Steal and Destroy Evidence Doctrine

Partner

As a consequence of the strange contours of California’s spoliation doctrine, there may be circumstances in which your client is better off stealing and destroying evidence than allowing that evidence to be used at trial.

The tort of spoliation of evidence was first recognized by California courts in Smith v. Superior Court, 151 Cal. App. 3d 491 (1984). “Spoliation of evidence means the destruction or significant alteration of evidence or the failure to preserve evidence for another’s use in pending or future litigation.” Williams v. Russ, 167 Cal. App. 4th 1215, 1223 (2008). The action endured for over a decade until in Cedars-Sinai Medical Center v. Superior Court, 18 Cal. 4th 1 (1998), the California Supreme Court ruled that no cause of action would lie for the intentional spoliation of evidence by a party to the litigation. The prohibition was later expanded to negligent spoliation, see Strong v. State, 201 Cal. App. 4th 1439, 1459 (2011), and to cover third parties, see Temple Community Hospital v. Superior Court, 20 Cal. 4th 464, 477 (1999). The policy rationale for killing the spoliation tort makes a lot of sense: “Creating a tort remedy for spoliation would spawn ‘endless litigation’ in which a dispute could never be finally resolved, because an unsuccessful litigant could always file a new action claiming that evidence which might have affected the outcome of the original action had been destroyed by another litigant or a third party.” Forbes v. Cty. of San Bernardino, 101 Cal. App. 4th 48, 56 (2002).

But recently the Court of Appeal may have gone too far, holding in an unpublished opinion that even when a litigant steals another party’s documents, the ban against pleading spoliation still protects the burglar. In Kwok v. Kwong, Case No. A143795 (Cal. Ct. App. Jul. 7, 2016) (unpublished), plaintiff alleged that defendants broke into plaintiff’s business, collected documents and carted them off in boxes. The alleged daytime-burglary was even caught by security cameras. But the Court of Appeal held, in affirming a demurrer, that it does not really matter how defendants came to possess the documents—theft or not—the act of “destroy[ing] or alter[ing] evidence . . . meets the definition of spoliation.” Id. And because there is no spoliation tort in California, there is no cognizable claim. Id. at 10. Matter dismissed.

The Kwok court sympathetically noted that there are a “number of nontort remedies . . . to deter the destruction or alteration of evidence” including discovery sanctions, state bar discipline, and criminal penalties. Id. at 8. But these remedies are often weak or effectively non-existent. Consider criminal penalties. Crimes are charged—or often not charged—at the discretion of the prosecutor. Parties have no real power to force the state to charge a crime. And generally speaking, prosecutors have neither the interest nor the bandwidth to take on document theft matters. In the Kwok case, for example, upon filing a police report, the police declined to investigate or charge the crime, as it was, in their opinion, a civil matter. And while discovery sanctions may be better than nothing, the Discovery Act was designed to redress incomplete discovery responses, not prosecute crimes; for that reason discovery sanctions are often incommensurate with the value of the lost or stolen evidence.

All this raises an interesting question: given the relative weakness of spoliation’s nontort remedies, and given the comparative value of documentary evidence, might there not be high-value cases where a party would be better off stealing and/or destroying documents—even if the spoliation is detected—than going to trial with those documents in evidence? Consider the following hypothetical (your law school flashback may begin now):

Defendant Jesse James knows that a set of “Smoking Gun Documents” virtually guarantee a civil judgment against him for tens of millions of dollars. So Jesse steals the lone copy of these documents and then destroys them. But poor Jesse gets caught. The Plaintiff reports the theft to the police who decline to prosecute.

Then Plaintiffs move for discovery sanctions and win. The court cannot impose terminating sanctions because that would “terminate” Plaintiff’s action. Remember Jesse is the Defendant. And because the documents are now gone, it is unclear to the Court what the value of the stolen documents might have been.

Plaintiffs argue the documents would have been decisive on the question of liability—arguing for issue sanctions—but the Court knows that as a general rule Plaintiffs always over-sell their position and the Court is disinclined as a matter of temperament to issue any important order on an evidentiary question when the evidence is missing. The Court settles on evidentiary sanctions that help plaintiff prove two of the four elements of its case, but there are still two other elements, which, in the absence of the Smoking Gun Documents will be difficult to prove indeed. The Court also orders monetary sanctions in the amount of $6,000 to cover the costs of the spoliation discovery motion.

Jesse is ecstatic. He happily pays his token monetary sanction satisfied with the knowledge that his liability on this multi-million dollar action just dropped appreciably.

Perhaps this hypothetical is unusual. But perhaps not. Either way, the Court’s strident spoliation doctrine, making no exception for theft, seems to create an incentive for Jesse’s kind of behavior. Strangely, the Court has found an exception for “extrinsic fraud,” Cedars-Sinai, 18 Cal. 4th at 9, just not theft. Parenthetically, as weak as the remedies for spoliation might be in California, the federal courts impose much more robust duties on litigants, and prospective litigants, with far more severe penalties.

The point of this article is not to advocate for parties to steal and destroy documents. Rather, the point is to highlight a system of incentives that rewards the Jesses of the world and punishes the more honest among us. The Court or the legislature might do well to remedy this inequity by carving out clear and certain exceptions to the spoliation ban for intentional torts and crimes such as theft, burglary, arson, and the like. Until then, the rule of law will suffer at the hands of less scrupulous litigants.


† B. Douglas Robbins is a partner at Wood Robbins LLP in San Francisco, California, a litigation firm specializing in complex business disputes, contract disputes, real property and land use disputes, employment law, professional liability, and media law. Mr. Robbins serves as the Chair of the IP Section at the San Mateo County Bar Association. He represented the plaintiff and appellant in the matter of Kwok v. Kwong, Case No. A143795 (Cal. Ct. App. Jul. 7, 2016) (unpublished).