Electronic discovery issues are a big part of contemporary litigation. On December 1, 2006, new Federal Rules of Civil Procedure dealing with electronic discovery took effect. The purpose of the Federal Rules amendments was to put discovery of electronically stored information (ESI) on essentially equal footing with discovery of paper documents. Many states, including Arizona, have followed suit. However, given the nature of ESI, there are a multitude of more complex production problems than are usually confronted with traditional document discovery. This reality is clearly illustrated in the opinion of the United States District Court for the Southern District of California in Qualcomm Inc. v. Broadcom Corp. (Case # 05-CV 1958-B BLM) (January 7, 2008), a case in which the Court, because of severe electronic discovery problems, ordered Qualcomm to pay $8.5 million in fines, and referred its outside lawyers to the California State Bar for possible disciplinary proceedings.
Factual Summary –Three Hundred Thousand Pages of Relevant Documents not Produced
The Court’s ruling stemmed from Qualcomm’s failure to produce tens of thousands of documents (mostly e-mails) that had been requested by Broadcom. Qualcomm had initiated a patent infringement suit against Broadcom, contending that Broadcom had improperly used video coding that belonged to Qualcomm. Broadcom defended the allegations by, among other things, alleging that Qualcomm had, as early as 2002 and early 2003, participated in a standards setting body (the Joint Video Team - JVT) which was involved in establishing protocols that created relevant standards for the video coding. Qualcomm’s participation in the JVT in 2002 or early 2003 during the creation of the standard in question would have given Broadcom a defense to Qualcomm’s suit.
Broadcom sought information concerning Qualcomm’s participation in and communications with the JVT through various discovery devices, including requests for production of documents. In response to an interrogatory, Qualcomm denied its participation in the JVT during the relevant time frame, insisting that it had submitted proposals to the JVT in 2006, but had no earlier involvement. Involvement in the 2006 time frame was irrelevant to Broadcom’s defense. Broadcom noticed the depositions of Qualcomm employees with the corporation’s best knowledge of its involvement in the JVT. Qualcomm did nothing to prepare the witnesses for the depositions, including significantly failing to search their computers for relevant documents or emails. At the time trial was to start, after all discovery was finished, Broadcom had failed to uncover any significant information about Qualcomm’s involvement in the JVT during the relevant time frame.
During witness preparation in the course of trial, one of Qualcomm’s lawyers discovered 21 separate emails on the laptop of one of Qualcomm’s witnesses that related to involvement in the JVT in late 2002. Qualcomm’s lawyers decided not to produce these documents, rationalizing that they were not responsive to Broadcom’s discovery requests and decided not to conduct any other investigation for relevant documents. However, serendipitously, Broadcom’s counsel asked the right questions on cross-examination and Qualcomm’s employee was forced to admit the existence of the 21 emails. The 21 emails were then produced by Qualcomm and were considered by the Court and the jury. After the trial, the judge found that Qualcomm and its lawyers had wrongfully concealed the JVT information. As a result the trial court ordered Qualcomm to pay Broadcom’s litigation fees, plus interest, voided two of Qualcomm’s patents, and then referred the matter to the Federal Magistrate to determine possible sanctions against the Qualcomm lawyers.
During the Magistrate’s investigation, Qualcomm and its lawyers continued to resist Broadcom’s efforts to determine the scope of Qualcomm’s discovery violations. However, Qualcomm was forced to admit that it has thousands of relevant unproduced documents (46,000 documents totaling more than 300,000 pages) that revealed facts inconsistent with their arguments during the litigation.
The Magistrates’ Findings – Qualcomm and its Lawyers Failed to use Good Faith
The Magistrate characterized the episode as an “incredible discovery violation.”
The Magistrate found that Qualcomm had the ability to identify its employees and consultants who were involved in the JVT, to access and review their computers, data bases and emails, to talk with the involved employees and to refresh their recollections if necessary, to ensure that those testifying about the corporation's knowledge were sufficiently prepared and testified accurately, and to produce in good faith all relevant and requested discovery, but failed to do so. This is a good, succinct summary of the discovery responsibilities of any litigant.
Regarding the attorneys’ actions, the Magistrate commented that it is inconceivable that talented lawyers such as those involved in the case failed to discover facts that should have made them question their client’s actions. Thus, while the Magistrate could not conclude that the lawyers intentionally hid documents (at least before trial), there was no doubt that the lawyers suspected that there were unproduced documents and blindly ignored the obvious. The lawyers had a duty to control the process so that it met the expectations of the system and failed to do so. The lawyers’ derelictions enabled Qualcomm to thwart the discovery process and make the trial a fraud on the Court and jury.
The Magistrate noted that the Federal discovery rules are premised on the good faith of those involved in the discovery process (clients and counsel). The process breaks down when good faith is absent. This is even more so in these days of electronic discovery when the chances are that lawyers and clients are less likely to touch or look at all documents in their custody and control. The Magistrate, perhaps intending to instruct future litigants stated:
For the current “good faith” discovery system to function in the electronic age, attorneys and clients must work together to ensure that both understand how and where electronic documents, records and emails are maintained and how to best locate, review and produce responsive documents. Attorneys must take responsibility for ensuring that their clients conduct a comprehensive and appropriate document search.
Lessons – Be Prepared for the Inevitable Electronic Discovery
The lessons of the Qualcomm case are clear. Outside lawyers should preferably, when there is a long-term relationship with the client, participate with the client in establishing an electronic discovery protocol before litigation arises. This protocol should include sensible electronic document retention policies, procedures for litigation holds (suspension of document destruction when a claim is likely), the search methods for determining the existence of relevant electronic information (there are software packages available that examine and catalog a network’s electronic documents), and review protocols (determining whether electronic information is confidential, privileged, relevant, etc). Necessarily, this process should inclu
de an interface between the client’s IT and records management department and the lawyer’s IT department, as well as counsel themselves. When the relationship is ad hoc, i.e. arising on a case by case basis, the electronic discovery plan should be one of the first things addressed after notice of the claim. Outside lawyers, as those who are on the front line in the discovery process, should have great influence and be given deference on decisions regarding what databases should be searched, what search terms are used and ultimately what data should be produced in any given matter. Proceeding in this fashion will go a long way toward avoiding situations like the one that got Qualcomm and its lawyers in so much trouble.