Proposed Changes to Federal Rule 37 and the Impact to Complying Litigants
Another theme that emerged from the 10th Annual Advanced eDiscovery Institute [see previous blog post] were proposed changes to Rule 37 of the Federal Rules of Civil Procedure pertaining to safe harbor and related sanctions. Rule 37(e) was added to the Federal Rules of Civil Procedure in 2006 to protect litigants who acted in good faith but failed to adequately preserve relevant information. While Rule 37(e) has been called the “safe harbor” provision, many judges, practitioners and commentators have suggested that this Rule has not been effective in providing a “safe harbor.”
The proposed amendments to Rule 37(e) (currently in the comment period) attempt to solve this problem, but many believe it will not reduce over-preservation because the new Rule fails to define what litigants and their counsel need to do to meet the duty to preserve. Over-preserving significantly increases the costs of collection, review and associated third party vendor costs; yet Rule 37(e)(1)(B)(i) provides that a Court may impose sanctions (listed in Rule 37(b) or an adverse jury instruction) if a party fails to adequately preserve documents.
The proposed amendments to Rule 37(e)(1)(B)(i) will require that a failed preservation effort causes “substantial prejudice in the litigation and [was] willful or in bad faith or irreparably deprived a party of any meaningful opportunity to defend against the claims in the litigation.” The amended Rule will require a party to prove “substantial prejudice” before an award of sanctions will be entered by the Court. Therefore, the proposed amendments to Rule 37(e) would require a party to prove prejudice from spoliation, which will place a higher burden on the non-violating party. This will also mean that the violating parties will not be sanctioned under the new Rule unless the non-violating party can show willfulness or bad faith. There will now be a higher burden for the complying litigant!
If the proposed amendments to the Rules remain on course, they will become part of the Federal Rules of Civil Procedure on December 1, 2015, following Supreme Court approval. Stay tuned for further updates.