A Smartphone Trade-In Nearly Leads to Sanctions in Alleged Skin Care Scam Case

Why This Case Is Important

When facing litigation, it’s important to consider where all your relevant data may live. Whether is a computer, tablet, or smartphone device, it’s critical that all potentially relevant data be preserved to avoid the risk of sanctions in litigation. 

Overview

In this putative claim case, the Plaintiff alleged the Defendants used text messages to scam her into purchasing a monthly subscription for skincare products. 

The Plaintiff performed a series of actions on her mobile device that she alleges enrolled her to receive monthly installments of skincare products. First, she received a text message from the Defendants with a link to a survey. After clicking the link and completing the survey, she was invited to redeem an offer for a free trial of skin care products. The Plaintiff agreed to pay a small shipping fee for the products, but soon noticed large, additional charges from the Defendant that she did not want or consent to purchase. 

After the lawsuit began, the Plaintiff traded in her smartphone without preserving the potential evidence stored in it, including the history of actions detailed above. The Defendants claimed the loss of the smartphone deprived them of relevant evidence and moved for sanctions to prevent the Plaintiff for testifying to what she saw but did not preserve. 

• Motion for Sanctions Denied. The court denied the Defendants motion for sanctions because they did not meet their burden to show that the text messages and other data points were “irretrievably lost.” The court explained that although the Plaintiff did not retain some of the requested information, much of the evidence in question was marketing messages which were not only sent to the Plaintiff, but to the Defendants’ marketing list. In short, the court stated that “ESI is not lost if it is available from another source.”
• Duty to Preserve Despite ruling in the Plaintiff’s favor, the court acknowledged that the Plaintiff had a duty to preserve the text messages when the lawsuit became imminent. Regarding the survey and website, the court drew a different conclusion stating that the Defendants could not assume information about the offending website and survey were stored in the “cache” of the Plaintiff’s previous mobile device. Therefore, the Plaintiff was not under duty to preserve her phone to avoid the loss data around their website and survey. 
• Prerequisites of Rule 37(e) Not Satisfied. The court agreed with Plaintiff that “the plain terms of Rule 37(e) require a moving party to explore other avenues of discovery before sanctions are appropriate.” Defendants chose not to bring a motion to compel production of the text messages, but instead “proceeded directly to a motion for sanctions under Rule 37(e), for which they bear the burden of showing by competent evidence that the ESI sought was actually lost.” The court found that the Defendants did not meet that threshold.

Expert Perspective

by : Angie Nolet, Corporate Counsel, Redfin, and Co-founder and host, eDiscovery Chicks Podcast

The Court's refusal to impose sanctions is unsurprising. After all, Defendants didn't show that the allegedly spoliated ESI was irretrievably lost—a critical, if not determinative, element of Rule 37. But it's curious that the Court suggests that screenshotting texts, which wouldn't preserve metadata, might be perfectly reasonable. As the Courts become more acquainted with text message metadata, I suspect we'll see a shift towards more stringent preservation obligations.