FTC Seeks Sanctions Against DIRECTV for Spoliation of ESI
In Federal Trade Commission v. DIRECTV Inc., et. al., Case No. 15-01129 (N.D. Cal., Dec. 21, 2016), the FTC filed suit against satellite television provider DIRECTV for deceptive advertising related to Defendants’ failure to disclose certain terms when offering low prices for a certain time frame on its service. During discovery, Plaintiff accused Defendants of spoliation, arguing that Defendants engaged in spoliation of ESI, including interactive website evidence relied upon in Defendants’ expert report; evidence of A/B testing conducted in the regular course of business; and web analytics data maintained by third party SiteCatalyst. The parties did not disagree that the duty to preserve arose in 2010 when Plaintiff first served its investigative demand upon Defendants. Plaintiff sought the lost information as evidence and also to exclude Defendants’ expert’s analysis of the information.
With respect to the interactive website evidence, Plaintiff argued that the failure to preserve the data prevented Plaintiff from recreating and analyzing the information tested by Defendants’ expert, Dr. Wind. Defendants argued that they informed Plaintiff in 2010 that they would not be maintaining copies of the website, and again in 2014. Defendants also offered screenshots.
As to the A/B testing, Defendants stated that they produced all relevant A/B tests, although they also did not dispute that they failed to take steps to preserve certain information and lost thousands of A/B tests. Defendants argue that the A/B test they did preserve was the one used in Dr. Wind’s report.
Finally, Plaintiff states that Defendants’ web analytics relating to behavior of website users was destroyed when Defendants modified its contract with SiteCatalyst; however, Defendants argued that Plaintiff did not accept their invitation to review the web analytics until a week before the close of discovery and did not complain about spoliation until October.
The court found that both parties could have been more proactive in their discovery actions. The court held that Plaintiff did not show sufficient prejudice to warrant the sanction of excluding the evidence, as Defendants produced sufficient information for Plaintiff to make its analysis. The only way in which Plaintiff was prejudiced, according to the court, was in its inability to review materials relied upon by the expert. Therefore, the court ordered Defendants to produce their expert for deposition but ordered no sanctions.