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Recognizing that a wide range of practical and helpful material appears in the newsletters prepared by committees of the International Association of Defense Counsel, this department highlights interesting topics covered in recent newsletters and presents excerpts from them.

Dismissal as Remedy for Spoliation Hard to Get

Writing in the December newsletter of the Advocacy, Practice and Procedure Committee, Joseph J. Roper and Jack W. Green Jr. of Foland & Wickens P.C., Kansas City, Missouri, discuss spoliation:

The term "spoliation" refers to the destruction or failure to preserve an object or property that potentially can be used as evidence in currently pending or reasonably foreseeable litigation. Courts have long recognized that those who destroy or fail to preserve evidence should not benefit from their wrongdoing. Some jurisdictions have begun recognizing an independent cause of action based on spoliation, both against adverse parties in imminent or pending litigation and against third persons who are not parties to the action in which the spoliated evidence would have been introduced. Intentional Spoliation of Evidence, Interfering with Prospective Civil Actions, as Actionable, 70 A.L.R. 4th 984 (1989 and Supp. 1996).

Sanctions in federal court

While not all jurisdictions have recognized an independent cause of action for spoliation, all federal jurisdictions agree that federal courts have the authority to impose sanctions against parties to litigation who participate in the spoliation of evidence. When the spoliated evidence is subject to a court order, courts have the authority to impose sanctions under Federal Rule of Civil Procedure 37(b). West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999). In the absence of a court order, most federal courts draw their authority from "a federal law of spoliation" arising from the court's "inherent power to control litigation." Silvestri v. General Motors Corp., 271 F.3d 583,590. However, in cases where federal jurisdiction is based on diversity, some courts have held that state law governs the imposition of sanctions. Nationwide Mutual Fire Insurance Co. v. Ford Motor Co., 174 F.3d 801, 804 (6th Cir. 1999). The majority of jurisdictions however, rely on federal law, even in diversity cases, in imposing sanctions for spoliation.

Courts have various sanctions at their disposal. These include the outright dismissal of the case, the exclusion of evidence derived from the spoliated evidence, the allowance of proof of a fact by secondary evidence, and an instruction permitting the jury to draw an adverse inference from the destroyed evidence. Townsend v. American Insulated Panel Co., 174 F.R.D. 1, 4 (D. Mass. 1997).

Sanction must be appropriate

While trial courts have broad discretion in imposing sanctions, appellate courts have held any sanction imposed should be "molded to serve the prophylactic, punitive and remedial rationales underlying the spoliation doctrines." Byrnie v. Town of Cromwell Board of Education, 243 F.3d 93, 107 (2d Cir. 2001); West, 167 F.3d at 779. The appropriate sanction should (1) deter parties from engaging in spoliation, (2) place the risk of an erroneous judgment on the party who wrongfully created the risk, and (3) restore the prejudiced parties to the same position they would have been in absent the destruction of the evidence.

Courts also will consider the following factors: (1) the degree of fault of the party who altered or destroyed the evidence, (2) the degree of prejudice suffered by the opposing party, (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party, and (4) whether the sanction serve to deter others from similar conduct in the future. Schmid v. Milwaukee Electric Tool Corp., 13 F.3d 76, 79 (3d Cir. 1993); Dillon v. Nissan Motor Co., 986 F.2d 263 (8th Cir. 1993).

Reluctant to dismiss

While dismissal is undoubtedly the most-favored sanction in response to the spoliation of evidence from a defense perspective, courts have been extremely reluctant to impose such a sanction. Concerning dismissal as a sanction, the Second Circuit in West stated:

"Outright dismissal of a lawsuit ... is within the court's discretion." Chambers, 501 U.S. at 45; see Fed. R. Civ. P. 37(b)(2)(C). Dismissal is appropriate if there is a showing of willfulness, bad faith, or fault on the part of the sanctioned party. See Jones v. NFTA, 836 F.2d [*9] 731, 734 (2d Cir. 1987). However, because dismissal is a "drastic remedy," it "should be imposed only in extreme circumstances, usually after consideration of alternative, less drastic sanctions." John B. Hull, Inc., 845 F.2d at 1176 (citation and internal quotation omitted); see Valentine v. Museum of Modern Art, 29 F.3d 47, 49-50 (2d Cir. 1994) (per curiam). In West, the plaintiff was injured while attempting to mount a 16-inch tire on a 16.5-inch rim in January 1991. He successfully mounted one tire but was injured at tempting to mount a second in the same manner. He retained counsel after his injury, and an investigator for the plaintiff's attorney took possession of the tire and rim that had been mounted successfully. After 10 months, the investigator deflated the mounted tire, based on safety concerns.

In May 1993, after suit has been filed in February, the plaintiff sold the tire mounting machine and air compressor he was using at the time of his injuries. They ultimate were located, but they had been stored outside, and their condition had deteriorated to the point they were no longer useful as evidence. The defendant moved for a dismissal based on the spoliation of evidence. The trial court granted this motion.

The Second Circuit overruled the trial court's decision that dismissal was a proper remedy for the spoliation in this particular instance. It held that dismissal was not appropriate because it was not the only adequate sanction available to address the issue of spoliation; the trial court could have "combined alternative sanctions in a way that would fully protect" the defendants.

The court left to the trial court's discretion the appropriate combination of sanctions to impose to meet the aims of spoliation sanctions, but it suggested combinations of the exclusion of evidence and an instruction presuming an adverse inference against the plaintiff. The court also did not address the issue of whether there was an adequate showing of willfulness, bad faith or fault by the plaintiff in handling the evidence.

No grant of judgment

The Fourth Circuit overturned a trial court's granting of judgment based on the spoliation of evidence in Cole v. Keller Industries Inc., 132 F.3d 1044 (4th Cir. 1998). It held that dismissal in the case was not appropriate as there was no finding of bad faith or any "like action" on the part of the spoliator. Absent bad-faith conduct, the court stated, "applying a rule of law that results in dismissal on the grounds of spoilation [sic] of evidence is not authorized."

Similarly, in Hartford Insurance Co. of the Midwest v. American Automatic Sprinkler Systems Inc., 201 F.3d 538 (4th Cir. 2000), aff'g 23 F.Supp.2d 623 (D. Md. 1998), the Fourth Circuit upheld the trial court's denial of a dismissal based on spoliation in the absence of "willful or badfaith conduct" on the part of the spoliator.

Dismissal upheld

In Silvestri v. General Motors Corp., 271 F.3d 583 (4th Cir. 2001), the Fourth Circuit cited the language in West that sanctions for spoliation "should be molded to serve the prophylactic, punitive and remedial rationales underlying the spoliation doctrine" and relied on West in stating that dismissal should be avoided if a lesser sanction will perform the necessary function. But it upheld the trial court's imposition of the sanction of dismissal.

The plaintiff was injured in a one-car accident on November 5, 1994. His attorney retained experts who examined the wrecked car approximately one week after the accident. The car remained in its wrecked condition for more than three months. In early 1995, the actual owner of the car transferred the vehicle title to his insurance company, which in turn sold the car to a collision...

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