Tennessee’s Supreme Court Holds That Intentional Misconduct is not a Necessary Prerequisite for Spoliation Sanctions

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By: Edward A. Jaeger, Jr. and Michael J. Wolfer

In Tatham v. Bridgestone Americas Holding, Inc., 473 S.W.3d 734 (Tenn. 2015), the Tennessee Supreme Court addressed whether intentional misconduct is a prerequisite to imposing sanctions for spoliation of evidence. The Supreme Court held that a finding of intentional misconduct is not a necessary prerequisite to imposing sanctions. Its presence, however, is a relevant factor in the totality of the circumstances to consider when determining whether to impose sanctions.

The Tatham case arose from a motor vehicle accident allegedly caused by a defective tire. On March 3, 2008, Lee Ann Tatham (Tatham) purchased two Primewell PS830 rear tires from Bridgestone Retail Operations, LLC d/b/a Firestone Complete Auto Care (Bridgestone). On May 30, 2008, Tatham’s vehicle crashed, purportedly as the result of a defect in one of her tires, while she was driving on the interstate in Tennessee. As a result of the accident, Tatham suffered a broken back and her vehicle was totaled.

At the advice of her insurance company, Tatham transferred the title of her vehicle, including the tire, to the company that towed it from the accident location. At the time of the title transfer, she was not represented by counsel and was not aware of the need to preserve the tire. The towing service reportedly “shredded” the tire in the routine course of its business.

On May 7, 2009, Tatham filed a complaint against Bridgestone and GITI Tire (USA), the company that imported the tires Tatham purchased, alleging that the tire at issue was defective and/or unreasonably dangerous. Tatham sought relief on the grounds of strict liability, negligence, and breaches of implied warranty of fitness, the implied warranty of merchantability and the duty to warn.

Pursuant to Tennessee Rule of Civil Procedure 34A.02, the Defendants moved to dismiss the case as a sanction for the spoliation of evidence, specifically, the destruction of the allegedly failed tire. Rule 34A.02 states: “Rule 37 sanctions may be imposed upon a party or an agent of a party who discards, destroys, mutilates, alters, or conceals evidence.” Rule 37 sanctions include, but are not limited to, dismissal of the action.

The Circuit Court of Madison County, Tennessee reasoned that “[Tatham] did not intentionally participate in the destruction of such evidence following the accident in question,” and denied the Defendants’ motion. The Defendants sought permission to file an appeal with the Tennessee Supreme Court. The Tennessee Supreme Court granted the Defendants’ application to decide, among other issues, whether the trial court abused its discretion by refusing to dismiss the case as a sanction for spoliation of evidence.

On appeal, the Defendants contended that the trial court applied an incorrect legal standard in its analysis of the spoliation issue. They argued that the trial court declined to impose sanctions solely because it found that Tatham did not intentionally destroy the tire, thereby placing improper weight on an element that is not required under Rule 34A.02.

The Supreme Court recognized that although Tennessee’s common law spoliation doctrine required intentional misconduct as a prerequisite to imposing a spoliation sanction, Tennessee courts have also addressed spoliation questions relying on the court’s inherent authority and wide discretion in imposing sanctions to ensure fundamental fairness and proper administration of justice. The court further recognized that when Tennessee adopted Rule 34A.02, it effectively codified Tennessee courts’ inherent authority to impose sanctions during the discovery process.

Finding no reason to continue the requirement of intentional misconduct as a prerequisite to imposing a sanction for spoliation of evidence and in light of Rule 34A.02 and the trial court’s inherent authority to impose sanctions to ensure fairness and proper administration of justice, the Supreme Court held that “intentional misconduct is not a prerequisite for a trial court to impose sanctions for the spoliation of evidence.” In addition, the court held that, “the analysis for the possible imposition of any sanction for the spoliation of evidence should be based upon a consideration of the totality of the circumstances.”

After clarifying the standard for imposing spoliation sanctions, the Supreme Court affirmed the trial court’s decision not to impose a sanction. As noted by the court, the trial court’s decision contained nothing suggesting the trial court required a finding of intentional misconduct to impose a sanction. In addition, the court found that the prejudice suffered by the Defendants, if any, was minimal because neither party had an opportunity to examine the tire.

In addition to affirming the trial court’s decision, the Supreme Court set forth the following factors that a court should consider when addressing a request for a spoliation sanction:

  1. The culpability of the spoliating party in causing the destruction of the evidence, including evidence of intentional misconduct or fraudulent intent;
  2. The degree of prejudice suffered by the non-spoliating party as a result of the absence of the evidence;
  3. Whether, at the time the evidence was destroyed, the spoliating party knew or should have known that the evidence was relevant to pending or reasonably foreseeable litigation; and
  4. The least severe sanction available to remedy any prejudice caused to the non-spoliating party.

Discussing the specific sanction of dismissal, the court stated that “such a sanction would be appropriate in circumstances where any less severe remedy would not be sufficient to redress the prejudice caused to the non-spoliating party by the loss of the evidence.”

Although the Tatham decision eliminates the requirement of intentional misconduct with respect to securing a sanction based on the common law doctrine of spoliation, its impact should have only a limited effect going forward for two reasons. First, although the court eliminated the need to find intentional misconduct before imposing a spoliation sanction, the court also stated that “the absence or presence of intentional misconduct is an important factor and the application and weight of such factor is within a trial court’s wide discretion.” Thus, in situations where a court finds that, although evidence was destroyed, there is no evidence that the spoliating party acted intentionally or fraudulently, the court should weigh the first factor noted above heavily against imposing a sanction.

The second reason that the Tatham decision should have a limited impact going forward is that, when faced with a request for a spoliation sanction, courts now need to consider enumerated factors and decide each case based on its unique circumstances. The factors courts have to consider should allow subrogating insurers who face a spoliation of evidence sanction request to argue either that no sanction should be imposed or that dismissal of the case is not an appropriate sanction.

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