Amended Federal Rule of Civil Procedure 37(e), which takes effect on December 1, 2015, authorizes courts to impose sanctions if electronically stored information (ESI) is lost because a party failed to take “reasonable steps to preserve it.” Although “reasonable steps” is a phrase that will surely be litigated and ultimately defined by the courts, the Advisory Committee Notes provide some insight into the intent behind the revision, which is a wholesale replacement of the old Rule 37(e), and outline factors that a court may consider in analyzing whether a party’s preservation efforts satisfy the new standard.
The Advisory Committee Notes are clear that “reasonable steps” is not synonymous with perfection, expressly recognizing what litigants have known for years—that the “ever-increasing volume of electronically stored information” and the “multitude of devices that generate such information” have made “perfection in preserving all relevant” ESI nearly “impossible.”
Although the Advisory Committee Notes are not as unequivocal on what is reasonable, they do provide a road map of the factors a court might consider in assessing whether a party’s preservation efforts rise to the level of “reasonable steps.” These factors include:
- The sophistication of the parties with regard to litigation. A multinational corporation or serial litigant will likely be held to a higher standard than an individual plaintiff.
- A party’s awareness of the risk of loss. The Advisory Committee Notes indicate that a party should not be held accountable for a loss outside of its control but suggest that courts may consider the party’s knowledge of the risk of loss and whether adequate steps were taken to guard against such risk.
- Acknowledging that “aggressive preservation” carries a hefty price tag, the Advisory Committee Notes recommend considering a party’s financial and human resources and acknowledge that less costly methods of preservation may be acceptable if they are “substantially as effective” as more costly forms.