Spoliations Sanctions a Tort?
Want to sue for the other party hiding evidence? Maybe sanctions are enough.
Of course most plaintiff’s lawyers in California hate it that the California Supreme Court eliminated our ability to sue for a once popular cause of action, called “spoliation.” In some cases, it was considered a tort to spoil, or “destroy” evidence. However, as will be discussed, sanctions can still be awarded by a judge, but they typically are rare, and only the judge, and not the jury gets to decide amounts and liability, etc.
What is Spoliation?
“The spoliation of evidence is the intentional or negligent withholding, hiding, altering, or destroying evidence that is relevant to a legal proceeding. Spoliation has two possible consequences: in jurisdictions where the (intentional) act is criminal by statute, it may result in fines and incarceration for the parties who engaged in the spoliation; in jurisdictions where relevant case law precedent has been established, proceedings possibly altered by spoliation may be interpreted under a spoliation inference.” (Source 1.)
It used to be, that it was an independent tort in this state. That is, a party that destroyed or concealed evidence, and that action or inaction damaged a party’s case, could be sued in a separate cause of action in tort, on top of their actual lawsuit, or defense against a lawsuit.
After all, in federal courts, spoliation, and punishment therefore, was recognized as early 1817 in The FORTUNA—Krause et.al.Claimants, (March 17, 1817), 15 U.S. 161, 4 L.Ed. 209, 2 Wheat 16 [ship seizure; concealment of documents may result in adverse inference or adverse determination], and is based upon the inherent power of courts to control abuses in litigation. And it often arises from a request for a jury instruction re adverse inference. Lewy v. Remington Arms (8th Cir 1988), 836 F.2d 1104, 1111. In any event, as California goes, so goes the country. And in Cedars-Sinai Med. Ctr. v Superior Court (1988) 18 Cal.4th 1, 17, the tort was eliminated in the Golden State (Source.)
Are Sanctions Sufficient Punishment?
Well, if sanctions gut a Plaintiff’s case, and keep them from winning, probably no sanction is enough. Right? Maybe not. There are safeguards.
Evidence Code Section 412 mandates that a jury find against a party that should have and could have produced stronger and more powerful evidence. And recently, in New Jersey, a District Judge upheld a ruling of a Magistrate’s finding of sanctions on an appeal in a liability case. The case was out of the U.S. District of New Jersey and even though there was no evidence of spoliation definitely found in the matter. What?
Well, the decision was upheld by District Judge Noel L. Hillman in the June 30, 2011 opinion of U.S. Magistrate Judge Ann Marie Donio in the State National Insurance Co. v County of Camden, 08-cv-5128 (D.N.J. March 21, 2012). The case involved the failure of the county to preserve its electronically stored information, when it did not issue a “litigation hold” on the email system, after notification of the State’s National’s lawsuit against it.
An appeal was filed by the County of Camden, on the premise that it could not be sanctioned, since there was no actual spoliation. The appeal was denied by the Court, since after the motion for spoliation sanctions was made, there was a determination whether the party failed in its duty to preserve. Kounelis v. Sherrer, 529 F. Supp. 2s 503, 518 (D.N.J. 2008) was cited.
The County’s efforts were found to be significantly lacking, by Judge Donio. Deniro found a failure to institute a legal hold after the triggered event should stop the automatic deletion of email. He also found that defendants must retain copies of any backup tapes. That failure the judge found “warranted the imposition of reasonable attorney’s fees and costs.”
Could The Sanctions Have Been Avoided?
The County may have avoided extremely severe sanctions, since the court did not find spoliation. The determination to compensate State National for costs incurred, according to Judge Hillman, in upholding Judge Donio’s opinion, saying “to determine the scope of the deletion or destruction,” which State National “still has suffered damages in the context of attorneys’ fees and costs.” Some would argue that the sanctions were so large, they might as well be a monetary award in tort.
The judge stated that “(p.6) as cited in footnote 2 (p. 6), State National “…requested more than $70,000 in sanctions.” Judge Hillman said that Judge Donio has the authority to determine a fair award to State National. And thus, the judge made a factual finding. And absent findings of abuse, it is unlikely the sanctions would be overturned and they were not.
Punishing Sanctions May Have Same Effect as a Damages Award
This support in the original sanctions reinforced that District of New Jersey litigants can be punished for preservation failures. This includes, whether spoliation occurred or not. The Court spent a great effort in sorting out the claim. And the fact that there was not a legal hold issue or measures taken to protect ESI. This could have been avoided, if there had been a legal hold. State National v. County of Camden shows the need for litigants to adequately preserve. After all, this is something that the County learned, by being sanctioned the hard way.
So maybe, just maybe, Jersey leads the way, and California can learn from this? Only time will tell. Of course in California, there are “issue, terminating and evidence sanctions,” which we will discuss later. In any event, discovery sanctions are not damages awarded for spoliation. Suffice it to say, a terminating sanction could gut a defendant’s defense. And with the right jury, it could almost be like winning a tort claim for spoliation in my opinion. Clearly, one must see the forest through the trees and be creative, but great advocates do just that! We report, you decide.