Slate’s Law Blog

Business Dispute: Spoliation of Evidence in Business Litigation

If your company is involved in business litigation or is anticipating litigation over an existing business dispute, it is critical for you to understand how courts handle cases involving spoliation of evidence. In short, you are not allowed to destroy business documents—even those you own—that could hurt your position in a business litigation matter. Likewise, the other side cannot get rid of or destroy any documents that you would be seeking in discovery that could benefit your case. When a business attempts to destroy evidence in a business litigation matter, this is known as “spoliation of evidence.” We will tell you more about this term and how it could arise in a Sant Fe business litigation matter.

What is Spoliation of Evidence in a Business Dispute?

Spoliation of evidence refers to any situation in which a party destroys evidence that is relevant to the existing dispute. Spoliation of evidence can be intentional, and it can also be accidental. The term spoliation of evidence can also refer to the destruction of different forms of evidence, from physical materials (like financial documents) to electronic materials.

Depending upon the state in which business litigation is taking place, spoliation of evidence can invoke existing case law or statutory law. For business litigation matters in Santa Fe, the New Mexico Supreme Court has recognized the intentional spoliation of evidence as a tort that can ultimately affect the outcome of a business dispute and may involve sanctions for the party who destroys evidence. In Coleman v. Eddy Potash, Inc. (1995), the New Mexico Supreme Court outlined the following elements in a spoliation of evidence case:

  • Existence of a potential lawsuit;
  • Defendant’s knowledge of the potential lawsuit;
  • Destruction, mutilation, or significant alteration of potential evidence;
  • Intent on the part of the defendant to disrupt or defeat the lawsuit;
  • Causal relationship between the act of spoliation and the inability to prove the lawsuit; and
  • Damages (caused by the spoliation).

Spoliation of Evidence in New Mexico can be a Separate Cause of Action

Unlike other states, New Mexico courts recognize spoliation of evidence as a separate cause of action. This means that a party in a civil lawsuit related to a business dispute may be able to file a separate tort claim against the party who destroys evidence. Beyond the separate cause of action, parties in a business dispute claim can also face sanctions and other consequences for spoliation of evidence in business litigation. Why does New Mexico go farther than other states in recognizing spoliation of evidence as a separate cause of action? In Torres v. El Paso Electric Co. (1999), the New Mexico Supreme Court explained that “the strong public policy in New Mexico disfavoring unjustifiable, intentional wrongs that cause harm to others.”

Cases involving the negligent or accidental spoliation of evidence can still result in sanctions or a jury instruction, but there would not be a separate cause of action for intentional spoliation of evidence.

Contact a Santa Fe Business Litigation Lawyer

If you are concerned or have questions about spoliation of evidence in a business dispute, you should seek advice from a New Mexico business litigation attorney as soon as possible. Contact Slate Stern Law today for more information.