The opinion of the court was delivered by: Barbara L. Major United States Magistrate Judge
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SANCTIONS AND SANCTIONING QUALCOMM, INCORPORATED
[DOC. NOS. 489, 540, 599, 614]
At the conclusion of trial, counsel for Broadcom Corporation ("Broadcom") made an oral motion for sanctions after Qualcomm Incorporated ("Qualcomm") witness Viji Raveendran testified about emails that were not produced to Broadcom during discovery. Doc. No. 489. The trial judge, United States District Court Judge Rudi M. Brewster, referred the motion to this Court pursuant to 28 U.S.C. § 636(b) and Civil Local Rule 72.1(b) of the United States District Court for the Southern District of California. Doc. No. 494. On May 29, 2007, Broadcom filed a written motion requesting that the Court sanction Qualcomm for its failure to produce tens of thousands of documents that Broadcom had requested in discovery. Doc. No. 540. Qualcomm timely opposed, and Broadcom filed a reply. Doc. Nos. 568, 578, 581. This Court heard oral argument on Broadcom's motion on July 26, 2007.
After hearing oral argument and reviewing Judge Brewster's Order on Remedy for Finding of Waiver ("Waiver Order") and Order Granting Broadcom Corporation's Motion for Exceptional Case Finding and for an Award of Attorney's Fees (35 U.S.C. § 285) ("Exceptional Case Order"), this Court issued an Order to Show Cause Why Sanctions Should Not be Imposed against Qualcomm's retained attorneys ("OSC"). Doc. No. 599. Specifically, this Court ordered James R. Batchelder, Adam A. Bier, Craig H. Casebeer, David E. Kleinfeld, Kevin K. Leung, Christian E. Mammen, Lee Patch, Kyle Robertson, Victoria Q. Smith, Barry J. Tucker, Jaideep Venkatesan, Bradley A. Waugh, Stanley Young, Roy V. Zemlicka, and any and all other attorneys who signed discovery responses, signed pleadings and pretrial motions, and/or appeared at trial on behalf of Qualcomm to appear and show cause why sanctions should not be imposed for their failure to comply with this Court's orders. Id.
On October 3, 2007, nineteen attorneys filed declarations and briefs responsive to the OSC. Doc. Nos. 670, 673-74, 676-80, 682, 685-87, 689-91, 693-700. Qualcomm filed a brief and four declarations. Doc. Nos. 675, 681, 683-84, 692. The attorneys filed objections to Qualcomm's brief on October 5, 2007 [Doc. No. 704], and both Broadcom and Qualcomm filed responsive briefs on October 9, 2007 [Doc. Nos. 705-06]. This Court heard extensive oral argument on the sanctions issue on October 12, 2007. Doc. No. 709 (October 12, 2007 Hearing Transcript).
Having considered all of the written and oral arguments presented and supporting documents submitted, and for the reasons set forth more fully below, the Court GRANTS IN PART and DENIES IN PART Broadcom's motion for sanctions against Qualcomm, REFERS TO THE STATE BAR OF CALIFORNIA six attorneys, and SANCTIONS Qualcomm and six of its retained lawyers. Doc. Nos. 489, 540, 599, 614.
The Patent Infringement Case Qualcomm initiated this patent infringement action on October 14, 2005, alleging Broadcom's infringement of Qualcomm patent numbers 5,452,104 (the "'104 patent'") and 5,576,767 (the "'767 patent'") based on its manufacture, sale, and offers to sell H.264-compliant products. Compl. ¶¶ 7-16. Qualcomm sought injunctive relief, compensatory damages, attorneys' fees and costs. Id. at 3. On December 8, 2006, Broadcom filed a First Amended Answer and Counterclaims in which it alleged (1) a counterclaim that the '104 patent is unenforceable due to inequitable conduct, and (2) an affirmative defense that both patents are unenforceable due to waiver. Doc. No. 370. Broadcom's waiver defense was predicated on Qualcomm's participation in the Joint Video Team ("JVT") in 2002 and early 2003. Doc. No. 540-2 at 3. The JVT is the standards-setting body that created the H.264 standard, which was released in May 2003 and governs video coding. Waiver Order at 5-9.
Evidence of Qualcomm's Participation in the JVT
Over the course of discovery, Broadcom sought information concerning Qualcomm's participation in and communications with the JVT through a variety of discovery devices. For example, as early as January 23, 2006, Broadcom served its First Set of Requests for the Production of Documents and Things (Nos. 1-88), in which it requested:
[a]ll documents given to or received from a standards setting body or group that concern any standard relating to the processing of digital video signals that pertains in any way to any Qualcomm Patent, including without limitation communications, proposals, presentations, agreements, commitments, or contracts to or from such bodies... . [and]
[a]ll documents concerning any Qualcomm membership, participation, interaction, and/or involvement in setting any standard relating to the processing of digital video signals that pertains in any way to any Qualcomm Patent. This request also covers all proposed or potential standards, whether or not actually adopted.
Decl. of Kate Saxton Supp. Broadcom's Mot. for Sanctions [Doc. No. 540] ("Saxton Decl."), Ex. BB-2 (Request for Production Nos. 49 & 50). On July 14, 2006, Broadcom served its Second Set of Requests for Production of Documents and Things (Nos. 89-115), calling for production of:
[a]ll documents referring to or evidencing any participation by Qualcomm in the proceedings of the JVT, the ISO, the IEC, and/or the ITU-T; and
[a]ll documents constituting, referring to, or evidencing any disclosure by any party to the JVT, the ISO, the IEC, and/or the ITU-T of any Qualcomm Patent and/or any Related Qualcomm Patent.
, Exs. D & DD (Request for Production Nos. 93-94). Broadcom also requested similar information via interrogatories and multiple Rule 30(b)(6) deposition notices. See id., Ex. EE (Broadcom Interrogatory Nos. 19-20); Saxton Suppl. Decl., Ex. K (Broadcom Interrogatory No. 13); Broadcom's Mem. Supp. Mot. for Sanctions [Doc. No. 540] ("Def.'s Mem.") at 4 n.4 (sample excerpt from Broadcom deposition notice directed to the Qualcomm witness knowledgeable about "attendance or participation by any Qualcomm principal, employee, or representative at any H.264 standards committee meetings").
On their face, Qualcomm's written discovery responses did not appear unusual. In response to Broadcom's request for JVT documents, Qualcomm, in a discovery response signed by attorney Kevin Leung, stated "Qualcomm will produce non-privileged relevant and responsive documents describing QUALCOMM's participation in the JVT, if any, which can be located after a reasonable search." Doc. No. 543-3, Ex. X (Qualcomm's Response to Broadcom's Request for Production No. 93); Decl. of Kevin Leung at 5-6, Ex. 3. Similarly, Qualcomm committed to producing "responsive non-privileged documents that were given to or received from standards-setting body responsible for the ISO/IEC MPEG-4 Part 10 standard, and which concern any Qualcomm participation in setting the ISO/IEC MPEG-4 Part 10 standard."*fn1 Leung Decl. at 6; Decl. of Christian Mammen at 7-8. When asked for "the facts and circumstances of any and all communications between Qualcomm and any standards setting body relating to video technology, including ... the JVT ...," Qualcomm responded that it first attended a JVT meeting in December 2003 and that it first submitted a JVT proposal in January 2006. Decl. of Stanley Young at 14 and Ex. 6 (Response to Interrogatory No. 19). In response to Interrogatory No. 13, Qualcomm stated that it submitted four proposals to the JVT in 2006 but had no earlier involvement. Leung Decl. at 6-7; Decl. of Kyle S. Robertson at 11 and Ex. 2. This response included the statement that "Qualcomm's investigation concerning this interrogatory is ongoing and Qualcomm reserves the right to supplement its response to this interrogatory as warranted by its investigation."
Kevin Leung signed both of these interrogatory responses. See Robertson Decl., Ex. 2 (Response to Interrogatory No. 13) and Young Decl., Ex. 6 (Response to Interrogatory No. 19).
Qualcomm's responses to Broadcom's Rule 30(b)(6) deposition notices were more troubling. Initially, Qualcomm designated Christine Irvine as the corporation's most knowledgeable person on the issue of Qualcomm's involvement in the JVT. Leung Decl. at 3-4. Although attorney Leung prepared Irvine for her deposition (id.), Qualcomm did not search her computer for any relevant documents or emails or provide her with any information to review (Decl. of Christine Irvine at 2-3; Decl. of Christine Glathe at 3). Irvine testified falsely that Qualcomm had never been involved in the JVT. Leung Decl. at 4. Broadcom impeached Irvine with documents showing that Qualcomm had participated in the JVT in late 2003. Id. Qualcomm ultimately agreed to provide another Rule 30(b)(6) witness. Id.
Qualcomm designated Scott Ludwin as the new representative to testify about Qualcomm's knowledge of and involvement in the JVT. Id. Leung prepared and defended Ludwin at his deposition. Id. Qualcomm did not search Ludwin's computer for any relevant documents nor take any other action to prepare him. Decl. of Scott Ludwin at 2-3 (listing all of the preparation he did not do); Glathe Decl. at 3. Ludwin testified falsely that Qualcomm only began participating in the JVT in late 2003, after the H.264 standard had been published. Id. In an effort to impeach him (and extract the truth), Broadcom showed Ludwin a December 2002 email reflector list from the Advanced Video Coding ("AVC") Ad Hoc Group that listed the email address email@example.com.*fn2 Decl. of Stanley Young at 19-20; Robertson Decl. at 14, Ex. 3; Leung Decl. at 8.
Although Ludwin did not recognize the document, Broadcom utilized the document throughout the litigation to argue that Qualcomm had participated in the JVT during the development of the H.264 standard. Young Decl. at 19-20; Robertson Decl. at 14-17; Decl. of Jaideep Venkatesan at 14-15.
As the case progressed, Qualcomm became increasingly aggressive in its argument that it did not participate in the JVT during the time the JVT was creating the H.264 standard.*fn3 This argument was vital to Qualcomm's success in this litigation because if Qualcomm had participated in the creation of the H.264 standard, it would have been required to identify its patents that reasonably may be essential to the practice of the H.264 standard, including the '104 and '767 patents, and to license them royalty-free or under non-discriminatory, reasonable terms. Waiver Order at 5-9. Thus, participation in the JVT in 2002 or early 2003 during the creation of the H.264 standard would have prohibited Qualcomm from suing companies, including Broadcom, that utilized the H.264 standard. In a nutshell, the issue of whether Qualcomm participated in the JVT in 2002 and early 2003 became crucial to the instant litigation.
Trial and Decision Not to Produce avc_ce Emails
Trial commenced on January 9, 2007, and throughout trial, Qualcomm argued that it had not participated in the JVT in 2002 and early 2003 when the H.264 standard was being created. In his opening statement, Qualcomm's lead attorney, James Batchelder, stated:
Later, in May of '03, the standard is approved and published. And then Qualcomm, in the fall of 2003, it begins to participate not in JVT because it's done. H.264 is approved and published. Qualcomm begins to participate in what are called professional extensions, things that sit on top of the standard, additional improvements.
Waiver Order at 45; Batchelder Decl. at 15.
While preparing Qualcomm witness Viji Raveendran to testify at trial, attorney Adam Bier discovered an August 6, 2002 email to firstname.lastname@example.org welcoming her to the avc_ce mailing list. Decl. of Adam Bier at 4, Ex. A. Several days later, on January 14, 2007, Bier and Raveendran searched her laptop computer using the search term "avc_ce" and discovered 21 separate emails, none of which Qualcomm had produced in discovery. Id. at 7. The email chains bore several dates in November 2002 and the authors discussed various issues relating to the H.264 standard. Mammen Decl. at 16-19, Ex. 8. While Raveendran was not a named author or recipient, the emails were sent to all members of two JVT email groups (jvt-experts and avc_ce) and Raveendran maintained them on her computer for more than four years. Id. The Qualcomm trial team decided not to produce these newly discovered emails to Broadcom, claiming they were not responsive to Broadcom's discovery requests. Bier Decl. at 7; Mammen Decl. at 18-19; Patch Decl. at 6-7; Batchelder Decl. at 16. The attorneys ignored the fact that the presence of the emails on Raveendran's computer undercut Qualcomm's premier argument that it had not participated in the JVT in 2002. Mammen Decl. at 18-19; Bier Decl. at 7; Patch Decl. at 7. The Qualcomm trial team failed to conduct any investigation to determine whether there were more emails that also had not been produced.
Four days later, during a sidebar discussion, Stanley Young argued against the admission of the December 2002 avc_ce email reflector list, declaring: "Actually, there are no emails -- there are no emails ... there's no evidence that any email was actually sent to this list. This is just a list of email ... addresses. There's no evidence of anything being sent." Trial Tr. vol. VII at 91-92; Young Decl. at 25-29. None of the Qualcomm attorneys who were present during the sidebar mentioned the 21 avc_ce emails found on Raveendran's computer a few days earlier.
; Batchelder Decl. at 16-17; Casebeer Decl. at 6.
During Raveendran's direct testimony on January 24th, attorney Lee Patch pointedly did not ask her any questions that would reveal the fact that she had received the 21 emails from the avc_ce mailing list; instead, he asked whether she had "any knowledge of having read" any emails from the avc_ce mailing list. Patch Decl. at 8-9; Trial Tr. vol. VIII at 46. But on cross-examination, Broadcom asked the right question and Raveendran was forced to admit that she had received emails from the avc_ce mailing list. Trial Tr. vol. VIII at 53. Immediately following this admission, in response to Broadcom's request for the emails, and despite the fact that he had participated in the decision three days earlier not to produce them, Patch told the Court at sidebar:
[I]t's not clear to me [the emails are] responsive to anything. So that's something that needs to be determined before they would be produced ... I'm talking about whether they were actually requested in discovery... . I'm simply representing that I haven't seen [the emails], and [whether Broadcom requested them] hasn't been determined.
Order at 46; Patch Decl. at 10. Over the lunch recess that same day, Qualcomm's counsel produced the 21 emails they previously had retrieved from Raveendran's email archive. Trial Tr. vol. VIII at 114.
On January 26, 2007, the jury returned unanimous verdicts in favor of Broadcom regarding the non-infringement of the '104 and '767 patents, and in favor of Qualcomm regarding the validity and non-obviousness of the same. Doc. No. 499. The jury also returned a unanimous advisory verdict in favor of Broadcom that the '104 patent is unenforceable due to inequitable conduct and the '104 and '767 patents are unenforceable due to waiver. Id. at 14.
On March 21, 2007, Judge Brewster found (1) in favor of Qualcomm on Broadcom's inequitable conduct counterclaim regarding the '104 patent, and (2) in favor of Broadcom on Broadcom's waiver defense regarding the '104 and '767 patents. Doc. No. 528. On August 6, 2007, Judge Brewster issued a comprehensive order detailing the appropriate remedy for Qualcomm's waiver. Doc. No. 593. After a thorough overview of the JVT, the JVT's policies and guidelines, and Qualcomm's knowledge of the JVT and evidence of Qualcomm's involvement therein, see id. at 5-22, Judge Brewster found: by clear and convincing evidence that Qualcomm, its employees, and its witnesses actively organized and/or participated in a plan to profit heavily by (1) wrongfully concealing the patents-in-suit while participating in the JVT and then (2) actively hiding this concealment from the Court, the jury, and opposing counsel during the present litigation. at 22. Judge Brewster further found that Qualcomm's "counsel participated in an organized program of litigation misconduct and concealment throughout discovery, trial, and post-trial before new counsel took over lead role in the case on April 27, 2007." Id. at 32. Based on "the totality of the evidence produced both before and after the jury verdict," and in light of these findings, Judge Brewster concluded that "Qualcomm has waived its rights to enforce the '104 and '767 patents and their continuations, continuations-in-part, divisions, reissues, or any other derivatives of either patent." Id. at 53.
Also on August 6, 2007, Judge Brewster granted Broadcom's Motion for an Award of Attorneys' Fees pursuant to 35 U.S.C. § 285. Doc. No. 594. Judge Brewster found clear and convincing evidence that Qualcomm's litigation misconduct, as set forth in his Waiver Order, see Doc. No. 593, justified Qualcomm's payment of all "attorneys' fees, court costs, expert witness fees, travel expenses, and any other litigation costs reasonably incurred by Broadcom" in the defense of this case. Doc. No. 594 at 4. On December 11, 2007, Judge Brewster adopted this court's recommendation and ordered Qualcomm to pay Broadcom $9,259,985.09 in attorneys' fees and related costs, as well as post-judgment interest on the final fee award of $8,568,633.24 at 4.91 percent accruing from August 6, 2007. Doc. Nos. 715 & 717.
Qualcomm's Post-Trial Misconduct
Following trial, Qualcomm continued to dispute the relevancy and responsiveness of the 21 Raveendran emails. Bier Decl., Exs. B-E. Qualcomm also resisted Broadcom's efforts to determine the scope of Qualcomm's discovery violation. Id., Exs. B-F. By letter dated February 16, 2007, Bier told Broadcom "[w]e continue to believe that Qualcomm performed a reasonable search of Qualcomm's documents in response to Broadcom's Requests for Production and that the twenty-one unsolicited emails received by Ms. Raveendran from individuals on the avc_ce reflector are not responsive to any valid discovery obligation or commitment." Id., Ex. C. In response to Broadcom's request that Qualcomm conduct additional searches to determine the scope of Qualcomm's discovery violation, Bier stated in a March 7, 2007 letter, we "believe your negative characterization of Qualcomm's compliance with its discovery obligation to be wholly without merit" but he advised that Qualcomm agreed to search the current and archived emails of five trial witnesses using the requested JVT, avc_ce and H.264 terms. Id., Exs. D & E. Bier explained that Qualcomm has "not yet commenced these searches, and [does] not yet know the volume of results we will obtain."
, Ex. E. Throughout the remainder of March 2007, Bier repeatedly declined to update Broadcom on Qualcomm's ...