Excerpted from Product Liability: Winning Strategies & Techniques by Richard J. Heafeyand Don M. Kennedy. Product Liability Resource Center subscribers save 10% on this book. Use promo code 218232 when placing your order at lawcatalog.com.
The legal meaning of the term "spoliation" encompasses the destruction, loss, or material alteration of a document, product or other item of evidence, whether the spoliation is intentional or negligent. 1 Such evidence increasingly includes documents and records maintained in electronic format, and the failure to properly preserve electronic materials may raise spoliation issues. 1.1 Lawsuits and motions based on spoliation have been brought by plaintiffs and defendants alike, both against other parties to existing litigation and against third parties not previously involved in the litigation. Although punishing a party for willful destruction of evidence is well established in the criminal field, the tort of spoliation of evidence is relatively new and somewhat controversial in civil litigation. Its ramifications have given rise to deep concerns among the judiciary, employers, businesses and lawyers¿for both plaintiffs and defendants¿who may unwittingly find themselves defending one of these actions. One court has succinctly articulated the concerns about what this tort could lead to:
"the generation of endless litigation. . . ; rank speculation as to whether the plaintiff could have ever recovered in the underlying action and, if so, the speculative nature of the damages; the limitless scope of the new duty which would be created; and the unwarranted intrusion on the property rights of a person who lawfully disposes of his own property." 2
The spoliation cause of action was judicially created by an intermediate appellate court in California in 1984. 3 It continues to be the subject of numerous legal commentaries. 4 Essential elements such as the measure of damages are still often undefined and untested even in those jurisdictions that have accepted spoliation as an independent tort. Ultimately, however, fourteen years after the Court of Appeal gave birth to this tort, the California Supreme Court rejected "first party" intentional spoliation¿i.e., intentional spoliation by a party to the underlying cause of action to which the evidence is relevant¿as a separate cause of action. The California Supreme Court reached this result in view of the existing and effective nontort remedies available, such as evidentiary inferences and monetary and issue sanctions, as well as the practical problems raised by uncertainty as to the fact of harm in spoliation cases, and the uncertainty in calculating the amount of harm. 5
The California Supreme Court continued its disapproval of a separate tort of spoliation when it rejected the tort's applicability to third party spoliators. 6 The court reasoned that "it would be anomalous for a nonparty to be liable in damages, including punitive damages, for conduct that would not give rise to tort liability if committed by a party." 7 The court noted that third party spoliation poses the same problem of uncertainty as does first party spoliation, and that while more limited, the nontort remedies available against third party spoliators were sufficient. 8 A California appellate court closed any remaining gap when it subsequently struck down the cause of action for negligent spoliation of evidence¿first or third party. 9
A month after the California high court first rejected spoliation as an independent tort, the Texas Supreme Court weighed in on the issue and it, too, refused to recognize a spoliation cause of action, stating:
"While the law must adjust to meet society's changing needs, we must balance that adjustment against boundless claims in an already crowded judicial system. We are especially averse to creating a tort that would lead to duplicative litigation, encouraging inefficient relitigation of issues better handled within the context of the core cause of action. We thus decline to recognize evidence spoliation as an independent tort." 10
In those jurisdictions that have adopted the spoliation tort, trial courts have been kept busy dealing with such claims, which have become almost routine "add-ons" to complaints and cross-complaints. 11 Thus, while spoliation as a separate cause of action has been recognized in a handful of jurisdictions, many courts, now including California and Texas, have opted to fashion a remedy for lost or destroyed evidence without stepping into the foray of a separate spoliation tort, which carries with it many uncertainties, not the least of which involve issues of causation and damages.
The loss or destruction of evidence poses significant risks, not to mention innumerable headaches, for trial counsel and their clients. It can expose clients to, or deprive them of, a significant damage award. Should the loss of the evidence be the result of the product liability lawyer's handling of the evidence, the lawyer may also be subject to a professional negligence action based on spoliation of evidence. 11.1 In fact, many jurisdictions have expressly rejected a spoliation tort, on the very ground that evidentiary sanctions and traditional actions in negligence are sufficient remedies for most harm caused by spoliation of evidence. 12
Other courts simply refuse, without a compelling reason, to create a new tort where one otherwise did not exist. 13 Still other courts have concerns about creating a tort absent a showing of a duty¿based on contract, voluntary assumption of a duty or a "special relationship between the parties" 14 ¿or of a strong nexus between the lost evidence and the allegedly resulting harm, 15 especially when the alleged spoliator did not benefit from the loss of evidence. 16 Consistent with that reasoning is the difficulty involved in computing damages which are not based solely on speculation and conjecture. 17 Finally, some jurisdictions believe it is more appropriate to address spoliation with jury instructions as to permissible inferences, 18 or evidence exclusion orders. 19 Courts have also addressed spoliation by awarding monetary sanctions to the aggrieved party. 20
In rejecting intentional first party spoliation as an independent tort in Cedars-Sinai Medical Center v. Superior Court , 21 the California Supreme Court discussed several policy concerns. The court acknowledged that destruction of evidence is a "grave affront to the cause of justice," but observed that three other policy concerns militated against embracing the controversial tort. Specifically, the court emphasized (1) the adequacy of existing nontort remedies such as issue preclusion and other sanctions; (2) the uncertainty of the fact of harm in spoliation cases; and (3) the policy against creating tort remedies for "litigation-related misconduct." The result reached in Cedars-Sinai is consistent with that reached by the majority of courts that have wrestled with the question, including the many federal courts that have opted for alternative remedies such as evidence exclusion orders rather than creating a new tort remedy. 22 The California Supreme Court subsequently extended the rationale of Cedars-Sinai and applied these same policy concerns to bar claims against third party spoliators. 23
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FOOTNOTES
1 See "Spoilage of Evidence¿Crimes, Sanctions, Inferences and Torts," Vol. XXIX, No. 1 Tort and Ins. L. J. 52 (Fall 1993). Before the advent of the spoliation tort, many courts dealt with spoliation of evidence problems by adopting an adverse inference against the spoliator.
1.1 See, e.g., Thompson v. United States Department of Housing and Urban Development, 219 F.R.D. 93, 100 (D. Md. 2003) ("The failure to preserve electronic or other records, once the duty to do so has been triggered, raises the issue of spoliation of evidence and its consequences.").
2 Koplin v. Rosel Well Perforators, Inc., 734 P.2d 1177, 1183 ( Kan. 1987).
3 Smith v. Superior Court, 198 Cal. Rptr. 829, 832, 837 ( Cal. App. 1984). In creating the tort of intentional spoilation of evidence, the Smith court relied on dicta in Williams v. State of California, 192 Cal. Rptr. 233 (Cal. 1983) stating that "new and nameless torts are being recognized constantly." The court analogized the spoliation cause of action to one for interference with prospective business advantage and then described the advantage interfered with as a "valuable probable expectancy." While troubled by the potentially speculative nature of the damages, the court allowed the cause of action to go forward. The Smith decision was later disapproved by the California Supreme Court in Cedars-Sinai Medical Center v. Superior Court, N. 5 infra.
4 See, e.g.: Sasso and Birk, "Discovery and Spoliation Issues in the High-Tech Age," 32 Colorado Lawyer 81 (Sept. 2003); Adamski, Comment, "A Funny Thing Happened on the Way to the Courtroom: Spoliation of Evidence in Illinois," 32 J. Marshall L. Rev. 325 (1999); Rubin, Note, "Tort Reform: A Call for Florida to Scale Back Its Independent Tort for the Spoliation of Evidence," 51 Fla. L. Rev. 345 (1999); Rivlin, Note, "Recognizing an Independent Tort Action Will Spoil a Spoliator's Splendor," 26 Hofstra L. Rev. 1003); Canter, "The Missing or Altered Product: Nightmare or Dream?," 26 Sw. U. L. Rev. 1051 (1997); Sparkman and Reis, "Spoliated Evidence: Better Than The Real Thing?," 71 Fla. B. J. (Aug. 1997); Addison, "The Tort of Spoliation," 60 Tex. B.J. 656 (1997); Pavlisin, "Spoliation: Issues for the Insurance Industry," 46 FICCQuarterly (Summer 1996); Graham, "Spoliation of Medical Records," 52 J. Mo. Bar 87 (1996); Lang, "Spoliation of Evidence: The Continuing Search for a Remedy and Implications for Aviation Accident Investigations," 60 J. Air L. & Com. 997 (1995); Wilson, "The Alabama Supreme Court Sidesteps the Definitive Ruling in Christian v. Kenneth Chandler Construction Co.: Should Alabama Adopt the Independent Tort of Spoliation?," 47 Ala. L. Rev. 971 (1996); Gorelick, et al., Destruction of Evidence (1989); Spencer, "Do Not Fold Spindle or Mutilate. The Trend Towards Recognition of Spoliation as a Separate Tort," 30 Idaho L. Rev. 37 (1994); Kuppens, "There is No Substitute: Spoliation of Evidence in Product Liability Suits," 5 S.C. Law., at 28 (March/April 1994); Eshelman, "Using Spoliation of Evidence in Products Liability Cases," 6 Cal. Lit., at 36 (Fall 1992); Owens, "Should Iowa Adopt the Tort of Intentional Spoliation of Evidence in Civil Litigation?," 41 Drake L. Rev. 179 (1992); Nesson, "Incentives to Spoliate Evidence in Civil Litigation: The Need for Vigorous Judicial Action," 13 Cardozo L. Rev. 793 (1991); Melgaard, "Spoliation of Evidence¿An Independent Tort?," 67 N.D. L. Rev. 501 (1991); Kerkorian, "Negligent Spoliation of Evidence: Skirting the 'Suit Within a Suit' Requirement of Legal Malpractice Actions," 41 Hast. L. J. 1077 (1990); Solum and Marzen, "Destruction of Evidence," 16 Litigation, at 11 (Fall 1989); Hill, "Judicial Activism and the Destruction of Evidence: Reconsidering Traditional Responses to Evidence Destruction in Civil Proceedings," 23 Land & Water L. Rev. 209 (1988); Rowse, "Spoliation: Civil Liability for Destruction of Evidence," 20 U. Rich. L. Rev. 191 (1985); " Smith v. Superior Court : A New Tort of Intentional Spoliation of Evidence," 69 Minn. L. Rev. 961 (1985).
5 Cedars-Sinai Medical Center v. Superior Court, 74 Cal. Rptr.2d 248 (Cal. 1998) (disapproving Smith v. Superior Court , N. 3. supra , and Willard v. Caterpillar, Inc., 40 Cal. App.4th 892 (Cal. App. 1995)).
6 Temple Community Hospital v. Superior Court, 84 Cal. Rptr.2d 852 ( Cal. 1999).
7 Id . , 84 Cal. Rptr.2d at 854.
8 A dissent faulted the majority for failing to acknowledge the serious limitations on nontort remedies for third party spoliation: "Only monetary and contempt discovery sanctions are even potentially available against a third party spoliator, and even these are further restricted by the limitation of section 2023 [of the California Code of Civil Procedure] to ¿conduct that is a misuse of the discovery process.'" Id . , 84 Cal. Rptr.2d at 865.
9 Farmers Insurance Exchange v. Superior Court, 79 Cal. App.4th 1400, 1407 (Cal. App. 2000) (noting that recognizing a claim of negligent spoliation would be "an absurdity" in view of Cedars-Sinai , N. 5 supra . and Temple , N. 6 supra . See also Copich v. Superior Court, 80 Cal. App.4th 1081, 1090 n.5 (Cal. App. 2000) (agreeing with Farmers Insurance Exchange ).
10 Trevino, M. D. v. Ortega, 969 S.W.2d 950 ( Tex. 1998) (a first party spoliation case).
11 The sting of spoliation was felt in a California trial court case. In the unreported case of Garcia v. Financial Indemnity Co., decided before Cedars-Sinai, N. 5 supra , a jury in the Superior Court of Orange County, California awarded a plaintiff $16 million in damages based on spoliation of evidence. This result highlights the devastating effect mishandling evidence can have.
In Florida , a jury awarded $2 million in damages for spoliation because a city police department failed to preserve evidence in violation of a departmental rule. See Ober v. City of Plantation , Broward Cir. Ct. No. 86-144-76-CP (unreported) (Aug. 1988).
11.1 For an extreme example, see, e.g., Jerista v. Murray, 883 A.2d 350, 365-366 (N.J. 2005) (the plaintiffs' lawyer concealed, for nine years, the dismissal of his clients' personal injury case due to his failure to respond to discovery; in the clients' subsequent malpractice action, summary judgment was granted for the defendant attorney on the ground that the client plaintiffs could not prove they would have won their underlying personal injury case because the doors that allegedly caused their injuries had been destroyed some time during the intervening nine years, but the New Jersey Supreme Court reversed, holding in part that to the extent evidence was lost due to the attorney's dereliction, he should not be permitted to benefit from its destruction and, upon a finding that his conduct caused the loss of relevant evidence, an adverse inference instruction to the jury would be warranted).
12 See, e.g., La Raia v. Superior Court, 722 P.2d 286 (Ariz. 1986) (finding it unnecessary to create a new tort because under existing negligence principles, the defendant already was under a duty to act reasonably to mitigate the harm to plaintiff caused by defendant's tortious conduct). See also:
Second Circuit: Sterbenz v. Attina, 205 F. Supp.2d 65 (E.D.N.Y. 2002); Rutgerswerke AG and Frendo S.p.A. v. Abex Corp., No. 93 Civ. 2914, 2002 WL 1203836 (S.D.N.Y. 2002); Whittlesley v. Espy, No. 96 Civ. 0671, 1996 WL 689402 (S.D.N.Y. November 26 1996).
Seventh Circuit: Crabtree v. National Steel Corp., 261 F.3d 715 (7th Cir. 2001).
Tenth Circuit: Talmadge v. State Farm Mutual Automobile Insurance Co., 107 F.3d 21 (10th Cir. 1997).
State Courts:
Alabama : Christian v. Kenneth Chandler Construction Co., Inc., 658 So.2d 408 ( Ala. 1995).
Arkansas : Rodgers v. CWR Construction, Inc., 33 S.W.3d 506 ( Ark. 2000); Goff v. Harold Ives Trucking Co., Inc., 342 Ark. 143 ( Ark. 2000).
California: Cedars-Sinai Medical Center v. Superior Court , N. 5 supra ; Temple Community Hospital v. Superior Court, 84 Cal. Rptr.2d 852 (Cal. 1999); R.S. Creative, Inc. v. Creative Cotton, Ltd., 89 Cal. Rptr.2d 353 (Cal. App. 1999) .
Connecticut : Reilly v. D'Errico, No. CV93 03460955, 1994 Conn. Super. LEXIS 2450 ( Conn. Super. 1994).
Delaware : Lucus v. Christiana Skating Center, Ltd., 722 A.2d 1247 ( Del. Super. 1998).
Florida: Golden Yachts, Inc. v. Hall, 920 So.2d 777, 779-780 (Fla. App. 2006) (rejecting spoliation as a first party tort but allowing use of adverse inference instructions); Martino v. Wal-Mart Stores, Inc., 835 So.2d 1251, 1255-1256 (Fla. App. 2003) (rejecting first party spoliation tort. citing policy reasons set forth in Cedars-Sinai , N. 5 supra ).
Georgia : Owens v. American Refuse Systems, Inc., 244 Ga. App. 780 ( Ga. App. 2000).
Illinois : Boyd v. Travelers Insurance Co., 652 N.E.2d 267 ( Ill. 1995); Dardeen v. Kuehling, 801 N.E.2d 960, 963 ( Ill. App. 2003); Jones v. O'Brien Tire and Battery Service Center, Inc., 752 N.E.2d 8 ( Ill. App. 2001).
Indiana : Gribben v. Wal-Mart Stores, Inc., 824 N.E.2d 349 ( Ind. 2005).
Iowa : Meyn v. State of Iowa , 594 N.W.2d 31 ( Iowa 1999).
Kentucky : Monsanto v. Reed, 950 S.W.2d 811 ( Ky. 1997).
Maryland: Klupt v. Krongard, 728 A.2d 727 (Md. 1999); Goin v. Shoppers Food Warehouse Corp., 890 A.2d 894, 897-898 (Md. App. 2006) (rejecting spoliation as an independent tort, relying on rationale of Cedars-Sinai , N. 5 supra ); Miller v. Montgomery County, 494 A.2d 761 (Md. Spec. App. 1986).
Massachusetts : Fletcher v. Dorchester Mutual Insurance Co., 773 N.E.2d 420 ( Mass. 2002).
Michigan : Helzer v. CBS Boring & Machine Co., No. 205805, 1999 Mich. App. LEXIS 593 ( Mich. App. 1999).
Mississippi : Richardson v. Sara Lee Corp., 847 So.2d 821 ( Miss. 2003); Dowdle v. Butane Gas Co., 831 So.2d 1124 ( Miss. 2002).
Nevada : Timber Tech Engineered Building Products v. The Home Insurance Co., 55 P.3d 952 ( Nev. 2002)
New Jersey : Rosenblit v. Zimmerman, 766 A.2d 749 (N.J. 2001); Manorcare Health Services, Inc. v. Osmose Wood Preserving, Inc., 336 N.J. Super. 218, 764 A.2d 475 (N.J. Super. App. Div. 2001); Callahan v. Stanley Works, 703 A.2d 1014 (N.J. Super. 1997).
New York : Marro v. St. Vincent 's Hospital, 742 N.Y.S.2d 327 (N.Y. App. Div. 2002).
Pennsylvania : Schroeder v. Commonwealth Department of Transportation, 710 A.2d 23 ( Pa. 1998); Tenaglia v. Procter & Gamble, Inc., 737 A.2d 306 ( Pa. Super. 1999); Elias v. Lancaster General Hospital , 710 A.2d 65 ( Pa. Super. 1998); Pia v. Perrotti, 718 A.2d. 321 (Pa. Super. 1998); Burke v. Sten, 1998 WL 351750 (E.D. Pa. 1998); Santore-Umbelina v. Advanced Data Systems, Inc., No. 97-5002, 1998 U.S. Dist. LEXIS 12615 (E.D. Pa. 1998); Troup v. TriCounty Confinement Systems, Inc., 708 A.2d 825 (Pa. Super. 1998); Smitley v. Holiday Rambler Corp., 707 A.2d 520 (Pa. Super. 1998); Dansak v. Cameron Coca-Cola Bottling Co., Inc., 703 A.2d 489 (Pa. Super. 1997).
Texas : Trevino, M. D. v. Ortega, 969 S.W.2d 950 ( Tex. 1998).
West Virginia : Hannah v. Heeter, 584 S.E.2d 560 (W. Va. 2003).
But see:
New York : Fada Industries Inc. v. Falchi Building Co., 730 N.Y.S.2d 827 (N.Y. App. Div. 2001).
13 See, e.g., Sharpnack v. Hoffinger Industries, Inc., 499 S.E.2d 363 (Ga. App. 1998); Gardner v. Blackston, 365 S.E.2d 545 (Ga. App. 1988) ( Georgia law does not recognize spoliation of evidence as a separate tort and there was no indication from the record that evidence was "despoiled or tampered with").
14 Second Circuit: Rutgerswerke AG and Frendo S.p.A. v. Abex Corp., No. 93 Civ. 2914, 2002 WL 1203836 (S.D.N.Y. 2002); John Street Leasehold, LLC v. Capital Management Resources, 154 F. Supp.2d 527 (S.D.N.Y. 2001).
Fourth Circuit: Silvestri v. General Motors Corp., 271 F.3d 583 (4th Cir. 2001); Trigon Insurance Co. v. United States , 204 F.R.D. 277 (E.D. Va. 2001).
State Courts:
Alabama : Smith v. Atkinson, 771 So.2d 429 ( Ala. 2000).
Iowa : Meyn v. State of Iowa , 594 N.W.2d 31 ( Iowa 1999).
Kansas : Koplin v. Rosel Well Perforators, Inc., 734 P.2d 1177 ( Kan. 1987).
Louisiana : Carter v. Exide Corp., 661 So.2d 698 ( La. App. 1995).
Massachusetts : Fletcher v. Dorchester Mutual Insurance Co., 773 N.E.2d 420 ( Mass. 2002).
New York : MetLife Auto & Home v. Joe Basil Chevrolet, Inc., 1 N.Y.3d 478, 484, 807 N.E.2d 865, 868 (N.Y. 2004) (refusing to recognize claim for third party spoliation absent duty to preserve or special relationship and without notice of impending lawsuit).
Virginia : Austin v. Consolidation Coal Co., 501 S.E.2d 161 ( Va. 1998).
But see:
Louisiana : Bethea v. Modern Biomedical Services, Inc., 704 So.2d 1227 (La. App. 1997) (holding that a general duty to preserve evidence exists).
15 Petrik v. Monarch Printing Corp., 501 N.E.2d 1312 (Ill. App. 1986) (refusal to adopt spoliation as a tort because plaintiff had failed to adequately plead a nexus between the failure of his underlying suit and the destruction of the ledger books and other records). See also:
Seventh Circuit: Lekkas v. Mitsubishi Motors Corp., 2002 WL 31163722 (N.D. Ill. 2002).
State Courts:
Alabama : Smith v. Atkinson, 771 So.2d 429 ( Ala. 2000).
Ohio : Carnahan v. Buckley, No. 99-C.A.-323, 2001 WL 315316 ( Ohio App. 2001) ( Ohio App. 2001).
16 Panich v. Iron Wood Products Corp., 445 N.W.2d 795 (Mich. App. 1989) (neither common law nor the Workers' Disability Compensation Act imposed affirmative duty on employer to preserve evidence which might be used in employee's third-party liability action; it was not in the employer's best interest to destroy evidence because of its economic interest as to third party tort recoveries).
17 Federated Mutual Insurance Co. v. Litchfield Precision Components, Inc., 456 N.W.2d 434 (Minn. 1990) (refusal to recognize the tort of spoliation of evidence because cause of action was premature since it was based only on speculative harm to Federated's prospective subrogation for the alleged destruction of evidence caused by a fire; spoliation cause of action if brought under different circumstances not ruled out). See also:
Arkansas : Goff v. Harold Ives Trucking Co., 342 Ark. 143, 27 S.W.3d 387 ( Ark. 2000).
California : Leuter v. State of California , 94 Cal. App.4th 1285 ( Cal. App. 2002).
Connecticut : Reilly v. D'Errico, 12 Conn. L. Rptr. 457 ( Conn. Super. 1994).
Iowa : Meyn v. State of Iowa , 594 N.W.2d 31 ( Iowa 1999).
18 Miller v. Montgomery County , 494 A.2d 761 (Md. App. 1985) (remedy for alleged spoliator when the spoliator is a party to the action is an appropriate jury instruction as to permissible inferences, not a separate and collateral action).
See also § 11.04[2] infra.
19 Kippenham v. Chaulk Services, Inc., 697 N.E.2d 527 ( Mass. 1998). See also § 11.04[1] infra.
20 See, e.g., Houlihan v. Marriott International, Inc., No. 00-Civ-7493, 2003 WL 22271206 (S.D.N.Y. Sept. 30, 2003); McMunn v. Memorial Sloan-Kettering Cancer Center, 191 F. Supp.2d 440 (S.D.N.Y. 2002).
21 Cedars-Sinai Medical Center v. Superior Court, 74 Cal. Rptr.2d 248 (Cal. 1998).
22 See:
Third Circuit: Larison v. City of Trenton, 180 F.R.D. 261 (D.N.J. 1998) (collecting cases discussing spoliation in the various jurisdictions).
State Courts:
Delaware: Lucus v. Christiana Skating Center, Ltd., 722 A.2d 1247 (Del. Super. 1998).
New Jersey: Rosenblit v. Zimmerman, 766 A.2d 749 (N.J. 2001).
23 Temple Community Hospital v. Superior Court, 84 Cal. Rptr.2d 852 (Cal. 1999). But see Holmes v. Amerex Rent-a-Car, 710 A.2d 846 (D.C. App. 1998) (recognizing an independent tort in the District of Columbia for third party spoliation of evidence).
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