This is what it sounds like, when sanctions are granted.
In March 2019, a federal judge in Minnesota sanctioned Defendants for their failure to preserve text messages in a copyright infringement suit brought in part by the estate of the late musician commonly known as “Prince”.
Representatives for Prince’s estate brought suit against Defendants George Ian Boxill, Rogue Music Alliance (“RMA”), Deliverance LLC (“Deliverance”), David Staley, Gabriel Solomon Wilson, and other parties alleging copyright infringement. Plaintiffs filed suit for copyright infringement after learning that Defendants Boxill and RMA created Deliverance to market and release previously unreleased recordings that Prince created during recording sessions in 2006. Defendant Boxill worked as Prince’s sound engineer during the 2006 recording sessions. Plaintiffs allege that a confidentiality agreement with Boxill placed ownership of the recordings solely on Prince.
Before releasing the music, Defendant Staley sent an email to Sensibility Music indicating that Defendant Boxill would indemnify RMA if Plaintiffs challenged the release. Shortly thereafter, Plaintiff’s estate sent a cease and desist letter, then filed suit.
The parties agreed to certain stipulations regarding discovery of ESI including taking “reasonable steps to preserve reasonably accessible sources of ESI.” The court did not enter an order concerning the stipulation but noted that it will enforce the agreement and warned that any non-compliance will be met with all available remedies, including sanctions. The Court also issued a pretrial scheduling order for both parties to preserve “all electronic documents that bear on any claims, defenses, or the subject matter of this lawsuit.” The court issued two additional pretrial scheduling orders each containing similar language to the first regarding preservation and warnings regarding consequences for violations.
Plaintiffs served discovery requests to Defendants for “all documents related to the timing, circumstances, format, and content of the music at issue in this lawsuit, communications with any third-party regarding Boxill, Prince, and items at issue in this lawsuit, and all documents related to Boxill, Prince, the music at issue here, Paisley Park Enterprises, and this lawsuit.” Plaintiffs included language in their request defining “documents” as broadly as possible.
Plaintiffs sent a letter outlining deficiencies in Defendant’s productions including failure to produce responsive text messages. Plaintiffs then received a third party production from Defendants’ public relations firm which included responsive text messages from Defendant RMA’s principal, Gabriel Wilson. Plaintiffs sought to compel production of additional text messages from Gabriel Wilson and another RMA principal, David Staley. The Court ordered Defendants to produce all responsive text messages.
The parties held a meet and confer where Defendants RMA, Staley, and Wilson admitted they did not preserve and cannot produce text messages. Defendants Staley and Wilson stated they did not disable the auto-delete function on their phones; Staley wiped and changed his phone, while Wilson wiped and changed his phone twice. Both also admitted that they did not have back-up data for their phones.
In deciding whether to grant Plaintiff’s motion for sanctions, the Court asked 3 different questions: (1) did the Defendants act with intent; (2) is the evidence purported to be spoliated available elsewhere; and (3) did the Plaintiffs suffer harm because of the spoliation. The Court answered a resounding yes to all three questions and sanctioned Defendants for their actions.
The Court found the Defendants acted with “the intent to deprive” in failing to preserve text messages when they failed to make reasonable efforts to preserve their data and admonished them for their “troubling” and “completely unreasonable” behavior. The Court explained that had Staley and Wilson merely failed to deactivate the auto-delete function on their phones, the Defendants may have just been negligent in their duty to preserve. But, not only did they fail to deactivate the function, but they (1) wiped their phones, (2) discarded their phones, and (3) failed to back-up their phones. Moreover, Wilson wiped and discarded his phone twice such that by the 2nd time he wiped and got rid of his phone, he had already been sued, was ordered by the court to preserve his data, agreed to the ESI stipulation, and was served with a letter by Plaintiffs alerting him to his duty to preserve. Furthermore, there is evidence that Staley knew how to back-up data from his phone because he was able to preserve photos in his cloud storage and Dropbox.
The Court also found that the text messages Defendants intentionally deleted were not available elsewhere. The Court reasoned that although the Plaintiffs were able to recover some text messages from other parties, they were not able to recover texts Staley and Wilson sent only to each other or other parties from whom Plaintiffs have not requested discovery. Because the texts have been deleted and cannot be recovered, it is “impossible to know what it was or to whom it may have been communicated” and so Plaintiffs do not have a complete picture of the evidence potentially relevant to their case.
Finally, the Court found that the Plaintiffs suffered harm as a result of Defendants actions. In fact, the Court found that there was “no doubt that Plaintiffs are prejudiced by the loss of the text messages.” Going back to its discussion regarding whether the text messages could be recovered elsewhere, the Court emphasized that because the texts are forever deleted and no one will ever know what they contain, Plaintiffs are indeed harmed by the spoliation because they are “forced to go to already existing discovery and attempt to piece together what information might have been contained in those messages, thereby increasing their costs and expenses.”
Defendants argued that they did not have a duty to preserve their phones because (1) Plaintiffs failed to present them with a legal hold for their phones, (2) Defendants did not know they should preserve their text messages, and (3) it is unreasonable to expect preservation of phones given the “personal nature” of mobile devices. To support their claim that they did not know they needed to preserve their text messages, the Defendants note that their previous counsel did not tell them to preserve, and that Plaintiffs did not specifically identify text messages as a form of document for discovery. The Court was not convinced by Defendants arguments. First, the Court noted that the duty to preserve was not incumbent on the opposing party to serve a legal hold. The Court also seemed annoyed that Defendants would even try to argue that they did not know they had a duty to preserve text messages. The Court further noted that parties are responsible for their counsel’s conduct and that it was “baffled as to how Defendants can reasonably claim to believe that their text messages would be immune from discovery” given that Rule 34 clearly states that data from “any medium from which information can be obtained” is discoverable and that the way we communicate nowadays would put anyone on alert that the contents of our phones are indeed discoverable.
Given the Court’s analysis that the Defendants intentional spoliation that caused prejudice to Plaintiffs, the Court also found that more than curative sanctions were appropriate. The Court fined Defendants and the employees $10,000 for the destruction of the text messages, in addition to paying all reasonable expenses incurred by Plaintiffs as a result of their misconduct. The Court declined to order an adverse inference instruction, though, because discovery was still on-going, and found it more appropriate to defer granting that sanction until trial was nearer.
This case highlights the importance of preserving all forms of potentially relevant communications, including text messages. In the current state of our heavily tech-dependent world, it would be difficult to argue that any sort of communications on phones or tablets would not be discoverable. Outside of an agreement with opposing counsel that certain forms of communications are exempt, it’s better to be safe (and save) than sorry (and sanctioned).