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E-Discovery Sanctions -- Forum Shop to Avoid Them?

October 13, 2010

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New York's state and federal courts impose sanctions for failure to preserve Electronically Stored Information (“ESI”). The state and federal courts, however, apply different standards for the sanctions imposed. By and large federal courts have hard and fast rules masked as “guidance that should not be ignored.” See Of Interest (Wade Clark Mulcahy), “Scheindlin Affirms Onerous E-Discovery Standards Applicable to Federal Litigation,” Feb. 3, 2010 (summarizing Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, No. 05 Civ. 9016 (SAS), 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010)) -- <a href=";t=498">;t=498</a> State courts, on the other hand, typically apply a “reasonableness standard,” and impose sanctions on a “case-by-case” basis. This discrepancy, and potential for litigants to forum shop, was the basis of the September 2010 Advisory Group to the New York State-Federal Judicial Council’s analysis and report on “Harmonizing the Pre-Litigation Obligation to Preserve Electronically Stored Information in New York State and Federal Courts.” In its report, the advisory group makes the following recommendations to New York's state and federal courts:
1. Courts should be made aware of the actual and potential inconsistencies between state and federal law addressing the pre-litigation duty to preserve ESI;
2. Courts should be reminded to effectuate consistency for attorneys and potential litigants in New York state;
3. Federal courts should consider designating the ESI sanction issue as “substantive,” giving priority to state law;
4. The Judiciary Council should disseminate the panel’s report to New York state and federal judges, the Federal Rules Committee, the New York State Office of Court Administration, and the New York State Legislature in an attempt to reconcile discrepancies.
Thanks to Cheryl Fuchs for her contribution to this post.
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