Spoliation of Digital Evidence: New Rules, Same Problems

In the beginning, there was Zubulake. The series of opinions that put e-discovery on the legal map concerned a plaintiff suing UBS Warburg for gender discrimination. When the plaintiff received far less discovery than she reasonably expected to receive (less than she herself had maintained from her time as the defendant’s employee), she moved to compel production and, eventually, for spoliation sanctions. The court ordered that an “adverse inference” instruction be issued, compelling the jury to find that anything not produced by the defendant would have proven the plaintiff’s case.

In the wake of Zubulake and opinions that followed, parties who had to produce e-discovery (typically, defendants) argued that, given the volume of electronically stored information (ESI) generated by such parties, and the fact that that volume will continue to grow vertiginously, parties should not be sanctioned for failure to preserve (and, hence, failure to produce) ESI simply because they perform the difficult and expensive act of preservation badly. Rather, they should be sanctioned only if they intentionally failed to preserve ESI. Congress agreed and amended Federal Rule of Civil Procedure 37(e), effective Dec. 1, 2015. The amended rule stated that if ESI that should have been preserved “in the anticipation or conduct of litigation” was lost “because a party failed to take reasonable steps to preserve it” and it could not be restored or replaced,” the court, upon “finding prejudice to another party from loss of the information,” could order measures no greater than necessary “to cure the prejudice.” Given, however, the difficulty of proving that the failure to produce ESI prejudiced the requesting party when, by definition, the ESI is absent and so one cannot know whether it would have been helpful to the requesting party, Rule 37(e) further stated that when the producing party “acted with the intent to deprive another party of the information’s use in the litigation,” the court could “presume that the lost information was unfavorable to the” producing party. By amending the rule to emphasize that the aforementioned sanctions were available only if the requesting party proved that it had been prejudiced by the failure to produce the requested ESI, which prejudice could be inferred if the requesting party proved that the producing party intentionally failed to produce such ESI, Congress hoped to strike a balance between requesting parties complaining that their cases had been undermined by the failure of producing parties to preserve ESI and producing parties complaining that, to avoid being sanctioned for spoliation in matters not yet even filed, they would have to revise their digital infrastructure to preserve absurd volumes of ESI at unspeakable costs.