Adverse Inferences for Spoliation of ESI: Do New Federal Rules Impact NJ Jurisprudence?

On Dec. 1, 2015, the proposed amendments to the Federal Rules of Civil Procedure went into effect. One of the most significant changes concerned Rule 37(e), which governs remedies available to parties when electronically stored information (ESI) is not adequately preserved. Initially adopted in 2006, the original Rule 37(e) sought to balance the common-law duty to preserve with the practical consequences of routine auto-delete features. It stated: “Absent exceptional circumstances, a court may not impose sanctions for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.”

Yet less than 10 years following its debut, the rule makers determined that Rule 37(e) should be replaced in its entirety. First, the limited nature of the rule did not adequately address the challenges arising from the explosion of ESI in recent years. Today, we cannot imagine a world without smartphones. But when the 2006 rule amendments were published for public comment in August 2004, there were no iPhones, iPads or Twitter, and Facebook was only six months old. Second, the rule spawned conflicting standards in different circuits regarding when sanctions such as adverse inferences could be imposed—was negligence sufficient or was bad faith required? Finally, the uncertainty in that standard led to the over-preservation of ESI and the needless expenditure of millions of dollars.