Before 2015, sanctions for lost electronically stored information were a patchwork. Different circuits applied different standards, and a party could face severe penalties for merely negligent loss in one jurisdiction while escaping them in another. In the Zubulake v. UBS Warburg line (S.D.N.Y. 2003–04) and decisions that followed it, some courts were willing to impose serious sanctions — including adverse-inference instructions — for loss that was negligent rather than deliberate. The 2015 amendment to Federal Rule of Civil Procedure 37(e) was written specifically to bring order to that landscape, and understanding its structure is essential to managing preservation risk.

The threshold questions

Rule 37(e) applies only when four conditions are met. Each is a gate; if you do not pass through it, the rule's sanctions are not available against you:

  • The information was ESI that should have been preserved;
  • in the anticipation or conduct of litigation;
  • it was lost because a party failed to take reasonable steps to preserve it; and
  • it cannot be restored or replaced through additional discovery.

That structure is itself a roadmap for defense. If you took reasonable steps, the rule does not reach you — even if some data was lost. And if the information can be recovered from another source, backup, or custodian, the loss is not sanctionable. "Reasonable steps" does not mean perfection; it means a documented, good-faith preservation process of the kind a playbook produces.

Two tiers of remedy

When the four threshold conditions are met, the rule splits into two very different paths.

Subdivision (e)(1): prejudice-based measures

If the loss prejudices another party, the court "may order measures no greater than necessary to cure the prejudice." These are calibrated, proportional remedies — for example, allowing additional discovery, permitting evidence and argument about the loss, or other curative steps. Critically, this tier does not require any finding of intent.

Subdivision (e)(2): the severe sanctions

The harshest measures — an adverse-inference instruction that the lost information was unfavorable, dismissal, or default judgment — are available only on a finding that the party acted with the intent to deprive another party of the information's use. Negligence, even gross negligence, is not enough. This was the central reform of the 2015 amendment: it took the most punishing sanctions off the table for parties who lost data carelessly rather than deliberately.

Courts do impose these measures when the record shows deliberate destruction. In Pable v. Chicago Transit Authority, No. 19 C 7868 (N.D. Ill. 2024), the court dismissed a plaintiff's case under Rule 37(e)(2) after finding he had intentionally deleted Signal messages that were central to the dispute — a sanction later affirmed on appeal. The case is a useful reminder that the intent finding turns on conduct, and that ephemeral or encrypted-messaging apps are a frequent setting for it.

What this means in practice

The rule rewards process. A party that can show reasonable, documented preservation steps is well positioned to avoid sanctions entirely. A party that destroyed data deliberately — or whose conduct supports an inference of intent — faces the case-ending remedies regardless of how the loss is characterized.

How losses actually happen

The cases that produce sanctions rarely involve a villain shredding documents. More often, ESI is lost to ordinary operations that no one paused:

  • Auto-delete and retention policies that kept running after the duty to preserve attached.
  • Departed-employee accounts deprovisioned before their data was preserved.
  • Ephemeral messaging and disappearing-chat features left enabled.
  • Personal devices under a BYOD policy that were never actually placed on hold.
  • Cloud and SaaS data that fell outside the team's mental map of "where the data is."

Each of these is preventable with a hold process that reaches IT and a current data-source inventory — the two things organizations most often lack.

The takeaway: documentation is the defense

Rule 37(e) does not ask whether you were perfect. It asks whether you took reasonable steps, whether the loss caused prejudice, and — for the severe sanctions — whether you intended to deprive. The way you answer the first question favorably is the same record a good playbook generates: dated triggers, hold notices, acknowledgement tracking, deletion suspensions, and a defensible collection process.

The organizations that sleep well are not the ones that never lose a byte. They are the ones that can show, with contemporaneous records, that their process was reasonable. If you are not confident you could make that showing today, a preservation-risk assessment is the place to start.