FRCP 37(e): The Two-Tier Framework for Spoliation Sanctions

Before December 1, 2015, federal courts applied a patchwork of circuit-specific standards to sanctions for the spoliation of electronically stored information. Some circuits required only negligence. Others required bad faith. The Second Circuit, in Residential Funding Corp. v. DeGeorge, 306 F.3d 99 (2d Cir. 2002), applied a standard that allowed adverse inference instructions based on negligent destruction of ESI — a standard the Advisory Committee on the Federal Rules of Civil Procedure would later specifically reject.

The 2015 amendments to Rule 37(e) replaced this inconsistency with a single, nationally uniform framework. The rule now governs every federal case involving the loss of ESI that should have been preserved. Understanding its two-tier structure is no longer academic — it is foundational to modern discovery practice, and a prerequisite for any attorney who advises clients on evidence preservation.

The Rule: FRCP 37(e) in Full

The amended rule is brief enough to quote in its entirety:

Rule 37(e). 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 obtained 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:
(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information was unfavorable to the party; or
(C) dismiss the action or enter a default judgment.

That is the entire rule. Every federal spoliation dispute involving ESI now passes through this framework.

The Two-Tier Structure

The rule establishes a sequential analysis. Before either tier applies, three threshold requirements must be met. Then, depending on the level of culpability, the court enters one of two tiers with fundamentally different remedies.

Threshold Requirements (Both Tiers)

Every 37(e) motion begins with the same three questions. If any answer is no, the rule does not apply:

1. The ESI should have been preserved. The party had a duty to preserve the information at the time it was lost. This duty arises when litigation is reasonably anticipated or has already commenced.
2. The ESI was lost due to a failure to take reasonable steps. The party did not take the steps a reasonable actor would have taken to preserve the information. The Advisory Committee Notes emphasize: reasonable steps suffice — the rule does not demand perfection.
3. The ESI cannot be restored or obtained through additional discovery. If the information can be recovered from another source — backup tapes, the opposing party's copies, third-party custodians — the rule's sanctions provisions do not apply, because the loss has been cured.

Only after all three threshold conditions are satisfied does the court proceed to sanctions analysis under either (e)(1) or (e)(2).

Tier 1: Curative Measures — Rule 37(e)(1)

Under (e)(1), the court must find that the loss of ESI caused prejudice to another party. If prejudice is established, the court may order measures "no greater than necessary to cure the prejudice."

Critically, (e)(1) does not require intent. Negligent or even inadvertent failure to preserve can trigger curative measures, provided the moving party demonstrates prejudice. The available remedies include permitting additional discovery, requiring the spoliating party to present information about the lost ESI, precluding certain evidence, or giving the jury a factual instruction about the loss.

The proportionality constraint is built into the text. Measures must be "no greater than necessary." A court cannot impose the most severe remedy — adverse presumptions, dismissal — under (e)(1). Those are reserved for (e)(2).

Tier 2: Severe Sanctions — Rule 37(e)(2)

Under (e)(2), the court may impose the harshest sanctions in the civil rules — but only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation. The available measures are:

• Adverse presumption: The court may presume that the lost information was unfavorable to the spoliating party.
• Adverse jury instruction: The court may instruct the jury that it may or must presume the information was unfavorable.
• Case-dispositive sanctions: The court may dismiss the action or enter default judgment.

Note what (e)(2) does not require: a showing of prejudice. The Advisory Committee Notes explain that when a party acts with the intent to destroy evidence for use in litigation, the finding of intent is sufficient. The court may presume the evidence was unfavorable without requiring the moving party to prove what the destroyed evidence would have shown. This makes practical sense — the spoliating party has made it impossible to demonstrate the content of the lost ESI.

The "Intent to Deprive" Standard: Emerging Circuit Consensus

The phrase "intent to deprive" is the critical dividing line in the rule. It separates proportional curative measures from case-altering sanctions. Over the past decade, the circuits have converged on how to interpret this standard.

Applebaum v. Target Corp., 831 F.3d 740 (6th Cir. 2016)

One of the earliest circuit-level interpretations came from the Sixth Circuit in Applebaum. The court held that (e)(2) requires actual intent to deprive the opposing party of the evidence, and that mere negligence — even gross negligence — is insufficient. The court stated that the rule's plain language requires something more than reckless or careless conduct: the spoliating party must have acted with the purpose of depriving its opponent of the evidence.

Gregory v. State of Montana, 118 F.4th 1069 (9th Cir. 2024)

The Ninth Circuit confirmed that Rule 37(e) provides the exclusive mechanism for addressing ESI spoliation in federal court. Courts may not rely on inherent authority to impose sanctions for ESI spoliation that exceed what 37(e) authorizes. This is significant because before 2015, some courts used inherent authority to impose severe sanctions — including adverse inferences — without a finding of intent. Gregory forecloses that approach. If the ESI cannot support (e)(2)'s intent requirement, the court is limited to (e)(1)'s curative measures.

Hoffer v. Tellone (2d Cir. 2025)

The Second Circuit's opinion in Hoffer is notable as the first comprehensive treatment of 37(e) from a circuit that had previously applied the more permissive Residential Funding standard. The court applied a preponderance-of-the-evidence standard to the intent finding and held that the determination of intent to deprive is for the judge, not the jury. This resolved an open question about the procedural mechanics of the intent finding under (e)(2).

The Superseded Standard: Residential Funding

For historical context, the Advisory Committee Notes to the 2015 amendment explicitly rejected the standard from Residential Funding Corp. v. DeGeorge, 306 F.3d 99 (2d Cir. 2002), which had permitted adverse inference instructions based on negligent destruction of ESI. The Notes state that the amended rule "rejects cases . . . that authorize the giving of adverse-inference instructions on a finding of negligence or gross negligence." Residential Funding is no longer good law on this point. The intentional rejection of this standard is what makes the two-tier structure meaningful: severe sanctions require proof of intent, full stop.

Cross-Circuit Alignment

Beyond the decisions discussed above, the Fourth, Fifth, Eighth, and Eleventh Circuits have applied the same framework consistently. The consensus is clear: (e)(2)'s severe sanctions require intentional conduct directed at depriving the opposing party of evidence. Negligence, gross negligence, and recklessness are insufficient.

The practical consequence of this high bar is striking. Research from Logikcull analyzing reported decisions found that more than 80% of motions seeking (e)(2) sanctions are denied. The intent standard is a genuine filter, not a formality. Parties seeking severe sanctions must present compelling evidence of deliberate conduct — code words, directed deletions, selective purges — not merely the absence of a reasonable preservation process.

When the Duty to Preserve Arises

The threshold question under 37(e) — whether ESI "should have been preserved" — depends on when the duty to preserve attached. The foundational standard comes from Zubulake v. UBS Warburg, 220 F.R.D. 212 (S.D.N.Y. 2003) (Zubulake IV): the duty to preserve arises when litigation is "reasonably anticipated."

Courts have identified several triggering events that establish reasonable anticipation of litigation:

• Receipt of a demand letter or pre-litigation notice
• Filing of a complaint or receipt of service
• Receipt of a government investigation notice, subpoena, or preservation letter
• An incident that a reasonable party would recognize as likely to generate litigation (workplace injury, product failure, data breach)
• Internal communications discussing the possibility of being sued or suing
• Engagement of counsel in connection with a potential dispute
• Receipt of a regulatory audit or enforcement action

The duty is not triggered by remote or speculative possibilities. But once a reasonable party in the same position would anticipate litigation, the obligation attaches — and failure to preserve from that point forward creates exposure under 37(e).

Cautionary Tales: What (e)(2) Conduct Looks Like

The 80%+ denial rate for (e)(2) motions means that most spoliation cases involve negligent failures that land in (e)(1). But the cases where courts do find intent to deprive illustrate just how destructive intentional spoliation can be — for clients, for attorneys, and for the integrity of the litigation itself.

Allied Concrete Co. v. Lester (Va. 2011)

After Isaiah Lester filed a wrongful death suit against Allied Concrete, his attorney instructed him to "clean up" his Facebook page. Lester deleted photographs showing him socializing after his wife's death — images that contradicted his claim of severe emotional distress. Allied Concrete's forensic experts discovered the deletions through metadata analysis.

The court imposed $542,000 in sanctions against the plaintiff plus $180,000 in attorney fees. The attorney who directed the deletion was separately sanctioned by the Virginia State Bar and ultimately had his license suspended for five years. The deletion was brief. The consequences lasted a decade.

Victor Stanley, Inc. v. Creative Pipe, Inc. (D. Md. 2010)

Judge Paul Grimm — the same judge who authored the landmark Lorraine opinion on digital evidence authentication — found that the defendant had engaged in systematic, deliberate destruction of relevant evidence. The defendant's principal had wiped hard drives, deleted files, and misrepresented the scope of destruction to the court.

The court entered default judgment against the defendant, held the defendant's principal in civil contempt, and referred the matter for criminal contempt proceedings — resulting in imprisonment. Judge Grimm described the conduct as among the most egregious examples of spoliation he had encountered. The case demonstrates that (e)(2) sanctions, when warranted, can be case-ending and liberty-threatening.

GN Netcom, Inc. v. Plantronics, Inc. (D. Del. 2012–16)

In an antitrust case, the court found that Plantronics employees had used code words in communications, double-deleted emails to circumvent automatic retention, and taken other steps to conceal evidence of anticompetitive conduct. The deliberate, coordinated nature of the destruction — not mere negligent failure to preserve — was the basis for the court's finding of intent.

The sanctions totaled approximately $3 million, plus adverse inferences that significantly affected the merits. GN Netcom illustrates that courts treat coordinated, deliberate destruction far differently from negligent process failures — and the evidence of intent (code words, double-deletion, circumvention of retention systems) is exactly what distinguishes (e)(2) conduct from (e)(1) conduct.

What "Reasonable Steps" Means Under 37(e)

The threshold requirement that a party "failed to take reasonable steps" is where most 37(e) analysis begins and, for well-prepared litigants, where it ends. If you took reasonable steps, the rule's sanctions provisions do not apply — even if ESI was ultimately lost.

The Advisory Committee Notes are direct on this point: the rule requires reasonable steps to preserve, not perfection. The Notes acknowledge that ESI is routinely lost through normal system operations and that no party can be expected to preserve every byte of data.

Zubulake v. UBS Warburg, 229 F.R.D. 422 (S.D.N.Y. 2004) (Zubulake V), established the foundational framework for what reasonable preservation requires of counsel:

1. Issue a written litigation hold to all relevant custodians as soon as litigation is reasonably anticipated. The hold must identify the subject matter, the categories of information to preserve, and the custodian's specific obligations.
2. Identify all relevant data sources — email accounts, file shares, messaging platforms, cloud storage, mobile devices, and any system that may contain responsive information.
3. Suspend automatic deletion policies for relevant custodians and data sources. Routine document retention schedules must be paused for preserved categories.
4. Collect and secure relevant ESI — or, at minimum, ensure it is preserved in place with protections against deletion or modification.
5. Monitor compliance. A litigation hold is not a single event. Counsel must periodically remind custodians of their obligations and verify that the hold is being followed.

The key insight from both the Advisory Committee Notes and Zubulake V is that "reasonable steps" is a process standard, not an outcome standard. A party that implemented a thoughtful litigation hold, identified custodians, suspended deletion, and monitored compliance has taken reasonable steps — even if specific documents were inadvertently lost. Conversely, a party that issued a verbal instruction to "save everything" with no follow-up has not taken reasonable steps, regardless of whether evidence was actually lost.

Practical Implementation: The Sedona Conference Resources

Two publications from The Sedona Conference provide the most authoritative practical guidance for implementing the preservation obligations that 37(e) requires:

The Sedona Principles, Third Edition (2018) — A comprehensive framework for managing electronic discovery, widely cited by federal courts. The Principles address the full lifecycle of ESI from identification through production and include detailed commentary on proportionality, preservation scope, and cooperation between parties. Courts have relied on the Sedona Principles as a benchmark for assessing the reasonableness of a party's preservation and discovery practices.

The Sedona Conference Commentary on Legal Holds, Second Edition (2019) — A step-by-step guide to implementing defensible litigation holds. The Commentary covers when to issue a hold, who should receive it, what information it should contain, how to enforce it at the system level, and how to document compliance. For practitioners building or evaluating a litigation hold process, this is the definitive reference.

Together, these publications translate 37(e)'s legal requirements into operational procedures. They are not binding authority, but they are persuasive — and a preservation process that conforms to the Sedona framework is well positioned to satisfy 37(e)'s "reasonable steps" standard.

Conclusion: From Framework to Practice

Rule 37(e)'s two-tier structure creates a clear set of incentives. Take reasonable steps to preserve ESI, and even if evidence is lost, the most severe sanctions are unavailable. Fail to preserve through negligence, and you face curative measures proportional to the prejudice caused. Act with intent to destroy, and the court can presume the evidence was unfavorable, instruct the jury accordingly, or end your case.

The rule rewards process. It rewards documentation. It rewards systems that prevent deletion rather than relying on individual compliance. And it reserves its harshest consequences for deliberate, documented bad faith.

For practitioners, the path is clear. Implement a litigation hold process that conforms to Zubulake V and the Sedona Commentary. Use systems that enforce preservation at the technical level — not just through instructions to custodians. Document every step. And recognize that in a post-2015 world, the question is not whether your preservation process will be scrutinized, but when.

Attested's preserved evidence storage with litigation hold prevents accidental or intentional deletion of evidence under preservation obligations. Access logs and SHA-256 verification provide the documentation courts require under 37(e) — proof that reasonable steps were taken, and proof that preserved evidence has not been altered.