources to devote to those efforts. 

A party may act reasonably by choosing a less costly form of information preservation, if it is substantially as effective as more costly forms. It is important that counsel become familiar with their clients’ information systems and digital data – including social media – to address these issues.

The approach to development and implementation of preservation policies and best practices do not change in light of the amendments. The same focus around a good faith and reasonable approach remains. Organizations need to focus on protecting themselves by creating and ensuring that there are regularly scheduled and meaningful protocols for deleting unnecessary or outdated ESI. It is expensive, risky and inefficient to store unneeded and unlimited amounts of ESI. Document destruction policies should be developed in good faith, be reasonable, be well-conceived, and have a valid business purpose.

Document destruction policies that are not developed in good faith and result in the deletion of relevant evidence will result in sanctions, dismissal or adverse inference instructions from the judge. As soon as a company anticipates litigation or receives a hold letter, internal protocols must require an immediate hold on the deletion of any ESI from company databases. 


Olivia Gerroll, CLSS, CeDP is Vice President, Discovery Engineer at D4,