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Trial Evidence Committee

Is Rule Making a Cure for Preservation Headaches?

By Richard Marcus – June 30, 2011

Almost everywhere you look, you see references to the preservation of electronically stored information. The Summer 2011 issue of the Trial Evidence Committee newsletter has an article by Carol Owen about the subject, called “The Duty to Preserve: Victor Stanley and Its Progeny.” A U.S. Senate report says that former senator John Ensign’s staff deleted incriminating emails. See Eric Lipton and Eric Lichtblau, “Senate Report Urges Reopening Ensign Case,” N.Y. Times, May 13, 2011, at A13. The roommate charged with criminal responsibility for the tragic suicide of a Rutgers student has also been charged with deleting a Twitter post about the events. See Lisa W. Foderaro, “Roommate Faces Hate-Crime Charges in Rutgers Spying-Suicide Case,” N.Y. Times, Apr. 21, 2011, at A19. The social website Friendster has stirred a controversy by proposing to erase early postings. See Jenna Wortham, “Social Site to Erase Early Posts,” N.Y. Times, Apr. 27, 2011, at B1.

These spoliation concerns can affect your cases. As Robert Shapiro noted in his article, “Conclusions Assumed,” in the Spring 2010 issue of Litigation, “Spoliation, in case you haven’t heard, is the newest battleground of contemporary litigation, now a continuing sideshow, if not the main event, in courtrooms across the country.” 36 Litigation 59, 59, Spring 2010.

Rule Changes Needed?
Adopting new rules about spoliation, sanctions, or both could change things. Some say that’s the only way things will change. Magistrate Judge James Francis noted that the present case law on the scope of the preservation duty may be amorphous. He added, however, that “[u]ntil a more precise definition is created by rule, a party is well-advised to ‘retain all relevant documents (but not multiple copies) in existence at the time the duty to preserve attaches.’” Orbit One Commc’ns, Inc. v. Numerex Corp., 271 F.R.D. 429, 436 (S.D.N.Y. 2010). A recent article coauthored by former Magistrate Judge Ronald Hedges says that case law is the only source of guidance “[u]ntil [the] next rules change.” See Brad Harris & Ron Hedges, “Until Next Rules Change, 2010 Cases Set the Standard,” Nat’l L.J., Apr. 11, 2011, Electronic Discovery Special Report, at 1.

In May 2010, the Advisory Committee on Civil Rules of the U.S. Judicial Conference—the outfit that develops proposals to amend the Federal Rules of Civil Procedure—convened a major conference on civil litigation at Duke Law School. For two days, the conferees heard from panels of experts about many aspects of contemporary civil litigation. The conference was full of statements and counterstatements—exactly the sort of skillful advocacy you would expect of a group of American lawyers. (All the conference papers and proceedings are accessible thanks to the Administrative Office of the U.S. Courts.)

Amid all the disputation at the Duke conference, the E-Discovery Panel, composed of leading lights in the field, spoke unanimously. The moderator was Greg Joseph of New York, former chair of the ABA’s Section of Litigation. Members of the panel included U.S. District Judge Shira Scheindlin (S.D.N.Y.); Magistrate Judge John Facciola (D.D.C.); private practitioners John Barkett of Miami, Joseph Garrison of New Haven, and Dan Willoughby Jr. of Atlanta; and Thomas Allman of Cincinnati, a retired corporate general counsel. The panel unanimously recommended that the rules be amended to add a rule addressing preservation and proposed elements that such a rule might contain. Their three-page proposal, directed to the Advisory Committee on Civil Rules, is available through the conference website.

The Rule-Making Background
The Advisory Committee has considerable experience dealing with e-discovery issues. Beginning in early 1997, lawyers urged the committee to design rule changes that specifically addressed the challenges of this new form of discovery. For a review of this history, see Richard Marcus, “Only Yesterday: Reflections on Rulemaking Responses to E-Discovery,” 73 Fordham L. Rev. 1 (2004). From an early date, one of the things lawyers asked the committee to do was “tell us exactly how to deal with these problems.” Dealing with new problems or technology understandably prompts a desire for specific directives that continues to this day.

The early problem was that although many lawyers were convinced there were serious problems, few were confident about what the solutions should be. The committee was also faced with a rapidly moving target as technology evolved; specific directives geared to current technology might be meaningless in three years. And the careful statutory cycle for rule amendments means that none can come into effect until about three years of study are completed.

Given these considerations, the actual pace of rule change to deal with e-discovery was cautious and, some said, slow. Eventually, proposed rule changes were published for public comment in 2004 and, after revision, went into effect on December 1, 2006. For a review of these events, see Richard L. Marcus, “E-Discovery and Beyond: Toward Brave New World or 1984?” 236 F.R.D. 598 (2006). These rule amendments did take some halting first steps toward addressing preservation and spoliation. Rule 26(f) was amended to direct the parties to discuss preservation along with other discovery issues at the outset of the case, and what is now Rule 37(e) was added, guarding against sanctions for loss of information due to the good-faith operation of an electronic information system, but the committee notes recognized that litigation holds should be used to avoid loss of information in some instances.

Ideas for Moving Beyond the 2006 Amendments
The Duke panel’s proposal included a range of topics that could be included in a rule and deserve mention.

The triggering event that causes an obligation to preserve to come into existence could be specified. A variety of suggested possible triggering events included service of a complaint or notice of a claim, actual notice of one, a statutory duty to preserve, or steps taken in anticipation of initiating litigation. Alternatively, a general trigger restating the common-law focus on reasonably foreseeable litigation could be written into a rule.

The panel recommended that a rule specify with as much precision as possible the scope of the duty to preserve, focusing on the subject matter, time frame, types of data, sources of data, form of preservation, and number of custodians of data to be covered. In addition, the rule could include how long information initially subject to a duty to preserve must be kept if no litigation eventuates.

The panel also urged that the rule specify different consequences for failure to preserve as required. The rule should specify different sanctions depending on culpability and the degree of harm to the victim’s case resulting from the failure to preserve.

Initial Consideration of These Issues
In the year since the Duke conference, the Discovery Subcommittee of the Advisory Committee has put considerable effort into analyzing the issues raised by the Duke panel. This analysis has identified a variety of issues that devising rules along these lines might implicate. For one thing, there arguably could be debate about whether regulation of preservation of material is within the committee’s authority under the Rules Enabling Act. See 28 U.S.C. § 2072. A huge range of preservation obligations exists in such legislation as the Sarbanes-Oxley Act, and those might be considered “substantive” and beyond the rule-making power.

Equally substantial considerations exist, however, about whether rule provisions could really provide the specifics some desire, even assuming unlimited rule-making power. The range of situations in which preservation issues can arise is extraordinarily broad. The variety of potential parties subject to such duties is very large. Specifics that apply to a large corporation or governmental agency, for example, might make no sense in a two-person operation. Trigger provisions that are suitable for sophisticated entities might be entirely inappropriate for prospective individual plaintiffs.

Technological change also could affect much that matters here. Nowadays many talk of “cloud computing,” although this form of digital activity is still at a nascent stage. But if many entities begin to store their information “in the cloud,” that would seem to raise serious questions about how readily they can ensure that the information will be preserved after a preservation duty has been triggered.

Current Possible Approaches
Given these uncertainties, the Discovery Subcommittee has developed three general approaches and is evaluating them to try to determine which would be most promising. The first is to devise extremely detailed and specific directives on when a duty to preserve arises, what is required, and how long information subject to such a duty must be retained. The second is to address those matters much more generally, in a sense repeating the case law or common-law treatment of them. A third is, rather than attempt to develop any provisions directly regulating preservation, to instead make rules only for “back-end” sanctions issues. Such a sanctions rule could direct focus on the reasonableness of a potential litigant’s demands in relation to preservation, attempting to encourage reasonable demands and proportional retention efforts. The Discovery Subcommittee has developed very detailed sketches of such rule ideas. These detailed sketches can be found in the agenda book for the April 2011 meeting of the Advisory Committee on Civil Rules by following the rule-making links at http://www.uscourts.gov. The agenda materials themselves [PDF] can also be accessed.

There is much to discuss, and many questions to answer, about whether any of these three approaches holds real promise of offering solutions to the problems that lawyers have encountered. The tension between specifics and flexibility presents great challenges. Unless a rule is specific and concrete, it is likely not to provide the desired certainty about how prospective or actual litigants are to behave. But the more specific the rule is, the greater the risk that it will not suitably address the particulars of given situations in which the specific directive could lead to unwise results. And technological change may render specifics inapplicable.

Another problem is to develop a promising integration focusing on both culpability and the importance of the lost information. No matter how culpable a party’s behavior, it would seem that the most severe sanctions should not be imposed if the culpable behavior actually inflicted no harm on the opposing party’s case. Consider, for example, a spoliator who assiduously attempts to remove all files that might be harmful, violating court orders in the process. Suppose also that the contemnor bungled the effort, and no files were actually erased. That behavior might well result in a contempt citation, but deciding the case against the contemnor based solely on his bungled efforts would violate due process. See Hovey v. Elliott, 167 U.S. 409 (1897) (holding that the district court violated due process by entering judgment against a party for disobeying a court order that money be deposited into court).

On the other hand, it may be that the most severe of sanctions should be available in cases involving minimal culpability if the loss of information completely eviscerates an opposing party’s ability to develop its case. A 2001 Fourth Circuit decision upholding dismissal of a personal injury suit illustrates that point. In that case, Silvestri v. Gen. Motors Corp., 271 F.3d 583 (4th Cir. 2001), while the plaintiff was in the hospital recovering from injuries sustained in an accident while driving his landlady’s car, his parents contacted a lawyer who had experts examine the vehicle. The experts concluded that the plaintiff’s injuries were much worsened by a malfunction of the airbag deployment system and documented their conclusions with photos. But the plaintiff then discharged the lawyer and hired another, who later filed suit against the car manufacturer. By that time, the landlady had sold the car, and it had been reconditioned. The court held that the plaintiff’s failure to ensure that his landlady’s car remained unchanged justified dismissal of his suit. Given the litigation shackles under which the manufacturer had to operate, that result is understandable, but it is difficult to say that the plaintiff was very culpable.

The Future
For the present, the study of these alternatives goes on. It may produce a rule amendment proposal in mid-2012. If so, that proposal would be published for public comment in August 2012. Those who are interested should be alert to this possible development. Should the public comment period support adoption of a rule change, the amendment could go into effect on December 1, 2014. So, relief is not imminent, but the process of gestation that could lead to some relief is well under way.

Keywords: litigation, trial evidence, preservation, electronically stored evidence

Richard Marcus holds the Horace O. Coil Chair in Litigation at the University of California Hastings College of the Law and is an associate reporter of the U.S. Judicial Conference’s Advisory Committee on Civil Rules.

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