Spoliation

How does Rule 37(e) treat spoliation?

Before 2015 the federal circuits disagreed sharply about what state of mind justified an adverse-inference instruction for lost ESI, and the disagreement drove over-preservation: parties kept everything because the consequences of a mistake were unpredictable. The 2015 amendment to Rule 37(e) replaced that with a single framework.

The rule first requires four things: that the ESI “should have been preserved in the anticipation or conduct of litigation”, that it “is lost”, that the loss occurred “because a party failed to take reasonable steps to preserve it”, and that it “cannot be restored or replaced through additional discovery”. Data recoverable from another custodian or another system is not lost for this purpose, which is one reason global deduplication and multiple custodians matter defensively.

Then the rule splits by state of mind. On a finding of prejudice, the court “may order measures no greater than necessary to cure the prejudice”. Only on a finding “that the party acted with the intent to deprive another party of the information’s use in the litigation” may the court presume the lost information was unfavorable, so instruct the jury, or dismiss the action or enter a default judgment.

What follows in practice is that the defensible answer to a spoliation allegation is documentary. A litigation hold issued and acknowledged, a collection log recording scope, and a chain of custody with acquisition hashes together evidence reasonable steps. None of them can be assembled afterwards.

What does spoliation look like in practice?

The two tiers of Rule 37(e), and what separates them:

What a court may order under Rule 37(e), by finding

Finding	What the court may order
Prejudice from the loss	Measures no greater than necessary to cure the prejudice
Intent to deprive	Presumption the information was unfavorable; adverse-inference instruction; dismissal or default

The distinction is state of mind, not the volume lost or how important the data turns out to have been. A party that loses a great deal through a badly scoped hold faces the first row. A party that switched off an archive after receiving a demand letter faces the second.

How does spoliation show up on an eDiscovery invoice?

Preservation itself is rarely a vendor charge. Where a provider is engaged early to preserve in place, it appears as per-custodian or per-source preservation fees, and the collection that follows is billed per custodian, per source or at hourly forensic rates.

The comparison worth drawing is with the cost of the alternative. Defending a spoliation motion means forensic analysis to establish what was lost and when, attorney time, and often a restoration from sources that were never meant to be searched. All of it is billed at hourly rates, and none of it advances the case.

Over-preservation has its own cost, and it is the one Rule 37(e) was amended to reduce. Every gigabyte held beyond what was needed still runs through processing and accrues recurring per-GB monthly hosting if it is collected. A hold scoped precisely is cheaper than a hold scoped defensively, and both are far cheaper than a hold scoped too narrowly.

Sources

• Fed. R. Civ. P. 37(e), quoted, and the 2015 Advisory Committee Notes on the circuit split the amendment resolved.
• Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003) (Zubulake IV), on when the duty to preserve attaches.
• Fed. R. Civ. P. 26(f) on discussing preservation at the conference.
• The Sedona Conference, Commentary on Legal Holds, Second Edition.
• Fee structure: the Fee Field Guide dataset.