FRCP Rule Changes Approved Standing Committee in May
Proposed FRCP Amendments Adopted by Committee on Rules of Practice and Procedure, Next Step Judicial Conference this September
A significant step was taken at the end of May, when the Committee on Rules of Practice and Procedure (the Standing Committee) adopted the proposed amendments to the FRCP. Now approved by the Standing Committee, the amendments will be reviewed next by the Judicial Conference of the United States in September and thereafter by the Supreme Court and finally Congress. Barring any bumps along the way, the new rules should take effect December 2015. From an e-discovery perspective the most significant amendments involve the changes to Rule 26(b)(1) and Rule 37(e) addressing proportionality and e-discovery scope, preservation requirements and the court imposed remedies or sanctions for the unintentional or deliberate loss of electronically stored information “ESI.”
Rule 37 (e) – Failure to Preserve ESI
Many of the 2,345 public comments narrowed in on the proposed amendments to Rule 37(e) addressing the creation of a new federal standard for sanctions in connection with spoliation. As a result, and upon further consideration, the Standing Committee significantly revised proposed Rule 37(e) before submitting it to the Judicial Conference for approval.
Throughout the efforts to amend Rule 37 (e) the goal has been to create uniformity around the use of sanctions when a party fails to preserve ESI and “relieve the pressures” that lead to “massive and costly over preservation” by litigants. The Rule is limited to ESI and centers on what a court may do when a party fails to take “reasonable steps” to preserve ESI, directing that the emphasis should be on determining if the lost ESI can be restored or replaced through additional discovery efforts. The revised rule therefore precludes sanctions based upon even gross negligence and recommends restoration through judicially ordered additional discovery and if that is insufficient, upon a finding of prejudice allows for measures “no greater than necessary to remedy the prejudice.” However, in those instances when it is found that a party intentionally acted to deprive another party of the information for use in litigation, the court can assume that the information was unfavorable, instruct the jury it may assume the information was unfavorable, dismiss the action or grant default judgment.
Interestingly, in weighing the trade-offs between the risk of sanctions and over preservation, the Committee stated that while reducing over preservation is a “worthwhile goal,” it realized that the savings to be achieved from reducing over-preservation are “quite uncertain.” Further noting that while commenters complained about the high cost of preservation, none were able to provide a “precise prediction” of the savings associated with reducing the fear of sanctions. Because many incentives for significant preservation would remain, including business operations as well as statues and regulations, the potential savings resulting from reducing over preservation were “too uncertain to justify seriously limiting trial court discretion.” Report to the Standing Committee Advisory Committee on Civil Rules, May 2, 2014, page 38.
Rule 26 (b) (1)-Proportionality and the Scope of Discovery
In an effort to emphasize the importance of proportionality considerations for judges and lawyers when deciding on the appropriate scope of discovery, the proportionality factors were moved to Rule 26(b)(2)(1) which now permits a party to “obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable” (new language highlighted). In their notes, the Committee states that the parties and the court have a “collective responsibility” to consider the proportionality of discovery and consider it in resolving discovery disputes.” It further explained the importance of “information asymmetry” noting that the burden of responding properly lies more heavily on the party who has more information.