United States: Electronic Discovery & Information Governance - Tip of the Month: How has Amending Federal Rule of Civil Procedure 37(e) Changed the World of Spoliation Sanctions?


A manufacturing company is a defendant in a case that is currently in discovery. In the course of identifying responsive electronically stored information (ESI) for production to the plaintiffs, the general counsel discovers that flash drives containing responsive information have been lost because a former employee discarded the flash drives without telling anyone when she retired from the company. The general counsel wonders whether the company will be subject to sanctions due to the loss of this ESI under amended Rule 37(e) of the Federal Rules of Civil Procedure.

Overview of the 2015 Amendment to Rule 37(e)

Under amended Rule 37(e), which became effective on December 1, 2015, the court may impose sanctions on an offending party for failing to preserve ESI where the ESI (1) "should have been preserved in the anticipation or conduct of litigation"; (2) is lost "because a party failed to take reasonable steps to preserve it"; and (3) "cannot be restored or replaced through additional discovery."

If these three conditions are met, the court will determine whether or not another party is prejudiced by the offending party's loss of the ESI. Under amended Rule 37(e)(1), the court may impose "curative measures" on the offending party based on a finding that another party was prejudiced from losing the information, but such measures may be "no greater than necessary to cure the prejudice." Under amended Rule 37(e)(2), if the court determines that the offending party "acted with the intent to deprive another party of the information's use in the litigation"—regardless of prejudice—then the court may (a) presume that the lost information was unfavorable to the offending party, (b) instruct the jury that it may or must presume the information was unfavorable to the offending party, or (c) dismiss the action or enter a default judgment.

A Sampling of Recent Case Law Applications of Amended Rule 37(e)

Amended Rule 37(e) was designed to address concerns about the consistency and proportionality of sanctions. In applying the amended Rule, district courts are issuing more predictable sanctions, such that Rule 37(e) now provides a genuine safe harbor for those parties that take "reasonable steps" to preserve their ESI information. Consequently, courts appear to be applying amended Rule 37(e) by crafting proportionate, "middle ground" curative sanctions when there is prejudice but no showing of intent to deprive. In addition, courts to date are not imposing preclusive sanctions absent a showing that the offending party acted intentionally and was not merely negligent with regard to lost ESI.

"Curative Measures" under Amended Rule 37(e)(1)

In a recent case in the Northern District of California, the court imposed "curative measures" as sanctions under Rule 37(e)(1) where the plaintiff lost certain electronically stored communications and had made no effort to preserve documents. Because of the plaintiff's "lackadaisical attitude towards document preservation," the court determined that spoliation had occurred and the defendant had been prejudiced. Consequently, the court expanded the scope of evidence that the defendant would be allowed to bring to trial and awarded reasonable attorney's fees.

Preclusive Sanctions under Amended Rule 37(e)(2)

Courts have found that although a judge may impose the severe measures set out in Rule 37(e)(2) when there is an intent to deprive—regardless of prejudice—the court is not required to impose any of these measures. The bottom line in sanctioning a party is that the remedy should fit the wrong to be redressed. Thus, several courts have determined that dismissal of an action is not an appropriate sanction even when a party has willfully destroyed data.

Courts Continue to Exercise "Inherent Authority"

Consistent with the Advisory Committee's Notes that the amended Rule forecloses reliance on inherent authority or state law to determine sanctions, some courts have declined to impose a sanction under "inherent authority" where ESI was lost. For example, one court determined that it could not rely either on amended Rule 37(e) or on its "inherent authority" to make an adverse inference instruction where the offending party was ultimately able to restore and produce the lost ESI. Other courts, however, have determined that a court's inherent power to sanction litigants remains even if the standards of Rule 37(e) are not met; these courts interpret the committee notes to mean only that a court cannot rely on inherent authority to impose sanctions expressly prohibited by amended Rule 37(e), such as dismissal of a case for merely negligent destruction of evidence.

However, when evaluating spoliation claims involving a non ESI tangible document or evidence, courts have questioned whether they should continue to rely on "inherent authority" and spoliation case law, even if the standards differ from the new spoliation standards established in Rule 37(e). Further, courts have questioned what constitutes ESI under amended Rule 37(e), noting that the Rule does not precisely define the term. For example, one court has inquired whether videotapes count as ESI, and another court has determined that text messages do constitute ESI.

Courts May Apply Amended Rule 37(e) Retroactively

Recent decisions have been mixed as to whether a court will apply amended Rule 37(e) retroactively. For example, one court imposed the previous standard for assessing the need for spoliation sanctions because the case had been filed more than two years before the amended Rule went into effect; the plaintiff was representing himself pro se; and discovery had already closed before the amendment. Consequently, although the court determined that the defendants' loss of ESI was grossly negligent but not intentional, the court granted the plaintiff's request for mandatory and permissive adverse inference instructions with respect to the spoliation of various ESI.

On the other hand, another court decided to apply amended Rule 37(e) retroactively in a case that had been pending for two years, reasoning that because the amendment to Rule 37(e) is in some respects more lenient as to the sanctions that can be imposed for violation of the preservation obligation, there would be no inequity in applying it.

In yet another case, the court retroactively applied the amended Rule 37(e) sanction standard after a prior ruling granting a sanction order under the pre-amendment Rule. Accordingly, the plaintiff was able to vacate an adverse inference ruling shortly before trial based on the new Rule's restrictions on sanctions in the absence of a finding that the offending party intended to deprive its adversary of the use of the allegedly lost information.

For more analysis of the retroactivity of the amended Federal Rules of Civil Procedure, please refer to our November 2015 Tip of the Month.


As recent cases illustrate, courts are applying each element of Rule 37(e) to determine whether, in the court's ultimate discretion, spoliation sanctions are appropriate. This approach may lead to an increase in predictability and consistency in the area of spoliation sanctions as compared to application of the old Rule. Most significantly, courts are recognizing that an adverse inference for lost ESI under the amended Rule is now considered an "extreme remedy for the alleged spoliation of evidence." Such an extreme remedy now requires a showing of intent to deprive instead of mere negligence.

To learn more about Mayer Brown's Electronic Discovery & Information Governance practice,

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© Copyright 2016. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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