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Commercial Litigation and Arbitration

New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
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Spoliation — No Adverse Inference Where Records Destroyed in Ordinary Course of Business and Movant Failed to Timely Request Them During Discovery

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Diaz v. Dep’t of Treasury, 2016 U.S. App. LEXIS 14114 (Fed. Cir. Aug. 3, 2016):

Hector Diaz appeals from the final order of the Merit Systems Protection Board sustaining his removal from the position of Individual Taxpayer Adviser Specialist. Because the Board's decision was supported by substantial evidence and was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, we affirm.

I

Mr. Diaz was formerly employed by the Department of Treasury (Agency) as an Individual Taxpayer Adviser Specialist. He was removed from his position after an altercation with a taxpayer at the Internal Revenue Service's Taxpayer Assistance Center in Chamblee, Georgia. During a hearing in front of the Administrative Judge, several witnesses, including the taxpayer, testified that Mr. Diaz and the taxpayer were in a "heated [*2]  exchange" in the walk-in area where employees assist taxpayers, and that after the taxpayer exited to the lobby, Mr. Diaz followed her and used profanity in loudly threatening her. Mr. Diaz admitted that he used profanity as the taxpayer exited the walk-in area, but asserted that he did so quietly.

The Administrative Judge determined that the witnesses other than Mr. Diaz provided credible testimony, but found Mr. Diaz's testimony to be contradicted by other evidence and internally inconsistent. Based on the other witnesses' testimony, the Administrative Judge affirmed the Agency's decision to remove Mr. Diaz for unprofessional dealings with a taxpayer and for creating a workplace disruption. The Administrative Judge also declined Mr. Diaz's request to draw an inverse inference against the Agency for spoliation of evidence, where the Agency had destroyed audio and video recordings of the incident in the normal course of business. The Board affirmed the Administrative Judge's initial decision as to both determinations.

On appeal, Mr. Diaz argues that the Administrative Judge erred by relying on the other witnesses' testimony and by declining to draw an adverse inference based on spoliation [*3]  of evidence. We have jurisdiction under 28 U.S.C. § 1295(a)(9).

II

***

We also reject Mr. Diaz's assertion that the Administrative Judge erred by failing to draw an adverse inference based on spoliation of evidence. The records were destroyed in the ordinary course of business. Moreover, Mr. Diaz had an opportunity to request the records during discovery but did not do so until the prehearing conference. Suppl. App. 19 n.5. Because Mr. Diaz failed to timely request the records, the Board did not abuse its discretion in affirming the Administrative Judge's decision not to draw an adverse inference based on spoliation of evidence.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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