When evidence is lost or destroyed in a legal case (which is called spoliation), the court can grant several different types of relief. Sometimes it’s an adverse inference or the loss of affirmative defenses. Other times a judge will grant monetary sanctions meant to compensate the injured party. Sometimes it can even result in the dismissal of a claim.
In the U.S. District Court case Ace American Insurance Company, et al, v. First Call Environmental, LLC, Judge John M. Gallagher granted the plaintiff’s motion for adverse inference sanctions because of spoliation of important safety documents.
As noted by eDiscovery Today, this case involved “a fire that the plaintiffs alleged broke out because the defendant improperly remediated environmentally hazardous substances at the plaintiff’s property.” One of the Requests for Production involved notes that summarized the “Daily Tailgate Safety Meetings.” These “Tailgate documents” were forms that employees had to fill out and upload to a web-based application called Basecamp in order “to identify a particular job’s site hazards.”
The defendant claimed it had no responsive documents. Later depositions, however, revealed the existence of these Tailgate documents, and one of the deponents claimed to have “personally filled out [two] Daily Tailgate Safety Meeting form[s] for the Bulk Chemical job” and had seen them uploaded to Basecamp. Furthermore, the defendant “claimed its employees were not located near the fire, but Plaintiff Bulk later produced surveillance footage of its facility showing one of Defendant’s employees located near where the fire started.” This, of course, resulted in a “corrected” narrative on the part of Defendant. Plaintiffs moved for sanctions against Defendant for spoliation of the Tailgate documents. No explanation or justification was given by Defendant for the loss of the Tailgate document, and given that litigation after the fire was likely, Defendant had a duty to preserve them.
Judge Gallagher ruled in favor of Plaintiff Bulk Chemical, granting adverse inference sanctions and finding that spoliation did occur. Once the court makes that finding, the next step is to determine whether an adverse inference sanction is appropriate. To do this, he examined “the degree of fault of the party who altered or destroyed the evidence. … Fault has two components: responsibility, and the presence or absence of bad faith.” Noting the “high degree of fault” because of its total control over the Basecamp documents and Defendant’s failure to offer any explanation as to why they were missing, the Court also observed that Defendant’s “earlier correction of false and misleading facts suggests bad faith” as opposed to the documents merely being lost or accidentally destroyed.
The Court also had to determine “the degree of prejudice suffered by the opposing party.” Plaintiff Bulk argued that they “suffered ‘significant’ prejudice due to Defendant’s non-production of the Tailgate documents.” The Court agreed, noting the uniqueness of the documents in question because they documented job hazards. “Defendant’s risk awareness [wa]s directly relevant to Plaintiffs’ claim Defendant negligently performed work resulting in a fire.” As such, the Court said that the documents were “key” to this litigation and Plaintiffs were greatly prejudiced by its non-production. This weighed “in favor of sanctions resulting from spoliation.”
The Court’s finding? The non-production of documents “amounts to spoliation because Defendant failed to preserve and produce these relevant documents in reasonably foreseeable litigation” and that an adverse inference by way of jury instruction against Defendant was warranted.
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