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Finding Safe Harbor in the Proposed Revisions to Rule 37(e)

January 25, 2013 - By Applied Discovery
Landmark changes to e-discovery law are on the horizon in 2013. One involves proposed revisions to Rule 37(e) of the Federal Rules of Civil Procedure, known as the “safe harbor” provision, which offers some protection to companies that have enacted records retention policies against the imposition of sanctions for failure to preserve. A replacement Rule 37(e), which was proposed by the Discovery Subcommittee of the Advisory Committee on Civil Rules Committee at its November 2012 meeting and ultimately approved—with several changes—for presentation to the Committee on Rules of Practice and Procedure at its meeting this month, continues to provide protection from sanctions and recommends sanctions for the failure to preserve evidence in certain circumstances.

The proposal that the Subcommittee presented to the full Advisory Committee in November “reflects nearly two and a half years of Subcommittee work” and input from a plethora of expert sources. Rather than form a new Rule 37(g), as it initially planned to do, the Subcommittee drafted a new rule “that protects everything that has been protected by present Rule 37(e) and protects much else as well.” It “is designed to provide more significant protection against inappropriate sanctions, and also to reassure those who might in its absence be inclined to overpreserve to guard against the risk that they would confront serious sanctions.” In addition, it raises the threshold for the standard of behavior that may draw sanctions to “willful” or “in bad faith” in an effort to set forth “a uniform standard for federal courts nationwide and thereby to address the case law cacophony that many have reported causes difficulty for those trying to make preservation decisions.”

The specific language the Subcommittee proposed is as follows:
Rule 37. Failure to Make Disclosures or to Cooperate in Discovery; Sanctions

*****
(e) FAILURE TO PRESERVE DISCOVERABLE INFORMATION. If a party fails to preserve discoverable information that reasonably should be preserved in the anticipation or conduct of litigation,

(1) The court may permit additional discovery, order the party to undertake curative measures, or require the party to pay the reasonable expenses, including attorney’s fees, caused by the failure.

(2) The court may impose any of the sanctions listed in Rule 37(b)(2)(A) or give an adverse-inference jury instruction only if the court finds:

(A) that the failure was willful or in bad faith and caused substantial prejudice in the litigation; or

(B) that the failure irreparably deprived a party of any meaningful opportunity to present a claim or defense.

(3) In determining whether a party failed to preserve discoverable information that reasonably should have been preserved, and whether the failure was willful or in bad faith, the court should consider all relevant factors, including:

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

(B) the reasonableness of the party’s efforts to preserve the information, including the use of a litigation hold and the scope of the preservation efforts;

(C) whether the party received a request that information be preserved, the clarity and reasonableness of the request, and whether the person who made the request and the party engaged in good-faith consultation regarding the scope of preservation;

(D) the party’s resources and sophistication in litigation;
[Note: The Advisory Committee then voted to remove this language, as discussed below.]

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

(F) whether the party sought timely guidance from the court regarding any unresolved disputes concerning the preservation of discoverable information.
Several other tenets of the law that merit attention include the following:
  • The proposed language applies not just to ESI but also to all other forms of information.
  • Substantial protection is afforded to parties whose failure to preserve information does not meet the “willful” or “bad faith” threshold. The new language offers remedies other than sanctions in these circumstances, including additional discovery and the payment of reasonable expenses associated with the failure to preserve.
  • The factors enumerated in proposed Rule 37(e)(3) “stress reasonableness and proportionality. They apply only when there is a failure to preserve.”
At the November meeting, the Subcommittee noted that it had failed to reach consensus on two factors listed under proposed Rule 37(e)(3). Namely, it sought additional guidance from the Advisory Committee on 37(e)(3)(C) regarding requests to preserve and 37(e)(3)(d) regarding a party’s resources and sophistication in litigation. After discussion and a vote on those, as well as on certain proposed Note language accompanying the rule that stated that “even an intentional attempt to destroy information does not support sanctions under the rule if the attempt fails,” the Advisory Committee decided to retain Rule 37(e)(3)(C) and discard factor (D) and the Note language in question.

To discuss how you can improve the defensibility of your information governance program under Rule 37(e), please contact us.
Posted in: Law



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