Reducing Environmental Risk

Destruction of Oil Spill Investigation Data Ruled Not Sufficiently Prejudicial to Warrant the Dismissal of a Cost Recovery Action Under Navigation Law § 12

Does the destruction of plaintiff’s technical data supporting disclosed oil spill investigation reports get a defendant off the hook? Apparently not, decided the Appellate Division (Third Dept.) in a November 2012 decision, rejecting a defense motion to reverse a plaintiff’s trial verdict. Defendants had received the reports themselves, without the backup technical data, but had not requested any of the data for nearly a year after the commencement of litigation, well after a document retention policy caused destruction of the backup data. 

Here’s the background: in 1997, the New York State Department of Environmental Conservation discovered two oil spills on neighboring properties owned by the 158th Street & Riverside Drive Housing Company, Inc. and the A.M.G. Properties Company, respectively. DEC hired an environmental consultant to investigate and clean up the spills, and brought suit against the two defendants in 1999 to recover the cost of the clean up under section 12 of the New York State Navigation Law.

158th Street settled with the DEC for $50,000, but A.M.G. chose to proceed with litigation. As part of the discovery process, DEC disclosed the investigation reports prepared by its consultants in the course of the investigation and remediation of the spill. However, it wasn’t until 2010 that A.M.G. requested any of the supporting technical data from the reports. An environmental consultant will always support its reports with technical data such as sampling methods and chain of custody forms that document proper handling of samples. Gaps in this technical data can sometimes raise questions about the reliability of the consultant’s report, but by the time A.M.G. requested the technical data, it had been destroyed pursuant to the DEC consultant’s seven year document retention policy.

At the conclusion of the trial, the jury awarded DEC a verdict of $792,200.98 in remediation costs, and assessed aggregate penalties of $857,500. A.M.G. appealed the verdict to the Appellate Division, arguing that DEC’s failure to preserve the spill investigation reports and supporting technical data should have entitled A.M.G. to summary judgment. The Appellate Division affirmed the trial court’s verdict for DEC, explaining that A.M.G. “failed to “establish that they were prejudiced to the extent that they were unable to defend the case.” State of New York v.158th Street & Riverside Dr. Housing Co., 513590 (Nov. 29) at 4.

In other words, merely arguing that the destruction of the supporting technical data theoretically prevented the defendant from mounting some unspecified defense was not enough to warrant overturning the trial court’s verdict. Instead, the defendant had to meet a much higher burden of proving not only did the plaintiff possess specific documents that should have been turned over to the defendant, but the plaintiff destroyed those documents maliciously, and that destruction prevented the defendant from mounting any defense to the case. A.M.G. failed to meet this burden, and was therefore unsuccessful in challenging the trial court’s verdict on appeal.

Environmental litigation is often complicated by the presence of reams of technical data produced by environmental consultants. Having experienced environmental counsel and consultants who are able to wade through the data and craft an appropriate strategy through a data-driven and analytically rigorous approach is often the difference between making an informed decision to settle early, as the defendant 158th Street did in this case, and facing an unfavorable verdict, as defendant A.M.G. did.

For more information on the New York Navigation Law, see the Periconi, LLC Environmental Law Blog here.



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