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Is Presumptive Text Message Searching in the Future (or Present) of E-Discovery?

Authors: James H. S. Levine and Douglas D. Herrmann

9/28/2018
Is Presumptive Text Message Searching in the Future (or Present) of E-Discovery?

Reprinted with permission from the September 26, 2018 edition of the Delaware Business Court Insider. © 2018 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. (ALMReprints.com, 877.257.3382).

Over the past 25 years, the emergence of electronic communications has dramatically altered the landscape of discovery. As new technologies develop and become more prevalent, the scope of what is considered appropriate or necessary in e-discovery continues to evolve. Parties can no longer rest on their discovery laurels after searching custodial emails and computers. SharePoint, Dropbox, Snapchat, WhatsApp and a bevy of other programs and mobile apps provide a fertile ground for disputes over the appropriate scope of a party’s document collection and review. In a recent transcript ruling, In re Appraisal of Kate Spade & Co., C.A. No. 2017-0714-AGB (June 21, 2018), Chancellor Andre G. Bouchard postulated whether the time has come for parties to proactively collect and search one of the most frequently used (but seldom searched) methods of electronic communications—text messages.

Background

Petitioners in this action, former stockholders of respondent Kate Spade, sought appraisal of their shares following the company’s 2017 acquisition by Coach Inc. In response to interrogatories, the company asserted that none of its custodians engaged in “substantive business communications” via text message, and that none of the four key executives negotiating the transaction (two on each side) had any prior professional, personal or social relationships with the others. Documents produced by the company, however, indicated the possible existence of relevant text messages between two of the executives.

Petitioners then moved to compel production of text messages from all four executives and five other custodians, arguing that some or all of them had social relationships that could have given Coach an advantage in the sale process, and the additional four custodians were necessary as a “backstop” to ensure production of the messages, because one executive’s practice was to delete text messages promptly.

The company opposed the motion, arguing that, based on interviews with the executives, the text messages were unlikely to contain responsive information, and that the burden of collecting and reviewing text messages (particularly given the abbreviated manner in which most people text) outweighed any benefit the messages may provide.

The Court’s Ruling

The Delaware Court of Chancery granted the motion in part, ordering the company to produce relevant text messages from the four executives. In his ruling, the chancellor provided helpful guidance about the discoverability of parties’ text messages. Responding to company counsel’s inquiry about when it is appropriate to collect text messages, the court mused, “Why isn’t it presumptively always appropriate? It’s how people communicate.”

Bouchard did not directly answer his own question, but did discuss the value that can be derived from text messages: “It has been my experience that text messages can be the source of a lot of probative information in cases, particularly when they’re covered with emojis and other things of that nature. … Maybe a text message will show a personal relationship. Maybe it won’t show that. But, frankly, just the precision of timing of exactly when certain things happened is extremely important in cases. … And so I have found, frankly, text messages to be probative in that regard.”

The chancellor also discussed the expense and burden associated with collecting text messages, recognizing that managing the discovery of text messages can be more cumbersome and expensive than reviewing emails or hard copy documents, and that the likelihood of yielding substantive content was lower than with the more traditional document formats. He adopted a practical approach to the parties’ dispute, ordering the production of relevant messages from the executives, but not requiring review or production of messages from the so-called “backstop” custodians, whose messages petitioners sought as a precautionary measure.

Takeaways: Getting Proactive With Your Clients

Text messaging has become ubiquitous in recent years, even within executive suites and corporate boardrooms. The Court of Chancery has, in the past, ordered parties to collect potentially relevant text messages in pending litigation, but Kate Spade may be the first time a member of the bench mused (publicly, at least) about whether collection of text messages is, or may become, presumptively appropriate in all cases. Although the chancellor did not reach that conclusion in Kate Spade, the question may be revisited in the not-too-distant future. Before that day arrives, Delaware lawyers should think about some issues that may be implicated if and when it does.

Lawyers should consider asking more follow-up questions about custodians’ text message usage in initial document preservation interviews, to validate (on some level) the custodians’ responses. Kate Spade’s counsel inquired whether custodians used text messaging for “substantive business communications,” and all but one answered in the negative. It is unclear whether follow-up questions were asked of those who answered “no,” but with the discoverability of text messages on the rise, additional inquiry may be warranted. Pointed follow up questions, particularly about the nature of business communications that did occur, may be appropriate. A more detailed—even if slightly uncomfortable—interview on the front end can save headaches and potentially unfavorable rulings later in the litigation.

Lawyers might also advise clients to update their document retention policies to include text messages, and to ensure that all employees and directors comply with such policies. In his ruling, the chancellor noted that, with respect to the executive whose claimed practice was always to delete text messages right away, “you can’t get blood from a stone.” If a party’s practice is to regularly delete text messages or other documents whenever litigation is neither anticipated nor pending, and if the practice is memorialized and consistently applied, the party might be able to avoid later discovery disputes.

Conclusion

Whether text messages ever become a presumptive part of the discovery process remains to be seen. Until then, Delaware lawyers should remember that the subject is in the mind of at least one member of the Court of Chancery, and that it might return to the fore in an appropriate case. By being proactive with clients, lawyers can better prepare them for the road ahead and ensure that they meet the court’s expectations should a similar situation arise in their case.

James H. S. Levine and Douglas D. Herrmann are members of the firm's Trial and Dispute Resolution Practice Group, a seasoned and trial-ready team of advocates who help clients analyze and solve their most emergent and complex problems through negotiation, arbitration and litigation.

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