In the short amount of time since the amendment to Rule 37(e) of the Federal Rules of Civil Procedure, courts have confronted the task of applying the parameters of this newly revised Rule. Importantly, in contrast to the prior version of Rule 37(e), the new Rule differentiates between bad faith spoliation and negligent failure to preserve Electronically Stored Information (ESI). The revised 37(e) states:

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:

  • resume that the lost information was unfavorable to the party;
  • instruct the jury that it may or must presume the information was unfavorable to the party; or
  • dismiss the action or enter a default judgment.

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