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Spoliation Remedies Equate Culpable Conduct and Ignorance

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In light of the broad allowances of discovery requests under New York law, litigation can be an extremely frustrating experience for clients who sometimes ask, “Why is that relevant?”  “Why does the other side even want that?”  “Those emails weren’t important anyhow!”  While it is only human to want to control the narrative, the client cannot unilaterally decide what is relevant, and throw away what they consider superfluous.  The outcome may be disastrous, for both client and counsel.  Two recent Appellate Division cases analyze the consequences of such unilateral destruction of evidence, both intentional and inadvertent, which in legal terms is called “spoliation.”

In Ferrer v. Go New York Tours Inc., 2024 WL 2925599 (1st Dep’t 2024), following an accident involving a tour company bus, the defendant tour operator’s employees “reviewed video footage from the six cameras on the bus, forwarded two videos to its insurer, and deleted the rest.”  Footage from four of the cameras were destroyed.  This is a classic case of spoliation

Notably, it seems as if the defendant was not speaking to its lawyers at this juncture, but they certainly should have been.  Prudent counsel should always instruct their clients to engage counsel as soon as litigation is anticipated.  Preservation obligations must be part of the initial conversation.  An attorney cannot merely assume that their client would know better — especially when heightened emotions or a need to regain control may lead to poor decisions.

Thus, in Ferrer, based on the destruction of the footage, the personal injury plaintiff filed a motion for sanctions premised upon spoliation.  The lower court granted the motion and imposed an adverse inference charge, which is an instruction to the jury to draw an inference in the plaintiff’s favor – in essence, to permit the jury to infer that the video footage showed something the defendant wanted to hide.  The defendant appealed.

The First Department, citing precedent, stated that the plaintiff bears the burden to show (1) the party having control over the evidence possessed an obligation to preserve it at the time of destruction; (2) the evidence was destroyed “with a culpable state of mind”; and (3) the destroyed evidence was relevant to the party’s claim or defense such that the trier of fact could find that the evidence would support that claim or defense.

As to the first factor, litigation need not have actually commenced.  The party must only be aware that litigation is a real possibility.

As to the second factor, the term “culpable” is somewhat misleading because a movant need not show wrongful intent or even deliberate conduct.  Rather, as the Ferrer Court states, citing precedent, that “[a] culpable state of mind for purposes of a spoliation sanction includes ordinary negligence,” a much lower bar than deliberate misconduct.

Regarding the third factor, as pointed out by the Ferrer Court, “The operations manager testified that Tours’ employees determined what footage was relevant, what should be preserved, and what should be deleted or overwritten. However, the defendant did not have the right to make this determination unilaterally.”

Of course, it is entirely possible that the destroyed footage was harmless, but the plaintiff need not prove here that the destroyed footage actually contained unfavorable information or plainly demonstrated driver misconduct, but only that it could be relevant under New York’s broad standards.  Indeed, the Ferrer Court notes that the destroyed footage may have revealed traffic or other conditions that might have shed light on the cause of the accident.

As such, the First Department affirmed the trial court’s decision imposing the adverse inference.   Now, instead of arguing the relevance or content of the destroyed footage, the defendant must contend with an assumption of misconduct, whether in realty there had been or not.

Looking at the other side of the coin; another recent decision in the Fourth Department, Buffalo Biodiesel, Inc. v. Blue Bridge Fin., LLC, 2024 WL 2986597 (4th Dep’t June 14, 2024), illustrates a more extreme example of how spoliation can be equally disastrous for a plaintiff’s case.

In Buffalo Biodiesel, the plaintiff was pursuing claims of libel and tortious interference with business relations, both based upon an email sent by the defendant to a financial services company that the plaintiff claimed “falsely characterized an ongoing legal dispute between the parties.”

The defendant’s discovery requests asked for, inter alia, communications between the plaintiff and the financial services company, and in response, the plaintiff eventually admitted that it had failed to issue a litigation hold and further failed to suspend the routine deletion of its emails during the course of the litigation.  The emails were gone, and the defendant’s attempts to subpoena said emails from the financial services company, which is now defunct, were also unsuccessful.

In response to the defendant’s subsequent motion for sanctions, the trial court, applying its broad discretion to fashion a remedy, did not merely order an inference, but struck the plaintiff’s complaint and dismissed the action with prejudice.  The Fourth Department affirmed and, citing precedent, found that the plaintiff’s failure to halt routing email purges “constituted the grossly negligent spoliation of evidence.”

The first lesson to be drawn from the Buffalo Biodiesel decision in particular is that Courts are not allowing for ignorance of online technology and the nature of email communications to serve as a defense to spoliation.  Indeed, the plaintiff’s failure was deemed gross negligence.  Therefore, in this day and age, all wise litigation counsel should have competent technology experts at the ready to preserve evidence.

The second lesson to be drawn from both of these decisions is that multiple Appellate Division departments are applying a strict liability-style standard regarding spoliation.  Whether the destruction was actively done or allowed through passivity or inadvertence, whether the destruction was intentional or through negligence, and whether there was any positive proof of relevance did not make a difference in these cases.  Instead, the Courts drew their own negative inferences, as indeed they must in these matters, as to both the party’s intent and the destroyed documents’ contents.  As the Fourth Department notes, “[w]hile the striking of a pleading is generally limited to ‘instances of willful or contumacious conduct,’” it is also a remedy available in instances of spoliation.  In this unique realm, culpable conduct and negligence are as one.

As such, attorneys should take notice of this trend, educate their clients before any problems even arise, and be fully prepared to take the necessary steps as early as possible to make certain that their client’s cases are tried on the facts, and not decided on necessary — but punitive — legal doctrines which may be factually unrelated to the merits of the dispute.

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