Friday, February 24, 2023

DOJ seeks sanctions over Google's systematic deletion of chats: more cross-pollination between United States et al. v. Google (D.C.) and In Re Google Play Antitrust Litigation (N.D. Cal.)

In the first of its two (possibly soon to be three) Google antitrust lawsuits, the Department of Justice filed a motion yesterday with the United States District Court for the District of Columbia, requesting that Judge Amit P. Mehta impose spoliation-of-evidence sanctions on Google over its systematic deletion of "history off" Google Chats after 24 hours. The motion proposes an evidentiary hearing over this issue.

This is only the latest example of United States et al. v. Google (in the District of Columbia) and In Re Google Play Antitrust Litigation (Northern District of California) being two highly interdependent cases--with some of the interdependencies being more than just procedural in nature. This blog has talked more about the Google chat preservation issue than any other (at least any other non-paywalled) website because the issue first arose in San Francisco (where the plaintiffs are three dozen state AGs, Epic Games (Fortnite), Match Group (Tinder), and some class-action lawyers). The DOJ motion explicitly refers in its D.C. motion to the California case, where an evidentiary hearing over this same issue was already held last month. The DOJ makes it clear that the developments in California inspired the motion in Washington. For example, two of the headlines speak for themselves:

"After The Epic Sanctions Motion, The United States Raised Concerns Regarding Spoliation In This Case"

"The Subsequent Epic Evidentiary Hearing Reveals Document Destruction"

Here are some previous FOSS Patents post on the Google Chats sanctions process in California (in reversely chronological order):

There have previously been at least two other overlaps, connections, and interdependencies between those two Google antitrust cases:

Back to the Google Chats discovery dispute: Let me first show you the DOJ's motion and then also the most recent minute order by Judge Donato in San Francisco, which shows that the noose may be tightening quickly around Google's neck now.

United States of America et al. v. Google (case no. 1:20-cv-3010-APM, D.D.C.): Memorandum in Support of the United States' Motion for Sanctions Against Google, LLC And an Evidentiary Hearing to Determine the Appropriate Relief

In my interpretation, the motion suggests that the DOJ has drawn a similar conclusion from watching the sanctions process in California as I did when I said (in one of the posts I linked to further above) that Epic and its co-plaintiffs had presented smoking guns. But the DOJ also had to act now with a view to the September trial date. The motion assures the court that the sanctions process does not require postponing the actual trial, and that makes sense--but they couldn't wait forever.

Last spring, Google came away unscathed in D.C. over another discovery issue: its "Communicate with Care" policy, which in the DOJ's opinion abused the attorney-client privilege. Some reference to "Communicate with Care" is also made in the latest motion, but the case for sanctions is now a lot stronger, and the key difference actually relates to what the consequences should be: if evidence has been destroyed, for which there is an extremely strong case here, the solution can't just be to go over a bunch of emails again and revisit privilege assertions like in the "Communicate with Care" context. There has to be an inference.

The DOJ says "Google’s daily destruction of written records prejudiced the United States by depriving it of a rich source of candid discussions between Google’s executives, including likely trial witnesses." Also: "Google destroyed written records covering nearly four years of employee communications, and those records likely would have been especially probative."

More specifically, the DOJ describes the potential impact of Google's systematic-automatic deletion of chats on the D.C. case by pointing to testimony according to which two Google executives chatted--with "history off"--about "Project Banyan, ... a potential collaboration with Samsung on app stores" that according to the DOJ was "worth hundreds of millions of dollars." That Project Banyan is at issue in both the California case over the Google Play Store and the D.C. case. A footnote of the DOJ's motion notes that "[Google executive] Mr. Rosenberg was shown Project Banyan documents during his deposition in [the D.C.] case."

The sanctions process in San Francisco is already at an advanced stage. It seems to me--and I say this with caution because I didn't attend any of the hearings (and the most interesting parts may have happened behind closed doors anyway)--that Judge Donato in California managed the sanctions process very well with his iterative approach. Step by step he obtained clarifications and asked the parties to make their arguments. Last week he entered the following minute order, which suggests that sanctions indeed loom large:

ORDER. For Google's production of additional chats, see MDL Dkt. Nos. 440, 451, Google must at minimum produce all chats that have been preserved for Custodians 1 through 383 (as identified in Dkt. No. 429-2) that are: (1) responsive to any search term the parties have agreed to in this litigation (as proposed by Google in Dkt. No. 451 at 6), OR (2) responsive to these additional terms: "sensitive," "history off," "history is not off," "history on," "history is on," "off the record," or "on the record."

To be clear, for the latter set of terms, Google may not limit its production to only those chats that discussed "turning history 'on' or 'off' in connection with the topics of this case or in connection with [a] legal hold, investigation, regulatory proceeding, or litigation." Dkt. No. 451 at 8. The responsive chats must be turned over without the additional limitation of being responsive to the search terms in this case or being connected to a legal hold, investigation, regulatory proceeding, or litigation.

Google must complete the production of these chats by February 24, 2023, at 5:00 p.m. California time at the latest. This deadline will not be extended. Google may conduct a responsiveness and/or privilege review only to the extent it can do that and still meet this deadline. To the extent Google decides against a privilege review, including for any subsets of custodians, plaintiffs will agree to a "broad non-waiver agreement allowing the clawback of any privileged material," as they have proposed. Dkt. No. 451 at 4.

Signed by Judge James Donato on 2/15/2023.

That's a rather strict tone. Google's lawyers have been trying for a while now to downplay the issue and to put up smokescreens, but Judge Donato wants the truth to come out--and as far as I can see, he's not asking for too much (such as a manual review of millions of documents).

Finally, a quick follow-up to the substantive issues in the D.C. case (United States et al. v. Google I):

Five days ago I wrote about the DOJ's and the state AGs' opposition briefs to Google's motion for summary judgment (U.S. states liken Google's various anticompetitive actions to octopus tentacles; DOJ says 'Google has bought, not earned, at least 33% of all U.S. searches'. Professor Herbert Hovenkamp commented on that, highlighting the key question, which is that defaults are not ties (defaults can be changed by customers, ties cannot):

Google's argument is that this is not really foreclosure, and if it is, then only to a negligible extent because most users would choose Google anyway. But there is evidence that Bing--Google's only competitor (and now even more so than ever)--gets far more usage where Google is not the default search engine. Shortly after the DOJ's and the state AG's opposition briefs, two amicus curiae briefs were filed. The American Antitrust Institute supports the plaintiffs, but what I find more interesting is the following amicus brief by three behaviorial economists (including one from Munich by the way) about the immense Power of Default:

United States of America et al. v. Google (case no. 1:20-cv-3010-APM, D.D.C.): Brief of Behavioral Economists George Loewenstein, Klaus M. Schmidt, and Paul Heidhues as Amici Curiae in Support of Plaintiffs

There'll be more discussion about the Power of Default--in both of the Google antitrust litigations discussed in this post.