Business 8th Edition by Marianne Jennings

Exercise 19

"Reining" Deer at the Local Wal-Mart
Facts
While stocking merchandise, a Wal-Mart employee accidentally knocked one or more decorative reindeer from a high shelf onto Monroe Johnson's head and arm. Mr. Johnson's fianceé, now his wife, was with him and heard but did not see the accident. When she went to investigate, she found her fiance dazed but still standing, with a cut on one arm and several reindeer lying at his feet. At the scene, Mr. Johnson told Phyllis McClane, a Wal-Mart supervisor who had come to investigate, that he was not hurt. After a Wal-Mart employee cleaned and bandaged his cut, Mr. Johnson and his fianceé left the store.
During her investigation, Ms. McClane took notes, photographed the reindeer, and obtained a written statement from the employee who caused the accident. She recorded the results of her investigation on a Wal-Mart form entitled "Report of Customer Incident." She attached the photo and the employee's statement, sending copies to the District Manager and claim management personnel. According to the incident report, Mr. Johnson neither threatened to sue nor indicated that Wal-Mart should pay any medical costs or other damages. After completing the report, Ms. McClane discarded her notes.
That evening, Mr. Johnson's neck and arm began to hurt, and he could not sleep. The next day, his doctor prescribed muscle relaxers, pain killers, and physical therapy. Still in pain six months later, Mr. Johnson and his wife sued Wal-Mart. While suit was pending, Mr. Johnson consulted three more physicians and tried additional treatments without success. About seventeen months after the accident, a surgeon performed an anterior cervical discectomy and fusion on Mr. Johnson's neck.
During discovery, the Johnsons asked whether Wal-Mart still possessed the reindeer that fell on him. Wal-Mart did not, but the company offered to provide a "reasonable facsimile." The Johnsons did not want the facsimile, and the trial court prohibited Wal-Mart "from introducing into evidence a reasonable facsimile of the reindeer made the basis of this lawsuit"
At trial, the parties offered sharply divergent evidence about the composition and weight of the reindeer in question. Mr. Johnson testified that they were made of wood, each weighing as much as ten pounds. Ron Wheeler, the store manager, countered that the reindeer were made of papier-mache and weighed only five to eight ounces each. Wal-Mart argued that such flimsy reindeer could not have proximately caused Mr. Johnson's neck problems, which it claimed resulted from an automobile accident years earlier. Mr. Wheeler also testified that Wal-Mart could not produce any of the reindeer because they had all been sold or, if broken, thrown away. Only the photograph of the reindeer was introduced in evidence, but its quality was too poor tb substantiate or rebut either party's description.
Based on Wal-Mart's failure to keep the reindeer, the judge gave the following jury instruction (see p. 134 for more information on jury instructions).
You are instructed that , when a party has possession of a piece of evidence at a time he knows or should have known it will be evidence in a controversy , and thereafter he disposes of it , makes it unavailable , or fails to produce it , there is a presumption in law that the piece of evidence , had it been produced , would have been unfavorable to the party who did not produce it. If you find by a preponderance of the evidence that Wal-Mart had possession of the reindeer at a time it knew or should have known they would be evidence in this controversy , then there is a presumption that the reindeer , if produced , would be unfavorable to Wal-Mart.
The jury found for Mr. and Mrs. Johnson and awarded damages. Wal-Mart did not appeal the award or the damages. Rather, Wal-Mart appealed the jury instruction. The court of appeals affirmed, and Wal-Mart appealed again.
Judicial Opinion
PHILLIPS, Chief Justice
Evidence may be unavailable for discovery and trial for a variety of reasons. Evidence may be lost, altered or destroyed willfully and in bad faith or it may be lost for reasons completely innocent. Sometimes, lost evidence may be easily replicated, or it may be so marginal that it has little or no effect on the outcome of the case. On other occasions, the loss or destruction of evidence may seriously impair a party's ability to present its case. A trial judge should have discretion to fashion an appropriate remedy to restore the parties to a rough approximation of their positions if all evidence were available.
In this case, the trial court decided to remedy what it perceived to be Wal-Mart's misconduct by giving a spoliation instruction. The instruction informed the jury that it must presume that the missing reindeer would have harmed Wal-Mart's case if the jury concluded that Wal-Mart disposed of the reindeer after it knew or should have known that they would be evidence in the case. Such an instruction is a common remedy for spoliation, with roots going back to the English common law.
Our courts of appeals have generally limited the use of the spoliation instruction to two circumstances: [1] the deliberate destruction of relevant evidence and [2] the failure of a party to produce relevant evidence or to explain its non-production.
Although the parties argue their respective positions under this second circumstance at length, we need not decide whether a spoliation instruction is justified when evidence is unintentionally lost or destroyed, or if it is, what standard is proper. Rather we begin and end our analysis here with the issue of duty, the initial inquiry for any complaint of discovery abuse. Before any failure to produce material evidence may be viewed as discovery abuse, the opposing party must establish that the non-producing party had a duty to preserve the evidence in question.
Wal-Mart argues that it had no duty to preserve the reindeer as evidence because it had no notice that they would be relevant to a future claim. Specifically Wal-Mart contends that it did not learn of the Johnsons' claim until all of the reindeer had been disposed of in the normal course of business. The Johnsons point out that Wal-Mart's extensive investigation on the day of the accident indicates its awareness of both the potential claim and the reindeer's importance to it. Wal-Mart responds that it routinely investigates all accidents on its premises, and this particular investigation revealed that Johnson had not been seriously injured and never indicated that he might seek legal relief. We agree that nothing about the investigation or the circumstances surrounding the accident would have put Wal-Mart on notice that there was a substantial chance that the Johnsons would pursue a claim.
Thus, as a foundation for the submission of the spoliation instruction in this case, the Johnsons had to show that Wal-Mart disposed of the reindeer after it knew, or should have known, that there was a substantial chance there would be litigation and that the reindeer would be material to it. We therefore agree with Wal-Mart that the trial court abused its discretion when it submitted the spoliation instruction to the jury because the Johnsons failed to establish that Wal-Mart had a duty to preserve the reindeer.
While we do not lightly reverse a judgment because of an erroneous instruction, we believe an unnecessary spoliation instruction is particularly likely to cause harm. Because the instruction itself is given to compensate for the absence of evidence that a party had a duty to preserve, its very purpose is to "nudge" or "tilt" the jury Thus, if a spoliation instruction should not have been given, the likelihood of harm from the erroneous instruction is substantial, particularly when the case is closely contested.
We hold that the trial court erred in submitting the spoliation instruction in this case and that the spoliation instruction was harmful and probably caused the rendition of an improper judgment. Accordingly, we reverse the court of appeals' judgment and remand this case to the trial court for further proceedings.
Case Questions
What will happen to the case now?