January 14, 2013 civil procedure

Federal Spoliation Rule Moves Forward

By Charles S. Fax

In two recent columns, I addressed the proliferation of conflicting and inconsistent local court rules throughout the federal system and the consequent burdens imposed on counsel litigating in multiple jurisdictions. In a third column, I discussed the conflicting ways in which federal courts resolve spoliation issues. These comments convey a concern for clarity—a uniform standard for rules to guide counsel in all federal courts, promoting predictability, efficiency, greater adherence to the rules, and reduction of costs.

Spoliation is a case in point. Conflicting decisions throughout the country give no guidance whatsoever to a corporation that may be sued anywhere. How does a company decide what document preservation and destruction policies to implement? What standards of behavior will guide the court’s consideration if spoliation is alleged? Will negligent destruction suffice as a defense to a spoliation charge? In Residential Funding Corp. v. DeGeorge Finan. Corp., the answer was “maybe not.” There, the U.S. Court of Appeals for the Second Circuit authorized sanctions for negligent destruction of e-mails. The Sixth and Ninth Circuits have followed suit.

In Aramburu v. Boeing Co., however, the Tenth Circuit, following the First and Fifth Circuits, held that “[m]ere negligence in losing or destroying records is not enough [to warrant an inference that production of the document would have been unfavorable to the party responsible for its destruction] because it does not support an inference of consciousness of a weak case.” And in Rimkus Consulting Group, Inc. v. CammarataJudge Lee Rosenthal, in the Southern District of Texas, took a highly nuanced approach to the necessity for sanctions for intentional spoliation. Clearly the cases, marshaled in Rimkus, are all over the lot.   

Now, the good news: The Advisory Committee on Civil Rules has embarked on the process of proposing an amendment to Rule 37(e) which, if adopted, would create a single nationwide standard for the imposition of spoliation sanctions. At the Committee’s November 2012 meeting, the draft proposal of the Committee’s Discovery Subcommittee was accepted for further discussion. The timetable for future action is uncertain at this time, but the signs augur well for a new rule.

Currently, Rule 37(e) 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 Discovery Subcommittee reviewed the cases discussing Rule 37(e), however, and found that it has had very limited impact. The amendment proposes to eliminate Rule 37(e) altogether in its present form, and substitute a new Rule 37(e). The new rule would apply to all discoverable information, and according to the Draft Committee Note, would seek to ensure that “potential litigants who make reasonable efforts to satisfy their preservation responsibilities may do so with confidence that they will not be subjected to serious sanctions should information be lost despite those efforts.” The proposed rule does not state a bright line, but instead identifies numerous considerations that the court should weigh in adjudicating its response to a party’s loss of information.

These factors include the extent to which the party was on notice of incipient litigation; the discoverability of the lost information at issue; 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 met and conferred regarding the scope of preservation; the party’s resources and sophistication in litigation; the proportionality of the preservation efforts to the litigation; and whether the party sought timely guidance from the court concerning any unresolved disputes regarding preservation.

Depending on the court’s findings, the court could rule that there was no untoward spoliation, or that it was negligent, grossly negligent, willful, or in bad faith. The court would be empowered to impose sanctions only upon a finding of willfulness or bad faith and that such misconduct caused “substantial prejudice” in the litigation, or that the failure “irreparably deprived a party of any meaningful opportunity to present a claim or defense.” Sanctions could include an adverse-inference jury instruction or any sanction listed under Rule 37(b)(2)(A).

The laudable intent of the proposed amendment to Rule 37(e) is the development of a consistent body of law imposing predictable penalties for established gradations of spoliation. The amendment cannot come soon enough. And might the Advisory Committee then turn to the matter of the local rules?


Charles S. Fax is an associate editor for Litigation News.

Keywords: spoliation, civil rules, Rule 37, Advisory Committee on Civil Rules


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