NNENs ATTORNEYS AT LAW Eckert SeamansCherin & Mellott, LLC 'IEL 973-855-4715 100 Mulberry Street FAX 973-855-4701 Newark, New Jersey 07102 www.eckertseamans.com April 3, 2018 The Honorable Manuel Mendez, J.S.C. New York County Supreme Court 71 Thomas Street New York, New York 10007 Re: Mary Murphy-Clagett as Temporary Administrator for the Estate of Pietro Macaluso v. A.O. Smith Corporation, et al Index No. 190311/2015 A.O. Smith's Letter Motion in Limine in Opposition to Plaintiff's Request For a Sanctions and/or an Adverse Inference Charge Dear Justice Mendez: Smith" This firm represents A.O. Smith Water Products Company ("A.O. Smith") above-captioned matter. We submit this letter brief in support of A.O. Smith's request that this Court deny Plaintiff's requests for sanctions and/or for an adverse inference charge. in the BECAUSE A.O. SMITH REVIEWED AND RETAINED ALL DOCUMENTS CONCERNING ASBESTOS AND ASBESTOS- CONTAIl4ING COMPONENTS IN ITS BOILERS AND WATER HEATERS. PLAINTIFFS REQUEST FOR SANCTIONS AND/OR AN ADVERSE INFERENCE CHARGÈ IS NOT APPROPRIATE UNDER NEW YORK STATE LAW. In the subject motion Plaintiff's counsel misconstrues otherwise clear facts to allege the subject case has been prejudiced such that sanctions and/or an adverse jury charge should be entered against A.O. Smith. In case after case in NYCAL and elsewhere, plaintiffs boldly allege A.O. Smith improperly destroyed documents. However, Plaintiff's applications completely ignore the uncontroverted evidence that A.O. Smith did the exact opposite, preserving and disclosing all documents related to asbestos in A.O. Smith boilers and water heaters. 1. Bradley Plank's Review of Documents and A.O. Smith's Document Retention Policy Resulted in Preservation of All Relevant Documents. (" The uncontroverted evidence shows Bradley Plank ("Mr. Plank" Plank") began working for A.O. Smith in 1993. At that time all A.O. Smith documents that had anything to do 1
with asbestos in boilers and water heaters were preserved and available for his review. See Trial Transcripts of Bradley Plank, attached hereto as Exhibit A, at 1662:12-22. Mr. Plank reviewed approximately 50,000 documents to familiarize himself with the asbestoscontaining components of A.O. Smith boilers, including engineering drawings, product certifications, parts lists, and various other documents. Id. at 1730:17-26, 2662:12 to 2663:3, and 2683:2-15. Mr. Plank preserved those documents. Id. at 2663:4-15 and 2683:12-15. When Mr. Plank began working for A.O. Smith in 1993, there was already a document retention policy in place in which documents were retained. Id. at 2667:23 to 2668:9. A.O. Smith was first sued in an asbestos action in 1994, and A.O. Smith's document retention policy was updated in 1995. Id. at 1659:13 to 1660:17. After A.O. Smith's revised document retention policy went into effect in 1995, certain documents relating to products out of production for more than ten years were discarded. See Exhibit A at 1658:18-20. Plaintiff's counsel improperly conflates Mr. Planks clear testimony argue here that Mr. Plank inappropriately destroyed documents. Id. at 1662:12 to 1663:23. However, when read without the overtones of plaintiff's interpretation, the record shows Mr. Plank testified that, for models out of production for ten years, only duplicates of some documents could be or were discarded. Id. at 1658:18 to 1659:9, 1663:24 to 1664:9, and 2668:10-21 (emphasis added). Mr. Plank testified he knew not to destroy anything that had to do with asbestos, and personally collected and reviewed all documents before they were destroyed. Id. at 1663:17 to 1664:9 and 1664:4 to 1665:15. The document retention policy maintained all unique documents relating to boilers and asbestos dating back to at least 1946. Id. at 2668:10 to 2669:15. All documents relating to asbestos in A.O. Smith boilers were preserved. The clear testimony is Mr. Plank retained them. Id. at 1664:13-21. The decision whether to impose sanctions, as well as the nature and severity of the sanctions, is up to the discretion of the trial Court. Hartford Fire Ins. Co. v. Regenerative Building Constr. Inc., 271 A.D.2d. 862, 706 N.Y.S.2d. 236 (App. Div. 2009). The nature and severity of the sanction depends on a number of factors, such as the knowledge and intent of the spoliator, the existence of proof of an explanation for the loss of the evidence, and the prejudice to the opposing party. Coleman v. Putnam Hospital Center, 74 A.D.3d 1009, 903 N.Y.S.2d. 502 (2d Dept. 2010). In general, Courts are reluctant to impose sanctions where the destruction of evidence, even if intentional, was undertaken in good faith in the course of the Defendant's normal business practices. Raymond v. State, 294 (4th A.D.2d 854, 740 N.Y.S.2d 743 Dept. 2002). Plaintiff's accusation that, beginning in 1995, A.O. Smith destroyed any unique documents, even those relating to boilers and/or water heaters that were out of production for ten years is plainly false. Rather, the evidence shows that Mr. Plank conducted an extensive document review and retention program for A.O. Smith after this time. He reviewed and preserved approximately 50,000 pages of non-duplicative documents pertaining to A.O. Smith boilers and asbestos. A.O. Smith's actions constitute a commitment to the utmost good faith in preserving records and materials that could be at 2
issue in asbestos-related actions. Moreover, A.O. Smith boiler and hot water heater documents have been produced to plaintiff's counsel repeatedly. A.O. Smith is not hiding behind missing documents, and plaintiff's arguments to the contrary are disingenuous at best. 2. Mr. Plank's Trial Testimony from Prior Cases Similarly Demonstrates that A.O. Smith has not Altered or Destroyed Documents, and that Sanctions are Unwarrented. A.O. Smith also submits for this Court's consideration, transcripts of Mr. Plank's prior testimony, which, as set forth below, demonstrates both consistency and contradicts all of the points underpinning Plaintiff's claims of spoliation. A.O. Smith had a document retention policy that was in effect at the company for decades prior to 1995, and that policy preserved the documents that served as the basis for Mr. Plank's extensive document review. See Exhibit B, Trial Testimony of Bradley Plank, Kelleher, Virginia (Estate ofroenbeck) v. A-B Electrical Supply Co., et als., Superior Court of New Jersey, MID-L-1202-90, Jan. 16, 1998), at 19:21 to 21:5. Until 1995, all engineering documents and drawings, and all documents relating to the design, testing, and certification of A.O. Smith's boilers, were subject to permanent retention. Id. at 23:1-6. In 1994, because A.O. Smith had been sued that year in their first asbestos-related lawsuit, Mr. Plank was assigned the task of reviewing all documents pertaining to the design and manufacture of A.O. Smith's boilers, and preserving all documents relating to asbestos-containing components used in those boilers. See Exhibit C, Pepe v. Aaron and Co., Inc., Superior Court of New Jersey, MID-L-13141-95, March 27, 1997, at 13:22 to 15:3. The 1995 modification to A.O. Smith's document retention policy called for the destruction of certain documents pertaining to boiler models that had been out of production for the previous ten years. Id. at 24:16 to 25:1. After this time, Mr. Plank preserved all unique documents relating to boilers and water heaters, including literally tens of thousands of pages of parts lists, product manuals, specification sheets, product brochures and, among other types of documents, and included all engineering drawings dating back to the 1940s. See Exhibit B at 25:2 to 25:24; 29:11 to 31:3, and 98:14-24. Mr. Plank preserved those documents specifically because A.O. Smith was a defendant in asbestos litigation. Id. at 97:7-15. In carrying out his responsibilities under the document retention policy, Mr. Plank created a comprehensive list of all model numbers of boilers for which he discarded documents, and as to those models, Mr. Plank retained all nonduplicative documents containing information about asbestos component parts. See, e.g., id. at 20:3 to 31:3, and 97:7-15. 3
3. A.O. Smith's Document Retention Program Resulted in Preservation, Not Spoliation, of Evidence, and, as Such, an Adverse Inference Instruction is not Permissible or Appropriate under New York Law. New York law permits a Court, in its discretion, to impose appropriate sanctions where a litigant intentionally or negligently disposes of critical evidence. See, e.g, Dorsa v. National Amusements, Inc., 6 A.D.3d 652, 776 N.Y.S.2d 583 (2d Dept. 2004). However, even if a party demonstrates that a corporate policy may have resulted in some documents being discarded, it is patently insufficient to merely show that some documents were lost or destroyed. Parties alleging spoliation of evidence must also demonstrate that the documents were relevant to issues that are the subject of active or reasonably anticipated litigation. Einstein v. 357 LLC, 2009 N.Y. Misc. LEXIS 3636 at *29 (N.Y. Sup. Ct., Nov. 12, 2009) (citing Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998)); See also, Fitzpatrickv. Toy Industry Association, Inc., 2009 N.Y. Misc. LEXIS 4122 at *12-13 (N.Y. Sup. Ct. Jan. 5, 2009). It is the burden of the party seeking to impose sanctions to come forward with evidence and establish three elements of spoliation, as follows: Courts have held that "[a] party seeking an adverse inference instruction or other sanctions based on the spoliation of evidence must establish the following three elements: (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) mind' that the records were destroyed with a 'culpable state of [;] and (3) 'relevant' that the destroyed evidence was to the party's claim or defense such that a reasonable trier of fact could find that it would support that defense." claim or Zubulake [v. UBS Warburg LLC], 229 F.R.D. 422, 430 (S.D.N.Y. 2004). [Einstein, 2009N.Y. Misc. LEXIS 3636 at *29.] Where the alleged destruction of evidence was the product of negligence rather than willfulness, the party seeking sanctions must demonstrate the relevance of the discarded documents with extrinsic evidence. Id. at *28 (citing Arista Records LLC v Usenet.com, Inc., 608 F. Supp. 2d 409, 439-40 (S.D.N.Y. 2009)). Moreover, mere speculation that destroyed records may have been relevant is patently insufficient to meet the moving party's burden of proof. See e.g., Fitzpatrick, 2009 N.Y. Misc. LEXIS 4122 at *15, 20-23. Plaintiffs leap from the facts through the case law towards a hopeful landing imposing an adverse inference charge, quite simply false short of its goal.. Plaintiff has not and cannot establish A.O. Smith destroyed anything other than duplicate certification files (applications for approval sent to outside agencies). Further, Plaintiff has not and cannot establish the duplicative documents that were destroyed actually reduced the count of available and produced unique records (that were not destroyed). The plain reason is simple. As detailed above, there was no spoliation. 4
Plaintiff's rank speculation as to the facts and circumstances surrounding an alleged destruction of relevant documents should be rejected because no such event took place. 4. Sanction are Inappropriate Under New York Law Because Plaintiff Cannot Show Prejudice from the Alleged Spoliation of Evidence. Finally, Plaintiff cannot demonstrate the destruction of non-duplicative certification files prejudiced their case. A party claiming spoliation must establish that he or she was prejudiced by the destruction of relevant documents, as "the lynchpin for spoliation sanctions under New York law, is prejudice." Fitzpatrick, 2009 N.Y. Misc. LEXIS 4122 at *26. A sanction for spoliation is not warranted where there is no independent proof adduced as to the relevance of the destroyed evidence to issues in dispute in the case. In Re Eno's Will, 196 A.D. 131, 187 N.Y.S. 756 (1st Dept. 1921). Thus, it follow that where the moving party "has not demonstrated a factual basis here for several defendants' conduct" of her assertions of wrongful and fails to articulate how, if at all, he or she is prejudiced, no sanctions are warranted. See Fitzpatrick, 2009 N.Y. Misc. LEXIS 4122 at *26 ; See also Riley v. ISS Intern. Service System, Inc., 304 A.D.2d 637, 638, 757 N.Y.S.2d 593, 594 (2d Dept. 2003). In the absence of demonstrable prejudice, plaintiff's applications should be denied. For all of the foregoing reasons, A.O. Smith respectfully submits Plaintiff's request for sanctions and/or an adverse inference charge based on spoliation be denied, and for such other relief as this Court deems just and proper. Respectfully Submitted, Eckert Seamans Cherin and Mellott, LLC By: David Katzenstein, Member To: All Parties via NY SCEF & Justice Mendez and Plaintiff's Counsel via Overnight FedEx 5