District Court Lifts Sanctions Against Six Qualcomm Attorneys, Remands Attorney Sanctions Issue to Magistrate Judge to Allow Attorneys to Defend Selves Fully

On March 5, 2008, District Judge Rudi M. Brewster issued his Order Remanding in Part Order of Magistrate Court re Motion for Sanctions Dated 1/7/08.  (View a copy of the decision from Westlaw here.)  The order vacated and remanded that portion of the January 7 Sanctions Order imposing sanctions against Qualcomm’s six outside counsel.  In doing so, the District Judge instructed that, in any future hearing held by the Magistrate Judge, the attorneys would be allowed to defend their conduct by any and all means, and would not be prevented from doing so by the attorney-client privilege of Qualcomm.  The court further instructed that Qualcomm be permitted, but not required, to participate without any exposure to further sanctions.

In reaching its decision to allow the attorneys to defend themselves fully, the court concluded that the self-defense exception to the attorney-client privilege was applicable.  It found that the employee declarations Qualcomm’s submitted in October in response to the Order to Show Cause Why Sanctions Should not be Imposed were "exonerative of Qualcomm and critical of the services and advice of their retained counsel."   The court continued:  

This introduction of accusatory adversity between Qualcomm and its retained counsel regarding the issue of assessing responsibility for the failure of discovery changes the factual basis which supported the court’s earlier order denying the self-defense exception to Qualcomm’s attorney-client privilege.  Meyerhofer v. Empire Fire & Marine Ins. Co., 497 F.2d 1190, 1194-95 (2d Cir. 1974); Hearn v. Rhay, 68 F.R.D. 574, 581 (E.D. Wash. 1975); First Fed. Sav. & Loan Ass’n v. Oppenheim, Appel, Dixon & Co., 110 F.R.D. 557, 560-68 (S.D.N.Y. 1986); A.B.A. Model Rules of Prof. Conduct 1.6(b)(5) & comment 10. 

Accordingly, the court’s order denying the self defense exception to the attorney-client privilege is vacated.  The attorneys have a due process right to defend themselves under the totality of circumstances presented in this sanctions hearing where their alleged conduct regarding discovery is in conflict with that alleged by Qualcomm concerning performance of discovery responsibilities.  See, e.g., Miranda v. So. Pac. Transp. Co., 710 F.2d 516, 522-23 (9th Cir. 1983).

In light of Judge Brewster’s March 5 Remand Order, Magistrate Judge Barbara L. Major issued an Order on March 6 continuing the CREDO status hearing set for March 13, 2008 at 8:30 a.m. to 2:00 p.m. the same day.  Magistrate Judge Major also indicated that she would conduct a status conference regarding Judge Brewster’s March 5 Remand Order at the same time.