Sometimes, There Is No Limit to the Duty to Preserve

Warren v. AmChem Prods., No. 190281/2014 (N.Y. Sup. Ct. Nov. 5, 2015).

In Warren v. AmChem Prods, the “strongest adverse inference” was warranted where a company failed to appreciate the likelihood of future litigation relating to asbestos exposure and destroyed dozens of boxes of documents.

In this case, the plaintiff accused defendant J-M Manufacturing Co. (J-M) of deliberately destroying 27 boxes of business records in 1997 when it ended its asbestos cement pipe business. Earlier, in 1990, at least 10 and as many as 50 boxes of documents had disappeared when J-M moved its corporate headquarters. A J-M employee admitted destroying the records in 1997 because he was “tired of moving stuff” and they were no longer relevant once J-M got out of the pipe business. Coincidentally, the same employee had been involved in the headquarters move.

The plaintiff claimed J-M’s loss of documents was “grossly negligent.” He also suggested that J-M knew about the likelihood of future asbestos litigation as early as 1982. J-M bought the business from Johns-Manville Corp, which declared bankruptcy that year because of “massive asbestos litigation liabilities,” and many Johns-Manville employees stayed on with J-M. Further, significant evidence showed that the company must have been aware of the health risks of asbestos, including a letter from a liability insurance broker who voiced concerns about asbestos exposure from the pipe. At that point, J-M should have issued a legal hold to protect potentially relevant documents; at the very least, J-M should have followed its own six- or seven-year document retention policy, which the plaintiff asserted the company did not do.

J-M countered that it had no obligation to preserve documents because it had “no notice of a credible threat of litigation” and was “without ‘notice of a specific case.’” J-M argued that the future risk that it might be sued for its products “cannot, by any practical measure, be the standard by which courts retroactively determine whether a ‘litigation hold’ applies,” or else “‘every corporation involved in the manufacture, distribution or sale of any product would be subject to a litigation hold of indeterminate length and scope.’” Moreover, J-M suggested that any loss of documents was at most negligent, and the plaintiff could not establish that the documents were relevant or that he was prejudiced, especially because the company had already produced “tens of thousands” of documents that may have been duplicates of the missing documents.

Siding with the plaintiff, the court found that J-M took a “lackadaisical, if not intentional, approach to a litigation hold” in light of the evidence that J-M knew of the hazards and mesothelioma’s long latency period. J-M was also aware of other litigation and workers’ compensation claims involving asbestos and should have preserved evidence. Accordingly, the court concluded that J-M’s loss of evidence was “egregious and in bad faith.” The court decided that no specific case had to be filed to trigger the duty to preserve and said there was an even greater “reason to reject a requirement of pending litigation when human lives are at issue, as opposed to the demise of a business.”

The court also ruled that because J-M’s spoliation “amount[ed] to gross negligence at a minimum,” the relevance of the lost documents was presumed, a fact J-M could not rebut. Further, J-M could not show that the loss of evidence did not prejudice the plaintiff, as required by New York law.

Accordingly, the court rejected the plaintiff’s request to strike J-M’s answer as too severe but ruled that the plaintiff was “entitled to the strongest adverse inference.” J-M’s “bad faith and disturbing behavior” merited a jury instruction that the documents would have supported the plaintiff’s claims.

Warren v. AmChem Prods., No. 190281/2014 (N.Y. Sup. Ct. Nov. 5, 2015).


The awareness of a specific claim is not required where other facts are sufficient to give rise to the need to anticipate litigation. Here, the context surrounding the destroyed records is particularly damning. Given the awareness of other asbestos-related litigation, workers’ compensation claims, and the broker’s threat to drop insurance coverage, the company’s destruction of documents was difficult to explain, even though it occurred many years before the defendants were sued.