Google Sanctioned for Failing to Preserve Internal Chats

Google has been sanctioned in a multidistrict antitrust case pending in the U.S. District Court for the Northern District of California. In Re Google Play Store Antitrust Litigation involves claims that Google monopolized the Android app distribution market by engaging in exclusionary conduct with its Google Play Store practices. Google’s failure to preserve Google Chat—its in-house instant messaging platform described by Google as an “electronic break room”—used daily by Google employees lead to the sanctions order. 

As part of its litigation hold, Google instructed its employees not to use Google Chat to discuss topics subject to the litigation. But if they did have such conversations, Google requested employees to preserve them using a feature that allows employees to turn history “on.” However, the district court concluded that Google failed to monitor its employees’ compliance with the hold notice and that employees were unable or unwilling to follow the hold instructions. ABA Litigation Section leaders view the case as a cautionary tale for litigators on the need for oversight in the preservation and production of electronically stored information (ESI).

Employees Given “Carte Blanche” for Google Chats

When the plaintiffs questioned Google about the paucity of chat messages in Google’s production, Google revealed that chats are typically deleted after 24 hours (thus the term “ephemeral” messaging). Google had not suspended the auto-deletion function after the litigation commenced, despite its ability to do so. 

Following a two-day evidentiary hearing on the plaintiffs’ motion for sanctions, the court found that Google had given its employees “carte blanche” to determine relevance and whether to preserve the chats, effectively adopting a “don’t ask, don’t tell” policy. The court further determined that Google Chat had been used by employees to discuss business topics relevant to the litigation, rejecting Google’s description of Google Chat as a mere “break room.”  

The court found that Google fell “strikingly short” of its obligation to preserve this ESI. More ominous for Google was the court’s conclusion that it had falsely assured the court in a case management statement that Google was taking appropriate steps to preserve all relevant evidence, while making no reference to Google Chat. Instead, the court found that Google “chose to stay silent until compelled to speak by the filing of the Rule 37 motion and the [c]ourt’s intervention.” 

The court’s finding of intentionality is potentially significant. Under Rule 37(e)(2), the court can make negative presumptions that the lost information was unfavorable for Google and that the other parties were prejudiced and so instruct the jury.

Sanctions Loom Over Google

The court pointed to proportionality as the guiding principle in deciding on the appropriate sanctions, and it will wait to see “the state of play of the evidence at the end of fact discovery” before determining the remedy. Fact discovery in the case is now closed, and the jury trial is set for November 2023. In the meantime, the court has ordered Google to pay the plaintiffs’ attorney fees and costs in the Rule 37 motion and resulting proceedings. 

The court recognized that it was holding Google to a higher standard. The court’s findings included the conclusion that Google is a “really big company” accustomed to litigation and electronic evidence holds. The Advisory Committee Notes to the 2015 amendments to Rule 37(e) state that the court should take into account a party’s “sophistication” regarding litigation in evaluating that party’s preservation efforts.

“This opinion reads like a primer on what can go wrong in efforts to preserve ESI,” says Jeffrey J. Greenbaum, Newark, NJ, former cochair of the Litigation Section’s Class Actions & Derivative Suits Committee and current member of the ABA Federal Practice Task Force. “Google actually did a good job instructing its employees on the litigation hold but made the mistake of relying on the custodians without following up to make sure they were complying,” Greenbaum notes. “There must be a system of verification to make sure your people understand and are doing their jobs," he explains.

Duty to Preserve “Ephemeral” Evidence

This case demonstrates the challenges for a large enterprise like Google to manage the production of ESI. Still, the court made it clear that if there were preservation challenges, Google should have raised them up front. Then they could have been addressed at an early stage in the litigation.

“This is where Google fell short,” points out Jared M. Katz, Santa Barbara, CA, member of the E-Discovery Subcommittee of the Section’s Commercial & Business Litigation Committee. “The court pointed out that counsel’s case management statement led the court and the plaintiffs to believe that all was well, and ESI being preserved, when in fact significant, potential evidence was being routinely destroyed,” Katz states. “While litigation counsel may have believed it was reasonable to rely on a sophisticated tech company like Google to vet the sufficiency of preservation methods, this decision highlights the ever-growing demands on litigation counsel to educate themselves in this area and take nothing for granted,” he emphasizes.