[EDRM Editor’s Note: The opinions and positions are those of Michael Berman.]
The Supreme Court of Maryland adopted an amendment to Maryland Rule 2-433, which governs sanctions in Maryland state courts. Amended Maryland Rule 2-433(b) abandons the shallow “safe harbor” rule.
The proposed rule, posted in the 219th Report of the Standing Committee on Rules of Practice and Procedure would have tracked the federal sanctions rule, Fed.R.Civ.P. 37(e). The Supreme Court did not follow that approach; however, it did adopt “reasonable anticipation” of litigation as the event triggering the common-law duty to preserve.
REPEAL OF THE SHALLOW “SAFE HARBOR” RULE
The federal “e-discovery rules” were promulgated in December 2006. They replaced the term “data compilations” with a new phrase – “electronically stored information” or “ESI.”
Maryland followed suit in January 2008, adopting e-discovery rules that were largely patterned on the federal example.[1]
Nationally, problems were experienced with disproportionate e-discovery costs and the “safe harbor” rule was viewed as too shallow to address the problem.
One of several solutions was to amend Fed.R.Civ.P. 37(e) by replacing the “safe harbor” rule. The December 2015 amendments did that and were designed in part to bring uniformity and proportionality to the federal sanctions doctrine.
The “safe harbor” rule stated when sanctions could not be imposed. The Maryland and federal “safe harbor” rules were identical.
The “safe harbor” rules were state-of-the art when they were adopted in 2006 and 2008; however, the “art” changed and the rules needed to do the same.
Nationally, problems were experienced with disproportionate e-discovery costs and the “safe harbor” rule was viewed as too shallow to address the problem. One of several solutions was to amend Fed.R.Civ.P. 37(e) by replacing the “safe harbor” rule. The December 2015 amendments did that and were designed in part to bring uniformity and proportionality to the federal sanctions doctrine.
In October 2022, I wrote a “white paper” that was published by the Maryland State Bar Association. See It’s Time to Replace Maryland’s “Safe Harbor” Rule. The white paper suggested that Rule 2-433(b) served its purpose when adopted; however, it was no longer workable or useful. Further, the white paper suggested that the process of replacing the “safe harbor” with a more comprehensive rule could provide the opportunity to clarify the degree of culpability that can support sanctions. Id.
The Discovery Subcommittee of the Maryland Standing Committee of Rules of Practice and Procedure asked me to present a proposed amendment, which I did. In fact, the Reporter’s Note states:
Proposed amendments to Rule 2-433 were presented to the Rules Committee by an attorney to address concerns regarding Maryland’s “safe harbor” Rule…. The attorney advised the Committee that Rule 2-433 (b) no longer is functioning. He explained that the current “safe harbor” provision offers little protection, has not been used since its adoption in 2008, and lacks clarity. Amendments to Rule 2-433 can clarify the culpability required to support sanctions when electronically stored information is lost. The attorney informed the Committee that the “safe harbor” provision of the parallel federal rule was amended in 2015 and suggested similar changes to Rule 2-433.
Discovery Subcommittee of the Maryland Standing Committee of Rules of Practice and Procedure, Reporter’s Note.
The November 2, 2023, decision by the Maryland Supreme Court replaces the “safe harbor” rule.
NEW MARYLAND RULE 2-433(b)
While the Rules Order has not yet issued, based on the hearing, it is my understanding that the new rule will provide:
“If electronically stored information that should have been preserved in the reasonable anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it and the information cannot be restored or replaced through additional discovery, upon finding prejudice to another party from loss of the information the court may order measures no greater than necessary to cure the prejudice.”
PROPOSED NEW MARYLAND RULE 2-433(b)
While the precise language has not been prepared, a Committee Note will be drafted to essentially state that the order may include that, in a jury trial, the court may instruct the jury that it may or must presume that the information was unfavorable to the party, or the court may dismiss the action or enter a default judgment.[2]
Positive Features of the Amended Rule
One positive feature of the amendment is to repeal the “safe harbor” rule. The many shortcomings of that Rule were outlined in the white paper and need not be repeated here.
Another positive change under the new rule is that Maryland now uses the federal “reasonable anticipation” of litigation standard as the trigger of the duty to preserve. See Rule 2-433 and the Committee note. That replaces the “fairly perceived as imminent” standard of some Maryland caselaw.[3]
Given that the duty to preserve is often triggered in a “free-for-all”[4] zone, before litigation has commenced, it is important that potential litigants, not knowing what forum will be selected, have a single, uniform standard.
Another positive change should be the sub silentio displacement of inherent power as a basis for sanctions where the Rule is applicable. Many older Maryland cases impose sanctions using the Court’s common-law “inherent authority.” See M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts,” at 227.
The federal advisory committee note expressly states that Fed.R.Civ.P. 37(e) “forecloses reliance on inherent authority.” While the Maryland note does not include that statement, the same conclusion should be reached under it. See M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts,” at 228.
Another major improvement is that Maryland cases were unclear as to the state of mind needed to support sanctions. Some cases suggested that “intent” was required; others found negligence sufficient. See M. Berman, et al., eds.,“Electronically Stored Information in Maryland Courts,” at 213, passim.
In my opinion, because the amended Rule is triggered by prejudice, after a failure to take “reasonable steps,” it includes both negligent and intentional spoliation.
In my opinion, because the amended Rule is triggered by prejudice, after a failure to take “reasonable steps,” it includes both negligent and intentional spoliation.
Possible Gaps in the Amended Rule
The amended rule requires a finding of prejudice before sanctions may be imposed. Under Fed.R.Civ.P. 37(e)(2), prejudice is presumed when ESI is destroyed with the intent of depriving the opponent of its use. That presumption was deleted by the Maryland Supreme Court. Further, any sanction is limited to “measures no greater than necessary to cure the prejudice.”
In my opinion, that decision may create uncertainty and may be inconsistent with the philosophy underlying the spoliation doctrine.
The Rule Should Not Limit Sanctions Where Destruction is Intentional
If there is intentional destruction of relevant, discoverable ESI, why is the Court limited to measures no greater than necessary to cure the prejudice?
If there is intentional destruction of relevant, discoverable ESI, why is the Court limited to measures no greater than necessary to cure the prejudice?
Deterrence of misdeeds is one legitimate goal of the sanctions doctrine.[5] Deterrence may justify a sanction greater than necessary to cure the prejudice.
Deterrence of misdeeds is one legitimate goal of the sanctions doctrine.[5] Deterrence may justify a sanction greater than necessary to cure the prejudice.
In Klupt v. Krongard, 126 Md. App. 179, 199 (1999), Mr. Klupt admitted that he had “smash[ed the tapes] with a hammer.” Dismissal was deemed appropriate as a sanction. However, under the amended Rule, the Court may be limited in the sanctions that it could impose, despite the egregious conduct.
Admittedly, the proposed Committee Note will state that “game ending” sanctions are included among measures no greater than necessary to cure the prejudice. However, “committee notes… are not part of these rules.” Md. Rule 1-201(e). “The Maryland Rules of Procedure, it has been said over and over again, are precise rubrics and not mere guidelines, .… [T]hey are to be read and followed.” Jones v. State, 61 Md. App. 94, 102 (1984).[6]
An Injured Party Should Not be Required to Prove Prejudice in All Instances
It may be difficult or impossible for an injured party to prove prejudice after the evidence has gone missing. For example, if my opponent destroys a video of an automobile accident after litigation is reasonably anticipated, how can I prove prejudice? I cannot show what was – or was not – on the missing video, and I cannot prove that it would support my client’s version of the occurrence.
It may be difficult or impossible for an injured party to prove prejudice after the evidence has gone missing.
To give another example, if my opponent intentionally destroys unique, internal emails and text messages, how can I prove prejudice when I am unable to show what was on the missing ESI?
Does the Presumption of Prejudice Survive Deletion from the Rule?
Under Fed.R.Civ.P. 37(e)(2), that gap is filled by a presumption of prejudice when ESI is intentionally destroyed. Under the ancient doctrine omnia praesumuntur contra spoliatem, all things are presumed against the spoliator. That presumption or inference rests upon a logical proposition that one would ordinarily not destroy evidence favorable to him or her self. The corollary is that a person will preserve that which is beneficial to his or her case. M. Berman, et al., eds.,“Electronically Stored Information in Maryland Courts,” at 207-08 (citations omitted).
The Appeals Court of Maryland has written that: “The destruction or alteration of evidence by a party gives rise to inferences or presumptions unfavorable to the spoliator, the nature of the inference being dependent upon the intent or motivation of the party. Unexplained and intentional destruction of evidence by a litigant gives rise to an inference that the evidence would have been unfavorable to his cause, but would not in itself amount to substantive proof of a fact essential to his opponent’s cause.” Anderson v. Litzenberg, 115 Md. App. 549, 560–61 (1997).
The presumption, at a minimum, shifts the burden of proof to the spoliating party. I suggest that the language in the amended Rule – – “upon finding prejudice to another party” – – implies that the burden of proof is on the injured party, although that is not entirely certain, and is an issue that may be litigated. One question that may arise is whether the Court’s decision to reject the presumption in the proposed amended rule means that that common-law presumption is no longer viable.[7]
The presumption, at a minimum, shifts the burden of proof to the spoliating party. I suggest that the language in the amended Rule – – “upon finding prejudice to another party” – – implies that the burden of proof is on the injured party, although that is not entirely certain, and is an issue that may be litigated. One question that may arise is whether the Court’s decision to reject the presumption in the proposed amended rule means that that common-law presumption is no longer viable.[7]
CONCLUSION
Sanctions decisions should be approached with great caution. M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts,” at 277-78. Sanctions have ruined careers, only to be later reversed on appeal. Id. at 279-80.
On the other hand, sanctions are valuable tools to “level the playing field” and deter misconduct. Clarity and predictability are important.
While the amendment has positive features, it is not clear to me that the amendment provides all of the available clarity. The limitation of available sanctions to those that are no greater than necessary, albeit read in light of the Committee Note, may work at cross-purposes with the need for deterrence.
The Rule’s focus on requiring prejudice in all instances is, in my view, misplaced and I suggest that it could be interpreted by Maryland courts to foreclose curative sanctions where they should be available.
It will be interesting to see if litigants are able to successfully argue that, where intentional destruction of appropriately discoverable ESI occurs after the duty to preserve is triggered, prejudice should be presumed. Creation of a presumption would ameliorate what I suggest is the harshness of the amended Rule; however, the provision creating that presumption was deleted by the Court and the import, if any, on the common-law presumption remains to be seen.
RESOURCES
[1] For a discussion of the differences between the Maryland and federal rules, see Does Maryland Have an Analog to Fed.R.Civ.P. 26(g)? and the series of blogs tagged “MD Rules v. Federal Rules of Civil Procedure.”
[2] In the event that the published language of the amended Rule or Committee Note differs, this blog may be revised.
[3] For a discussion of the “fairly perceived” standard, see M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020), 153-67.
[4] For a discussion of the “free-for-all zone,” see M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts” at 162, 163 n. 13, 167.
[5] “A proper spoliation sanction should serve both fairness and punitive functions.” Cumberland Ins. Grp. v. Delmarva Power, 226 Md. App. 691, 699 (2016)(citation omitted; cleaned up), cert. denied, 447 Md. 298 (2016). Courts have written that “deterrence” is a factor to consider in determining what sanction to impose. Fisher v. Fisher, 2012 WL 2873951, at *3 (D. Md. July 12, 2012).
[6] I do not suggest that Committee Notes are ignored. The rules “must be read in light of … case law and [the] Committee Note.” Arrington v. Dep’t of Hum. Res., 402 Md. 79, 101 (2007); Bijou v. Young-Battle, 185 Md. App. 268, 288 (2009).
[7] Absent a clear indication to the contrary, Maryland courts assume that a rule was not intended to amend, nullify, or supersede the common law. Holmes v. State, 350 Md. 412, 422 (1998).
