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#CaseoftheWeek Episode 38: When Failure to Preserve Mobile Devices Leads to Sanctions

Episode 38 of #CaseoftheWeek is an examination of In Re Gold King Mine Release in San Juan Cty., Col on August 5, 2015, 2021 WL 3472440(D.N.M). The decision from August 6, 2021 was presided over by United States Distict Judge William P. Johnson.

Good morning and welcome to our Case of the Week for September 7, 2021. My name is Kelly Twigger. I am the CEO and founder of eDiscovery Assistant and the Principal at ESI Attorneys.

Each week in partnership with the Association of Certified eDiscovery Specialists, otherwise known as ACEDS, we choose a case from our eDiscovery Assistant Case Law database that highlights key issues for litigators and those involved in the eDiscovery process and talk about the practical implications of that case for you, your practice, and your clients.

Whichever platform you’re watching us on, you can see the public link to the decision we’re discussing today, which is In re Gold King Mine Release in San Juan Cty., Col., in the comment section. Whether you’re on YouTube, Twitter, LinkedIn or Facebook, you can do it there. You can also sign up at our blog at eDiscovery assistant.com/blog to receive the weekly Case Law newsletter, which will include the video link to today’s broadcast.

Also in the comments section for your platform, you will see a link to our 2020 Case Law Report, which shows trends from 2020. We’ll be putting out a subsequent report also in partnership with another partner of ours, eDiscovery Today and Doug Austin. We also invite you to check out our recently updated website at eDiscoveryassistant.com, and you can sign up there to receive, as I mentioned, a weekly Case Law newsletter, and other blog posts that come out. We’re still working on our series on ESI protocols, and that is getting up to being a ten part series I think at this point.

This week’s case is a decision from In re Gold King Mine Release in San Juan Cty., Col. on August 5, 2015. The decision itself is dated August 6, 2021, so a full six years after the actual blowout happened at the mine. The judge here is Judge William Johnson, who’s the United States District Judge in the District of New Mexico.

We talk a lot about the issues that we tag cases with in eDiscovery Assistant, and this week’s decision has a number of issues that are key—Inaccessible, Photograph, Cloud Computing, Text Messages, Spoliation, Adverse Inference, Costs and Fees, Mobile Devices, and Self Collection. Those are all issues that are covered in today’s decision.

All right, let’s dive into the underlying facts of the case. The Gold King Mine was an inactive mine located in southwestern Colorado. On August 5, 2015, the EPA led contractor crew inadvertently triggered a spill of wastewater. The crew was using heavy equipment to excavate the mine opening in preparation for a possible cleanup when a worker breached a debris pile that was holding back waste water in the shaft. The breach destroyed the plug that was holding the water trapped inside the mine, which caused an overflow of the pond, spilling 3 million gallons of wastewater and tailings full of lots of heavy metals from the inactive mine to pollute rivers in Colorado, New Mexico, in Utah, including on the Navajo Nation lands. Some of those waterways turned an orange yellow color.

Because I’m a resident of Colorado, there was a significant news coverage about this way back in 2015 and who was responsible for the associated cleanup. That brings us to the litigation at hand.

Six days after the blowout at the mine, the EPA did issue a litigation hold on August 11, 2015, and what we have in front of us is a motion for sanctions for spoliation of data loss related to the EPA’s efforts to preserve.

Here the plaintiffs are alleging the spoliation of multiple mobile devices that contained data from two different on-scene coordinators or OSCs. That’s a specific title from the EPA. There were two individuals who held that position during the time that’s relevant to this litigation. Mr. Way was the OSC that was generally assigned to the gold mine. On August 4 and August 5, Mr. Griswold had temporarily relieved Mr. Way at the time that the blowout occurred. Information in the decision tells us that the OSCs are responsible for and directed whatever happened on site at the Gold King Mine in 2014 and 2015 as they prepped the mine for possible excavation. With regard to the potential spoliation motion, the Court details a lot of information about steps that the EPA took to preserve devices from those two On-scene Coordinators and the data from those two individuals is what is an issue on this motion for sanctions for Spoliation.

Mr. Griswold, who is the on-site coordinator who took over or was there on August 4th and 5th, the day that the blowout occurred, had two iPhones; one that he used before, during, and after the blowout, and one that was subsequently replaced after that. The EPA collected Mr. Griswold’s phone in May of 2016, the one that had been used before, during and after the blowout, and issued him a second phone. At that time, the EPA made a backup of Griswold’s first iPhone, but because the password was lost, the backup to that phone is inaccessible—cannot get to the backup of the first phone from Mr. Griswold, who again was the on-scene coordinator at the actual explosion that day.

They’re not certain as to whether the EPA transferred the ESI from the first phone to the second one, and then the facts also tell us that the EPA erased Mr. Griswold’s second phone by resetting it to factory settings in May of 2018. Essentially, absent being able to access that backup of Griswold’s first phone, there’s no information available from those two phones.

Mr. Griswold also had an iPad, also considered a mobile device. that he used extensively for work at the Gold King Mine, including taking photos in the field. The facts of the case tell us that the iPad was reset to factory settings before he turned it into the EPA, which would mean that the data on that iPad was wiped. Another source of information for Mr. Griswold was his OneDrive account on Office 365, where all of his documents were stored. According to the facts of the case, the EPA backed up Mr. Griswold’s EPA issued laptops to an online cloud storage service, but did not collect the data from his OneDrive account until almost five years after the blowout.

What we have here, really, and I’m laying out for you actually, is steps taken to preserve information, keep it in a certain location, but no actual collection of the information or review of the specific documents. By review, in this instance, I’m talking about actually looking and making sure that after you collect the information, all of it is valid. Nothing is corrupt so that you can simply hold it in place and pull it up as needed during the litigation.

Contained on the OneDrive that we were discussing are two folders, one of which contained around 800 photographs, and another that was in the My Document section that contained around 120 documents. Both of those folders were missing from the OneDrive when the EPA went to go and get that information five years after preserving it.

That’s the information for Mr. Griswold devices. Mr. Way’s devices—again, Mr. Way was the OSC for the gold mine in 2014 and 2015, but not during the actual incident—he had two devices, an iPhone as well as an iPad.

Mr. Way’s devices, let’s start first with his iPhone. Mr. Way did not preserve any of his text messages until the EPA collected his iPhone in May of 2016, and the Court found that none of his text messages were available on his phone pre-October 20, 2015, which is a full year and several months or several months after the actual incident, but a full year in several months after he was assigned to this project. There are, however, produced documents that show that he exchanged at least 245 Gold King Mine related text messages between July 7th and October 20th of 2015. You’ve got no data, no text messages preserved from his phone for the entirety of 2014 and 2015, but then you’ve also got records showing that he sent approximately 250 text messages between July 7th right before the event occurred and October 20, 2015, which was a couple of months after the event occurred.

Mr. Way also had an EPA issued iPad, and when he retired in May 2016, he gave the iPad back to the EPA, but the EPA could not access it because Mr. Way could not remember the password. I believe we must be talking about the pass code associated with an iPad, both the iPhone and the iPad have passcodes, not passwords, but they are referred to as passwords in this decision.

That’s what we have at this point. We’ve lost two iPhones for Mr. Griswold, as well as OneDrive account with the backup of his information from his laptop, as well as text messages from Mr. Way’s iPhone and the entirety of Mr. Way’s iPad.

November 23, 2015 — several months after the blowout and four or five months after the EPA sent out the legal hold — the EPA then sent instructions directing custodians to preserve all text messages related to Gold King and provided contact for technical assistance to help with preservation of those messages.

April of 2016 — fast forward four or five months later — the EPA followed up on the text preservation and sought to preserve texts on approximately 500 cell phones. So not just Way and Griswold, but 500 total custodians.

In May of 2016, the EPA held an in person meeting with Griswold and Way with an EPA attorney and tech support present. Way did not receive a new phone due to his retirement in 2016, so we were still just talking about the two phones for Griswold and the one phone for Way. But at that meeting, both witnesses signed a form certifying that they had complied with the text preservation instructions.

In July 2020 — a couple of months after that — the EPA worked with consultants to try and crack the backup of Mr. Griswold’s phone using the same technology that had been used in previous incidents with Apple and with the federal government. Despite using a password cracker that ran for 13 weeks, they were unable to access the backup of the iPhone so that information was not available.

Now, at this point, the EPA has a thousand custodians on legal hold and and they collected more than 500 mobile devices. Now fast forward — Griswold retired in October of 2018 so three years and some months after the incident in which he was the onsite coordinator. The EPA had counsel work with Griswold prior to his retirement to visually identify that his files were synced with the OneDrive account and to create a backup of those files.

Again, this is October 2018 we’re three years and some months after the actual incident occurred and this is one of the key people in the incident because he was the onsite coordinator for the EPA.

Fast forward now to 2020, and the EPA learns that OneDrive is no longer available and that the Gold King Mine subfolder from which Griswold’s backup is missing the pictures folder as well as the My Documents folder, and they were unable to recover any of the ESI.

Those are our facts. As we’re looking at them, let’s talk for a minute about what plaintiff’s arguments were on the motion for sanctions.

Essentially, the plaintiffs said to the Court, “look, you allowed Griswold and Way to self-collect and forward text messages, and that was completely unreasonable given their conduct, their role here, and that they were subject to multiple investigations, as well as Griswold being investigated criminally for false statements made to a government agency.” The plaintiffs claim they were prejudiced by the loss of data, including communications and documentation from Way and Griswold, and that those communications and documents specifically go to the plaintiff’s primary defense, which is related to the discretionary function exception of the Federal Tort Claims Act that allows for EPA liability.

The underlying tenor of this litigation is that the EPA did not want to claim liability for the cleanup, and the plaintiffs here are suing the EPA to be responsible for the cost associated with the cleanup. That liability is governed by the Federal Tort Claims Act, and there’s an exception that the plaintiffs claimed they would have been able to meet but for this data from Griswold and Way, which is subsequently lost.

Essentially, the EPA and the defendants argue that they have made extensive productions for multiple and redundant sources, making it highly unlikely that any “unique or material data” was lost. I use that in quotes because that’s the language that the parties used, and it’s the specific language quoted later. The plaintiffs contend that while the EPA did produce SMS text messages, it did not produce iMessages, which is the native text message app for the iPhone and the iPad, and that logs reveal that there are, in fact, hundreds of text messages that were deleted from the iPhones of Griswold and Way. There’s no real discussion about what those logs are or where they came from. Those logs could have come from mobile service providers—AT&T, Verizon Sprint— but they would only show phone numbers. They would not show the actual text messages; they would show the number they were sent from and the number they were sent to and the date and time of those messages. We don’t know what those actual logs are to be able to comment on what kind of data happens or how valuable of a resource those logs are to be able to show what information existed or what the substance of that information was. Regardless, because these two were the onsite coordinators, and this was an enormously significant event for everyone involved—for the States that were involved, water that was polluted, the Navajo Nation as well as the government agencies that were involved—the notion that we wouldn’t be providing this information is pretty significant.

In an effort to try and cure some of the prejudice, the EPA did offer to waive the privilege on all of the documents from both Griswold and Way, but the plaintiffs really found that that was not going to alleviate the prejudice. Plaintiffs then sought sanctions in the form of an adverse inference permitting the plaintiffs to introduce evidence of this spoliation at trial as well as costs and fees on the motion.

Plaintiffs also asked for an order precluding the federal parties/defendants from putting on evidence that Griswold did not intend to open the mine and was only attempting to ready it for a site visit. Or, alternatively, the plaintiffs asked for an adverse inference or presumption that Mr. Griswold intended to open the mine and was not simply attempting to expose the blockage in preparation for a site visit.

Essentially, they want to completely undermine the theory of the federal parties as to why this whole thing happened, and that’s what they’re asking for. While he may not get an adverse inference instruction, they’re saying, okay, next best thing is you can’t allow the federal parties to put on the evidence of what they say they were trying to do because of what happened. That’s a pretty significant sanction in and of itself.

What is the courts analysis here? The court looks at two different sections of Federal Rules of Civil Procedure Rule 37. The first starts with Rule 37(e), which, as we know for multiple editions of case of the week, is sanctions for failure to preserve ESI. The Court goes through essentially the three steps, while whether the party has a duty to preserve, whether the adverse party is prejudiced by the destruction of evidence, and whether there is bad faith or intent to deprive another party of evidence in order to seek adverse inference or dismissal as sanctions.

The Court looked at all the facts that we’ve just talked about and said that the EPA failed to take reasonable steps to preserve Griswold and Way’s ESI. Now keep in mind before we go down this path that the EPA issued a legal hold; they sent specific instructions about how to deal with text messages; they had in person meetings with folks; they physically took their devices and made backups of them. All of that information is what we normally consider is reasonable. But what the Court looked at is the timeline of when that happened and then the subsequent ability to access and produce that information. The Court said, “hey, yeah, you sent your legal hold, but you did not issue instructions on text messages until several months after the hold issued. That’s not acceptable. You did not take affirmative steps to preserve until eight months after the actual incident.” In April of 2016 is when the EPA officially started preserving information on these mobile devices, according to what’s in this particular decision. That, and an in person meeting with Way and Griswold did not happen until May of 2016. We’re at nine months at this point after the incident occurred. The Court also recognized that because these two individuals where the onsite coordinators, theirs were the most crucial devices and the volume of the 500 mobile devices as well as the 1000 custodians on legal hold is a factor, but the other folks were much more remotely involved, and the key evidence here should have been preserved.

The Court also rejected the defendant’s argument that almost all the lost ESI had been produced or that what was lost was unlikely to be unique and material. In fact, the federal parties had admitted that, “potentially relevant texts that may be lost and unrecoverable from another source are those that are strictly between the two OSCs.” In fact, you’ve got the EPA and the federal parties associated with the litigation admitting that there were text messages exchanged between Griswold and Way, both of which would have only been on their mobile devices, and all of those mobile devices were lost.

The Court then granted the plaintiff’s request “for an order precluding the federal parties from putting on evidence that Mr. Griswold did not intend to open the mine and was only attempting to expose the blockage to ready it for a site visit. Precluding the federal parties from putting on such evidence while allowing the sovereign plaintiffs to introduce evidence of the federal party’s spoliation at trial would undermine the Court’s interest in promoting accurate fact finding by the jury.”

The Court is going to allow the plaintiffs to be able to block the federal parties from putting on that evidence. That is really crucial to the EPA’s avoidance of liability. However, with regard to the adverse inference instruction, remember that we have to be able to show intent to deprive that’s one of the elements of Rule 37(e) that the Court looks at very specifically. As we’ve seen in previous episodes of Case of the Week, meeting that intent to deprive standard is very tough. With regard to that here, the Court really deferred ruling, saying that it cannot yet determine whether the federal parties acted with the required intent to deprive to permit an adverse inference instruction. The court did note this, and this is a quote.

“The Court finds it striking that so much ESI on the OSCs’ electronic devices was spoliated as a result of delay, forgotten passwords, and the wiping resetting of devices. While this spoliation may be the result of mere negligence on the part of several persons, that amount of ESI spoliation of perhaps the two most important witnesses, the fact that EPA was directing and was responsible for the activities at the Gold King Mine, and the fact that the OSCs may have had personal reasons for deleting ESI due to the investigation of their actions suggests that the spoliation may have been the result of more than mere negligence.”

That’s going to be really important as the Court entertains further briefing later. However, unless there are new facts here that are going to be able to rise to the level of intent to deprive, I think the plaintiffs still face an uphill battle. I do think the sanctions that they’ve received here are going to be significant for them and will push the parties towards evaluating strategy in light of that decision.

The Court also notes that while there are over 400 pages of briefs and exhibits, there are still a number of open issues that remain unclear on the intent to deprive, including what steps were taken by Griswold or Way to preserve data prior to the May 16th in person meeting. Why that meeting didn’t occur earlier? Who had custody of the backup of Griswold’s phones and what really happened there? How did they lose the passcodes? What happened to the backup of the phone? Why was Griswold’s iPad reset and who did it?  Why wasn’t it preserved first? More questions that are around the access to Way’s iPad? When did he last use it? Why did he stop using it? And why didn’t he preserve it in response to the legal hold? What steps were taken to preserve the backup of Griswold’s OneDrive files, and why isn’t it available? Finally, whether the OSCs’ admissions can be imputed to the EPA.

These are all the issues that the Court identifies for the parties to address on subsequent briefing related to the adverse inference question. These are, in fact, all of the open issues that would allow the Court to determine intent to deprive.

Now, as we’ve seen in discussing Rule 37(e), we’ve really only seen active steps taken on intent to deprive that would really elevate to that. It will be interesting to see whether the case gets that far and what happens on that subsequent briefing.

The Court did all allow for the costs and fees associated with the motion to the plaintiffs, and the Court denied Sunshine’s, which is one of the plaintiffs, request for a waiver of privilege in the documents. Even though that’s something that EPA had offered, the Court said, “no, that’s not supported by the failure to preserve and there’s really no basis for that waiver of privilege. We also don’t see how that waiver of privilege cures any of the prejudice that exists here.”

Now, the plaintiffs also sought sanctions for the defendants disobeying of the Court’s preservation order under 37(b). We know that FRCP Rule 37(b) says that for a violation of a court order, you can have certain sanctions as well. The Court looks at that and says, “no, I’ve already issued the appropriate sanctions under 37(e), and frankly, all of the errors that occur occurred before that order was entered so there was no violation of the actual border.”

What are our takeaways from this case? Well, this case is a tough one, right? Because we’re talking more and more about mobile devices and how to be able to preserve those. In this particular situation, it feels like the two custodians who probably had the most data, steps were not necessarily taken to make sure that that data was kept in a timely fashion. Absolutely steps were taken to preserve that data later. But I think what happened here is a step that we see a lot, and that is that we take steps to preserve the information, but we don’t necessarily collect the information. Meaning that we don’t collect it and put it in a place where we review the information. Make sure that it is all intact. It’s visible. There are no corrupt files. Then a second redundant backup of that information is made. In this kind of situation, where you’ve got almost a certainty of litigation and the EPA knew days after the event, after they issued a legal hold that there was an anticipation of litigation. As the Court mentioned here, just preserving in place, just keeping a backup of the phone without accessing that data and making sure that it was available was not reasonable.

What this case is saying to us is when is it reasonable to preserve in place. When do you need to collect and view that information and make sure it is actually available to you. For example, when we conduct a collection, we are not only collecting information and put the file aside, which can be considered preservation, so we’re pulling it from its original source and just setting it aside. That’s really preserving it as part of that same concept. It’s really a collection at the same time, because we’re going to review that information and make sure that the scope of the information is what we need and that we can review each one of those individual files. Each one of those have to be clicked on and reviewed and make sure that they are available so that you don’t have subsequent spoliation issues later.

Now, there there are a lot of things that the EPA did right. They issued the legal hold immediately. They went back and advised witnesses on text messages. They actively preserved data on mobile devices and cloud data. They took a lot of reasonable steps, but where they got in trouble was not prioritizing the OSCs’ data.

Now, in the facts, you heard that both of them retired throughout the course of this investigation; one just a year after the event. The timeliness of the preservation and the meeting with those two individuals is really what’s key here. I think that’s got to be your focus is you’ve got to meet with the key individuals as soon as possible after you reasonably anticipate litigation. And you’ve got to take active steps to preserve that information and make sure that it is viable and available to you for use in the litigation.

Making sure that data is really physically available by making sure you had the pass codes or that you gone ahead and pulled the data from those devices. There are ways to do that very inexpensively to allow that information to be preserved effectively, and that needed to be done here. A lot of times, leaving data on a network where IT permissions, devices, subsequent information are really not in your control, even though you feel like they are, that has a lot of risk associated with it. Make sure your processes are in place to manage and keep that information.

Now, the EPA here had a lot of data. Huge number of issues associated with this mine blow out, which was just one issue that the EPA has been dealing with over the last six years. Incredible scope of information to be collected and handled. Not to mention that there was a third party contractor involved that was actually involved in the situation. Huge scope of litigation.

Point being, all of that is completely relevant, but it does not change the reasonableness inquiry on whether or not you have information that’s available. If all the steps that you took were reasonable, but you still don’t have the information, you still have spoliation. Here we had timeliness issues, right? Steps were taken, but they were not necessarily taken in a timely fashion according to what the Court finds.

Preservation is one part of the battle, and you constantly have to make decisions. Usually it’s a cost benefit analysis about whether it’s reasonable to leave that data in place or move it off the system. Whether we’re moving it off the system, putting it with counsel, with a service provider, whether you’ve got separate systems for storing litigation related data, you’ve got to make those judgments based on the scope of the matter, the potential implications for your clients—whether they are public relations or monetary—and how you’re going to handle all of that going forward. There’s a number of issues that come into play, not just about the reasonableness of the steps that you took, but were they reasonable in light of the value of the information.

Mobile devices are hard and expensive to preserve in full, although those costs have dropped dramatically over the last couple of years. The cost even of a forensic image of devices dropped dramatically. When you’re looking at a huge numbers of devices like here, you should be able to negotiate substantial discounts at this point. Likely buying license to the actual software to do the forensic imaging probably would have been more cost effective for the EPA.

You’ve got to realize early on the scope of what needs to be done and come to an agreement with the other side on steps to be taken. In this particular instance, where you’ve got 500 potential mobile devices that need to be collected, almost coming up with a spreadsheet of information and agreeing with the other side on what needs to be imaged, what needs to be collected. Now, I can tell you that if you go to the other side with just a blanket, hey, tell us which ones you want us to keep the other side’s going to say all of them because they have no basis to determine who would have the relevant data and who would not. You’re going to have to do some investigation on your own and say, “here are the steps that we’ve taken. Here’s why we’ve taken those steps. Tell us if you don’t think that’s reasonable, and then we’ll discuss it.”  Simply passing the buck over to the other side to make that determination is not going to get the job done. You’ve got to do your own analysis first, with the data.

Final takeaway. In the sanctions analysis, that intent to deprive under Rule 37(e) is always going to be the key in avoiding that adverse inference instruction. Now, here the sanction that’s levied against the federal defendants is still very significant, but it’s not physically telling the jury that they can actually assume that the evidence that they would have found had that ESI been produced would have been favorable to the plaintiffs. That is much more significant than the sanctions that are issued here. In thinking about that intent to deprive, as you’re conducting your investigation, as you’re engaging in your reasonable analysis, you’ve got to consider, how have other courts looked at the intent to deprive? What are the actual steps that the courts have required to establish intent to deprive? I still think even with all of the questionable issues here that the Court raised in it analysis, that it’s still going to be an uphill burden to prove intent to deprive unless the Court is willing to say that a lack of active steps taken still rises to the level of intent to deprive.

All right, that’s our Case of the Week for this week. Thanks so much for joining me. I’ll be back next week with another edition of our Case of the Week for eDiscovery Assistant. If you are an ACEDS member and interested in using eDiscovery Assistant, there is a discount available to current ACEDS members and a trial for folks taking the ACEDS exams. If you’re interested in either of those, please drop us a line at aceds@ediscoveryassistant.com, and one of our team will get in touch.

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Thanks so much. Have a great week. Stay safe and healthy. And I’ll see you next week.

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