Closing The Loop

Smartphones have a limited lifespan. In just a few years, they can break, become outdated, stop being supported and may need to be replaced or traded in. And those are just the phones that live out their full lifecycle. It’s certainly easy to snuff out of a smartphone’s life before its time. Lightly drop it on the pavement, touch it with a drop of water, leave it behind in a cab. The possibilities are endless. 

Yet when a client loses or replaces a smartphone full of relevant ESI, spoliation sanctions could loom—and, depending on how an attorney reacts, public discipline and censure may follow apace. That’s the lesson from two recent cases involving the untimely demise of smartphones.

 

Trading in ESI for a $200 Credit 

Let’s start with the most straight-forward of the two recent smartphone ESI spoliation rulings, Montgomery v. Iron Rooster, LCC. There, plaintiff Erin Montgomery accused her former employer, Iron Rooster bar and restaurant in Annapolis, Maryland, of wage and hour violations. The restaurant countered that Montgomery was acting as an exempt employee and that, even when she was a mere bartender, she had fulfilled a managerial function.  

To prove it, the restaurant sought ESI from Montgomery’s HTC cell phone. Texts sent from her to other employees could show that she was managing them, the restaurant claimed.

But Montgomery’s phone was nowhere to be found. In September, 2016, two months before she sued Iron Rooster, Montgomery had mailed her phone back to Verizon for a $200 upgrade credit. Her contacts and other information transferred to her new phone, but not her text messages.Iron Rooster Fake Text.jpg

Montgomery had threatened legal action as early as that June and, the court noted, “ironically enough, requested defendants preserve any electronic evidence.” At that point, she had notice of her obligation to retain information related to the litigation for at least a month, including any information on the phone. 

Enter the spoliation sanctions. Early this May, Magistrate Judge A. David Copperthite found Montgomery’s testimony regarding her intent credible -- she had not disposed of her phone in order to deprive the restaurant of ESI, she simply had not understood her need to preserve the phone. He thus recommended sanctions under Rule 37(e)(1). In order to cure the resulting prejudice:

As a remedy I recommend the Court give an instruction to the jury that Plaintiff had a duty to maintain potential ESI contained on her phone, but failed to do so. The Court may further instruct the jury as to any inference to draw from the Plaintiff’s failure to preserve texts on her phone. The Court may consider whether Defendants can show that there (1) were in fact texts between Plaintiff and employees during the relevant time period, and (2) whether there is any evidence to show that those communications would have been favorable to Defendants' claim of exempt status of Plaintiff.

 

Lost Your Phone? Here, Produce This One

It’s bad enough when a client gets rid of a phone full of relevant ESI. But things can get much worse when an attorney then gives his client a replacement phone to turn over to requesting party—the equivalent of handing over an empty file box to replace all the docs your client accidentally shredded. 

That was, unfortunately, the case in a bankruptcy dispute out of Texas. Michael J. Aviles, a New York attorney, agreed to represent a friend who was to be disposed as a nonparty witness in a chapter 7 proceeding. The witness, Carol Paredes, was the late debtor's ex-girlfriend. She had purportedly received text messages from the debtor’s driver, indicating where the debtor’s hidden assets were located. 

When Paredes was deposed, she testified that her iPhone had "suffered a data loss" three days earlier, erasing all her messages. She would try to recover the data, she promised.

About a week later, the trustee filed an emergency motion to compel the phone’s production. Paredes, however, had lost the phone just days before. Whoops.

Aviles Fake Text.jpgIf that’s an undesirably situation to be stuck in, things soon got worse. At a hearing on the trustee’s emergency motion, Aviles didn’t inform the bankruptcy court that the phone had been lost. Rather, he argued that turning over the phone would violate his client’s Fourth Amendment rights.

The court didn’t buy it and when the deadline to produce the phone rolled around, Aviles turned over Paredes new phone, the one she had purchased shortly after losing the other. Not only was the new phone missing the relevant text messages, it wasn’t even the same model of iPhone.

Sanctions soon followed. The bankruptcy court, finding that the conduct rose “to the level of a fraud on the Court,” ordered Aviles to pay $54,421.03 in sanctions, representing the costs the trustee expended in his efforts to recover the phone. As a kicker, the court also found that Aviles had engaged in unauthorized practice, as he wasn’t licensed to practice in Texas or admitted to the Southern District of Texas.

The sanction decision was then forwarded to New York’s Attorney Grievance Committee, which publicly censured the attorney this Tuesday.

Finally, if you thought the disaster couldn't get any worse, it’s worth noting that, aside from a flight to Miami, Aviles was never paid for representing his phone-losing friend.

 

Getting Smart About Smartphones

The takeaway here? Attorneys need to remind clients, strongly, of the importance of preserving electronically stored information, including smartphone ESI. 

While the deleted email was the prototypical case of ESI spoliation a decade ago, more and more information, communication, and ESI is being produced and stored on cell phones and mobile devices today. Such devices are ubiquitous. Seventy-seven percent of Americans own smartphones and 95 percent own cell phones, according to Pew Research Center.

By some estimates, Americans send 8.5 billion text messages every day, or an average of 32 daily texts per texter. Those communications often aren’t backed up. Devices can be easy to lose and quick to die. And when clients don’t realize their obligations to preserve such messages—or worse, they ignore them—litigation disaster can soon follow.

This post was authored by Casey C. Sullivan, Esq., who leads education and awareness efforts at Logikcull. You can reach him at [email protected] or on Twitter at @caseycsull.

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