Thursday, June 08, 2006

Shredder Trucks? Shredder Trucks??

Well, before we jump to conclusions, maybe it's all an innocent mistake. After all:

With identity theft on the increase, State Farm wants to keep customer information out of the wrong hands. State Farm spokesman Richard Ludke said the company works to maintain the confidentiality and security of private records.

"It would be of course cost-prohibitive to maintain every document, obviously, and so we've implemented this program to orderly dispose of the records we don't need.

"But we do issue litigation hold orders so that we make sure we retain the records that may be needed for specific litigation."

On the other hand:

at least one shredded document was an engineering report that went missing after Attorney General Jim Hood subpoenaed such State Farm reports for a grand jury investigation. Scruggs said he also had subpoenaed that report and others for his lawsuit against State Farm.

But wait:

The employee was told that State Farm was transferring paper records to computer images, then shredding the original paper.

Well, that's fine, except:

while computer imagining works fine for photographs, the quality at the State Farm office is so poor with printed documents that they are almost impossible to read.

How do we know this? A State Farm employee explains:

The employee first learned while working on a policyholder file that an original engineering report had been destroyed. The copy scanned to images could not be located, either.

"I can tell you I was in a file that was supposed to have an engineer report. No one could find the engineer report and the person I was working with was told it had been shredded because they'd decided to scan it into images.

No problem! Just get another copy from the engineering firm, right? Except:

The employee's co-worker was about to call the engineering firm for another copy, but a claims manager said not to. Instead, an employee authorized to talk to the engineering firm called and requested another copy of the report.

The firm sent over another report, the employee said, adding, "but of course at that point you don't know if it's the one we originally got or not."

I feel like I'm watching a tennis match. These charges are serious, though, and if it's demonstrated to the court's satisfaction that State Farm is destroying evidence, the court ought to be imposing severe sanctions based on spoliation of evidence. Moreover, if State Farm destroyed subpoenaed evidence [i.e., a court order to produce], then it ought to be held in contempt of court.

By the way, if a plaintiff was caught doing what State Farm is alleged to have done here, then you can bet the defendant insurance company would be pushing hard for sanctions, including dismissal of the plaintiff's case.

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