Purple Rain of Sanctions Falls on the Record Company in the “Prince Case” for their Intentional Destruction of Text Messages

March 10, 2019

Honey, I know, I know
I know times are changing
It’s time we all reach out
For something new, that means you too.
Purple Rain
PRINCE Rogers Nelson
1958-2016

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.

One is reminded of the first verse to Purple Rain:
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.

 

 


Happy Birthday to Abraham Lincoln, America’s First Tech-Lawyer

February 12, 2019

Lincoln in his lawyer phaseAbraham Lincoln was born on February 12, 1809. He was probably our greatest President. Putting aside the tears honest Abe must now be shedding over his political party, it is good to remember Lincoln as an exemplar of a U.S. lawyer. All lawyers would benefit from emulating aspects of his Nineteenth Century legal practice and Twenty First Century thoughts on technology. He was honest, diligent, a deep thinker and ethical. Very ethical. He did not need to be lectured on Cooperation and Rule 1. He also did not need to be told to embrace technology, not hide from it. In fact, he was a prominent Tech-Lawyer of his day, well known for his speaking abilities on the subject. Near the end of his legal career Abe was busy pushing technology and his vision of the future. Sound familiar dear readers? It should. Most of you are like that.

Close up of Lincoln's face on April 10, 1865

Lincoln Was a Technophile

Lincoln was as obsessed with the latest inventions and advances in technology as any techno-geek e-discovery lawyer alive today. The latest things in Lincoln’s day were mechanical devices of all kinds, typically steam-powered, and the early electromagnetic devices, then primarily the telegraph. Indeed, the first electronic transmission from a flying machine, a balloon, was a telegraph sent from inventor Thaddeus Lowe to President Lincoln on June 16, 1861. Unlike Lincoln’s generals, he quickly realized the military potential of flying machines and created an Aeronautics Corps for the Army, appointing Professor Lowe as its chief. See Bruce, Robert V., Abraham Lincoln and the Tools of War. Below is a copy of a handwritten note by Lincoln introducing Lowe to General Scott.

Lincoln's handwritten introduction of Professor Lowe

At the height of his legal career, Lincoln’s biggest clients were the Googles of his day, namely the railroad companies with their incredible new locomotives. These newly rich, super-technology corporations dreamed of uniting the new world with a cross-country grid of high speed transportation. Little noticed today is one of Lincoln’s proudest achievements as President, the enactment of legislation that funded these dreams, the Pacific Railway Act of 1862. The intercontinental railroad did unite the new world, much like the Internet and airlines today are uniting the whole world. A lawyer as obsessed with telegraphs and connectivity as Lincoln was would surely have been an early adopter of the Internet and an enthusiast of electronic discovery.  See: Abraham Lincoln: A Technology Leader of His Time (U.S. News & World Report, 2/11/09).

Abraham Lincoln loved technology and loved to think and talk about the big picture of technology, of how it is used to advance the dreams of Man. In fact, Lincoln gave several public lectures on technology, having nothing to do with law or politics. The first such lecture known today was delivered on April 6, 1858, before the Young Men’s Association in Bloomington, Illinois, and was entitled “Lecture on Discoveries and Inventions.” In this lecture, he traced the progress of mankind through its inventions, starting with Adam and Eve and the invention of the fig leaf for clothing. I imagine that if he were giving this speech today (and I’m willing to try to replicate it should I be so invited) he would end with AI and blockchain.

In Lincoln’s next and last lecture series first delivered on February 11, 1859, known as “Second Lecture on Discoveries and Inventions,” Lincoln used fewer biblical references, but concentrated instead on communication. For history buffs, see the complete copy of Lincoln’s Second Lecture, which, in my opinion, is much better than the first. Here are a few excerpts from this little known lecture:

The great difference between Young America and Old Fogy, is the result of Discoveries, Inventions, and Improvements. These, in turn, are the result of observation, reflection and experiment.

Writing – the art of communicating thoughts to the mind, through the eye – is the great invention of the world. Great in the astonishing range of analysis and combination which necessarily underlies the most crude and general conception of it, great, very great in enabling us to converse with the dead, the absent, and the unborn, at all distances of time and of space; and great, not only in its direct benefits, but greatest help, to all other inventions.

I have already intimated my opinion that in the world’s history, certain inventions and discoveries occurred, of peculiar value, on account of their great efficiency in facilitating all other inventions and discoveries. Of these were the arts of writing and of printing – the discovery of America, and the introduction of Patent-laws.

Can there be any doubt that the lawyer who wrote these words would instantly “get” the significance of the total transformation of writing, “the great invention of the world,” from tangible paper form, to intangible, digital form?  Can there be any doubt that a lawyer like this would understand the importance of the Internet, the invention that unites the world in a web of inter-connective writing, where each person may be a printer and instantly disseminate their ideas “at all distances of time and of space?”

Lincoln standing by his generals in the field; close up

Abraham Lincoln did not just have a passing interest in new technologies. He was obsessed with it, like most good e-discovery lawyers are today. In the worst days of the Civil War, the one thing that could still bring Lincoln joy was his talks with the one true scientist then residing in Washington, D.C., the first director of the Smithsonian Institution, Dr. Joseph Henry, a specialist in light and electricity. Despite the fact that Henry’s political views were anti-emancipation and virtually pro-secession, Lincoln would sneak over to the Smithsonian every chance he could get to talk to Dr. Henry. Lincoln told the journalist, Charles Carleton Coffin:

My visits to the Smithsonian, to Dr. Henry, and his able lieutenant, Professor Baird, are the chief recreations of my life…These men are missionaries to excite scientific research and promote scientific knowledge. The country has no more faithful servants, though it may have to wait another century to appreciate the value of their labors.

Bruce, Lincoln and the Tools of War, p. 219.

Lincoln was no mere poser about technology and inventions. He walked his talk and railed against the Old Fogies who opposed technology. Lincoln was known to be willing to meet with every crackpot inventor who came to Washington during the war and claimed to have a new invention that could save the Union. Lincoln would talk to most of them and quickly separate the wheat from the chaff. As mentioned, he recognized the potential importance of aircraft to the military and forced the army to fund Professor Lowe’s wild-eyed dreams of aerial reconnaissance. He also recognized another inventor and insisted, over much opposition, that the army adopt his new invention: Dr. Richard Gatling. His improved version of the machine gun began to be used by the army in 1864, and before that, the Gattling guns that Lincoln funded are credited with defending the New York Times from an invasion by “anti-draft, anti-negro mobs” that roamed New York City in mid-July 1863. Bruce, Lincoln and the Tools of War, p. 142.

As final proof that Lincoln was one of the preeminent technology lawyers of his day, and if he were alive today, surely would be again, I offer the little known fact that Abraham Lincoln is the only President in United States history to have been issued a patent. He patented an invention for “Buoying Vessels Over Shoals.” It is U.S. Patent Number 6,469, issued on May 22, 1849. I could only find the patent on the USPTO web, where it is not celebrated and is hard to read. So as my small contribution to Lincoln memorabilia in the bicentennial year of 2009, I offer the complete copy below of Abraham Lincoln’s three page patent. You should be able to click on the images with your browser to enlarge and download.

Lincoln Patent Pg. 1
Lincoln Patent Pg. 2Lincoln Patent Pg. 3 (Drawings)

The invention consisted of a set of bellows attached to the hull of a ship just below the water line. After reaching a shallow place, the bellows were to be filled with air that buoyed the vessel higher, making it float higher and off the river shoals. The patent application was accompanied with a wooden model depicting the invention. Lincoln whittled the model with his own hands. It is on display at the Smithsonian and is shown below.

Lincoln Hand-Carved Wooden Model of Patent

Lincoln Filing Invention at Patent Office (fictionalized depiction)

Conclusion

On Abe Lincoln’ birthday it is worth recalling the long, prestigious pedigree of Law and Technology in America. Lincoln is a symbol of freedom, emancipation. He is also a symbol of Law and Technology.  If Abe were alive today, I have no doubt he would be, among other things, a leader of Law and Technology.

Stand tall friends. We walk in long shadows and, like Lincoln, we shall overcome the hardships we face. As Abe himself was fond of saying: down with the Old Fogies; it is young America’s destiny to embrace change and lead the world into the future. Let us lead with the honesty and integrity of Abraham Lincoln. Nothing less is acceptable.



Do TAR the Right Way with “Hybrid Multimodal Predictive Coding 4.0”

October 8, 2018

The term “TAR” – Technology Assisted Review – as we use it means document review enhanced by active machine learning. Active machine learning is an important tool of specialized Artificial Intelligence. It is now widely used in many industries, including Law. The method of AI-enhanced document review we developed is called Hybrid Multimodal Predictive Coding 4.0. Interestingly, reading these words in the new Sans Forgetica font will help you to remember them.

We have developed an online instructional program to teach our TAR methods and AI infused concepts to all kinds of legal professionals. We use words, studies, case-law, science, diagrams, math, statistics, scientific studies, test results and appeals to reason to teach the methods. To balance that out, we also make extensive use of photos and videos. We use right brain tools of all kinds, even subliminals, special fonts, hypnotic images and loads of hyperlinks. We use emotion as another teaching tool. Logic and Emotion. Sorry Spock, but this multimodal, holistic approach is more effective with humans than an all-text, reason-only approach of Vulcan law schools.

We even try to use humor and promote student creativity with our homework assignments. Please remember, however, this is not an accredited law school class, so do not expect professorial interaction. Did we mention the TAR Course is free?

By the end of study of the TAR Course you will know and remember exactly what Hybrid Multimodal means. You will understand the importance of using all varieties of legal search, for instance: keywords, similarity searches, concept searches and AI driven probable relevance document ranking. That is the Multimodal part. We use all of the search tools that our KL Discovery document review software provides.

 

The Hybrid part refers to the partnership with technology, the reliance of the searcher on the advanced algorithmic tools. It is important than Man and Machine work together, but that Man remain in charge of justice. The predictive coding algorithms and software are used to enhance the lawyers, paralegals and law tech’s abilities, not replace them.

By the end of the TAR Course you will also know what IST means, literally Intelligently Spaced Training. It is our specialty technique of AI training where you keep training the Machine until first pass relevance review is completed. This is a type of Continuous Active Learning, or as Grossman and Cormack call it, CAL. By the end of the TAR Course you should also know what a Stop Decision is. It is a critical point of the document review process. When do you stop the active machine teaching process? When is enough review enough? This involves legal proportionality issues, to be sure, but it also involves technological processes, procedures and measurements. What is good enough Recall under the circumstances with the data at hand? When should you stop the machine training?

We can teach you the concepts, but this kind of deep knowledge of timing requires substantial experience. In fact, refining the Stop Decision was one of the main tasks we set for ourself for the  e-Discovery Team experiments in the Total Recall Track of the National Institute of Standards and Technology Text Retrieval Conference in 2015 and 2016. We learned a lot in our two years. I do not think anyone has spent more time studying this in both scientific and commercial projects than we have. Kudos again to KL Discovery for helping to sponsor this kind of important research  by the e-Discovery Team.

 

 

Working with AI like this for evidence gathering is a newly emerging art. Take the TAR Course and learn the latest methods. We divide the Predictive Coding work flow into eight-steps. Master these steps and related concepts to do TAR the right way.

 

Pop Quiz: What is one of the most important considerations on when to train again?

One Possible Correct Answer: The schedule of the humans involved. Logistics and project planning is always important for efficiency. Flexibility is easy to attain with the IST method. You can easily accommodate schedule changes and make it as easy as possible for humans and “robots” to work together. We do not literally mean robots, but rather refer to the advanced software and the AI that arises from the machine training as an imiginary robot.

 

 

 

 

 

 

 

 

 


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