Login | April 19, 2024
Rewritten FRCP Rule 37(e): Sanctions for spoliation
RICHARD WEINER
Technology for Lawyers
Published: June 24, 2016
Among a number of changes that came to the Federal Rules of Civil procedure last December was one that may be destined to change the way that every single business in this country preserves its electronically stored information (ESI).
Rule 37(e), as rewritten, now allows courts to impose an escalating series of sanctions on a party whom the court determines has, negligently or deliberately, permanently deleted case-relevant, non-privileged ESI from its databases.
It is now the rule that any party that reasonably anticipates litigation must suspend its own data retention and destruction policies and subject itself to a litigation hold, in which all potentially relevant ESI is preserved.
While it would seem as if competent counsel would automatically advise any client to not destroy potentially relevant data, that has not always been the case. Any number of litigants have destroyed any imaginable amount of data to attempt to win a case.
The newly written rule makes it clear that counsel needs to advise its clients to do hold onto that data, or the client will face some pretty severe sanctions.
Here is the rule, in pertinent part:
“[E]lectronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court may take certain actions.”
(1) Upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or
(2) Only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:
(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.
So—it will no longer be arguable that a client can get away with destroying ESI because it was following its own document preservation and destruction policies, subsequent to the client being put on notice that litigation is possible
In fact, I would think that following those policies, in and of itself, may now be proof of intent such that sanctions may be imposed, up to and including losing the case by summary judgment.
So now everyone in America has to figure out new data retention and destruction policies.
Fun!