Qualcomm Fined for “Monumental” E-Discovery Violations—Possible Sanctions Against Counsel Remain Pending
By Kristine L. Roberts, LITIGATION NEWS Associate Editor
Section offers materials to help litigators avoid similar nightmares
In a dramatic ruling that underscores the pitfalls of e-discovery, a federal magistrate ordered Qualcomm, Inc. to pay more than $8.5 million in sanctions and referred six attorneys to the California State Bar for possible disciplinary proceedings after Qualcomm withheld tens of thousands of responsive documents in discovery. Qualcomm Inc. v. Broadcom Corp. Although the federal district judge later vacated the magistrate’s order against the attorneys and remanded for further proceedings, the judge affirmed the sanctions against Qualcomm.
Qualcomm filed a patent infringement action against Broadcom Corporation in October 2005. When the case was tried in January 2007, Broadcom learned during cross-examination that a Qualcomm witness had received highly relevant emails that had never been produced in discovery. Qualcomm later admitted it had failed to produce substantial documents that revealed facts “inconsistent” with Qualcomm’s arguments at trial. By June 2007, Qualcomm located more than 300,000 pages that were initially requested but never produced.
Magistrate Judge Barbara L. Major drew “the inevitable conclusion” that Qualcomm intentionally withheld these documents “to win this case and gain a strategic business advantage.” She chastised Qualcomm’s “talented, well-educated, and experienced lawyers” for failing to make reasonable inquiry of their client. Judge Major also ordered Qualcomm and its counsel to participate in a “collaborative process” to identify how Qualcomm’s discovery failures had occurred and to develop a protocol to prevent violations in future cases.
The sanctioned attorneys filed objections to the magistrate’s order, arguing that they were unable to adequately defend themselves because Qualcomm had invoked the attorney-client privilege. U.S. District Judge Rudi M. Brewster agreed, vacated the sanction order against the attorneys, and remanded the issue to the magistrate.
“The Qualcomm decision reminds all litigators—in a very forceful way—of the serious obligations we undertake in responding to discovery,” says Erica L. Calderas, Cleveland, Cochair of the Section of Litigation’s Pretrial Practice and Discovery Committee.
“We should not be surprised by the ruling,” says David A. Soley, Portland, ME, Cochair of the Section’s Trial Practice Committee. Soley believes that the opinion “reflects what day-to-day practice ought to be. Attorneys are professionals and have professional standards to uphold, including a duty of good faith and reasonable inquiry in responding to discovery.”
Calderas recommends that to avoid e-discovery violations, attorneys should use checklists to “ensure that you apply a consistent protocol in any new matter—for example, that you routinely instruct your client to preserve evidence, that you identify witnesses with knowledge, that you determine how the client maintains its documents, that you ask the right questions regarding where potential documents may be located, and that you ask about additional relevant documents and potential witnesses in every witness interview.” Calderas also suggests that litigators enter into agreements with opposing counsel regarding what search terms will be used, the places at which relevant evidence may be found, and the persons whose files will be searched.
Soley advises that “because lawyers will be held responsible for their clients’ production of documents, lawyers must go to the site where documents are kept.” With respect to documents gathered by clients, “the lawyer must understand what the client did and then verify it.”
If attorneys have their own IT staff, these individuals should work with the client’s IT department and confirm that all responsive data is obtained, Soley says. Calderas adds that e-discovery vendors can assist with this process.
To avoid Qualcomm’s fate:
- Use checklists and develop a standard discovery protocol.
- Understand how and where your client maintains paper files and electronic information, as well as your client’s business structures and practices.
- Go to the location where information is actually maintained—do not rely entirely on the client to provide responsive materials to you.
- Ensure you know what steps your client, colleagues, and staff have actually taken and confirm that their work has been done right.
- Ask all witnesses about other potential witnesses and where and how evidence was maintained.
- Use the right search terms to discover electronic information.
- Bring your own IT staff to the client’s location and have them work with the client’s IT staff, employ e-discovery vendors, or both.
- Consider entering into an agreement with opposing counsel to stipulate to the locations to be searched, the individuals whose computers and hard copy records are at issue, and the search terms to be used.
- Err on the side of production.
- Document all steps taken to comply with your discovery protocol.