Many businesses use video surveillance in and around their properties. People generally tend to remain more honest when they believe their actions will be filmed. Video surveillance also records incidental things that happen which can make it useful for sorting out the sequence of events in premises liability claims.
Businesses may elect to erase footage that is not favorable to their side of a premises liability case. A recent district court decision from the third circuit suggests subjective preservation of video surveillance footage by a business after an incident is not adequate to meet the duty to preserve evidence. The team at Fee, Smith & Sharp LLP examines this ruling and what it may mean for your business.
The Duty to Preserve Evidence and Spoliation
When someone is injured on the premises of a business and there is a substantial chance a claim for damages will be filed, a business has a legal duty to preserve the video surveillance of the incident. Yet, how much of the footage must a business preserve and what happens if the business does not comply with its duty?
In Brookshire Bros., LTD vs. Aldridge, the Texas Supreme Court said that the duty to preserve evidence arises when it’s known or should be known there is a substantial chance a claim will be filed and evidence within the control of one party is material to the resolution of the claim. The party with the duty must use reasonable care to preserve the evidence. If reasonable care is not taken and the evidence is lost (or intentionally destroyed), spoliation occurs.
A court decides whether there was spoliation and determines the appropriate sanction. The sanctions for spoliation can be severe depending on the significance of the evidence lost and the intentions of the party responsible.
Spoliation Sanctions in Texas
Texas courts have a lot of options when imposing sanctions for spoliation of evidence. However, the sanction imposed must be proportionate to the prejudice caused by the spoliation and cannot be excessive.
When evaluating how a party has been prejudiced by evidence spoliation, the court must consider the following factors:
- Relevance of spoliated evidence to the key issues
- How harmful the evidence was to the spoliating party’s position
- How beneficial the evidence was to the non-spoliating party’s position
- Whether the spoliated evidence is cumulative of other available, competent evidence
Because it can be challenging to determine how a party has been prejudiced by evidence that no longer exists, Texas courts are allowed to conclude that intentionally destroyed evidence was both relevant and harmful to the spoliating party. In Texas, if unintentional spoliation irreparably prevents the non-spoliating party from being able to make or defend a legal claim, then the court could impose an adverse inference instruction. This exception underscores the importance of knowing when the duty to preserve evidence arises and what the scope of that duty is in any given situation.
Spoliation or adverse inference instructions are severe sanctions delivered in the form of a jury instruction directing or allowing the jury to infer that the missing evidence would have been unfavorable to the spoliating party. In Texas and many jurisdictions, adverse inference instructions are only deemed appropriate when it is determined the spoliation was done in bad faith – with the intent to destroy evidence. Unlike other jurisdictions, Texas allows one narrow exception for negligent spoliation.
Federal Rules Regarding Spoilation
The Federal Rules of Civil Procedure have a rule that specifically addresses the spoliation of electronically stored information (ESI). Rule 37(e) says ESI spoliation occurs when evidence that should have been preserved in anticipation of litigation is lost because reasonable care is not taken to preserve it, and there is no other credible source for the information.
If the complaining party is prejudiced by the spoliation, the federal rules allow a court to impose only those sanctions necessary to alleviate the prejudice. If the court determines the spoliating party was intentionally trying to keep probative information from another party, the court may:
- Presume the lost evidence was unfavorable
- Instruct a jury it must or may presume the lost evidence was unfavorable
- Dismiss the case or enter a default judgment.
Preserving Video Surveillance in Premises Liability Cases after Nagy vs. Outback Steakhouse
In Nagy vs. Outback Steakhouse, a district court faced the question of spoliation of evidence in a premises liability claim where only specific portions of the video surveillance of the incident were preserved by a store manager, and the rest of the footage was recorded over and lost.
Background of the Case
Nagy was a customer who slipped and fell while walking in an Outback Steakhouse. The incident happened near the kitchen and was recorded by the store’s video surveillance cameras. The court found that Outback had the requisite awareness of an impending liability claim to give rise to a duty to preserve the video footage. The question then became whether Outback adequately fulfilled its duty.
The restaurant had no policy regarding how much footage should be preserved. A store manager reviewed the recording and determined which portions of the footage would be saved. The footage was routinely overwritten every seven days, so when Nagy’s request to preserve additional video surveillance came 12 days later, the evidence was already gone.
Findings and Conclusions
In finding spoliation occurred, the court particularly looked at the fact that Outback had no policy on evidence preservation and offered no guidance to employees as to how to comply with its legal duties despite having dealt with similar claims in the past. The court also pointed out that saving the additional video footage would not have been unduly burdensome for the store.
Outback argued that the spoliation was not intentional because some footage was preserved. However, the court looked at the following circumstances and determined that Outback acted with the intent to keep relevant information from Nagy.
- The video was reviewed and selectively preserved.
- The determination regarding what portions to save was completely subjective.
- There were no objective criteria to guide employees on how much footage to save.
- Outback did not preserve the footage for a period of time relevant to issues in the
By concluding the spoliation was intentional, the court sanctioned Outback and granted Nagy’s request to instruct the jury to presume the lost evidence would have been unfavorable to the restaurant’s defense.
What Texas Businesses Can Do to Avoid Evidence Spoliation of Video Surveillance Footage
So, what does this all mean for businesses with video surveillance in Texas? Businesses need to be aware of when the duty to preserve evidence can arise and understand what should reasonably be done to preserve it. It means having policies and procedures in place that let employees know what to do and making sure they receive training so they can respond appropriately. A Texas premises liability lawyer can assist a business with the development and implementation of a comprehensive risk management strategy.
In the Dallas, Austin, and Houston law offices of Fee, Smith, & Sharp, LLP, we help national and local restaurant, hospitality, and retail clients mitigate the risk of premises liability claims with defense-oriented policies and procedures that are designed to facilitate safer business operations and minimize litigation. When accidents happen, our courtroom-ready attorneys have the skill and experience to provide our clients with an aggressive defense to premises liability claims.
