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E-Discovery | MONDAY, OCTOBER 5, 2015 | S3

difficulty of assessing damages militate of court order can seek full compensation claims for fraud and fraudulent concealment was needed as evidence in a personal injury

against establishing a cause of action for from the contemnor.”16 The court in Ortega against Morgan Stanley.20
lawsuit to be brought by [worker] against
spoliation in this case, where there was further reasoned that the proof of such cause In upholding the claims against Morgan the manufacturer of said machinery” and
no duty, court order, contract or special of action would involve “multiple levels of Stanley, the First Department distinguished that “despite receiving written notice,” the
relationship.11
speculation” that the court was reluctant to Ortega because in IDT the spoliation was employers “failed to preserve said machin-
Following MetLife, the New York Court of embrace.17
intentional, not negligent. The First Depart- ery,” “destroyed said machinery,” and “caused
Appeals three years later addressed whether Notwithstanding Ortega’s foreclosure of the
ment also stated that, unlike the City of New
said machinery to be unavailable.”23 In so rul-
New York recognized the tort of third-party ing, Alegria distinguished Ortega finding that
negligent spoliation of evidence in Ortega a third-party spoliation claim can still survive
v. City of New York.The plaintiff in Ortega in an employee/employer relationship.
12 24
New York courts have made clear that the burden is on parties to a
was injured in a motor vehicle accident.13 The As demonstrated above, the implica-
vehicle she had been driving at the time of tions for a nonparty’s failure to preserve litigation to take steps to preserve documents of nonparties.
her accident was towed and brought to an documents upon receipt of a preservation
auto pound maintained and operated by the demand vary considerably depending on the
New York City Police Department.14 Although facts and applicable jurisdiction. While New tort of negligent spoliation, the court in IDT v. York, the defendant in IDT—Morgan Stanley—
Ortega’s attorney obtained an order from York does not recognize a tort for negligent Morgan Stanley Dean Witter & Co.18 held that was not a stranger to the underlying arbitra-
the Supreme Court for preservation of the spoliation, there are other potential causes “cognizable claims for fraudulent misrepre- tion, and in fact had a relationship with both
vehicle, and the order was properly served of action that are still available against a non- sentation and fraudulent concealment may be contracting parties and owed each a fiduciary
IDT
on the pound, the vehicle was inadvertently party who destroys documents particularly based on intentional spoliation of evidence. duty. Finally, the court in opined that
destroyed. Ortega then commenced an action if there is a contractual or special relation- The spoliation at issue in IDT was Morgan unlike Ortega, there was no concern that the
against the City—a nonparty to the collision— ship between the nonparty and a party to a Stanley’s withholding of over 500,000 pages content of the lost evidence is unknown as the
asserting a tort claim, based upon spoliation litigation. Indeed, the notion that a special that should have been produced in response concealed documents had been produced.21
of evidence.15
relationship may give rise to a duty to pre- to a subpoena served on Morgan Stanley in an Since Ortega, lower courts in New York
In concluding that the tort of third-party serve was highlighted by the courts in IDT, arbitration between plaintiff IDT and another have not entirely foreclosed claims against
spoliation is not cognizable in the state, the Alegria, and MetLife.25
company with which IDT had contracted.19 In third parties for negligent spoliation. In
court in Ortega stated that “[a]s the present Accordingly, upon receiving a preserva- the arbitration proceeding, after producing Alegria v. Metro Metal Prods.,22 for example, a
case demonstrates, there will be unfortunate tion notice for a nonparty, attorneys should only 2,000 pages of documents in response New York trial court held that a worker stated

instances when third parties with a duty to carefully study the nonparty’s contractual, to the subpoena, Morgan Stanley certified a cause of action against his employers for
preserve evidence but with no connection to corporate/structural, statutory and/or com- in writing that it had fully complied with the spoilation of evidence needed for the worker
the underlying lawsuit will negligently breach mon law duties to assess whether a duty subpoena. Plaintiff then discovered that to bring a personal injury claim against the
that duty, presenting a situation where discov- to preserve exists. Attorneys for nonpar- there were an additional 500,000 relevant manufacturer of machinery that caused the
ery sanctions are inadequate to address the ties should also attempt to communicate documents, including some “smoking gun” worker’s injury. The plaintiff in Alegria had
spoliation victim’s loss [but] ... . a party who with the parties requesting preservation documents, which would have significantly alleged that the employers “were put on writ-
suffers a loss or injury as a result of violation
to determine if a subpoena is » Page S10
increased its award of damages and brought
ten notice that the machinery in question

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