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Spoliation of EvidenceforNorth American Risk ServicesAltamonte Springs, FL9/25/14

Dale K. Forsythe, Esq.Wayman, Irvin & McAuley, LLC www.waymanlaw.com

DefinitionSpoliation of evidence refers to intentional or negligent withholding, hiding, alteration or destruction of evidence relevant to a legal proceeding.DefinitionWord comes from the Latin word spoliare - to plunder.

Most dictionary definitions include words such as pillage, robbery, destruction.ExamplesAsbestos litigation - loss or destruction of sales records, meeting notes, medical findings

Truck accident owner puts his truck back into operation or loses IVIS (in-vehicle information system)

Fire loss failure of the property owner (defendant?) to preserve the scene/evidence

Consequences Possible Criminal Consequences - fines or even incarceration

Judicial ApproachesTreat it as a matter within their inherent powers. (Telectron, Inc. v. Overhead Door Corp., 116 F.R.D. 107 (S.D.Fla. 1987)Recognize it as a separate cause of action / independent tort (minority approach).Treat it as a form of discovery abuse. Fed. R. Civ. P. 37

Duty to Preserve EvidenceSource of the Duty

Statutory authority

Contractual obligation

Case law

Procedural Rules local, state, federal

Inherent authority of the court

Ethical obligations Duty to Preserve EvidenceOnce litigation arises

When defendant is served with complaint

When plaintiff is served with Answer/Counterclaim

Subpoena is servedDuty to Preserve EvidencePrior to Litigation

- if pre-litigation communication of potential litigation, e.g., a pre-litigation hold letter

- once it becomes reasonably certain that an action will be filed, or when litigation is reasonably anticipated. Duty to Preserve EvidencePrior to Litigation

Factors to Consider (case by case):Level of knowledge in organization about the claim;The risk to the organization of the claim;The risk of losing information without a litigation hold;The complexity/number of sources

Burden generally less on a non-party

Connor R. Crowley, et. al.., The Sedona Commentary on Legal Holds: The Trigger and the Process, The Sedona Conference (2007).

Duty to Preserve EvidenceWhose else has the duty?

Ethical obligation on the part of a lawyer

Duty to advise clients

Duty to Preserve EvidenceScope of Duty

Evidence that is relevant to the litigation serves as the minimum guideline

Suspend retention policy / litigation hold

Evidence reasonably likely to be part of discovery requestDuty to Preserve EvidenceScope of DutyElectronically stored information Fed. R. Civ. P. 34(a) In General. A party may serve on any other party a request within the scope of Rule 26(b): (1) to produce and permit the requesting party or its representative to inspect, copy, test, or sample the following items in the responding party's possession, custody, or control:(A) any designated documents or electronically stored informationincluding writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilationsstored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form;.....

Duty to Preserve EvidenceScope of DutyElectronically stored information Fed. R. Civ. P. 26a. Required Disclosures(1) Initial Disclosure.(A) In General. Except as exempted by Rule 26 (a)(1)(B), or as otherwise stipulated or ordered by the court, a party must, without awaiting a discovery request, provide to the other parties:(ii) a copyor a description by category and locationof all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses, unless the use would be solely for impeachment;.Duty to Preserve EvidenceScope of DutyElectronically stored information Fed. R. Civ. P. 34(b) Discovery Scope and Limits.(2) limitations on frequency and extent(B) Specific Limitations on Electronically Stored Information. A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for the discovery.Duty to Preserve EvidenceScope of DutyElectronically stored information Rule 37 Failure to Make Disclosure or Cooperate in Discovery: Sanctions - incorporates other provisions

Duty to Preserve Evidence

Sophisticated entities / litigants (such as insurance carriers) can be held to a higher standard.

Ballotis v. McNeil, 870 F. Supp. 1285, 1290 (M.D. Pa. 1994).Allstate Ins. Co. v. Sunbeam Corp.,865 F. Supp. 1267, 1278 (N.D. Ill., 1994).Indiana case Thompson v. Owensby, 704 N.E. 2d 134 (Ind. App. 1998).

Duty to Preserve EvidenceLitigation/claims tactics:

Early inspection

Early notification

Participate in post-accident inspections

Records

Confirm product identification (products case)

Chain of custody

Consequences / Remedies

Criminal Statute Florida, Title XLVII 918.13Tampering with or fabricating physical evidence.(1)No person, knowing that a criminal trial or proceeding or an investigation by a duly constituted prosecuting authority, law enforcement agency, grand jury or legislative committee of this state is pending or is about to be instituted, shall:(a)Alter, destroy, conceal, or remove any record, document, or thing with the purpose to impair its verity or availability in such proceeding or investigation; or(b)Make, present, or use any record, document, or thing, knowing it to be false.(2)Any person who violates any provision of this section shall be guilty of a felony of the third degree, punishable as provided in 775.082, 775.083 or 775,084.

Judicial Approaches Inherent power of the courtThe authority to dismiss an action for lack of prosecution or to enter default for discovery abuses is one of the inherent powers of the court. In particular, the courts have the inherent power to enter a default judgment as punishment for a defendant's destruction of documents.Telectron, Inc., supra, HN2 at 108.; See also, Trigon Ins. Co. v. United States, 204 F.R.D. 277 (E.D. Va. 2001). Independent Cause of ActionMinority Position

First Party v. Third Party

Negligent v. Intentional

Independent Cause of ActionElements of Negligent Spoliation Against Third Parties (from Montana standard, Gentry v. Douglas Hereford Ranch, Inc., 962 P. 2d 1205 (Mont. 1998).

Potential civil actionLegal or contractual duty to preserve evidenceDestruction of the evidenceSignificant impairment of ability to prove potential civil actionCausal connectionSignificant possibility of success if the evidence were availabledamagesIndependent Cause of ActionElements of Intentional Spoliation Against Third Parties (from Oliver v. Stimson Lumber Co., 993 P. 2d 11 (Mont. 1998)).

Existence of a potential lawsuitThe defendants knowledge of the potential lawsuitIntentional destruction of evidence designed to disrupt/defeat lawsuitDisruption of the lawsuitCausal connection

Independent Cause of ActionStates which recognize independent cause of action:Alaska first part intentional tort recognized (Hazen v. Anchorage, 72 P. 2d 456 (Alaska 1986)).Hawaii still unresolved (Matsuura v. E.I. du Pont de Nemours and Co., 73 P. 3d 687, 706 (Haw. 2003)).Idaho not recognized, but it would require intentional action (Yoakum v. Hartford Fire Ins. Co., 923 P. 2d 416, 422-23 (Idaho 1996)).Illinois claim can fit within existing negligence principles (Dardeen v. Kuehling, 821 N.E. 2d 227, 231 (Ill. 2004).

Independent Cause of ActionStates which recognize independent cause of action:Indiana third party tort only if duty exists (Gloyzbach, CPA v. Froman, 827 N.E. 2d 105 (Ind. App. 2005)).Louisiana is independent cause of action, if intentional (Guillory v. Dillards Dept. Store, Inc., 777 So. 2d 1,3 (La. App. 3d Cir. 2000); Desselle v. Jefferson Hosp. Dist. No. 2, 887 so. 2d 524, 534 (La. App. 2004). Montana have adopted torts of intentional and negligent spoliation against third parties (Gentry, supra.; Oliver, supra).

Independent Cause of ActionStates which recognize independent cause of action:New Mexico Intentional tort recognized, negligent tort rejected (Coleman v. Eddy Potash, Inc., 905 P. 2d 185 (N.M. 1995)).Ohio - Intentional tort recognized (for first party and third party ) (Smith v. Howard Johnson Co., Inc., 615 N.E. 2d 1037 (Ohio 1993). West Virginia Intentional tort recognized (for first party and third party) and negligent tort recognized for third party) (Hannah v. Heeter, 584 S.E. 2d 560 (W.Va. 2003).

Independent Cause of Action - FloridaFlorida no independent cause of action for first-party spoliation (Martino v. Wal-Mart Stores, Inc., 908 So. 2d 342 (Fla. 2005).

Florida appellate courts have recognized third party claims (Townsend v. Conshor, Inc., 832 So. 2d 166 (Fla. Dist. Ct. app. 2002); Jost v. Lakeland Regl Med. Ctr., Inc., 844 So. 2d 656 (Fla. 2d DCA 2003). Independent Cause of Action - FloridaThird party claims do not arise until after completion of underlying action. (Lincoln Ins. Co., v. Home Emergency Servs., Inc., 812 So. 2d 433 (Fla. Dist. Ct. App. 2001).

Third party claim against otherwise immune employer also permitted. (Builders Square, Inc. v. Shaw, 755 So. 2d 721 (Fla. Dist. Ct. app. 1999).Independent Cause of Action - FloridaNegligent spoliation cause of action (from Jost, supra):1. existence of potential civil action2. legal or contractual duty to preserve evidence3. destruction of the evidence4. significant impairment to ability to prove lawsuit5. causal connection6. damages Discovery AbuseThe preferred position across most jurisdictions, in the first party situation primarily, is to treat the loss or manipulation of evidence as a form of discovery abuse.

The court has rather wide discretion to formulate appropriate orders/sanctions under the facts and circumstances of a particular case.Discovery Abuse Pennsylvania Rule of Civil Procedure 4019:

(c) The court, when acting under subdivision (a) of this rule, may make(1) an order that the matters regarding which the questions were asked, or the character or description of the thing or land, or the contents of the paper, or any other designated fact shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;(2) an order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting such party from introducing in evidence designated documents, things or testimony, or from introducing evidence of physical or mental condition;(3) an order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or entering a judgment of non pros or by default against the disobedient party or party advising the disobedience;(4) an order imposing punishment for contempt, except that a party may not be punished for contempt for a refusal to submit to a physical or mental examination under Rule 4010;(5) such order with regard to the failure to make discovery as is just.

Discovery AbuseThe Pennsylvania Supreme Court in Schroeder v. Com. Dept. of Transportation, 710 A. 2d 23 (Pa. 1998), adopted the following three part test from Schmid v. Milwaukee Electric Tool Corp., 13 F.3d 76 (3rd Cir. 1994), to be considered in determining a penalty for failure to preserve evidence:1. the degree of fault of the party who altered or destroyed the evidence;

2. the degree of prejudice suffered by the opposing party; and

3. the availability of a lesser sanction that will protect the opposing party's rights and deter future similar conduct.Discovery Abuse

Three part test was applicable in product liability actions as well as non-product liability actions. (Eichman v. McKeon, 2003 PA Super 185, 824 A.2d 305 (Pa. Super. 2003)).

Discovery AbuseEvaluation of fault

Look at:

The extent of the offending partys duty or responsibility to preserve the evidence

The presence of bad faithCreazzo v. Medtronic, Inc., 903 A. 2d 24 (Pa. Super. 2006).Discovery AbuseEvaluation of intent

Look at:

Destroyed with actual knowledge?

Court order, preservation letter?

What would reasonable party have done?

Was it analyzed by spoliating party?

Discovery AbuseEvaluation of reasonableness of retention policy

Look at:

Facts and circumstances surrounding the relevant documents?

Other lawsuits?

Policy initiated in bad faith?

Retain notwithstanding policy

Lewy v. Remington Arms Co., 836 F. 2d 1104 (8th Cir. 1988).

Discovery AbuseFactors in determining prejudice

How important is it to the partys case?

Can evidence be reconstructed?

Other sources?

Discovery AbuseIn Croydon Plastics Co. v. Lower Bucks Cooling & Heating, 698 A.2d 625, 629 (Pa. Super. 1997), the Superior Court emphasized that the decision to sanction a party, and the severity of the sanction imposed, was bestowed to the sound discretion of the trial court.

The Superior Court in Croydon quoted Stewart v. Rossi, 681 A.2d 214, 217 (Pa. Super. 1996), by stating that the court must carefully balance the equities of the particular case and "dismiss only where the violation of the discovery rules is willful and the opposing party has been prejudiced." 698 A.2d at 629.Discovery AbuseThe court in Stewart enumerated the following considerations to be addressed when imposing the sanction of dismissal:(1)the nature and severity of the discovery violation;(2) the defaulting party's willfulness or bad faith;(3) prejudice to the opposing party;(4) the ability to cure the prejudice; and(5) the importance of the precluded evidence in light of the failure to comply.Croydon, 698 A 2d at 629.

Discovery AbuseExcept in egregious circumstances, the preferred approach over dismissal is an adverse inference against the party responsible for the spoliation, in the form of an instruction to the jury.Discovery AbuseFla. R. Civ. P. 1.380

(b) Failure to Comply with Order. (1) If a deponent fails to be sworn or to answer a question after being directed to do so by the court, the failure may be considered a contempt of the court.(2) If a party or an officer, director, or managing agent of a party or a person designated under rule 1.310(b)(6) or 1.320(a) to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under subdivision (a) of this rule or rule 1.360, the court in which the action is pending may make any of the following orders:(A) An order that the matters regarding which the questions were asked or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order.(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence.(C) An order striking out pleadings or parts of them or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part of it, or rendering a judgment by default against the disobedient party.(D) Instead of any of the foregoing orders or in addition to them, an order treating as a contempt of court the failure to obey any orders except an order to submit to an examination made pursuant to rule 1.360(a)(1)(B) or subdivision (a)(2) of this rule.Discovery AbuseWhen evidence is intentionally lost, misplaced, or destroyed by one party, courts are to rely on sanctions in Fla. R. Civ. P. 1.380(b)(2), and a jury could well infer from such a finding that the records would have contained indications of negligence. Public Health Trust v. Valcin, 507 So. 2d 596 (Fla. 1987).

If negligent loss of evidence hinders the other partys ability to establish a prima facie case, then a rebuttable presumption of negligence for the underlying tort will be applied. (Upheld in Martino v. Wal-Mar Stores, Inc., 908 So. 2d 342 (Fla 2005).Take AwayInsurance carrier has higher duty than typical litigant, likely has a duty to insured, possible third parties.

Spoliation by a defendant can lead to an inference of negligence when no negligence existed.

Spoliation by a plaintiff /subrogee could result in dismissal or exclusion of important evidence.

While not many states have affirmatively found independent cause of action against third party, quite a few simply have not addressed the issue in the appropriate circumstances. Disclaimer This material is prepared for information/educational purposes only. It is not intended as legal advice, nor should it be construed as or relied upon as legal advice. You should consult with counsel before embarking on any course of conduct or refraining from any activity that may entail legal consequences. Although the above was prepared on the basis of the state of the law of Pennsylvania or other states as noted, as of the date of preparation, the law is subject to interpretation and may change in the future. Therefore, absolutely no representations are made relative to any specific legal situation or the application of law to any specific facts. NO EXPRESS OR IMPLIED WARRANTIES ARE INTENDED OR MADE.

The foregoing is not intended to be a complete and exhaustive review of each and every reported or unreported decision issued by Pennsylvania Courts, state and federal, on the issues presented. Rather, the foregoing is intended as an overview of some of the recent and significant decisions with respect to these issues.

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