The present-day version of Federal Rule of Civil Procedure 37(e) contains a safe harbor for routine, good faith destruction of electronically stored information (ESI). "Whoops. We deleted it per our regularly-scheduled maintenance. Our bad."
Even with that safe harbor, however, companies find themselves adopting overbroad preservation measures to ensure that they will avoid sanctions, a situation exacerbated by inconsistent law across the states. In some cases, the potential penalties are so severe that companies settle just to avoid the possibility of sanctions.
Last year, the Advisory Committee recommended the replacement of Rule 37(e) with a new version, one that is intended to limit the circumstances in which sanctions can be ordered.
What's the proposed rule? And will it help?
(e) Failure to Preserve Discoverable Information.
(1) Curative measures; sanctions. If a party failed to preserve discoverable information should have been preserved in the anticipation or conduct of litigation, the court may
(A) permit additional discovery, order curative measures, or order the party to pay the reasonable expenses, including attorney's fees, caused by the failure; and
(B) impose any sanction listed in Rule 37(b)(2)(A) or give an adverse-inference jury instruction, but only if the court finds that the party's actions:
(i) caused substantial prejudice in the litigation and were willful or in bad faith; or
(ii) irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation.
There is also a section listing factors to use in assessing the culpability of a party's conduct.
Nay: Shifts Burden to Innocent Party
Bloomberg discusses the case against the rule, specifically the burden of proof and the "willful or intentional misconduct" standard.
Judge Shira A. Scheindlin, who set the trend for ESI preservation standards in the Zubulake rulings, is not a fan of the proposal. She notes that it would require the innocent party, which is requesting the materials, to prove that the loss of evidence was due to willful or intentional misconduct and that they suffered prejudice as a result or, in the alternative, that they were deprived of an opportunity to present or defend its claims.
The party destroying evidence, meanwhile, has to prove nothing.
Furthermore, Judge Scheindlin argued in footnoted dicta that the new rule encourages sloppy behavior, as a party must act willfully or destroy evidence via Intentional misconduct. She also notes that, "Under the proposed rule, parties who destroy evidence cannot be sanctioned (although they can be subject to "remedial curative measures") even if they were negligent, grossly negligent, or reckless in doing so."
Judge Scheindlin makes great points ... for discovery diggers. And if your company ever engages in corporate v. corporate litigation, the proposed rule could make propounding discovery a nightmare for your company.
However, in person v. corporation litigation, such as a former employee suing your company, they're more likely to be requesting loads of e-discovery, such as emails between supervisors. Shifting the burden to the "innocent party" to show that you either destroyed the evidence on purpose or that her entire case is sunk, is a difficult showing to make, a beneficial situation for you, the hypothetical discovery request recipient.
Will the rule change make a difference? If so, will it be positive or negative for in house counsel? Tweet us your thoughts @FindLawLP.
- In-house Bar Files Comment Letter Aimed to Reduce the Excessive Costs and Burdens of FRCP Discovery Rules (Association of Corporate Counsel)
- Legal Process Outsourcing May or May Not Be Growing (FindLaw's In House Blog)
- 3 Ethics Issues In-House Counsel Regularly Face (FindLaw's In House Blog)
- Corporate Counsel Center (FindLaw)