Reasonable Steps Under Amended Rule 37(e)

Spoliation Sanctions Update, Part 2

A review of the first year of cases under the amended spoliation sanctions rule reveals simpler analyses from judges and some relief from severe sanctions for litigants, but new ambiguities create uncertainty about reasonable steps, demonstrating intent, and inherent authority

In the first Part of this series, we reviewed the December 2015 amendments to Federal Rule of Civil Procedure 37(e) and the issues that amendment was intended to address.  In this Part, we turn our attention to the topic of “reasonable steps” to preserve that which must be preserved.

Reasonable Steps

Among the newly articulated limitations on the application of ESI spoliation sanctions in amended Rule 37(e) is this: sanctions can only be applied if the ESI that should have been preserved was lost “because a party failed to take reasonable steps to preserve it.”  This, of course, raises the question of what qualifies as “reasonable steps.”

The Advisory Committee Notes on the 2015 Amendments provide some guidance on what this phrase was intended to embody.  First and most importantly, the notes emphasize several times that, “[t]his rule recognizes that ‘reasonable steps’ to preserve suffice; it does not call for perfection.”  Beyond emphasizing that this key principle of discovery is unchanged by this amendment, the Notes go on to enumerate several specific factors that courts should consider when assessing whether specific steps in a particular case were “reasonable”:

  1. “The court should be sensitive to party resources; aggressive preservation efforts can be extremely costly, and parties (including governmental parties) may have limited staff and resources to devote to those efforts. A party may act reasonably by choosing a less costly form of information preservation, if it is substantially as effective as more costly forms.”
    • Parties may be graded on a curve that also considers their relative resources
  2. “. . . information the party has preserved may be destroyed by events outside the party’s control — the computer room may be flooded, a ‘cloud’ service may fail, a malign software attack may disrupt a storage system, and so on. Courts may, however, need to assess the extent to which a party knew of and protected against such risks.”
    • This is, essentially, a force majeure clause allowing an out for acts of god
  3. “As under the current rule, the routine, good-faith operation of an electronic information system would be a relevant factor for the court to consider . . . although the prospect of litigation may call for reasonable steps to preserve information by intervening in that routine operation.”
    • This first factor is essentially the prior version of Rule 37(e)
  4. “The court should be sensitive to the party’s sophistication with regard to litigation in evaluating preservation efforts; some litigants, particularly individual litigants, may be less familiar with preservation obligations than others who have considerable experience in litigation.”
    • Parties may be graded on a curve that considers their relative sophistication
  5. “Another factor in evaluating the reasonableness of preservation efforts is proportionality.”
    • Preservation, like discovery itself, need only be proportional to the matter

2016 Decisions Discussing Reasonable Steps

Over the course of 2016, a number of courts had the opportunity to issue orders on motions for spoliation sanctions and to consider whether or not a party had taken the required reasonable steps:

  • Marten Transp., Ltd. v. Plattform Adver., Inc., 2016 U.S. Dist. LEXIS 15098 (D. Kan. Feb. 8, 2016) – failure to preserve Internet search history not found to be a failure to take reasonable steps, partly because it isn’t something businesses typically retain
  • Living Color v. New Era Acquastructure, 2016 WL 1105297 (S.D. Fla. March 22, 2016) – failure to disable a text message auto-delete function found to be failure to take reasonable steps
  • O’Berry v. Turner, 2016 WL 1700403 (M.D. Ga. Apr. 27, 2016) – failure to preserve ESI, reliance on a single hard copy, and loss of that hard copy found to be a failure to take reasonable steps
  • Matthew Enterprise, Inc. v. Chrysler Group, LLC, 2016 WL 2957133 (N.D. Cal. May 23, 2016) – failure to notify email vendor to suspend auto-delete function found to be failure to take reasonable steps
  • McQueen v. Aramark Corp., 2016 U.S. Dist. LEXIS 43958 (D. Utah, Nov. 29, 2016) – failure to notify necessary individuals of preservation instructions found to be a failure to take reasonable steps
  • Alarm Fin. Enters., L.P. v. Alarm Protection Tech., LLC, 2016 WL 7115911 (D. Alaska Dec. 6, 2016) – failure to explicitly cover relevant recordings in a general litigation hold and failure to extract and preserve those recordings before they were overwritten found to be a failure to take reasonable steps

It should also be noted that, in at least one case, additional discovery has been ordered to help determine whether the steps taken were reasonable (and whether the materials can be recovered from other sources): Konica Minolta Bus. Sols., U.S.A. Inc. v. Lowery Corp., 2016 WL 4537847 (E.D. Mich. Aug. 31, 2016).

And, of course, in any case involving intentional or egregious conduct by the spoliating party, the steps taken to preserve (if any) are not considered reasonable.  For examples, see:

  • CAT3 LLC v. Black Lineage, 2016 WL 154116 (S.D. N.Y. Jan. 12, 2016)
  • DVComm v. Hotwire, 2016 U.S. Dist. LEXIS 13661 (E.D. Pa. Feb. 3, 2016)
  • Brown Jordan v. Carmicle, 2016 WL 815827 (S.D. Fla. March 2, 2016)
  • GN Netcom v. Plantronics, 2016 WL 3792833 (D. Del. July 12, 2016)

Summary

This early collection of orders considering “reasonable steps” suggests that most common preservation failures are going to be viewed in the same way under the amended rule as they were before.  The likelihood and severity of resulting sanctions have both been reduced by other parts of the rule, but for this part of the analysis, the typical expectations remain: effective litigation holds; timely notices to relevant individuals; suspension of automated janitorial functions (or preventative back-up or collection); and, of course, no intentional misconduct.

Upcoming In This Series

In the next Part of this series, our survey of 2016 spoliation sanctions decisions will look at some of those cases featuring intentional or egregious conduct to see where judges have found intent to deprive and where they have declined to do so.

MATTHEW VERGA, JD
VP, Marketing Content
Advanced Discovery

Matthew Verga is an electronic discovery expert proficient at leveraging his legal experience as an attorney, his technical knowledge as a practitioner, and his skills as a communicator to make complex eDiscovery topics accessible.  A nine-year industry veteran, Matthew has worked across every phase of the EDRM and at every level from the project trenches to enterprise program design.  As VP, Marketing Content, for Advanced Discovery, he leverages this background to produce engaging educational content to empower practitioners at all levels with knowledge they can use to improve their projects, their careers, and their organizations.

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