Attorneys say case a reminder of value of litigation holds
Kris Olson // May 24, 2024
Given the specter of litigation, a company should have preserved the entire source code behind its automotive diagnostic tool, a Superior Court judge has found, ruling that its failure to do so warranted a spoliation sanction.
The case Espaillat v. Lynnway Auto Auction, Inc., et al. was initially brought by the personal representative of the estate of one of five people killed when a Jeep Cherokee accelerated unexpectedly at an auto auction facility in Billerica.
The original defendants then brought a third-party action against the manufacturer of a “scan tool,” the insertion of which into the Jeep’s onboard diagnostics electric port under the dashboard may have caused the Jeep’s unintended acceleration, according to those defendants.
During discovery in that third-party action, the manufacturer produced some but not all the source code for the scan tool.
In weighing the third-party plaintiffs’ spoliation motion, Judge C. William Barrett first had to determine whether the missing source code was relevant to the proceedings.
The manufacturer pointed to two formal investigations, both of which concluded that operator error caused the accident. But neither investigation evaluated whether the scan tool could have caused or contributed to the accident, Barrett noted.
In fact, the manufacturer’s own expert had conceded that when the company tested its product for latent defects, it had the entire source code. That testimony “emphasizes [the third-party plaintiffs’] need for the same evidence,” Barrett wrote.
Next, Barrett considered the timing of the alleged spoliation because sanctions can only be imposed when the spoliating party knew or reasonably should have known that the evidence might be relevant to a possible action.
While there was no concrete evidence that the manufacturer was in possession of the source code when it first became aware of potential litigation, it was reasonable to infer both that it had the source code and that it subsequently negligently lost or destroyed that evidence, the judge ruled.
The 11-page decision is Lawyers Weekly No. 12-020-24.
‘Cast the net broadly’
By filing the spoliation motion, Louis J. Muggeo of Salem said he and his co-counsel were pursuing an answer to a simple question: “How could this possibly have happened?”
While the State Police and National Highway Traffic Safety Administration had concluded the cause of the accident was “driver error,” those were “default conclusions in both instances,” said Muggeo’s co-counsel, David A. White of North Andover.
“They weren’t able to determine whether or not the scan tool was a causative factor in the sudden acceleration of the vehicle,” White said.
The biggest hurdle in pursuing the spoliation sanction was “making the judge understand that this was really a simple issue, although the underlying technology was extremely complex,” Muggeo added.
He said they overcame that hurdle by playing the video of the accident repeatedly at the motion hearing, enabling the judge to appreciate the temporal connection between when the scan tool was placed in the vehicle and when it suddenly accelerated.
“You look at it and you say, ‘Something had to happen here because a vehicle doesn’t just take off like a rocket,’” Muggeo said.
Beyond the complexity of the technology, another of their concerns was that, based on the discovery, they could not affirmatively establish when or how the source code was discarded, Muggeo said.
“Most of the case law said that’s part of our burden,” he acknowledged.
But Muggeo and White shifted that burden to the manufacturer by showing that the source code was in the manufacturer’s exclusive possession and control and that the manufacturer had an unwritten custom and practice of retaining the source code for a product for approximately two years after the product was last sold.
While not disagreeing with the result, Boston attorney Joseph J. Laferrera said it made him a “little squeamish” to impose sanctions on the manufacturer for failing to retain evidence that it may not have possessed when it first became aware of a possible suit.
“Yes, past pattern or practice may suggest that the code was in [the manufacturer’s] possession …, but that ‘informal custom’ is doing a lot of work here,” Laferrera said. “There are a zillion innocent explanations for its being written over or discarded.”
Laferrera said he was also surprised the judge did not require the plaintiffs to offer something more than conjecture that the device might have triggered the unplanned acceleration.
“That might not have been enough for some judges in the commonwealth,” he said.
Attorneys agreed that Barrett’s decision reminds corporate counsel of the value of issuing all-encompassing “litigation holds” once the prospect of a legal action arises.
“I think that corporate counsel would be very prudent to advise their clients to retain more rather than less,” White said.
Spoliation is always thought about in terms of a guilty defendant trying to hide something. But this could be a case of the opposite, where an otherwise ‘innocent’ defendant could be facing potential liability by not preserving exculpatory evidence.
Laferrera said he instructs his clients to “cast the net broadly.”
“Generally speaking, the sanctions are worse for the client than if they had kept the materials at issue,” he said.
It seems entirely possible that the manufacturer’s product had nothing to do with the incident at all, noted Lowell attorney Michael D. Molloy. But without the code, there is no way to prove that.
“Spoliation is always thought about in terms of a guilty defendant trying to hide something by either deleting or not preserving evidence,” he said. “But this could be a case of the opposite, where an otherwise ‘innocent’ defendant could be facing potential liability by not preserving exculpatory evidence — a tough pill to swallow.”
On the issue of notice, Newton attorney Matthew J. Fogelman said the standard is often misunderstood as requiring that a company know of an actual pending case. But the Supreme Judicial Court has said that the standard is that a litigant or its expert either knows or reasonably should know that the evidence might be relevant to a possible action, he explained.
The SJC also stated that the threat of a lawsuit must be sufficiently apparent such that a reasonable person in the spoliator’s position would realize the possible — rather than the certain — importance of the evidence, Fogelman added.
On that front, too, Laferrera has qualms. One might question whether it would have been evident to a reasonable person that the type of analysis the plaintiffs’ expert characterized as crucial would have been necessary to the investigation, Laferrera said.
The manufacturer’s attorneys, Jay V. Lee and Andrew D. McNaught, of Lowell, had not responded to requests for comment as of Lawyers Weekly’s deadline.
A tragic day in Billerica
Roger Hartwell, an employee of the Billerica automobile auction facility Lynnway Auto, was in the driver’s seat of a 2006 Jeep Grand Cherokee being sold at auction when auto dealer John Sirek approached the Jeep and inserted an Innova 3160d model scan tool into the Jeep’s on-board diagnostics electric port under the dashboard.
Seven seconds after the scan tool was inserted, the Jeep, which had been stopped for more than a minute, accelerated out of Hartwell’s control and crashed into the building, killing five people and injuring seven others. The Middlesex County District Attorney’s Office, which would later file manslaughter charges against Lynnway Auto and the company’s president, interviewed Sirek and seized the scan tool.
