To Be Argued By:
FRANCES E. BIVENS
New York County Clerk’s Index No. 768000/08E
New York Supreme Court
APPELLATE DIVISION—FIRST DEPARTMENT
In Re: Steam Pipe Explosion at 41st Street and Lexington Avenue
REPLY BRIEF FOR DEFENDANTS-APPELLANTS AND THIRD-
PARTY PLAINTIFFS-APPELLANTS CONSOLIDATED EDISON, INC.
AND CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
d
FRANCES E. BIVENS
DAVIS POLK & WARDWELL LLP
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
frances.bivens@davispolk.com
CLARK, GAGLIARDI & MILLER, P.C.
99 Court Street
White Plains, New York 10601
(914) 946-8900
jrand@cgmlaw.com
CAROLE A. BORSTEIN
4 Irving Place
New York, New York 10003
(212) 460-4600
borsteinc@coned.com
Attorneys for Defendants-Appellants
and Third-Party Plaintiffs-Appellants
Consolidated Edison, Inc. and
Consolidated Edison Company of
New York, Inc.
REPRODUCED ON RECYCLED PAPER
i
TABLE OF CONTENTS
PAGE
PRELIMINARY STATEMENT ........................................................................................ 1
ARGUMENT ...................................................................................................................... 4
POINT I The Court Abused Its Discretion in Ruling That Documents Relating to
Prior Incidents, Including the Diamond Shamrock Explosion, Are Not
Discoverable .................................................................................................. 4
POINT II Team Should Be Sanctioned for Permitting the Loss or Destruction of
Diamond Shamrock Documents .................................................................. 13
CONCLUSION ................................................................................................................. 18
ii
TABLE OF AUTHORITIES
PAGE
CASES
Allen v. Crowell-Collier Publ’g Co.,
21 N.Y.2d 403, 235 N.E.2d 430, 288 N.Y.S.2d 449 (1968) ......................................... 5
Andon v. 302-304 Mott St. Assocs.,
94 N.Y.2d 740, 731 N.E.2d 589, 709 N.Y.S.2d 873 (2000) ......................................... 3
Byam v. City of New York,
68 A.D.3d 798, 890 N.Y.S.2d 612 (2d Dep’t 2009) ............................................... 3, 16
Coan v. Long Island R.R.,
246 A.D.2d 569, 668 N.Y.S.2d 44 (2d Dep’t 1998) ..................................................... 9
Dattmore v. Eagan Real Estate, Inc.,
112 A.D.2d 800, 492 N.Y.S.2d 302 (4th Dep’t 1985) ................................................. 5
Gibbs v. St. Barnabas Hosp.,
61 A.D.3d 599, 878 N.Y.S.2d 38 (1st Dep’t 2009), rev’d, 16 N.Y.3d 74, 942
N.E.2d 277, 917 N.Y.S.2d 68 (2010).................................................................... 16, 17
Herbert v. Sivaco Wire Corp.,
289 A.D.2d 71, 734 N.Y.S.2d 133 (1st Dep’t 2001) .................................................... 5
James v. Metro North Commuter R.R.,
166 A.D.2d 266, 560 N.Y.S.2d 459 (1st Dep’t 1990) .................................................. 9
Mendelowitz v. Xerox Corp.,
169 A.D.2d 300, 573 N.Y.S.2d 548 (1st Dep’t 1991) ................................................. 5
O’Brien v. Clark Equip. Co.,
25 A.D.3d 958, 807 N.Y.S.2d 703 (3d Dep’t 2006) ............................................... 3, 15
People v. Arredondo,
226 A.D.2d 322, 642 N.Y.S.2d 630 (1st Dep’t 1996) ................................................ 11
Petrilli v. Federated Dep’t Stores, Inc.,
40 A.D.3d 1339, 838 N.Y.S.2d 673 (3d Dep’t 2007) .................................................. 9
iii
Scozzaro v. Matarasso,
Index No. 800125/10, 2012 N.Y. Slip Op. 32049U, 2012 N.Y. Misc. LEXIS
3743 (Sup. Ct. N.Y. Cnty. July 27, 2012) ..................................................................... 9
Strong v. City of New York,
112 A.D.3d 15, 973 N.Y.S.2d 152 (1st Dep’t 2013) ............................................ 16, 17
VOOM HD Holdings LLC v. EchoStar Satellite L.L.C.,
93 A.D.3d 33, 939 N.Y.S.2d 321 (1st Dep’t 2012) .................................................... 16
STATUTES & RULES
CPLR 3101(a) ................................................................................................................. 5, 6
CPLR 3126........................................................................................................................ 17
PRELIMINARY STATEMENT
As set forth in Con Edison’s opening brief on this appeal,1 Team’s injection
of excess amounts of leak sealant in a flange on Con Edison’s steam system
(amounting to approximately eighteen gallons of sealant), its failure to adopt
appropriate procedures despite knowing the risks from the injection of excess
sealant, and its failure to warn Con Edison of those risks, are all central to this
litigation. Extensive post-incident investigations concluded that Team’s sealant
clogged steam traps in the vicinity of the flange and led to the steam pipe rupture at
issue. Under the governing legal standards, the motion court abused its discretion
by not requiring Team to produce evidence of substantially similar prior incidents,
most notably a catastrophic explosion at a Diamond Shamrock facility that was
also caused by Team’s injection of excess sealant.
Team’s opposition fails to refute the key points that Con Edison raises on its
appeal. First, Team does not and cannot dispute that the motion court applied the
wrong legal standard in denying Con Edison’s motions, relying on cases that turn
on admissibility at trial or summary judgment, rather than the broad standards for
disclosure under the CPLR. Second, Team does not and cannot dispute that the
1 Capitalized terms not defined in this reply have the same meaning as in Con Edison’s
opening brief.
2
motion court found that, like the steam pipe rupture, the Diamond Shamrock
disaster concerned Team’s injection of excess sealant (A. 103) and “may have
placed Team on notice generally of dangers associated with excessive sealant.”
(A. 105.)2 The motion court nonetheless permitted Team to withhold all of the
Diamond Shamrock documents from discovery, apparently finding that the two
incidents had to be virtually identical, rather than simply “substantially similar,” in
order for documents concerning Diamond Shamrock to be discoverable.
In an effort to shore up the motion court’s unsupportable decision, Team
ignores the strong evidence of substantial similarity between the Diamond
Shamrock incident and the rupture at issue, and instead trumpets superficial and
irrelevant distinctions between the incidents, ranging from the fact that the plaintiff
in the Diamond Shamrock case alleged other grounds for Team’s negligence as
well – not simply the injection of excess sealant – to the fact that the two incidents
and ensuing litigations took place in different states.
Team also attempts to evade responsibility for its loss or destruction of
numerous Diamond Shamrock documents. After responding to Con Edison’s
specific request for Diamond Shamrock documents by denying for years their very
2 Citations to Con Edison’s opening brief, dated April 25, 2014, are preceded by “App.
Br.”; citations to Team’s brief, dated August 6, 2014, are preceded by “Resp. Br.”; and citations
to the Appendix are preceded by “A.”
3
existence, Team began spinning a series of changing and inconsistent stories
concerning the Diamond Shamrock files. Team finally acknowledged in 2012 –
four years after these documents were requested – that 100 boxes of documents
existed in the custody of its former counsel (but categorically refused to retrieve or
produce them); then stated, in response to Con Edison’s motion to compel, that all
but eight boxes had been destroyed; and subsequently stated, in response to Con
Edison’s spoliation motion, that 48 boxes had been recovered, but that an unknown
number could not be located. In its opposition brief in this Court, Team changes
its story yet again, insisting that no documents have been destroyed or discarded.
As in O’Brien v. Clark Equipment Co., 25 A.D.3d 958, 807 N.Y.S.2d 703 (3d
Dep’t 2006) – a case highlighted and discussed at length in Con Edison’s opening
brief that Team does not even mention – Team’s denials, its inconsistent and
changing stories, and its loss or destruction of an unknown quantity of the
Diamond Shamrock documents justify serious sanctions. The motion court abused
its discretion by not imposing such sanctions against Team.3
3 Even in the absence of an abuse of discretion, this Court is permitted to substitute its
discretion for that of the motion court. Andon v. 302-304 Mott St. Assocs., 94 N.Y.2d 740, 745,
731 N.E.2d 589, 592, 709 N.Y.S.2d 873, 876 (2000); Byam v. City of New York, 68 A.D.3d
798, 800, 890 N.Y.S.2d 612, 614 (2d Dep’t 2009).
4
ARGUMENT
POINT I
THE COURT ABUSED ITS DISCRETION IN RULING THAT
DOCUMENTS RELATING TO PRIOR INCIDENTS, INCLUDING THE
DIAMOND SHAMROCK EXPLOSION, ARE NOT DISCOVERABLE
Team’s opposition brief asks this Court to ignore the law and the motion
court’s incorrect application of the law. Team does not and cannot deny the black-
letter law that the scope of discoverability is broader than the scope of
admissibility. (App. Br. at 18-19 & n.5.) Nor can Team deny that evidence of a
prior incident is discoverable when that incident is substantially similar to the
incident at issue. (App. Br. at 17-18.) Yet every case upon which the motion court
relied in denying the discoverability of the Diamond Shamrock documents
concerned admissibility for purposes of trial or summary judgment, not the broader
standard that applies to discovery. (A. 104-05.) Team has no response to the
critical flaw in the motion court’s legal analysis other than to state that Con
Edison’s “objection” to the motion court’s applying the wrong legal standard is
“not well taken.” (Resp. Br. at 26.) This is no response at all.
Proceeding from this flawed analysis, the motion court abused its discretion
by requiring Con Edison to demonstrate that the Diamond Shamrock incident and
the rupture were not only substantially similar, but similar in every respect – even
5
though only Team, not Con Edison, possesses the relevant evidence. Thus, despite
recognizing that Team’s injection of excess amounts of leak sealant was a
“contributing factor” to both incidents (A. 103), and that the Diamond Shamrock
explosion “may have placed Team on notice generally of dangers associated with
excessive sealant” (A. 105), the court nonetheless denied Con Edison’s motion
because the “particular allegations” (A. 104) or “specific problem” (A. 106) in the
two incidents were not identical. That is not the applicable standard; to the
contrary, the touchstone is substantial similarity. An exact match between the two
incidents is not required, particularly at the discovery stage.4 Team offers no
support for the motion court’s interpretation and application of the law, which does
not comport with New York’s liberal disclosure regime. See Allen v. Crowell-
Collier Publ’g Co., 21 N.Y.2d 403, 406, 235 N.E.2d 430, 432, 288 N.Y.S.2d 449,
4 See Herbert v. Sivaco Wire Corp., 289 A.D.2d 71, 72, 734 N.Y.S.2d 133, 133-34 (1st
Dep’t 2001) (holding that evidence of prior incidents involving improperly spooled industrial
wire was discoverable, even if prior incidents involved a different type of wire, when the
spooling technique in question was consistent); Mendelowitz v. Xerox Corp., 169 A.D.2d 300,
307, 573 N.Y.S.2d 548, 552 (1st Dep’t 1991) (holding that, “in the context of disclosure,” there
was “absolutely no merit” to the argument that discovery should be limited to incidents involving
the same models of photocopiers that were involved in the case at issue); Dattmore v. Eagan
Real Estate, Inc., 112 A.D.2d 800, 800, 492 N.Y.S.2d 302, 303 (4th Dep’t 1985) (reversing
decision denying access to records of prior accidents; holding that even if such records are
ultimately inadmissible, an admissibility standard “is not the test for disclosure under CPLR
3101(a), which is to be liberally construed”); see also App. Br. at 19-20 & n.6 (citing cases).
6
452 (1968) (stating that CPLR 3101(a) is “to be interpreted liberally to require
disclosure . . . of any facts bearing on the controversy”).
Team also ignores the strong evidence in the record that the Diamond
Shamrock explosion and the incident at issue are, in fact, substantially similar.
Instead, Team attempts to differentiate the Diamond Shamrock explosion from the
steam pipe rupture on the basis that Diamond Shamrock alleged in the prior
litigation that, among other things, Team was negligent in its improper design of
the enclosure that it installed at the site. (Resp. Br. at 14.) In making this
argument, Team ignores all the evidence in the record of substantial similarity
between the two incidents, including the following allegations common to both:
− Team “inject[ed] too much sealant material” without regard
to the volumetric capacity of the component (A. 251, 260);
− Team continued such injections even though repeated leak-
repair attempts had been unsuccessful (A. 260);
− Team assured its customers that its repair procedures were
safe notwithstanding the known risks they entailed (A. 260);
− Team failed to warn its customers of those risks (A. 260).
While the Diamond Shamrock explosion, like many accidents, may have
more than one cause, Team cites no authority for the proposition that the existence
of multiple causes makes evidence of a prior incident not discoverable. Indeed,
Team completely ignores the case law cited in Con Edison’s opening brief which
7
shows that an exact match between the incidents is not required in order to meet
the substantial similarity threshold. (App. Br. at 19 & n.6; see also supra at 5 n.4.)
As Diamond Shamrock’s complaint (A. 242-62), its expert report (A. 966, 1278),
and trial testimony from Team’s own witness (A. 979) all demonstrate, Team’s
injection of excess amounts of sealant was a principal cause of the Diamond
Shamrock explosion.5
Team also fails to confront the undisputed facts that, following the Diamond
Shamrock explosion, Team failed to modify its leak-repair procedures to prevent
the same type of incident from happening again (A. 774-77); and that, despite
being cited and penalized by the Occupational Safety and Health Administration
(“OSHA”) for its failure to warn Diamond Shamrock of known hazards caused by
its leak-sealing practices (A. 771-73, 841-42), Team failed to improve its customer
notification procedures (A. 777).
Based on the undeniable and substantial similarities between the two
incidents, and the direct relevance of the Diamond Shamrock incident to Team’s
notice of the risks of its leak-sealing practices and failure to exercise due care,
5 Team, of course, does not and cannot dispute that it settled the Diamond Shamrock case
for $12 million (A. 468), and does not and cannot challenge the jury finding in that case that
Team’s negligence was greater than that of any other defendant (A. 990).
8
documents relating to the Diamond Shamrock explosion are plainly material and
necessary to Con Edison’s case against Team.
In a further misguided effort to defend the motion court’s ruling, Team relies
on the fact that New York and Texas (where the Diamond Shamrock explosion
occurred) are different states. (Resp. Br. at 24, 27.) The CPLR, of course,
nowhere limits responsive documents to those that can be found within New
York’s borders; moreover, Team does not and cannot deny that it used the same
leak-repair procedures in both states (see A. 775-77). Team also asserts that the
Diamond Shamrock incident occurred before the rupture at issue (Resp. Br. at 27),
but – far from being a relevant distinction – that is precisely why the Diamond
Shamrock incident put Team on notice that its leak-repair practices posed serious
risks.6 Team does not and cannot even attempt to explain how these facts negate
the substantial similarity between the incidents.
Team also contends, against the weight of authority, that evidence of prior,
substantially similar accidents is relevant only when a design defect is alleged.
(Resp. Br. at 25-26.) Team ignores the fact that Con Edison’s third-party
6 The fact that the Diamond Shamrock explosion did not involve a steam system (Resp.
Br. at 24) is yet another distinction without a difference. Team should not inject excess amounts
of sealant into any customer system, whether that system contains water, steam, chemicals, or
some other substance.
9
complaint includes, inter alia, claims for strict products liability and negligent
design. (A. 175-77.) In any event, Team misstates the law. While some Second
Department cases state such a narrow rule, the weight of authority supports the
proposition that discovery concerning other incidents is proper in cases where there
was a dangerous condition or the defendant was on notice of that condition. See,
e.g., Petrilli v. Federated Dep’t Stores, Inc., 40 A.D.3d 1339, 1341, 838 N.Y.S.2d
673, 675-76 (3d Dep’t 2007) (rejecting argument that evidence of substantially
similar incidents is discoverable only in design defect cases, and holding that such
evidence was discoverable in a case involving the negligent misuse of a product).7
In a continued effort to avoid the facts, Team repeatedly invokes the motion
court’s in camera review of nine boxes of documents. That review, however, does
not and cannot change the applicable legal standards or evidence of substantial
similarity. Moreover, the motion court’s review focused exclusively on a post-
7 See also, e.g., Coan v. Long Island R.R., 246 A.D.2d 569, 569, 668 N.Y.S.2d 44, 45 (2d
Dep’t 1998) (holding, in case involving negligent operation of train, that “[r]ecords of prior
similar accidents are admissible and discoverable in a negligence action since they are relevant in
establishing that a particular condition was dangerous and that the defendant had notice of that
condition”); James v. Metro North Commuter R.R., 166 A.D.2d 266, 268-69, 560 N.Y.S.2d 459,
461 (1st Dep’t 1990) (requiring discovery as to prior lawsuits concerning railroad accidents
“where speed limits or fencing of tracks were at issue,” without limitation as to time or place);
Scozzaro v. Matarasso, Index No. 800125/10, 2012 N.Y. Slip Op. 32049U, 2012 N.Y. Misc.
LEXIS 3743, at *5 (Sup. Ct. N.Y. Cnty. July 27, 2012) (holding that reports of past incidents
“would be useful in bringing to light the information that [defendant] possessed about the risks
associated with its equipment[], and whether it incorporated this information in its training
sessions and warnings”).
10
incident investigation that was conducted in large measure by Team itself and was
concluded well before the Diamond Shamrock litigation commenced. (See A. 803-
20, 821-25 (post-incident investigation reports concerning Diamond Shamrock
explosion signed by Team’s Francis Labry); A. 829, 834, 839 (testimony that Mr.
Labry was a member of the investigation team, and that he reviewed and approved
reports before they were issued).)8 In a single-sentence ruling, the motion court
relied on this flawed investigation to the exclusion of many other documents –
such as an expert report, trial transcript, and verdict form – that either were or
should have been among the “essential” trial documents provided to the motion
court, which documents directly contradict the motion court’s conclusion. (A. 38-
39 (holding that the Diamond Shamrock documents were not discoverable because
“the records reflect that an investigation into the fire concluded that Team’s
injection or application of sealant did not cause or contribute to the incident”); see
also A. 1166-67 (affidavit describing documents that were included in the boxes
provided to the court).) The motion court also apparently failed to review (or, at
least, failed to acknowledge that it reviewed) the entire OSHA investigation file,
which Team concedes was included in the boxes that were provided in camera. (A.
8 Mr. Labry also admitted that the investigation reports were “brief” and not
commensurate with the seriousness of the Diamond Shamrock explosion. (A. 839.)
11
1166.) Even the limited portions of that file that Con Edison was able to obtain
show that Team was penalized by OSHA for failing to inform Diamond Shamrock
of known hazards associated with its leak-repair practices. (A. 771-73, 841-42.)9
Notably, Team admits it has already identified all of the Diamond Shamrock
documents that it can locate. (Resp. Br. at 35.) Accordingly, contrary to Team’s
protestations, there would be minimal burden and cost for Team to produce the
Diamond Shamrock documents. All Team would have to do is copy and produce
(or otherwise make available for inspection) hard copy documents in its possession.
Rather than requiring Team to meet its obligations, the motion court
effectively rewarded Team for its intransigence and punished Con Edison for its
diligence, stating that Con Edison did not show “that it cannot otherwise obtain or
has not already obtained pertinent documents.” (A. 106; see App. Br. at 23.)
Unsurprisingly, Team adopts the motion court’s view – unsupported by any case
law – that Con Edison’s possession of certain publicly available Diamond
Shamrock documents obviates Team’s obligation to disclose documents in its
possession. (Resp. Br. at 23-24, 28.) But plainly the 48 surviving boxes of
9 The cases Team cites on the subject of in camera review (e.g., People v. Arredondo, 226
A.D.2d 322, 642 N.Y.S.2d 630 (1st Dep’t 1996)) all involved situations in which the review was
performed in camera for reasons of privilege or privacy. (Resp. Br. 19-20.) Those rationales do
not apply here, where the motion court simply conducted an in camera review for relevance.
12
Diamond Shamrock documents in Team’s possession include numerous documents
that are not in the public record, such as deposition transcripts and documents
exchanged by the parties in the Diamond Shamrock litigation, and – as Team
concedes – the complete OSHA investigation file. (A. 1166-67.) Con Edison’s
efforts, at its own expense, to obtain the public court file do not relieve Team of its
obligation to produce the 48 boxes of Diamond Shamrock documents in its
possession.
Finally, Team does not and cannot deny that the motion court ignored Con
Edison’s fully-briefed request for documents concerning other substantially similar
prior incidents that were identified by Team witness Francis Labry. (See App. Br.
at 11-12, 24-25.) Rather than seriously contesting the relevance of those
documents, Team merely cites a letter in which its counsel asserted that this single
witness, Mr. Labry, was unable to find documents concerning those incidents.
(Resp. Br. at 29 (citing A. 523, 525).) Team should be compelled to conduct a
reasonable search and to produce any documents concerning these substantially
similar incidents.
13
POINT II
TEAM SHOULD BE SANCTIONED FOR PERMITTING THE LOSS OR
DESTRUCTION OF DIAMOND SHAMROCK DOCUMENTS
In its effort to avoid spoliation sanctions, Team glosses over its egregious
conduct with respect to the Diamond Shamrock documents, including the
undeniable cat-and-mouse game that Team – even in its opposition brief in this
Court – continues to play. Team does not and cannot deny that on July 23, 2008,
Con Edison specifically requested the Diamond Shamrock documents. (A. 190.)
What transpired thereafter can hardly be deemed a “good faith effort[ ] to identify
and obtain the files” as Team remarkably – and disingenuously – contends (Resp.
Br. at 10):
− On December 8, 2008, Team represented that it had no
Diamond Shamrock documents in its possession (A. 229);
− On January 7, 2009, Team asserted that its General Counsel
had never heard of the Diamond Shamrock litigation (A.
756), even though Team had reported that litigation in its
Form 10-K three years earlier (A. 266), settled the case for
$12 million (A. 468), and received a sanction and monetary
penalty from OSHA (A. 771-73, 841-42);
− For four years following the receipt of Con Edison’s
document requests, Team insisted that it possessed no
Diamond Shamrock documents at all (A. 756-57);
− On May 1, 2012, Team admitted for the first time that it had
approximately 100 banker’s boxes of such documents in
14
storage, but categorically refused to produce them (A.
521);10
− On November 29, 2012, in response to Con Edison’s first
motion to compel, Team changed its story again, asserting
without qualification that all but eight of the 100 boxes of
Diamond Shamrock documents had been destroyed (A. 548-
49);
− On August 12, 2013, in response to Con Edison’s motion for
spoliation sanctions, Team’s former counsel, Darrell Greer,
stated in an affidavit that Team had located a total of 48
boxes of Diamond Shamrock documents, that certain
documents were not among the boxes, and that he did not
know how much of the remaining file could not be located.
(A. 1164-69.)11
Team now claims in its brief that it “did not destroy or discard any of the
files at issue.” (Resp. Br. at 33.) That assertion, however, is contradicted by the
affidavit of its former counsel, Mr. Greer. Mr. Greer concedes that “portions of the
Diamond Shamrock file may have been misplaced”; that he “do[es] not know if
there are any additional boxes containing Diamond Shamrock files” (A. 1168-69);
and that the boxes he has reviewed do not include all of the deposition transcripts
(A. 1167). While he states that a “majority” of the Diamond Shamrock file has
10 To this day, Team implausibly asserts that it does not have at its offices even a single
document relating to the Diamond Shamrock incident or any of the other substantially similar
incidents about which its witnesses have testified. (A. 757.)
11 Given its delays and obfuscations, Team’s complaints about the “protracted” nature of
this litigation ring especially hollow. (Resp. Br. at 21.)
15
been located (A. 1169), that assertion is questionable given that the number of
surviving boxes (48) is less than half the number (100) that Mr. Greer originally
represented to be the size of the Diamond Shamrock file. (A. 1165-66.)
Far from “duly investigat[ing]” and “set[ting] the record straight” (Resp. Br.
at 34-35), Team has repeatedly changed its story depending on what motion it was
responding to. If Team’s present tale were true, it could have “set the record
straight” in 2008 when Con Edison requested the Diamond Shamrock documents.
Instead, Team’s purported attempt to “set the record straight” five years later is an
effort to recharacterize an affidavit from its outside counsel to make it far less
damaging than it actually is.
In its opening brief, Con Edison described at some length the Third
Department’s decision in O’Brien v. Clark Equip. Co., 25 A.D.3d 958, 807
N.Y.S.2d 703 (3d Dep’t 2006), a case that involved the withholding and
subsequent loss of prior accident reports. Con Edison observed that O’Brien was
“nearly on all fours” with the instant case (App. Br. at 31) – yet Team does not
mention, much less attempt to distinguish, O’Brien. In O’Brien, the
defendant/spoliator, like Team in this case, “repeatedly refused to provide the
requested accident reports” for a period of four years. Id. at 959, 807 N.Y.S.2d at
704. Only after plaintiff’s motion to compel was filed did the defendant reveal that
16
all of the pre-1985 accident reports had been destroyed (id.) – again, comparable to
Team’s conduct here in response to Con Edison’s motion to compel. Based on the
above-described conduct, which prompted the plaintiff in O’Brien to make a
second motion to compel followed by a spoliation motion, the motion court
granted the plaintiff’s motion for a preclusion order, precluding the defendants
from controverting the defect at issue or the prior notice of that defect. The court
also granted the plaintiff’s motion for attorneys’ fees and costs. The Appellate
Division upheld both the preclusion order and the monetary sanction. Id. at 960,
807 N.Y.S.2d at 705. Similar penalties should be exacted against Team for its
virtually identical conduct in this case.12
Instead of even attempting to distinguish O’Brien or other case law cited in
Con Edison’s opening brief, Team cites Gibbs v. St. Barnabas Hosp., 61 A.D.3d
599, 878 N.Y.S.2d 38 (1st Dep’t 2009) (Resp. Br. at 31), a decision that Team fails
to acknowledge was reversed by the Court of Appeals, see 16 N.Y.3d 74, 942
12 See also Byam v. City of New York, 68 A.D.3d 798, 801, 890 N.Y.S.2d 612, 615 (2d
Dep’t 2009) (reversing lower court’s denial of sanctions and striking pleading based on party’s
failure for four years to comply with notice to produce, followed by non-compliance with
subsequent so-ordered stipulation and belated production of four relevant documents many years
later); App. Br. at 30-33 (citing cases). Team contends that its conduct was not willful or
contumacious – a point with which Con Edison strenuously disagrees – but in any event the case
law is clear that sanctions may be warranted even with respect to negligent spoliation. See, e.g.,
Strong v. City of New York, 112 A.D.3d 15, 21, 973 N.Y.S.2d 152, 156 (1st Dep’t 2013);
VOOM HD Holdings LLC v. EchoStar Satellite L.L.C., 93 A.D.3d 33, 45, 939 N.Y.S.2d 321,
330 (1st Dep’t 2012) (sanctions justified by “ordinary negligence”).
17
N.E.2d 277, 917 N.Y.S.2d 68 (2010). In reversing the Appellate Division, the
Court of Appeals held that a party’s pleading had to be stricken when its failure to
comply with its pre-trial obligations undermined the integrity of the judicial
system. Id. at 81, 942 N.E.2d at 281, 917 N.Y.S.2d at 72. Likewise, Team’s
disgraceful behavior with respect to the Diamond Shamrock documents has made a
mockery of the discovery process. The motion court abused its discretion by
failing to impose serious sanctions on Team. At a minimum, Team should be
subject to adverse inferences as a result of its deplorable conduct. (App. Br. at
33.)13
Lastly, Team simply ignores Con Edison’s request for fees and costs. Con
Edison has been forced to engage in expensive motion practice in an attempt to
obtain documents that Team should have produced years ago, which justifies an
award of fees and costs in Con Edison’s favor. (App. Br. at 33-34.)
13 Team makes a mystifying argument that Con Edison has failed to preserve its appeal
with respect to sanctions for violations of CPLR 3126, and that only common law spoliation has
been preserved. (Resp. Br. at 36-37.) However, Con Edison’s Notice of Appeal generally
preserves Con Edison’s appeal from the motion court’s denial of spoliation sanctions against
Team and does not distinguish between legal theories in the manner Team suggests. (A. 117-
19.) In any event, sanctions such as dismissal of pleadings and preclusion of evidence may be
imposed under New York common law. Strong, 112 A.D.3d at 21-22, 973 N.Y.S.2d at 156-57.
18
CONCLUSION
For the reasons stated above and in Con Edison’s opening brief, the portions
of the First, Second, and Third Orders of the Supreme Court, New York County,
denying Con Edison’s motions to compel the production of documents by Team
relating to prior incidents, including the Diamond Shamrock explosion and
litigation, and denying Con Edison’s motion for spoliation sanctions against Team,
should be reversed; the case should be remanded with instructions to allow the
parties sufficient time to engage in document and deposition discovery relating to
these issues, and with instructions to, at a minimum, impose adverse inferences
that Team was on notice that the excessive application of leak sealant could cause
serious damage and that the information it supplied to customers was deficient;
along with such other and further relief as the Court deems just and proper.
Dated: New York, New York
August 15, 2014
DAVIS POLK & WARDWELL LLP
By: ___________________________
Frances E. Bivens
Nancy B. Ludmerer
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
/s/ Nancy B. Ludmerer
19
CAROLE BORSTEIN
Attorney for Consolidated Edison
Company of New York, Inc.
4 Irving Place
New York, New York 10003
(212) 460-4600
CLARK, GAGLIARDI & MILLER, P.C.
99 Court Street
White Plains, New York 10601
(914) 946-8900
Attorneys for Defendants-Appellants
and Third-Party Plaintiffs-Appellants
Consolidated Edison, Inc. and
Consolidated Edison Company
of New York, Inc.
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