Saturday, April 1, 2023

U.S. Department of Justice reinforces motion for spoliation sanctions against Google, heavily relies on evidence from Epic Games case and points to Google's untruthfulness

On February 23, the Department of Justice (DOJ) on behalf of the United States brought a motion for spoliation sanctions against Google in the United States District Court for the District of Columbia. That motion referred to parallel proceedings over the same issue--the automatic deletion of "history off" Google chats after 24 hours and Google's employees' systematic use of "history off" chats for discussions involving allegedly anticompetitive behavior--as a motion by Epic Games and its co-plaintiffs (including three dozen state AGs) in the Northern District of California. In fact, the D.C. motion would likely never have been brought if not for Epic's persistent and investigative efforts.

On March 17, Google filed its opposition brief (which I've uploaded to DocumentCloud). Google argued that the plaintiffs in the D.C. search engine case were not prejudiced and, above all, that the motion was brought way too late.

Only 11 days later, Judge James Donato in San Francisco determined that Google had to be held responsible for spoliation of evidence. The first sanction he imposed is not important per se: just a reimbursement of fees. The big one--which will be non-monetary, but not "terminating"--is to be determined after the close of the (additional) fact discovery (April 7). What was remarkable about that order is that Judge Donato essentially accused Google's lawyers of having lied.

The DOJ reacted swiftly. It notified the California sanctions order to Judge Amit P. Mehta in D.C. on the same day it issued (Tuesday, March 28).

Yesterday (Friday, March 31) the DOJ filed its reply brief in support of its motion for sanctions:

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

That file has more than 100 pages because I've also uploaded all publicly accessible exhibits. One can see that the evidentiary body here basically comes from the Epic litigation in California. Also, there's an excerpt from a San Francisco hearing transcript.

That reply brief is very well-crafted. I can't imagine that Judge Mehta would throw out the motion, at least not without the evidentiary hearing that the DOJ reasonably requests.

Frankly, the evidence is overwhelming that Google employees--all the way up to CEO Sundar Pichai--purposely used "history off" chats for sensitive discussions. There is even evidence of employees who wanted to act lawfully and have those chats recorded drawing internal pushback.

The evidentiary body for prejudice may become more robust. As I noted in my post on the California order, Google's Revenue Share Agreements (RSAs) with Android device makers are indeed at issue in the D.C. litigation and were mentioned in some of the Epic documents. The DOJ is currently reviewing 20,000 chats that it received after it brought its motion. And "recently produced chats show that Google discusses substantive business over chats with third parties—also instructing those third parties to communicate with care." So there already is quite some evidence, and this here is particularly damning:

"[...] Google’s Finance Director (and a deponent in this case) noted that 'the DOJ case is making the content very sensitive to share via email these days.'"

Like Epic, the DOJ notes that even Google's CEO "regularly turned 'history off so that we can speak (more) freely.'"

The DOJ seeks to dismantle Google's untimeliness argument using two attack vectors. One is that the DOJ argues that spoliation motions are not time-barred. In this context, the DOJ notes that the alternative would mean "flood[ing] courts with sanctions motions over what are often routine discovery conflicts" by filng motions "at the first hint of any potential issue." While it's just an out-of-circuit district court decision, the United States District Court for the District of Alaska stated it quite well when it wrote in a 2016 ruling that "a party need not file a motion at the first inkling of spoliation but is entitled to gather evidence . . . before filing a motion."

There may nevertheless be an untimeliness argument in some cases. But here there's an important factor:

"Google did not fully disclose its chat retention policy until January 2023. Following that disclosure, the United States timely moved for relief. The Federal Rules do not absolve Google’s spoliation because it previously provided partial information about its chat preservation policies.

"Google averred that it 'put a legal hold in place' which 'suspends auto-deletion' in November 2019. [...] The United States relied on that assertion."

Therefore, "it was only after the Epic sanctions motion was filed in October 2022 that the United States began to learn the full scope of Google’s chat preservation policies and its employees’ chat practices."

Google seeks to benefit from misrepresentations and stonewalling. I can't imagine that such a strategy will work. In the end, Judge Mehta will face the same dilemma as Judge Donato: to determine the proper sanctions, taking into account Google's misconduct on the one hand and the enormous implications of those huge antitrust cases--which no one would be comfortable deciding based on spoliation alone--on the other hand.