December 18, 2013 Articles

New Spoliation Rule One Step Closer to Enactment

The amendments could have a greater impact on the bar in the long run than the various changes to the other rules

By Charles S. Fax

Major changes are in the works for several key provisions of the Federal Rules of Civil Procedure, including limitations on discovery and spoliation sanctions. At its meeting on August 15, 2013, the Advisory Committee on Civil Rules approved a number of amendments to the discovery rules that will have an immediate impact on practitioners if enacted. See Comm. on Rules of Practice and Procedure of the U.S. Judicial Conference, Preliminary Draft of Proposed Amendments to the Federal Rules of Bankruptcy and Civil Procedure (Aug. 2013). Written comments are due by February 15, 2014. (Comments may be submitted electronically through the Administrative Office of the United States Courts’ Proposed Amendments Published for Public Comment webpage. Hard-copy submissions may be mailed to the Committee on Rules of Practice and Procedure, Administrative Office of the United States Courts, Suite 7-240, Washington, D.C. 20544.)

Two patterns have emerged in the comments to date. First, there is a great deal of controversy surrounding the proposed changes to Rules 26, 30, 31, 33, 34 and 36. Second, there is almost no controversy regarding the proposed changes to Rule 37(e). I find this curious, because to my mind, the amendments to Rule 37(e), dealing with spoliation, could have a greater impact on the bar in the long run than the various changes to the other rules, which are primarily designed to simplify discovery.

Thus, the committee proposes to reduce the presumptive limit on the number of depositions (Rules 30 and 31) from 10 to 5, and the presumptive time limit from 7 hours to 6. The committee also recommends reducing the presumptive limit on the number of interrogatories (Rule 33) from 25 to 15. Although many local court rules already set a limit on the number of requests for admission (Rule 36), the Federal Rules do not—but if the proposed amendments are enacted, a cap of 25 will be instituted (although requests to admit the genuineness of documents will be exempted).

While segments of the plaintiffs’ bar have criticized these changes as unfair and arbitrary limitations on discovery calculated to frustrate the search for the truth, the parties can stipulate to broader limits, and the court retains the discretion to vary the limits based on the exigencies of the case. What is wrong with placing the burden on the proponent of greater discovery to explain the reasons why it is needed? If they make sense, the court should agree.

The same is true for the major proposed revision to Rule 26(b)(1), requiring that “discovery be proportional to the needs of the case considering the amount in controversy, the importance of the issues at stake in the action, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” That language is already in the rule, but it is buried in Rule 26(b)(2)(C)(iii).

Moving it to the top of Rule 26(b)(1) is intended to emphasize the affirmative burden on each lawyer to assess, at the outset of a case, what discovery is necessary and appropriate, taking into account the variables listed. One might ask how any practitioner could reasonably object to such a provision. Yet, the complaints are numerous, well summarized by the following remarks from one commentator:

Increased emphasis on proportionality is harmful and not necessary. Empirical evidence of systemic discovery abuse is lacking or non-existent. The problem is disproportionately low discovery, not high. Further, providing parties with a method of concealing information is anathema to our judicial system. We do not try cases by ambush. An emphasis in the rules on proportionality will disproportionately limit the determination of truth at trial. A claim for $100,000 by a supermarket cashier is just as important to that person as a claim for $10 million is to a business owner, and the facts may be no less complicated in actions involving lower amounts. Lady Justice wears a blindfold. Excessive discovery is adequately limited by objections and motions for protective orders.

Given the vigor of the objections to the proposed changes above, it may seem surprising that there have been few comments (pro or con) regarding the proposed wholesale revision of Rule 37(e). The current rule affords a safe harbor for “failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.” The new rule would apply to all discoverable information, and it is aimed at ensuring that those who make reasonable efforts to satisfy their preservation responsibilities will not be sanctioned if information is lost nonetheless.

The proposed rule identifies numerous considerations for the court to weigh in formulating its response to a party’s loss of information. These include the extent to which the party was on notice of incipient litigation, the discoverability of the lost information, the reasonableness of the party’s efforts to preserve the information, whether the party was sent a “litigation hold” letter and the clarity of that notice, whether the parties conferred regarding the scope of preservation, the party’s sophistication and resources, the proportionality of the preservation efforts to the litigation, and whether the party timely sought guidance from the court concerning any unresolved disputes regarding litigation.

The committee’s comments on the proposed amendment to Rule 37 make its intent clear:

A central objective of the proposed new Rule 37(e) is to replace the disparate treatment of preservation/sanctions issues in different circuits by adopting a single standard. In addition, the amended rule makes it clear that—in all but very exceptional cases in which failure to preserve “irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation”—sanctions (as opposed to curative measures) could be employed only if the court finds that the failure to preserve was willful or in bad faith, and that it caused substantial prejudice in the litigation. The proposed rule therefore rejects Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99 (2d Cir. 2002), which stated that negligence is sufficient culpability to support sanctions.

Comm. on Rules of Practice and Procedure, supra, at 272. (The Advisory Committee’s notes on Rule 37(e) may be found at pages 270–75.)

Obviously, uniformity is desirable, and maybe that logic explains the dearth of comments. Still, the impact of the new rule could be enormous. The confusion wrought by the multiplicity of conflicting standards for spoliation sanctions under the current rules may have served as a deterrent to litigating that issue. But the proposed rule encourages the development of a uniform, nationwide, body of law. As the precedents mature—and are held applicable nationwide—we may see more and more litigation applying those evolving standards and testing their limits. The simplification of the rules sought by the changes to Rules 26, 30–34, and 36 could be at least partially offset by the growth of litigation under the new Rule 37(e).

But it could be several years before new rules are enacted. Once the comment period is closed, the Civil Rules Advisory Committee will take all comments under advisement and make any changes deemed appropriate. If the committee then decides to move forward, it will submit its final version to the Standing Committee on Civil Rules, which could approve or disapprove them—or return them to the Advisory Committee for further action. If the Standing Committee approves the proposed rule changes, then they will go to the Judicial Conference of the United States Courts. Upon approval by that body, the proposed rules will go to the United States Supreme Court. If approved by the Court, the rules will be sent to Congress, which will have until December 1 of that year to block their enactment. If Congress does not act to do so, they will then become final. As one august commentator has put it, “It is quite a process.”

Keywords: litigation, spoliation, sanctions, Federal Rule of Civil Procedure 37(e), proportionality


Copyright © 2013, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).