Episode 102: Failure to Preserve Chat Messages Results in Sanctions

In episode 102 of the Case of the Week series, Kelly Twigger analyzes a recent decision from the In re Google Play Store Antitrust Litigation, in which Google was found to have failed to adequately preserve chat communications. The decision highlights the importance of preserving instant messages and the need for attorneys to be familiar with the chat programs used by their clients. The court found that Google intentionally spoliated ESI, but has not yet ruled on appropriate sanctions, pending further information on the scope of lost evidence. Attorneys must be prepared to negotiate preservation, collection, and review of chat messages in discovery.

Introduction

Good morning, and welcome to episode 102 of our Case of the Week series, published in partnership with ACEDS. My name is Kelly Twigger. I am the founder and CEO of eDiscovery Assistant and the principal at ESI Attorneys. Thanks so much for joining me today.

If you haven’t had a chance yet to grab a copy of our 2022 Case Law Report, download a copy of that for your perusal.

We’re going to dive right into this week’s decision, which comes to us from the In re Google Play Store Antitrust Litigation. This is a decision from United States District Judge James Donato, dated March 28, 2023. So very recent.

As always, we add the issues to each of the cases in our eDiscovery Assistant database, and the issues for this week’s decision include sanctions, failure to preserve, cost recovery, legal hold, instant messaging, and proportionality.

Background

All right, so what are the facts before us here on this decision? This is a multi-district litigation action that involves multiple antitrust cases challenging Google’s Play Store practices as anti-competitive. The plaintiffs allege that Google illegally monopolized the Android app distribution market by engaging in exclusionary conduct, which has harmed the plaintiff’s group in various ways. The plaintiffs here are Epic Games, consumers and the Attorney Generals of 38 states.

Now, in April of 2021, so not quite a year after the party’s preservation obligations arose, the plaintiffs asked Google about a curious lack of Google Chat messages in its document production. In October 2021—so about five months later—Google said that the Google chats are typically deleted after 24 hours and that Google had not suspended its auto deletion even after the litigation began in August of 2020. Google instead chose to let employees make their own personal choices about preserving chats that may be relevant to the matter.

Facts

There are some very specific facts about how that conduct was undertaken at Google.

What is Google Chat? If you’re not familiar with it, Google Chat is an instant messaging communications tool that allows users to send each other text messages within the system. In effect, it’s Google’s in house instant messaging platform. This decision from Judge Donato focuses on Google’s internal use of chat — its internal preservation practices for chat messages sent on the platform by Google employees.

Now, we’re before the Court on a motion for sanctions here. Essentially, as I noted earlier, the plaintiffs obtained information during discovery indicating that Google did not adequately preserve its chat communications. The plaintiffs say that this shortfall was intentional and deprived them of material evidence and have requested sanctions under Federal Rule of Civil Procedure 37(e).

This is a section of the Federal Rules that we’ve discussed multiple times on Case of the Week, and we’re going to see some interesting developments with it here.

The Court gave the plaintiffs consent to file a motion for sanctions, and so that’s where we are here is on the motion for sanctions. The Court held a two day hearing on this issue — finding that briefs were not going to be sufficient — and detailed the very significant efforts that it undertook to compile a detailed record regarding Google’s conduct around the preservation of chats, how they’re used internally at the company, as well as policies about preservation and legal hold generally.

Based on that record—the hearing, the submissions by the Court, affidavits, a lot of information in the record—the Court made the following findings of fact:

First, that Google is a sophisticated litigant and that its employees, including the ones that are involved here, are regularly on litigation hold and understand their obligations on legal hold.

Second, Google trains its employees to communicate, quote, with care that there are lawyers who specifically provide training to employees on how to communicate in writing. Specifically, there are slides that are presented to employees that include the following language:

At Google, we are constantly in the public eye and the courthouse. We often have to produce employee communications as evidence, which means your communications can become public at any time. Our communications can hurt or embarrass us as a company or as individuals. We need to be cautious in our communications to avoid unnecessary harm. This is not about hiding stuff or not pointing out something that may need fixing. Speaking up is a core company value. This is about being thoughtful in your communication in order to reduce the risk of unintended harm to Google and or you.

Additional slides during the presentation also discourage employees from sending emails when tired or late at night and specifically provide an option for sending information in chat instead of email. Note that sending in chat is, “not without risk.” The slides note:

Chat is better than sending the email, but not without risk. While off the record hangout chats between individual corporate accounts are not retained by Google as emails are, any chat participant may save the conversation by simply copying and pasting it into a doc or email . . .

According to the Court here, the apparent concern is that the chat might then be retained for a much longer period of time than the off record chat messages usually are. In effect, the lawyers are communicating to the employees how to handle chat because they want to minimize the risk of preserving additional information longer than chat messages are stored for the 24 hours under the standard policy.

The “Communicate with Care” training also gave specific instructions to Google employees about strategies for seeking to make their emails and other communications protected by the attorney-client privilege. Employees are advised that they should include an attorney in the address of the email, and in addition to addressing it to an attorney and labeling it as such, for the email to be attorney-client privilege, it must be for the purposes of granting legal advice.

The Court also noted multiple instances in which internal communications actively expressed concerns about the possibility of disclosure in litigation and the risks of preserving chats. There are specific images of chats in the decision where the Court notes exactly what the employees said as far as content goes.

In those examples, the employees specifically note that chats are not maintained for more than 24 hours, that turning history off ensures that the chats won’t be retained for longer, and that it’s likely the content being discussed could be implicated in court. In short, really, those snippets that are included in the decision show you quite clearly that the employees were aware of the legal implications of particular topics, that history needed to be turned on to preserve that information per company policy, and that often they were encouraged to turn history off or to leave conversations when topics were to be discussed that were covered by a legal hold.

The Court then goes on to describe how Google Chat functions, and that it is an essential tool that is used by Google employees every single day. There are no restrictions on topics to be covered in chat. Users can attach documents to chats and the history is turned off by default, meaning that messages are not stored for more than the routine 24 hours by default.

There are different types of chats that can be used in Google chat. If you’re familiar with any sort of instant messaging software, it’s roughly the same kind of functionality. One-on-one chats where I have a chat with one specific person are retained for 24 hours unless history is turned on. If so, then chats are retained for 30 days. Again, 30 days not a long time from a preservation and collection perspective.

Chats in a group conversation with history turned on or in a flat, non-threaded room (as described by the Court) are retained for 18 months. Chats in a threaded room have history always on and can’t be turned off. Those messages are also retained for a period of 18 months.

There is going to be some data that Google has here even despite not turning on history for one on one messaging. The user does have options to preserve chat for longer than the default retention period. In Google Chat, a user can turn on history for a chat in a menu option. The history setting applies to all messages that are sent in a chat after the history button has been toggled, and that chat’s history will stay on until manually turned off.

The user can also forward chats to their inbox, which would retain them for 18 months or for anyone on a litigation hold because Google puts all of its custodians on email litigation hold, they can also cut and paste into a document in Google Drive that would be retained for longer than the 24 hours of chat.

The Court goes on to note that the record demonstrated —contrary to Google’s testimony— that employees use chat for substantive conversations, including matters relevant to the antitrust litigation, and the Court provides those examples that I mentioned early about showing that the parties engaged in conversations that were relevant to this particular litigation.

Looking at all of that, the Court has laid out very clearly how Google Chat functions, which is a great guide for you to use if you’re not familiar with Google Chat, you haven’t used it, or you need to work with a client on it. It also discusses all the various ways in which either the user or Google itself could have turned on preservation for chat messages at the time that its duty to preserve arose.

The next thing the Court goes through is the steps that Google actually took to implement a legal hold. Google notes that it put a legal hold in place in September of 2020 and also resent the legal hold four times following that original legal hold to 360 employees, 40 of which were listed as custodians.

The Court notes that Google has the ability to turn on history for all of the litigation hold recipients for Google Chat, but chose not to. It also noted that legal hold recipients are advised in the notice that if their conversation in chat turns to topics that are covered by the legal hold, they should turn on their history.

Google did not check to see if any of the custodians were actually preserving any relevant chats as directed by the hold notice, and they did nothing in the way of auditing or monitoring any chat preservation. There’s no evidence that the Court notes establishing that Google did any of the individualized follow up on chat preservation with the hold recipients, including those designated as custodians.

Employees also did not follow the preservation instructions for chat. The Court found that in reviewing the testimony that, “Google employees were largely left on their own to determine what chat communications might be relevant to the many critical legal and factual questions at issue in this complex antitrust litigation.” The Court noted various instances where a lawyer would understand that subjects covered in chat were relevant to the litigation where the employee did not.

Again, the Court’s doing all this analysis, looking at these individual snippets of chat that were produced by Google following the plaintiff’s request in April of 2021. The Court notes multiple examples in the opinion of those chats in which Google employees specifically discuss the need to turn on history per policy to preserve chats on topics and other employees who dispute that and even take employees off chat so that the history is not turned on. All of that is documented well in this decision and in the record.

In February of 2023, three years after implementing a legal hold, Google advised the Court that it would turn on the history for all legal hold recipients and preclude employees from turning off history. Nothing in the decision says that this ability to control the history of chats is new, meaning that the functionality didn’t exist in August of 2020, and that it’s likely that Google had this ability all along, but did not exercise it. That’s my commentary, not something that’s specifically noted by the Court.

Analysis

Okay, with all of those facts in mind, what is the Court’s analysis here? Well, the Court starts with Federal Rule of Civil Procedure Rule 37(e) for sanctions for failure to preserve ESI. This, again is a topic that we’ve covered multiple times on the Case of the Week. There is no dispute that a duty to preserve existed as of August 2020, and the sole question is whether or not Google met its obligations with respect to preserving chat communications in this case.

As to that question, the Court states:

There is no doubt that Google was perfectly free to set up an internal IM service with any retention period of its choosing for employees to use for whatever purposes they liked. The overall propriety of chat is not an issue here. What matters is how Google responded to the lawsuits after the lawsuits were filed and whether it honored the evidence preservation duties it was abundantly familiar with from countless prior cases.

The Court looked to multiple reasons why it found that Google’s failure to preserve chat messages was very troubling.

1. The duty to preserve is an unqualified obligation under the Federal Rules of Civil Procedure.
2. The language of Judge Donato’s standing order requires parties to take affirmative steps to preserve all relevant ESI.
3. Google falsely assured the court in a case management order in October of 2020 (two months after its duty to preserve arose) that it had taken appropriate steps to preserve all evidence relevant to the issues reasonably evident in the action and said nothing to the Court or to the plaintiffs about Chat or its decision not to pause the 24 hours default deletion.
4. Google did not reveal the chat practices to plaintiffs until October of 2021, months after the plaintiffs first asked about them in April of 2021.
5. The Court had also since had to spend a substantial amount of resources to get to the truth of the matter, including several hearings, a two day evidentiary proceeding, and countless hours reviewing voluminous briefs. All the while, during the Court’s analysis, Google continued to downplay the problem and displayed a very dismissive attitude, ill tuned to the gravity of its conduct. Google’s initial defense was that it had no ability to change the default settings for individual custodians with respect to the chat history setting, but evidence at the hearing plainly established that that representation was not truthful.
6. The Court had repeatedly asked Google why it never mentioned Chat until the issue became a substantial problem. Google has not provided the Court at all with an explanation which is “worrisome, especially in light of its unlimited access to accomplished legal counsel and its long experience with the duty of evidence preservation.”
7. The Court also found that Google intentionally hid the ball with respect to Chat, that individual users were conscious of litigation risks and valued the off the record functionality of Chat. The Court notes that Google, as an enterprise, had the capacity of preserving all chat communications system wide once litigation had commenced, but decided not to do it without any assessment of financial costs or other factors that might help to justify the decision in a proportionality analysis.
8. Finally, the Court noted the contrast to Google’s other practices regarding preserving information, specifically the handling of email in which Google immediately places a hold on all email from relevant custodians. Instead, Google left chat preservations to individual custodians and then adopted essentially a “don’t ask, don’t tell” policy for chat preservation in violation of its preservation obligations.

For all of those reasons, the Court found that Google did not take reasonable steps to preserve chat evidence under Rule 37(e). The next question then goes to prejudice and then to intent. But the Court kind of jumps around those a little bit and says that the prejudice finding under Rule 37(e)(1) is not strictly necessary here. Citing to the committee notes of Rule 37(e), Judge Donato notes that the finding of intent under (e)(2) supports “not only an inference that the lost information was unfavorable to the party that intentionally destroyed it, but also an inference that the opposing party was prejudiced by the loss of information that would have favored its position.”

Essentially, the judge goes on to say that it’s clear that relevant substantive business communications were made on chat that the plaintiffs will never see to the potential detriment of the case. The judge does find that Google intentionally spoliated ESI in its Google chat messages. He also finds that there is the requisite prejudice.

You’d think next we’d get to remedy. But in this particular case, the judge says, we’ve got to consider proportionality as the governing concept as it applies to remedy, that the remedy should fit the wrong, and the Court has already declined to issue terminating sanctions against Google. The rules provide that the remedy that the Court orders is within the judge’s discretion here, and that’s what Judge Donato puts forth. The Court states:

The Court fully appreciates plaintiff’s dilemma of trying to prove the contents of what Google has deleted. Even so, the principle of proportionality demands that the remedy fit the wrong, and the Court would like to see that the state of play of the evidence at the end of fact discovery. At that time, plaintiffs will be better positioned to tell the court what might have been lost in the chat communication.

The Court goes on to award costs on the motion for sanctions and states that the determination of any appropriate non-monetary sanction requires further proceedings. We will keep an eye on what happens in this case.

Takeaways

All right, what are our takeaways from this decision? Well, the Court’s ruling here seems to be a bit confusing, but it’s really not. Essentially, the judge says, look, I found that you violated Rule 37(e). What I don’t know yet is the severity of the evidence that was lost, and as such, I can’t rule on what is an appropriate sanction. So we’re going to have to keep an eye on what else transpires in discovery.

This ruling is in keeping with other decisions where we’ve seen that a party blatantly ignores its duty to preserve and then seeks absolution with no reasonable basis for why it didn’t preserve the relevant ESI. What we did find here, though, unlike in other cases, is that there was the intent required under Rule 37(e). So we don’t yet know those sanctions that will be levied against Google, and we’ll be interested to see how the Court rules.

The next takeaway here is really about self collection. Google left it to the employees to self-collect chat messages, even where it had the ability to do so at a company wide level. And we’ve seen back since the M1 5100 decision (that was our episode one on the Case of the Week series) that lack of supervision over employees does not meet an attorney’s obligations to supervise identification, preservation, and collection of relevant evidence. We’ve got that problem here as well.

The Court showed here that to get sanctions under Rule 37 requires a duty to preserve, a failure to take reasonable steps to preserve that data prejudice, and intent to deprive, all of which were demonstrated by Google’s engaging in a pattern of behavior to delete chat messages. As I mentioned, what the Court really doesn’t know is the true scope of what information was contained in those chat messages to warrant an appropriate sanction. That’s what it needs more information on.

What does this mean for you and your clients? Chat messages that can contain relevant information must be preserved. It’s pretty simple, full stop. You’ve got to preserve instant messages. Get up to speed on what chat programs your clients are using, and be prepared to negotiate preservation, collection, and review of that information in discovery.

Chat messages like text messages and slack data that we’ve discussed on multiple decisions on the Case of the Week are very hard to review. Some tools manage them better than others. Have a plan in place to deal with this data, so you aren’t flying by the seat of your pants when this comes up in discovery.

Conclusion

Okay, that’s our Case of the Week for this week. Thanks so much for joining me. We’ll be back again next week with another decision from our eDiscovery Assistant database.

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Thanks so much and have a great day.