A federal judge yesterday ruled that Google intentionally destroyed evidence and must be sanctioned, rejecting the company’s argument that it didn’t need to automatically preserve internal chats involving employees subject to a legal hold.

“After substantial briefing by both sides, and an evidentiary hearing that featured witness testimony and other evidence, the Court concludes that sanctions are warranted,” US District Judge James Donato wrote. Later in the ruling, he wrote that evidence shows that “Google intended to subvert the discovery process, and that Chat evidence was ‘lost with the intent to prevent its use in litigation’ and ‘with the intent to deprive another party of the information’s use in the litigation.'”

He said that chats produced by Google last month in response to a court order “provided additional evidence of highly spotty practices in response to the litigation hold notices.” For example, Donato quoted one newly produced chat in which “an employee said he or she was ‘on legal hold’ but that they preferred to keep chat history off.”

Donato’s ruling was made in a multi-district antitrust case bringing together lawsuits filed by Epic Games, the attorneys general of 38 states and the District of Columbia, the Match Group, and a class of consumers. It’s being heard in US District Court for the Northern District of California. The case is over the Google Play Store app distribution model, with plaintiffs alleging that “Google illegally monopolized the Android app distribution market by engaging in exclusionary conduct, which has harmed the different plaintiff groups in various ways,” Donato noted.

Donato’s ruling said that Google provided false information to the court and plaintiffs about the auto-deletion practices it uses for internal chats. Google deletes chat messages every 24 hours unless the “history-on” setting is enabled by individual document custodians.

Judge: Google repeatedly gave false info

There are 383 Google employees who are subject to the legal hold in this case, and about 40 of those are designated as custodians. Google could have set the chat history to “on” as the default for all those employees but chose not to, the judge wrote.

“Google falsely assured the Court in a case management statement in October 2020 that it had ‘taken appropriate steps to preserve all evidence relevant to the issues reasonably evident in this action,’ without saying a word about Chats or its decision not to pause the 24-hour default deletion,” Donato wrote. “Google did not reveal the Chat practices to plaintiffs until October 2021, many months after plaintiffs first asked about them.”

The judge then chided Google at greater length:

The Court has since had to spend a substantial amount of resources to get to the truth of the matter, including several hearings, a two-day evidentiary proceeding, and countless hours reviewing voluminous briefs. All the while, Google has tried to downplay the problem and displayed a dismissive attitude ill tuned to the gravity of its conduct. Its initial defense was that it had no ‘ability to change default settings for individual custodians with respect to the chat history setting,’ but evidence at the hearing plainly established that this representation was not truthful.

Why this situation has come to pass is a mystery. From the start of this case, Google has had every opportunity to flag the handling of Chat and air concerns about potential burden, costs, and related factors. At the very least, Google should have advised plaintiffs about its preservation and related approach early in the litigation, and engaged in a discussion with them. It chose to stay silent until compelled to speak by the filing of the Rule 37 motion and the Court’s intervention. The Court has repeatedly asked Google why it never mentioned Chat until the issue became a substantial problem. It has not provided an explanation, which is worrisome, especially in light of its unlimited access to accomplished legal counsel, and its long experience with the duty of evidence preservation.

Donato said another “major concern is the intentionality manifested at every level within Google to hide at the ball with respect to Chat. As discussed, individual users were conscious of litigation risks and valued the ‘off the record’ functionality of Chat. Google as an enterprise had the capacity of preserving all Chat communications systemwide once litigation had commenced but elected not [to] do so, without any assessment of financial costs or other factors that might help to justify that decision.”

How to punish Google not yet decided

Google finally agreed on February 7 to turn the history setting to “on” for all 383 employees subject to a legal hold, at least temporarily. “These employees will not have the ability to change history to ‘off.’ Google will meet and confer with Plaintiffs regarding which of these 383 legal hold recipients are the ‘core set of relevant custodians’ for which this setting should remain and then report back to the Court,” Donato wrote.

Donato hasn’t yet decided how Google should be sanctioned, saying the “determination of an appropriate non-monetary sanction requires further proceeding.” In their motion for sanctions, Epic Games and other plaintiffs asked the court to “issue adverse inference jury instructions to remedy Google’s spoliation of Google Chats,” or alternatively to “issue a curative jury instruction.”

“The Court fully appreciates plaintiffs’ dilemma of trying to prove the contents of what Google has deleted,” Donato wrote yesterday. “Even so, the principle of proportionality demands that the remedy fit the wrong, and the Court would like to see the state of play of the evidence at the end of fact discovery. At that time, plaintiffs will be better positioned to tell the Court what might have been lost in the Chat communications.”

In the meantime, Donato said Google must cover the plaintiffs’ reasonable attorneys’ fees and costs and directed plaintiffs to provide documentation of the costs by April 21.

US also wants Google to be sanctioned

Google’s brief opposing the motion for sanctions said its approach to history-off chats is “reasonable” and thus complies with federal rules. “Plaintiffs do not come close to showing Google acted with the intent to deprive plaintiffs of evidence,” Google wrote in November. “To the contrary, the record shows that Google worked to preserve relevant evidence: Google (a) ensured that ‘history on’ chats are automatically preserved, (b) provided users with a way to set history on for any potentially relevant chats, and (c) provided relevant employees with litigation hold instructions—and multiple reminders—on chat preservation.”

Google could also be sanctioned in a separate antitrust case brought by the federal government in US District Court for the District of Columbia. The US filed a motion for sanctions last month, arguing that “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.”

After yesterday’s ruling against Google in the Northern California federal court, a US Department of Justice attorney submitted a notice of the sanctions to the DC-based court. Google is fighting the request for sanctions in that case, too.