Why Meta shareholders are seeking sanctions for former COO Sheryl Sandberg

Attorneys for Meta shareholders asked a Delaware judge Monday to sanction the company’s former Chief Operating Officer Sheryl Sandberg and fellow Facebook board member and current White House chief of staff Jeff Zients for deleting emails related to the Cambridge Analytica privacy scandal, despite being told to preserve such records.

The plaintiff attorneys contend that Sandberg and Zients used personal email accounts to communicate about key issues relating to their 2018 shareholder lawsuit that alleged Facebook officers and directors violated both the law and their fiduciary duties in failing for years to protect the privacy of user data.

“Although Sandberg and Zients received a litigation hold requiring them to preserve documents from these accounts, they both knowingly and permanently destroyed electronically stored information from such sources,” attorneys said in a court filing.

The plaintiffs say the former board members were either “reckless or intentional” in destroying documents, noting that Sandberg deleted communications to and from her Gmail account after only 30 days, even after being notified of the “litigation hold” to preserve documents. Zients never disabled an auto-delete function on his email account, even though he, too, received a litigation hold and consulted with lawyers, they said.

The plaintiffs argue that Sandberg and Zients should be prohibited from testifying about information they sent or received using their personal email accounts. They also say the burden of proof for any affirmative defense they present should be raised to a standard of “clear and convincing evidence,” instead of the lower standard of a “preponderance” of the evidence.

Sandberg was deposed last week. Plaintiff attorney Max Huffman said Zients is “busy” and will be deposed in February “after there’s an effective transition in Washington.”

Defense attorney Berton Ashman described the email deletions as “unfortunate” but argued that the plaintiffs have not shown that they were prejudiced in any way.

“There’s no intent here to destroy relevant or responsive information,” Ashman told Vice Chancellor J. Travis Laster, adding that there no “trove of missing emails.”

“There’s no grand scheme or suggestion of bad behavior,” he added.
Ashman said the vast majority of emails that Sandberg and Zients sent or received using their personal accounts were also received by other individuals at Facebook. He suggested that any emails that may have been deleted have been made available to the plaintiffs from other sources at Facebook.

Huffman, the plaintiffs’ lawyer, said Sandberg does not deserve the benefit of the doubt.

“She unilaterally controlled what was kept and what was destroyed,” he told the judge.

Laster, who is scheduled to preside over a non-jury trial in April, said he wanted to see a transcript of Sandberg’s deposition before ruling on the motion for sanctions.

Last year, the judge rejected a defense motion arguing that the lawsuit should be dismissed because the plaintiffs did not first demand that Facebook’s board take legal action before filing litigation themselves. He agreed with the plaintiffs that such a demand would have been futile because of doubts that a majority of the relevant Facebook board members, many with close personal and business ties to Mark Zuckerberg, would be willing to confront the CEO and founder of the company over its privacy failures.

Laster noted that, in deciding on a motion to dismiss, he was required to accept the allegations in the complaint as true.

The complaint alleges that Facebook officials repeatedly and continually violated a 2012 consent order with the Federal Trade Commission under which Facebook agreed to stop collecting and sharing personal data on platform users and friends without their consent.

Facebook later sold user data to commercial partners in direct violation of the consent order and removed disclosures from privacy settings that were required under consent order, the lawsuit alleges. The company’s conduct resulted in significant fines from regulators in Europe and culminated in the Cambridge Analytica scandal in 2018. That case involved a British political consulting firm hired by Donald Trump’s 2016 presidential campaign that paid a Facebook app developer for the personal information of tens of millions Facebook users.

The fallout led to Facebook agreeing to pay unprecedented $5 billion penalty to settle FTC charges that the company violated the 2012 consent order by deceiving users about their ability to protect their personal information.

—Randall Chase, AP Business Writer

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