In my last post I announced that discussions are taking place that could change the way preservation and sanctions issues are handled within the federal court system. The next round of discussions about possible amendments to the Federal Rules of Civil Procedure (FRCP) is scheduled to take place on September 9th in Dallas, Texas as part of a “mini-conference” led by the Discovery Subcommittee – a committee appointed by the Advisory Committee on Civil Rules. This post discusses three different rule amendment approaches that attendees have been asked to consider in order to help them prepare for the mini-conference. A complete list of attendees, preparation materials, and questions the group will consider are included in the Advisory Committee’s June 29, 2011 memorandum to the participants.
The debate about whether or not rule amendments are even required is far from over. A 452-page document located on the U.S. Courts’ website chronicles many of the meetings, notes, and submissions driving the current discussion. Page 265 of the document contains a memorandum prepared by the Civil Rules Advisory Committee earlier this year, stating that:
“the Subcommittee has reached no conclusion on whether rule amendments would be a productive way of dealing with preservation/sanctions concerns, much less what amendment proposals would be useful.”
Despite concerns that amending the current rules now would amount to jumping the gun, there is an undeniable desire for more clarity around when the duty to preserve electronically stored information (ESI) is triggered, what must be preserved, and when the duty expires. This momentum has resulted in the crafting of draft proposals that are likely to help frame the discussion on September 9th. The “proposals” are really draft approaches that have been broken down into three general categories described in the Civil Rules Advisory Committee’s memorandum, titled: “PRESERVATION/SANCTIONS ISSUES” (see page 263). The Category 1 approach can best be described as providing a higher degree of specificity than the other approaches. For example, the Category 1 approach provides a fairly detailed explanation of the duty to preserve evidence (Rule 26.1(a)) and details possible triggers (26.1(b)), the scope of the duty to preserve (26.1(c)), and sanctions (Rule 37). Category 2 proposes a more general preservation rule, while Category 3 only addresses sanctions as a tool for influencing behavior. The three categories are discussed in more detail below.
Category 1: Specific Rule
This draft includes many different exemplary lists, alternative approaches, and footnotes that highlight the fact that one of the key challenges with drafting a specific rule is trying to foresee all of the challenges that might lie in the road ahead. For example, the draft rule provides a long list of events that could trigger the duty to preserve evidence, including everything from serving a pleading to taking “any other action” in anticipation of litigation. The rule also provides a list of information types that are “presumptively excluded” from the preservation duty, such as deleted data on hard drives, temporary internet files, and physically damaged media.
The lists are helpful in that they provide guidance. However, each list also includes a “catch-all” provision to address scenarios that might not be foreseeable. The inclusion of catch-all provisions highlights the inherent challenge of providing more clarity and certainty without creating rules that are so inflexible that they are difficult to apply to unforeseen factual scenarios or technological developments. Some might argue that trying to provide a laundry list of examples will make passage of new rules difficult because each item on the list will stir debate. Others contend that the lists add little value because the catch-all provisions will still require litigators to pass the sniff test of “reasonableness.”
Despite the inherent challenges related to drafting rules with specificity, most practitioners would likely support the inclusion of lists or examples that provide at least some direction. What is likely to be far more controversial with respect to Category 1 is the use of alternative language proposing fixed limits around custodians and litigation holds. For example, one alternative would limit data preservation requirements to a fixed number of custodians and the duty to preserve evidence would similarly expire after a fixed number of years. Bright line rules like these may be easier to understand, but they also tend to be controversial since they lack the flexibility necessary to fairly address every conceivable situation.
Category 2: General Rule
Like the Category 1 proposal, the Category 2 proposal uses lists and outlines several alternative approaches throughout the rule. However, the Category 2 proposal fundamentally differs from Category 1 by outlining a more general approach. For example, one of the alternatives essentially states that the duty to preserve evidence is triggered whenever a “reasonable person” would expect to be a party to an action. Similarly, the ongoing duty to preserve information after the duty has been triggered would be evaluated based on what is described as a “reasonable period” under the circumstances.
The beauty of this more general approach lies in its simplicity and flexibility. The idea is that evaluating conduct based on the “reasonableness” of a person’s actions is much easier than attempting to draft bright line legal guidelines that account for every possible factual scenario. The flip side is that reasonable minds could differ and results could be inconsistent if there are no bright line rules. What this means in the context of the federal rule discussion is that one judge might find a party’s conduct with respect to data preservation efforts reasonable, while another judge might issue sanctions based on the same set of facts. In large part, it is this lack of certainty and guidance in the current rules that sparked the current debate in the first place.
Category 3: Sanctions-Based Rule
Unlike the first two categories, the Category 3 approach focuses only on sanctions and would act like more of a “back-end” rule. In other words, the rule would not contain any specific directives about preservation, but it would provide direction in the areas of when and how sanctions might be applied.
Despite the draconian image a “sanctions” based rule might conjure up, the Category 3 rule may seem surprisingly lenient to some. For example, absent extraordinary circumstances, the court would be prohibited from imposing any of the sanctions listed in Rule 37(b)(2) or from giving an adverse-inference instruction unless:
“the party’s failure to preserve discoverable information was willful or in bad faith and caused [substantial] prejudice in the litigation.”
The sanctions based approach would almost certainly have an impact on how parties handle upstream preservation related issues. However, the key ingredients that will impact what kind of behavior this rule drives are the severity of the threatened sanction as well as the applicable standard. For example, a party facing severe sanctions for conduct that is either negligent, willful or in bad faith is likely to take their preservation obligations seriously. On the other hand, if the realm of possible sanctions is trivial, parties are less likely to take their preservation related obligations seriously.
The three rule approaches represent very early attempts at framing possible approaches to amending the FRCP. If the Discovery Subcommittee chooses to recommend rule amendments following the September 9th mini-conference in Dallas, the proposed language is likely to be closer to final form and easier to assess than the current proposals. I will continue to monitor the rule making discussion and provide commentary in future posts. Stay tuned for my next post where former US Magistrate Judge Ron Hedges explains why he thinks the rule changes are unnecessary and why the current proposals might run afoul of the Rules Enabling Act.