National Association of College and University Attorneys June 22, 2017 Vol. 15 No. 10

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1 National Association of College and University Attorneys June 22, 2017 Vol. 15 No. 10 TOPIC: E-DISCOVERY UPDATE: E-DISCOVERY UNDER THE AMENDED FEDERAL RULES OF CIVIL PROCEDURE AUTHORS[1]: David J. Kessler, Partner, Norton Rose Fulbright Caroline M. Mew, Senior Counsel, Norton Rose Fulbright Andrea D Ambra, Partner, Norton Rose Fulbright INTRODUCTION: This is the third in a series of NACUANOTES on e-discovery. The Preparing for E-Discovery NACUANOTE,[2] published in 2008, provided a general overview of e-discovery, encouraging institutions of higher education to be proactive in preparing for e-discovery and providing advice on steps that such institutions can take to prepare for e-discovery before litigation begins. That guidance remains relevant today. The second NACUANOTE,[3] published in 2013, provided an updated overview of e-discovery obligations in light of the growing body of case law addressing electronic data preservation and production issues. This NACUANOTE will address the December 1, 2015 amendments to the Federal Rules of Civil Procedure[4] that are relevant to e-discovery obligations of institutions of higher education.[5] Specifically, although Rules 1, 4, 16, 26, 30, 31, 33, 34, 37, 55, and 84 were amended,[6] this Note will focus on changes to Rules 16, 26, 34, and 37 that impact parties e- discovery obligations, as well as recent case law interpreting and applying these amended rules. Perhaps the two greatest takeaways from the amendments are the increased emphasis on proportionality at all stages of discovery including document preservation, review, collection, and production and the dramatic changes to Rule 37(e) regarding sanctions for the 1

2 failure to preserve. Institutions of higher education also should keep in mind the importance of cooperation throughout the litigation process, including e-discovery.[7] DISCUSSION: SUMMARY OF RULE CHANGES ADDRESSED The amendments to Rules 16, 26, 34, and 37 are intended to accelerate, streamline, and encourage increased cooperation in discovery, particularly as to matters involving electronically stored information (ESI). Rule 16 addresses pretrial conferences, scheduling, and case management, and was amended in various ways to provide for early meet-and-confer conferences between the parties and active judicial management of discovery. Rule 26 was significantly reworked to narrow discovery and explicitly emphasizes and expands upon the concept of proportionality. Rule 34 now addresses document production requests and responses, and significantly changes how parties respond in writing to such requests and ultimately produce responsive documents and ESI. Finally, Rule 37(e) specifically addresses the consequences when relevant ESI is lost. The following discussion highlights the changes to these Rules and, in particular, their effect on e-discovery. RULE 16 ( Pretrial Conferences; Scheduling; Management ) Rule 16(b)(2): Accelerated litigation schedule The default time for the court to issue a litigation scheduling order has been shortened to the earlier of 90 days (rather than 120 days) after any defendant has been served or 60 days (rather than 90 days) after any defendant has appeared.[8] This also shortens the default time period for parties to hold their initial Rule 26(f) discovery planning conference, which generally precedes the issuance of any scheduling order.[9] The rule also allows a judge to delay issuance of the scheduling order for good cause. [10] As the Advisory Committee Notes acknowledge, parties in more complex cases may need additional time to adequately prepare for the initial Rule 26(f) planning conference, and therefore the time for issuance of the initial scheduling order may need to be extended.[11] Nevertheless, the Advisory Committee Notes also provide that in most cases it will be desirable to hold at least a first scheduling conference in the time set by the rule. [12] It is important for institutions of higher education to take the time and effort necessary to fully prepare for the initial Rule 26(f) discovery planning conference so that they can set the agenda and ensure that they enter into agreements with the opposing party that minimize both their discovery costs and their discovery risks.[13] Such institutions should be aware of the shortened timeline under amended Rule 16(b)(2) for issuance of the initial scheduling order (and thus the shortened deadline for holding the Rule 26(f) planning conference) and be prepared to meaningfully address e-discovery issues at a very early stage in the litigation. At the same time, institutions of higher education also should be aware that, due to the complexity of e-discovery issues and the renewed emphasis on proportionality under the Federal Rules, multiple conferences held throughout the litigation may be necessary to reasonably manage e- discovery obligations. Higher education institutions face a number of challenges with respect to the preservation and collection of ESI that, while not unique, are nevertheless more prevalent given their 2

3 organizational structure and overarching mission. For example, because such institutions necessarily deal with younger (and generally more technologically savvy) people than the average corporation or governmental organization, they are often early adopters of new technology. These new technologies may create significant amounts of data that can be difficult to preserve and expensive to collect. In addition, these data sources are often only marginally relevant. It can be helpful to identify these sources before the Rule 26(f) conference because, in many cases, the parties can agree up front to exclude data sources with marginal relevance, the preservation of which would cause an undue burden. It is not possible in every case, however, to exclude data sources such as mobile devices, cloud storage, or social media accounts, because, depending on the claims and defenses in the case, these sources may hold highly relevant information. Parties must make a case-by-case determination. In addition, many institutions of higher education serve as internet service providers for their students, faculty, and staff. In the rare cases where the identity of the person who accessed documents or systems and the timing of such access are at issue, an institution may have to move quickly to preserve IP audit logs and other automated access logs. Although not normally implicated in most cases, when these logs are potentially relevant, they are considered reasonably accessible and thus should be preserved with other potentially relevant information.[14] Conducting a thorough assessment with key players and the IT department once the duty to preserve has attached in a case is an important step in identifying these data sources in preparation for the Rule 26(f) conference. In a setting where faculty members and staff conduct growing amounts of their work on personal mobile devices, determining whether those devices are under the control of the employing institution can also be a challenge. Courts across the country have split on the legal definition of control, with some federal courts holding that an employer must have a legal right to obtain the information before it is deemed to have control over (and thus a duty to preserve) the information,[15] and other federal courts holding that an organization has control over information whenever it has the practical ability to obtain the information, regardless of whether there is any legally enforceable right to do so.[16] For an institution of higher education, this could mean that where the school permits faculty and staff members to conduct business on their personal mobile devices, the school may be deemed to have either the legal right (if the school has a formal Bring Your Own Device or BYOD policy) or the practical ability (through threat of termination) to obtain the potentially relevant information and therefore it must take reasonable steps to ensure its preservation.[17] Rule 16(b)(3)(B): Additional e-discovery matters addressed in the initial scheduling order Amended Rule 16(b)(3)(B) adds additional permissible subjects relevant to e-discovery to be addressed in the initial scheduling order for a case. First, while Rule 16 previously stated that a scheduling order could provide for disclosure or discovery of electronically stored information, it now provides that the scheduling order may provide for the disclosure, discovery, or preservation of electronically stored information. [18] This correlates to a new provision in Rule 26(f)(3)(C), which adds ESI preservation to the list of subjects to be discussed in the parties initial scheduling meeting. Of course, an obligation to preserve documents including ESI will almost always arise prior to the time the initial scheduling order is issued or the discovery planning conference is held, so litigants should use the opportunity presented by the amended rule to address ongoing document preservation obligations. As discussed earlier, institutions of higher education can 3

4 use the Rule 26(f) conference and any resulting ESI protocol or order to narrow the scope of preservation and potentially eliminate data sources that have only a tangential relationship to the matter and would be expensive to preserve (e.g., mobile devices or social media sites). Second, the amended rule contemplates that the court s scheduling order may include any agreements reached between the parties under Federal Rule of Evidence 502.[19] A similar provision is also added to Federal Rule of Civil Procedure 26(f)(3)(D). Federal Rule of Evidence 502(b) provides that disclosure of a communication or information covered by the attorney-client privilege or work-product protection shall not constitute waiver if (1) the disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error.[20] Rule 502(d) allows federal courts to enter orders providing that the disclosure of privileged material does not constitute waiver in any circumstance, regardless of the efforts made to withhold or rectify the error (which can eliminate discovery disputes about such efforts).[21] Institutions of higher education should take advantage of Rule 502(d) agreements as a matter of course, as they can provide valuable protection against the inadvertent production of privileged materials.[22] Third, scheduling orders may now direct that, before moving for an order relating to discovery, the movant must request a conference with the court[.] [23] The decision whether to require such a conference is left to the discretion of the trial judge, but the Advisory Committee Notes explain that [m]any judges who hold such conferences find them an efficient way to resolve most discovery disputes without the delay and burdens attending a formal motion[.] [24] The expectation is that this increased judicial management through pre-motion conferences with the court will help resolve e-discovery disputes more efficiently. RULE 26 ( Duty to Disclose; General Provisions Government Discovery ) Rule 26(b)(1): Proportionality now explicitly addressed, emphasized and expanded Rule 26 was significantly reworked to narrow discovery and explicitly emphasize and expand upon the concept of proportionality. Rule 26(b)(1) now provides:[25] Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties relative access to relevant information, the parties resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within the scope of discovery need not be admissible in evidence to be discoverable. This revised language brings a number of changes in the approach to discovery. First, the scope of discovery was explicitly narrowed by removing the language that a court could expand the scope of discovery to any matter relevant to the subject matter of the case for good cause.[26] The Advisory Committee Notes explain that this language is rarely invoked and [p]roportional discovery relevant to any party s claim or defense suffices, given a proper understanding of what is relevant to a claim or defense. [27] 4

5 Second, new Rule 26(b)(1) eliminates the provision allowing for discovery of relevant but inadmissible information if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. [28] As the Advisory Committee Notes indicate, this provision was never intended to expand the scope of discovery, but simply to make it clear that inadmissibility was not a bar to otherwise legitimate discovery. The new rule clarifies this point: Information within this scope of discovery need not be admissible in evidence to be discoverable. [29] Finally, the new amendments were designed to emphasize proportionality by explicitly moving up the discussion of proportionality, from former Rule 26(b)(2)(C)(iii) to current Rule 26(b)(1), and listing six factors relevant to proportionality for parties and courts to consider. As one court has explained: No longer is it good enough to hope that the information sought might lead to the discovery of admissible evidence. In fact, the old language to that effect is gone. Instead, a party seeking discovery of relevant, non-privileged information must show, before anything else, that the discovery sought is proportional to the needs of the case.[30] In addition to considering the needs of the case, prior discovery in the case, the amount in controversy, and the importance of the issues at stake in the action all factors relevant under prior Rule 26(g)(1)(B)(iii) Rule 26(b)(1) now provides that the parties relative access to relevant information, the parties resources, and whether the burden or expense of the proposed discovery outweighs its likely benefit are all factors to be considered in assessing the scope of discovery. As succinctly summarized in the Advisory Committee Notes, Information is discoverable under revised Rule 26(b)(1) if it is relevant to any party s claim or defense and is proportional to the needs of the case. [31] The Advisory Committee Notes to Rule 26 also specifically address the burden and expense of electronic discovery, advising: The burden or expense of proposed discovery should be determined in a realistic way. This includes the burden or expense of producing electronically stored information ( ESI ). Computer-based methods of searching such information continue to develop, particularly for cases involving large volumes of electronically stored information. Courts and parties should be willing to consider the opportunities for reducing the burden or expense of discovery as reliable means of searching electronically stored information become available.[32] One example of a court s application of proportionality principles in an ESI discovery dispute can be seen in a workplace discrimination case from the Western District of Washington.[33] The plaintiff filed a motion to compel on a number of discovery issues, including her claim that the defendant failed to conduct proper searches. The plaintiff wanted the defendant to conduct additional searches using 88 new search terms, many of which were quite generic (annoy*, bull, click*, dad, date*, hand, rack, rod, box), and without adding plaintiff s name to the search. The court concluded: Plaintiff s request for searches is overly broad and not proportional to the case.... Searching without the use of Plaintiff s name would not be proportional in this single-plaintiff case. While the additional search terms could possibly yield some relevant results, Plaintiff has not provided specifics about what Plaintiff reasonably expects such a search to show, and Plaintiff has not shown that this information could not be found through other means. For 5

6 example, Plaintiff has not shown that she would be unable to uncover the same information by asking additional questions of witnesses already scheduled to be deposed.[34] As this case also reflects, institutions of higher education involved in discovery disputes should be prepared to fully address the relevant proportionality factors, regardless of whether they are the plaintiff or the defendant.[35] Practicalities often place the initial burden of demonstrating proportionality (or lack thereof) on responding parties. This does not mean that institutions of higher education should not push back on requesting parties to demonstrate the expected value of the discovery and to justify the cost, particularly where documents already have been produced and the additional discovery is arguably cumulative or redundant. They should, however, be mindful of the facts necessary to support a burden argument when first raising it and be ready to raise such facts when meeting and conferring with opposing parties. Although in many cases, because of budgetary constraints, institutions of higher education use in-house IT resources to identify, preserve, and collect potentially relevant data, this does not preclude them from demonstrating burden in a proportionality analysis. Time spent on identification, preservation, and collection tasks is time an IT resource is pulled away from his or her regular duties. It is therefore possible to reasonably estimate the cost to the institution for the hours required to perform these discovery tasks versus a resource s normal duties, either by directly allocating wages for hourly employees to the required tasks or determining the hourly equivalent for salaried employees based on a 40-hour work week. The same sort of allocation can be calculated as needed for the expenditure of other resources such as network space, while direct costs such as additional hard drives can be added as necessary. Altogether, the potential implications of the amendments to Rule 26(b)(1) are significant. By narrowing the scope of discovery in general, institutions of higher education responding to discovery requests should be able to search for, review, and produce smaller, more focused bodies of information in litigation. It is to be hoped that this will lead to cost savings in discovery. Furthermore, by explicitly incorporating proportionality into the scope of discovery, courts and litigants will be compelled to consider both the costs of discovery and the value of the case earlier in the course of litigation. Finally, integrating proportionality into the scope of discovery significantly strengthens the argument that proportionality is also fundamental to defining the scope of preservation of ESI. Rule 26(c)(1)(B): Allocation of expenses in discovery Rule 26(c)(1)(B) now explicitly contemplates the possibility of cost-sharing in discovery. Rule 26(c) governs protective orders, and the amended rule provides that a protective order may be issued that, inter alia, specif[ies] terms, including time and place or allocation of expenses, for the disclosure or discovery at issue.[36] As explained in the Advisory Committee Notes, although courts already held authority to allocate expenses for disclosure or discovery, this [e]xplicit recognition [in the amended Rule] will forestall the temptation that some parties may feel to contest this authority. [37] The notes also caution, however, that cost-shifting should not become a common practice. [38] Instead, [c]ourts and parties should continue to assume that a responding party ordinarily bears the costs of responding. [39] This amendment abrogates the minority of cases[40] holding that courts may not shift discovery costs unless the underlying data is not reasonably accessible. Institutions of higher education may now argue that if marginal or barely proportionate discovery is going to be allowed, it should be paid for by the requesting party to ensure that they only push for discovery where they believe the value outweighs the cost. Institutions also should be careful, however, not to 6

7 allow requesting parties to use this provision to push for truly irrelevant or disproportionate discovery to go forward simply because they are willing to pay for it. Rule 26(d)(2): Early delivery of discovery requests Prior to the December 2015 amendments, in most cases parties could not serve discovery requests until after they held their Rule 26(f) discovery planning conference. Rule 26(d)(2) now allows for early document production requests. Under this new rule, a request for production or inspection under Rule 34 may be delivered once 21 days have passed after the service of the summons and complaint.[41] The requests will be deemed served at the parties first Rule 26(f) conference.[42] The Advisory Committee Notes explain that the relaxation of the discovery moratorium is designed to facilitate focused discussion during the Rule 26(f) conference. [43] The Committee also anticipates that discussions during the conference may prompt changes in the discovery requests. If an institution of higher education receives document production requests from an opposing party prior to the Rule 26(f) planning conference, it should take the opportunity to address whether any of the requests appear disproportionate to the needs of the case, and actively negotiate with the opposing party to revise the requests before discovery formally commences. Rule 26(f)(3): Changes to the discovery planning conference Rule 26(f), which governs the discovery planning conference between the parties, was amended to track the changes in Rule 16(b)(3) regarding initial scheduling orders discussed above. Now, by rule, the parties initial discovery planning conference must include discussion of document preservation and Federal Rule of Evidence 502 agreements and orders.[44] RULE 34 ( Producing Documents, Electronically Stored Information, and Tangible Things, or Entering onto Land, for Inspection and Other Purposes ) Rule 34(b)(2)(A): Changes to address early delivery of document requests As mentioned above, amended Rule 26(d)(2) allows parties to deliver document requests early in the case. Consistent with this change, Rule 34(b)(2)(A) now provides that written responses to document requests must be provided within 30 days after being served or if the request was delivered under Rule 26(d)(2) within 30 days after the parties first Rule 26(f) conference. [45] The parties may agree to a shorter or longer period of time to respond, or a different response time may be ordered by the court.[46] These early requests are intended to assist the parties in discussing ESI issues during the 26(f) conference by providing specific detail on the types of information the requesting parties believe to be relevant. Rule 34(b)(2)(B): Changes to requirements for responses to document production requests Three changes have been made to Rule 34(b)(2)(B): First, this rule now requires institutions of higher education to state with specificity the grounds for objecting to each document request. This amendment memorializes the existing law in most federal courts prior to the amendments.[47] This amendment also ties in to changes in Rule 34(b)(2)(C), discussed below, which require parties to state whether any materials are being withheld on the basis of the objection, and presents novel questions in the context of ESI. 7

8 Second, amended Rule 34(b)(2)(B) also allows a party to specify whether it will allow inspection of documents or ESI, or whether it will produce copies. This amendment reflects the common practice of most parties to produce copies of requested documents and ESI rather than permitting an inspection of its records, and again memorializes what courts have already been allowing a party can choose either to produce or permit an inspection, and a court cannot force an inspection over a party s objection without good cause.[48] Third, and the amendment to Rule 34(b)(2)(B) that may have the biggest impact on the discovery behavior of institutions of higher education, is the requirement that responding parties specify a reasonable period of time in which they will complete their production. At the time a party prepares its written responses to document requests, it may be hard to know when production(s) will be substantially complete, because the scope of discovery is likely still being negotiated and a party may still be investigating the volume of information that may be at issue. Even though productions on a rolling basis are allowed, the Advisory Committee Notes counsel that [w]hen it is necessary to make the production in stages the response should specify the beginning and end dates of the production. [49] It is unclear at this time what obligation a party has to supplement this date or what may happen to a party who fails to complete its production by the date it specifies in its response. For now, institutions of higher education should set as realistic time frames as possible for completing their productions. This likely will be an area where ongoing communications and cooperation with opposing parties could protect against unnecessary discovery disputes down the road. Rule 34(b)(C): Stating whether responsive materials are being withheld Perhaps the biggest philosophical change to Rule 34 is the new mandate in Rule 34(b)(2)(C) that, when a party objects to a document request, the objection must state whether any responsive materials are being withheld on the basis of that objection. [50] The Advisory Committee intends this amendment to end confusion as to whether any information has been withheld by a responding party: The producing party does not need to provide a detailed description or log of all documents withheld, but does need to alert other parties to the fact that documents have been withheld and thereby facilitate an informed discussion of the objection. An objection that states the limits that have controlled the search for responsive and relevant materials qualifies as a statement that the materials have been withheld. [51] Thus, according to the Advisory Committee Note, a responding party could comply with its Rule 34(b)(2)(C) obligation by disclosing, for example, the filters it used to search for responsive information, including date restrictions, data sources, or search terms. This type of response, however, is not required by the Rule and may be unadvisable in most cases, as it may generate more scrutiny and motion practice as requesting parties seek to broaden institutions of higher education s searches. Such disclosures also may unnecessarily divulge privileged or confidential information. Until more courts have had time to determine the practical implementation of Rule 34(b)(2)(C), the extent to which litigants will be required to disclose their ESI search and review criteria will remain somewhat unclear. For now, an institution of higher education can fashion various means of satisfying the amended Rule, such as describing specifically what material it is looking for instead of how it is looking for it. This should provide requesting parties enough information to object if they think the search is too narrow. For example, if a higher education institution 8

9 objects based on the breadth of a discovery request, it may then specify in its response the faculty, staff, or departments whose records will be searched, and/or the period of time its search will encompass. This approach was taken by a party, and approved by the court, in a recent case in the District of Kansas.[52] There, in response to one discovery request, the responding party stated that it has limited its search to the .pst files for project management for the subject project.... The court found that this approach complied with Rule 34(b)(2)(C).[53] For some requests, it also may be possible to state that you will produce documents sufficient to show a certain fact. RULE 37 ( Failure to Make Disclosures or to Cooperate in Discovery; Sanctions ) Rule 37(e): Discovery failures involving ESI and appropriate sanctions Prior to the December 2015 amendments, Rule 37(e) provided that [a]bsent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system. This rule was problematic in practice. As explained in the Advisory Committee Notes to the 2015 amendments: This limited rule has not adequately addressed the serious problems resulting from the continued exponential growth in the volume of [ESI]. Federal Circuits have established significantly different standards for imposing sanctions or curative measures on parties who fail to preserve electronically stored information. These developments have caused litigants to expend excessive effort and money on preservation to avoid the risk of severe sanctions if a court finds they did not do enough.[54] Indeed, prior to the 2015 amendments, the standards of culpability ranged from mere negligence to recklessness and willful conduct among the various circuit courts. The new rule specifically overrules precedent in the United States Court of Appeals for the Second Circuit that arguably authorized adverse-inference instructions on a finding of negligence or gross negligence in the loss of ESI.[55] Perhaps the most contentiously disputed amendment to the Federal Rules, amended Rule 37(e) now provides a consistent standard for spoliation of electronic evidence in all federal courts.[56] The rule now provides: Failure to Preserve Electronically Stored Information. If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court: (1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or (2) only upon finding that the party acted with the intent to deprive another party of the information s use in the litigation may: (A) presume that the lost information was unfavorable to the party; (B) instruct the jury that it may or must presume the information was unfavorable to the party; or (C) dismiss the action or enter a default judgment.[57] 9

10 Rule 37 establishes a tiered approach to loss of ESI (it does not apply to physical evidence or hard copy documents, which still fall under the common law rule).[58] First, intervention by a court under Rule 37(e) is not permitted unless three elements are established: (1) ESI that should have been preserved has been lost; (2) the party who lost the ESI failed to take reasonable steps to preserve it; and (3) the lost ESI cannot be restored or replaced. Only if these three elements are established may the court either: (1) order curative measures, but only after finding the moving party is prejudiced by the loss of ESI; or (2) levy one of a list of enumerated sanctions, but only if the court determines that the spoliating party acted with the intent to deprive the requesting party of the ESI. Therefore, under Rule 37(e), a court should not even consider ordering curative measures or more significant consequences against a party unless the moving party can establish that the other party lost ESI that it should have preserved because it did not take reasonable steps, and the ESI cannot be restored or replaced. Curative measures can be broad and could include precluding a party from presenting evidence, deeming some facts as having been established, or permitting the parties to present evidence and argument to the jury regarding the loss of information. On the other hand, casealtering intervention by the court, including adverse inferences, is only available where a responding party has lost or destroyed the data with an intent to deprive the requesting party of its use in the litigation (which arguably requires the loss to occur in the current matter and not in a former one). Because 37(e)(2) uses the language the intent to deprive another party of the information s use in the litigation (emphasis supplied) and does not use the terms a or any, the Advisory Committee arguably has limited the question of intent to whether the party deleted the ESI to deprive the opponents in the instant litigation (or group of related cases) of the ESI, and does not allow future cases to piggy-back on a spoliation error that occurred for some other prior case. While there is some question as to whether prejudice should be considered once it has been shown that a party intended to deprive its opponent of relevant information, the Advisory Committee Notes caution courts about the use of severe sanctions and emphasize that the least draconian sanction should be levied: Courts should exercise caution, however, in using the measures specified in (e)(2). Finding an intent to deprive another party of the lost information s use in the litigation does not require a court to adopt any of the measures listed in subdivision (e)(2). The remedy should fit the wrong, and the severe measures authorized by this subdivision should not be used when the information lost was relatively unimportant or lesser measures such as those specified in subdivision (e)(1) would be sufficient to redress the loss.[59] Reading this Advisory Committee Note in connection with the revisions makes clear that Rule 37(e)(2) should be read with proportionality and prejudice in mind. In this case, a party should have the ability to rebut the presumption that its opponent was prejudiced by the intentional spoliation of information. To make new Rule 37(e) more manageable, we have included a flow chart to help explain the analysis. 10

11 Was ESI Lost? Yes, FRCP 37(e) Applies Should have the ESI been preserved? Did the party fail to take reasonable steps? Can the ESI not be restored or replaced? No on any one (e)(1) Was there prejudice? Yes, on all three (e)(2) Was there intent to deprive? No No intervention No Yes Yes Measures no greater than necessary to cure prejudice Case altering intervention Presume information was unfavorable Adverse inference Dismiss Courts have begun to explore the boundaries of the amendments to Rule 37 since the amendments were implemented in December In one case, the United States District Court for the District of Kansas opined that the amendments to Rule 37 do not change existing federal law concerning when the duty to preserve attaches.[60] In that case, the scope of discovery and the duty to preserve expanded during the litigation, but the ESI was lost before the party reasonably understood that the lost evidence was relevant.[61] Thus, the court did not award sanctions.[62] In a case from the United States District Court for the Southern District of Florida, the court held that the intent to deprive standard in the amended Rule 37(e) may be harmonious with the bad faith standard used by courts in the Eleventh Circuit.[63] The court also found that no showing of prejudice would be required to impose the case-altering sanctions of Rule 37(e)(2) as long as the party intended to deprive the opposing party of the lost ESI.[64] The court did not address the final paragraph of the Advisory Committee Notes quoted above and therefore decided, sub silentio, that consequences available under 37(e)(1) would not cure the spoliation and the more draconian sanctions under 37(e)(2) were necessary. Finally, the United States District Court for the Eastern District of New York has made clear that Rule 37(e) does not eliminate the possibility of imposing sanctions for the negligent loss of non- 11

12 ESI evidence.[65] (As a reminder, Rule 37(e) only applies to the loss of ESI.) In a recent case, the court addressed the loss of both ESI and paper (tangible) documents by the plaintiff. The court explained that it may issue an adverse inference instruction with regard to the [lost] tangible evidence... on a finding that Plaintiff acted negligently, but may not issue an adverse inference [for ESI] unless the Court finds that Plaintiff acted with intent to deprive Defendants of that information. [66] Although the court found that the plaintiff acted negligently in its loss of certain tangible documents and ESI, it did not find prejudice to the defendant, and therefore did not order sanctions with respect to any of the lost tangible evidence under the common law or the lost ESI under Rule 37(e)(1). The court did order the plaintiff to pay the defendants costs and attorney fees in making the spoliation motion under Fed. R. Civ. P. 37(a)(5)(A). It noted that such measures were intended to punish the offending party for its actions and deter the litigant s conduct, sending the message that egregious conduct will not be tolerated. [67] CONCLUSION: The December 2015 amendments to the Federal Rules of Civil Procedure as a whole focus on avoiding disputes related to discovery and ensuring that discovery remains reasonable and proportional. The Rules demand that parties discuss discovery, including potential problems in discovery, as early as possible in litigation. To help avoid a run-up on discovery costs later in the litigation, institutions of higher education should take the time and effort to fully prepare for their Rule 26(f) discovery planning conferences so they can set the agenda and ensure they can enter into agreements with opposing parties that minimize both their discovery costs and their discovery risks. With respect to reasonableness and proportionality, the amended Rules provide new bases for institutions of higher education to argue that the cost of requested discovery is not worth the expected benefit. In responding to discovery requests, institutions of higher education should ask: Will the documents likely found by the discovery help to resolve a factual dispute and, if so, is it worth the cost to collect, search, and review them? Institutions of higher education should contemplate these issues as early in the litigation as possible, negotiate in good faith with opposing parties to manage the scope of discovery, and, when necessary, seek court intervention, bolstered by the amended rules emphasis on proportionality. RESOURCES: Wendy Butler Curtis & Caroline Mew, Preparing for E-Discovery, NACUANOTES, Vol. 6, Iss. 2 (Feb. 22, 2008) David Kessler & Caroline Mew, Preparing for E-Discovery Revisited: Five Years Later, NACUANOTES, Vol. 11, No. 10 (Apr. 23, 2013). DAVID J. KESSLER, JAMI MILLS VIBBERT & ALEXANDER STEVEN ALTMAN, Discovery Related Amendments to the Federal Rules (December 2015). LAURENCE WHITE, NACUA, The General Counsel and E-Discovery (2013). THE SEDONA CONFERENCE, (last visited June 15, 2017) 12

13 EDRM, DUKE LAW, (last visited June 15, 2017) Electronic Discovery Law, K&L GATES, (last visited June 15, 2017) ELECTRONIC DISCOVERY INSTITUTE, (last visited June 15, 2017) ELECTRONIC DISCOVERY INSTITUTE, FEDERAL JUDGES GUIDE TO E-DISCOVERY (2015) E-Discovery and Electronically Stored Information Resource Page, NACUA (last visited June 15, 2017). END NOTES: [1] David Kessler is a partner at Norton Rose Fulbright and chair of its E-Discovery and Information Governance Practice. David focuses his practice on e-discovery, privacy, data security, records management, and cross-border discovery. David has been recognized by Chambers as one of the top 5 e-discovery lawyers in the United States and teaches "E-discovery" as an adjunct professor at the University of Pennsylvania Law School. Caroline Mew is Senior Counsel in the Washington, DC office of Norton Rose Fulbright US LLP. Her practice centers on complex civil litigation in federal and state courts at both the trial and appellate level. Caroline has experience representing higher education clients in a broad range of matters. Andrea D Ambra is a partner in Norton Rose Fulbright s New York Office and a member of the firm s E- Discovery and Information Governance team. Andrea focuses her practice on e-discovery, privacy, data security, cross-border discovery, and information governance. In addition, she is an adjunct professor of law at Temple and William and Mary Law Schools where she teaches classes on Electronic Discovery. The authors would like to thank Sean Topping for his research efforts in support of this article [2] Wendy Butler Curtis & Caroline Mew, Preparing for E-Discovery, NACUANOTES, Vol. 6, Iss. 2 (Feb. 22, 2008). [3] David Kessler & Caroline Mew, Preparing for E-Discovery Revisited: Five Years Later, NACUANOTES, Vol. 11, No. 10 (Apr. 23, 2013). [4] See David G. Campbell, New Rules, New Opportunities, 99 JUDICATURE 19, 19 (2015); David G. Campbell et al., The Nuts and Bolts, 99 JUDICATURE 26, 27 (2015); see also Judicial Conference Advisory Comm. on Civil Rules & Comm. on Rules of Practice and Procedure, Report to the Chief Justice of the United States on the 2010 Conference on Civil Litigation (2010). A summary of the work on what ultimately became the amended rules that took effect on December 1, 2015, can be found in Hon. Elizabeth D. Laporte & Jonathan M. Redgrave, A Practical Guide to Achieving Proportionality Under New Federal Rules of Civil Procedure 26, 9 FED. CTS L. REV. 19, (2015). [5] Institutions of higher education are subject to, and struggle with, the same challenges of timely and reasonable preservation as other large organizations, such as governmental entities and serial litigants like pharmaceutical companies where the majority of their litigation is asymmetric. See, e.g., Nicholson v. Bd. of Trustees for the Conn. State Univ. Sys., No. 3:08CV1250 WWE, 2011 WL , at *4 (D. Conn. Sept. 12, 2011) (allowing adverse inference against university that permitted spoliation of records by failing to issue a litigation hold until more than two years after it learned of potential litigation); Siani v. State Univ. of N.Y. at Farmingdale, No. CV JFB WDW, 2010 WL , at *1, *7 (E.D.N.Y. Aug. 10, 2010) (finding that a university s duty to preserve in anticipation of litigation extended to the same scope of individuals key players or employees likely to have relevant information as would be required for a corporation). 13

14 [6] A compilation of the amendments can be found at Letter from John G. Roberts, Chief Justice, U.S. Supreme Court, to John A. Boehner, Speaker of the House, U.S. House of Representatives, and Joseph R. Biden, Vice President, United States (Apr. 29, 2015). [7] See FED. R. CIV. P. 1. Historically, Federal Rule of Civil Procedure 1 was not frequently cited, although its terms inform all of the Federal Rules. That may all change, as the Rule was amended to convert it from an aspirational rule to express guidance on how all the other Civil Rules should be interpreted: [These Rules] should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding. Id. (emphasis added). As explained in the Advisory Committee Notes, Rule 1 was amended to emphasize that the parties, and not just the courts, share the responsibility to employ the rules for just, speedy, and inexpensive outcomes. The Advisory Committee Notes urge that [e]ffective advocacy is consistent with and indeed depends upon cooperative and proportional use of procedure. However, the Advisory Committee Notes also explain that the changes to Rule 1 do not create a new or independent source of sanctions. [8] See FED. R. CIV. P. 16(b)(2). [9] See id. at 26(f)(1). [10] Id. at 16(b)(2). [11] FED. R. CIV. P. 16 advisory committee s note to 2015 amendment. [12] Id. [13] See David Kessler and Caroline Mew, supra note 3. [14] See Columbia Pictures Indus. v. Bunnell, No. CV FMCJCX, 2007 WL , at *7, *13 (C.D. Cal. May 29, 2007) (concluding that ISP log data was reasonably accessible because activating logging feature to preserve and store data did not incur undue burden or cost); see also Arista Records LLC v. Usenet.com, Inc., 608 F. Supp. 2d 409, 432 (S.D.N.Y. 2009) (finding that party had an obligation to preserve and produce usage data from server system after it had not challenged the production as overly burdensome and produced some of the usage data). [15] See, e.g., Searock v. Stripling, 736 F.2d 650, 654 (11th Cir. 1984) (holding that party s asserted practical ability to retrieve certain documents did not establish control under Federal Rules of Civil Procedure Rule 34 absent a legal right to obtain the documents on demand ); Dugan v. Lloyds TSB Bank, PLC, No. 12CV02549WHANJV, 2013 WL , at *2 (N.D. Cal. Sept. 4, 2013) (finding evidence insufficient to establish that subsidiary had control over parent company s documents or information absent a contractual or other legal right ); Enron Corp. Savings Plan v. Hewitt Assocs., LLC, 258 F.R.D. 149, 164 (S.D. Tex. 2009) (requiring an LLC to produce documents held by its predecessor entity if the LLC has the legal right to control or obtain any of the requested documents). [16] See, e.g., Alexander Interactive, Inc. v. Adorama, Inc., No. 12 CIV PKC JCF, 2014 WL 61472, at *1 (S.D.N.Y. Jan. 6, 2014) (finding that party had practical ability to obtain documents from a non-party because of a close and continuing working relationship between them); Digital Vending Servs. Int l, Inc. v. Univ. of Phoenix, No. 2:09cv555, 2013 WL , at *5 (E.D. Va. Oct. 3, 2013) (concluding that corporation controlled documents on a thumb-drive used by its managing director as it had the authority and ability to ask the managing director to preserve the documents in his possession ); cf. New All. Bean & Grain Co. v. Anderson Commodities, Inc., No. 8:12CV197, 2013 WL , at *3 (D. Neb. May 2, 2013) (finding defendants did not have the practical ability to obtain [] documents once they had sold their company (and the sought-after corporate records) to non-parties to the action). 14

15 [17] See Small v. Univ. Med. Ctr. of S. Nev., No.: 2:13-cv APG-PAL, 2014 WL , at *28 (D. Nev. Aug. 18, 2014) (finding that university wrongfully took no appropriate steps to preserve, collect and/or produce [] data stored on personal mobile devices used to conduct university business); Ewald v. Royal Norwegian Embassy, No. 0:2011cv02116, 2014 WL , at *18 (D. Minn. Apr. 1, 2014) (holding that embassy spoliated employee s personal mobile phone likely containing relevant ESI by failing to preserve it upon employee s retirement); cf. Cotton v. Costco Wholesale Corp., No JWL, 2013 U.S. Dist. Lexis , at *20 21 (D. Kan. July 24, 2013) (denying requested discovery seeking information from all warehouse employees personal cellphones because there was no evidence that employees used their personal devices for business purposes). [18] FED. R. CIV. P. 16(b)(3)(B)(iii) (emphasis added). [19] See FED. R. CIV. P. 16(b)(3)(B)(iv). [20] FED. R. EVID [21] FED. R. EVID. 502(d). [22] A model 502(d) agreement may be found at The Sedona Conference Commentary on Protection of Privileged ESI, 17 SEDONA CONF. J. 99, 195 (2016). [23] FED. R. CIV. P. 16(b)(3)(B)(v) (emphasis added). [24] FED. R. CIV. P. 16 advisory committee s note to 2015 amendment. [25] For a discussion of the evolution of Rule 26(b)(1) and the purpose behind the new amendments, see Judge Conti s opinion in Cole s Wexford Hotel, Inc. v. Highmark. Inc., Civ. A. No , 2016 WL (W.D. Pa. Sept. 20, 2016), reconsideration denied, 2017 WL (W.D. Pa. Feb. 1, 2017). [26] See, e.g. Lifeguard Licensing Corp. v. Kozak, No. 15 Civ (LGS)(JCF), 2016 WL (S.D.N.Y. May 23, 2016) (holding that discovery is limited to pled claims and defenses). [27] FED. R. CIV. P. 26 advisory committee s note to 2015 amendment. [28] FED. R. CIV. P. 26(b)(1). [29] Id. [30] Gilead Sciences, Inc. v. Merck & Co., Inc., No. 5:13-cv-04057, 2016 WL (N.D. Cal. Jan. 13, 2016). [31] FED. R. CIV. P. 26 advisory committee s note to 2015 amendment (emphasis supplied); see also In re: Bard IVC Filters Prods. Liability Litig., No. MDL , 2016 WL , at *2 (D. Ariz. Sept. 16, 2016). Although some courts have held, even after the December 2015 amendments, that discovery is relevant under 26(b)(1) if there is any possibility that the information may be relevant to the general subject matter of the action[,]... [t]his statement of the law prior to the 2015 amendment was at best incomplete and now, following the 2015 amendments, is erroneous. E.g., Cole s Wexford Hotel, Inc. v. Highmark. Inc., Civ. A. No , 2016 WL , at *10 (W.D. Pa. Sept. 20, 2016)(internal citations omitted). [32] FED. R. CIV. P. 26 advisory committee s note to 2015 amendment. [33] Moore v. Lowe s Home Centers, LLC, No , 2016 WL (W.D. Wash. Feb. 19, 2016). [34] Id. at *5. [35] See Wilmington Trust Co. v. AEP Generating Co., No. 2:13-cv-01213, 2016 WL , at *2 (S.D. Ohio Mar. 7, 2016) ( Courts have, in evaluating the proportionality issue, suggested that both parties have 15

16 some stake in addressing the various relevant factors. ) (citing Oracle Am., Inc. v. Google, Inc., 2015 WL , at *2 (N.D. Cal. Dec. 3, 2015)); Bd. of Comm rs of Shawnee Cty. v. Daimler Trucks N. Am., LLC, No , 2015 WL , at *2 (D. Kan. Dec. 11, 2015) (shifting burden to objecting party to establish lack of relevance or lack of proportionality). The Advisory Committee Notes do not clearly answer the question of which party bears the burden of persuasion when proportionality is disputed. See FED. R. CIV. P. 26 advisory committee note to 2015 amendment ( A party claiming undue burden or expense ordinarily has far better perhaps the only information with respect to that part of the determination. A party claiming that a request is important to resolve the issues should be able to explain the ways in which the underlying information bears on the issues as that party understands them. ). [36] FED. R. CIV. P. 26(c)(1)(B) (emphasis added). [37] FED. R. CIV. P. 26 advisory committee s note to 2015 amendment. [38] Id. [39] Id. [40] See Nogle v. Beech St. Corp., No. 2:10-CV KJD, 2012 WL , at*8 (D. Nev. Aug. 27, 2012) (concluding that information stored on archival backup tapes is generally considered not reasonably accessible and, thus, subject to cost-shifting); Peskoff v. Faber, 251 F.R.D. 59, 61 (D.D.C. 2008) (refusing to shift costs of producing inaccessible data because responding parties failure to preserve and produce at earlier requests led to data being inaccessible); OpenTV v. Liberate Techs., 219 F.R.D. 474, 476 (N.D. Cal. 2003) (holding that partial cost-shifting was appropriate for inaccessible data that involved the undue burden and expense involved in extracting and copying the source code ). [41] See FED. R. CIV. P. 26(d)(2)(A). [42] See FED. R. CIV. P. 26(d)(2)(B). [43] FED. R. CIV. P. 26 advisory committee s note to 2015 amendment. [44] See FED. R. CIV. P. 26(f)(3)(C)-(D). For an example of a Stipulated ESI and Hard Copy Protocol entered under the amended Federal Rules (and with frequent reference to principles of proportionality), see Martinelli v. Johnson & Johnson, No. 2:15-cv-01733, 2016 WL (E.D. Cal. Apr. 13, 2016). [45] FED. R. CIV. P. 34(b)(2)(A). [46] Id. [47] See, e.g., Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354, (D. Md. 2008) (requiring objections to document requests to be stated with specificity). This tracks similar language in Rule 33(b)(4), which requires responding parties to state objections to interrogatories with specificity. [48] See, e.g., In re Ford Motor Co., 345 F.3d 1315, (11th Cir. 2003) (reversing court order granting requesting party unlimited, direct access to responding party s databases, including to information that would not and should not otherwise be discoverable under Rule 34 without responding party first having had an opportunity to object ); Carolina Bedding Direct, LLC v. Downen, No. 3:13-CV-336-J-32MCR, 2013 WL , at *1 (M.D. Fla. June 4, 2013) (stating that Rule 34 does not grant unrestricted access to a respondent s database compilations but rather to gain direct access to the respondent s databases, the court must make a factual finding of some non-compliance with discovery rules ); Daimler Truck N. Am. LLC v. Younessi, No. 08-MC-5011RBL, 2008 WL , at *3 (W.D. Wash. June 20, 2008) (allowing responding party to search its own computers to produce documents in lieu of providing full hard drive copies that may have revealed trade secrets and privileged information); Palgut v. City of Colo. Springs, No. CIV. A. 06-CV , 2007 WL , at *1 (D. Colo. Dec. 3, 2007) (holding that Rule 34(a) allows 16