Committee Comments to Amendment to Rule 37(g) Effective December 21, 2018

A. Introduction

See section 1 of the Committee Comments to Amendment to Rule 26 Effective February 1, 2010, and the Committee Comments to Adoption of Rule 37(g) Effective February 1, 2010, for general information concerning the changes to Rules 26 and 37 governing discovery of electronically stored information.

Rule 37(g), as adopted in 2010 to be consistent with the 2006 changes to the Federal Rules of Civil Procedure related to discovery of electronically stored information, provided: “Absent 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.” Since the adoption of Rule 37(g), there has been a large increase in the volume of electronically stored information, and discovery related to electronically stored information has likewise increased. Certainly, discovery should not prevent continued routine operation of computer systems necessary for business or other endeavors in this world increasingly connected by computer systems. But it is important for a party aware of the existence of relevant electronically stored information to take reasonable steps to preserve such information. Uncertainties under former Rule 37(g) concerning discovery of electronically stored information and sanctions for failure to preserve electronically stored information had the potential to result in litigants expending significant time and money on preservation efforts in order to avoid the risk of sanctions if a court were to find they did not do enough to preserve electronically stored information.

B. Section (g)

Rule 37(g), as amended, focuses upon the reasonableness of the steps taken to preserve electronically stored information, as well as whether the information can be replaced or restored. Under former Rule 37(g), sanctions could not be imposed if the information was lost as a result of the “routine, good-faith operation” of a party’s computer system and “exceptional circumstances” were not presented. Moreover, the rule did not speak to the curative measures a court could employ when punitive sanctions were to be imposed. Rule 37(g), as amended, specifies measures a court may employ if information that should have been preserved is lost and specifies the findings necessary to justify those measures. It therefore forecloses reliance on the inherent authority of the court to determine when certain measures should be used.

Although former Rule 37(g) indicated that spoliation of electronically stored information should be reviewed using a standard that turns on “good faith,” Rule 37(g), as amended, focuses more upon the reasonableness of the steps taken to preserve the information. Too, Rule 37(g), as amended, addresses more specifically the sanctions that may be imposed and recognizes the difference between sanctions intended to cure prejudice to a party, including the assessment of the cost of replacing or restoring the lost information, and punitive sanctions when there has been a deliberate manipulation of computer systems to prevent discovery of relevant and important information.

Under Rule 37(g), as amended, before the court considers measures necessary to cure prejudice to a party, it must find not only that reasonable steps were not taken to preserve relevant information, but also that the information cannot be restored or replaced. To this end the court may, for example, order additional discovery from sources that were previously designated as not reasonably accessible because of burden or cost under Rule 26(b)(2)(A). Further, pursuant to a simultaneous change to Rule 26(c), express authorization is provided to the court to assess the associated costs, including the cost of replacing or restoring the information and attorney fees, to the party who lost the information.

However, it should be remembered that efforts to restore or replace lost information should be proportional to the importance of the lost information.

C. Subsection (g)(1)

The rule does not specify which party bears the burden of proving prejudice once it has been determined that electronically stored information has been lost because of a failure to take reasonable steps to preserve the information. This is left to the discretion of the trial court. As the Advisory Committee’s Notes on the 2015 Amendment to Rule 37, Federal Rules of Civil Procedure, state:

“Determining the content of lost information may be a difficult task in some cases, and placing the burden of proving prejudice on the party that did not lose the information may be unfair. In other situations, however, the content of the lost information may be fairly evident, the information may appear to be unimportant, or the abundance of preserved information may appear sufficient to meet the needs of all parties. Requiring the party seeking curative measures to prove prejudice may be reasonable in such situations. The rule leaves judges with discretion to determine how best to assess prejudice in particular cases.”

If the trial court finds that electronically stored information should have been preserved, has been lost because a party failed to take reasonable steps to preserve it, and cannot be replaced or restored and that another party has been prejudiced, it may order appropriate measures to cure the prejudice, but nothing more. Such measures, as noted in the Federal Advisory Committee’s Notes, may include prohibiting the party that lost the information from putting in certain evidence. For example, the court may “exclude a specific item of evidence to offset prejudice caused by failure to preserve other evidence that might contradict the excluded item of evidence.” Advisory Committee’s Notes to the 2015 Amendment of Rule 37, Federal Rules of Civil Procedure. However, the objective must be only to cure the prejudice, and, as the Federal Advisory Committee notes: “Care must be taken … to ensure that curative measures under subdivision (e)(1)[Rule 37(g)(1), Ala. R. Civ. P., as amended,] do not have the effect of measures that are permitted under subdivision (e)(2) [Rule 37(g)(2), Ala. R. Civ. P., as amended,] only on a finding of intent to deprive another party of the lost information’s use in the litigation.”

The amendment to our Rule 37(g) requires that the court, not the jury, determine not only whether the lost information should have been preserved, whether the loss resulted from a failure to take reasonable steps to preserve it, and whether it can be replaced or restored, but also whether another party has been prejudiced by the loss and what measures should be taken to cure that prejudice, being mindful that the rule calls for measures no greater than necessary to cure the prejudice. It was the opinion of the Committee recommending this amendment that the court was in a much better position to make such determinations and that to allow the parties to put in evidence of the loss and to allow the jury to determine the appropriate cure had too much potential to distract the jury. It should be noted that this may be a departure from the Federal Rules of Civil Procedure. Although the corresponding federal rule is not clear as to whether the court or the jury should make such determinations, the Advisory Committee’s Notes to the federal rule appear to indicate that the federal rule allows the court to permit the parties to put in evidence of the loss and allow the jury to determine the appropriate cure.

D. Subsection (g)(2)

Rule 37(g)(2), as amended, applies to those rare cases when a party deliberately fails to preserve electronically stored information with intent to prevent another party’s use of that information. In other words, the intent required to invoke subsection (g)(2) is the specific intent to deprive another party of electronically stored information and anything short of such specific intent would not involve this subsection. It is noted that the corresponding federal rule addresses the negligent and the intentional loss of electronically stored information, but nothing is directly said in the Advisory Committee’s Notes to the federal rule about wanton conduct, although the Federal Advisory Committee’s Notes do make clear that “grossly negligent” conduct is to be treated in the same manner as a negligent loss of information. Moreover, if the trial judge believes the loss of information was occasioned by conduct that is more egregious than negligence, but is not intentional, under the Alabama rule the judge is provided discretion under subsection (g)(1) to take appropriate measures to cure the prejudice. This approach also simplifies matters for the trial court, which will have to fit the facts into only one of two, not three, categories (i.e., intentional conduct and nonintentional conduct).

Subsection (g)(2)(A) authorizes the court to presume that the lost information was unfavorable to the party responsible for its loss. This could have application when the court is presiding at a bench trial or ruling on a pretrial motion.

Subsection (g)(2)(B) has application in a jury trial and provides that the court may instruct the jury that it may or must presume the information lost was unfavorable to the party that lost it. The Alabama rule requires that the court make the finding whether the relevant information was lost intentionally (that is, with the intent to deprive another party of the use of the information in the litigation) and, if so, the sanction to impose, which may include an adverse-inference charge. If the court determines that such loss was intentional, it may give the “must presume” adverse-inference charge as the sanction. The court having found that the party intentionally lost the information, it may be inferred that the information lost was both unfavorable to the party that lost it and favorable to the opposing party’s case.

Here again, the Alabama Rules of Civil Procedure deviate from the Federal Rules of Civil Procedure, which allow the court to permit the jury to determine the issue of intent and, if the jury finds intent, gives the jury the option of presuming that the information was unfavorable to the party that lost it. This, of course, would require that the parties put in evidence of the loss. Although this is not entirely clear from the federal rule itself, it is clearly expressed in the Advisory Committee’s Notes to the federal rule.

This amendment to Rule 37(g) does not change existing Alabama substantive law regarding spoliation of evidence or when a duty to preserve evidence arises. Further, this amendment addresses only electronically stored information and leaves unchanged Alabama law as to sanctions for the failure to preserve other types of evidence or information.

Note from the reporter of decisions: The order amending, effective February 1, 2010, Rule 16, Rule 26, Rule 33(c), Rule 34, Rule 45, and Form 51A, and adopting effective February 1, 2010, Rule 37(g) and the Committee Comments to Amendment to Rule 16 Effective February 1, 2010, the Committee Comments to Amendment to Rule 26 Effective February 1, 2010, the Committee Comments to Amendment to Rule 33(c) Effective February 1, 2010, the Committee Comments to Amendment to Rule 34 Effective February 1, 2010, the Committee Comments to Adoption of Rule 37(g) Effective February 1, 2010, and the Committee Comments to Amendment to Rule 45 Effective February 1, 2010, is published in that volume of Alabama Reporter that contains Alabama cases from ___ So. 3d.

Committee Comments to Adoption of Rule 37(g) Effective February 1, 2010

See the Committee Comments to Amendment to Rule 26 Effective February 1, 2010, for general information concerning the comprehensive changes to Rules 16, 26, 33(c), 34, 37, and 45, which govern discovery of electronically stored information (“ESI”).

The change to Rule 37 recognizes that ESI is routinely and automatically altered and deleted in the normal course of business for reasons entirely unrelated to litigation. Accordingly, ESI may be lost or destroyed without culpability, fault, or ill motive. The addition of subdivision (g) to Rule 37 recognizes this and provides that, absent exceptional circumstances, sanctions are inappropriate if ESI is lost as a result of the routine operation of a computer system, provided that the party responsible for the lost ESI was acting (or failed to act) in good faith.

Good faith may require a party to take steps to alter the routine operation of the computer system or otherwise preserve appropriate ESI if a duty to preserve exists. This rule is procedural and does not address the issue whether and when such a duty exists. However, when it does exist, the party must act appropriately, which may include issuing a “litigation hold.”

Good faith requires that a party not exploit the routine operation of its computer system. For example, a party may not adopt a short record-retention period with no legitimate business purpose in order to thwart discovery of harmful information by having its computer system overwrite the information.

A decision whether a party has acted in good faith regarding ESI that is within sources that are not reasonably accessible should be made on a case-by-case basis. As the Federal Rules of Civil Procedure Advisory Committee Notes to Fed. R. Civ. P. 37 provide: “One factor [to be considered] is whether the party reasonably believes that the information on such sources is likely to be discoverable and not available from reasonably accessible sources.”

Committee Comments on 1973 Adoption

Rule 37(a) provides recourse for compulsion of discovery and applies to all discovery devices. Generally comparable provisions existed in Tit. 7, § 474(17), Code 1940.

Rule 37(a)(1) states which court is the appropriate court for determination of problems arising in discovery. Note that it makes available the possibility of an application to the judge of the circuit in the state of Alabama when the deposition is being taken inside the state but in a circuit other than the circuit wherein the action is pending. Note further that it provides for application to a court outside the state of Alabama when the deposition is being taken outside the state of Alabama and a problem arises during the taking of a deposition. Problems arising with respect to parties may be brought to the attention of the court where the deposition is being taken or in the court where the action is pending. Problems arising with the deposition of persons not parties must be taken up with the court in the circuit or state or place where the deposition is being taken.

Rule 37(a)(2) establishes a motion as the vehicle for relief under the various discovery devices. Further, the party successfully opposing a Rule 37 motion compelling discovery can obtain a protective order as an adjunct to the order denying the Rule 37 motion just as if he had moved for such relief under Rule 26(c). This provision applies to nonparties against whom documentary discovery is sought under Rule 34. Relief against nonparties for failure to produce documents in compliance with the deposition subpoena duces tecum served pursuant to Rule 45 is available within the terms of Rule 45.

Rule 37(a)(3) specifically treats evasive or incomplete answers as failures to answer.

Rule 37(a)(4) requires award of expenses including attorney’s fees to the successful party under a Rule 37 motion unless the court finds that the position taken by the loser was with substantial justification or other circumstances found to make such award unjust. Partial successes and failures can result in apportioned expenses where appropriate.

Rule 37(b) provides sanctions such as contempt, admissions, exclusion of claims, defenses or evidence, stays, and default judgments. Contempt is not available for refusals to submit to physical or mental examinations.

Rule 37(c) affords a right to expenses attendant to proof of matters after an unsuccessful effort to procure admissions under Rule 36. Expenses are available only when the request for admission is unobjectionable, of substantial import, without reasonable expectation of prevailing on the matter or no other good reason for failure to admit exists.

Rule 37(d) provides remedies for complete failures to respond or object to discovery for which compliance is expected without court order unless objected to. Previous sanctions available in instances where refusals based upon objections have been the basis of orders compelling discovery are available. That the discovery reaches objectionable matter is only available as an excuse when motion for a protective order under Rule 26(c) has been made.

Rules 37(e) and 37(f) are omitted as they are inapplicable to state practice.

Committee Comments to Amendment Effective March 1, 1982.

Rule 37(a)(2) referred to the practice under Rule 34 and, with the amendment of Rule 34, it is necessary to make certain changes in Rule 37. While the procedure is set forth under Rule 37(a)(2) for the filing of a motion which would lead to a court order requiring production from a nonparty and thereby justify a citation of contempt of court for noncompliance, the disregard of the subpoena itself could form the basis for the issuance of an order to show cause why a contempt citation ought not to issue. The use of the motion practice might be preferable in instances where noncompliance is most likely attributable to confusion on the part of the nonparty and the invocation of the contempt power of the court would appear to be beyond the necessities of the case.

Committee Comments to August 1, 1992, Amendment to Rule 37(a)(2).

The portion of the first paragraph requiring a statement of the attorney for the moving party was added to require all attorneys to consult with opposing counsel before filing a motion for discovery. The committee hopes that most discovery disputes will be resolved between counsel without resort to provisions regarding motions for discovery.

Committee Comments to October 1, 1995, Amendment to Rule 37

The amendment is technical. No substantive change is intended.