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The End
of Sanctions?

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Executive Summary: The End of Sanctions and the De-Risking of eDiscovery

The 2015 amendments to the Federal Rules of Civil Procedure have drastically reduced the risk of spoliation sanctions, creating an environment where the threat of incurring liability through the handling of traditionally risky discovery processes is significantly diminished.

  • Spoliation sanctions have declined by 35%
  • The severest sanctions are denied in 4 out of 5 cases
  • Only one in every 8,000 federal civil court cases involves motions for spoliation sanctions

The result is a ‘de-risking’ of eDiscovery, allowing practitioners to bring more of the discovery process in house, without the fear that has long accompanied eDiscovery practice. Read on to find out why.

87%

denial rate for severe sanctions

35%

decline in spoliation sanctions since 2014

1 IN 8,000

sanction rate, all federal cases

eDiscovery
Without Fear

Are we seeing the end of eDiscovery sanctions? The data indicates a powerful trend in that direction. In the three years since the amendment of Rule 37(e) of the Federal Rules of Civil Procedure in December 2015, the number of federal cases involving spoliation sanctions has plummeted.

Exhaustive new research conducted by Logikcull shows that court issuance of spoliation sanctions has decreased by 35 percent from their height in 2014. Since 2016, more than three out of every four 37(e) sanctions motions have been denied. Such motions are, on average, denied in whole or in part in 76 percent of cases. When the stakes are the highest and the most severe sanctions are at issue, those motions were denied in whole or in part in 82 percent of cases in 2018.

This decline in sanctions, combined with a small, but significant growth in the bar’s technology expertise overall and the emergence of easier-to-use discovery tools, is leading to broad adoption of “do it yourself” discovery practices, where incurring liability through the handling of traditionally risky discovery processes is far less of a concern.

“The end result is a ‘de-risking’ of eDiscovery, allowing practitioners to bring more of the discovery process in house, without the fear that has long accompanied eDiscovery practice.”

The end result, we posit, is a “de-risking” of eDiscovery, allowing practitioners, whether corporate legal departments, small firms, or their Big Law counterparts, to bring more of the discovery process in house, without the fear that has long accompanied eDiscovery practice. This change, too, has allowed corporate legal departments to focus on other imperatives, from cybersecurity to GDPR, while realizing significant cost savings.1 In one example, one of the world’s largest companies was able to realize an estimated $7.5 million savings by in-housing much of their eDiscovery work and subsequently reducing data reviewed by outside counsel by 30 percent on average.2

“When the amendments were approved, in-house lawyers were ecstatic.”

The implications of this change have not been lost on innovation-focused practitioners. “When the amendments were approved, in-house lawyers were ecstatic,” says Mira Edelman, former Associate General Counsel of eDiscovery and Information Governance at Facebook and Senior Counsel and Discovery Manager at Google at the time of the 2015 amendments. “The new Rule gave us power to influence outside counsel who were more conservative in their approach to preservation. It gave in-house lawyers the legal authority to make decisions that weren’t driven by uncertainty, to focus on creating defensible workflows, and to begin thinking about corporate information governance. It was freeing.”

Sanctions Today:
By the Numbers


Decline of sanctions, 2010-2018:

Decline of Sanctions 2010 2018

82%

denial rate, in whole or in part, of severe sanctions in 2018

76%

denial rate of Rule 37(e) sanctions, in whole or in part, in all federal civil cases from 2016 through 2018

35%

decline in issuance of spoliation sanctions from 2016 through 2018 compared to their peak in 2014

1 in 8,000

Approximate rate of federal cases where Rule 37(e) sanctions were granted from 2016 to 2018


Sanctions outcomes, 2016-2018

Sanctions outcomes 1


Rule 37(e)(2) sanctions outcomes, 2016-2018

Sanctions outcomes 2

1. See Norton Rose Fulbright, 2017 Litigation Trends Annual Survey (2017) (noting that “spending on disputes as a proportion of the organization’s revenue is least when internal spend is between 41% and 60% of overall budget…”).

2. See Logikcull, Case Study: How One of the Nation's Largest Companies Is Pioneering a Fundamentally New Approach to Discovery (2019).

3. Cases were collected from Bloomberg Law, which was determined to have the most comprehensive results after consulting Bloomberg, Lexisnexis, Westlaw, and Google Scholar databases. For cases predating December 1, 2015, keyword searches were used to identify relevant opinions, targeting the keywords spoliation, sanctions, Rule 37(e), adverse inferences, electronic evidence, ESI, and/or eDiscovery and their permutations. For opinions issued after December 1, 2015, cases citing Rule 37(e) were collected. For both data sets, the cases were reviewed, false positives and irrelevant cases excluded, and the total number culled down for analysis. Post-amendment spoliation cases that do not cite or discuss Rule 37(e) remain outside the scope of this study.

4. Emery G. Lee III, Fed. Judicial Ctr., Motions for Sanctions Based Upon Spoliation of Evidence in Civil Cases: Report to the Judicial Conference Advisory Committee on Civil Rules (2011).

5. See, e.g., Gareth T. Evans et al., 2012 Year-End Electronic Discovery and Information Law Update (2013).

Methodology

To measure the impact of the 2015 Federal Rules amendments on the issuance of spoliation sanctions, Logikcull analyzed nearly 700 opinions dealing with sanctions for the spoliation of ESI in federal, civil district court litigation, from 2012 through 2018.3 Those cases were then categorized by the type of sanctions sought. Adverse inferences, adverse jury instructions, dismissal or default judgement, the measures currently reserved to Rule 37(e)(2), were referred to as Rule 37(e)(2) sanctions, regardless of whether that subsection was specifically named.

Other sanctions, such as evidence preclusion or attorneys’ fees, were treated as Rule 37(e)(1) sanctions, for the subsection allowing courts to take “measures no greater than necessary to cure the prejudice.” In most cases, movants sought sanctions allowable under both Rule 37(e)(1) and (e)(2).

The outcomes of each of the 684 relevant opinions were then further tallied, based on whether sanctions motions were denied in whole, granted in part and denied in part, or granted fully. Two past surveys were also consulted to identify historical trends, the Federal Judicial Center’s 2011 study surveying civil cases filed in 19 federal district courts from 2007 to 2008,4 and the Gibson Dunn year-end electronic discovery updates from 2009 through 2012.5

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The End of Sanctions?

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