With the explosion of technology, businesses today generate immeasurable quantities of electronic data. And when they face the mere prospect of litigation, current rules often force businesses to store and maintain—at significant cost—any data that may relate to that litigation. Such a broad and nebulous standard for preserving electronically stored information (ESI) often leaves a business with more questions than answers regarding what it must preserve. But it wasn’t always this way. Under the historical common-law standard, the duty to preserve attached only when a party filed suit (or filing was imminent), and generally required only that parties not destroy evidence directly related to the litigation. This standard substantially lessens the burden businesses face when litigation looms by providing far clearer answers to two key questions. One, when does the duty to preserve attach? And two, what data must be preserved? With the proliferation of ESI, the modern duty to preserve forces corporate defendants to shoulder an unfair portion of the discovery burden. By returning to the historical common-law approach, courts can restore the traditional balance and equity in discovery.
The Duty to Preserve
Today, the duty to preserve comes largely from Judge Scheindlin’s opinion in Zubulake IV (S.D.N.Y. 2003). Zubulake IV holds that the duty to preserve is triggered “when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” In other words, “at the time that litigation [is] reasonably anticipated.” As for the scope of the duty, a party “must not destroy unique, relevant evidence that might be useful to an adversary.” That includes what the party “knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, [or] is reasonably likely to be requested during discovery.”
As detailed more fully in the law review article, “Sometimes, Old Rules Know Best: Returning to Common Law Conceptions of the Duty to Preserve in the Digital Information Age,” Catholic University Law Review, (Winter 2018), the historical common law was very different. At common law, the duty to preserve attached only once litigation began (or was imminent). That is, the duty started when a party filed a lawsuit (or when that lawsuit was plainly forthcoming). And courts generally agreed that this duty extended only to information and documents that would be direct evidence in litigation—not, as Zubulake IV found, to information and documents that could lead to admissible evidence. This narrowed focus allowed courts (and litigants) to identify the relevant pieces of evidence relatively easily, significantly reducing the number of documents a party needed to preserve.
Sanctions for Spoliation
But the differences between the modern-day and common-law duty to preserve do not stop there. According to Zubulake IV, a spoliation sanction—even one of the most severe, an adverse inference—may be imposed if a party destroys evidence relevant to the party’s claim or defense, had a duty to preserve that evidence, and did so with a “culpable state of mind.” What makes this standard broad? Ordinary negligence counts as a culpable state of mind. Common-law courts had a far narrower view of when spoliation sanctions were appropriate, generally requiring a showing that the spoliator acted with bad faith or with the intent to obstruct litigation.
In Zubulake IV’s wake, the Advisory Committee on Civil Rules revised Federal Rule of Civil Procedure 37(e), which permits courts to take only proportional, remedial action in response to spoliation that prejudices another party. This rule is triggered only when “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.” Thus, not all losses of ESI will implicate the rule, which calls for “reasonable steps, not perfection.” The Committee also rejected Zubulake IV’s negligence standard for an adverse inference, allowing this severe sanction only “upon finding that a party acted with the intent to deprive another party of the information’s use in the litigation.”
The Path Forward
Although revised Rule 37(e) addresses parts of the problem, it has not drastically altered the ESI preservation landscape, as the Subcomittee itself recognized. That is because the Subcommittee did not address the scope of the duty of preservation, instead leaving these critical questions—when the duty to preserve arises and what material it covers—to the courts. To answer these questions, we should return to the historical common law approach, which offers more clarity on these two key inquiries. By instituting preservation obligations only upon the actual filing of a lawsuit (or when a suit is imminent), litigants can ensure a fair discovery process without spending exorbitant sums on maintaining and reviewing documents that will never be relevant to an actual lawsuit. To move forward and keep up with the digital age, we must look back.