Federal Rule of Civil Procedure (FRCP) 37(e) was originally intended to provide litigants with a “safe harbor” with respect to sanctions for spoliation of electronically stored information (ESI). However, since its enactment, it has failed to provide the shelter promised. Under the current rule, courts are still broadly permitted to find “exceptional situations” where the loss of ESI is not a result of “routine, good-faith operation of an electronic information system,” and award spoliation sanctions under other authorities. Additionally, the Rule’s safe harbor provision is rarely invoked. As a result, many litigants have operated under the conversative belief that to avoid possible sanctions they must be overbroad in their preservation efforts. The litigation cost of such conservativism is often very high.
To address this issue, the the federal judiciary’s Committee on Rules and Procedure recently proposed an extensive amendment to Rule 37(e). The proposed rule focuses on sanctions rather than the scope of preservation efforts. However, it would recognize that a party adopting reasonable and proportionate preservation efforts should not face sanctions. Thus, other than in exceptional cases where a party’s actions “irreparably deprive another party of any meaningful opportunity to present or defend against claims in the litigation,” sanctions – such as dismissing an action or prohibiting the party from supporting or opposing certain claims or defenses – will only be permitted where a party is found to have acted willfully or in bad faith. Id. But where a party undertaking reasonable preservation efforts otherwise fails to preserve discoverable information – for example, is negligent in its litigation hold practice – the court may permit less drastic efforts such as ordering additional discovery or requiring payment of reasonable expenses caused by the failure.
The amended rule also offers a uniform national standard for fault in such a case. The court would have to consider all relevant factors to determine whether a party acted in bad faith or willfully, including whether the party was on notice that litigation was likely and had information that would be discoverable; the reasonableness of the party’s preservation efforts; whether the party received a clear and reasonable request to preserve; and the proportionality of preservation efforts to the anticipated or current litigation.
The rule will be published for a six-month comment period in August 2013. The final amendment could be adopted by December 2015.