New amendments to the Federal Rules of Civil Procedure—which focus on early case management, proportionality, and preservation—took effect on December 1, 2015. Under the amendments, the most significant changes impacting electronic discovery occurred with respect to Rules 26(b)(1) and 37(e). These amended rules, which address proportionality and preservation, will impact the way practitioners and their clients think about and manage electronically stored information (ESI).
The scope of discovery under former Rule 26(b)(1) was extremely broad. And, as many practitioners know all too well, discovery has become increasingly burdensome and expensive given the high volume of potentially discoverable ESI. Accordingly, to address these problems, the Advisory Committee on Rules of Civil Procedure (Committee) revised the scope of discovery under Rule 26 by limiting discovery to information that is not only relevant, but "proportional to the needs of the case." Fed. R. Civ. P. 26(b)(1). The Committee also clarified, and in a sense further limited, the scope of discovery by deleting the "reasonably calculated to lead to the discovery of admissible evidence" language. This language, according to the Committee, was incorrectly used to define and expand the scope of discovery. So, to prevent potential misuse and expansion of the rule, the often cited "reasonably calculated to lead to the discovery of admissible evidence" language was cut, and the rule now directly states that "[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable."
With the amendments to Rule 26(b)(1) in place, discovery should become more focused and less burdensome and expensive. Practitioners will be able to use proportionality to facilitate the discovery process and resolve discovery disputes. Practitioners, however, cannot use proportionality as grounds for refusing discovery simply by asserting a boilerplate objection that the discovery is not proportional. See Fed. R. Civ. P. 26(b)(1), advisory committee's note to 2015 amendment.
In addition to its role in defining the scope of discovery, proportionality is also incorporated into the standard for determining whether ESI should be preserved.
The language of Rule 37(e) formerly provided that unless "exceptional circumstances" exist, a court may not impose sanctions "on a party for failing to provide [ESI] lost as a result of the routine, good-faith operation of an electronic information system." According to the Committee, the rule did not address the problems resulting from the continued exponential growth in the volume of ESI. Therefore, to address this problem and to resolve the uncertainty surrounding the applicable standards that courts may employ when determining whether a party should be sanctioned for failing to preserve ESI, the Committee substantially amended Rule 37(e) and set forth a uniform standard for courts to apply. See Fed. R. Civ. P. 37(e).
Under the amended rule, a party must take "reasonable steps" to preserve ESI in the anticipation or conduct of litigation in order to avoid sanctions or curative measures. If a party fails to take "reasonable steps" to preserve ESI and the information cannot be restored or replaced through additional discovery, the new rule provides for appropriate action to be taken by the court. For example, "upon finding prejudice," the court may order curative measures that are "no greater than necessary to cure the prejudice." Fed. R. Civ. P. 37(e)(1). On the other hand, if the court finds that the party "acted with the intent" to deprive another party of ESI, the court may take more drastic measures to sanction the party, including presuming the lost ESI was unfavorable to the party, instructing the jury that it may or must presume the ESI was unfavorable, or dismissing the action or entering a default judgment. Fed. R. Civ. P. 37(e)(1)(A)−(C).
Although the new rule provides a more uniform standard for courts to apply when determining how to address lost ESI, the amendments do little to resolve the uncertainty surrounding what ESI actually requires preservation. However, the committee does advise that proportionality should be a factor. Thus, practitioners need to take advantage of early case assessment tools and engage in meaningful discussions with their clients and opposing counsel concerning the issues in the case, the potential amounts in controversy, and the types of ESI that may be available. By taking these steps early on, practitioners may be able to avoid the pitfalls of over or under preservation.
