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Qualcomm Inc. v. Broadcom Corp.

April 2, 2010


The opinion of the court was delivered by: Barbara L. Major United States Magistrate Judge



On January 7, 2008, this Court issued an Order Granting in Part and Denying in Part Defendant's Motion for Sanctions and Sanctioning Qualcomm Incorporated and Individual Lawyers ("Sanctions Order"). Doc. No. 718. The Court found that Plaintiff Qualcomm Incorporated ("Qualcomm") intentionally withheld tens of thousands of documents that Defendant Broadcom Corporation ("Broadcom") had requested in discovery. Id. at 18-23. In reaching this conclusion, the Court emphasized that the suppressed documents directly contradicted a key argument advanced by Qualcomm in pretrial motions and throughout trial and supported a defense asserted by Broadcom.

The Court also stressed the quantity of suppressed documents, the ease with which Qualcomm ultimately was able to locate the documents, the simplicity and relevancy of the search terms and search locations that led to the discovery of the documents, and the lack of evidence indicating that Qualcomm had engaged in any meaningful oversight of its document production. Id. The Court also found that six attorneys assisted Qualcomm in withholding the critical documents by failing to conduct a reasonable inquiry into the adequacy of Qualcomm's document production and by ignoring warning signs, which indicated that the document search was not thorough and that Qualcomm's document production was not complete. Id. at 23-31. The Court specifically identified several inadequacies in Qualcomm's document search that should have been apparent to outside counsel, including the failure to search the computers belonging to, or used by, deponents and trial witnesses, the failure to adequately investigate when significant, relevant, and unproduced documents were discovered, and the failure to ensure there was a legitimate factual basis for the legal arguments made to the Court before making them. Id. Qualcomm did not appeal the $8.5 million sanction imposed against it.

The sanctioned attorneys*fn1 ("Responding Attorneys") filed objections to the Sanctions Order with the trial judge, United States District Judge Rudi M. Brewster. On March 5, 2008, Judge Brewster vacated the Sanctions Order as to the Responding Attorneys and remanded the matter to this Court, finding that the Responding Attorneys had a due process right to defend themselves and, therefore, should "not be prevented from defending their conduct by the attorney-client privilege of Qualcomm and its employees and representatives because of the application of the self-defense exception to the attorney-client privilege of Qualcomm." Doc. No. 744. This Court provided Responding Attorneys with an almost unlimited opportunity to conduct discovery and to present new facts to the Court.

Over a period of roughly fifteen months, the parties undertook a massive discovery effort. Qualcomm searched for, uploaded to its internal review database, and had its outside counsel review for responsiveness and privilege, over 1.6 million documents. It ultimately produced approximately 22,500 documents (totaling well over 100,000 pages) to Responding Attorneys. The Day Casebeer firm produced approximately 31,000 pages of hard copy documents and 39,000 electronic documents to attorney Young in response to his document requests. These documents were reviewed by Day Casebeer's outside counsel, Young's outside counsel, and Qualcomm's outside counsel prior to use in these proceedings. And, all of the parties producing documents prepared and provided extensive privilege logs and, where appropriate, redacted responsive documents. They then culled this universe of documents down to the subset to be used for depositions. All told, Responding Attorneys deposed seven Qualcomm engineers, three of Qualcomm's in-house attorneys, two of Qualcomm's in-house paralegals, and one fellow Responding Attorney during the remand proceedings. Excerpts from all of these depositions, as well as three depositions of Qualcomm engineers from the underlying proceedings (depositions taken by Broadcom), were presented via video at the three-day evidentiary hearing before this Court.

In resolving this Order to Show Cause ("OSC"), the Court has reviewed and considered all of the submitted documents, including expert opinions, lengthy declarations from all of the Responding Attorneys, and extensive legal arguments from all of the parties, has heard and considered the testimony of the Responding Attorneys and deponents, and has thought long and hard about this case. There still is no doubt in this Court's mind that this massive discovery failure resulted from significant mistakes, oversights, and miscommunication on the part of both outside counsel and Qualcomm employees. The new facts and evidence presented to this Court during the remand proceedings revealed ineffective and problematic interactions between Qualcomm employees and most of the Responding Attorneys during the pretrial litigation, including the commission of a number of critical errors. However, it also revealed that the Responding Attorneys made significant efforts to comply with their discovery obligations. After considering all of the new facts, the Court declines to sanction any of the Responding Attorneys.

Given the large amount of detailed evidence presented to the Court and the frequently conflicting nature of the testimony and evidence, the Court has elected not to summarize the evidence in this order. The evidence is available in the court record to anyone interested in reviewing it and the parties are extremely familiar with it. Instead, the Court will summarize the major errors it perceives as contributing to the massive cache of critical documents remaining undiscovered by Responding Attorneys and unproduced by Qualcomm until after trial.

Discovery Errors

The fundamental problem in this case was an incredible breakdown in communication. The lack of meaningful communication permeated all of the relationships (amongst Qualcomm employees (including between Qualcomm engineers and in-house legal staff), between Qualcomm employees and outside legal counsel, and amongst outside counsel) and contributed to all of the other failures. The Court was not presented with any evidence establishing that either in-house lawyers or outside counsel met in person with the appropriate Qualcomm engineers (those who were likely to have been involved in the conduct at issue and who were likely to be witnesses) at the beginning of the case to explain the legal issues and discuss appropriate document collection.*fn2 Moreover, outside counsel did not obtain sufficient information from any source to understand how Qualcomm's computer system is organized: where emails are stored, how often and to what location laptops and personal computers are backed up, whether, when and under what circumstances data from laptops are copied into repositories, what type of information is contained within the various databases and repositories, what records are maintained regarding the search for, and collection of, documents for litigation, etc. Finally, no attorney took supervisory responsibility for verifying that the necessary discovery had been conducted (including ensuring that all of the correct locations, servers, databases, repositories, and computers were correctly searched for potentially relevant documents) and that the resulting discovery supported the important legal arguments, claims, and defenses being presented to the court. These fundamental failures led to the discovery violations.

Another factor that contributed to the discovery failure was a lack of agreement amongst the participants regarding responsibility for document collection and production. Batchelder delegated discovery responsibility to Leung and Mammen, assuming they would be assisted by capable and trustworthy in-house lawyers and paralegals. 10/09/09 Batchelder Decl.*fn3 ¶¶ 3-18. Leung and Mammen testified that they followed the procedure set forth in the memorandum entitled "Overview of Document Collection at Qualcomm" ("Overview Memo") in which Qualcomm legal staff dictates which databases and computers are searched. 1/15/10 Hearing Tr.*fn4 at 112:12-16 (Mammen); 10/10/09 Leung Decl. ¶10. In contrast, in-house legal personnel apparently were unaware of the Overview Memo. 7/16/09 Martin Depo. Tr. at 35:5-13 (attorney Roger Martin did not recall seeing the memo or hearing about it); 6/29/09 Glathe Depo. Tr. at 10:24-11:3, 54:18-55:2 (the lead paralegal on this case from May or June 2006 forward did not recall seeing the Overview Memo until after trial concluded); 7/16/09 Laxamana Depo. Tr. at 47:21- 48:12 (another paralegal did not recall reading the memo). Morever, contrary to the guidelines set forth in the Overview Memo, the paralegals understood that while they might suggest potential search locations or custodians, it was outside counsel's role to direct them to documents and to instruct them as to what to collect. 6/29/09 Glathe Depo. Tr. at 68:13-69:8, 70:2-13, 73:25-74:13; 7/16/09 Laxamana Depo. Tr. at 26:18-27:7.

With regard to the Rule 30(b)(6) deponents, in-house attorneys provided guidance on the appropriate witnesses. See, e.g.,10/10/09 Leung Decl. ¶ 29 (Roger Martin suggested Chris Irvine for the standards issues). Leung followed the advice and then specifically requested that the designated individuals' files be collected. Depo. Ex.*fn5 21/QX*fn6 85. In response, Qualcomm paralegals advised Leung that they believed there was no need to search the witnesses' individual files or laptops because the information was likely to duplicate information and documents contained in other corporate repositories that already were being searched. Moreover, the paralegals represented that this procedure had been utilized successfully in other litigation against Broadcom proceeding in the International Trade Commission ("ITC"). See 11/5/09 Leung Decl. ¶ 11 and Depo. Ex. 45; see also 1/15/10 Hearing Tr. at 180:21-181:9 (Leung testimony). Leung and Mammen acquiesced to this suggestion even though they had not reviewed any of the witnesses' individual files, did not know what information was contained in the databases or repositories that were being searched, and had not been involved in the ITC litigation and did not know how documents were collected for it. See, e.g., 1/15/10 Hearing Tr. at 119:20-23 and 141:24-143:9 (Mammen's testimony), 181:1-6 and 199:7-13 (Leung's testimony); 11/5/09 Leung Decl. ¶ 11; Depo. Ex. 22; Mammen Decl. ¶¶ 36-37. Leung then sent an email to the trial team*fn7 explaining that they were not going to search individual computers or files of deponents because "none of the document requests propounded by Broadcom call for documents uniquely in the possession of these individuals" and "it was determined that anything responsive in their possession would be cumulative of documents otherwise collected and produced." Depo. Ex. 45; 1/15/10 Hearing Tr. at 181:11-23 (Leung testimony). Apparently no one, including in-house attorneys or more experienced outside counsel, responded to the email or otherwise advised Leung that the proposed method of collecting documents was inadequate.

These failures were exacerbated by an incredible lack of candor on the part of the principal Qualcomm employees. For example, Viji Raveendran repeatedly told Responding Attorneys, other outside counsel, and Qualcomm employees that she had not participated in, and had no involvement with, the JVT during development of the H.264 standard and she testified to those facts under oath. 10/10/09 Leung Decl. ¶¶ 44-45; 10/13/09 Patch Decl. ¶¶ 28-33; 1/15/10 Hearing Tr. at 207:21-22; generally, 7/15/09 Raveendran Depo. Raveendran made these statements despite the fact that she personally had attended some of the JVT meetings (see, e.g., Depo. Ex. 159 (Raveendran telling Isailovic "I attended (sic) few of the JVT sessions and I'm curious")), had analyzed the H.264 standard for in-house counsel (see, e.g., Depo. Ex. 165 (email thread regarding Raveendran's January 2003 report to Qualcomm's patent counsel of an earlier "investigation on infringement of ABS patents by JVT") and Depo. Ex. 166 (February 2003 email from Raveendran to in-house counsel stating "[t]his is to inform you that JVT ... could potentially infringe on Digital Cinema patents, specifically ABS and related patents")), and had exchanged emails with other Qualcomm employees and consultants regarding the meetings (see, e.g., 10/10/09 Cialone Decl., Ex. 200 (appendix of emails between Raveendran and Qualcomm's JVT consultant, Jordan Isailovic, many of which were copied to other Qualcomm employees)). In fact, when directly asked whether a consultant working for Qualcomm had attended the JVT meetings, Raveendran replied "I don't know," despite having personally exchanged approximately 118 emails with Qualcomm's paid JVT consultant, Jordan Isailovic. 7/18/06 Raveendran Depo. Tr. at 79:8-12. While Raveendran provided a nuanced explanation for her statements during the remand proceedings, the fact remains that she did not provide any of these facts to Responding Attorneys, even when asked. 10/10/09 Leung Decl. ¶¶ 19, 24, 38, and 40; 10/10/09 Mammen Decl. ¶ 30(b); 10/13/09 Patch Decl. ¶¶ 28-29; see generally, 7/15/09 Raveendran Depo. Unfortunately, this lack of candor was not limited to her JVT attendance nor was it unique to Raveendran, or even to just the Qualcomm engineers. The remand proceedings have clarified that a number of Qualcomm employees, including legal counsel, knew that Qualcomm had analyzed the H.264 standard and had attended JVT meetings during the relevant time period and yet no one informed Responding Attorneys.

While they did not adequately search for documents, Responding Attorneys did repeatedly try to determine whether Qualcomm had participated in the JVT proceedings during the time the H.264 standard was being developed. As previously discussed, outside counsel, including Responding Attorneys, repeatedly asked Raveendran and other Qualcomm employees about Qualcomm's alleged participation. In addition, Batchelder explained that one of the reasons he brought Patch into the case was to provide a "fresh pair of eyes" to the JVT fact investigation. 1/15/10 Hearing Tr. at 24:20-25:4. Patch conducted a "fresh" investigation (although it included the erroneous assumption that the deponents' and potential trial witnesses' personal computers had been searched) and reached the same conclusion-that Qualcomm had not participated in the JVT proceedings during the relevant time period. 10/13/09 Patch Decl. ΒΆΒΆ 24-27; 1/15/10 Hearing Tr. at 206:14-207:5, 211:5-212:9, 220:13-221:22. Moreover, five third-parties, including the chair of the JVT and a Broadcom employee involved in the JVT proceedings, confirmed their belief that Qualcomm was not involved with JVT during development of the H.264 ...

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