In Episode 159, Kelly Twigger discusses whether an individual is put on notice of litigation via letter, whether that implicates the duty to preserve, and whether the routine deletion of text messages based on settings avoids sanctions under Rule 37 in Safelite Grp., Inc. v. Lockridge.
Introduction
Welcome to this week week’s episode of the Case of the Week series, brought to you by eDiscovery Assistant in partnership with ACEDS. My name is Kelly Twigger. I am the CEO and founder at eDiscovery Assistant, your GPS for ediscovery knowledge and education, and the Principal at ESI Attorneys. Thanks so much for joining me this week.
Each week here on the Case of the Week, I choose a recent decision in eDiscovery case law and talk to you about the practical implications of that decision for you and your clients. This week’s decision is once again about the failure to preserve text messages, and what is becoming a very common theme here on the Case of the Week. This time, however, the question is one level deeper — as to whether or not a communication to a lay person can trigger the duty to preserve text messages.
A couple of announcements this week before we dive in.
Please mark your calendars for February 12-13, 2025, for the University of Florida eDiscovery Conference. That conference will be held in person in Gainesville, Florida, on the University of Florida campus at the Levin College of Law and will also be available virtually as well. I’m privileged again to be a part of the Planning Committee this year, and eDiscovery Assistant will also be sponsoring the event. This year’s theme is E-Discovery with Heart: Connecting Law, Technology, and Innovation. As always, our goal is to provide you practical advice that you can leverage in your practice right away.
Second, we’ve mentioned this a couple of times, but our Case of the Week is now available as a podcast on your favorite podcasting platform. Each week’s episode will be added on Thursday our weekly newsletter comes out, and we’re working hard to add each of the back episodes as well. We’ll also be adding other segments, including interviews and other information that impacts the case law and, therefore, your practice. So please subscribe and download the new episodes as they are available. Announcements of new episodes are available on social media, so to receive those notifications you can follow eDiscovery Assistant or me on LinkedIn.
Let’s dive into this week’s decision.
This week’s decision comes to us from the matter of Safelite Grp. v. Lockridge. This is a decision from September 30, 2024, from United States District Judge, Sarah Morrison. Judge Morrison is a District Judge. She doesn’t see as many decisions. She has five decisions in our eDiscovery Assistant database. As always, we add the issue tags for each of the decisions in our database, and this week’s issues include failure to preserve, sanctions, adverse inference, cost recovery, spoliation, and text messages.
Facts
What are the facts that we’re looking at here?
We’re before the Court on a motion for sanctions for spoliation in the lawsuit that’s brought by Safelite. Safelite Group is a nationwide auto glass repair and replacement provider. You’ve seen their commercials. They send a truck to your home or business to repair your windshield, which is a problem that we have often here in Colorado, and I’ve used the service multiple times. Per the Court, Caliber Collision Centers expanded its collision repair business to include auto glass repair and replacement. That happened sometime before the facts of this case start in 2021.
This is a case where the timeline is key, so pay attention as we go through all of the facts. Nathaniel Lockridge, the defendant, took over as the store manager for Safelite at a location in Tucson, Arizona, in 2020. According to Safelite’s allegations, Lockridge viewed the assignment as a demotion and was not happy about it. During his employment, Lockridge contacted a colleague about working for Caliber. Additional conversations resulted in Caliber offering Lockridge a job as General Manager at its Tucson location. Lockridge accepted the offer from Caliber on July 30, 2021. In August 2021, Lockridge held a staff meeting at Safelite and announced that he had resigned and was going to work for his wife’s cleaning company. Instead, he began working at Caliber on August 16th.
Ten days later, Lockridge sent an email to a recruiter that worked for Caliber, offering the names of the tech leads that he worked with at Safelite and telling the recruiter that he had reached out to each of them, and they were expecting the recruiter’s call. He also sent a text to one of the techs, whose name was Richard Gracia, and gave him instructions on how to apply to Caliber. Safelite learned of Lockridge’s employment and recruiting and believed that both violated his contractual obligations to Safelite.
On August 27th, so just a few days later, Safelite sent Lockridge a cease and desist letter, telling him that he was in violation of the terms of the Non-Competition, Non-Disclosure, Non-Solicitation and Assignment of Inventions Agreement dated March 1, 2016, between him and Safelite, and precluding him from (1) working for Caliber, (2) divulging confidential information, (3) soliciting Safelite’s customers, or (4) recruiting any of Safelite’s employees for 12 months following his last day at Safelite.
You know already from the timeline of the case that if that is a valid agreement, then Lockridge is in violation of those terms. The letter also indicated that Safelite wished to resolve the issue without litigation but would pursue litigation if necessary. There was nothing specific in the cease and desist letter asking Lockridge to preserve his ESI. Lockridge sent the letter to Caliber a few days later.
Safelite filed litigation against Lockridge on September 13, 2021, just six weeks after Lockridge took the job at Caliber and less than a month after he started working there. That’s really key, so keep focused on that timeline. Lockridge was served, notified Caliber, and then met with counsel on October 7, 2021. Counsel advised him as of October 7th, orally, to preserve his “documents, records, or communications that dealt with the allegations of the lawsuit.” Nothing in the decision from the Court tells us that counsel discussed ESI at all, including text messages, email, or any other source of ESI.
Now, next timeline step. During a February 3, 2022, conference with counsel, Lockridge “learned [that his] personal phone was set to auto-delete text messages after 30 days.”
In discovery, Safelite sought all communications with two individuals, including text messages and text conversations and all communications regarding his employment with Caliber. Lockridge did not produce any text messages in response to Safelite’s discovery. Per the Court, Lockridge admitted that he made no effort to preserve his text messages until February 3, 2022, about six months after the allegations arose. Safelite moved for sanctions for spoliation of the text messages and sought an adverse inference instruction, as well as costs and fees.
Analysis
What is the Court’s analysis based on this set of facts?
The Court began its analysis by setting out the standard language for when the duty to preserve attaches — when he knows or should know that the information may be relevant to future litigation — and the Court identified the three requirements for Safelite to show to be entitled to sanctions under Rule 37(e), which governs failure to preserve:
- ESI that should have been preserved in the anticipation or conduct of litigation was lost;
- the party responsible for preserving the information failed to take reasonable steps to preserve it; and
- the information cannot be restored or replaced through additional discovery.
Note the difference between 1 and 2 — should have been preserved and took reasonable steps to preserve.
The Court also noted the difference between Section 37(e)(1), which requires prejudice, and 37(e)(2), that requires intent to deprive. We’ve covered those concepts multiple times here on Case of the Week.
As you might have guessed from the facts, the Court found that Safelite established each of the three threshold requirements of Rule 37(e). The text messages are gone, they should have been preserved, and the text messages were relevant.
The Court found that the August 27th cease and desist letter put Lockridge on notice of the potential litigation, despite the fact that it did not specifically prompt him to preserve evidence and that as a layperson he would not have had that understanding. Citing Goodman v. Praxair Servs., Inc., the Court held that:
The August 27 letter was detailed and specific, describing Safelite’s concern that Lockridge was, among other things, soliciting employees in violation of his contract. Safelite laid out its view of Lockridge’s contractual obligations and demanded assurance-of-compliance from him by a date certain. Safelite also demanded that Lockridge cease and desist from any further violations, and closed with explicit reference to ‘a lawsuit seeking monetary damages and injunctive relief.’ Where ‘a letter openly threatens litigation, then the recipient is on notice that litigation is reasonably foreseeable and the duty to preserve evidence relevant to that dispute is triggered.
The Court rejected the layperson argument from Lockridge, and, in analyzing the case law cited by him, found that a party’s inexperience in litigation is one factor in evaluating whether he took reasonable steps to preserve evidence, not whether he had a duty to preserve. Big difference between one and two. The Court also cites to the committee notes to Rule 37, which state that “The court should be sensitive to the party’s sophistication with regard to litigation in evaluating preservation efforts.”
In assessing the relevance of the lost text messages, the Court allowed Safelite to rely on circumstantial evidence to suggest the contents of those lost text messages. It found that Safelite’s cease and desist letter specifically demanded that Lockridge stop recruiting away Safelite’s employees, and it pointed to email correspondence that Lockridge sent to the Caliber recruiter that stated that Lockridge had spoken with the Safelite employees and that they were waiting for the recruiter’s call. Text messages from August 27th from Lockridge to Gracia — presumably from his phone, although maybe it’s from the phone records that we’ll hear about later — showed that Lockridge was encouraging him to apply to Caliber. Safelite also submitted declarations from other Safelite technicians about Lockridge’s efforts to recruit them.
The Court goes on further to show that text messages were sent to multiple of the technicians, all of which supported the inference “that the lost text messages would have also shown a continuation of Lockridge’s solicitation activities.” The combination of all of those facts pointed to the relevance of the spoliated text messages.
The Court also found that Safelite was prejudiced by the lost messages, but did not find intent to implicate the dispositive sanctions that are available under Rule 37(e)(2). In doing so, the Court makes some excellent notes about language on what prejudice means from existing case law. “Prejudice can be properly understood as a party’s ability to obtain the proof necessary for its case…which is another way of saying the loss of ESI could negatively impact a party’s ability to make its case, or prejudice that party because of the loss of information.” That’s terrific language that you should be leveraging in your briefing when you’re discussing these sanctions issues. The Court also points to the language in the advisory committee notes of the Rule which state that:
The rule does not place a burden of proving or disproving prejudice on one party or the other. Determining the content of lost information may be a difficult task in some cases, and placing the burden of proving prejudice on the party that did not lose the information may be unfair. In other situations, however, the content of the lost information may be fairly evident, the information may appear to be unimportant, or the abundance of preserved information may appear sufficient to meet the needs of all parties. Requiring the party seeking curative measures to prove prejudice may be reasonable in some situations. The rule leaves judges with discretion to determine how best to assess prejudice in particular cases.
In applying that analysis to the current facts, the Court found the requisite prejudice here. Kudos to the counsel for Safelite here because they went and got the phone records from Lockridge’s phone to show that he sent and received texts with relevant individuals during the critical six-week time period. Those records will not show the actual text messages because the content of text messages is not retained by your phone provider, but they will show the date, time, and phone number to which a text message is sent or received from. Those are easy enough to compare with the key individual’s phone numbers. Another route would have been to get the text messages from the other individuals whom they were sent from or to, but you can only take a guess at how many different individuals he would have sent them to.
Finally, having met the requirements for sanctions under Rule 37(e)(1), the Court found that a permissive adverse inference instruction was sufficient to cure Lockridge’s negligent failure to preserve his text messages. Per the Court:
Accordingly, Safelite will be permitted to introduce evidence at trial of the August 27 Letter and of Lockridge’s failure to preserve his text messages. Safelite may also argue for whatever inference it hopes the jury will draw. Lockridge will also be permitted to present evidence on the matter, and argue that the jury should not draw any inference from his failure to retain his text messages. This sanction is appropriate but no greater than necessary to cure the prejudice.
The Court also awarded Safelite fees and costs on the motion as permitted by Rule 37(a)(5)(A), as well as all fees and costs associated with all of the discovery related to the dispute over Lockeridge’s text messages. That’s quite a lot of fees.
Takeaways
All right, what are our takeaways from this decision? This is a fantastic case for takeaways.
First, and this is really important, the quick action by Safelite here was the key to creating a duty to preserve before the 30-day delete on the text messages would have passed that Lockridge alleges. If you followed the timeline, the cease and desist letter was sent just 10 days after he started work at Caliber, and also within the same time frame of when he sent the email to the recruiter and would have had communications with the other individuals from Safelite that he sought to recruit to Caliber.
If you are employment counsel or you represent clients where these issues arise, advise them using this case, send them an email today that they need to call you asap when they think there is an issue. That early action here put Safelite in the driver’s seat, because the duty to preserve attached even before the text messages would have disappeared. If the duty to preserve had not attached here, there would not be any spoliation and there would not be any sanctions.
Next, there’s no evidence in this decision about when Lockridge changed the settings on his phone. I was curious about this because I know that the default on mobile devices is to keep text messages forever, so it piqued my curiosity when Lockridge didn’t realize his phone was changed to delete text after 30 days until months after he received the complaint. There are rarely coincidences in litigation.
So I reached out to Jerry Bui. Jerry is the CEO at Right Forensics, and I had a couple of questions for him: (1) whether it’s true that the default setting for text messages is to keep them forever, and (2) if there’s a way to tell from a phone (in this case Lockridge’s phone) when a user changed their phone settings. Because in my view, if Safelite had shown that Lockridge changed his phone settings after he received either the cease and desist letter or the complaint, which triggered the duty to preserve, that would make a great case for intent and potentially terminating sanctions under Rule 37(e)(2), instead of just the negligent finding the Court made here, putting sanctions under Rule 37(e)(1).
What did Jerry have to say? First, he confirmed that the default is to keep text messages forever, but that they can be modified by a BYOD policy or if a device is managed by corporate. Any enterprise IT Department may force a shorter retention out of the gate, so that’s a question to ask. Here, we don’t have any evidence of any kind of interplay in that issue. Simply, we know that Lockridge was using his personal phone, so it’s unlikely that it was corporate managed, but there’s simply no discussion of it. But keep that in mind as you face these issues. You need to understand whether it’s a personal phone and the user is making the decisions about the settings or whether there is some corporate management that is managing the device. Second, Jerry also confirmed my suspicion that you can, in fact, check the preference file on the device itself and see the modification timestamp on that file to see when the phone was changed to delete texts after 30 days.
Here, if Safelite had asked for the phone to conduct that analysis or gotten a court order to have Lockridge do it, that could have been checked. Would it be worth the cost? A couple of thousand dollars, probably. If Safelite got a permanent injunction against Lockridge as a sanction instead of an adverse inference instruction, then likely, yes, it would have been worth the cost, in my opinion.
That’s going to vary case by case and client by client. Huge thanks to Jerry Bui for his input here, especially for responding to my questions while he was on an airplane. Thanks, Jerry.
The facts here highlight how incredibly important it is for you to recognize the ability for ESI to disappear. While that can be the basis of a sanctions motion, most of the time, you’d much rather have the evidence to prove your case, not the sanctions. Also, as occurred here, the sanction of the adverse inference instruction is valuable only if the case goes all the way to trial, which very few do. Early and immediate discovery of ESI, discussion of the settings of text messages and preservation is critical to ensuring that your client gets the evidence they are entitled to.
Use this case as leverage. Use this case in your weekly updates to the clients, your monthly updates. Tell them what they need to be paying attention to using this case.
This case also raises the importance of reading the Committee Notes to the Amended Federal Rules of Civil Procedure in both 2006 and 2015. Twice in this episode, I’ve noted the Court’s reference to the committee notes to Rule 37, and that’s key. The amendments all have advisory notes that give a deeper description of the nuances of the amended language and how that language should be interpreted. Read them. They are key, and many, many courts rely on them. Including that language in your briefs will build your credibility with the courts, and it will build the credibility of your argument.
Finally, I talk about the Power of ESI all the time. Here, Safelite leveraged the power of ESI very effectively to demonstrate relevance and prejudice from this spoliation by going and getting phone records, and understanding when text messages were sent to or from other relevant custodians within the time period. This is my best tip for each of you trying to tell a story through ESI. If you don’t know how to piece a story together, find someone who does using technology. So many of the activities that tell a story are captured because we send them all electronically, and you just need to know where to look for it and how to use technology to put it all together.
Conclusion
That’s our Case of the Week for this week. Be sure to tune in next week, whether you’re watching us via our blog, YouTube, or downloading it as a podcast on your favorite podcast platform. Thanks and have a great week!
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