Can’t We All Get Along? – FRCP 37 Failures and Sanctions

In last week’s post, I discussed changes to the concept of proportionality under the changes to the Federal Rules of Civil Procedure that took effect in late 2015. I’d like to extend on that conversation a bit and talk about the changes to expectations of the parties and, especially, the intended changes to sanctions for failing to live up to those expectations under FRCP 37 et seq. The common thread running through the notes regarding the amendments is that the committee seems intent on bringing clarity to litigants and – at least as far as sanctions are concerned – removing some control from judges. While it seems clear what the committee intended to do, I fear that in some instances, the language of the amendments may not be as clear. In fact, several Federal district courts have already cited the new FRCP when addressing discovery disputes. Coincidentally, these cases have focused on the same two areas as in these posts: Rules 26(b)(1) and 37(e) regarding proportionality and sanctions. I’ve included links at the end of this post to a few cases.

Under the revised FRCP 37, specifically rule 37(e), the revisions attempt to address what the Committee saw as a lack of guidance to the judiciary about when a failure to preserve warrants severe measures. The new rule includes an element of intent in the analysis of a failure to preserve. Now, a court must find that a party acted “with the intent to deprive another party of the information’s use in the litigation” before imposing terminating sanctions or an adverse inference instruction. I find it interesting to note that, in my opinion, this rule seems to give judges less discretion whereas, in one of the cases referenced below, the magistrate expressed the notion that the, “the amendment is in some respects more lenient as to the sanctions that can be imposed for violation of the preservation obligation” and thereby gives the arbiter greater discretion regarding remedies for failure to preserve. The judge also provides extensive citation leading up to why he believes this is so. The case is CAT3 v. Black Lineage, (S.D.N.Y. Jan. 12, 2016). Thus, on its face, FRCP seems to bifurcate the spoliation analysis around the intent of the spoliating party: severe sanctions when a party intended to spoilate evidence, and less severe punishment, “no greater than necessary to cure the prejudice,” without a showing of intent. Any way you slice it, there will have to be more analysis of the facts surrounding preservation efforts of the parties. Vendors, get your forensic data collection kits ready…

Finally, I would like to spend a little time on a small amendment to FRCP 37(a)(3)(B)(iv). The rule now effectively reads that a party may enter a motion to compel when a party “fails to produce documents”. On its surface, this amendment doesn’t have a substantive effect on the abilities of the parties to seek a motion to compel and the Committee note states that the rule “is amended to reflect the common practice of producing copies of documents or electronically stored information rather than simply permitting inspection” and brings the rule in line with the text of FRCP 37(a)(3)(B). I wonder, however, if the ambiguity of the language somehow lowers the bar for when a motion to compel is warranted because there is no guidance as to why the failure to produce occurred. Was the failure due to oversight? Privilege designation? Spoliation? A good faith belief that the documents were not responsive? When combined with the Committee’s expressed desire for greater judicial involvement in discovery, could this small amendment lead to greater motion practice? While it seems possible but unlikely, only time will tell.

Links: CAT3 v. Black Lineage, (S.D.N.Y. Jan. 12, 2016). Gilead Sciences, Inc. v. Merck & Co., Inc., No. 5:13-cv-04057-BLF, 2016 WL 146574 (N.D. Cal. Jan. 13, 2016). NuVasive, Inc. v. Madsen Medical, Inc. et al, No. 3:2013cv02077 – Document 166 (S.D. Cal. 2015).