Dealing with ESI Spoliation in State Court

Dealing with ESI Spoliation in State Court

Legal consequences flow from the use or abuse of EHR. This monthly column presents examples of what those consequences can be.

The vast majority of civil litigation in the US takes place in state courts, where Rule 37(e) has no application and approaches to allegations of spoliation vary from one state to the next. While it is important to understand Rule 37(e) as it applies to litigation in federal court, few states have developed comparable standards to spoliation of electronically stored information (ESI) for litigation at the state level. A recent state court decision in New York gives an example of how states handle these motions.

Delmur, Inc. v. School Construction Authority, 2019 NY Slip Op 05764 (2d Dept. App. Div. July 24, 2019), does not involve healthcare or ESI. What it does involve is the failure of the plaintiff to preserve a truck it owned that was allegedly damaged when struck by a vehicle owned and operated by the defendants. The defendants demanded that the plaintiff preserve the truck, advise the defendants of its current location, and allow the defendants to inspect it. Instead, the truck, which had been stored at a yard in Brooklyn, had been “seized and disposed” of by the owner of the yard to cover storage costs. The defendants moved for sanctions based on the loss of the truck. A trial court denied the motion. The appellate court reversed and struck the complaint as a sanction. According to the decision:

“As the party seeking sanctions for spoliation, the defendants were required to demonstrate ‘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 . . . such that the trier of fact could find that the evidence would support that claim’ ***. ‘A culpable state of mind for purposes of a spoliation sanction includes ordinary negligence’ ***. ‘Where the evidence is determined to have been intentionally or wilfully destroyed, the relevancy of the destroyed [evidence] is presumed. On the other hand, if the evidence is determined to have been negligently destroyed, the party seeking spoliation sanctions must establish that the destroyed [evidence was] relevant to the party’s claim or defense’ ***.

Here ***, the defendants sustained their burden of establishing that the plaintiff was obligated to preserve the truck at the time it was purportedly ‘seized and disposed’ of, that the truck had been seized and disposed of before the defendants had an opportunity to inspect it, and that the truck was relevant to the litigation ***. Furthermore, the defendants demonstrated that their ability to prove their defense had been significantly, if not fatally, compromised by the loss of the truck. Under the circumstances presented, the sanction of striking the complaint was appropriate ***.”

What can we learn from Delmur? First, it is an example of a judicially imposed standard for the loss of any relevant information, whether that information is ESI or a physical object such as a truck or a piece of paper. New York does not distinguish between what has been lost. Second, note how New York approaches the “culpable state of mind” necessary for the imposition of spoliation sanctions. Negligence is a sufficient state of mind for the imposition of the most severe sanction (unlike Rule 37(e)(2) and its lesser remedial measures). These two characteristics of New York spoliation law—a single approach to the loss of anything relevant and an “elastic” approach to a requisite state of mind—are common in other states as well.

What does this mean for the healthcare provider and its attorneys when facing or bringing a spoliation motion? First, understand where you are in litigation. Standards for the imposition of spoliation sanctions vary among the states. Arguments in opposition to or in support of sanctions must keep the applicable standards in mind and facts must be developed and presented consistent with those standards. Second—and this goes back to a fundamental principle of litigation—understand the duty to preserve. That means knowing when the duty arises, knowing what should be preserved, communicating the duty to the appropriate persons and business units, and monitoring to see that the duty is being executed reasonably. Following these principles should enable a healthcare provider to navigate through spoliation.

Ron Hedges, JD, is a former US Magistrate Judge in the District of New Jersey and is currently a writer, lecturer, and consultant on topics related to electronic information.

**Editor’s note: The views expressed in this column are those of the author alone and should not be interpreted otherwise or as advice.

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