In the debates leading up to the 2006 amendments to the Federal Rules of Civil Procedure,  much controversy was stirred by the proposal to add a  “safe harbor” from spoliation sanctions.  The version of the safe harbor that was enacted in what is now Rule 37(e) bears little resemblance to what was originally offered for public comment; continued reference to the rule as a “safe harbor” is more often than not sarcastic.   Given the gaping caveats that characterize the rule, its adoption was met with widespread skepticism and an apparent consensus that litigants should not expect the “safe harbor” to provide much protection in the event of a spoliation storm.

Now that the rule has been in effect for more than three years, we can reconsider predictions of its impotence in light of the judicial history of the rule’s application and the response to it in practice.  At first blush, this reconsideration seems to affirm these predictions.  Generally, courts have interpreted the rule as inapplicable once the duty to preserve arises.  In other words, when the duty to preserve arises, the “routine” and otherwise “good faith” operations of information technology systems must be suspended.
 
This interpretation of the rule has been reiterated by a number of courts that have refused to absolve alleged destruction of evidence.  These decisions underscore the analyses immediately following  the rule’s enactment predicting its lack of utility.  If the rule does not offer protection for spoliation committed after the duty to preserve has arisen, when does it offer protection?  Is there an implicit suggestion that spoliation can be punished even where it occurred prior to the attachment of a duty to preserve?  These questions have not been answered by the cases applying the rule.

The controversial Adams v. Dell opinion from a federal district court in Utah, in which an accused spoliator argued that the safe harbor protected it from sanctions, includes a detailed analysis of the putative retention policy that led to the loss of information.  The Adams court concluded that a policy with no centralized control, where retention decisions reside in the individual discretion of each employee/custodian, is not the kind of “routine” or “good faith” policy that Rule 37(e) intends to protect.  While the Adams court also found that a duty to preserve had arisen prior to the alleged spoliation, its analysis is reminiscent of earlier cases examining the destruction of evidence pursuant to document retention policies where the destruction occurred prior to the arising of a duty to preserve in connection with the particular litigation before the court.
 
This leaves the issue of the rule’s application fairly murky at best. To put the question bluntly: If the rule does not protect the loss of information after the triggering of a duty to preserve,  does this mean that the loss of information can result in sanctions even  absent a duty to preserve for purposes of a particular case? Are there two kinds of duties to preserve—one that exists even before reasonable anticipation of litigation and another that attaches with reasonable anticipation?
 
In practice, the prevailing point of view seems to be that document retention policies should be formulated and enforced in a way that integrates Rule 37(e)’s criteria of “routine” and “good faith.”  Even without the existence or reasonable anticipation of a specific lawsuit, prudence dictates that document retention policies be based on sound business and technical rationales.  And of course, these policies should incorporate provisions for suspending destruction when reasonable anticipation of a particular litigation triggers a duty to preserve.   There is a widely held notion that inquiry into the operation of a document retention policy prior to the triggering of a duty to preserve is misguided. We have been reminded by the courts time and again that once a duty to preserve is triggered, “routine” and “good faith” policies are trumped by the imperatives of the litigation hold. Under this state of affairs, Rule 37(e) may well be a trap for the unwary who seek to interpret the rule in a way that gives it effect—while they don’t see a need for protection from a duty to preserve that doesn’t exist, the rule doesn’t protect them from one that does.

About Adam I. Cohen

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