United States: Day 3: Your First Five Questions (Times Four): A Practical Guide To The Amended Federal Rules Of Civil Procedure – Preservation

The current amended Federal Rules of Civil Procedure—and, in particular, those that address the practice of civil discovery—are the product of five years of development, debate, and, of course, dialogue. Now that the Rules are set to be implemented on December 1, 2015 – and they apply to pending cases where "just and practicable" — the focus among attorneys and their clients has changed from what the Rules shouldsayto how they shouldwork. While debates remain as to how certain parts of the Rules will wear-and-tear once put to the test in discovery, there are clear indications within the text of the Rules (with some help from the Committee Notes to the Rules and the contributions of judges and other writers) as to how the Rules will apply. Over the next few weeks as part of Discovery Advocate's First Five Questions series, we will examine some of the initial and immediate considerations expressed within and surrounding the rules and applies them to practice, regarding the Rules' application to Proportionality (Rule 26); Early Case Assessment (Rules 4, 16, 26, and 34);Preservation(Rule 37); andObjections(Rule 34). A version of these posts were published as "Twenty Questions: A Practical Guide to the Amended Federal Rules of Civil Procedure" for the 2015 Georgetown Advanced E-Discovery Institute.

Today we review: Preservation

Preservation is being added to both Rule 16 and 26 as a topic for meet and confers and scheduling orders. But with respect to the duty to preserve, it is the "new and (hopefully) improved" Rule 37(e) that holds a special place in the hearts of those practitioners who have been following its progression. Rule 37(e) as it existed from 2006 through 2015 provided for a limited safe harbor associated with the systematic loss of ESI1 instead of imposing sanctions. However, determining what behaviors removed parties from that safe harbor became a court-by-court analysis that ran the gamut from negligence to recklessness to outright willfulness. The modified (and streamlined) Rule 37(e) has attempted to simplify that inquiry and is intended to require that, before a court determines sanctions, it is not considering the range of behavior described above. Instead, the court will examine simply whether the "loss involves ESI that 'should have been preserved' because the party failed to take 'reasonable steps' to prevent the loss of relevant ESI once the duty to preserve [is] triggered."2 Subsequently, if the court finds that a party failed to take reasonable steps and there is no alternative replacement evidence, then—and only then—will the court examine whether curative or other sanctions will be awarded under 37(e).3 This underscores the importance of the required reasonable steps, as well as what it means for organizations to preserve and/or search for alternative evidence in the face of accidental deletion of ESI and other evidence. Both are examined more fully below.

  1. If I make reasonable steps to preserve relevant information upon a reasonable anticipation of litigation, is that sufficient?

Yes—that is, if a court finds a party has made reasonable steps, the inquiry ends4 without taking the effects of those actions into account. Because of this determination's importance, this threshold inquiry also underscores the necessity of documenting those steps that a party takes to preserve relevant information. And as provided below, those steps may not begin and end with the implementation of a legal hold; other party actions may be important parts of a preservation story as well.

  1. What are some reasonable steps under the rules?

What constitutes "reasonable steps" likely will vary from court to court, even on similar facts. That said, in most matters parties should be developing and issuing a written (documented) legal hold and memorializing the implementation and decision making. While some courts have held that written legal holds are not always required,5 other courts have disagreed.6 Given the power of the reasonable steps threshold inquiry, a written legal hold and the evidence (and documentation) it provides may tip the scale in that portion of a Rule 37(e) analysis. This approach and demonstrated intent to document may assist a party if there are related inquiries into those actions the party opted not to take, but turn out to be important later on. For instance, if a party initially determines that a custodian does not have relevant information (before the evolution of a case), the party might document that determination and the party's reasoning when the decision is made. This "memo to file" regarding a preservation step not taken may help to demonstrate the party's reasonable behavior when combating a later spoliation claim wherein the party is forced to "prove the negative" of why that custodian's documents were not part of initial preservation actions.

  1. Is it true that if there's no harm, there's no foul?

Yes. The Rule is only imposed if the missing ESI "cannot be restored or replaced through additional discovery." This can be read as an effort to remedy the situation—and allow the parties to litigate the facts rather than discovery. Commentators note that providing "intermediate measures (additional discovery, [an] order [for] curative measures, etc.) before serious sanctions (such as an adverse inference instruction) are imposed" can limit those instances where a party is deprived of a "meaningful opportunity to present or defend against the claims in the litigation."7 This means that parties cannot claim that a particular missing copy of a document is a smoking gun for spoliation; however, it does indicate that courts will support additional efforts to implement curative measures and support the discovery process, some of which may be relatively expensive.

  1. Does the Rule require intent?

The Rule and the Committee's direction indicate that the conduct involved requires intent—although what constitutes "intent" will likely also be an issue of debate. This new requirement was "designed to create a uniform national standard" in the face of various—and sometimes conflicting—court decisions.8 But this requirement of intent does not operate in the reverse; that is, as discussed above, the application of Rule 37(e) is meant to put the parties in the best position to litigate the case. This means that, even in those instances where specific intent is satisfied and a party meant to deprive the opposing party of evidence, the "no harm, no foul" standard still holds true, and the court is not obligated to impose sanctions even where there was intent and information loss if "the information lost was relatively unimportant or lesser measures . . . would be sufficient to redress the loss."9

  1. If my organization never deletes anything, do I really have to worry?

Maybe not (if nothing goes missing), but it's much—much—more likely than not that your organization should be taking affirmative steps to avoid the loss of relevant information in the face of litigation and demonstrate those "reasonable steps" if the loss happens regardless. Case law is clear that a simple "keep everything" policy, without more, will not pass muster.10 And the intersection between when documents should be held for a given matter and when litigation is reasonably anticipated as a theme such that a broader litigation hold and related information governance policy changes are required are now becoming more frequently litigated.11 Further, while ESI is easy to copy and store, its preservation is still a dicey proposition where its loss "is much more susceptible to unintentional destruction than hard copy documents."12


1 Tera Brostoff, Advisory Committee Makes Unexpected Changes to 37(e), BloombergBNA eDiscovery Resource Center (Apr. 14, 2014) http://www.bna.com/advisory-committee-makes-n17179889550/.

2 Thomas Allman, The 2015 Civil Rules Package As Approved By the Judicial Conference, (Mar. 11, 2014) http://www.americanbar.org/content/dam/aba/administrative/litigation/materials/2015-sac/written_materials/5_1_2015_summary_of_rule_package.authcheckdam.pdf.

3 Philip J. Favro, The New ESI Sanctions Framework under the Proposed Rule 37(e) Amendments, 21 Rich. J.L. & Tech. 8 (2015), available at http://jolt.richmond.edu/v21i3/article8.pdf.

4 Judicial Conference Committee, supra note 2, at B-61 , ("[b]ecause the rule calls only for reasonable steps to preserve, it is inapplicable when the loss of information occurs despite the party's reasonable steps to preserve.").

5 Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497, 522-23 (D. Md. 2010); Haynes v. Dart, 2010 WL 140387, at *4 (N.D. Ill. Jan. 11, 2010).

6 Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456, 488 (S.D.N.Y. 2010); Jones v. Bremen High Sch. Dist. 228, 2010 WL 2106640, at *7 (N.D. Ill. May 25, 2010).

7 Jeff Lilly & Terence Ridley, Spoliation and the long-awaited federal e-discovery rule changes, InsideCounsel (May 21, 2015) http://www.insidecounsel.com/2015/05/21/spoliation-and-the-long-awaited-federal-e-discover.

8 Philip J. Favro, The New ESI Sanctions Framework under the Proposed Rule 37(e) Amendments, 21 Rich. J.L. & Tech. 8 (2015), available at http://jolt.richmond.edu/v21i3/article8.pdf.

9 Judicial Conference Committee, supra note 2,at B-66-67.

10 Zest IP Holdings, L.L.C. v. Implant Direct Mfg., L.L.C., 2013 WL 6159177 (S.D. Cal. Nov. 25, 2013).

11 Porcal v. Ciuffo, 2011 U.S. Dist. LEXIS 109537, at *3, *3 n.1, *5-6 (D. Mass. Sept. 23, 2011); see also James Sherer & Jacqlyn Rovine, Past Information Governance May Haunt the Present: The Need for Routine Document Retention/Destruction Policies, 14 Bloomberg BNA Digital Discovery & e-Evidence, 235 (May 8, 2014) available at https://www.bakerlaw.com/files/uploads/Documents/News/Articles/LITIGATION/2014/2014-05-08-J-Sherer-J-Rovine-Past-Information-Governance.pdf.

12 Shira A. Scheindlin & Kanchana Wangkeo, Electronic Discovery Sanctions in the Twenty-First Century, 11 Mich. Telecomm. & Tech. L. Rev. 71, 71 (2004).

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