Federal Rule of Civil Procedure 37(e) was adopted in 2015 to provide federal courts with a uniform standard to determine when and whether to impose sanctions on parties who have failed to preserve electronically stored information (ESI). Courts, though, have differed in their application and interpretation of the rule, and scant guidance on Rule 37(e) has been provided to magistrate and district court judges by circuit courts of appeal.

In a recent decision, the U.S. Court of Appeals for the Ninth Circuit clarified and affirmed the use of Rule 37(e) as the standard for imposing sanctions for the loss of ESI and upheld the dismissal of a plaintiff's employment discrimination case as a sanction for intentional spoliation of text messages. The decision offers valuable guidance on the elements and evidence of intent under Rule 37(e)(2), the relationship between Rule 37(e) and prior circuit precedent, and the discretion of courts to impose the harshest sanctions for egregious spoliation. It also serves as a cautionary tale for parties who may be tempted to delete or hide relevant ESI from their adversaries.