April’s Notable Cases and Events in E-Discovery

[Editor’s Note: This article was first published April 19, 2023 and EDRM is grateful to Robert Keeling, Chair of the EDRM Global Advisory Council and our Trusted Partner, Sidley, for permission to republish.]

This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:

1. an order from the U.S. District Court for the Northern District of California granting a motion for sanctions against Google for failing to preserve internal Google Chat messages, where Google declined to set a default hold on all chat messages for the relevant custodians, instead relying on the custodians themselves to ensure preservation of relevant chat messages but failing to monitor the custodians’ preservation
2. a ruling from the U.S. District Court for the Western District of Pennsylvania denying a motion to compel the Defendants to produce all calendar entries and text messages for certain custodians without application of search terms, finding that the use of search terms was routine and acceptable and that Defendants’ search terms and search methodologies were not shown to be unreasonable or inadequate
3. a decision from the U.S. District Court for the Western District of New York denying a request to compel Defendants to re-produce their entire document production in text-searchable format with a production log, finding that the Plaintiff had not specified a different format for production in its requests and that the Defendants’ production was “reasonably usable”
4. an opinion from the U.S. District Court for the District of Nevada compelling a Plaintiff to produce documents with a labeling system and organization sufficient to identify which documents were being produced in response to specific requests, where the Plaintiff had previously tried to satisfy its production obligation by providing the Defendants with access to 30 bankers boxes of documents

1. An order from the U.S. District Court for the Northern District of California granting a motion for sanctions against Google for failing to preserve internal Google Chat messages, where Google declined to set a default hold on all chat messages for the relevant custodians, instead relying on the custodians themselves to ensure preservation of relevant chat messages but failing to monitor the custodians’ preservation.

In In re Google Play Store Antitrust Litigation, — F. Supp. 3d —-, 2023 WL 2673109, No. 21-md-02981-JD (N.D. Cal. Mar. 28, 2023), U.S. District Judge James Donato addressed a motion for sanctions against Google for failing to preserve relevant messages using Google’s in-house instant messaging tool, Google Chat, where the decision to preserve the messages was largely left to individual custodians.

In this antitrust multidistrict litigation, Plaintiffs alleged that Google illegally monopolized the Android app distribution market by engaging in exclusionary conduct. Id. at *1. During discovery, Plaintiffs asked Google about a “curious lack of [Google] Chat messages in its document productions.” Google responded that Google Chats are typically deleted after 24 hours and that Google had not suspended this autodeletion even after the litigation began, instead leaving it to employees to make their own personal choices about preserving Google Chat messages. Plaintiffs subsequently moved for sanctions on the grounds that Google failed to preserve relevant electronically stored information (ESI), and the court held an evidentiary hearing on the motion.

Judge Donato began his factual findings by noting that Google is “a frequent and sophisticated litigation party,” that its employees “are no strangers to document production and discovery obligations,” and that Google has thousands of employees who are under a litigation hold for document preservation. Id. at *2.

Judge Donato next summarized evidence that Google employees receive training to “Communicate with Care,” involving live group trainings presented by lawyers to teach Google employees how to handle written communications. Id. at *2-3. Among other things, these trainings provided “rules” for communicating, such as to “Avoid Communicating When Angry or Tired.” Judge Donato highlighted that the training appeared to discourage Google employees from using chat programs to communicate as an alternative to email because “off the record” chats could still be saved by copying and pasting the contents of the chat into a document or email. Judge Donato noted that “[t]he apparent concern is that the chat might then be retained for a much longer period of time than off-the-record chat messages usually are.”

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,” including by copying attorneys on emails and labeling communications as privileged, but the training also noted that privileged documents must be sent “for the purposes of getting legal advice.” Judge Donato highlighted several examples of internal Google communications that “actively expressed concerns about the possibility of disclosure in litigation and the risks of preserving Chats.”

Judge Donato then summarized the evidence regarding Google Chat, which can take the form of one-on-one chats, group chats involving three or more people, or “rooms and spaces,” which are “topic- or project-based types of conversations that are specifically oriented around a particular item or subject matter.” Id. at *3-4. A “threaded room” is a room with a general topic, where its members can have “threaded” conversations about various subtopics. He noted that “Google Chat is an essential tool used daily by Google employees.” 

Judge Donato next discussed the evidence regarding preservation of Google Chats. He explained that “history” is off by default for all Google Chats among Google employees with the sole exception of threaded rooms, but history can be turned on or off by users for a particular Google Chat. Under Google’s standard retention policy, one-on-one Google Chats with history off are retained for 24 hours only, after which they are deleted forever and cannot be recovered. One-on-one chats with history on are retained for 30 days; “History-on” chats in a group conversation or “flat (non-threaded) room” are retained for 18 months; and “threaded room” messages are also retained for a period of 18 months. Google employees can “turn on history” for a Google Chat to preserve it for longer than its default retention period.

Judge Donato summarized that a Google employee can retain Google Chat messages with a “forward to inbox” feature, which “allows a user to select an individual message and up to four preceding messages and send those to their email inboxes for longer-term archiving.” Once in the user’s personal Gmail inbox, the chats would be subject to an 18-month default retention period. He noted that a Google employee could copy and paste a chat into a document saved to the employee’s Google Drive, which would remain on Google’s systems “indefinitely unless removed by the Googler themselves.”

Judge Donato next described that a Google information governance employee testified that the retention policy for Google Chats was “animated by the goals of protecting privacy, reducing the cost of storage, guarding against cybersecurity risks, and promoting employee productivity and efficiency” and that Google Chat was “typically” used for “quick, one-off” questions like an invitation to grab coffee or for “sensitive,” personal topics like “birth announcements” or “promotion[s].” Id. at *4-5. But Judge Donato found that there was an “abundance of evidence” that Google employees routinely used Google Chat to discuss substantive business topics, including matters relevant to litigation.

Judge Donato explained that approximately 360 individuals were subject to the legal hold for this case, but Google did not set the Google Chat history to “on” as the default for all employees who were subject to a legal hold. Id. at *5. As a result, Google left it up to each individual hold recipient to decide which, if any, of the one-on-one or group chats where history was off should be preserved. Employees were instructed not to use Google Chat to “discuss any topics that are related to their legal hold” and to turn on history if the discussion in a Google Chat turned to matters covered by a legal hold. Id. at *6. Finally, Judge Donato noted that a “Google Chat Retention FAQs” document advised Google employees that the “History ON setting” should be used when discussing a topic identified in any legal hold notice, but Google did not check to see if custodians were actually preserving relevant Google Chats and “did nothing in the way of auditing or monitoring [Google] Chat preservation.”

Judge Donato found that “Google employees who received a litigation hold in this case were unable or unwilling to follow the [Google] Chat preservation instructions, and sometimes disregarded the instructions altogether.” Judge Donato gave examples of Google employees who received the hold notice but who kept the Google Chat history off. Id. at *6-7. Judge Donato concluded that “Google left employees largely on their own to determine what Chat communications might be relevant to the many critical legal and factual issues in this complex antitrust litigation,” which was “a fundamental problem with Google’s approach to [Google] Chat preservation.” Judge Donato also reproduced and discussed two Google Chat conversations providing “evidence of highly spotty practices in response to the litigation hold notices.” Id. at *7.

Turning to his conclusions of law, Judge Donato first summarized the relevant provisions of Federal Rule of Civil Procedure 37(e) regarding failures to preserve ESI. He highlighted the Committee Notes for Subdivision (e), which state that the rule embodies the “common-law duty” of “potential litigants … to preserve relevant information when litigation is reasonably foreseeable.” Judge Donato noted that it was not in dispute that Google bore this duty as of August 2020, when the first relevant lawsuit was filed.

Judge Donato then noted that the relevant question was, did Google do “the right thing with respect to preserving [Google] Chat communications in this case?” Id. at *8. He noted that Google was free to set up an internal chat service with any retention period of its choosing and to allow its employees to use the system for any purpose. But he explained that the key question was whether Google “honored the evidence preservation duties it was abundantly familiar with from countless prior cases.”

Judge Donato concluded that “Google fell strikingly short” of its document preservation obligations, including several “troubling” aspects. First, notwithstanding the “unqualified obligation” to take “affirmative steps to preserve evidence related to the issues presented by the action,” Google “falsely assured the Court in a case management statement in October 2020 that it had ‘taken appropriate steps to preserve all evidence relevant to the issues reasonably evident in this action,’ without saying a word about [Google] Chats or its decision not to pause the 24-hour default deletion.” In addition, Google did not reveal the Google Chat practices to Plaintiffs until October 2021, many months after Plaintiffs first asked about them. Google’s initial defense was that it had no “ability to change default settings for individual custodians with respect to the chat history setting,” but evidence established that this representation was not truthful.

Judge Donato explained that another troubling aspect of Google’s conduct was the “intentionality manifested at every level within Google to hide the ball with respect to [Google] Chat.” He noted the evidence that both individual custodians and “Google as an enterprise” had the capacity to preserve all Google Chat communications but failed to do so, and he contrasted this with Google’s policies for email retention, where individual custodians cannot override the automated preservation of their emails. Id. at *9. Judge Donato noted the “obvious danger” of putting the preservation decision in the hands of custodians, who could not be expected to understand the issues in this litigation, while “intentionally deciding not to check up on employee decisions to ensure that relevant evidence was being preserved.” Judge Donato likened this to a “don’t ask, don’t tell” policy for Google Chat preservation, at the expense of its preservation duties.

Consequently, Judge Donato concluded that Google did not take reasonable steps to preserve ESI, that the deleted Google Chat evidence could not be restored or replaced through additional discovery, and that the preservation failures were intentional. And while a prejudice finding under Rule 37(e)(1) was not strictly necessary because he already found intent, Judge Donato found that “relevant, substantive business communications were made on [Google] Chat that plaintiffs will never see, to the potential detriment of their case.” He rejected Google’s argument that the prejudice was limited because the discovery from a number of custodians was limited by agreement among the parties, finding that such agreements “were made while Plaintiffs were completely in the dark about Google’s practices.”

Finally, Judge Donato addressed the appropriate remedy, noting that “[p]roportionality is the governing concept here.” He referred to the Committee Notes, which advise courts to “exercise caution,” and stated that “[t]he remedy should fit the wrong.” Id. at 18. He declined to issue terminating sanctions, stating that “[t]his antitrust case will not be decided on the basis of lost Chat communications.” Id. at *10. He ordered Google to cover Plaintiffs’ reasonable attorneys’ fees and costs in bringing the Rule 37 motion but concluded that a determination of the appropriate non-monetary sanction would require further proceedings after the close of fact discovery when the “state of play of the evidence” was clear.

2. A ruling from the U.S. District Court for the Western District of Pennsylvania denying a motion to compel the Defendants to produce all calendar entries and text messages for certain custodians without application of search terms, finding that the use of search terms was routine and acceptable and that Defendants’ search terms and search methodologies were not shown to be unreasonable or inadequate.

In In re Diisocyanates Antitrust Litigation, MDL No. 2862, 2023 WL 427082 (W.D. Pa. Jan. 26, 2023), U.S. District Judge W. Scott Hardy addressed a motion to compel Defendants to produce hundreds of thousands of calendar entries and text messages that did not hit on search terms after Defendants had already applied search terms to the documents.

Plaintiffs in this antitrust litigation alleged that Defendants conspired to reduce the supply and increase prices for precursor ingredients used in the manufacturing of polyurethane foam and thermoplastic polyurethanes. After extensive discovery, Plaintiffs moved to compel the production of text messages and full sets of calendar entries from 45 custodians of three Defendants over a five-year period. Id. at *1. Defendants had already produced more than 50,000 calendar entries and 5,000 text messages after applying search terms, but Plaintiffs moved to compel the production of the remaining more than 350,000 calendar entries and 750,000 text messages that Defendants reported returned no hits under the relevant search criteria. 

Judge Hardy noted that Plaintiffs’ motion was governed by Federal Rule of Civil Procedure 26(b) and, therefore, that discovery requests must be proportional to the needs of the case. He rejected Plaintiffs’ argument that “courts routinely order the full production of calendars without first applying search terms and because the search term review improperly risks excluding relevant evidence,” finding that the cases Plaintiffs cited did not support wholesale production of calendar entries without application of search terms. Id. at *3.

Judge Hardy emphasized that the use of search terms to cull large document productions is routine and acceptable, particularly in complex cases. The parties had agreed to a stipulated ESI protocol setting out search terms for the parties’ initial disclosures and providing for a process for limiting future production requests, and this protocol did not exclude calendar entries or text messages. Id. at *2, 3. Judge Hardy noted that the motion to compel at issue concerned a dispute about the scope of the search Defendants ultimately conducted, stating that “the record … reflects disagreements between Plaintiffs and Defendants as to the adequacy of the search terms that were applied.” Id. at *2–3. He found, however, that “Plaintiffs have presented no basis to persuade this Court to disrupt those agreements and thus expand Defendants’ review and production obligations (and the commensurate costs and burdens created thereby) by obviating the use of search terms at this far-along juncture.” And he concluded that Plaintiffs had failed to demonstrate that Defendants’ search terms or search methodologies for calendar entries or text messages were unreasonable or inadequate. Id. at *4.

Judge Hardy then held that the requested production of the calendar entries was disproportionate to the needs of the case. Id. at *4. He noted that the parties “expressly contemplated that Plaintiffs would likely propound follow-up discovery requests,” so there was no need for Defendants to produce the whole set of calendar entries and text messages that had already been searched and appropriately reviewed, “[g]iven the substantial time and effort undertaken … thus far.” As such, Judge Hardy stated that “targeted follow-up discovery requests for discernably relevant information, rather than the wholesale production of documents that will certainly yield significant amounts of irrelevant material, is more aptly proportional to the needs of this case.” Judge Hardy noted that “the burden or expense of re-reviewing the entire universe of calendar entries and text messages sans search terms” did not outweigh its likely benefit. In denying the motion to compel, Judge Hardy stated that Plaintiffs could issue discovery requests that are “non-cumulative, specifically targeted and not generalized, and be informed by the documents and other information produced to Plaintiffs thus far.” Id. at *4.

3. A decision from the U.S. District Court for the Western District of New York denying a request to compel Defendants to re-produce their entire document production in text-searchable format with a production log, finding that the Plaintiff had not specified a different format for production in its requests and that the Defendants’ production was “reasonably usable.”

In Mills v. Steuben Foods, Inc., No. 19-CV-1178WMS(F), 2023 WL 179579 (W.D.N.Y. Jan. 13, 2023), U.S. Magistrate Judge Leslie G. Foschio addressed a motion to compel a production log identifying the documents in an alleged document “dump” and to re-produce the documents in a text-searchable format. 

In this employment discrimination case, Plaintiff issued a document request to Defendants, including his former employer, for “all documents in Defendants’ possession or control relating or pertaining to plaintiff.” Id. at *5. Defendants responded to this request by providing Plaintiff with 5,295 documents consisting of 111,896 pages. Id. at *6. Plaintiff subsequently brought a motion to compel the re-production of that “document dump” in a format that was text-searchable and a production log “detailing by Bates Nos. which documents are responsive to which of Plaintiff’s Requests.” 

Magistrate Judge Foschio denied these requests. He explained that Federal Rule of Civil Procedure Rule 34(b)(2)(E)(ii) requires that “[i]f a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms.” He noted that “the record does not indicate that Plaintiff ever requested that ESI discovery” at issue “be produced in a particular format.” He therefore concluded that Defendants were not obliged by the Federal Rules to produce documents in the formats Plaintiff requested unless those documents were not “originally maintained” that way and were not “reasonably usable.”

Magistrate Judge Foschio rejected Plaintiff’s argument that Defendants’ “dumping” of the extensive number of documents on Plaintiff was improper for lack of a log sorted by Bates number. He stated that Plaintiff never argued that the documents provided were not in the form in which they were “originally maintained.” He also stated that Defendants previously provided a production log that set forth Bates ranges for ranges of categories provided, thereby rendering the production “reasonably usable.” Magistrate Judge Foschio declined to find that Defendants’ production was “incomplete, vague and inaccurate” and “disordered, irrelevant and unresponsive” because Plaintiff failed “to provide any reasonable particularization or examples of such deficiencies.”

Magistrate Judge Foschio then addressed the text-searchability of the documents provided to Plaintiff. Id. at *7. Defendants claimed that the documents, provided in PDF format, were text-searchable using the “Ctrl-F” function and were also “suitable for uploading to ‘the most commonly used document reviewing platforms, . . . to enable sorting and searching functions.” Plaintiff, on the other hand, claimed that the documents were not text-searchable. But Magistrate Judge Foschio held that text-searchability itself was not required by the federal rules. Rather, it was only important that the documents be provided in a “reasonably usable” format. Thus, rather than making a finding about text-searchability itself, the court ordered the parties “to meet and confer with the assistance of IT professionals in good faith effort to resolve any technical issues.”

In denying the motion to compel, Magistrate Judge Foschio stressed that Plaintiff’s request was “to produce ‘all’ records pertaining to Plaintiff.” He then noted that Defendants’ existing production log noting ranges of Bates numbers was sufficient for Defendants’ large production. He noted that other courts “have held similar aides to the use of large quantities of e-mail ESI to be sufficient responses to a party’s discovery requests.”

4. An opinion from the U.S. District Court for the District of Nevada compelling a Plaintiff to produce documents with a labeling system and organization sufficient to identify which documents were being produced in response to specific requests, where the Plaintiff had previously tried to satisfy its production obligation by providing the Defendants with access to 30 bankers boxes of documents.

In Flynn v. Love, No. 3:19-CV-00239-MMD-CLB, 2023 WL 2561158 (D. Nev. Mar. 16, 2023), U.S. Magistrate Judge Carla Baldwin addressed a motion to compel Plaintiff to provide labeling and organization to its production after Plaintiff provided a “document dump” on Defendants.

During discovery in this action, Defendants requested certain documents from Plaintiffs about expert work and related matters from a prior litigation. Plaintiff Michael Flynn, representing himself pro se, offered to let Defendants “come and copy” every document in Flynn’s possession related to the other case. At a prior hearing regarding this dispute, Magistrate Judge Baldwin had informed Flynn that this was not appropriate, explaining to him that “you have an obligation to go and look for documents that are responsive to the request for production of documents…. It is not the responsibility of the defense counsel to go and simply copy swaths of documents.”

Plaintiffs later moved for a protective order, asserting that their discovery obligations should be deemed “complied with” because they made 30 bankers boxes full of documents available for Defendants’ review “in a storage shed in an unspecified location.” Id. at *2. Plaintiffs argued that any requirement to copy, stamp, and deliver these documents to Defendants would “be oppressive and place undue burden and expense on Plaintiffs.” But Magistrate Judge Baldwin denied Plaintiffs’ request, noting that there appeared to be no organization of the documents from the prior litigation sufficient to indicate how those documents were maintained in the ordinary course of business, and she ordered Plaintiffs to search their files to identify and provide those documents responsive to Defendants’ requests, including specifically organizing the documents, with some sort of labeling system, and identifying which documents are responsive to the specific requests served by Defendants.

When Plaintiffs failed to produce the documents as directed by the Court, Defendants filed a renewed motion to compel and motion for sanctions, seeking an order compelling Flynn to organize and unitize the documents in his production with some sort of labeling system and identify which documents responded to the specific request. Defendants argued that Flynn did not specifically organize and produce all documents responsive to the requests and that the documents that were produced were often grouped together and produced as a single PDF with as many as 2,625 pages.

Magistrate Judge Baldwin began her analysis by noting that “discovery is supposed to proceed with minimal involvement of the Court” and that “counsel should strive to be cooperative, practical, and sensible, and should seek judicial intervention only in extraordinary situations that implicate truly significant interests.” Id. at *2. She further explained that when a dispute arises that the parties cannot work out and must submit to the Court, the party moving for an order to compel discovery bears the initial burden of informing the Court (1) which discovery requests are the subject of the motion to compel; (2) which of the responses are disputed; (3) why the party believes the response is deficient; (4) why defendants’ objections are not justified; and (5) why the information he seeks through discovery is relevant to the prosecution of this action. Then the burden shifts to the party seeking to avoid discovery to show why that discovery should not be permitted, but the party may not rely on boilerplate, generalized, conclusory, or speculative arguments: “Arguments against discovery must be supported by specific examples and articulated reasoning.” Id. at *3.

Magistrate Judge Baldwin then quickly granted the motion to compel. Id. at *5. She found that Flynn had not complied with her prior order directing him to provide responsive documents specifically organized with a labeling system and to identify which documents were responsive to the specific requests. She explained that Flynn and any Plaintiffs were “not at liberty under federal discovery rules to dump massive amounts of documents, which apparently have no logical order to them, on [his] adversaries and demand that they try to find what they are looking for.” She noted that the documents that were produced had been provided in a “do it yourself document dump fashion,” which flew in the face of both the spirit of Rule 34 and established case law.

Accordingly, Magistrate Judge Baldwin ordered Flynn to search his files to identify and provide those documents responsive to Defendants’ document requests within 30 days — including specifically organizing the documents, with some sort of labeling system, and identifying which documents were responsive to the specific requests.

Magistrate Judge Baldwin also granted Defendants’ motion for sanctions and ordered Flynn to pay Defendants’ reasonable attorneys’ fees associated with filing the motion to compel. Id. at *6. She declined to find either Plaintiff in contempt but warned them that continued discovery issues or failures could result in a recommendation that the action be dismissed pursuant to Rule 37(b)(2)(v).LESS

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