A Proposal for Preservation Rule Amendments

In 2000, Judge Scheindlin warned, “It is safe to predict that federal courts will see a surge in the number of discovery disputes arising from electronic discovery.” (Scheindlin, S. Rabkin, J.,“Electronic Discovery in Federal Civil Litigation: Is Rule 34 Up to the Task?” 41 B.C. L. Rev 327, 341 (2000). Six years later, amendments to the Federal Rules of Civil Procedure established guidelines for eDiscovery but failed to address preservation.

In 2010, Judge Scheindlin admonished, “By now, it should be abundantly clear that the duty to preserve means what it says.” (Pension Committee of the Univ. of Montreal Pension Plan v. Banc of America Securities LLC, et al., 685 F. Supp. 2d 456, 462 (S.D.N.Y. Jan. 15, 2010).

Unfortunately, what should be “abundantly clear” is still unclear. There are no rules clarifying preservation. The problem is especially vexing and expensive because preservation decisions happen so early, well before the parties meet under Rule 26 or the courts get involved and can limit the scope of discovery. By the time the rules kick in, the preservation decisions may be irreversible. Parties trying to decide if and how a lawsuit affects information management practices, back-up tape rotation practices, or email server policies, must apply the “better safe than sorry” rule and save unreasonably large volumes of ESI.

Will it take another 6 years to pass rules on preservation? The Judicial Conference Subcommittee on Discovery recently made excellent progress at a meeting in Texas identifying some of the problems created by the hole in the 2006 amendments.

But perhaps we are making this harder than it needs to be. Perhaps the solution to the preservation dilemma can already be found in the 2006 amendments. After all, the Rules Committee(s), the folks at Sedona, and other commentators who hashed out the 2006 amendments built in some excellent safeguards. Under the rules:

• Inaccessible ESI is off limits. Producing parties may identify inaccessible data sources and then exclude those sources from production.
• The Rule 26 “proportionality” balancing test applies specifically to producing ESI, and if the burden or expense of production outweighs the likely benefit, the party need not produce it.
• Under Rule 37, sanctions may not be awarded for good faith loss of ESI.

While imperfect, these protections provide some guidance to litigants faced with daunting discovery demands. Why not extend those same protections, explicitly, to preservation? The solution could be as simple and elegant as adding the words “or preservation” to the existing rules that protect litigants from disproportionate discovery costs.

So, here is how those amendments to Rules 26 and 37 would look:

Rule 26. Duty to Disclose; General Provisions Governing Discovery
(b) Discovery Scope and Limits.
(1) Scope in General.
Unless otherwise limited by court order, the scope of discovery is as follows: … All preservation and discovery is subject to the limitations imposed by Rule 26(b)(2)(C).

(2) Limitations on Frequency and Extent.
(B) Specific Limitations on Electronically Stored Information.  A party need not preserve or provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for the discovery.

(C) When Required. On motion or on its own, the court must limit the frequency or extent of preservation or discovery otherwise allowed by these rules or by local rule if it determines that:

(i) the preservation or discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;

(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or

(iii) the burden or expense of the preservation or proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.

Adding two words to Rule 37 would explicitly extend the “safe harbor” to preservation:

Rule 37. Failure to Make Disclosures or to Cooperate in Discovery; Sanctions
(e) Failure to Provide Electronically Stored Information.
Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to preserve or provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

We need to extend the protections in the rules in order to protect litigants trying to do the right thing. Because right now, what should be abundantly clear remains unclear. And there are already helpful safeguards that apply to producing electronic information. Applying those helpful safeguards to preservation – explicitly, in the rules – would help fill the gap. We could continue to work toward “bright line rules” on scope and trigger date. But, for now, these simple amendments could help guide practitioners facing the unclear rules governing ESI preservation.

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