Court sanctions Google for destruction of 'Chat' communications after lawsuit

In a March 28 ruling, the United States District Court for the Northern District of California sanctioned Google for not taking “reasonable steps to preserve electronically stored information that should have been preserved in the anticipation or conduct of litigation.”

The sanctions include monetary costs for coverage of plaintiffs’ reasonable attorneys’ fees and costs in bringing the motion to sanction “including the joint statement that preceded the motion and the evidentiary hearing and related events. Plaintiffs are directed to file by April 21, 2023, a statement of proposed attorneys’ fees and costs with adequate documentation.”

The court stopped short of “terminating sanctions” instead ruling that “The determination of an appropriate non-monetary sanction requires further proceedings” stating that “This antitrust case will not be decided on the basis of lost Chat.”

The motion for sanctions for destruction of evidence hinges on an ongoing multidistrict litigation (MDL) brought by Epic Games, Inc., the consumer plaintiffs, the Attorneys General of 38 states and the District of Columbia, and the Match Group plaintiffs for monopolizing the smartphone application market in violation of state and federal antitrust laws.

Attorney General Rob Bonta, as one of the plaintiff AGs that brought the suit, said in a released statement, “Let this send a strong message: California will not let companies hide from accountability when they break the law.”

The plaintiffs allege that Google illegally monopolized the Android app distribution market by engaging in exclusionary conduct, which has harmed the different plaintiff groups in various ways. Google amassed a number of exclusionary deals with phone makers and carriers exerting control over app distribution on Android phones through its Google Play Store, putting competitors at a disadvantage.

The sanction noted, “The principle of proportionality demands that the remedy fit the wrong, and the Court would like to see the state of play of the evidence at the end of fact discovery. At that time, plaintiffs will be better positioned to tell the Court what might have been lost in the Chat communications.”

Google uses an internal chat system which automatically deletes all communications on a 24 hour cycle. The court found that Google had an obligation to take steps to preserve those chats and to disclose to the plaintiffs that such chats existed, not wait until they were asked about it. As such, internal staff chats since the antitrust suit was brought, were automatically wiped by the Google system. Google did not reveal the Chat practices to plaintiffs until October 2021, many months after plaintiffs first asked about them. The deleted Chats “cannot be restored or replaced through additional discovery.”

“The parties do not dispute that Google bore that duty as of August 2020, when the first constituent lawsuit in the MDL was filed by Epic Games.

At the heart of this dispute is a simple question: did Google do the right thing with respect to preserving Chat communications in this case? There is no doubt that Google was perfectly free to set up an internal IM service with any retention period of its choosing for employees to use for whatever purposes they liked. The overall propriety of Chat is not in issue here.

What matters is how Google responded after the lawsuits were filed, and whether it honored the evidence preservation duties it was abundantly familiar with from countless prior cases,” the sanction ruling stated.

The record establishes that Google fell strikingly short on that score. Several aspects of Google’s conduct are troubling…..the duty to preserve relevant evidence is an unqualified obligation in all cases. The Court’s Standing Order for Civil Cases expressly spells out the expectation that “as soon as any party reasonably anticipates or knows of litigation, it will take the necessary, affirmative steps to preserve evidence related to the issues presented by the action, including, without limitation, interdiction of any document destruction programs and any ongoing erasures of e-mails, voice mails, and other electronically-recorded material.

Google clearly had different intentions with respect to Chat, but it did not reveal those intentions with candor or directness to the Court or counsel for plaintiffs. Instead, 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 Chats or its decision not to pause the 24-hour default deletion.”

“Google has now not only violated the trust of Android phone customers by limiting consumer choice and raking in outrageous commissions, but has also violated the discovery process in this case,” Bonta stated.

Along with California’s AG, the motion was brought by attorneys’ general from Utah, New York, North Carolina, Tennessee, Alaska, Arkansas, Arizona, Colorado, Connecticut, Delaware, Florida, Idaho, Indiana, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Vermont, Virginia, Washington, West Virginia, and the District of Columbia.