The Supreme Court of Virginia recently decided an important case concerning spoliation of evidence and issues of jury instructions and liability at trial. First, you may ask “what is spoliation of evidence?” You may also ask—“why do I care?” Spoliation of evidence occurs when a party is aware that there is pending or probable litigation involving evidence in the party's custody or under its control, and such evidence, if destroyed or otherwise not preserved, will interfere with the ability of the adverse party to establish some element of its claim. Spoliation can come in many different forms including failure to properly preserve onboard electronic data from a truck after an accident or destroying records from an employee’s personnel file that could be the subject of a Title VII claim. Such failure to preserve evidence in the face of litigation could have dire consequences for your potential defense. Luckily, the Supreme Court of Virginia shed some light on this issue in December. In Emerald Point, LLC, et al. v. Hawkins, et al., 808 S.E.2d 384 (Va. 2017), the plaintiffs were former apartment tenants who claimed they were injured by exposure to carbon monoxide. Tests in the apartments showed that carbon monoxide levels were well above the normal range. The problem was suspected to stem from the gas supply in the furnace that heated the units. The alleged spoliation stemmed from the landlord removing the furnace on January 4, 2013. It was then stored in a maintenance bay for over a year before it was thrown away months before the complaint was filed on November 13, 2014. There is no evidence that the landlord had actual notice of a potential claim, i.e. a letter from an attorney to preserve evidence, but it was argued that the landlord should have known of potential or probable litigation concerning the furnace and the release of carbon monoxide. The landlord maintained that the it did not reasonably know the furnace was likely to be subject to litigation. At the trial level in this case, the judge ruled that, even though the landlord did nothing in bad faith, if a party with exclusive possession of material evidence disposes of the evidence, the jury may infer that the evidence would have been detrimental to that party’s case. An instruction such as this, known as an “adverse inference,” is potentially fatal to any defense case. The trial judge gave the following instruction in Emerald Point: “If a party has exclusive possession of evidence which a party knows, or reasonably should have known would be material to a potential civil action and the party disposes of that evidence, then you may infer, though you are not required to do so, that if that evidence had been available it would be detrimental to the case of the party that disposed of it[]. You may give such inference whatever force or effect you think is appropriate under all the facts and circumstances.” The Supreme Court of Virginia reversed the trial court on this spoliation issue. The Court stated “that the evidence must support a finding of intentional loss or destruction of evidence in order to prevent its use in litigation before the court may permit the spoliation inference.” The Court deemed it “neither just nor proportionate” to allow severe sanctions for spoliation arising from simple negligence. This standard will be applied to all forms of spoliation evidence, and a party seeking an adverse inference must show that the party accused of spoliation acted with bad faith or intentional conduct. This brings Virginia law in line with the rules adopted by the federal courts regarding spoliation of electronically stored information. The Advisory Notes to Federal Rule of Civil Procedure 37(e)(2)(B) state that “[i]nformation lost through negligence may have been favorable to either party, including the party that lost it, and inferring that it was unfavorable to that party may tip the balance at trial in ways the lost information never would have.” Virginia courts now apply this logic to all forms of evidence, not just electronic information. While this decision may make it more difficult for parties to get adverse inference instructions in cases of alleged spoliation, it is still important to always preserve evidence when a lawsuit is reasonably foreseeable. Importantly, in the Emerald Point case there had been no letter from claimant or claimant’s attorney advising of potential litigation. It is not hard to imagine the court reaching a different - and more punitive - result for the defendant had such a letter have been sent, and ignored. Prudent carriers are well advised to take any such letters or other notice seriously and follow a well-crafted litigation hold plan when any such notice is received. If have any questions, please contact Steve Setliff at (804) 377-1261, ssetliff@setlifflaw.com, or Justin Thatch at (804) 377-1270 or jthatch@setlifflaw.com.