The Rise of Spoliation Claims In Premises Liability Cases

“Spoliation” generally includes the destruction of evidence or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation. See Owner-Operator Indep. Drivers Ass’n v. Comerica Bank, No. 2:05-cv-56, 2012 U.S. Dist. LEXIS 37143, 2012 WL 936208, at *16 (S.D. Ohio Mar. 20, 2012). As premises liability claims have become more difficult to prove, plaintiffs have sought to distract courts from their inability to make the prima facie elements of a negligence claim and instead would have the court focus on whether or not the business took steps to preserve any possible evidence (or in some cases whether the business owner actively destroyed evidence) that the plaintiff believes would have supported their claim. Increasingly, spoliation torts are becoming the centerpiece of premises liability lawsuits and the actual premises liability claim is becoming an afterthought. It is important that retailers take active steps to preserve evidence and are able to show that these steps were taken.

POTENTIAL EFFECTS OF SPOLIATION

Adverse Inference: Traditionally, if a party lost or destroyed evidence, a jury is instructed that they may draw an adverse inference about the missing evidence. That is, the jury would be instructed that the evidence—which was destroyed—would have been favorable to the plaintiff. To justify an adverse inference instruction based on the spoliation of evidence, Plaintiff, as the moving party, must establish: (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the [evidence was] destroyed with culpable state of mind; and (3) that the destroyed evidence was relevant to the party's claim or defense such that a reasonable trier of fact could find that it would support that claim or defense. Id. (quoting Beaven v. U.S. Dept. of Justice 622 F.3d 540, 553 (6th Cir. 2010). This test is conjunctive, so a party seeking an adverse inference must satisfy all three prongs. Id.

Sanctions: Moving beyond a mere adverse inferenced, many state and federal courts, have issued actual sanctions for spoliation of evidence. As part of a court’s “inherent powers,” it has the broad discretion to craft proper sanctions for spoliation, “‘including dismissing a case, granting summary judgment, or instructing a jury that it may infer a fact based on lost or destroyed evidence.’” Adkins v. Wolever, 554 F.3d 650, 653 (6th Cir. 2009). Regardless of the underlying state court law, federal law governs spoliation issues in federal court. Id. Spoliation sanctions are wholly discretionary: courts can order dismissal, an adverse inference, or attorneys’ fees after evaluating a party’s conduct on a “continuum of fault,” ranging “from innocence through the degrees of negligence to intentionality.” Id. at 652–53. A court should use the least severe sanction that removes the prejudice caused by the spoliation. Strong v. U-Haul Co., No. 1:03-cv-00383, 2006 U.S. Dist. LEXIS 97158, *14 (S.D. Ohio 2006). “Absent exceptional circumstances,” Courts generally require bad faith before dismissal or default judgment. In re Nat’l Century Fin. Enters., No. 2:03-md-1565, 2009 U.S. Dist. LEXIS 68379, *16 (S.D. Ohio 2009).

Spoliation Torts: Ohio has created an actual cause of action for spoliation if:

• Litigation involving the parties is existing or probable;

• Knowledge that litigation exists or is probable;

• Willful destruction of evidence designed to disrupt plaintiff's case;

• Disruption of plaintiff's case; and

• Damages proximately caused by the Defendant's acts.

Id.

A plaintiff who prevails on a spoliation claim can collect “damages proximately caused by the defendant’s acts.” Smith v. Howard Johnson Co., Inc., 1993-Ohio-229, 67 Ohio St. 3d 28, 29, 615 N.E.2d 1037, 1038 (1993). The Ohio Supreme Court has confirmed that, in addition to compensatory damages, an intentional alteration, falsification, or destruction of evidence to avoid liability can give rise to a punitive damages award upon a showing of actual malice. Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St.3d 638, 635 N.2d 331, ¶ 1 syllabus (1994); see also 1-CV 437 OJI CV 437.01, Comment 3 (“The Ohio Supreme Court has also held that interference with evidence may be used as grounds for a claim for punitive damages where the underlying cause of action was not interference with or destruction of evidence.”).

ADDRESSING AND PREVENTING SPOLIATION ISSUES

As more and more Plaintiff-oriented counsel are seeking to use spoliation claims to account for their lack of evidence, a business owner’s road to pre-empting these claims starts before the accident or incident ever occurs. The first step is to create policies and procedures aimed at preserving the potentially relevant evidence. The policies and procedures should be clear and precise, as well as easy to follow. For example, if the business has video cameras, there should be policies about preserving potentially relevant footage. This may include the method of preservation (e.g. making a hard copy or maintaining an electronic version), the amount of footage (e.g. 30 minutes before the accident and 30 minutes after), and the length of time the evidence should be retained. Similarly, another policy might involve precise instructions on how to respond if an employee encounters a spilled liquid or an overturned display, and what actions should be taken to both preserve the evidence and guard against a subsequent accident.

The next step is to ensure that the policies are being followed. Knowledge of the policies and procedures and compliance with those mandates is crucial. It should be part of an employee’s evaluation. In this manner, even non-management employees will have the necessary knowledge so that they can actively participate in preserving evidence. Far too often, such issues are solely in the hands of management employees, who usually not the first employee on the scene. For example, a policy on responding to an accident involving a spilled liquid may require the first employee on the scene to cordon off the area around the spill. This allows the evidence to be preserved and should prevent further accidents involving other patrons and the spill. But, if the non-management employee does not have knowledge of the policies and procedures, the spill may be cleaned up before it is examined and the evidence may be lost.

Another issue faced by business owners is the problem transmitting the investigative materials from the store to risk management and/or counsel. Retailers should not allow the only copy of the investigative materials to be maintained at the store. Rather, multiple copies should be maintained. Policies should be clear and have checklists for employees on the steps needed to preserve the evidence.

Another overlooked issue with regard to spoliation is proving that evidence preservation actions took place. With turnover in retail establishments, it is difficult to prove that there was an attempt to preserve evidence, absent documentation to this effect. In order to overcome this problem, retailers should have policies which designate a central person to investigate, a checklist for the investigations which is signed by that person and this information should be preserved, along with the actual evidence.

Finally, once suit is filed, defense counsel should lead the effort to preserve evidence. Defense counsel should obtain not only the evidence, but also policies, procedures and checklists related to the preservation of the evidence. Thus, if there is actually a spoliation issue, defense counsel can be in a position to evaluate the issue and its potential effect on the litigation. In some cases, this can even lead defense counsel to recommend settlement of the underlying case before the potential spoliation issue comes into play.