Honey, I know, I knowI know times are changingIt’s time we all reach outFor something new, that means you too.
I know, I know, it used to be good enough just to save the relevant emails and ESI on company computers. Not any more. Times are changing. Important business is now conducted by phone text and other messages. It’s time we all reach out and save something new, save the texts, save the phones. That directive applies to everyone, that means you too. Prince record company executives recently found that out the hard way in District Court in Minneapolis. Paisley Park Enters. v. Boxill, No. 0:17-cv-01212, (D. Minn., 3/5/19) (copy here: Prince_Discovery_Order).
United States Magistrate Judge Tony N. Leung sanctioned the record company defendant and its two top executives in a suit over the posthumous release of Prince’s “Deliverance” album. They were sanctioned because the plaintiff, the Prince Estate via Paisley Park, proved that the defendant executives intentionally destroyed text messages about the album. They denied bad intent and claim they did what they thought the law required, save the emails and office computer data. Defendants claimed they provided discovery from other sources of ESI, including their work computers, cooperated with a forensic data firm to ensure Plaintiffs obtained everything they sought, but, they further argue that Plaintiffs never asked to inspect their cell phones during this process. They claimed they did not know they also had to preserve their text messages.
I never meant to cause you any sorrow
I never meant to cause you any pain
I only wanted to one time to see you laughing
I only wanted to see you
Laughing in the purple rain
Judge Tony Leung was not laughing, purple rain or not. He did not believe defendants’ good faith intent argument. He was no more impressed by their “times are changing,” “we didn’t know” argument than Prince was in Purple Rain. In today’s world preservation of email is not enough. If text messages are how people did business, which was the case in Paisley Park, then these messages must also be preserved. As Judge Leung put it:
In the contemporary world of communications, even leaving out the potential and reality of finding the modern-day litigation equivalent of a “smoking gun” in text messages, e-mails, and possibly other social media, the Court is baffled as to how Defendants can reasonably claim to believe that their text messages would be immune from discovery.
Perhaps what really got to the judge was that these record executives not only the deleted the texts, they wiped the phones and then they threw them away. This was all before suit was filed, but they knew full well at the time that the Estate was going to sue them for copyright violations. As Judge Leung explained (emphasis added): “An e-discovery lawyer for Plaintiffs’ law firm indicates that had Staley and Wilson not wiped and discarded their phones, it might have been possible to recover the deleted messages. (ECF No. 387, p. 2).” (Note: this is the first time I can recall this expression “e-discovery lawyer” being used in an opinion.)
Text Message Spoliation Law
Judge Leung provides a good summary of the law.
The Federal Rules of Civil Procedure require that parties take reasonable steps to preserve ESI that is relevant to litigation. Fed. R. Civ. P. 37(e). The Court may sanction a party for failure for failure to do so, provided that the lost ESI cannot be restored or replaced through additional discovery. Id. Rule 37(e) makes two types of sanctions available to the Court. Under Rule 37(e)(1), if the adverse party has suffered prejudice from the spoliation of evidence, the Court may order whatever sanctions are necessary to cure the prejudice. But under Rule 37(e)(2), if the Court finds that the party “acted with the intent to deprive another party of the information’s use in the litigation,” the Court may order more severe sanctions, including a presumption that the lost information was unfavorable to the party or an instruction to the jury that it “may or must presume the information was unfavorable to the party.” The Court may also sanction a party for failing to obey a discovery order. Fed. R. Civ. P. 37(b). Sanctions available under Rule 37(b) include an order directing that certain designated facts be taken as established for purposes of the action, payment of reasonable expenses, and civil contempt of court.
Pgs.6-7
There is no doubt that Staley and Wilson are the types of persons likely to have relevant information, given their status as principals of RMA and owners of Deliverance. Nor can there be any reasonable dispute as to the fact that their text messages were likely to contain information relevant to this litigation. In fact, Boxill and other third parties produced text messages that they sent to or received from Staley and Wilson. Neither party disputes that those text messages were relevant to this litigation. Thus, the RMA Defendants were required to take reasonable steps to preserve Staley and Wilson’s text messages.
The RMA Defendants did not do so. First, Staley and Wilson did not suspend the auto-erase function on their phones. Nor did they put in place a litigation hold to ensure that they preserved text messages. The principles of the “standard reasonableness framework” require a party to “suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” Steves and Sons, Inc. v. JELD-WEN, Inc., 327 F.R.D. 96, 108 (E.D. Va. 2018) (citation and internal quotation marks omitted). It takes, at most, only a few minutes to disengage the auto-delete function on a cell phone. It is apparent, based on Staley’s affidavit, that he and Wilson could have taken advantage of relatively simple options to ensure that their text messages were backed up to cloud storage. (ECF No. 395, pp. 7-9). These processes would have cost the RMA Defendants little, particularly in comparison to the importance of the issues at stake and the amount in controversy here. Failure to follow the simple steps detailed above alone is sufficient to show that Defendants acted unreasonably.
Pgs. 8-9
But that is not all the RMA Defendants did and did not do. Most troubling of all, they wiped and destroyed their phones after Deliverance and RMA had been sued, and, in the second instance for Wilson, after the Court ordered the parties to preserve all relevant electronic information, after the parties had entered into an agreement regarding the preservation and production of ESI, and after Plaintiffs had sent Defendants a letter alerting them to the fact they needed to produce their text messages. As Plaintiffs note, had Staley and Wilson not destroyed their phones, it is possible that Plaintiffs might have been able to recover the missing text messages by use of the “cloud” function or through consultation with a software expert. But the content will never be known because of Staley and Wilson’s intentional acts. The RMA Defendants’ failure to even consider whether Staley and Wilson’s phones might have discoverable information before destroying them was completely unreasonable. This is even more egregious because litigation had already commenced.
Pg. 9
It is obvious, based on text messages that other parties produced in this litigation, that Staley and Wilson used their personal cell phones to conduct the business of RMA and Deliverance. It is not Plaintiffs’ responsibility to question why RMA Defendants did not produce any text messages; in fact, it would be reasonable for Plaintiffs to assume that Defendants’ failure to do so was on account of the fact that no such text messages existed. This is because the RMA Defendants are the only ones who would know the extent that they used their personal cell phones for RMA and Deliverance business at the time they knew or should have reasonably known that litigation was not just possible, but likely, or after Plaintiffs filed suit or served their discovery requests.
Furthermore, the RMA Defendants do not get to select what evidence they want to produce, or from what sources. They must produce all responsive documents or seek relief from the court. See Fed. R. Civ. P. 26(c) (outlining process for obtaining protective order).
Pg. 12
Having concluded that the RMA Defendants did not take reasonable steps to preserve and in fact intended to destroy relevant ESI, the Court must next consider whether the lost ESI can be restored or replaced from any other source. Fed. R. Civ. P. 37(e).
Pg. 13
While it is true that Plaintiffs have obtained text messages that Boxill and other parties sent to or received from Staley and Wilson, that does not mean that all responsive text messages have been recovered or that a complete record of those conversations is available. In particular, because Wilson and Staley wiped and destroyed their phones, Plaintiffs are unable to recover text messages that the two individuals sent only to each other. Nor can they recover text messages that Staley and Wilson sent to third parties to whom Plaintiff did not send Rule 45 subpoenas (likely because they were not aware that Wilson or Staley communicated with those persons). The RMA Defendants do not dispute that text messages sent between Staley and Wilson are no longer recoverable. . . .
At most, Plaintiffs now can obtain only “scattershot texts and [e-mails],” rather than “a complete record of defendants’ written communications from defendants themselves.” First Fin. Sec., Inc. v. Lee, No. 14 cv-1843, 2016 WL 881003 *5 (D. Minn. Mar. 8, 2016). The Court therefore finds that the missing text messages cannot be replaced or restored by other sources.
Pgs. 13-14
There is no doubt that Plaintiffs are prejudiced by the loss of the text messages. Prejudice exists when spoliation prohibits a party from presenting evidence that is relevant to its underlying case. Victor Stanley, 269 F.R.D. at 532. As set forth above, in the Court’s discussion regarding their ability to replace or restore the missing information, Plaintiffs are left with an incomplete record of the communications that Defendants had with both each other and third parties. Neither the Court nor Plaintiffs can know what ESI has been lost or how significant that ESI was to this litigation. The RMA Defendants’ claim that no prejudice has occurred is “wholly unconvincing,” given that “it is impossible to determine precisely what the destroyed documents contained or how severely the unavailability of these documents might have prejudiced [Plaintiffs’] ability to prove the claims set forth in [their] Complaint.” Telectron, Inc. v. Overhead Door Corp., 116 F.R.D. 107, 110 (S.D. Fl. 1987); see also Multifeeder Tech., Inc. v. British Confectionary Co. Ltd, No. 09-cv-1090, 2012 WL 4128385 *23 (D. Minn. Apr. 26, 2012) (finding prejudice because Court will never know what ESI was destroyed and because it was undisputed that destroying parties had access to relevant information), report and recommendation adopted in part and rejected in part by 2012 WL 4135848 (D. Minn. Sept. 18, 2012). Plaintiffs are now forced to go to already existing discovery and attempt to piece together what information might have been contained in those messages, thereby increasing their costs and expenses. Sanctions are therefore appropriate under Rule 37(e)(1).
Sanctions are also appropriate under Rule 37(e)(2) because the Court finds that the RMA Defendants acted with the intent to deprive Plaintiffs of the evidence. “Intent rarely is proved by direct evidence, and a district court has substantial leeway to determine intent through consideration of circumstantial evidence, witness credibility, motives of the witnesses in a particular case, and other factors.” Morris v. Union Pacific R.R., 373 F.3d 896, 901 (8th Cir. 2004). There need not be a “smoking gun” to prove intent. Auer v. City of Minot, 896 F.3d 854, 858 (8th Cir. 2018). But there must be evidence of “a serious and specific sort of culpability” regarding the loss of the relevant ESI. Id.
Pgs. 15-16
The Court can draw only one conclusion from this set of circumstances: that they acted with the intent to deprive Plaintiffs from using this information. Rule 37(e)(2) sanctions are particularly appropriate as to Wilson, RMA, and Deliverance for this reason as well.
Pg. 17
The Court believes that Plaintiffs’ request for an order presuming the evidence destroyed was unfavorable to the RMA Defendants and/or for an adverse inference instruction may well be justified. But given the fact that discovery is still on-going, the record is not yet closed, and the case is still some time from trial, the Court believes it more appropriate to defer consideration of those sanctions to a later date, closer to trial. See Monarch Fire Protection Dist. v. Freedom Consulting & Auditing Servs., Inc., 644 F.3d 633, 639 (8th Cir. 2011) (holding that it is not an abuse of discretion to defer sanction considerations until trial). At that point, the trial judge will have the benefit of the entire record and supplemental briefing from the parties regarding the parameters of any such instruction or presumption.
The Court will, however, order the RMA Defendants to pay monetary sanctions pursuant to Rules 37(b), and 37(e) and the Court’s pretrial scheduling orders.
Pgs. 18-19
The Court will therefore order, pursuant to Rules 37(b)(2)(C), 37(e)(1), and 37(e)(2) and the Court’s pretrial scheduling orders, the RMA Defendants to pay reasonable expenses, including attorney’s fees and costs, that Plaintiffs incurred as a result of the RMA Defendants’ misconduct. The Court will order Plaintiffs to file a submission with the Court detailing such expenses and allow the RMA Defendants the opportunity to respond to that submission. In addition, pursuant to Rule 37(e)(2) and the Court’s pretrial scheduling order, the Court will also order the RMA Defendants to pay into the Court a fine of $10,000. fn3 This amount is due within 90 days of the date of this Order.
Pg. 20
Let’s close with the original music of Prince.
Posted by Ralph Losey 
It’s Mueller Time! I predict we will be hearing this call around the world for decades, including boardrooms. Organizations will decide to investigate themselves on sensitive issues before the government does, or before someone sues them and triggers formal discovery. Not always, but sometimes, they will do so by appointing their own independent counsel to check on concerns. The Boards of tomorrow will not look the other way. If Robert Muller himself later showed up at their door, they would be ready. They would thank their G.C. that they had already cleaned house.
Most companies who decide it is Mueller Time, will probably not investigate themselves in the traditional “full calorie” Robert Muller way, as good as that is. Instead, they will order a less expensive, AI based investigation, a Mueller Lite. The “full calorie” traditional legal investigation is very expensive, slow and leaky. It involves many people and linear document review. The AI Assisted alternative, the Mueller Lite, will be more attractive because of its lower cost. It will still be an independent investigation, but will rely primarily on internal data and artificial intelligence, not expensive attorneys.
Robert Mueller investigations typically cost millions and involves large teams of expensive professionals. AI Assisted investigations are cheap by comparison. That is because they emphasize company data and AI search of the data, mostly the communications, and need so few people to carry out. This new kind of investigation allows a company to quietly look into and take care of its own problems. The cost savings from litigation avoidance, and bad publicity, can be compelling. Plus it is the right thing to do..
The computer “reads” or reviews at nearly the speed of light and is 100% consistent. But it has no knowledge on its own. An idiot savant. The AI cannot do anything without its human handlers and trainers. It is basically a learning machine designed to sort large collections of texts into binary sets, typically relevant or irrelevant.
This new legal service allows concerned management to proactively investigate upon the first indications of possible wrong-doing. It allows you to have greater assurance that you really know what is going on in your organization. Management or the Board then retains an independent team of legal experts to conduct the quick E-Vestigation. The team provides subject matter expertise on the suspected problem and uses active machine learning to quickly search and analyze the data. They search for preliminary indications of what happened, if anything. This kind of search is ideal for sensitive legal inquiries. It gives management the information needed without breaking the bank or publicizing the results.
E-Vestigations are a pre-litigation legal service that relies heavily on artificial intelligence, but not entirely. Investigations like this are very complex. They are nowhere near a fully automated process, and as mentioned the AI is really just a learning machine that knows nothing except how to learn document relevance. The service still needs legal experts, but a much smaller team
The glory days of litigation are over. All trial lawyers who, like me, have lived through the last forty years of legal practice, have seen it change dramatically. Litigation has moved from a trial and discovery practice, where we saw each other daily in court, to a discovery, motion and mediation practice where we communicate by email and occasional calls.
But the times were a changing. In the nineties and first decade of the 21st Century, trials quickly disappeared. Instead, Mediation started to take over. I know, I was in the first group of lawyers ever to be certified as a Mediator of High Technology disputes in 1989. All types of cases began to settle earlier and with less preparation. I have seen cases settle at Mediation where none of the attorneys knew the facts. They just knew what their clients told them. Even more often, only one side was prepared a knew the facts. The other was just “shooting from the hip.”
E-Vestigations are confidential, internal investigations that focus on search of client data and metadata. They uses Artificial Intelligence to search and retrieve information relative to the client’s requested investigation, their information need. We use an AI machine training method that we call Hybrid Multimodal Predictive Coding 4.0. The basic search method is explained in the open-sourced 
E-Vestigation is done outside of Litigation and court involvement, usually to try to anticipate and avoid Litigation. Are the rumors true, or are the allegations just a bogus attempt to extort a settlement? E-Vestigations are by nature private, confidential investigations, not responses to formal discovery. AI Assisted investigations rely primarily on what the data says, not the rumors and suspicions, or even what some people say. The analysis of vast volumes of ESI is possible, even with millions of files, because e-Vestigations use Artificial Intelligence, both passive and active machine learning. Otherwise, the search of large volumes of ESI takes too long and is too prone to inaccuracies. That is the main reason this approach is far less expensive than traditional “full calorie” Muller type investigations.
Defendants in criminal cases will still plea out, but based on the facts, on truth, not threats. Defendants in civil cases will do the same. So will the plaintiff in civil cases who makes unsubstantiated allegations. Facts and truth protect the innocent. Most of that information will be uncovered in computer systems. In the right hands, E-Vestigations can reveal all. It is a proactive alternative to Litigation with expensive settlements. The AI data review features of E-Vestigations make it far less expensive than a Muller investigations. Is it Mueller Time for your organization?
I find this kind of constant monitoring to be distasteful. For me, it is too Big Brother and oppressive to have AI looking at my every email. It stifles creativity and, I imagine, if this was in place, would make me overly cautious in my communications. Plus, I would be very concerned about software error. If some baby AI is always on, always looking for suspicious patterns, it could make mistakes. The programming of the software almost certainly contains a number of hidden biases of the programmers, typically young white dudes.
Stealthiness:
Speed:
As discussed, the rise and commoditization of Mediation over the last twenty years has had unintended consequences. The move from the courtroom to the mediator’s office in turn caused the Law to move from objective to subjective opinion. Discussion of the consequences of mediation, and the subjectivist attitude it brings, complicates my analysis of the death of Litigation, but is necessary. Litigation did not turn into private investigation work. One did not flow into another. Litigation is not changing directly into private Investigations, AI assisted or not. Mediation, and its unexpected consequences, is the intervening stage.
Most of my Mediator friends strongly disagree, but I have never heard a compelling argument to the contrary. The death of the trial is a stunning development. But mediation has had another impact. One that I have not seen discussed previously. It has not only killed trials, it has killed the whole notion of objective truth. It has led to a mediation mind-set where the “merits” are just a matter of opinion. Where cost of defense and the time value of money are the main items of discussion.
Objective accounts of what happened in the past are not only possible, they are probable in today’s Big Data world. Your Alexa or Google speakers may have part of the record. So too may your iWatch or Fitbit. Soon your refrigerator will too. Data is everywhere. Privacy is often an illusion. (Sigh.) The opportunity of liars and other scoundrels to “get away with it” and fool people is growing smaller every day. Fortunately, if lawyers can just learn a few new evidence search skills, they can use AI to help them find the information they need.
As Michiko Kakutani said in her book, 
The truth is attainable, but requires dedication and skilled efforts by everyone on a legal team to find it. It requires knowledge of course, and a proven method, but also impartiality, discipline, intelligence and a sense of empathy. It requires experience with what the AI can do, and just as important, what it cannot do. It requires common sense. Lawyers have that. Jurors have that.
In Part Two we consider the last seven gifts from the beloved client and how to deal with the problems and opportunities these presents present. Suggest you 
The issue here is reasonability of search effort. It arises out of Rule 26(g) and the requirement that a search in response to a request for ESI must be reasonable. Good faith is presumed under the Rules because attorneys of record in the court proceeding are in charge of the discovery effort. They have a duty to the court in which they are allowed to appear as a member of the Court’s Bar. The trial attorneys may delegate to specialized experts, to be sure, but counsel of record signing the 26(g) response is the attorney ultimately responsible.
What a great gift. This may be the evidence you need, literally, to prove that the other side is cheating on their discovery obligations, maybe even trying to hide the ball. That is game-changing news. Verify and authenticate first, as we will discuss with twelfth present. After you authenticate, then you may want to keep it secret for a while. See if gotcha-traps of counter-discovery might be possible to get them to lie even more, to dig the grave deeper. This is in accord with the general examination principle that when a witness is lying, go along with it, pretend you believe, and maybe they will embellish further under oath. Then, when you have their detailed lie as sworn testimony under oath, confront them with the lies. Every good lawyer deserves a Perry Mason moment. Every good liar in turn deserves their own Mueller moment of impeachment.
Same drill as with the iPhones, get all this data, and remember, there could be hundreds of millions of files with that many USB drives, into a forensic engineer’s hands ASAP. Preserve, cull and get some of the ESI into a database for review. Find the needles of important ESI in the vast haystacks of irrelevant data.
First thing to do is get the labels and all other information from the client about these tapes. You don’t want to pay an outside vendor to tell you what is on the client’s tapes, but that is always possible if they are truly a mystery. Do they have to be preserved? Do they also have to be searched? Why?
When a “too good to be true” electronic documents are your present, inspect them very carefully, especially the metadata. It might be a fake. The smoking gun might be smoke and mirrors. Question your client about the background and origin of all ESI, but especially hot documents that appear unexpectedly and late in a case. You have a legal and ethical duty to do so. See Eg: Lawrence v. City of N.Y., Case No. 15cv8947 (SDNY, 7/27/18) 
What do you do
When you find that a custodian Tweets, and he or she tells you during the interview that some of the Tweets “might” have pertained in some way to the “topic in dispute,” then you have to preserve them. You may also want to go ahead and have them reviewed or read them yourself. Ask the Twitterers to show you a few. Get hands-on ASAP. Most tweets are public.
Stinky spoliation reports, by which we mean real serious and extensive reports of ESI destruction, are the worst presents of all. They can make an easy winning case into a big loser. Three reports of ESI being lost or destroyed in the normal course, but after the duty to preserve was triggered, is a lot of sanctions trouble. Spoliation problems of any kind can make the client look bad, usually far worse than they in fact are, because most of these situations are triggered by errors and omissions. But sometimes the ESI destruction was not accidental, it was intentional, bad faith and your client faces serious sanctions. See: The Jimi Hendrix Experience: Sanctions For Destruction (e-Discovery team, 12/02/18) (article on 
Here it is not the present itself that concerns us, but the way it was delivered. You, the attorneys, do not want to receive the thumb drives, you want your computer engineers to receive and safeguard the large data stores. You want the professionals to take custody and safeguard the ESI. If you are like me and have a vendor who does the set up and management of your document review databases, then you will want the electronic storage devices – here the four drives – to be sent directly from the client to the vendor.
Ralph has long been a leader of the world's tech lawyers. He has presented at hundreds of legal conferences and CLEs around the world. Ralph has written over two million words on e-discovery and tech-law subjects, including seven books. He is also the founder of 
Ralph is a specialist who has limited his legal practice to electronic discovery and tech law since 2006. He has a special interest in software and the search and review of electronic evidence using 
