The Judicial Conference Committee on Rules of Practice and Procedure recently released their September report on proposed amendments to the Federal Rules of Civil Procedure. The new rules are now under review by the Supreme Court. Before the Court is a significant amendment to Rule 37(e) designed to “establish[] greater uniformity in how federal courts respond to the loss of ESI [electronically stored information].”
Since the current Rule 37(e)’s adoption, and given the proliferation of both ESI and requests for spoliation sanctions for the loss of ESI, the Rules Committee has recognized that “a more detailed response to problems arising from the loss of [ESI] is required.” The problem, as the Committee observes, is a lack of uniformity among the circuits about how and when Rule 37 sanctions – particularly adverse inference jury instructions – are imposed on a party for the destruction or loss of ESI. In deciding when to impose an adverse inference instruction as a result of the loss of ESI, many circuits have adopted the second prong of the test from the Second Circuit’s 2002 Residential Funding case: the ESI must have been destroyed “with a culpable state of mind.” The crux of the issue, however, is what level of culpability is required in order to obtain the adverse inference instruction. Some circuits hold that a court may impose an adverse inference instruction if a party destroyed ESI “negligently,” whereas some demand a showing of “gross negligence” or even “bad faith” to merit the sanction. (The Sixth Circuit adopted the negligence standard for adverse inference sanctions under Rule 37 in Beaven v. U.S. Department of Justice, 622 F.3d 540 (2010) and recently reaffirmed this standard in Stocker v. United States, 705 F.3d 225 (2013)).
The Committee argues that this wide range of culpable states of mind “has resulted in a tendency to over preserve ESI” because parties face serious sanctions if a court determines – in hindsight – that their destruction of ESI was negligent. In response, proposed Rule 37(e)(2) “eliminates the circuit split on when a court may give an adverse inference jury instruction for the loss of ESI” and adopts a heightened standard for the level of culpability necessary to issue an such an instruction. The new Rule 37(e)(2) allows an adverse inference instruction only upon a finding that a party “acted with the intent to deprive another party of the information’s use in the litigation” (emphasis added). Thus, under the new Rule 37 (if adopted by Congress and the Supreme Court), the mere negligence standard from Residential Funding and Beaven will no longer warrant the issuance of an adverse inference instruction.
We have previously reported on potential changes to the Federal Rules of Appellate Procedure with respect to word limits for briefs, so the pending rule changes could have a significant impact on practice within the Circuit if adopted.
