Judge Refuses To Reopen Discovery

In Lufthansa Cargo AG v. Total Airport Services, 12 CV 4869 (E.D.N.Y. Oct. 24, 2014), Magistrate Judge Roanne L. Mann granted defendant’s motion for reconsideration to the extent of deferring decision on the admissibility of evidence and denied reconsideration of the motion to reopen discovery. Magistrate Judge Mann had denied defendant’s motion to reopen fact discovery after defendant had fortuitously discovered new evidence during a court-ordered inspection of an aircraft outside the bounds of the authorized inspection and five months after the close of discovery.

Defendant argued that it should be allowed to reopen discovery because plaintiffs’ Rule 30(b)(6) witness, Dieter Hammer, had testified that Lufthansa did not fly with repaired aircraft, but admitted that he was not knowledgeable about structural damage or related repairs. A subsequent 30(b)(6) witness, Andreas Grubert, gave testimony that appeared to contradict Hammer. The newly discovered evidence indicated that Lufthansa may indeed have flown aircraft following structural repairs.

Magistrate Judge Mann refused to reopen discovery because defendant had not been diligent in pursuing additional information from plaintiffs following the contradictory testimony given by Hammer and Grubert. A court-ordered scheduling order may be modified under Federal Rule of Civil Procedure 16(b)(4) only for “good cause,” and “good cause depends on the diligence of the moving party.” Slip op. 6. Here, defendant did not seek documents and answers to interrogatories concerning other repairs for structural damage to plaintiffs’ fleet of aircraft before discovery closed, thus a fortuitous finding during a post-discovery inspection did not demonstrate adequate diligence to convince the court to reopen discovery long after it ended.

Concerning the admissibility of the fortuitous evidence gathered during the inspection of the aircraft, the court concluded:

that the balancing of the probative value of such evidence as against any prejudice resulting from its admission is more appropriately deferred until the time of trial; the presiding judge will then be in a position to consider the testimony already adduced at trial in assessing the admissibility of the proof in question.

Slip op. 10.

Court Imposes Spoliation Sanctions Despite Absence Of Showing By Moving Party That Relevant Evidence Was Altered Or Destroyed

A few weeks ago we wrote about a decision by Chief Magistrate Judge Gold, in Rodgers v. Rose Party Functions Corp., 10 CV 4780 (E.D.N.Y. Nov. 12, 2013), concluding that the jury could draw an adverse inference as a sanction for the defendants’ non-bad faith spoliation of a key piece of evidence in a personal injury case, a videotape of the plaintiff’s slip and fall that gave rise to the lawsuit (see our prior blog post here).  Now comes a November 30 order from Judge Arthur Spatt, in Dwyer v. General Motors LLC, No. 11 CV 3057 (E.D.N.Y. Nov. 30, 2013), imposing sanctions for spoliation of evidence, also in a personal injury case involving physical evidence, in a ruling that creates peril for diligent plaintiffs’ lawyers who seek to verify the merit of their client’s claims before filing suit.

Plaintiff, an experienced “automotive technician” employed by a General Motors dealership, was injured when a shock absorber exploded while he was working on a customer’s car.  After the accident, he turned over the offending shock absorber to his lawyers.  The lawyers took photos of the part and gave it to their retained experts, who also took photos of it.  Both sets of photos were later provided to GM in discovery.  To verify whether the defect suspected by plaintiff was present in the shock absorber, the experts removed the outer casing of the part by drilling a hole and making four cuts in it, so as to be able to examine the shock absorber’s interior components, which the court described as “apparently the crucial evidence in this case.”  Slip op. 9.  After the experts had examined the part’s interior, plaintiff filed the action, asserting various products liability theories.

GM moved for summary judgment dismissing the complaint as a sanction for spoliation of evidence, which it claimed occurred when the plaintiff’s experts cut open the exterior casing of the shock absorber to examine the interior components that allegedly caused plaintiff’s injuries.  The court denied summary judgment as too drastic a remedy, since cutting open the casing was “at most” negligent” and “resulted in limited prejudice” to GM.  Slip op. 8.  In fact, the court expressly found that GM did not show that the exterior casing (i) was relevant evidence, (ii) would have been favorable to its case, or (iii) how its removal “destroyed or significantly altered” the interior portion of the shock absorber.  GM’s expert did not say in his report that the absence of the outer casing impaired his ability to reach a conclusion about the cause of the accident.  Despite the absence of a showing on these critical elements, the sanctions imposed by the court would (i) preclude the plaintiff’s experts from testifying as to the condition of the shock absorber before it was cut open; (ii) inform the jury of the plaintiff’s conduct regarding the exterior casing; and (iii) permit the jury to draw an adverse inference from plaintiff’s removal of the casing “if it concludes such an inference is warranted based on the evidence presented.”  Slip op. at 12.

The sanctions may be only minimally biting, but why grant a remedy at all in these circumstances?  What should plaintiff and his lawyers have done differently?  If they had not opened the casing to examine whether a defect existed, one can readily imagine the defendant later arguing lack of a good faith basis to bring the suit if the eventual examination of the shock absorber’s interior did not reveal a defect.  Litigation tactics aside, plaintiff’s lawyers had a duty to investigate the claim before bringing it, and the client and the judicial system benefit from them doing so.  Should counsel have given the part to GM to examine before filing suit so that GM could not later complain of spoliation, thereby giving the defendant control of the timing of the filing and a pre-suit, pre-discovery preview of the plaintiff’s evidence?  The ruling leaves counsel with less than optimal choices.

Court Invokes “Inherent Powers” To Order Sanctions For Negligent Spoliation Of Evidence

In Rodgers v. Rose Party Functions Corp., No. 10 CV 4780 (E.D.N.Y. Nov. 12, 2013), Chief Magistrate Judge Steven Gold granted the plaintiff an adverse inference as a sanction for the defendant’s negligent failure to preserve a key piece of evidence.  Plaintiff Tiffani Rodgers was injured when she slipped on a flight of stairs on the premises of defendant Rose Castle, a catering hall.  She thought her fall was caused by liquid or debris on the stairs.  The hall’s security personnel called an ambulance for her, and she was taken to the hospital.  Two days after the accident, Rodgers called Rose Castle seeking the defendants’ insurance information.  In discovery, it emerged that a video camera on the stairway captured the plaintiff’s fall, but that the footage generally recycled every two weeks and the footage of the fall was not saved.

Judge Gold held that the defendants were negligent in failing to preserve the videotape because they should have anticipated litigation on the day of the accident, when Rodgers was rushed to the hospital in an ambulance called by the hall’s own security guard, or at the very latest, two days later when Rodgers called about the defendants’ insurance information, which made “clear that plaintiff was seeking compensation for her injuries from defendants’ insurance carrier.”  Judge Gold ruled that the “culpable state of mind” requirement for spoliation sanctions is satisfied by negligent destruction of evidence, and that the plaintiff did not have to show bad faith or gross negligence.  Rather, “[o]nce a duty to preserve evidence arises, any destruction of that evidence is, at a minimum, negligent,” and the destruction at that point, without more, reflects “a culpable state of mind.”  Slip op. at 5.

The Court said that sanctions were therefore warranted and the Court would impose them “pursuant to its inherent powers and even absent violation of a discovery order.”  Slip op. at 3.  As a sanction Judge Gold granted Rodgers an adverse inference instructing the jury that it may infer that the absent videotape would have corroborated the plaintiffs’ allegations and rebutted the defendants’.  The plaintiff didn’t have to present “extrinsic evidence” that the contents of the video “would have been favorable to her case,” as Judge Gold acknowledged was “generally” required.  Slip op. at 5.  Ouch.  But don’t tell a judge in the Eastern District you weren’t warned.  Any company that experiences a conceivably litigable incident had better suspend its document destruction or recycling procedures immediately.