Court Declines to Impose Sanctions Against Qualcomm Attorneys Absent Evidence of Bad Faith

Qualcomm Inc. v. Broadcom Corp., No. 05cv1958-B (BLM) (S.D. Cal. Apr. 2, 2010)

Apparently bringing an end to one of the best known e-discovery sagas since the 2006 amendments to the Federal Rules, United States Magistrate Judge Barbara Major has declined to impose sanctions against the previously sanctioned Qualcomm attorneys absent evidence of bad faith.

On January 7, 2008, Magistrate Judge Major issued an order granting in part defendant’s motion for sanctions upon finding that the plaintiff, Qualcomm, intentionally withheld thousands of documents and that six attorneys “had 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 documents production was not complete.”  The sanctioned attorneys objected.  Thereafter, U.S. District Court Judge Rudi Brewster determined that the sanctioned attorneys “had a right to defend themselves” and “should not be prevented from defending their conduct by the attorney-client privilege of Qualcomm and its employees and representatives.”  Finding the self-defense exception to the attorney-client privilege applicable, the court lifted the sanctions and remanded the case to the Magistrate Judge for additional consideration. A ccordingly, between March 2008 and the present, the previously sanctioned attorneys undertook significant efforts to defend their actions.  As a result of those efforts, Magistrate Judge Major has now declined to impose sanctions: 

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.

Choosing not to summarize the evidence resulting in her determination, Magistrate Judge Major instead summarized the “major errors” she perceived throughout the discovery process, beginning with the “fundamental problem”, namely, “an incredible breakdown in communication.”  Specifically, the Magistrate Judge determined that “the lack of meaningful communication” permeating the relationships of all involved “contributed to all of the other failures.”  Among the specific failures recognized by the court were:  the failure to present evidence establishing that any attorney (in-house or outside counsel) explained the legal issues to the appropriate employees or discussed collection procedures; the failure to obtain sufficient information to understand the relevant computer systems; and the failure of any attorney to take on a supervisory responsibility for verifying that the necessary discovery was conducted.

Following some discussion of the specific relevant facts, the court determined that “although a number of poor decisions were made, the involved attorneys did not act in bad faith.” Accordingly, the court concluded:

It is undisputed that Qualcomm improperly withheld from Broadcom tens of thousands of documents that contradicted one of its key legal arguments. However, the evidence presented during these remand proceedings has established that while significant errors were made by some of the Responding Attorneys, there is insufficient evidence to prove that any of the Responding Attorneys engaged in the requisite “bad faith” or that Leung failed to make a reasonable inquiry before certifying Qualcomm’s discovery responses. Accordingly, the Court declines to impose sanctions on the Responding Attorneys and hereby dissolves the order to show cause that initiated these proceedings.

A copy of the full opinion is available here.