There was a very important Tennessee Supreme Court case released on Friday, October 30, 2015, which will increase the pressure on retaining evidence in cases.
In Tatham v Bridgestone et al (October 30, 2015), the Tennessee Supreme Court in many respects revamped the law on spoliation of evidence, and these changes will increase the pressure upon our clients to preserve evidence of all kinds. There has long been somewhat of a non-uniform analysis of spoliation of evidence, bouncing between assessing spoliation and sanctions under general spoliation law, versus the court’s general authority to prevent and otherwise sanction for discovery abuse. As the court stated in Tatham, “in reviewing a trial court’s decision to impose sanctions for the spoliation of evidence, Tennessee’s appellate courts generally have analyzed the issue under either the common law doctrine of spoliation, including the prerequisite of intentional misconduct, or under the trial court’s inherent authority and wide discretion to impose sanctions during the discovery process, without any discussion of this dichotomy.”
Tennessee courts have long applied a prerequisite of intentional misconduct in the context of spoliation of evidence, particularly under general spoliation related law. In order to draw a negative inference jury instruction for spoliation, the trial court had to find that the spoliating party intentionally or for an improper purpose destroyed, mutilated, lost, altered or concealed evidence. Then, if spoliation was found, the primary sanction imposed was the negative inference jury instruction. Spoliation can, of course, work against plaintiffs as well as defendants. For example, there are instances of plaintiff cases being dismissed for a very key piece of evidence being lost or destroyed, but overall, particularly for defendants, the negative jury inference was our primary concern, and in the scheme of things, at least compared to some other states, this was something we could oftentimes deal or work around, although obviously not ideal. This, however, now changes.
In this recent case, the Court discussed the history of spoliation and decided to enact a “Uniform Standard” as to spoliation of evidence. The Court has ruled that going forward, “intentional misconduct is not a prerequisite for a trial court to impose sanctions for spoliation of evidence. . . The Court formally states in this opinion that there “is no reason to continue the requirement of intentional misconduct for the imposition of sanctions for the spoliation of evidence whether the sanction is imposed under the common law doctrine, under the inherent authority of the court, or under Rule 34.02” T.R.C.P.
The Court further discusses the range of sanctions available to the trial court, as well as the factors to be considered in deciding upon what sanction to impose. The opinion reiterates at various points within the opinion that the trial court has wide discretion on this issue. The Supreme Court holds that “to adopt an inflexible, bright-line rule restricting a trial court’s power to fashion the appropriate remedy for spoliation of evidence would be contrary to the trial court’s inherent authority to sanction abuses of the discovery process and to remedy the potential prejudice caused thereby.”
The opinion states that the determination of whether a sanction should be imposed for spoliation of evidence depends upon the “unique circumstances of each case.” Factors which are relevant to a trial court’s consideration of what, if any, sanction should be imposed include the following: (1) the culpability of the spoliating party in causing the destruction of the evidence, including evidence of intentional misconduct or fraudulent intent; (2) the degree of prejudice suffered by the non-spoliating party as a result of the absence of the evidence; (3) whether, at the time the evidence was destroyed, the spoliating party knew or should have known that the evidence was relevant to pending or reasonably foreseeable litigation; and (4) the least severe sanction available to remedy any prejudice caused to the non-spoliating party. The opinion further stresses that a trial court’s discretionary standard to impose a particular sanction will be set aside on appeal only when the trial court has misconstrued or misapplied the controlling legal principles or has acted inconsistently with the substantial weight of evidence.
It is also important to note that, as stated above, the sanctions available to the trial court include not only the negative inference jury instruction but also common law sanctions as well as sanctions “under the inherent authority of the court.” This means that those sanctions available to a trial court in the case of general discovery abuse under the Tennessee Rules of Civil Procedure are also formally available in cases of spoliation. These include such things as a dismissal of a case, entering a default judgment, exclusion of a witness’s testimony, refusing to allow a party to support or oppose certain claims, excluding evidence, striking pleadings, staying a case and issuing an order designating certain facts as established for purposes of the action (see also Rule 37 T.R.C.P.). Of note, Rule 37 T.R.C.P. even includes a provision for paying attorney fees in the case of discovery abuse. This judicial opinion does not specifically list an attorney fee sanction for spoliation, but in reading the opinion, that cannot be excluded. I can envision numerous possible scenarios where a monetary sanction could cure a spoliation or lost evidence issue. Likewise, strategically thinking, I can envision scenarios where a monetary payment imposed to cure an evidence/spoliation problem may be better than other sanctions that could be imposed. In other words, there may be situations where the spoliating party could buy themselves out of an even worse situation.
This is a significant new development in handling litigation. This will undoubtedly apply to evidence of many kinds, including but not limited to, video surveillance from businesses, incident reports, employee and witness statements, photos, physical evidence and numerous things. This will further impact how parties do litigation, whether it be actual or potential litigation, and approach evidence-related issues. Parties and attorneys alike need to be on the lookout for possible problems in this arena immediately upon receiving a claim and then the lawsuit to follow. This has always been the case, but the need is now intensified even further. Steps must be taken to address the factors and criteria discussed in the new case, from the onset of a potential claim, all the way through the conclusion of a lawsuit.
Thus, in summary, Tennessee is joining the ranks of other states whereby the hurdles on proving spoliation are less burdensome. Likewise, the sanctions are potentially more severe under this new holding. Aside from enacting a uniform standard on this issue, while the opinion doesn’t explicitly say it, my take on this is that the Court realizes that, in today’s day and time, evidence is more available due to cell phone cameras, increasing video opportunities, technology and other reasons. In any event, this is a new issue that will impact cases. I am already advising clients on ways to deal with the expanded spoliation threat, whether it be how to avoid the spoliation issue in the first place or how to minimize the effects of spoliation issues as needed.