Business Litigation Alert: "What You Don't Keep Can Hurt You"
A recent Texas Supreme Court decision has important implications for the policies companies follow in Texas to avoid accusations that they have tampered with evidence or destroyed records improperly. The Supreme Court established new procedures for courts to determine whether companies improperly destroyed evidence (“spoliation”), and what sanctions should apply if they did.
In Brookshire Bros., Ltd. v. Aldridge,[1] the Supreme Court decided that the trial judge, not the jury, must first must determine whether a party spoliated evidence. Some Texas courts previously left this to a jury’s determination. The Supreme Court’s decision should end that practice. To conclude that a party spoliated evidence, a court must find that (1) the spoliating party had a duty to reasonably preserve evidence, and (2) the party intentionally or negligently breached that duty by failing to do so.
If the judge finds spoliation did occur, the judge has broad discretion to impose an appropriate remedy, but the key considerations are (1) the level of culpability of the spoliating party, and (2) the degree of prejudice to the nonspoliating party. The trial judge must consider three key questions in deciding this: (1) Is what was lost important? (2) Would it have helped the nonspoliating party or hurt the spoliating party? (3) Is there other evidence that would show the same thing?
Judges have sometimes instructed jurors that they can assume that the spoliated evidence would be unfavorable to the party who destroyed it, even if such evidence was disposed of as part of a company policy prior to a lawsuit being filed. This instruction is extremely dangerous to the accused party, because, as in politics, a perceived “cover-up” is often worse than the “crime.” A jury sometimes believes that the spoliating party intentionally committed worse “sins,” even when it just followed its normal practices and committed no “sin” at all. Fortunately, the Supreme Court decided in Brookshire Bros. that the “harsh remedy of a spoliation instruction” is authorized only when the spoliating party intentionally concealed discoverable evidence and a less severe remedy would not suffice. Without evidence of the “requisite intent to conceal or destroy relevant evidence,” the trial judge cannot submit a spoliation instruction of any form to the jury.
The facts in Brookshire Bros. show how a company following established records retention policies can help protect against a spoliation claim. Plaintiff Aldridge reported to a Brookshire Bros. grocery store that he slipped and fell on a spill on the floor there several days after the incident. A surveillance camera recorded the slip-and-fall incident, but a table blocked the camera’s view of the floor where the fall took place. A store employee decided to copy and retain only about eight minutes of the video, starting just before the plaintiff entered the store and concluding shortly after the fall. At the time, Brookshire Brothers had a policy to record over the surveillance video every 30 days. Aldridge learned about the video, and asked the claims department for a copy 11 days after the incident so he could see his fall. The employee refused. Brookshire Brothers deleted the remaining video from the day of the incident (other than the eight minutes previously copied) about 30 days after the incident in accordance with its policy.
Nearly a year later, Aldridge’s lawyer sent the store a request for approximately two-and-a-half hours of additional video footage. Aldridge sued Brookshire Brothers and argued that Brookshire Brothers improperly destroyed evidence by erasing the tape that would have been helpful to the key issue of whether the spill was on the floor long enough to give the store a reasonable opportunity to discover it. The trial judge submitted a spoliation instruction to the jury, which awarded Aldridge over $1 million.
The Supreme Court decided that Brookshire Brothers’ deletion of the video was not “intentional,” but in accordance with company policy to delete surveillance video after 30 days. The Court created a new definition of “intentional” in the spoliation context, holding that “intentional spoliation” that justifies a spoliation instruction requires proof that a party “acted with the subjective purpose of concealing or destroying discoverable evidence” with the “requisite intent to conceal or destroy relevant evidence.” Therefore, even though Brookshire Brothers did purposefully delete much of the video, the Court held that “there is simply no evidence that Brookshire Brothers saved the amount of footage that it did in a purposeful effort to conceal relevant evidence.”
Because the deletion of the video was merely negligent (i.e., in accordance with company policy) and other evidence was available to Aldridge to prove the elements of his slip-and-fall claim (including the 8-minutes of retained video; the store incident report; and testimony of various witnesses, including the plaintiff), the Supreme Court decided the jury should not have been given a spoliation instruction and reversed the judgment.
In the wake of Brookshire Bros., businesses of all sizes should evaluate their implementation of formal records and media retention policies. Compliance with well-considered, reasonable policies is the first step to avoid harsh sanctions for spoliation of evidence that can arise long after the event.
If we can help you with your records retention policy, call us.
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[1] No. 10-0846, 2014 WL 2994435, ___ S.W.3d ___ (Tex. July 3, 2014).
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