What is the Newest Proposed Federal Rule 37(e)?

11 Apr 2014

In our last blog post, we began a discussion of recently-published Discovery Subcommittee Report on Rule 37(e) (Jump to page 369 of the linked PDF.) We won’t rehash the controversy of Rule 37(e) on this post. As our last blog post pointed out, the Subcommittee completely rewrote the proposed Rule 37(e) after a massive outcry from plaintiff trial lawyers.

The Subcommittee noted the wide diversity of federal cases and fact patterns to which this rule might apply—which underscores the need to allow some discretion by the trial courts. The Subcommittee also stated the importance of ESI in civil litigation is likely to accelerate in the future. Many comments noted that limiting forms of sanctions to a showing of substantial prejudice with bad faith is too restrictive.

The Subcommittee found any savings from over-preservation are too uncertain to justify limiting a trial court’s discretion in the matter. Further, although characterized as “sanctions,” many of these remedies are appropriate curative measures that must be kept as options. The committee suggests a list of factors for courts to consider when deciding what remedy is appropriate.  Here is the newest version:

The Latest Proposed Rule 37(e)

(e) Failure to Preserve Electronically Stored Information. If a party failed to preserve electronically stored information that should have been preserved in the anticipation or conduct of litigation, the court may:

(1) Order measures no greater than necessary to cure the loss of information, including permitting additional discovery; requiring the party to produce information that would otherwise not be reasonably accessible; and ordering the party to pay the reasonable expenses caused by the loss, including attorney’s fees.

(2) Upon a finding of prejudice to another party from loss of the information, order measure no greater than necessary to cure the prejudice.

(3) Only upon a finding that the party acted with the intent to deprive another party of the information’s use in litigation:

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.

(4) In applying Rule 37(e), the court should consider all the relevant factors, including:

(A) the extent to which the party was on notice that the litigation was likely and that the information would be relevant;

(B) the reasonableness of the party’s efforts to preserve the information;

(C) the proportionality of the preservation efforts to any anticipated or ongoing litigation; and

(D) whether, after commencement of the action, the party timely sough the court’s guidance on any unresolved disputes about preserving discoverable information.

What do you think about the newest proposed rule? Does the newest rule support plaintiff trial attorneys and their clients, or is there more work to be done?

ILS – Plaintiff Electronic Discovery Experts

Did you know? The Subcommittee on Fed.R. 37(e) estimates there will be 26 billion devices connected to the internet within 6 years.