State Law Applied to Decide Spoliation in Diversity Case
Plaintiffs in a diversity case, LaFerrera et. al. v. Camping World RV Sales of Birmingham et. al., Case No. 15-00473 (N.D. Ala., Mar. 21, 2016), sought a federal court ruling regarding spoliation. Plaintiffs sued Defendants over claimed defects in a motor home they purchased and misrepresentations about the condition of the vehicle. They also alleged that they had been fraudulently induced into signing a release. After discovery, the parties each filed motions for summary judgment, and Plaintiffs filed a Motion to Preclude Defendants’ Argument based upon accusations of spoliation. Defendants filed a Motion to Strike the Motion to Preclude.
The evidence claimed to be spoliated included a particular email, an electric dash control panel removed from the motor home, and various hard copies of documents. The requested sanctions were to preclude Defendants from relying on the release (based upon argument that the absence of the evidence contributed to Plaintiffs being fraudulently induced into agreeing to the release), or in the alternative, an adverse inference instruction that the spoliated evidence was damaging to Defendants’ position.
The court first highlighted that in a diversity case, federal law allows for and generally controls a determination of sanctions based upon the evidentiary doctrine of spoliation, but further noted that since there were no specific federal law guidelines within that circuit, it could seek guidance from state law as long as consistent with federal spoliation principles. The court then proceeded to apply Alabama state court law, which defines spoliation as an attempt by a party to suppress or destroy material evidence favorable to the adverse party, and which further requires a finding of bad faith in order to impose an adverse inference sanction (bad faith constituting intent exceeding mere negligence but not requiring evidence of malice). With regard to the email, the court found no evidence that the email was not produced, or that any lack of production was in bad faith. The court also denied the motion as to the other items allegedly spoliated, finding that Plaintiffs had not provided evidence of the requisite intent or damage. Ultimately, the court denied both of Plaintiffs’ motions and granted summary judgment in favor of Defendants as to certain claims while leaving the rest for trial. The court made an additional observation that a motion to compel would have been the more appropriate means by which to bring the spoliation issues to the court’s attention.