In re Local TV Advert. Antitrust Litig.

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IN RE LOCAL TV ADVERTISING ANTITRUST LITIGATION

MDL No. 2867

No. 18 C 6785

United States District Court, N.D. Illinois, Eastern Division

August 30, 2023

MEMORANDUM OPINION AND ORDER PLAINTIFFS' DISCOVERY MOTION NO. 20 FOR SPOLIATION SANCTIONS AGAINST DEFENDANT GRIFFIN COMMUNICATIONS, INC.

Virginia M. Kendall, Judge.

Plaintiffs^[1]in this putative antitrust class action move under Federal Rule of Civil Procedure 37 and the Court's inherent authority for an order imposing spoliation sanctions on Defendant Griffin Communications Inc. (“Griffin”) for its failure to preserve relevant electronically stored information (“ESI”).^[2](Dkt. 960). For the following reasons Plaintiffs' Motion is granted in part and denied in part. (Id.)

Background

A. Department of Justice investigations and Griffin's Esi Preservation Policies

On September 11, 2017, the Department of Justice sent a Civil Investigative Demand (“CID”) letter to Griffin (the “September 2017 CID letter”). (Dkt. 960-2 at 125). It described the DOJ's “antitrust investigation to determine whether there is, has been, or may be a violation of Section 7 of the Clayton Act, 15 U.S.C. § 18, by conduct, activities, or proposed action of the following nature: Proposed merger of Sinclair Broadcasting Group and Tribune Media Company.”^[3](Id.) The September 2017 CID letter instructed Griffin to “take all necessary steps to ensure that [it] preserves all documents, emails, and information, including hard copy and electronically stored information (“ESI”) relevant to this investigation.” (Id. at 136). The letter then listed potentially relevant documents and ESI, including:

• Sinclair's acquisition of Tribune or any other company's potential acquisition of Tribune;

• information provided to or received from lenders, investment bankers, or financial advisors relating to the sale or acquisition of Tribune;

• competition between any of Tribune, Sinclair, and Griffin;

• data, internal deliberations and discussions, and external communications regarding sales in the local advertising spot market in any of the following designated market areas [DMAs] as defined by The Nielsen Company: Seattle, WA; St. Louis, MO; Salt Lake City, UT; Oklahoma City, OK; Grand Rapids, MI; Harrisburg, PA; Greensboro, NC; Richmond, VA; Wilkes-Barre, PA; and Des Moines, IA (“Overlap DMAs”); and

• data, internal deliberations and discussions, and external communications regarding retransmission consent given to multichannel video programming distributor (“MVPDs”), including without limitation as to the retransmission consent fees and conditions of carriage.

(Dkt. 960-2 at 136-37). Griffin placed a companywide “email hold,” plus a “hold on information that was responsive to the September 2017 CID.” (Dkt. 960-2 at 6). Griffin has not produced any documentation of this email and information hold nor how it was implemented.

On February 8, 2018, the DOJ sent a CID letter (the “February 2018 CID letter”) notifying Griffin that the DOJ's Antitrust Division had “recently become aware that Griffin . . . has been exchanging, directly or indirectly, with other Big 4 broadcast stations in the Oklahoma City DMA current and forward-looking competitive information. The Division's ongoing investigation suggests that direct or indirect exchange of competitive information has also been happening in other DMAs besides Oklahoma City.” (Dkt. 960-2 at 139). The February 2018 CID letter required Griffin to preserve documents and ESI, including those related to:

• The direct or indirect exchange of competitive information, including without limitation pacing information, inventory, revenue, market shares, pricing information or any other information regarding the spot advertising market with Griffin's competitors;

• Internal consideration at Griffin of competitive information received from any of Griffin's competitors; and

• Griffin's use of competitive information, including without limitation Griffin's use of such information in the setting, evaluation, or negotiation of price or other terms for spot advertising.

(Id.) Further, the DOJ stated the preservation “should include documents in Oklahoma City and in any other DMA in which Griffin exchanged directly or indirectly, or continues to exchange directly or indirectly, competitive information with one or more other broadcast stations . . . .” (Dkt. 9602 at 139). Griffin “implemented the document hold through its IT department within one week” of receiving the February 2018 CID letter. (Dkt. 960-2 at 6). It has produced no documentation of this document hold nor how it was implemented.

Finally, on March 16, 2018, the DOJ sent another CID letter indicating the Department was investigating “whether there is, has been, or may be a violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, by conduct, activities, or proposed action of the following nature: competitively sensitive information exchanges in unreasonable restraint of trade.” (Dkt. 960-2 at 146).

Griffin's CEO, David Griffin, explained that after receiving the February 2018 CID letter, he met with IT personnel and legal counsel to discuss it. (Dkt. 969-3 at 161). He “made sure that [Griffin] put a document hold on everything and that no documents would be destroyed” and “instructed the staff.” (Dkt. 969-3 at 161). He stated that the need to preserve documents “was communicated to all relevant staff.” (Id. at 161-62). Derek Criss, Griffin's Director of Local Sales in Tulsa, testified that after the 2018 DOJ investigation began, Griffin's Vice President of Sales, Wade Deaver, instructed employees to save all electronic and paper documents. (Dkt. 960-2 at 6566). According to Criss, document-preservation responsibilities fell to the company's sales account representatives, who “were in charge of keeping their documents and uploading them to the common drive or the OneDrive so it could be backed up every night, and then IT was in charge of that.” (Id. at 66; see also id. at 71-73). The extent to which Griffin's attorneys provided guidance to Griffin's employees or oversaw the litigation hold is unclear.^[4]

Griffin declined to make its IT personnel available to Plaintiffs' e-discovery consultant to discuss its preservation policies and procedures. (Dkt. 960-3 ¶ 8). Companies of Griffin's size typically rely on a “ticketing system” to execute and track employees' IT requests and actions. (Id. ¶ 25). Ticketing systems help ensure effective implementation of litigation holds; companies track when and how a hold was implemented and what data is preserved. (Id. ¶ 26). Griffin appears to have neither a formal ticketing system nor an informal documentation scheme to track actions related to IT. (Id. ¶ 27). Nor does Griffin appear to track its physical IT assets, such as employees' computers, as would be typical for a similarly situated company. (Id. ¶¶ 28-30). Because Griffin did not track its IT actions or IT physical assets, it would not be possible to determine precisely how Griffin implemented the litigation hold.

B. ESI Not Preserved for Litigation

1. Lex Sehl's Emails

Lex Sehl supervised a group of account executives who sold advertising time for Griffin's Tulsa stations. (Dkt. 969-6 at 34:7-35:23). Sehl left Griffin for Sinclair Broadcasting on August 10, 2017. (Id. at 60:6-9). Despite Griffin designating Sehl as one of its document custodians in this litigation, Griffin had failed to produce any of Sehl's documents by March 2022. (Dkt. 960-2 at 2). Griffin then admitted that it had not preserved Sehl's emails or other computer files following his departure but does not know precisely when they were deleted. (Dkt. 960-2 at 7). Nor does Griffin know which company-issued computer Sehl used before he left because Griffin did not track them. (960-3 ¶ 12; 960-2 at 7).

Griffin represents that “prior to the document hold being put in place, it was Griffin's practice to delete a departed employee's emails and files. Griffin did not have a practice of retaining a departed employee's emails and files, nor a practice of documenting when a departed employee's emails and files were deleted.” (Dkt. 960-2 at 6). It was Griffin's regular practice for the IT department to disable a former employee's access to Griffin's network and their Office 365 email and OneDrive files. (Dkt 960-2 at 7). Then, if a supervisor did not need the former employee's data, Griffin deleted the user account, which in turn deleted his data and files. (Id.)

In Sehl's case, his access to Griffin's system was terminated when he departed on August 10, 2017. (Dkt. 960-2 at 7). His supervisor, Derek Criss, wanted to receive his incoming email until December 2018, so Sehl's email account was set to a “shared mailbox status.” (Id.) Griffin turned over emails responsive to Plaintiffs' document requests sent to Sehl and received by Criss from August 10, 2017 to October 15, 2018. (Id.) Additionally, Griffin has produced over 3,000 emails and other documents sent by Sehl to others, or by others to Sehl, as well as over 100,000 documents relating to its Tulsa stations from Tulsa custodians. (Dkt. 969-2 ¶ 3). Griffin also worked with Sehl recently to obtain text messages from his personal cell phone and has turned over these messages that are responsive to Plaintiffs' document requests. (Id. ¶ 4). But otherwise, Sehl's pre-departure files and emails were deleted and are now unrecoverable. (Dkt. 960-2 at 7).

Griffin admits that it “cannot be certain that Mr. Sehl's files dated prior to his departure were deleted when he departed in August, 2017,” and “cannot exclude the possibility that an error was made in 2018 in connection with the document hold.” (Dkt. 960-2 at 7). Plaintiffs subpoenaed Microsoft, which indicated that Sehl's email account remained active...