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WeChat: A New Frontier in ESI Preservation and Production

WeChat is an increasingly widespread communication platform whose content is being sought with growing frequency by parties to U.S. litigation. Despite its growing ubiquity, many lawyers either know nothing about WeChat or are not advising clients to preserve and produce relevant WeChat communications in discovery. Failing to do so can be damaging or even disastrous to a party’s claims or defenses. This is evident from the number of recent court cases addressing discovery of relevant WeChat messages and imposing sanctions for preservation or production failures.

What is WeChat?

WeChat is a multifaceted digital age platform owned and operated by the Chinese tech titan Tencent. WeChat is ubiquitous in China and boasts over one billion active users throughout the world. Described in court opinions as both a “social media application” and a “communication platform,” WeChat includes both of these functions and much more. WeChat offers the following for its users:

  • Text messaging
  • Voice calls
  • Social media features
  • A payment service
  • Gaming
  • Management of financial investments
  • Ride hailing and
  • A virtual network of applications with additional services and offerings

While WeChat has entered the U.S. marketplace and is available on both the App Store and Google Play, it has yet to penetrate the mainstream consciousness that iMessage, Facebook, and WhatsApp have achieved.

Discovery of WeChat Communications

Despite its relatively limited presence in the U.S., WeChat is already showing up in court opinions. WeChat discovery disputes tend to follow a similar paradigm, which resembles so many other “new” technologies:

  • A requesting party seeks discovery of relevant WeChat communications from custodians who work for a Chinese company or who are based in China;
  • The responding party fails to either preserve or produce the requested WeChat information; and
  • The court generally imposes sanctions against the responding party for failing to preserve or produce the relevant WeChat materials.

Siras Partners LLC v. Activity Kuafu Hudson Yards LLC fits this pattern.[1] In Siras Partners, a real estate development dispute venued in New York state court, plaintiff obtained sanctions against defendants after they failed to preserve relevant WeChat communications. The trial court determined that the individual defendants—who were principals for the corporate defendant, a Chinese private equity firm—lost the communications at issue around a year after plaintiff first requested their production. In affirming that decision on April 30, 2019, the appellate court held that “defendants’ failure to preserve the [WeChat] discussions for more than a year” justified the trial court’s decision to issue an adverse inference instruction to the jury at the time of trial.

Similarly, the defendant in Brooks Sports, Inc. v. Anta (China) Co., Ltd. failed to produce most of the relevant WeChat communications that plaintiff sought in the parties’ trademark infringement litigation.[2] The WeChat messages at issue were maintained on smartphones belonging to defendant’s executives and employees, most of which were based in China. Defendant declined to produce those WeChat discussions, arguing that “Chinese privacy law” forbade defendant from compelling its workers to turn over their messages after they refused to provide consent to allow the company do so. After defendant failed to obey production orders for the messages (and other documents) and also made misrepresentations to the court regarding the nature and content of those messages, the court imposed terminating sanctions against defendant in January 2019.

And in Shanghai Weiyi International Trade Co., Ltd. v. Focus 2000 Corp., plaintiff declined to produce relevant WeChat messages that defendants requested during discovery.[3] Plaintiff—“a state-owned garment factory in Shanghai, People’s Republic of China”—failed to produce any WeChat messages (along with several other categories of documents). To remedy plaintiff’s noncompliance with the court’s production order, the court imposed a broad preclusion sanction affecting the evidence plaintiff could present at trial.

Among recent cases, only Monolithic Power Systems, Inc. v. Intersil Corporation from November 2018 declined to issue sanctions after a responding party (plaintiff) neglected to preserve or produce relevant WeChat messages.[4] The court in Monolithic Power took no remedial action against plaintiff because defendant was not able to demonstrate that plaintiff’s failure to preserve the WeChat communications was nefarious or even negligent. As the court observed, plaintiff’s deletion of the WeChat messages arose “in the ordinary course – and consistent with apparent industry practice – to conserve limited space on employees’ phones.”

Dealing with WeChat Communications

Given the widespread use of WeChat and the number of recent court opinions dealing with WeChat related discovery issues, counsel should develop a set of procedures for addressing the preservation and production of relevant WeChat information from clients.

An initial step that counsel should consider is adding WeChat to its checklist of possible sources of relevant information and to its custodian interview questionnaire. Doing so will better ensure that WeChat is not overlooked when triaging sources of relevant information.

The next step is not unique to WeChat, but has been recommended almost universally by courts and eDiscovery experts alike: develop an understanding of client information systems. As the framers of the 2015 amendments to Rule 37(e) counseled, “[i]It is important that counsel become familiar with their clients’ information systems and digital data.” Lawyers that do so will learn whether their clients use WeChat and whether they do so for business purposes. They can then make a determination as to the relevance of such information.

A final issue to consider is the manner in which a client has set up WeChat for employee communications. Whether the platform has been implemented as an official information system within the enterprise or if it is used as a form of shadow IT by individual custodians may affect whether the client can produce relevant WeChat information. Brooks Sports suggests that under the latter scenario, individual custodians (if based in China) could withhold their consent under “Chinese privacy law” and thus stymie efforts by the client to produce relevant WeChat communications from their mobile devices.[5] Understanding how WeChat has been implemented within the corporate environment will better enable counsel to advise the client on preservation and production.

[1] Siras Partners LLC v. Activity Kuafu Hudson Yards LLC, --- N.Y.S.3d ---, 2019 WL 1905478 (2019).

[2] Brooks Sports, Inc. v. Anta (China) Co., Ltd., No. 1:17-cv-1458, 2018 WL 7488924 (E.D. Va. Nov. 30, 2018); report and recommendation adopted, 2019 WL 969572 (Jan. 11, 2019); judgment modified, 2019 WL 969569 (Feb. 5, 2019).

[3] Shanghai Weiyi Int’l Trade Co., Ltd. v. Focus 2000 Corp., 15-CV-3533, 2017 WL 2840279 (S.D.N.Y. June 27, 2017).

[4] Monolithic Power Systems, Inc. v. Intersil Corp., No. 16-cv-1125, 2018 WL 6075046 (D. Del. Nov. 18, 2018).

[5] The Brooks Sports court nevertheless imposed sanctions, reasoning that defendant “should not be able to conveniently use Chinese law to shield production of communications responsive to discovery requests when it could have set up Anta-controlled WeChat accounts for its employees’ use which would not have the same issues regarding Chinese privacy laws.” Brooks Sports, 2018 WL 7488924 at *10, *13.

Philip Favro
Philip Favro
Philip Favro acts as a trusted advisor to organizations and law firms on issues surrounding discovery and information governance. Phil provides guidance on data preservation practices, litigation holds, data collection strategies, and ESI search methodologies. In addition, he offers direction to organizations on records retention policies and the need to manage dynamic sources of information found on smartphones, cloud applications, and social networks. Phil is available to serve as a special master on issues related to electronic discovery. Phil is a nationally recognized thought leader and legal scholar on issues relating to the discovery process. His articles have been published in leading industry publications and academic journals and he is frequently in demand as a speaker for eDiscovery education programs. Phil is a member of the Utah and California bars. He actively contributes to Working Group 1 of The Sedona Conference where he leads drafting teams and serves as the Steering Committee project manager. Prior to joining Driven, Phil practiced law in Northern California where he advised a variety of clients regarding business disputes and complex discovery issues. He also served as a Judge Pro Tempore for the Santa Clara County Superior Court based in Santa Clara, California.