Michigan Civil Discovery Process Will Change

Effective January 1, 2020, the Michigan civil discovery process will change dramatically. The changes include imposing new duties on retaining electronically stored information (ESI), including emails, word documents, PDFs, etc. Here is what businesses should know about preserving ESI before and during litigation.

A party must preserve ESI before the lawsuit is even filed. The new rule says that ESI must be preserved “in the anticipation or conduct of litigation.” What does in the anticipation of litigation mean? The new rule does not specify when the duty to preserve ESI attaches. In federal courts, where there is also a duty to preserve ESI, this duty attaches when litigation is reasonably foreseeable. Litigation can often be reasonably foreseeable when one party sends another a litigation hold letter. A litigation hold letter advises the party that the sender puts the other party on notice that litigation is possible and that you should start preserving ESI in anticipation of this litigation. Moving forward, when litigation arises, we should refrain from implementing routine space-saving measures such as automatic deletion of emails after 30 days.

Penalties for Failing to Preserve ESI

Parties may face severe penalties for failing to preserve ESI, depending on whether the party lost the ESI by failing to act reasonably or acting with malice. For a party that “failed to take reasonable steps to preserve” the ESI, the court “may order measures no greater than necessary to cure the prejudice” to the other party. The court will impose sanctions on the party that loses important ESI in proportion to the harm caused. The second way that a court can sanction a party is when that party “acted with the intent to deprive another party of the information’s use in the litigation.” Finding the “intent to deprive” is a high bar, but there are significant consequences. The possible penalties include a legal presumption that the lost information was unfavorable to the party that lost it, allowing the jury to presume that the lost information was unfavorable, and even entering a judgment against the party.

What does this mean for businesses? The Michigan Court Rules will soon impose a duty to preserve ESI, even before a lawsuit begins. This means when a lawsuit is reasonably foreseeable, parties now have a duty to preserve ESI and safeguard files. The party should suspend routine ESI destruction, stop personal/casual ESI destruction, and preserve pre-and-post-duty-to-preserve ESI. If a party neglects to preserve or intends to deprive another’s use of ESI, the court may impose severe sanctions. Starting January 1st, you should pause before you delete that old email.