The effects of this unusual ruling evidently continued at the first Actos trial. According to a post last week on the E-Discovery Law Alert (a blog specializing in ediscovery):
[The judge instructed the jury after closing arguments Monday that they could take [defendant’s] evidence spoliation into account. Additionally, throughout the trial, the jurors were exposed to voluminous evidence detailing [defendant’s] conduct in destroying the relevant evidence.
As a result we ended up with a $9 billion punitive damages verdict where the plaintiff received all of $1.5 million in compensatory damages. That’s a ratio of six thousand to one. The Supreme Court and most state courts consider any ratio above 10:1 presumptively unconstitutional. A ratio this large, we think, is not only unconstitutional, but is presumptively the product of what lawyers call “passion and prejudice” on the part of the jury. A verdict based on passion and prejudice is typically thrown out in its entirety. This one certainly should be.
How topsy-turvy is Actos getting?
That Actos verdict was in federal court, in an MDL no less. Most defendants prefer to be in federal court, for a whole variety of reasons. Every year the American Tort Reform Association (“ATRA”) puts out its list of the ten worse places for defendants to be sued. It calls those jurisdictions “Hellholes.” Here’s a link to ATRA’s current (2013-14) list. No federal court is on that list, either among the so-called “hellholes” or on the secondary “watch list” – a total of 16 states, parts of states, counties, or municipalities.
According to our quick review of ATRA’s online archives, no federal court has ever landed on ATRA’s annual list – not as a “hellhole, and not even on the organization’s “watch list.”
One jurisdiction that has appeared somewhere on ATRA’s list every year since 2005 is Cook County Illinois (otherwise known as “Chicago”). Things have gotten so topsy turvy in Actos that the defense is doing better – much better – in Cook County than in a federal court MDL.
Recently, in Cook County Circuit Court, the plaintiffs in their local version of Actos Litigation, attempted to get the supervising judge there to go along with the discovery atrocity that the federal MDL has become.
No dice – thanks in no small part to Sherry Knutson at Sidley, who in addition to arguing successfully for the defendant, was nice enough to send the decision our way. In at least one Actos agglomeration, someone seems to understand what is blatantly obvious to us: that plaintiffs shouldn’t get a free pass on prejudice where the litigation that didn’t even exist at the time alleged spoliation. In re Actos Litigation, No. 11 L 010011, slip op. (Ill. Cir. Cook Co. April 19, 2014).
So how did this blessed breath of sanity occur?
Two weeks before trial (nearly two years after suit was filed), the Cook County plaintiff sashayed into court with a motion seeking nasty sanctions and waiving the MDL Actos decision around. Slip op. at 2, 5. Bad move as it turns out.
Illinois follows a six-factor test for sanctions in cases of alleged spoliation. These are:
(1) the surprise to the adverse party; (2) the prejudicial effect of the proffered testimony or evidence; (3) the nature of the testimony or evidence; (4) the diligence of the adverse party in seeking discovery; (5) the timeliness of the adverse party’s objection to the testimony or evidence; and (6) the good faith of the party offering the testimony or evidence.
Slip op. at 3 (citing Shimanovsky v. General Motors Corp., 692 N.E.2d 286, 291 (Ill. 1998)). Actually the court cited 181 Ill. 2d 112, which is the same thing – but we doubt very many readers have the Illinois Reports handy.
Factor 1: The court couldn’t find surprise. Indeed the plaintiffs didn’t even address it (probably because there was none after all the MDL brouhaha). With no evidence, that factor “favors neither party.” Slip op. at 4.
Factor 2: There’s none of the MDL-style prejudice in the air in Illinois. The court demanded real evidence of prejudice, and the Actos plaintiffs couldn’t deliver. Rather, they argued that the court “may presume prejudice” based on the number of files at issue and whose they were. Slip op. at 4. That may have worked in the MDL, but not in Cook County. “[A] federal trial court’s ruling is not binding on this Court.” Id. at 5.
Plaintiff neither explains to this Court what evidence she expected to find in the lost custodial files nor sets forth how this missing evidence would have been utilized to pursue any of her claims or rebut any of [the] defenses. A court should not presume that a party was prejudiced by the mere fact that potentially relevant documents were destroyed. Because [defendant’s] document destruction is not presumptively prejudicial, Plaintiffs failure to present evidence of prejudice is fatal to her motion.
Id. (citation omitted). With no showing of actual prejudice, the sanctions only “would serve to punish.” Id. Thus, when the Actos plaintiffs had to put up or shut up on spoliation, they couldn’t deliver. They were, to adapt an old Texas saying, all presumption and no prejudice. This factor “militates decisively against imposing any sanction.” Slip op. at 5.
Factor 3: Plaintiffs could not establish that the nature of the evidence – mostly missing emails and custodial files – was likely to benefit them. “It is not clear if the missing documents, if found, would contain evidence beneficial to [plaintiffs] or detrimental to [defendant].” As far as the record showed, the documents “may have been beneficial” to the defendant. Slip op. at 5-6. This factor favored nobody. Id. at 6.
Factor 4: Plaintiffs likewise couldn’t show their “diligence in seeking discovery.” Id. at 6. They relied on a protective order, but that order “was entered after much, if not all, of the document destruction took place.” Id. The factor also favored nobody. Id.
Factor 5; Plaintiffs were woefully delinquent in seeking sanctions:
Here, Plaintiff was aware of the document issue as early as summer 2013. Yet, Plaintiff waited to file the present motion until three weeks after the MDL Court issued its order and two weeks before this case was set for trial.
Slip op. at 6. Basically, the Cook County plaintiffs were trying to avoid doing any heavy lifting. They tried to piggy-back on the MDL ruling, while waiting until the eleventh hour to disrupt the defense’s preparation. This factor “militates against imposing a sanction.” Id.
Factor 6: While the defendant acted in good faith during the litigation, slip op. at 6 (defendant “diligently complied with this Court's discovery orders” and its “cooperation . . . to facilitate discovery has been exceptional”), it still fell afoul of its own discovery holds (as we discussed before). Id. (“documents were destroyed in clear contravention of a products liability litigation hold” from 2002). This was the only factor the court found weighed “in favor of imposing a sanction.” Id.
But lack of good faith alone was insufficient to support any sanction in Cook County – let alone to justify the sort of jury instructions that goaded the runaway MDL jury – and which the currently proposed amendments to Fed. R. Civ. P. 37 (see our post here) would prohibit absent specific intent to deprive an opponent of evidence in “the litigation.” Instead, under Illinois law:
Plaintiff has not demonstrated how she has or will be prejudiced by [defendant’s] destruction of the specific documents that are missing. Plaintiffs inability to demonstrate prejudice is fatal to her motion because an order imposing sanctions against [defendant] for conduct it engaged in which did not prejudice Plaintiff would only punish [defendant] while furthering no interest in promoting discovery or a fair trial.
Actos Litigation, slip op. at 7.
One major purpose of bellwether trials in mass tort litigation is to come up with some way of accurately valuing cases. An outlier verdict, like the one in the Actos MDL defeats that purpose, and indeed is contrary the purpose of aggregating litigation in the first place. ATRA may call Cook County a “hellhole” (and Illinois discovery practice generally is not defendant friendly), but in this instance at least it’s proving to be a lot less hellish than what has transpired so far in the MDL.