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1 via FedEx. Tracking No Jonathan C. Rose, Esquire, Secretary Committee on Rules of Practice and Procedure Judicial Conference of the United States Thurgood Marshall Federal Judiciary Building One Columbus Circle NE Washington, D.C Re: Proposed Amendments to Rule 3 7 of the Federal Rules of Civil Procedure Dear Secretary Rose: The American College of Trial Lawyers is dedicated to maintaining and improving the standards of trial practice, the administration of justice and the ethics of the legal profession. The Federal Civil Procedure Committee of the College (the 'Committee') is charged with monitoring the operation of the Federal Rules of Civil Procedure and evaluating proposed changes. The Committee has reviewed the proposed amendments to Rule 3 7 of the Federal Rules of Civil Procedure to address the five issues on which the Judicial Conference Advisory Committee (the 'Advisory Committee') has sought comment. 1 Our comments on each of these issues are set forth below. In addition, we have addressed additional issues that have come to the Committee's attention. 1. Responses to the Advisory Committee's Questions. "1. Should the rule be limited to sanctions for loss of electronically. stored information? Current Rule 37(e) is so limited, and much commentary focuses on the preservation problems resulting from the proliferation of such information. But the dividing line between 'electronically stored information ' and other discoverable matter may be uncertain, and may become more uncertain in the future, and loss of NATIONAL OFFICE MacArthur Blvd. Suite 530 Irvine, CA t: f: 949) The questions are set forth in the Report of the Advisory Committee on Civil Rules as contained in the Memorandum from Hon. David G. Campbell to Hon. JeffreyS. Sutton dated May 8, 2013, as supplemented June 2013.

2 December 19, Page 2 tangible things or documents important in litigation is a recurrent concern in litigation today. " Response: The rule should not be so limited. ESI may be the biggest issue in discovery today, but the destruction or loss of documents and tangible things is just as important as the destruction or loss of ESI. Limiting the rule to loss of ESI would suggest that there can be different standards for the imposition of sanctions for the loss of other sorts of evidence, leading to divergent rulings from court to court on issues such as whether sanctions can be imposed if the loss of physical evidence is due to negligence. A uniform rule pertaining to all evidence would promote certainty and reduce the likelihood of unproductive satellite litigation. ((2. Should Rule 37(b)(l)(B)(ii) (sic)be retained in the rule? This provision is focused on the possibility that one side 's failure to preserve evidence may catastrophically deprive the other side of any meaningful opportunity to litigate, and permits imposition of sanctions even absent a finding of willfulness or bad faith. It has been suggested that limiting the rule to loss of electronically stored information would make (B)(ii) unnecessary. Does this provision add important flexibility to the rule?" Response: We presume the reference was intended to be to Rule 3 7 ( e )(1 )(B)(ii), which allows sanctions regardless of the culpability of the sanctioned party if that party's 'actions' presumably including innocent actions- cause a party to lose 'any meaningful opportunity' to prosecute or defend the case. In our view, this provision should be deleted. As set forth below, we believe that sanctions for loss of evidence should be limited to cases of bad faith. To create a lesser standard of culpability for loss of evidence that causes catastrophic prejudice would encourage counsel who cannot show that the loss of evidence was due to bad faith to claim that the impact of the loss satisfies the standard of no 'meaningful opportunity' to prosecute or defend. This in tum would require opposing counsel to argue that the party seeking sanctions could nonetheless prevail - in effect arguing the other side's case. ((3. Should the provisions of current Rule 37(e) be retained in the rule? As stated in the Committee Note, the amended rule appears to provide protection in any situation in which current Rule 37(e) would apply."

3 Page 3 Response: It would be important to retain the current Rule 37(e), which precludes the imposition of sanctions for the loss of ESI due to the routine, good faith operation of an electronic information system, if proposed Rule 37(e)(l)(B)(ii), discussed in response to Question 2 above, is adopted. Otherwise, parties who claim that they have lost 'any meaningful opportunity' to prosecute or defend a case as the result of the ordinary, good faith operation of an electronic information system will seek sanctions. If proposed Rule 3 7( e )(1 )(B)(ii) is not adopted, and if, as our Committee proposes, the standard for imposition of sanctions is limited to bad faith, there would seem to be no need for current Rule 37(e). "4. Should there be an additional definition of (substantial prejudice ' under Rule 37(e)(l)(B)(i)? One possibility is that the rule could be augmented by directing that the court should consider all factors, including the availability of reliable alternative sources of the lost or destroyed information, and the importance of the lost information to the claims or defenses in the case. " Response: The Committee does not believe that any further definition is necessary. Judges routinely exercise their discretion to decide issues of prejudice. Prejudice may arise in myriad factual scenarios, and a rule defining what constitutes prejudice might inadvertently exclude situations in which true prejudice exists that do not strictly fall within the definition. The availability of alternative sources of the information and the importance of the lost information are rather obvious factors to be considered in assessing prejudice, and incorporating them in the rule appears superfluous. "5. Should there be an additional definition of willfulness or bad faith under Rule 37(e)(l)(B)(i)? If so, what should be included in that definition?" Response: As discussed below, the Committee believes that the only standard of culpability for the imposition of sanctions should be bad faith, which should be defined to mean "taken with the intent to destroy or delete potentially relevant evidence or in reckless disregard of the consequences of the party's actions."

4 Page4 2. Additional Comments. a. Rule 37(e)(l)(B)(i): The Committee suggests deleting "willful or" and adding, after "faith," the following phrase: "-that is, were taken with the intent to destroy or delete potentially relevant evidence or in reckless disregard of the consequences of the party's actions." This change would accomplish three important objectives: (1) it would eliminate the terribly ambiguous concept of "willfulness" (for example, saving district judges from having to grapple with the idea of actions taken in good faith that are nonetheless "willful"); (2) it provides a uniform standard that should be easily understood by lawyers, judges, litigants, and witnesses; and (3) it makes clear that the sanctions provided for in Rule 37(e)(1)(B) are not to be imposed upon a showing that the offending party's actions were merely negligent. Our view on the elimination of "willfulness" as a basis for the imposition of sanctions is the same as that advanced by the Leadership of the American Bar Association Section of Litigation in its letter to Hon. David G. Campbell regarding proposed revisions to Rule 37(e) dated March 13, Adopting this suggestion would also require the deletion of "willful" or "willfulness" in proposed Rule 3 7 ( e )(2) and in the Committee Notes at pages 39 and 41 through 43. b. Rule 37(e)(2)(E): The Committee suggests changing "the party" in the first line to "any party." There may be circumstances in which it would be reasonable for the requesting party to seek the court's guidance on the responding party's obligation to preserve evidence, and the requesting party's failure to do so could be a relevant factor in assessing the responding party's good faith. c. Committee Note to Subdivision (e)(2), at pages 45-46: The Committee suggests deleting the carryover sentence from page 45 to page 46 ("The court should be sensitive to the party's sophistication... "). An explicit invitation to the courts to consider a party's lack of sophistication in evidence-preservation practices would encourage lack of diligence or, worse, sharp practices by parties insincerely professing to be "unsophisticated." Encouraging parties to claim lack of sophistication as an excuse for failing to preserve relevant evidence would thus have the unfortunate effect of punishing those litigants who appreciate (perhaps having learned the hard way) the need to take the reasonable actions that the rule intends to encourage. The

5 Page 5 elimination of negligence as a basis for imposing sanctions provides more than ample protection for individual litigants who may not appreciate either the need to preserve evidence or the steps necessary to ensure such preservation. Accordingly, there is no need for the Note's express invitation of"non-sophistication" claims. The Committee appreciates the opportunity to offer these comments for consideration by the Committee on Rules of Practice and Procedure. Sincerely, ~:~~:.~~~(y Chair, Federal Civil Procedure Committee American College of Trial Lawyers cc: Board of Regents Federal Civil Procedure Committee