Six Simple Steps to Avoid Sanctions for Failure to Preserve Electronic Evidence
I’m not a lawyer, and far be it for me to give legal advice, but I’ve lived and worked around lawyers for all of my professional legal career, so I’m at least qualified to comment on the importance of executing sound legal hold and preservation processes.
Google Has Monopolized the Search Market
Recently, the United States District Court for the District of Columbia issued a decision in United States of America et al., vs. Google LLC, Case No. 1:20-cv-03010-APM (08/05/24). This case was brought against Google by the federal and state governments alleging that Google practices related to their dominance of the search market violated the Sherman Act and the Clayton Act, which are U.S. laws designed to protect against antitrust, monopolistic, and unfair and anti-competitive business practices.
Commenced in 2020 and proceeding through discovery and eventually a trial in 2023, the case largely flew under the radar for many legal professionals, unlike the Microsoft trial in the late 1990s, in which the software giant was accused of monopolizing the web browser market. The Microsoft case was settled in 2002 with a consent decree.
The action against Google did not get much attention until recently when District Judge Amit P. Mehta found Google liable for monopolistic and anticompetitive behavior in a 286-page opinion. It is not yet clear what remedy the court will order.
What Does Any of This Have to Do with E-Discovery?
Well, buried in the very back of Judge Mehta’s ruling in the Google case is the court’s resolution of the government plaintiff’s motion for sanctions filed against Google earlier in the case. The plaintiffs accused Google of a “systemic destruction of documents” for failing to preserve chat messages.
Judge Mehta found that,
“This failure to retain chats continued even after Google received the document hold notice at the start of the investigative phase of this case. It was not until Plaintiffs moved for sanctions in February 2023, more than two years after filing suit, that Google changed its policy to automatically save all chats of employees under a legal hold. Plaintiffs maintain that, as a result of Google’s chat deletion policy, ‘years’ worth of chats—likely full of relevant information—were destroyed’ and thus never subject to regulatory scrutiny, ‘show[ing] that Google knew its practices were likely in violation of the antitrust laws and wanted to make proving that impossible.’” (U.S. v. Google LLC, p. 273)
Apparently, it has been Google’s internal policy since at least 2008 to delete internal chat messages after 24 hours. Ordinarily, this would be fine—it is entirely within the province of an organization to establish such a policy. It’s perfectly legal and we refer to it in the e-discovery business as defensible deletion.
Defensible deletion means that an organization may choose to delete information from its systems that it does not need or that it is not legally required to retain. Defensible deletion policies are usually considered good information governance practice.
The problem in the Google case is that when the action was commenced in 2020 the government put Google on notice to preserve electronically stored information (ESI). It’s not entirely clear from the court’s opinion whether Google circulated a legal hold notice internally.
Preservation Is as Old as the Legal System
It remains amazing to me that in 2024 organizations continue to struggle with the concept of preserving ESI and implementing a legal hold when a legal action arises.
One need not be a lawyer to know that deleting information relevant to a legal action is a no-no. It has been black letter law since at least 2004 that a company is legally required to preserve ESI relevant to a legal action once the company anticipates or it learns it is being sued or some other legal, regulatory or investigational event is imminent.
Yet, improper spoliation of ESI continues to happen. In the first six months of 2024 alone, there were nearly 200 court decisions in the U.S. related to either failure to preserve ESI or failure to implement a legal hold—and those are just the reported decisions.
I think there are a few things at work here. First, different degrees of “seriousness” are attached to legal matters. Not every lawsuit or legal inquiry is “bet the company” legal action. An organization might perceive a legal action as a nuisance or as a strategic move, and not necessarily a threat to the business. But even a seemingly harmless legal action can become problematic if spoliation of ESI becomes an issue in the matter. The outcome could be a monetary penalty or attorney’s fees, an adverse inference instruction or limitations on how ESI can be used, or in the worst-case scenario, terminating sanctions. So, what may appear to be a relatively innocuous case, might become a drawn-out and costly discovery battle that no one anticipated or wants.
Second, there are instances in which a party to a legal matter can be outright defiant and refuse to properly participate in the discovery process, or a party might literally be trying to hide or cover up harmful information. In this scenario, the courts usually consider the party’s intent, and if evil intent is a motivating factor, we’ve seen some of the most devastating sanctions ever imposed.
Third, there are still instances in which those involved simply do not know, have not been trained, and have not taken the time to consider, the full scope of the legal requirements that must be considered when a legal action is commenced.
Twenty years have passed since the last Zubulake decision made the phrases “legal hold” and “preservation” commonplace in the e-discovery industry. Even before that, parties engaged in discovery, albeit in a more analog sort of way. Discovery has been part of the legal process for hundreds of years. It should not be new to any practicing attorney that you are required to preserve information relevant to a legal action—whether that information is in paper or digital form. They do teach at least this much in law school.
And I’ve never heard any lawyer say that e-discovery is their favorite part of legal practice. But like it or not, e-discovery is an integral, essential part of the legal process. Organizations and their lawyers have a legal and ethical responsibility to comply with discovery rules and to effectively execute on the ESI preservation process. If an organization lacks the skills, resources, or technical competence to preserve ESI and implement a legal hold, then the obligation is to either learn about e-discovery through training or to hire someone who has the expertise.
Six Simple Tactics for Avoiding Spoliation Sanctions
In the meantime, what’s a company to do? It’s pretty simple. Here’s a checklist of things that every GC’s office — and this includes legal operations folks — should have at the ready if and when a legal action is anticipated or is filed against your company:
- Proactively create a data map that identifies the systems, sources, and locations of documents and ESI that may contain information potentially relevant to a legal action;
- When legal action is anticipated or taken against the company, immediately take steps to learn who may possess or control potentially relevant documents and ESI (including third parties and locations outside the company);
- Interview key personnel and ask them not only about their involvement in the events relevant to legal action, but also what relevant information they possess and where it is located;
- Implement a legal hold advising all key personnel, the IT team, and management not to destroy, delete, or alter any documents or ESI that are relevant to the legal action;
- Suspend any routine document or ESI disposition polices or practices that could result in the loss of potentially relevant information; and
- Preserve in place or physically collect and sequester all potentially relevant documents and ESI.
Like other important components of the e-discovery process, there is a handful of pretty simple tactics every organization must follow to preserve ESI and implement a legal hold. Following the six steps outlined above will save organizations a whole bunch of grief, time and money.
Conclusion
Ultimately, Google avoided spoliation sanctions in this case. Judge Mehta determined that the question of sanctions had no bearing on his findings related to Google’s liability for violating antitrust laws. The Court did, however, offer one final rebuke:
“The court’s decision not to sanction Google should not be understood as condoning Google’s failure to preserve chat evidence. Any company that puts the onus on its employees to identify and preserve relevant evidence does so at its own peril. Google avoided sanctions in this case. It may not be so lucky in the next one.”
(US v. Google, p. 276).
And you don’t have to take my word for it. All anyone needs to do is Google any combination of the words “e-discovery + legal + hold” and you can very quickly learn the steps organizations are required to undertake to avoid sanctions for failure to preserve ESI.
