Failure to Suspend Skype Auto-Delete Policy Leads to Sanctions

Resolute Forest Products, Inc. v. Greenpeace International

N.D. Cal. 11/2/22 7:00

Why This Case Is Important

As organizations continue to evolve and leverage more collaboration tools (instant messaging, text messaging, etc.), it's imperative that legal teams work proactively with IT teams to ensure data related to litigation is preserved or risk e-discovery sanctions.

Overview

In this defamation case, the plaintiff sought spoliation sanctions for the defendant’s failure to preserve and produce Skype data.

Within this highly contentious e-discovery period, the plaintiff wanted the defendant to produce Skype text message data as evidence of defamation, alleging “that Defendant made a number of false or misleading press releases and reports about Plaintiff’s sustainability practices." When it was discovered the defendant failed to preserve these requested Skype messages due to a failure to turn off Skype’s auto-delete option, the Plaintiff filed for spoliation sanctions.

The plaintiff argued that the Skype data, which was lost, showcased evidence during a “critical” time period that the plaintiff claims could have demonstrated Defendant’s knowledge of the falsity of its statements.

Conversely, the defendant motioned for e-discovery sanctions against the plaintiff alleging they “failed to search and permitted the destruction of text messages,” which one of Plaintiff’s witnesses testified were used for work communications.

Ruling

• Reasonable Steps Taken By Defendant. Plaintiff’s motion was analyzed under Rule 37(e) for loss of ESI, where the Plaintiff was required to demonstrate that Defendant failed to take reasonable steps to preserve the data it lost. Although some of the data was lost as a result of Microsoft migrating data which impacted data storage, the judge ruled that the Defendant did take the reasonable steps necessary to preserve the data.
• Failure to Suspend Auto-Delete Policy Leads to Sanctions. However, the court acknowledged the failure to turn off the auto-delete option on Skype was not reasonable. The judge found that the resulting loss of the Skype message data was prejudicial because the messages were between custodians “during a critical period.” Thus, the judge ordered an adverse inference instruction and monetary damages.
• Defendant's Spoliation Motion Granted as Well. The court found that Plaintiff failed “to take any reasonable steps to produce or preserve the texts” and so “deprived [Defendant] of communications between employees and with customers, with no ability to determine if they were, in fact, nonsubstantive.”

Legal Analysis

By, Hon. Andrew Peck (Ret.), Sr. Counsel, DLA Piper

This case is a demonstration of the adage that people who live in glass houses should not throw stones. Preservation problems often arise from new(er) means of communication, with employees mistakenly assuming that a litigation hold applied to only emails. Both litigants had mishaps; Greenpeace lost Brandi’s Skype messages and Resolute lost employee texts. The Court was creative as to remedy: not an adverse inference but a factual statement to the jury that certain information was lost because of the party's failure to preserve. The lesson for future cases is that counsel need to clearly inform employees that all new means of communication must be preserved for litigation.