Part II: Focus on Rule 37

Concerns over spoliation based on preservation failures continue to dominate electronic discovery. ¹The number of instances in which litigants sought sanctions has doubled in the first half of 2011. Gibson Dunn 2011 Mid-Year E-Discovery Update, July 22, 2011, available at http://pub.bna.com/lw/2011MidYearEDiscoveryUpdate.pdf. The Federal Rules of Civil Procedure contribute to the problem by failing to make Rule 37 available to adjudicate disputes. I would amend Rule 37 to close this gap while making appropriate changes to Rule 37(e) to encourage uniform culpability requirements for sanctions. I would not, however, incorporate the proposals before the Discovery Subcommittee of the Advisory Committee on Civil Rules ²See Proposed Rule 26.1, Rules Comm. Memo on Preservation and Sanctions Issues, 3-13 & 18-20, available at http://pub.bna.com/lw/Preservation.pdf (hereinafter “Issues Memo, __”). to detail the trigger and scope of the duty to preserve, but would leave that task to the common law.

Harnessing Rule 37.

Courts typically address spoliation allegations through use of their inherent power even when also asserting a rule-based power to sanction spoliation. This undermines the Federal Rules, encourages a lack of uniformity, and makes appellate review more difficult. ³See, e.g., Sentis v. Shell Oil, 559 F.3d 888, 900 (8th Cir. March 24, 2009) (criticizing failure to distinguish between use of “specific rules tailored for the situation” and “the relatively unstructured analysis associated with inherent authority”).

In the absence of prior orders, Rule 37 provides remedial and punitive responses only for failures to meet discovery obligations. However, there is no logical reason to distinguish between the consequences of non-performance of preservation and discovery obligations. I agree with the Rules Committee that it is time to “obviate reliance on ‘inherent authority.’” ⁴Issues Memo, 14, at n.37.

Only Modest Changes Needed.

The required changes to Rule 37 would be minimal. One approach would be to amend Rule 37(c)(1) to authorize sanctions if a party “fails to preserve or provide information as required by these rules or by known preservation obligations.”

Under this approach, courts could select their sanctions from within the four corners of the federal rules because the rules would be “up to the task.” ⁵Chambers v. NASCO, 501 U.S. 32, 50 (1991) (a court should “ordinarily” rely on the rules rather than inherent power). Existing case law would apply in selection of a sanction as long as it yielded “just” results, constituted an “appropriate” sanction and was “substantially justified.”

The onset and scope of the conduct required to meet preservation obligations would be furnished by the evolving common law. ⁶See, e.g., Rimkus Consulting v. Cammarta, 688 F. Supp. 2d 598 (S.D. Tex. Feb. 19, 2010) (acceptable conduct is defined by “what is reasonable,” which depends on whether it was “proportional to that case and consistent with clearly established applicable standards”) (emphasis in original) (Rosenthal, J).

Amending Rule 37(e).

Rule 37(e) is ideally positioned to address conflicting approaches to spoliation sanctions among the circuits. However, it currently limits sanctions for losses of ESI to those “under these rules,” tempting some courts to dismiss its teaching when exercising their inherent authority.

This limitation should be dropped since exempting sanctions for losses from “routine, good faith” operations helps provides an incentive for adoption of sound policies and practices in the management of information, a trend that ought to be encouraged.

The rule should also be reinforced by providing, as Connecticut has recently done, that sanctions would not issue for “failure to provide information, including [ESI], lost as a result of the routine, good-faith operation of a system or process in the absence of a showing of intentional actions designed to avoid known preservation obligations.” ⁷Connecticut recently amended its rules to so provide. See Sec. 13-14 Connecticut Practice Book (2011) (eff. Jan. 2012) (available athttp://pub.bna.com/lw/PBRevisions.pdf.

Conclusion.

On balance, this modest proposal seems preferable to the proposed complexities of adopting Rule 37(g) in the form before the Rules Committee at this time. ⁸Issues Memo, 22 - 25. That approach utilizes a checklist of factors to cast a “backwards shadow” over pre-discovery conduct. It seems doubtful, however, any general rules governing preservation can obviate the inherent fact-specific judgments required of parties prior to discovery. That risk is inherent in the preservation doctrine and is best addressed by the continued evolution of the common law, buttressed by an enhanced Rule 37(e).