Facebook, Gibson Dunn face $854K sanctions demand in Cambridge Analytica class action

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(Reuters) - In a newly unsealed sanctions motion in a class action arising from the Cambridge Analytica data-sharing scandal, plaintiffs' lawyers contend that Facebook Inc and its legal team from Gibson, Dunn & Crutcher not only acted in bad faith by delaying crucial discovery but compounded their violations by attempting to blame plaintiffs for the slowdown.

The redacted sanctions motion, originally filed under seal on March 12, seeks about $854,000 in fees and costs from Facebook (now Meta Platforms Inc), Gibson Dunn and Gibson Dunn’s lead partner in the class action, Orin Snyder.

Plaintiffs' lawyers from Keller Rohrback and Bleichmar Fonti & Auld moved for sanctions at the urging of the judge presiding over the class action, U.S. District Judge Vince Chhabria of San Francisco. At a hearing in February, Chhabria said he had already developed “quite a strong preliminary view” that the company and Gibson Dunn had engaged in sanctionable conduct.

The newly unsealed brief, first spotted by my colleague Mike Scarcella, offers 56 pages of arguments to bolster Chhabria’s supposition. Plaintiffs’ lawyers allege that Facebook’s obfuscation and delay were a deliberate litigation strategy. The company and its lawyers, the brief said, “delayed discovery by slow-walking discovery disputes, obstructing plaintiffs’ requests for relevant evidence, disobeying or distorting court orders and making insubstantial and sometimes frivolous legal arguments.”

Moreover, the plaintiffs allege, Facebook pushed a “false narrative” that any delay was due to unreasonable discovery demands from plaintiffs scrounging for viable claims and trying to expand their case beyond allegations that Facebook improperly shared users’ data without consent. Keller Rohrback and Bleichmar Fonti argued that Facebook’s attempt to shift the blame for seemingly irresolvable discovery disputes was additional proof of its bad faith.

Plaintiffs appear to have a receptive audience in Chhabria. At a March 30 hearing, the judge floated the possibility of simply ruling that adverse inferences may be drawn against Facebook in class certification and summary judgment briefing and at trial. Chhabria even floated the prospect of entering judgment against Facebook as a sanction for discovery delays.

“Let me just ask one question,” the judge said to plaintiffs' lawyer Derek Loeser of Keller Rohrback. “Have there ever been cases where judgment is simply entered against the defendant based on dilatory discovery conduct?”

Loeser's co-counsel, Lesley Weaver of Bleichmar Fonti, responded that case-ending sanctions were “an appropriate remedy for serious discovery abuse," citing motions last year for default rulings against Endo International in opioids litigation.

Meta said in an email statement that the sanctions motion "is not an accurate reflection of the record in this case," and that the company is looking forward "to presenting the complete record to the court." Gibson Dunn declined to provide a statement. Loeser and Weaver declined to comment on their brief.

Facebook and its lawyers have previously told Chhabria, in hearings and in filings, that the full record will show they have complied with every discovery order issued by Special Master Daniel Garrie and have acted throughout the case in good faith.

At the March 30 hearing, Gibson partner Rosemarie Ring, a recent addition to Facebook’s defense team, repeated those protestations after Chhabria mused about a default judgment. “I truly believe once there's a fuller understanding of what has happened here and how things have unfolded, we will be able to convince you that not only are terminating sanctions not warranted here, but no sanctions are warranted,” she said. Facebook, she noted, has not yet filed its brief responding to plaintiff's assertions.

Chhabria responded that he is looking forward to reading that brief - it's due on April 11 - but warned, “It might be a little bit of an uphill battle based on everything I've learned thus far.”

Plaintiffs’ sanctions motion highlighted alleged discovery abuses in several areas that the judge previously cited as concerns, including Facebook’s assertion of privilege over documents from its internal investigation of data-sharing with other apps and Facebook’s reluctance to produce all of the information it has harvested about the eight named plaintiffs in the prospective class action.

The motion asserts that Facebook improperly insisted it was entitled to privilege over material from the app developer investigation even after U.S. Magistrate Judge Jacqueline Corley, who was initially appointed to oversee discovery, ruled that the company could not broadly claim privilege. Facebook’s contrary arguments to the subsequently-appointed special discovery master, Garrie, “were factually baseless and legally frivolous” and “disobeyed” the magistrate’s orders, plaintiffs said.

Plaintiffs also accused Facebook and Gibson Dunn of disregarding a series of orders from Corley and Garrie to produce all of Facebook’s data on the named plaintiffs, even if that data was not shared with app developers. (Plaintiffs allege that the company harvested and shared highly personal and revealing data – such as photos and videos they posted or looked at; information about their relationships, politics and religious views; and even the actual words they used in messages – without users' knowledge or consent.)

“Between them, Judge Corley and Special Master Garrie have issued more than a dozen orders related to the named plaintiffs’ data,” the sanctions motion said. “As of the date of this filing, Facebook has not produced any documents," except for information Facebook users can access on their own.

You can be sure that Facebook and Gibson Dunn will tell Chhabria a different story when they file Facebook’s brief on April 11. The most recent case management report in the class action, which was filed soon after the sealed sanctions brief, gives a taste of the company’s defense on the issue of the named plaintiffs' data. The report quotes from a March 9 hearing in which the special master profusely thanked Facebook for providing witnesses and written submissions to explain the complexity of gathering the information sought by plaintiffs. Facebook also said it has turned over everything except for lawyer communications from the internal app developer investigation.

Even Keller Rohrback and Bleichmar Fonti acknowledged in the joint report that Facebook has changed its tone since Chhabria first suggested sanctions in February - but the judge's most recent statements suggest that a mere shift in tone isn’t going to change his mind.

We’ll know in a week what else Facebook and Gibson Dunn have to say.

Read more:

Sanction threat looms for Facebook and Gibson Dunn in privacy class action

Facebook to pay record $5 billion U.S. fine over privacy; faces antitrust probe

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Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. A Dartmouth college graduate, she has worked as a journalist in New York covering the legal industry and the law for more than three decades. Before joining Reuters, she was a writer and editor at The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin.