A trial court opinion involving allegations of spoliation of text messages on a mobile phone in the Southern District of New York has gotten attention because of the application of legal preservation standards.  Ronnie Van Zant, Inc. v. Pyle 2017 BL 3018, S.D.N.Y. 17 Civ. 3360 (RWS), 8/23/17) is an interesting read, not just because it involves odd characters, intrigue and drama surrounding one of the greatest Southern Rock bands of all time.  It also includes some instructive information about the application of the “practical ability” test for preservation, and the uphill battle for witnesses who lose credibility in testimony about what they did and did not do in a preservation effort.

Not long after the tragic plane crash that resulted in the deaths of Lynyrd Skynyrd lead singer Ronnie Van Zandt and his co-founding band member Steven Gaines,  Artimus Pyle, the former drummer, entered an agreement with the surviving heirs and other members of the band.  The agreement involved promises to never perform as “Lynyrd Skynyrd,” or to generally profit from the name of the band or the tragic deaths of Van Zant or Gaines without approval of the original parties to the agreement.  Their dramatically named “blood oath” agreement was more concretely memorialized in a Consent Order in 1988, following other litigation, which Pyle signed.

Over 20 years after the 1988 Consent Order, the drama that spawned the litigation began in a story that sounds like it came from a Netflix mini-series.  A film director named Jared Cohn, who worked under contract for an independent record label-turned movie producer, Cleopatra Records, Inc. (“Cleopatra”) reached out to Pyle about making a movie centered around the band and Pyle’s life in it.  Cohn was hired by the founder and co-owner of Cleopatra Records, Brian Perera, who is another interesting character in his own right. Pyle met and consulted with Perera on multiple occasions about ideas for a film generally depicting his life and the plane crash, which Pyle survived.  In their first conversations, Pyle did not mention the 1988 Consent Order, but the Order eventually was delivered to Cleopatra.  The copy of the Order was also eventually followed by a “cease and desist” letter and other correspondence from the Plaintiffs’ counsel.  All the while, Cleopatra’s movie production work continued.

The description of events includes a series of attempted revisions to history by witnesses for Cleopatra and somewhat shady versions of testimony that clearly influenced the Court’s opinion about the overall reliability of both Perera and Cohn.  For instance, the original title of the movie was supposed to be “Free Bird,” which would have obviously conflicted with the “blood oath” agreement.  The Court mentioned in an early footnote that “Perera stated that the choice of the title ‘Free Bird’ had nothing to do with the Lynyrd Skynyrd song but, rather, was because of ‘an airplane in the sky and a bird.’”  The Court quickly went on to observe that, “[s]uch an explanation is not credible.”  As a result of other testimonial inconsistencies involving Perera, it is clear that the Court put very little stock in anything Perera had to say about events surrounding the film. Pulling no punches, the opinion later concluded that Perera is “an unreliable witness whose answers and demeanor evinced an attempt by the Film’s makers and producers to evade the Consent Order upon its receipt.”

After it received a “cease and desist” letter from the other parties to the Consent Order, Cleopatra changed the way it internally referred to Pyle’s role in the movie and script, but continued to work on the film.  The colorful director, Jared Cohn, continued consulting with Pyle on the movie script and events in the band’s history to work into the story. While adept at a drum set, Pyle apparently did not own or know how to operate a computer, and his principle communication was text messaging. This becomes important, because most all of Cohn’s communications with Pyle occurred over text messages and telephone calls.  As a result, text messages to and from Pyle during the months after Cleopatra became aware of the Consent Order were critical evidence regarding Pyle’s collaboration and the intent of the Cleopatra organization.

Undeterred by all the threatening letters it had received, Cleopatra issued a press release regarding the film’s continued development, which had been re-named “Street Survivors: The True Story of the Lynyrd Skynyrd Plane Crash.”  True to his colors, Perera later testified that the fact that Lynyrd Skynyrd had a prior album titled “Street Survivors,” released just days before the plane crash was purely a coincidence, and that it was just a good title. The judge was not convinced by that explanation.

After finally coming to the conclusion that Cleopatra was ignoring its letters and demands, the other parties to the Consent Order finally filed a lawsuit against Cleopatra.  After that, the revisionist history was kicked into high gear by Cleopatra personnel. Cleopatra sent a contract modification for Pyle to sign that officially changed his role. They then rushed the film to completion, including completion of the filming, sound, and other production efforts.  Around the same time, the director Cohn switched cell phone providers and, despite backing up pictures and other information on the new device, failed to back up or preserve any of the critical text messages sent and received from Pyle.

The events surrounding the Cohn mobile phone becomes the focus of the inevitable spoliation charge and sanctions motion by the Plaintiffs against Cleopatra.  However, there is a little more to consider, because Cohn was a non-party to the litigation. The director was a third-party contractor, but not an employee of Cleopatra. The question then became, can Cleopatra be sanctioned for the spoliation misconduct of its contract director, Cohn?  In examining this question, the Court cited the widely known In re NTL Inc. Securities Litigation, 244 F.R.D. 179 (S.D.N.Y. 2007) decision that “the concept of control has been construed broadly.”  The Southern District of New York uses the “practical ability” test for custody and control, which essentially means that if a party has the practical ability to obtain documents from another, regardless of legal entitlement, that is enough to find they have control for purposes of discovery and preservation.  See In re NASDAQ Mkt. Makers Antitrust Litigation, 169 F.R.D. 493, 530 (S.D.N.Y. 1996).

Applying the “practical ability” test, the judge concluded that “while Cohn is a non-party, his text messages were, practically speaking, under Cleopatra’s control,” because Cleopatra and Cohn had been working closely on the film.  The opinion cites Golden Trade, S.r.L. v. Lee Apparel Co., 143 F.R.D 514, 525 (SDNY 1992) for the concept that a company can have legal control of documents possessed by a non-party because of a “cooperative relationship between the two.”

After determining that Cleopatra could be sanctioned for the spoliation by the director, the court proceeded through an analysis of whether sanctions are appropriate.  The Court rather quickly dismissed the somewhat credible argument by Cleopatra that the Plaintiffs could have acquired the same text messages from Pyle, who presumably was the other party to the conversations.  The judge said that Pyle has “made minimal appearance and has not produced any documents in this litigation,” and that “Plaintiffs have represented they sought Pyle’s messages to no avail, a credible claim…” The Court then closed out the same sentence concluding that “moreover, given the time-frame sought by the parties for this matter, this is sufficient effort.”

After then dispensing with Cleopatra’s other arguments against a sanctions award, including such creative defenses as Laches and Unclean Hands, the hammer fell.  The sanctions hit Cleopatra like a fatal snake bite, with an adverse inference that resulted in a permanent injunction and other various sanctions for violations of the Consent Order, including attorney fees.  As a result of the injunction, the world will never see whatever artistry and cinematic work Cohn put into the “Street Survivors” film, and all the money Cleopatra spent on the effort was gone with the wind.

While it is undeniable that the seedy misconduct by the cast of characters in the Cleopatra organization influenced the result, this opinion is still worth noting by in-house attorneys, particularly for its application of the “practical ability” test to expand the duty to preserve to include a non-party with whom the defendant had a “cooperative relationship” that related to the subject matter of the litigation. The Van Zant opinion is a reminder that a party should outline their preservation strategy as early as possible, and consider whether a non-party in possession of potentially relevant ESI may nonetheless fall under a party’s preservation obligation because they have the “practical ability” to obtain and preserve the information at issue.