Page 3 - Litigation

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Litigation | MONDAY, APRIL 13, 2015 | S3
funding of $200 million in a deal that valued the company at $15 billion.3 These apps are being directly marketed to business people for their obvious benefits in protecting sensi- tive competitive information, trade secrets, and sensitive customer information, among others. These apps promise to provide users with the confidentiality of an oral conversa- tion combined with the convenience and time shifting properties of electronic messaging. In the litigation context, however, these apps may also provide spoliation concerns for law- yers and their clients precisely because of these qualities.
Courts have not yet considered how to cat- egorize self-destructing message apps, but the law’s general distaste for missing records and the increasing popularity of self-destructing message apps makes a forthcoming confron- tation likely. Indeed, Cyber Dust’s marketing strategy tees the issue up by touting the app as designed to prevent the discovery of com- munications in litigation. In the short term, litigators will need to become knowledgeable of this emerging technology in order to effec- tively deal with clients or adversaries that use them. In the long run, perhaps it is time for the law to evolve in order to recognize the legitimacy of these modern communication methods.
Litigation Context
Litigators typically want to preserve all written communication and are inclined to be critical of self-destructing message apps. Because these apps potentially deprive attorneys of evidence to build a case, they also raise spoliation concerns. Spoliation, or “‘the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation’”4 is a seri- ous threat to litigants. Parties may face sanc- tions, adverse inferences, or other penalties if found to have committed spoliation by using these apps. A party’s obligation to preserve evidence often arises at the start of a lawsuit but may arise even sooner if a party knows or “‘should have known that the evidence may be relevant to future litigation.’”5 Accordingly, use of these apps when litigation is pending, threatened or reasonably anticipated may trigger spoliation concerns.
To date, no court has decided a spolia- tion claim involving self-destructing message apps. However, the legal treatment afforded other new communication methods may pro- vide guidance on how courts will treat these apps. For example, social network users that have deleted potentially relevant content have been sanctioned for spoliation. In Gatto v. United Airlines, the plaintiff deactivated his Facebook account, causing the permanent deletion of account content 14 days later.6 In response to the plaintiff’s destruction of evi- dence, the court gave the jury a “spoliation instruction,” telling the jury that it may draw an adverse inference against the plaintiff for failing to preserve his Facebook account.7 In other words, the court told the jury to infer that the deleted information was deleted “‘out of the well-founded fear that the contents would harm’” the plaintiff’s case.8 Similarly, in Allied Concrete v. Lester, the Supreme Court of Virginia affirmed the sanctions imposed against plaintiff and his attorney for delet- ing content from plaintiff’s Facebook page in addition to affirming the adverse infer- ence instruction given to the jury relating to the deleted Facebook content.9 These are just a few examples of sanctions levied on litigants who deleted potentially relevant electronic communications in the litigation context. Additionally, bar associations have addressed social media content in this area. The Commercial and Federal Litigation Sec- tion of the New York State Bar Association’s “Social Media Ethics Guidelines” advises that “[u]nless an appropriate record of the social media information or data is preserved, a party or nonparty may not delete information from a social media profile that is subject to a duty to preserve.”10
Based on the above, it would seem that spoliation case law addressing the deletion of electronic communications—the exact purpose of apps like Cyber Dust, Snapchat, TigerText and others—raises such a sig- nificant risk of sanctions in the event those communications become relevant in a litiga- tion context, that general commercial use of these types of apps would be unacceptable. But that conclusion is premature for several reasons.
First, each of the cases above arose in a context where there was a pre-existing duty to preserve documents because of a
pending lawsuit. Accordingly, routine com- mercial use of such apps where there is no pending, threatened or foreseeable litigation would arguably not be in violation of a duty to preserve relevant documents (although it may run afoul of other statutory or regula- tory document preservation requirements). Absent a duty to preserve, it may be difficult for an adversary to argue for sanctions after the commencement of litigation based on the routine commercial use of such apps prior to litigation.
Second, the intent of the parties in using a self-destructing messaging app on a regular basis, outside of the litigation context, may differ from the intent of someone deleting potentially relevant information after litiga- tion is pending. There are several legitimate reasons to use self-destructing messag- ing apps in commercial communications, including without limitation, the protection of sensitive competitive or customer infor- mation. In some industries, such as health care, customers, clients or counterparties may significantly benefit from using such apps as a method of safeguarding confiden- tial communication. Unlike the facts in the spoliation cases cited above, in such situa- tions it may be difficult for an adversary to credibly argue that a party’s use of these apps was intended to destroy relevant informa- tion in order to gain a litigation advantage, and therefore it may be difficult to support an argument for an adverse inference or a spoliation jury instruction during subsequent litigation.
Once litigation is pending, threatened or foreseeable, however, the analysis becomes more complicated because a duty to preserve all potentially relevant documents arises. Using these apps arguably creates a poten- tially relevant electronic document and then subsequently deletes it. Accordingly, in the near term, counsel and clients need to seri- ously reevaluate the risks associated with use of such apps once a preservation obliga- tion arises.
In the long term, it may be time to con- sider an evolution of spoliation standards to accommodate the manner in which modern communications have evolved. The law has been adjusting to new means of communi- cation long before the advent of email and social networks. At one point, the telephone
was a new form of technology that perhaps caused an adjustment for 19th century litigators forced to build a case with fewer memos and letters than they had become accustomed to. A modern-day party’s choice to use the phone as opposed to sending an email does not open it up to a spoliation vio- lation. Absent a recorder, a phone call, like a self-destructing message, leaves no docu- mentary evidence reflecting the content of the conversation. Perhaps the law should treat self-destructing message app com- munications like phone calls or face-to-face communications, not email communications. Otherwise, pending litigation, regardless of merit, could potentially cause an undue dis- ruption in normal commercial communica- tions that could last for several years, creating unintended inefficiencies in the commercial context.
Practice Tips
The frequently asked questions section of the Cyber Dust website indicates that when a message is deleted, “the message/image is gone forever and not stored anywhere. Ever!”11 Further, Cyber Dust advises that “[m] essages on our servers are never saved to disk, and are only stored in memory until they are delivered or expire.”12 Similar apps make similar claims. For example, Confide assures users that it “employ[s] end-to-end encryption to ensure conversations remain confidential and are private to you” and that “[e]ven we at Confide cannot decrypt or see any messages.”13 Despite these claims, some commentators have suggested that remnants of data relating to messages exchanged on self-destructing message apps may be retained and retrieved.14 As one real life example, reports indicated that in October 2014 hackers obtained thousands of Snapchat images that users thought were deleted, fur- ther crediting critics who claim that not all content related to self-destructing messages can be permanently deleted.15 Additionally, even if a message and its corresponding data have been fully removed from a smartphone, the messages may still exist on a third-par- ty server or as screenshot on a recipient’s phone.
Given the uncertainty concerning the abil-
ity to completely delete these
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