Spoliation sanctions under FRCP Rule 37(e) are one of the most consequential — and avoidable — risks in litigation. For email evidence specifically, the path from normal business operations to sanction-worthy conduct is shorter than most attorneys and clients expect.
Here's what Rule 37(e) actually requires, how courts apply it, and what small firm attorneys need to do to protect their clients.
What Rule 37(e) Says
FRCP Rule 37(e) was significantly amended in 2015 to create a clearer, more uniform standard for sanctions when electronically stored information (ESI) — including email — is lost. The rule applies when:
- ESI that should have been preserved in anticipation of litigation was lost
- The loss resulted from the failure to take reasonable steps to preserve
- The ESI cannot be restored or replaced through additional discovery
If those conditions are met, a court has two tiers of remedies available:
Tier 1 (any prejudice): The court may order measures no greater than necessary to cure the prejudice. This includes things like additional discovery at the losing party's expense, adverse jury instructions about the missing evidence, or the court drawing certain factual inferences.
Tier 2 (intent to deprive): If the court finds that a party intentionally destroyed ESI to deprive the opposing party of its use, the court may presume the information was unfavorable, instruct the jury that it may or must presume the information was unfavorable, or dismiss the action or enter default judgment.
The intent standard for Tier 2 is meaningful — courts are not supposed to apply the harshest sanctions based on negligence alone. But the Tier 1 remedies are available for any prejudice, which casts a much wider net.
When the Preservation Duty Attaches
This is where most clients get into trouble. The duty to preserve relevant evidence arises when litigation is "reasonably anticipated" — not when a complaint is filed, not when a summons is served, but when a party reasonably should have known that the information would be relevant to future litigation.
For email, that moment often comes before any formal legal action:
- An employee files an internal HR complaint that could become an employment claim
- A contract dispute escalates to formal written demands
- An accident occurs that is likely to generate a claim
- A business relationship deteriorates in ways that suggest litigation is coming
At the moment litigation is reasonably anticipated, normal document destruction schedules — including email retention policies that auto-delete after 90 days or a year — must be suspended for relevant communications. A litigation hold must be issued.
Clients who continue following their normal email retention schedule after that trigger point are not in compliance, even if their policy is otherwise entirely reasonable.
Common Scenarios That Lead to Sanctions
Auto-deletion not suspended. A company has a 90-day email auto-deletion policy. They receive a demand letter. The litigation hold memo goes out, but the IT team doesn't actually suspend the auto-deletion for the relevant custodians. Three months later, emails from the relevant period are gone.
Key custodians not identified. The litigation hold goes out to the plaintiff's immediate supervisors but not to HR personnel who handled related complaints. Emails from those custodians are deleted on schedule. The court finds the omission was negligent.
Personal email used for business. An employee conducted relevant business communications on personal email. Because the company's litigation hold only covered corporate email accounts, those communications are never preserved. The court finds the company had an obligation to take reasonable steps to obtain them.
Device replacement without imaging. A custodian's phone or laptop is replaced and the old device is wiped before the relevant emails are collected. Even if the corporate email server has backups, metadata and communications that existed only on the device are lost.
"I deleted it before I knew there was a lawsuit." This doesn't protect clients as much as they think. If the deletion happened after the duty to preserve attached — even before they hired an attorney — courts have found it sanctionable.
What Courts Actually Look At
In applying Rule 37(e), courts assess:
1. When did the preservation duty attach? Courts look at communications, demand letters, internal memos, and other evidence to determine when the party reasonably should have anticipated litigation.
2. What steps were taken to preserve? A documented litigation hold process, with evidence that it was actually implemented and monitored, is the baseline defense. Companies that can show what they did, when they did it, and to whom they communicated it are in a much better position.
3. Was the loss preventable? Courts look at whether reasonable steps would have saved the evidence. Losing emails because a server crashed is different from losing emails because no one thought to suspend auto-deletion.
4. What was lost and how prejudicial is it? Courts try to assess the significance of the missing evidence. If the lost emails were likely to be unfavorable to the party who failed to preserve them, courts are more likely to infer intent.
Protecting Your Clients
Issue litigation holds early. The single most effective step is issuing a written litigation hold as soon as you have reason to believe litigation may be coming. The hold should identify specific custodians, the relevant time period, and the categories of communications to be preserved.
Follow up on IT implementation. A litigation hold memo that goes unread doesn't satisfy the preservation obligation. Confirm with IT that auto-deletion has been suspended for identified custodians, and document that confirmation.
Think broadly about custodians. Who had knowledge of or involvement in the relevant events? Include them in the hold, even if their role was peripheral. It's easier to over-preserve and later narrow scope than to try to recover what was deleted.
Collect sooner rather than later. Preservation holds can fail — IT staff changes, policies get accidentally re-enabled, people leave the company. Collecting the relevant email data into a preserved form earlier in the case reduces that risk.
Document everything. If sanctions are ever in dispute, your ability to defend depends on being able to show what you did and when. Keep records of when holds were issued, who was notified, what steps IT took, and when collection was completed.
The Bottom Line
Rule 37(e) is not a technicality that only applies to large companies with complex IT systems. Email is ubiquitous in litigation, and the loss of relevant email — for any reason, at any point after the preservation duty attaches — creates exposure.
The firms that avoid these problems are not the ones with the most sophisticated eDiscovery infrastructure. They're the ones that counsel their clients early, issue litigation holds promptly, and follow through to make sure those holds are actually implemented.