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

Logos of Facebook and Gibson, Dunn & Crutcher LLP.

(Reuters) - Facebook Inc and its lawyers at Gibson, Dunn & Crutcher are learning the hard way that fierce litigation tactics can provoke equally fierce blowback.

At a hearing Thursday in a class action alleging that Facebook (now Meta Platforms Inc) violated consumer privacy laws by sharing users’ data with the political consultant Cambridge Analytica and others, U.S. District Judge Vince Chhabria of San Francisco invited plaintiffs lawyers to file a motion for sanctions against Facebook and Gibson Dunn for “stonewalling” during discovery in the four-year-old case.

The judge came in blazing hot, announcing at the very beginning of the hearing that he had developed “quite a strong preliminary view” that the company’s conduct was sanctionable – and that the Gibson Dunn lawyers who signed Facebook’s briefs are just as much to blame as their client. Chhabria said he felt so strongly on that point that if plaintiffs lawyers from Keller Rohrback and Bleichmar Fonti & Auld were not inclined to seek sanctions from Gibson Dunn, “I’m going to want to know if there’s a good reason not to.”

The judge gave Keller Rohrback and Bleichmar Fonti until Feb. 24 to file the sanction motion. He also waived his usual 15-page limit, urging plaintiffs lawyers to “take whatever space you need to articulate the misconduct and to identify the appropriate standard for imposing sanctions.”

Facebook did not respond to my query on the hearing. Gibson Dunn declined to provide a statement. The company told the judge in a Feb. 9 filing that it had not engaged in litigation misconduct. “Facebook submits that the actual record will reflect that at all times it acted in good faith and complied with every order the special master [overseeing discovery] has issued,” it said.

Chhabria declined to allow Facebook counsel Orin Snyder of Gibson Dunn to respond to his criticism during Thursday’s hearing, telling him to save those arguments for Facebook’s brief.

Plaintiffs lawyer Lesley Weaver of Bleichmar declined to comment.

Keep in mind that Chhabria has been mostly uninvolved in discovery in the case. Disputes have so far been overseen by U.S. Magistrate Judge Jacqueline Corley and, since July 2012, special master Daniel Garrie. The case record does not show that either of them have accused Facebook or Gibson Dunn of sanctionable conduct during the extremely combative litigation over Facebook’s discovery obligations. In fact, at a hearing in January, Corley pushed back when plaintiffs lawyers complained about Facebook’s insistence on revisiting previous discovery rulings. “I don't think you can make an argument that there was anything bad faith about that,” the judge said.

Chhabria, though, seemed at Thursday's hearing to have doubts about Facebook's good faith. The judge appeared particularly irked about three discovery disputes, all of which require a bit of explaining.

The name plaintiffs are eight current or former Facebook users who 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 their knowledge or consent. Facebook contends, among other defenses, that users cannot claim privacy violations when they themselves share information on social media or other public websites. (Chhabria largely rejected that theory when he denied Facebook’s motion to dismiss in 2019.)

The name plaintiffs want Facebook to produce all of the information it harvested about them, including data from sources other than their Facebook accounts. Facebook insists that it has already produced everything that the company might have shared with third parties. It has argued for the last year or so that plaintiffs lawyers keep expanding their demands for discovery on Facebook's data collection in order to assert new theories.

Both special master Garrie and magistrate judge Corley have heard repeated rounds of arguments about the scope of Facebook's obligations. In a Feb. 3 case management statement, Keller Rohrback and Bleichmar said the company is dragging its feet on “critical” discovery about its tracking of the name plaintiffs – and about how Facebook monetized its analysis of their internet usage.

At Thursday’s hearing, Chhabria seemed impatient that the issue has provoked extensive litigation when “it seems obvious to me that [the data] was discoverable.”

Chhabria also accused Facebook and Gibson Dunn of stonewalling on documents from the company’s 2018 internal investigation of its data sharing practices. Plaintiffs in the class action demanded to see documents from the internal probe, known as the app developer investigation, early in the case. Facebook said, as it did in a parallel (and also hotly contested) privacy suit by the Massachusetts attorney general, that documents from the investigation were shielded by attorney-client privilege.

Chhabria said at last week’s hearing that Facebook’s slow production of the investigative material it's been ordered to turn over was “particularly egregious.” Facebook counsel Snyder promised the judge that the company would produce all of the requisite material to plaintiffs lawyers in a matter of weeks. “We’re working around the clock,” he said.

Finally, Chhabria castigated Facebook for cancelling scheduled depositions of three name plaintiffs. In its Feb. 9 filing, Facebook said it had ditched the depositions because the other side hasn’t produced information the company needs to question the witnesses efficiently. “Plaintiffs have not identified what information they believe Facebook shared without consent [and] have not identified how they believe they were harmed,” the company said.

That excuse did not fly with Chhabria, who dubbed it “preposterous.” If plaintiffs incurred any expenses from the cancelled depositions, the judge said, “that strikes me as probably sanctionable, as well.”

Like I said, we haven’t heard Facebook’s side of the story. But based on Thursday’s hearing, it’s not going to be easy to convince Chhabria to back down.

Read more:

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

Who is Cambridge Analytica and what did it do?

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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.