When litigation is possible or pending in a federal case, the litigants should take care to instruct those in possession of documents and especially electronically stored information to preserve and prevent loss of such documents. If the litigation has begun, or is reasonably anticipated, lawyers should send a letter by way of email or written notice to the other side to put them on notice that there is a duty of preservation that has been triggered. They should also describe the electronically stored information believed to be relevant in a case that should be preserved.
The newly amended Rule 37(e) authorizes what measures the courts can use if the electronic information that should have been preserved has been destroyed or lost.
Amended Rule 37(e) provides:
Rule 37. Failure to Make Disclosures or to Cooperate in Discovery; Sanctions
* * * *
(e) . . . If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:
(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or
(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:
(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information was unfavorable to the party; or
(C) dismiss the action or enter a default judgment.
Fed.R.Civ. P. 37(e) (Dec. 2015).
This amended section Rule 37 sounds a lot like Illinois’ Pattern Jury Instruction 5.01, “Failure to Produce Evidence or Witness.”
As amended, Rule 37 calls for “reasonable steps” in the preservation of electronically stored information and allows for curative measures if there is a loss or destruction of ESI. Before this amendment, there was some different standards that were found in the federal circuits that imposed sanctions or other punitive measures for parties who chose not to preserve electronically stored information. This amendment solidifies the circuits on what happens in the event of lost or destroyed ESI.
One of the keys to this amendment is the measure of harm to the party that loses or destroys evidence. The courts are authorized to impose measures no greater than necessary to cure the prejudice or “curative measures.” So in the case where there is lost or destroyed evidence or documents as such that the court finds that the loss or destruction was accidental or unintentional, then curative measures might include the barring of certain evidence about the party’s failure to preserve the evidence.
There is a much worse result, including spoliation measures where Subsection (e)(2) occurs where the party acted with the intent to deprive a party of ESI. In a case where the court finds that the party acted intentionally, the court is allowed to impose much more severe spoliation measures including an instruction to the jury that the electronic information was unfavorable, dismissing the action or entering a default judgment. That section of the amendment seems to follow closely the Illinois Pattern Jury Instruction 5.01 where a party has failed to produce a witness or produce evidence that was under its control and should have been produced by reasonable diligence.
To avoid problems with electronically stored information, lawyers should send the hold letter when it is known or reasonably should know of future litigation or that an investigation is underway.
In the event that a lawsuit is filed, the defendant party served is under a legal duty to preserve all potentially relevant ESI. Whether the preservation of ESI and other documents is relevant is still a question that must be answered. The test is whether the ESI that must be preserved is relevant and proportional to the subject matter in the lawsuit. Therefore, once a party reasonably believes litigation is on its way, the party must suspend routine document retention and destruction policies and put in place a litigation hold. Lawyers should advise clients to have in place a record retention policy that would require destruction of the ESI only at appropriate intervals. No destruction of ESI should occur when the party has a legal duty to preserve has arisen.
Federal Rules of Civil Procedure ¶ 37(e) (December 2015).
Kreisman Law Offices has been handling federal jury trials, commercial litigation, Illinois civil litigation, business disputes and catastrophic injury cases for individuals, families and businesses for more than 40 years, in and around Chicago, Cook County and its surrounding areas, including, Tinley Park, Chicago Ridge, Calumet Park, Marionette Park, Alsip, Dolton, Oak Forest, Maywood, Bridgeview, Northlake, Schaumburg, Wilmette, Niles, Park Ridge and Prospect Heights, Ill.
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