In Nagy v. Outback Steakhouse, No. 19-18277(MAS)(DEA) (D.N.J. Feb. 21, 2024), New Jersey Magistrate Judge Douglas E. Arpert found that defendant Outback had a duty to preserve video footage that was spoliated, as well as an internal incident report related to a slip and fall incident at their restaurant. As a result, Judge Arpert assessed a permissive adverse inference instruction sanction for the destruction of the evidence.

Case Discussion

In this case, the plaintiff experienced a serious accident at an Outback Steakhouse in Greenbrook, New Jersey, where she slipped and fell near the kitchen area, allegedly due to a greasy substance on the floor—a high-traffic area frequently traversed by servers carrying food and beverages. This fall resulted in significant injuries, including a fractured hip and femur, necessitating emergency medical attention and subsequent surgery.

Following the incident, Outback’s on-duty manager promptly reported the fall to the restaurant’s insurance claims handler, as required by Outback’s policy. The restaurant’s surveillance system captured the incident on video; however, significant portions of the footage were later overwritten due to the system’s seven-day storage loop policy. Plaintiff’s counsel sent a preservation letter sent to Outback twelve days post-incident, demanding the retention of all relevant surveillance footage from 24 hours before to 24 hours after Ms. Nagy’s fall, which was after most of the footage was overwritten. Outback did preserve a 19-second clip specifically of the fall and a little over 27 minutes surrounding the event, but the plaintiffs contended that this was insufficient and argued that more extensive footage from before the fall was crucial to their case.

Judge’s Ruling

Judge Arpert began by discussing whether litigation was reasonably foreseeable when the footage was deleted, stating: “Given the circumstances and seriousness of Ms. Nagy’s injuries, litigation was reasonably foreseeable…Indeed, it is apparent that Defendants themselves immediately anticipated litigation—they contend, as discussed further below, that a record of information reported by Outback’s manager on the day of the incident to claims administrator Gallagher Bassett is privileged because it was prepared in anticipation of litigation.”

Finding that litigation was reasonably foreseeable, Judge Arpert next addressed whether Outback had a duty to preserve video footage, stating: “Because litigation was foreseeable, Outback had a duty to preserve evidence that it knew, or reasonably should have known, would likely be requested in that litigation…Outback, a sophisticated business entity and experienced litigant working with an experienced claims administrator, should have known that more than 5 minutes of video footage prior to Ms. Nagy’s fall would be relevant and would be requested by Ms. Nagy in any potential litigation. Indeed, it is hard to imagine evidence that would be more pertinent to Ms. Nagy’s claims in this case. The Court agrees with Plaintiffs that such footage would have been probative of issues such as whether a slippery substance was deposited on the floor and, if so, how long it was there, whether Defendants had notice of a condition that could have caused Ms. Nagy’s fall, and whether Defendants’ employees inspected the floor in accordance with Outback’s policies. Under the circumstances here, the Court finds that Outback had a duty to preserve the disputed video footage.”

Judge Arpert also pointed out that the lost video footage, which was not preserved beyond a 27-minute span around the incident, could not be recovered or replaced through other means. And he criticized Outback for not taking reasonable steps to preserve the relevant footage, highlighting that Outback had no clear policy guiding its employees on how much footage to preserve in the event of incidents, leaving too much discretion to individual managers without proper guidelines.

As a result, Judge Arpert stated this regarding sanctions for Outback’s violating its duty to preserve video footage, stating: “The Court, therefore, grants Plaintiffs’ motion to the extent that the jury may be instructed that Outback intentionally failed to preserve the disputed video evidence and that the jury may presume that the lost video footage was unfavorable to Outback… However, rather than the mandatory inference sought by Plaintiffs, the Court finds a more permissive adverse inference instruction is appropriate. The Court, therefore, grants Plaintiffs’ motion to the extent that the jury may be instructed that Outback intentionally failed to preserve the disputed video evidence and that the jury may presume that the lost video footage was unfavorable to Outback.”

So, what do you think? Do you agree that Outback had a duty to preserve video footage, considering they didn’t receive a preservation letter until after their normal deletion period had occurred? Please share any comments you might have or if you’d like to know more about a particular topic.

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