Dillon v. Nissan Motor Co., Ltd.

• Decision Date: 23 February 1993
• Docket Number: No. 92-1909,92-1909
• Citation: 986 F.2d 263
• Parties: , 25 Fed.R.Serv.3d 304, 38 Fed. R. Evid. Serv. 82 Vernon Ervin DILLON, Jr.; Louise Dillon, Plaintiffs-Appellants, v. NISSAN MOTOR CO., LTD.; Nissan Motor Corporation in U.S.A., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 263

986 F.2d 263

61 USLW 2532, 25 Fed.R.Serv.3d 304,

38 Fed. R. Evid. Serv. 82

Vernon Ervin DILLON, Jr.; Louise Dillon, Plaintiffs-Appellants, v. NISSAN MOTOR CO., LTD.; Nissan Motor Corporation in U.S.A.,

Defendants-Appellees.

No. 92-1909.

United States Court of Appeals,

Eighth Circuit.

Submitted Dec. 16, 1992.

Decided Feb. 23, 1993.

Del F. Phillips, Clayton, argued (Ray B. Marglous, on the brief), for appellant.

Jordan B. Cherrick, St. Louis, argued (Andrew B. Mayfield, Ben Ely, Jr., and John G. Enright, on the brief), for appellee.

Before JOHN R. GIBSON, Circuit Judge, BRIGHT, Senior Circuit Judge, and FAGG, Circuit Judge.

JOHN R. GIBSON, Circuit Judge.

Vernon and Louise Dillon appeal from an adverse judgment entered on a jury verdict in their products liability suit against Nissan Motor Company, Ltd. and Nissan Motor Corporation in U.S.A. At trial, the Dillons were prohibited from calling an expert witness, Dr. Mario Gomez, because he had ordered that evidence be destroyed. The Dillons argue that the district court ¹ erred in prohibiting Dr. Gomez from testifying, allowing Nissan's counsel to repeatedly argue misconduct and spoliation of the evidence, and instructing the jury that it could draw an adverse inference from the Dillons' failure to produce evidence. The Dillons also argue that several other evidentiary decisions were erroneous. We affirm.

Vernon Dillon was a back seat passenger in a 1978 Datsun B-210 (manufactured by Nissan) which collided with a trailer that swerved out from behind an oncoming vehicle. Dillon received massive head and facial injuries, and claims they were caused by his coming into contact with a seat belt retractor on the car's left "B-pillar" during the collision. After the collision, the Dillons' counsel contacted Timothy Finley, an expert, to inspect the accident vehicle. Finley inspected and extensively photographed the entire vehicle, including the seat belt retractor. Finley informed the Dillons' attorney that he did not believe any design defects were present.

The Dillons' attorney then sent the car to the engineering consulting firm of Dr. Mario Gomez, another expert. Gomez extensively photographed the entire vehicle. During his inspection, he removed the seat belt retractor assembly and the B-pillar for future examination. After Gomez finished his inspection, the local police requested that the vehicle be removed from Gomez's parking lot. Gomez had the car towed to a salvage yard, and the Dillons' attorney was notified of the car's removal approximately two weeks before it was destroyed.

The Dillons thereafter filed this action against Nissan, and during discovery, produced the B-pillar and seat belt retractor, answered interrogatories stating that Gomez was the only person who had inspected the Datsun, and reiterated this answer in supplemental interrogatories. Following further discovery, however, a third expert retained by the Dillons, Wallace Diboll, disclosed in his deposition that Finley had also inspected and photographed the vehicle.

On September 27, 1990, after the Dillons had answered the interrogatories but before Diboll's deposition testimony revealed Finley's inspection, Nissan filed a motion to dismiss or exclude evidence and testimony related to Gomez's inspection. Affidavits were filed and a magistrate judge ² conducted an evidentiary hearing. During these proceedings, the Dillons did not tell the magistrate judge or defense attorneys that Finley had inspected and photographed the car. The magistrate judge found that the Dillons and their representatives had destroyed crucial evidence but did not do so in bad faith. Although the magistrate judge noted that Nissan had a strong case for outright dismissal, he did not recommend it. Instead, the magistrate judge concluded that Gomez should be excluded as an expert witness because Nissan had been prejudiced by the inability to inspect and perform tests on the damaged vehicle.

The district court reviewed the magistrate judge's report, precluded Gomez from testifying, and excluded any evidence derived from his inspection, including photographs, a mock-up of the Datsun B-210 automobile, and a videotape. At trial, Nissan called Finley as a witness. Finley testified that the Dillons' attorney had hired him to inspect the Datsun B-210, and he stated that he could not find any defects in the automobile. He concluded that the seat belt retractor did not cause Vernon Dillon's injuries. Nissan's attorney made several comments about the destroyed evidence and read the Dillons' interrogatory answers (in which Finley's identity and work product were not revealed) to the jury. The court instructed the jury that it could infer that the destroyed evidence would have been unfavorable to the Dillons. The jury returned a verdict for Nissan, the court denied the Dillons' motion for a new trial, and this appeal followed.

I.

The most critical issues in this case are whether the district court erred in excluding Dr. Gomez's testimony, photographs, and exhibits; in allowing Nissan's counsel to repeatedly argue misconduct and spoliation of the evidence; and in instructing the jury that it could draw an adverse inference from the Dillons' failure to produce evidence.

The Dillons argue first that the district court erred in excluding Gomez's evidence because there was no finding that the Dillons' attorney or expert destroyed the car in bad faith, and that Nissan had ample evidence regarding defective design and the cause of Dillon's injuries available before trial. The Dillons, however, do not amplify their bad faith argument beyond a simple statement in the argument caption.

The Supreme Court has held that a court may assess attorneys' fees when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. See Chambers v. NASCO, Inc., --- U.S. ----, ----, 111 S.Ct. 2123, 2133, 115 L.Ed.2d 27 (1991); Roadway Express, Inc. v. Piper, 447 U.S. 752, 767, 100 S.Ct. 2455, 2464, 65 L.Ed.2d 488 (1980). The Court has also held that dismissal may be ordered as a sanction upon a finding of bad faith, willfulness, or fault. See National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639, 640, 96 S.Ct. 2778, 2778, 49 L.Ed.2d 747 (1976); Societe Internationale v. Rogers, 357 U.S. 197, 212, 78 S.Ct. 1087, 1095, 2 L.Ed.2d 1255 (1958). This case, however, involves neither an assessment of attorneys' fees nor dismissal. Instead, the district court relied on its inherent power to exclude Gomez's evidence because the vehicle was destroyed before this case was filed and (at least at the time of the order and to the court's knowledge) the Dillons had not violated a discovery order which would have invoked the sanctions available under Fed.R.Civ.P. 37.

We review a court's imposition of sanctions under its inherent power for an abuse of discretion. Chambers, --- U.S. at ----, 111 S.Ct. at 2138; see also Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 2460, 110 L.Ed.2d 359 (1990). This is true with regard not only to the sanction imposed, but also to the factual basis for the sanction. See Chambers, --- U.S. at ----, 111 S.Ct. at 2138; see also Cooter & Gell, 496 U.S. at 405, 110 S.Ct. at 2460 (rejecting a three-tier standard of review for Rule 11 violations, and adopting an abuse-of-discretion standard for reviewing all aspects of the district court's determination); National Hockey League, 427 U.S. at 643, 96 S.Ct. at 2781 (determining that a district court did not abuse its discretion in both finding bad faith and concluding that the sanction of dismissal was appropriate). As we recognized in Frumkin v. Mayo Clinic, 965 F.2d 620, 626-27 (8th Cir.1992), the issue is not what we might have done if the situation had been presented to us originally, but rather, whether the district court abused its discretion in imposing the sanction.

In Harlan v. Lewis, 982 F.2d 1255 (8th Cir.1993), we discussed in detail a court's inherent powers and the requirement of finding bad faith before imposing sanctions. Id. at 1258-1260. We held that a showing of bad faith is not necessary to support a monetary sanction against counsel, and recognized that the "bad faith" requirement does not extend "to every possible disciplinary exercise of the court's inherent power, especially because such an extension would apply the requirement to even the most routine exercises of inherent power." Id. at 1260. Here, the district court based its order to exclude Gomez's testimony, photographs, and exhibits on the magistrate judge's finding that "both plaintiffs' expert and plaintiffs' attorney knew or should have known that the car was an important piece of evidence which should have been preserved in its entirety." Magistrate's Report and Recommendation at 6. We must decide whether this finding is sufficient to support the order.

A number of district courts have sanctioned parties for the destruction of evidence under findings similar to these. See, e.g., Capellupo v. FMC Corp., 126 F.R.D. 545 (D.Minn.1989) (stating that "[s]anctions are appropriately levied against a party responsible for causing prejudice when the party knew or should have known that the destroyed documents were relevant to pending or potential litigation"); Wm. T. Thompson Co. v. General Nutrition Corp., 593 F.Supp. 1443, 1455 (C.D.Cal.1984) (recognizing that "[s]anctions may be imposed against a litigant who is on notice that documents and information in its possession are relevant to litigation, or potential litigation, or are reasonably calculated to lead to the discovery of admissible evidence, and destroys such documents and information"); see generally Jamie S. Gorelick et al., Destruction of Evidence § 3.11 (1989 & Supp.1990). We do not hesitate in determining that the findings in this case--a retained witness and counsel destroyed evidence that they knew or should have known was relevant to imminent litigation--are sufficient for imposing...