Case Law

Hold Onto the Phone: Turning in Phone for Rebate has Preservation Consequences


Montgomery v. Iron Rooster-Annapolis, 2017 U.S. Dist. LEXIS 71338 (D. Md. May 9, 2017) In this case, the plaintiff alleged that her rights under the Fair Labor Standards Act and the Maryland Wage and Hour Law were violated when working for the defendants’ restaurant. The defendants contend that the plaintiff was exempt for a large part of her employment due to the managerial nature of her position. During the time the defendants’ claim the plaintiff was exempt, the plaintiff used an HTC cell phone from Verizon. The defendants believed the phone contained text messages between her and other employees, which would show she was acting as a manager, as well as text messages to her former supervisor who brought a similar claim against the restaurant. The plaintiff claimed that she began having problems with her phone around August 15, 2016 and brought the phone into the Verizon store. The plaintiff opted to participate in a trade-in program in which she would receive $200 for returning her phone to Verizon when a shipping box arrived. The shipping box took longer than expected to arrive, the plaintiff ultimately shipped the phone back at some point in September 2016, and the account was credited with the $200 on October 4, 2016. Both parties agree that the plaintiff was on notice of litigation as early as May 4, 2016 and on June 23, 2016 the plaintiff, through counsel, threatened the defendants with criminal action and requested they preserve all electronic information. The defendants filed a motion to compel sanctions, citing FRCP 37(e), for the plaintiff’s failure to preserve the cell phone data. The magistrate judge found that there was no intent behind the plaintiff’s failure to preserve the ESI and noted the defendant’s counsel had yet to try to retrieve the sought after ESI from other employees. As a result, the magistrate judge recommended that jury instructions be provided that there was a duty to maintain the ESI on the HTC cell phone and that there should be consideration of whether the defendants can prove the phone contained text messages during the relevant time period and whether there is any evidence that proves text messages on the HTC phone would be favorable to the defendants.

Keywords: cell phone, mobile device, text messages, failure to preserve, preservation, litigation hold, sanctions, employees, intent, FRCP 37(e)