One Hurdle Remains for the Proposed Amendments to the Federal Rules of Civil Procedure

October 8, 2014 conduentblogs

On September 16, 2014, the Judicial Conference Committee on Rules of Practice and Procedure approved the proposed slate of amendments to the Federal Rules of Civil Procedure. The proposed amendments include changes to two rules with important implications for e-discovery.

Rule 26(b)(1)
Rule 26(b)(1) redefines the scope of discovery, eliminating the “reasonably calculated to lead to the discovery of admissible evidence” standard and incorporating the proportionality factors currently in Rule 26(b)(2)(C)(iii)—many of which were added to Rule 26(b)(1) in 1983. As described in its report, the Committee opted to move the factors because “previous amendments have not had their desired effect” in ensuring discovery is proportional. With the shift, the Committee intends for “parties and courts alike to consider them when pursuing discovery and resolving discovery disputes.” In addition to the existing factors, such as the “importance of the issues at stake” and the “amount in controversy,” the amended rule adds a new factor, “the parties’ relative access to relevant information,” acknowledging that litigants often have asymmetrical discovery burdens.

Rule 37(e)
In its report, the Committee recognized that “a more detailed response to problems arising from the loss of electronically stored information (ESI) is required.” The changes to Rule 37(e) are designed to rectify the split among the circuits as to how and when to impose sanctions for the destruction or loss of ESI. The amendment allows courts to sanction parties that failed to take “reasonable steps” to preserve ESI that “cannot be restored or replaced through additional discovery.” It is unclear what will satisfy the “reasonable” standard; presumably, courts will expect more of sophisticated, litigious parties.

Under the current version of Rule 37, many courts find that sanctions are warranted only if the ESI was destroyed with a culpable state of mind. However, they disagree as to the level of culpability required: negligence, gross negligence, or bad faith. Given the uncertainty, many parties tend “to over preserve ESI out of a fear of serious sanctions if actions are viewed in hindsight as negligent.” Thus, proposed Rule 37(e)(1) also requires courts to “order measures no greater than necessary to cure the prejudice” from the loss of the information. Proposed rule 37(e)(2) sets a more rigorous standard for the severest sanctions, allowing adverse inferences and default judgments only where a party “acted with the intent to deprive another party of the information’s use in the litigation.”

The amendments are now before the U.S. Supreme Court. If the Court adopts the rules before May 1, 2015, and if Congress does not intervene, then the proposed rules will go into effect on December 1, 2015. Before then, organizations should take several steps to prepare. First, they should shore up their litigation hold processes and designate someone to follow up regularly on compliance. In addition, they should determine the types of data they produce and where they store it. Finally, they should confirm that they are applying their records retention program consistently across all departments.

Chris O’Brien is senior vice president at Conduent. He can be reached at cobrien@conduent.com.

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