Court Strikes Complaint As Sanction For Spoliating Evidence

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Posted on: Jun 17 2024

Section 3101 of the Civil Practice Law and Rules (“CPLR”) provides that, in general, “there should be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof” by, among others, a party and its representatives. The phrase “material and necessary” is “interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity.”[1] As recognized by the Court of Appeals, the exchange of “material and necessary” information is an important part of litigation.

Thus, in order for the disclosure process to be meaningful, and for the purposes of disclosure to be furthered, individuals or entities that are involved, or anticipate being involved, in litigation have a duty to preserve “material and necessary” information. When information is not preserved when it should have been, it is known as “spoliation”.

[Eds. Note: This Blog examined the duty to preserve evidence and the doctrine of spoliation here, here, here, and here.]

Spoliation “refers to evidence which is destroyed or substantially altered.”[2] “Under the common-law doctrine of spoliation, when a party negligently loses or intentionally destroys key evidence, the responsible party may be sanctioned.”[3]

When sanctions are sought for spoliation, a party “must show that the party having control over the evidence possessed an obligation to preserve it at the time of its destruction, that the evidence was destroyed with a culpable state of mind, and that the destroyed evidence was relevant to the party’s claim or defense such that a trier of fact could find that the evidence would support that claim or defense.”[4] “A culpable state of mind for purposes of a spoliation sanction includes ordinary negligence.”[5] However, when spoliation is based on negligence the party seeking a spoliation sanction is required to “establish that the destroyed evidence was relevant to the party’s claim or defense.”[6]

“The nature and severity of the sanction depends upon a number of factors, including … the knowledge and intent of the spoliator, the existence of proof of an explanation for the loss of the evidence, and the degree of prejudice to the opposing party.”[7] The court has broad discretion in determining what, if any, sanction is warranted for spoliation of evidence, including “an order striking out pleadings or parts thereof.”[8] While the striking of a pleading is generally limited to “instances of willful or contumacious conduct,” it may also be warranted where the negligent destruction of relevant evidence leaves a party prejudicially bereft “of the means of proving [its] claim or defense.”[9]

The Appellate Division, Fourth Department, addressed the foregoing issues in Buffalo Biodiesel, Inc. v. Blue Bridge Fin., LLC, 2024 N.Y. Slip Op. 03259 (4th Dept. June 14, 2024) (here).

Plaintiff commenced the action asserting four causes of action arising from allegations that defendant sent an email to a financial services company in which defendant falsely characterized an ongoing legal dispute between the parties. Two of the causes of action were previously dismissed, leaving only plaintiff’s causes of action for libel and tortious interference with business relations.

Thereafter, defendant served discovery demands in which it sought, inter alia, copies of all communications between plaintiff and the financial services company. In response, plaintiff advised that it no longer had any such documents in its possession. Plaintiff later revealed that it had failed to issue a litigation hold and that all of its emails were deleted during the pendency of the action, either by plaintiff itself or, upon plaintiff’s approval, by the company hosting its server. Plaintiff attempted to subpoena the deleted emails directly from the financial services company, but that company was no longer operating, and the emails could not be recovered.

Defendant moved for sanctions due to the spoliation of evidence. The motion court granted the motion pursuant to CPLR 3126, striking the complaint and dismissing plaintiff’s remaining causes of action with prejudice. Plaintiff appealed. The Fourth Department affirmed.

In affirming the motion court’s decision and order, the Court “reject[ed] plaintiff’s contention that the [motion] court abused its discretion in striking plaintiff’s pleading as a sanction for spoliation of evidence.”[10]

The Court found that plaintiff failed “to suspend the routine deletion of its emails during the course of litigation.”[11] Plaintiff’s deletion of the emails, said the Court, “constituted the grossly negligent spoliation of evidence.[12] The Court explained that because the emails had been deleted, whether intentionally of through gross negligence, it could draw an inference that the emails were relevant:

Although plaintiff contends that defendant failed to establish the relevance of the deleted emails, “it is the peculiarity of many spoliation cases that the very destruction of the evidence diminishes the ability of the deprived party to prove relevance directly”[13] and, thus, where emails are deleted “either intentionally or as the result of gross negligence, the court [may] properly dr[a]w an inference as to the[ir] relevance”.[14]

“Thus,” concluded the Court, “on the facts presented in this action, we conclude that the [motion] court did not abuse its discretion in striking the complaint.”[15]

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes and is not intended to be and should not be taken as legal advice.

[1] Allen v. Crowell-Collier Publishing Co., 21 N.Y.2d 403, 406 (1968) (citation omitted).

[2] Gilliam v. Uni Holdings, 201 A.D.3d 83, 86 (1st Dept. 2021) (citation omitted).

[3] Mahiques v. County of Niagara, 137 A.D.3d 1649, 1650 (4th Dept. 2016) (internal quotation marks omitted)).

[4] Phelps-Vachier v. Genovese Drug Stores, Inc., 207 A.D.3d 582, 583 (2d Dept. 2022) (citations and internal quotation marks omitted); Teodoro v. C.W Brown, Inc., 200 A.D.3d 999, 1000 (2d Dept. 2021).

[5] Phelps-Vachier, 207 A.D.3d at 583.

[6] Id. at 584 (citations and internal quotation marks omitted).

[7] Mahiques, 137 A.D.3d at 1651 (internal quotation marks omitted).

[8] Miller v. Miller, 189 A.D.3d 2089, 2094 (4th Dept. 2020) (internal quotation marks omitted); see also CPLR 3126(3).

[9] Mahiques, 137 A.D.3d at 1651 (internal quotation marks omitted); see Koehler v. Midtown Athletic Club, LLP, 55 A.D.3d 1444, 1445 (4th Dept. 2008); New York Cent. Mut. Fire Ins. Co. v. Turnerson’s Elec., 280 A.D.2d 652, 653 (2d Dept. 2001).

[10] Slip Op. at *1.

[11] Id. at *1-*2.

[12] Id. at *2 (citing Voom HD Holdings LLC v EchoStar Satellite L.L.C., 93 A.D.3d 33, 45 (1st Dept. 2012)).

[13] Id. (quoting Sage Realty Corp. v. Proskauer Rose, 275 A.D.2d 11, 17 (1st Dept. 2000), lv. dismissed, 96 N.Y.2d 937 (2001)).

[14] Id. (quoting Ahroner v. Israel Discount Bank of N.Y., 79 A.D.3d 481, 482 (1st Dept. 2010)).

[15] Id. (citing Sage Realty Corp., 275 A.D.2d at 18).