In Warren v. Amchem Products, Inc., Justice Peter Moulton sanctioned defendant J-M Manufacturing Company for destroying documents in 1990 and 1997 – 24 years and 17 years, respectively, before the Warren Estate filed suit against asbestos manufacturers in 2014. The Court granted plaintiff’s motion for spoliation sanctions and ordered that, should the case proceed to trial, the jury will be instructed that it may infer that the destroyed documents would have supported plaintiff’s claims and would not have supported J-M’s defenses.
In 1990, more than ten boxes of documents (possibly as many as 50) were lost during J-M’s cross-country relocation of its corporate headquarters to Livingston, New Jersey. In 1997, former J-M employee James Reichert testified that he destroyed approximately 27 boxes of records in an effort to free up office space and, as he explained, after moving the boxes several times, “you just get tired of moving stuff.”
In New York, a party seeking sanctions for spoliation must establish “(1) the party with control over the evidence had an obligation to preserve it at the time it was destroyed, (2) the records were destroyed with a ‘culpable state of mind’ (which includes ordinary negligence), and (3) the destroyed evidence was relevant to the party’s claim or defense such that the trier of fact could find that the evidence would support that claim or defense.” Further, where the destruction of evidence was intentional, willful, or the result of gross negligence, the relevance of the destroyed documents is presumed. Id.
The Court agreed with plaintiff that J-M had an obligation to preserve documents before being served with a complaint or “notice of a specific claim or pending litigation.” The Court determined that J-M was on notice of potential litigation concerning its asbestos products due to asbestos-related litigation against the pipe company it purchased in the early 1980s and other internal documents reflecting knowledge of the risk of future asbestos litigation. J-M had argued that “[s]uch a standard would mean that every corporation involved in the manufacture, distribution or sale of any product would be subject to a litigation hold of indeterminate length and scope.” However, the Court held that “it is neither unfair nor overly burdensome for a company to place a litigation hold for a time period commensurate with the nature and risks of the product.” The Court’s recognition of the “long latency period of asbestos-related diseases” suggests that a litigation hold would not apply for as long a period in other cases, involving products other than asbestos.
The Court further held that J-M’s approach to a litigation hold was “lackadaisical, if not intentional” and that the disappearance of documents during J-M’s corporate relocation (while other documents arrived safely) was, at a minimum, gross negligence. Accordingly, the relevance of the missing documents was presumed. J-M failed to rebut the presumption of relevance, the Court decided, because merely speculating that “some of the documents might be irrelevant or duplicative does not suffice,” nor does suggesting that the plaintiff has “other means to prove his case.” Having established the necessary predicates, the Court granted plaintiff’s motion for sanctions, but declined to strike J-M’s answer as too harsh a remedy.