FRCP 37(e) Safe Harbor from Sanctions for Loss of ESI (E-Discovery)

It’s not possible to retain all ESI that’s created or generated. Companies reuse backup tapes, which overwrite older data and files. Servers crash. New systems are implemented and older ones retired. ESI loss will happen in any of those examples. ESI that you cannot produce because you have lost it exposes you to spoliation sanctions, which are deliberately harsh to act as a deterrent.
Rule 37(e) creates a safe harbor from sanctions if you did not preserve, and therefore no longer have, ESI that’s requested provided that certain conditions and circumstances are met.
Rule 37(e), of course, doesn’t apply if you deliberately destroyed the ESI. Your chance of a safe harbor is zero.
A key to falling within the safety of Rule 37(e) is having a written electronic records management policy and routine procedures, and following them consistently.
Once your duty to preserve kicks in, you need to take affirmative action to stop routine procedures that could destroy the responsive ESI. Forgetting to stop the destruction or waiting a while before stopping is negligence. Negligence, ironically, destroys your safe harbor.
Rule 37(e) is like the rule of last resort. You’re required to meet and confer to limit scope of discovery and discuss the forms of production, among other things, before judges are required to get involved. Failing to work through those rules in good faith may result in sanctions under Rule 37(e).