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Exploring FRCP Rule 37(e) and Avoiding Spoliation Sanctions

In a recent eDiscovery webinar, Avoiding Spoliation Sanctions in 2017 Under New FRCP Amendments, the Honorable Xavier Rodriguez spoke with Lexbe CEO, Gene Albert regarding the intricacies of Rule 37(e). Judge Rodriguez offered insight into how courts are interpreting Rule 37(e), and how the amendment has changed the landscape for attorneys with regard to data loss and sanctions.

Prior to the FRCP’s 2015 amendments to Rule 37(e) courts were inconsistent in how they imposed sanctions due to lost data. As a result, many attorneys, fearing consequences, opted for a “save it all” approach when a preservation letter landed in their laps. With the growth of data and the high cost of storage, the “save it all” approach became prohibitively expensive.

Given the expense of managing preservation combined with the inconsistent application of sanctions, the FRCP’s 2015 amendments to Rule 37(e) aimed to address the “excessive efforts and money” spent on preservation and also provide a framework in which to evaluate actual damages resulting from lost data.

In the webinar discussion, Judge Rodriguez explained that the FRCP advisory committee suggests that courts consider “proportionality” across the entire spectrum of Rule 37(e). The committee notes for the rule suggest that courts look at the parties’ technical sophistication, their resources, and the weight of the ESI to the claim or defense when considering the appropriate and proportionate remedy.

With proportionality in mind, Judge Rodriguez suggests that a court needs to ask three questions before determining whether there is cause for prejudice (see infographic).

In making this determination, a court will seek to determine how relevant the data loss is to the case and a proportional remedy to the party experiencing prejudice. Remedies could include requiring additional depositions at the spoliating party’s expense or the preclusion of evidence (preventing the spoliating party from entering evidence).

In the webinar, Judge Rodriguez emphasized that intent to deprive must be deliberate. Negligence, even gross negligence, does not necessarily meet the strict requirement of actual intent. If, however, intent is found, the court has three options from which to choose: (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.”

For more information, watch the recorded webinar on-demand: Avoiding Spoliation Sanctions in 2017 Under New FRCP Amendments.

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