Lips v. Scottsdale Healthcare Corporation (5/3/10)

This case was brought to try to create a new tort: third-party spoliation (i.e. “spoliation” by someone who’s not a party to a lawsuit). As with many cases brought to make legal points, the lawyers win while their client loses.

We blogged the opinion of the Court of Appeals (which, as we suggested then, was written to slide the case to the Supreme Court while not changing the law but also not sticking anybody’s neck out – the bureaucratic mind at work). The facts haven’t changed: Lips got a hip replacement at Scottsdale/Osborn. Part of it broke, requiring its replacement. She wanted to sue its manufacturer but the hospital had thrown the old hardware away, so she sued the hospital for spoliation.

The Supreme Court looked separately at the issues of negligent and intentional third-party spoliation.

The alleged damage to Plaintiff’s cause of action was an economic injury. There is no general duty of due care for the economic – as opposed to physical – safety of others. Plaintiff argued that there should be a “limited” duty because her surgeon told SHC that it had to keep the hardware. But the requests or demands of others do not create duties. (Another way of saying this is that they don’t create rights, which we wish people would remember when “reserving the right” to do something they have no right to do.) In a footnote, though, the court obliquely points out that the hospital could be liable if it had undertaken to keep the hardware and then damaged it.

A tort of intentional third-party spoliation, however, would in the court’s view be perfectly consistent with the law so long as it required a specific intent to damage the plaintiff’s claim. But this plaintiff didn’t allege that and the surgeon’s message wasn’t enough to create an inference of one. “Therefore, even assuming that we would recognize the tort of third-party intentional spoliation,” Plaintiff loses. The opinion upholds the trial court’s dismissal of the claim while vacating what the Court of Appeals had to say about intentional spoliation.

We won’t claim entirely to understand why the court is playing games here. The effect of the ruling is to create a tort of intentional third-party spoliation. If it didn’t want to change the law, the thing to do was to decline review. If it hadn’t realized when it accepted review that this plaintiff couldn’t quite qualify for a new tort then it could – as it has done before in analogous situations – announce that the petition had been improvidently granted. Instead, it approves the tort, defines it, vacates the lower court’s explanation that there is no such tort, but plays coy about whether its going to “recognize” it. The fact is that this is a major change in the law, and it is done by dictum, and if the court is embarrassed by that then – rather than do the deed and try to preserve its modesty with a fig leaf – it shouldn’t have. No matter who signed the briefs.

Stylistically the opinion is clear and relatively short, though its longest paragraph (12) is mostly unneeded. Citations to Doubtful Danny Dobbs or to the cheerful but bibulous Bill Prosser are always red flags but are handled reasonably here.