John Larimer
BridgeTower Media Newswires
Dear John: I work for a small technology company and we have recently been sued by a competitor in Federal Court in New York. We are in discovery and have requested that Plaintiff produce a variety of information, including any relevant text messages. We suspect that Plaintiff’s employees use their personal cellphones to conduct business. Plaintiff has produced emails and some other information, but indicates that the employees in question previously wiped the data off of their personal phones. Plaintiff has brushed off our concerns about the destroyed phone data, stating that: (1) it already produced “more than 100,000 emails and documents, at great expense”; (2) it does not have a right to “confiscate” its employees’ personal phones and therefore was unable to preserve the data on them; and (3) even if it was obligated to preserve text messages on its employees’ personal phones, that duty only arose after it filed the current lawsuit, by which time the data on the personal phones belonging to the relevant custodians had already been destroyed. We are considering pursuing a motion for sanctions due to spoliation of evidence based on Plaintiff’s failure to preserve text messages on these phones. Do you think this is worth pursuing?
— Show Me the Text
Dear Show Me: Although you will likely first want to gather some more information, your motion is likely worth pursuing. The Federal Rules of Civil Procedure specifically require that parties take reasonable steps to preserve electronically stored information (“ESI”) that is relevant to litigation. Under Fed. R. Civ. P. 37(e), the Court may sanction a party if relevant ESI is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery.” Text messages are a form of ESI.
Rule 37(e) makes two types of sanctions available to the Court. Under Rule 37(e)(1), if the adverse party has suffered prejudice from the spoliation of evidence, the Court may order measures “no greater than necessary to cure the prejudice.” But under Rule 37(e)(2), if the Court finds that the spoliating party acted with the intent to deprive another party of the information’s use in the litigation, the Court may order more severe sanctions, including an adverse inference instruction to the jury that it may or must presume the information was unfavorable to the party or, in the most severe cases, dismiss the action or enter a default judgment against the sanctioned party. Note also, that in addition to the Court’s authority to sanction parties for spoliation of ESI under Rule 37(e), the Court also has broad inherent authority to sanction parties to the extent necessary to redress conduct that is abusive of the judicial process.
A duo of cases involving the legacies of two late, great rock and roll legends, Prince and Lynyrd Skynyrd, are instructive here and taken together, show your opponent is litigating like it’s 1999. Let’s start with Plaintiff’s first excuse for failing to preserve potentially relevant texts on its employees’ cellphones, namely that Plaintiff already produced plenty of other data. The defendant in Paisley Park Enterprises, Inc. v. Boxill, No.-cv-1212 (WMW/TNL), 2019 WL 1036058 (D. Minn. Mar. 4, 2019) made a similar argument and lost. In Paisley Park, Prince’s estate brought copyright infringement claims for misuse of the deceased artist’s unreleased music.
Defendant Boxill was a sound engineer for Prince in 2006. After Prince’s death, Boxill and certain related co-defendants attempted to market and release previously unreleased material from some 2006 recording sessions.
During discovery, Prince’s estate received a third-party document production that contained relevant text messages between the third party and one of the defendants. When Prince’s estate moved to compel discovery of text messages from the defendants, the defendants revealed they had not preserved them: specifically, they failed to disengage the auto-delete function from their phones and subsequently discarded the phones without backing them up. Prince’s estate moved for spoliation sanctions and defendants countered that given the personal nature of their phones, it would be unreasonable to expect them to preserve information contained on those devices. Defendants also noted that they had already provided discovery from other sources of ESI, including their work computers.
The Paisley Park court was unimpressed, noting that litigants “do not get to select what evidence they want to produce, or from what sources.” Because the record showed that defendants used their phones for work purposes, defendants had an obligation to preserve and produce relevant text messages stored on them. The record also showed that the defendants “acted willfully and with intent to destroy discoverable information” when they failed to preserve the text messages. As a result, the Paisley Park court fined the defendants $10,000 and ordered them to pay all reasonable expenses incurred by Prince’s estate as a result of defendants’ misconduct.
Plaintiff’s second excuse, that it did not have the right to access its employees’ personal phone data, is also less than rock solid. In Ronnie Van Zant v. Pyle, 270 F.Supp.3d 656 (S.D.N.Y. 2017) the court rejected a similar argument. In that case, defendant Cleopatra Records (“Cleopatra”) set out to make a film based on the 1977 plane crash of the band Lynyrd Skynyrd. Cleopatra paid Jared Cohn to write and direct the film and also contracted with one of the surviving Lynyrd Skynyrd bandmates, Artimus Pyle, to work with Cohn on the film. Pyle’s surviving Lynyrd Skynyrd bandmates and others sued to enjoin the film, alleging it violated a consent decree into which they and Pyle had previously entered governing the use of the Lynyrd Skynyrd name, images and band history.
Shortly after the lawsuit was filed, Cohn switched cellphone providers. In doing so, Cohn failed to create a backup of text messages between himself and Pyle. Pyle’s bandmates moved to sanction Cleopatra for failing to preserve the Cohn-Pyle texts. Cleopatra argued it could not be sanctioned for Cohn’s actions because Cohn was not an employee and therefore Cohn’s phone was not under its control. The Van Zant court disagreed, noting that in the Second Circuit, “documents are considered to be under a party’s control if the party has the practical ability to obtain the documents from another, irrespective of his legal entitlement.” Although Cohn was neither a Cleopatra employee nor a party to the lawsuit, the Van Zant court concluded that Cohn’s text messages were, “practically speaking,” under Cleopatra’s control. As a result, the Van Zant court sanctioned Cleopatra with an adverse inference with respect to the missing Cohn-Pyle texts.
Lastly, Plaintiff is incorrect to maintain that its duty to preserve the texts could not have arisen until after it filed its complaint. A party is obligated to preserve evidence once litigation is “reasonably anticipated.” Establishing exactly when litigation becomes reasonably anticipated can be a subjective exercise, but the duty to preserve often predates the filing of a complaint, particularly with respect to a plaintiff, who must first conclude they have been wronged before pursuing litigation. In Paisley Park, the Court found that the defendants’ duty to preserve evidence arose prior to the filing of the lawsuit, and no later than the date on which defendants’ employee sent an email acknowledging that releasing the music sessions was risky and might be challenged by the Prince estate.
With respect to your prospective motion for sanctions, you should likewise look for evidence to establish that Plaintiff reasonably anticipated litigation earlier than the date Plaintiff filed its complaint. A good place to start would be to look through emails and other information at your client’s disposal or through documents produced to you by Plaintiff or any other nonparties to the lawsuit. Such information might include communications by the Plaintiff to your client threatening litigation, or Plaintiff’s internal discussions about filing a lawsuit or retaining litigation counsel. There is a good chance that the court will impose upon Plaintiff a preservation date at some date prior to the filing of the claim based on such evidence.
In sum, Plaintiff’s three proffered excuses for not preserving text messages on its employees’ personal devices are likely surmountable and you should not be discouraged from pursuing spoliation sanctions on those grounds. However, note that to prevail on a motion for sanctions under Rule 37(e), generally speaking, as the moving party, it is your burden to establish the necessary elements, including but not limited to establishing that Plaintiff’s production was inadequate. In your case, while the Court might consider the fact Plaintiff did not retain ANY text messages as facially demonstrative of bad faith or misconduct, the mere supposition that Plaintiff possessed relevant text messages that were deleted, alone, might be insufficient to warrant sanctions. Therefore, it would be in your best interest to seek additional information before pursuing a motion for sanctions, such as combing through the data already produced by the opposing side, through further discovery such as depositions or forensic examinations, or through third-party discovery, to establish that Plaintiff’s employees did in fact communicate by text messages on their personal phones for business purposes. With this information in hand, you will be in a better position to decide if your motion for sanctions is worth pursuing and what facts and arguments to use.
————
John Larimer is founder and managing attorney of Larimer Law, PLLC. Send questions about e-discovery to info@Larimer-Law.com. Lawrence Bice contributed to this article.
