The broadcast TV station arm of Sinclair Inc. has been tasked with compensating plaintiffs in a case decided by an Illinois federal district court as a result of failing to retain such electronically stored information as text messages. It’s tied to a antitrust lawsuit filed against the company tied to alleged price fixing of broadcast TV ads.
In this particular matter, Sinclair Broadcast Group was judged to have had a duty to preserve relevant electronically stored information (ESI) in the antitrust lawsuit. The company failed to do so by not keeping text messages from work-issued cell phones.
This failure to preserve ESI led to the court sanctions, including an order to compensate the plaintiffs for their investigation costs, because the duty to preserve is triggered by pending or probable litigation.
More than 50 company-issued cellphones were involved in the text message data erasure, making discovery motions difficult for a plaintiff.
“Spoliated evidence” can come through “disorganized, careless, and inadequate” preservation practices, and in May 2023 “extensive negotiations” led CBS News & Stations parent Paramount Global; FOX Corporation; and Cox Media Group to each come to terms with settlement agreements that resolved advertising price-fixing claims against the three television station ownership groups.
CMG, controlled by Apollo Global Management, was responsible for the bulk of the settlement totaling $48 million in value.
The plaintiffs are comprised of One Source Heating & Cooling, ThoughtWorx Inc. (doing business as Minnesota-based ad shop MCM Services Group), Minneapolis-based creative shop Hunt Adkins and Cleveland-area retailer Fish Furniture.
This is germane to the current Sinclair legal fight, as the cases involving the other broadcast TV licensees were subsequently transferred and consolidated before the Illinois Northern District Court in October 2018, with Megan Jones of Hausfeld LLP appointed Interim Lead Counsel.
Amended complaints came in 2019, adding Nexstar Media Group to a group of companies that originally included Raycom Media and Meredith Local Media — entities that no longer exist thanks to deals with Nexstar; Oklahoma-based broadcast company Griffin Communications; the former Tribune Broadcasting; the former Dreamcatcher Broadcasting; and Sinclair Broadcast Group.
A second amended complaint added CBS, Cox Media Group, The E.W. Scripps Co., TEGNA and FOX as defendants, based on Department of Justice investigations uncovering their involvement in the alleged activity.
This activity, the plaintiffs argued, involved the broadcast TV station owners engaging in “a unitary scheme” to raise the prices of broadcast television spot advertisements to “supra-competitive levels” by agreeing to fix prices and exchange competitively sensitive information, including pacing data. This is a violation of Section 1 of the Sherman Act and various state unfair competition laws.
Sinclair settled that matter with the DOJ in 2018.
