Are Legal Holds Protected by Privilege? Insights from the FTC's Battle with Amazon

Curious about whether legal holds are protected by privilege? You won't want to miss this week's breakdown of a landmark decision in the Federal Trade Commission versus Amazon case. We explore the intricacies of Amazon's legal battle, where Judge John Chun tackles whether Amazon must produce document preservation notices and instructions about the use of ephemeral messaging applications like Signal. Join Kelly Twigger, an experienced attorney with 25 years in the field, as she dissects the FTC's motion to compel and Amazon's privilege objections, offering keen insights that are crucial for anyone navigating the complex world of eDiscovery.

This episode is packed with essential takeaways on how this ruling could influence your litigation strategy and risk mitigation practices. We highlight the potential ramifications of this antitrust case, coinciding with Amazon Prime Day, and what it teaches us about the broader implications for consumers, merchants, and your everyday eDiscovery obligations. Tune in for blunt, actionable insights that promise to keep legal professionals ahead of the curve, armed with the knowledge needed to tackle future challenges in electronic discovery with confidence.

FTC v. Amazon.com, Inc. (July 9, 2024)
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Thank you for tuning in to Case of the Week with Kelly Twigger. If you found today’s discussion helpful, don’t forget to subscribe, rate, and leave a review wherever you get your podcasts. For more insights and resources on ediscovery, visit Minerva26 and explore our practical tools, case law library, and on-demand education from the Academy. Join us next episode as we break down another important case shaping the future of ediscovery.

Episode Transcript

Kelly Twigger (00:13):
Welcome to the Case of the Week podcast, where
each week, we break down arecent decision in electronic
discovery case law and talkabout the practical impact for
you and your clients and keepyou up to date on your
obligations with electronicallystored information as evidence.
If you're a litigator, legalprofessional or you love the
power of ESI as much as I do,this is the place to be.

(00:34):
I'm Kelly Twigger, the CEO andfounder of eDiscovery Assistant
and the principal at ESIAttorneys, with more than 25
years of experience navigatingthe evolving landscape of
litigation and eDiscovery.
I'm a practicing attorney,author, speaker, entrepreneur
and now podcaster who works as adiscovery strategist and expert
for clients at ESI Attorneysand to provide that knowledge to

(00:55):
all legal professionals throughour e-discovery assistant
platform.
In each episode, we'll tackle anew decision in e-discovery
case law and how it shapes bothyour litigation strategy and
planning for risk mitigation.
If you're ready for blunt,actionable insights that keep
you ahead of the curve, andmaybe a few laughs along the way
, this is your go-to podcast.
Subscribe or follow now tostart embracing's episode of our

(01:19):
Case of the Week series broughtto you by eDiscovery Assistant.
My name is Kelly Twigger.
I am the CEO and founder ateDiscovery Assistant and the

(01:40):
principal at ESI Attorneys.
Ediscovery Assistant is yourGPS for eDiscovery knowledge and
education.
Thanks so much for joining metoday.
As you know, each week on Caseof the Week I choose a recent
decision in eDiscovery and talkto you about the practical
implications of what thatdecision means for your practice
, your clients, how you need tobe proceeding on a daily basis

(02:01):
in eDiscovery.
This week's decision is a veryshort one, but very compelling
in that it touches again on theissue of whether the legal holds
that counsel send to custodiansare privileged and under what
circumstances that privilege canbe circumvented and those holds
will have to be produced.
This is the second time thatthis has come up in case of the
week in 2024, and we'll get intothat.

(02:22):
Our decision this week comes tous from the Federal Trade
Commission versus Amazoncom.
This is a case that's pendingin the Western District of
Washington and this is adecision from United States
District Judge John Chun datedJuly 9, 2024.
Judge Chun has 24 decisions inour e-discovery assistant
database.
A decision in our database, asyou know, is tagged with our
proprietary issue taggingstructure assistant database.

(02:43):
A decision in our database, asyou know, is tagged with our
proprietary issue taggingstructure, and this week's
issues include signal ephemeraldata 30B6 corporate designee
bulliation, legal hold,attorney-client privilege,
attorney work product andfailure to produce.
We are before the court on amatter that is brought by the
FTC alleging that Amazon is amonopolist that uses a set of

(03:06):
interlocking, anti-competitiveand unfair strategies to
illegally maintain its monopolypower.
The FTC and its state attorneygeneral partners say that
Amazon's actions allow it tostop rivals and sellers from
lowering prices, degrade qualityfor shoppers, overcharge
sellers, stifle innovation andprevent rivals from fairly

(03:27):
competing against Amazon.
I hadn't really thought aboutit, but given that today is the
first day of Amazon Prime, thiscase is fairly timely.
This is an enormous antitrustcase with sufficient significant
implications for consumers andmerchants who sell their
products through Amazon.
We are before the court todayon the FTC's motion to compel
the production of quote document, preservation notices and its

(03:51):
instructions about the use ofephemeral messaging applications
, including Signal.
Close quote.
Plaintiffs sought the documentsas relevant to their assessment
of defendants' potentialspoliation from two ephemeral
messaging applications, signaland Wicker.
The FTC's RFPs sought quote.
All litigation holdspreservation notices or similar

(04:12):
documents sent by Amazon inconnection with the June 17,
2019 preservation letters.
August 5, 2019.
Voluntary access letter.
February 20, 2020, civilinvestigative demand and or
September 26, 2023, complaintsin this matter.
Close quote as well asinstructions or advice given to

(04:34):
employees about the use ofephemeral messaging, including,
but not limited to, signal andWicker.
Now, defendants objected tothese requests as privileged and
did not produce them.
From a timeline perspective,think about the dates that I
just gave you on the specificthings that the FTC is
requesting.
They're saying to Amazon weknow that you sent out notices

(04:56):
as early as June 2019, again inAugust of 2019, again in
February 2020, and again inSeptember 2023, all of which
were likely triggered by theduty to preserve information as
a result of the FTC'sinvestigation.
Now, this case was not filed bythe FTC until September 2023,

(05:17):
but the FTC was working withAmazon on an investigation for
four years prior to the filingof the complaint and, according
to these requests for productionasking for these legal hold
notices, they want data thatgoes back as far as that early
stages of that investigation in2019.
All right, so what is thecourt's analysis here?
It's a pretty simple factpattern.

(05:37):
The court began its analysis byagreeing that the documents that
plaintiffs are asking for maybe relevant to spoliation, but
the court also acknowledged thatblack letter law that quote
litigation hold notices are notdiscoverable, particularly when
a party has made an adequateshowing that the letters include
material protected under theattorney client privilege or the

(05:59):
attorney work product doctrine.
Close quote showing ofspoliation overcomes the
protections against disclosurethat might otherwise apply to
document preservation noticesand attorney-client privilege
communications about litigationholds or spoliation.
In response, the defendantsmade multiple arguments, but the

(06:21):
court really latched on to onefrom the defendants, which
asserted that the appropriateresponse in this situation is to
order a 30B6 deposition of theparty seeking the privilege.
So in this case, the court thedefendants are asking the court
to order the FTC to take a 30B6deposition of an Amazon employee
, and the court then looked tosimilar cases in which courts

(06:43):
have granted 30B6 depositionsand testimony that then provided
a sufficient basis forrequiring production of the
legal hold notices.
So essentially, case law givesus a basis, in fact, for using
the 30b6 notice as the nextprocedural step before
compelling production of thepreservation notices.

(07:03):
Now the plaintiffs came back andargued that they'd already
sought corporate testimony onAmazon's preservation efforts,
citing excerpts from testimonythat was given by Amazon's
corporate representative at aninvestigational hearing taken
during the pre-complaintinvestigation and that an
additional deposition would befruitless.
During that testimony,plaintiffs asked about the

(07:24):
document preservation noticesthat Amazon had circulated, and
Amazon's counsel stated that thewitness had not viewed specific
hold notices and that Amazonviewed those as privileged
communications.
So they'd already asked thequestion once and Amazon had
refused to answer it.
Now Amazon is saying well, askus again.
And the plaintiffs are sayingwhat is the point of that?

(07:44):
The court disagreed withplaintiffs and ordered Amazon to
provide a 30B6 witness within30 days and allowed plaintiff to
ask about one when and to whomthe litigation notices were
given.
Two, what kinds of categoriesof information and data
defendant's employees wereinstructed to preserve and
collect.
And three, what specificactions they were instructed to

(08:05):
take to that end.
The court then permittedplaintiffs to renew their motion
if the deposition did notprovide the information
necessary to analyze the fullextent of the possible
spoliation, and with that ruling, the court then denied the
motion without prejudice.
So we're essentially left withAmazon will now be required to
provide a 30B6 witness who willbe able to provide those three

(08:26):
categories of information.
All right, what are ourtakeaways from this case?
Well, we're seeing a lot moredecisions this year in which
parties are working to compelthe production of legal holds
documents that have beenconsistently protected as
privilege.
But, as we discussed in episode138 on Case of the Week, which
was the UberTex case, there arecertain circumstances where the

(08:48):
courts will order the productionof information around the legal
holds, ie information about thesources of ESI preserved, what
sources of ESI preserved, wheneach source was preserved, when
each ESI source was used, whateach source was used for and the
general types of informationhoused in each source.
In the UberTex case, uber wasalso required to provide names

(09:12):
and roles of folks who receivedthe actual litigation hold, so
very similar to the informationthat the court has ordered here.
There's no information in thisdecision about what the alleged
spoliation is to this point fromthe FTC, so we don't have a
real basis to sort of thinkstrategically about what's
happening here.
But given the subset ofinformation in the request for

(09:35):
production that they're askingfor Signal and Wicker data, we
can absolutely consider thatthose ephemeral messaging
applications are likely thesources of that potential
spoliation.
Now, in the case before us, theFTC wants the actual legal hold
notices to know what Amazon toldits custodians regarding the
preservation of data from Signalor Wicker to ephemeral

(09:55):
messaging applications.
If you've read our 2023 annualcase law report, we walked
through how a user can changetheir settings in Signal to have
messages auto-delete or becomeephemeral.
Signal can be an ephemeralmessaging application, but its
default settings are to keepmessages on the device that
they're sent from and to.
Because of that, it's importantto know what instructions, if

(10:17):
any, amazon gave to itscustodians about preservation of
data for the application.
Now as to Wicker, interestingly, amazon bought Wicker in 2021,
stopped allowing new users onthe app on December 31st 2022,
and discontinued the use ofWicker on December 31st 2023.
Remember that the investigationfrom the FTC started in 2019, so

(10:41):
two full years before Amazonbought Wicker.
So the question of what datawas retained for purposes of
this litigation is important,especially when it appears that
plaintiffs know that Wicker wasused to communicate information
that may be relevant to thelitigation.
The FTC again filed this casein September 2023, after those
four years of investigation intoAmazon's practices, during

(11:03):
which time, according to newsreports, they sought documents
from more than 130 current andformer Amazon employees.
So pretty good bet that the FTChad a good source, good
knowledge base of information ofwhat was available and what
sources were used to communicateas a result of that years-long
investigation.
Now, context here is key and itseems likely that we'll see a

(11:26):
revisit of this foliation here,given the amount of evidence
that the FTC already had priorto filing suit.
It will be an interestinganalysis in that it appears
Amazon's duty to preserve Wickerwill have arisen well before it
shut the platform down inDecember of 2023.
Now, practically speaking, thekey takeaway from this case is
that the privileged protectionsof a legal hold may be overcome

(11:49):
by a preliminary showing ofspoliation.
This analysis adds a level ofcomplexity to how counsel
leverage legal hold notices tocommunicate to custodians and
liaisons for specific datasources.
In my view, it really ratchetsup the need for early and direct
conversations with custodiansand the liaisons of those data

(12:11):
sources.
The more we get into thesecomplex data sources mobile
devices, collaboration tools,things that are not our standard
email that are kept forever andever it's more important than
ever to have those conversationsearly.
A notice that's sent via emailwithout a follow-up conversation
following shortly thereafterthat ensures that a custodian

(12:32):
knows and fully understandstheir obligations, is really
important, as well as theproactive collection of data in
order to mitigate risk.
So keep that in mind, as you'removing forward, that those
legal hold notices now are beingchallenged more and more
regularly.
Yes, they are in these largeMDL and significant litigations
against technology companies,but that doesn't mean that the

(12:55):
principles won't filter downinto other litigation.
So be aware of the potentialprescription on the privilege of
litigation holds if there is anallegation of spoliation to
which those legal holds couldbecome relevant, and be prepared
to provide a 30B6 witness toanswer the questions that are
outlined both in the UberTaxcase and in this decision from

(13:17):
FTC versus Amazon.
All right, that's our case ofthe week this week.
Thanks so much to all of youwho've been tuning in for the
last few years to watch ourseries and we look forward to
talking again on the 150thepisode.
Thanks, and have a great week.
Thanks for joining me on theCase of the Week podcast.
Tune in next episode as Idiscuss a new decision in the
discovery case law and identifythe issues you need to be paying

(13:40):
attention to and how they canhelp you do better discovery for
your clients and leverage thepower of ESI.
Be sure to subscribe and leavea review to help others discover
the show and be kept in theknow on all things electronic
discovery.
I'm Kelly Twigger.
See you next time.