In episode 18 of the ACEDS and eDiscovery Assistant #CaseoftheWeek, we discuss how legal hold letters in this week’s case were discoverable. Kelly goes over the details of the matter and why the court ruled that the letters were not privileged.
Good morning and welcome to our #CaseoftheWeek for March 30th, 2021. My name is Kelly Twigger and I am the CEO and founder of eDiscovery Assistant and the Principal at ESI Attorneys.
Before I get started this week, I just wanted to take a moment and thank all of you who reached out to us following the tragedy in Boulder this week. It’s been a tough week, but it’s been made a lot easier by all the love and support that has flowed from all of you. Thank you very much from the bottom of my heart.
Let’s get into our #CaseoftheWeek for this week.
As you know, through our partnership with ACEDS, each week we talk about a different eDiscovery decision and the practical implications of those cases in the hopes that it will provide some insight for you, your practice and for your clients.
This week, you’ll find in the links in the events page, depending on what platform you’re watching us on, the public link to eDiscovery Assistant for the case we’re going to talk about today, which is Thomas v. Cricket Wireless. You’ll also find a link to our 2020 Annual Case Law Review report, which we put out in partnership with Doug Austin from eDiscovery Today. We’ll also try to add the links to the sessions from the University of Florida eDiscovery Conference that took place on March 18th. Those sessions are now live and available on the conference registration page. You can use the password “eDisco21” to access those sessions. Also in your links, you’ll also find a write up of the Cricket Wireless case from Doug Austin at eDiscovery Today. Doug wrote on this case last week, when we were originally supposed to do the #CaseoftheWeek, but our events here in Boulder kind of put that off for a week.
Let’s dive in.
Our decision this week is a second decision that we have in eDiscovery Assistant from the case, Thomas v. Cricket Wireless. The decision date is from March 16th, 2021. Very recent. These are both decisions from Alex Tse, who is the United States Magistrate Judge in the Northern District of California. Judge Tse is relatively new to the bench. There are four total eDiscovery decisions from the judge in our database.
As we’ve talked about before, one of the benefits of eDiscovery Assistant is not only that we curate eDiscovery decisions, but also that we tag them with eDiscovery issues to make what you’re looking for a little bit easier. In this case, this decision from Thomas v. Cricket Wireless includes the following issue tags in eDiscovery Assistant:
- Failure to preserve
- In camera review
- Attorney client privilege
- 30(b)6 or corporate designee
- and legal hold.
You can use any of those tags to search for the case in our database. You can also search for it using the title or the site.
What are the facts of Thomas v. Cricket Wireless? The decision that we’re looking at right now, it’s really important to put this in context because we can get out of it pretty quickly. We’re looking at a motion to compel Cricket’s legal hold notices by the plaintiffs. As always, when we get into these cases, the timeline of what’s happened prior to the motion becomes very critical.
This case is a class action that was filed in November of 2019, alleging that Cricket engaged in a fraudulent scheme to market and sell 4G LTE devices and service plans to customers nationwide by falsely advertising coverage. According to the complaint, the alleged scheme ran from May 2012 until May 2014 when Cricket was acquired by AT&T. We’ve got that class period is 2012 to 2014. We’ve got this case that’s filed in 2019. What happened prior to that is also going to be really important.
In May of 2015, roughly a year after the class period ended, different plaintiffs brought an almost identical allegation in a case called Barraza v. Cricket Wireless. That case was before a judge also in the northern district of California.
Now, it’s really important to keep this in mind. Barraza was resolved before any class was certified, meaning that the resolution of the case applied only to the two named plaintiffs in that case. During the hearing in Barraza just prior to dismissal, Judge Alsup asked the parties if there was “any scenario” under which the merits of the case could come back to life, and the parties said no. He also asked counsel whether there was, quote, “any kind of side deal that allows you to go off and refile a similar case in some other court.” The parties also said no.
At the time of the Barraza dismissal, the statute of limitations had not run on the hundreds of thousands of other putative class members claims against Cricket. That’s really important to understand. Statute of limitations still open. Fast forward sixteen months to September of 2016, sixteen months after the Barraza complaint was filed, not after the dismissal. I don’t actually have the timing of the dismissal, but that would be key because you’ve got 16 months between the filing of these complaints.
Two of the named plaintiffs, that are here in our current case, filed suit against Cricket in Missouri federal court based on the same alleged misconduct during the same time period. The court refers to that case filed again in September of 2016 in Missouri as “Thomas I”. Doesn’t ever actually refer to our case as Thomas II, but for purposes of our conversation today, we’re going to do that to avoid confusion.
Thomas I was filed in September of 2016. Now, Thomas I was voluntarily dismissed without prejudice, subject to a tolling agreement that would toll the statute of limitations and allowed the parties to discuss early resolution. The tolling agreement expired on November 4th, 2019. This case, Thomas II was filed on November 4th, 2019. We’re now into Thomas II, that’s our current case that we’re talking about in the decision that we’re talking about today. During discovery in Thomas II, plaintiffs learned that after Barraza was resolved in December of 2015, Cricket discarded certain documents and data from the class period that plaintiffs believed would help substantiate their class allegations.
There’s nothing specific in the decision about the timing of the deletion, but it’s important to note that we’re not on a spoliation motion yet, we don’t have to talk about the duty to preserve and the timing of the deletion of the data and whether it accounts as spoliation, because what we’re on here is a motion to compel the production of the litigation hold or legal hold notice documents from Cricket.
What the court does indicate here is that Cricket took the following steps to delete information after the Barraza dismissal and we’ll see why this is important. They deleted custodial accounts of key decision makers who participated in directed or approved of the alleged fraud, including the CEO, COO, CFO, Chief of Strategy, Senior VPs of Product and Marketing, Devices Business Development and the Chief Marketing Officer. Basically, all the key players. They failed to preserve a single custodial account from a single member of the Sales and Operations Planning Committee, so didn’t keep any of those custodians, which was, according to the plaintiffs, a central decision making body responsible for more than 150 critical operating decisions. They failed to preserve critical sales data related to the 4G phone sales, including the price that customers would have paid for their devices, which would have been key to damages, and they failed to take steps to preserve the 4G advertisements it used during the class period. Of course, those would be crucial to determining whether or not the advertisements were fraudulent.
The plaintiffs argued here, on the motion to compel, that those actions by Cricket following the Barraza case constituted “preliminary evidence of spoliation”, and they wanted further evidence on the spoliation claims, hence why they’re asking for the legal hold or the litigation hold letters from Cricket.
Now, you’ve heard me talk on our #CaseoftheWeek series about moving for sanctions too early. And in fact, there was a short of article on law.com yesterday in which I was quoted talking about the number of decisions, or number of motions for sanctions that we see that are premature. Here we’re seeing the opposite. We’re seeing exactly what I’m always telling you. We’re seeing the plaintiffs nailing down all of the facts and making sure that they’ve got all of the information about whether there is, in fact, spoliation before they’re moving for sanctions. This is a really great example of exactly what we always talk about in terms of what you need to do before you move for sanctions.
On an initial motion before the court seeking these litigation hold notices — this is the decision from December 14, 2020 which is also included in eDiscovery Assistant — Cricket argued that the plaintiffs didn’t need to get the litigation hold notices yet, that they could instead take a 30(b)(6) deposition to discern the facts about how the litigation holds were put in place and what information was in the litigation holds versus having to produce the privilege hold notices and that that was the appropriate process. Really important point. Cricket is saying on the first motion to compel judge, don’t give them the notices, make them take a 30(b)(6) deposition.
Cricket’s already taken asked for information in written discovery about the data that was deleted. They’ve been given what they’ve been given, they’ve been given privilege logs. They haven’t been able to determine what they need. Now Cricket saying make them take a 30(b)(6).
The judge then agreed with the plaintiffs that the litigation hold notices were relevant, But said I’m not going to compel production of them right away. What I’m going to say is you need to take a 30(b)(6) deposition like Cricket suggesting and then if that’s not sufficient you can come back to me and you can renew that that this motion.
What the court also did on this December 14th ruling was provide specific guidance regarding the permissible categories of inquiry at the 30(b)(6) deposition. This is important. “The plaintiffs will have the opportunity to get answers about Cricket’s document preservation issues at the upcoming 30(b)6 deposition, and while the plaintiffs should not inquire specifically into how the litigation hold notices were worded or how they describe the legal issues in this or any other action, questions about the basic details surrounding the litigation holds are fair game.” That’s a direct quote from the court. This is further quote. “These basic details include:
- When and to whom the litigation hold notices were given.
- What kinds and categories of information and data Cricket employees were instructed to preserve and collect., and
- 3. What specific actions they were instructed to take on that end to preserve that information.
Plaintiffs then asked for and got two 30(b)(6) deponents from Cricket, but when they took the depositions of the 30(b)(6) deponents and asked about the individual categories of documents that were covered by the litigation hold, clearly a basic detail that the court had said they were entitled to, counsel instructed the witness not to answer the questions on grounds of privilege.
The court goes through a couple of examples, specific examples from the deposition and also says that they reviewed 800 pages of deposition testimony. In effect, to sum it up, the plaintiffs went through and asked whether advertising, customer records, data related to the price of consumer paid for a device, or retention policies were included in the litigation hold notice. Every single one of those questions was met with objection and refusal to answer by the witness based on privilege.
What we essentially have here is Cricket arguing on the first motion to compel that plaintiffs should be required to take a 30(b)(6) deposition and then plaintiffs taking a 30(b)(6) deposition and Cricket instructing its witnesses not to answer the basic details that the court ordered they were required to answer.
Then Thomas comes back, plaintiffs come back to the court on the motion to compel and says to the court, OK, we did what you said. We took the 30(b)(6) depositions. They won’t tell us what’s in the litigation hold notice. We still know that they have agreed that they destroyed all of this information following the dismissal of Barraza in 2015, and we have “preliminary evidence” of spoliation. We should be entitled to pursue additional evidence of that, and the only evidence that we can pursue further are these litigation hold notices to be able to understand whether they knew what their duty to preserve was and when it arose and what information should be preserved.
Like I said, the court looked at 800 pages of deposition testimony and then compelled the production of the litigation hold letters in Thomas to Barraza and a third case that was related, and said that it was appropriate and the only way that plaintiffs would get the information they needed to further investigate and possibly prove spoliation.
In reaching that conclusion, the court looked at the undisputed fact that Cricket had admittedly destroyed information and documents from the putative class period after Barraza was dismissed and found that those admissions raised enough questions about Cricket’s document retention and preservation effort. The fact that Cricket had refused to answer those questions through written discovery and now two 30(b)(6) depositions, that it was required to allow plaintiffs to take the initial step of discovering the content of the litigation hold notices so they could investigate and possibly prove spoliation.
Somewhat unrelated, but the court did deny production of litigation hold letters from two peripheral patent infringement actions that the plaintiff sought, but the court held were not going to be produced.
What are our takeaways from this case?
First, remember, I know I mentioned it a couple of times that this is a motion to compel production of legal hold letters, and not a motion for sanctions for spoliation yet. That’s really important just because of our takeaways. We’re going to have a lot to explore on the decision on a motion for sanctions, if it comes to that.
As a general rule, your litigation hold or legal hold notices are privileged. The contents of those documents are privileged. Who they are sent to, when they are sent, whether they are sent, that information is often discoverable, but the contents of the notices themselves are generally determined to be privileged.
What this case teaches us is that you have to know and understand the context in which you’re writing a litigation hold letter, and you also need to understand that if that litigation hold letter ever becomes discoverable, the contents of it will be free and open for the other side to see. When you are writing them, you have to keep that in mind. It’s hard to tell here in this case, what is in that litigation hold letter that could be so damaging such that Cricket would go through two motions to compel and to somewhat fruitless 30(b)(6) depositions, prior to providing the litigation hold letters, but there may be some very damaging information in there that they’re trying to put off and see whether there can be a resolution to the case or there’s probably a lot of legal strategy that’s happening in what Cricket’s doing in this particular case. The reality is that when you write your litigation hold letters, you need to plan that if at some point they become discoverable, that you have taken the actions that are set out in that letter and you will be able to defend them.
One thing that’s really important in this particular case, and I know that many of you who are out there are not dealing in class actions all the time, but this is important for our consistency across all of your clients’ matters. You need to understand what your clients have done in previous matters. Here I didn’t go back to all of these individual cases to see whether the same lawyers were representing Cricket on all of these different cases, and we talked about one from 2015, 2016, and now 2019. If there are different lawyers, did those lawyers look back at what those litigation hold letters said from Barraza and from Thomas I to Thomas II? So, do we have differences between the letters that are going to be a huge issue when it comes to the analysis producing those letters?
Did counsel recognize that in drafting a legal hold letter for Thomas II in 2019 after that case was filed, that data was deleted following Barraza? Did they know that already? Should their letter have been drafted differently because they would have known what information had been deleted? You’ve got to have a full understanding of your client’s data when you’re drafting those letters. Don’t consider them just a one off kind of throwaway thing where you’re just meeting your obligation to make sure you’re informing your witnesses. They are very important documents that need to be carefully thought through and how you’re wording them, and the history of what your client has done is going to impact them. Again, make sure that whatever information in there, if discovered, is not going to undermine your case.
We talked a little bit about how what counsel probably didn’t realize was that information that was deleted between Barraza and Thomas I before the statute of limitations had expired on the thousands of claims. We do have also a duty to preserve issue here that I’ll address in just a minute, but that’s going to be more of an issue on the motion for sanctions.
There are also, just from a timing perspective and putting all of this in context, there’s a huge amount of time that’s transpired between the time period of 2012 to 2014, which is the putative class period, the first case that was filed in 2015, the second case filed in 2016, and this other case filed in 2019. That’s seven years from the beginning of the putative class period during which time Cricket was acquired by AT&T, so the changes that were made to the IT systems and how Cricket was integrated with AT&T probably has a lot to do with why numerous systems were deleted following Barraza. There’s no information about that decision so I’m really just speculating, just trying to think through all the facts that could have impacted what happened here.
Now, there is information in this decision that says that Cricket provided a spreadsheet of information on custodians and database systems that were deleted or taken offline by Cricket following Barraza, a lot of that is documented and that’s fantastic. One of our big lessons on #CaseoftheWeek is document, document, document. That’s a great process and to be commended. We’ll see if this case shakes out on a motion for sanctions, whether that documentation is going to be sufficient on a duty to preserve argument.
One of the things that is going to come up is that duty to preserve. When does a duty to preserve disappear? We know that the duty to preserve arises when litigation is reasonably anticipated. Clearly, the filing of the complaint in May of 2015 would have created a duty to preserve. Given the merger between Cricket and AT&T Wireless, there might have been some sort of second request or investigation at a federal level where information would have been captured and preserved for purposes of that and provided to the federal government. If there was that information would have likely been discoverable had it been maintained. There’s lots of lots of discovery here, and the question becomes, when Barraza was dismissed in, I believe, December of 2015 and then you had nine months before the next complaint was filed, because the statute of limitations had not yet run on these hundreds of thousands of claims that had been identified by Judge Alsup, did Cricket continue to have a duty to preserve information? That’s going to be what’s going to play out in a potential motion for sanctions here. We’ll have to keep an eye on that and follow up on this case, and if such a motion is brought and we see a decision from Judge Tse, then we’ll bring that one to you.
What more could Cricket have done here? It’s a little strange to argue first for 30(b)(6) depositions and then instructed witnesses not to answer the questions that the judge said the plaintiffs were entitled to. There has to be some strategy going on here, otherwise there’s a whole lot of miscommunication among the teams and the previous lawyers that represented Cricket as to exactly what’s happening. But again, given that span of time that’s passed from the putative class period beginning in 2012, the acquisition, the numerous cases filed in different courts, there’s a lot of potential there for for gaps in communication.
As to privilege on the legal hold letters, and this is perhaps the most important takeaway here, the plaintiffs here were able to compel the production of those letters because they exhausted every avenue of written and oral discovery to get the information in the letters, AND they had a preliminary evidence of spoliation that they’d shown that the court held was permitted to be investigated by production of the letters.
So, we’ve got two things that happened here. First, we had the admission by Cricket that information had been deleted. You’ve got that preliminary evidence of spoliation. Secondly, you’ve got the plaintiffs using every tool in their arsenal to try and find the information about potential spoliation before asking for the letters.
At that point, the court said the only way you can continue to investigate the spoliation of which we already have some evidence is to get these letters. That’s a high bar to getting legal hold letters, and it’s appropriate. As we’ve said at the outset, legal or litigation hold letters are privileged as a general rule.
If you’re trying to compel production of legal hold letters, know that that’s the two step process that you’re going to have to meet in front of Judge Tse and likely in front of the Northern District of California. I haven’t seen too many other cases just like this one, so we’ll keep an eye out for it and any follow up that we see citing this decision in Thomas v. Cricket.
Keep this case in mind when you’re drafting your legal hold letters and when you have related cases. Make sure that you understand the history of what’s been done for your client in the past, what data might have been eliminated that you are including as broad categories in your litigation hold letters, certainly would not want to include categories of information that no longer existed, and be sure that your legal hold letters are sufficiently either broad enough to include information that continues to exist at your client or narrow enough to make sure that you’re taking into account what you know has already been destroyed.
Consistency in that process and use of discovery counsel to be able to manage that process effectively is also going to be key to be protecting your client’s interest here. Knowing your client’s data sources, understanding implications when you draft those legal notices is really key.
Those are the takeaways from Thomas v. Cricket Wireless and that is our #CaseoftheWeek for this week. Thank you so much for joining me. I’ll be back next week with another case chosen for you from eDiscovery Assistant.
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Have a great week. Stay safe and healthy. Hug your loved ones close if you can, and I’ll see you next week. Thanks again.