ThumbonScaleI wrote this four years ago, and didn’t post it. With the Rules amendments effective in just over two months, I thought it timely:

Litigants have been ignoring e-discovery obligations with impunity for so long they’ve come to think of it as an entitlement.  Protected from predators, few have evolved.  But now that opponents and courts are waking to this failure, those who’ve failed to adapt are feeling exposed. They don’t like it, and they want protection.  They call it “proportionality.”

Proportionality sounds wholesome and virtuous, like “patriotism” or “faith;” but like those wholesome virtues, it’s sometimes the refuge of scoundrels.

The much-ballyhooed “rise in sanctions” is designed to mislead.   The solid metrics we have on spoliation sanctions prove that the risk of being sanctioned for negligent non-preservation remains miniscule (.00675% per a report from the Federal Judicial Center).  Put simply: In the United States, you are more likely to be hit by lightning than to be sanctioned for non-preservation of ESI.

More significant than the piddling increase in the frequency of sanctions is the consistency of the circumstances under which courts have imposed sanctions.  Litigants are not being sanctioned for diligent, good faith efforts gone awry.  As always, the overwhelming majority of e-discovery sanctions decisions turn on venal acts like intentional destruction of evidence and contemptuous disregard of discovery obligations.  Sanctions continue to be a response to really bad behavior.

So let’s tell it like it is: The claim that diligent, responsible litigants are being sanctioned for innocent e-discovery errors is hogwash.

Why, then, are litigants so irrationally terrified of court-imposed sanctions that they elect to sanction themselves by embracing monumental inefficiency in preservation instead of making sensible, defensible choices?

Most would say, “We are over preserving because the plaintiffs demand it and we are afraid of being sanctioned if we guess wrong and fail to preserve something.”

There are two ways to deal with monumental inefficiency: become more efficient or accept the inefficiency.  To achieve the former, you reward efficiency and penalize inefficiency.  You’re relegated to the latter when you shield the inefficient from the consequences of their failure.  To the extent “proportionality” is a byword for “let us err with impunity,” it’s too soon in the evolution of e-discovery to be so resigned to incompetence.  If anything, we need more sanctions for incompetence, not more safe harbors.

MORE sanctions!?!?

Yup.  We are barely out of the starting blocks in the evolution of e-discovery. It’s just too soon to give lawyers and clients another reason to defer acquiring genuine e-discovery expertise and sanctions seem to be the only impetus that works.

It’s the Plaintiff’s Fault!
Absent a court order, the scope of preservation is determined solely by the party with care, custody or control of the electronically stored information.  An opponent can demand any scope of preservation, just as an opponent can demand any amount in money damages.  An outsize demand for damages doesn’t establish the true value of a case anymore than an outsize demand for preservation establishes the proper scope of preservation.  In each instance, parties must make an assessment based on facts, experience and risk tolerance.

“The plaintiff wanted more” wouldn’t justify a decision to overpay a case, yet, that’s the justification frequently offered for over-preservation.  The plaintiffs always want more–that’s why they file suit.  But, a plaintiff’s preservation demand doesn’t define or enlarge the preservation duty.  At best, a preservation demand fixes the latest date on which the common law duty attaches and undercuts claims of innocent oblivion to sources of relevant ESI. [The coming amendments to Rule 37(e)(2)(C) make “clear and reasonable” preservation requests a factor to be considered in the sanctions calculus and in the determination of willfulness and bad faith, at least when the requesters are also amenable to a good faith consultation about the scope of the requests].

It’s not the plaintiff’s fault.

But What If We Guess Wrong?
Litigants shouldn’t guess wrong—not because they can’t be wrong but because they shouldn’t be guessing. They should be making reasoned judgments based on reliable intelligence and competence.  It’s the absence of reliable intelligence and the paucity of sound judgment that account for overpreservation.  “Keep it, just in case” is lazy lawyering.  Instead, when you know what you have, you can make efficient and defensible choices.  “Knowing” means understanding how to investigate, search and manage ESI.

Pure Heart, Empty Head
Grafting proportionality onto preservation, we must be vigilant to demand diligence, competence and accountability from those deciding what to keep.  A pure heart should not be a sanctions shield if it serves an empty head.  Until counsel and parties demonstrate that they can capably and cost-effectively identify, manage and search ESI, they will reliably misjudge the cost and burden of preservation.  Sanctions for failure to preserve shouldn’t turn on a party’s subjective–and inherently partisan–assessment of a case’s merit or value, but on objective, informed standards.

Moreover, a proportionality inquiry shouldn’t reward incompetence.  If high cost or burden is driven by subpar management of ESI, courts should assess the burden and cost measured against the proper information management practices that should have been employed and give no quarter to chaos.

Can the Proportionality Rule Help?
Clearly, proportionality shouldn’t be pressed into service as a “Get Out of Jail Free” card for botched preservation; but, it can prove instructive to courts weighing sanctions for failure to preserve relevant evidence.  Though the standards for imposition of spoliation sanctions for failure to preserve ESI [used to] vary across the circuits [and now will be harmonized in amended Rule 37(e)], all weigh the reasonableness of the respondent’s conduct and the harm flowing from the alleged spoliation.  In arguing the reasonableness of their conduct, a party may seek to demonstrate that the burden or expense of the preservation outweighed the likely benefit of the data not preserved 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.  In seeking to mitigate the alleged harm, litigants can show that the evidence not preserved can be obtained from a source more convenient, less burdensome, or less expensive than the source not preserved.

Many carp about Monday morning quarterbacking by courts; but, proportionality factors should properly be viewed through an objective post hoc lens, and yes, with some 20-20 hindsight, not seeking perfection but also not from the perspective of those who always think the other side’s case stinks and the cost of preservation excessive.

Mom and Apple Pie
If proportionality is code for “don’t hold us responsible for our own bad decisions,” beware.  But if it signifies that counsel must become adept at understanding client data and managing risk, fantastic!  If it means that judges will demand ESI competence of counsel and intervene early and aggressively to keep discovery focused and affordable, then proportionality really is mom and apple pie!  When litigants weigh proportionality, courts must insist parties know how to use the scale and don’t put their thumbs on the pan. 

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