Wednesday, January 25, 2023

36 states, Epic Games, Match Group allege Google had 'culpable state of mind' when auto-deleting relevant Google-internal chat messages: Google obviously denies

It's getting really serious now in the Google Chats discovery dispute that is part of the Google Play Store antitrust litigation in the Northern District of California (the plaintiffs are Epic Games, Match Group (Tinder), three dozen state AGs, and some consumer class-action plaintiffs). For a recap:

The following screenshot shows the first part of the Google-internal policy at issue (Google Chat Retention Policy; click on the image to enlarge):

Judge James Donato approved the parties' proposed briefing schedule for the Google Chats discovery dispute. The two post-evidentiary-hearing briefs, answering specific questions about what to make of the evidence and what remedies to potentially impose, were due yesterday (Tuesday, January 24). By coincidence, that was the day the United States Department of Justice and eight state AGs filed a second Unite States et al. v. Google antitrust lawsuit (in that case, over ad tech), so some governmental plaintiffs dealt Google two blows on the same day.

Either side is allowed to file a response on Friday (January 27), and the next hearing over the issue will be held on Tuesday (January 31).

Given that there will be another round of briefing, it may be a bit early to predict the outcome, but I'll share my observations based on what I've read so far and what I infer from the court's case management decisions:

I doubt that Judge Donato will ultimately have no problems with Google's conduct. The company argues that it produced millions of documents and seeks to downplay the importance of what was not preserved, but it apparently can't deny the most important allegations the diverse group of plaintiffs has made.

It looks to me like this is now mostly about two questions:

  • The Latin term for the first question--whether Google acted with a culpable state of mind--is mens rea, but this here is not a criminal case. The plaintiffs jointly (which is rather meaningful) take the firm position that Google did act with a culpable state of mind. It did mean to deprive the plaintiffs of relevant evidence. Google disputes this and suggests that it had other reasons for auto-deleting internal chats, and points to long-standing practice.

  • If Google is held responsible, what should the consequences be?

    • The plaintiffs ask the court to instruct the jury that it's not going to see all the evidence that is relevant, and "should infer that Chat messages destroyed by Google would have been unfavorable to Google in this case."

    • Google says there wasn't really much prejudice (if any) to plaintiffs, and the remedy must be proportionate. It proposes--without actually submitting a specific wording--a "neutral" instruction. Google would then like to present evidence about the chat issue in hopes of persuading the jury that it acted diligently and correctly--and would then like to leave it to the jury to draw whatever conclusions from this mess.

There is no question that what the plaintiffs propose would substantially up the ante for Google in the jury trial in the fall. It's not like a "terminating sanction" that ends the debate: the jury is going to hear and see plenty of other evidence, and won't necessarily assume that the deleted chats prove everything wrong that Google says. But there are contexts in which an adverse inference instruction could tip the scales, such as the question of whether Google's "Project Hug" was about maintaining its Android app distribution monopoly through anticompetitive agreements with the likes of Activision Blizzard King. Some court filings related to Epic Games and Match Group's motion to amend the complaint referred to some evidence that "Project Hug" was about the Google Play Store more than anything else, and triggered by fear of Epic-style defections; I'll talk about that in another post one of these days. Now, if the jury additionally has to assume that Google executives may have said in internal chats that it was all about maintaining the Android app distribution monopoly, that would pave the way for a finding of a per se violation of Sherman Act Section 1. That's just one (but rather important) example.

Was Google's systematic deletion of chat messages so outrageous as to justify such punishment? Let's see what the responsive filings say before the weekend. In another disovery dispute (over a less problematic issue, though), Google came away unscathed in the District of Columbia last year.

I remember at least one mandamus petition by Google ahead of a major trial in the Northern District of California, and wouldn't be surprised if Google immediately appealed an adverse inference instruction to the Ninth Circuit (though appeals courts generally prefer to hear appeals of final judgments, which is why in 2020 the Federal Circuit rejected a mandamus petition over such sanctions), but we're not there yet.

Here are the two post-evidentiary-hearing briefs with all the (public) exhibits:

In Re Google Play Store Antitrust Litigation (case no. 3:21-md-2981-JD, N.D. Cal.): Plaintiffs' Responses to Minute Order Questions

In Re Google Play Store Antitrust Litigation (case no. 3:21-md-2981-JD, N.D. Cal.): Defendants' Brief in Response to the Court's Questions Regarding Preservation of Chat Messages

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