In Ongoing Sanctions Dispute, Protective Order Limits Access to and Uses For Production, and Clarifies No Waiver by Production Pursuant to Self-Defense Exception

Qualcomm Inc. v. Broadcom Corp., 2008 WL 4858685 (S.D. Cal. Nov. 7, 2008)

At trial in this case, Broadcom made an oral motion for sanctions related to Qualcomm’s failure to disclose documents corroborating its participation in the Joint Video Team (“JVT”), a standards body related to video coding specifications.  Qualcomm’s claimed lack of participation in the JVT was a core element of its claims for patent infringement against Broadcom.  Judge Brewster referred the discovery aspects of that motion to Magistrate Judge Major and then issued an Order on Remedy for Finding of Waiver based on his determination that Qualcomm’s attorneys had participated in a sequence of discovery misconduct throughout the litigation process.  However, because those attorneys had not had an opportunity to be heard before the order was issued impugning their behavior and in order to afford them an opportunity to be heard on the potential imposition of attorney sanctions, the court issued an Order to Show Cause Why Sanctions Should not be Imposed.

Following briefing and hearings on the sanctions issues, the court denied the motion brought by Qualcomm outside counsel seeking an order that the self-defense exception to the attorney-client privilege applied.  Shortly thereafter, Qualcomm filed four employee declarations indicating that outside counsel was to blame for the discovery failures in the case.  The following week, the court heard oral argument on the Order to Show Cause.

On January 7, 2008, the court granted in part and denied in part Broadcom’s oral motion for sanctions, and imposed sanctions on Qualcomm and six of its outside attorneys (the “Responding Attorneys”).  After the sanctioned attorneys filed objections, Judge Brewster determined that the four declarations previously filed by Qualcomm “introduced accusatory adversity between Qualcomm and its retained counsel regarding the issue of assessing responsibility for the failure of discovery.”  Accordingly, he found that “this accusatory adversity changed the factual basis which supported [this] court’s earlier order denying the self-defense exception to Qualcomm’s attorney-client privilege.”  Judge Brewster then vacated the order regarding Broadcom’s oral motion for sanctions and remanded the issues to Magistrate Judge Major for further proceedings.

As part of the Remand Proceedings, Broadcom and the Responding Attorneys served documents requests on Qualcomm and on each other.  Eventually, Broadcom and the Responding Attorneys filed motions to compel Qualcomm’s production of the requested documents.  The Responding Attorneys sought documents related to their contention that Qualcomm affirmatively misled them during the discovery process, that the attorneys made reasonable inquiries of Qualcomm, and that there were no “red flags” in Qualcomm’s representations to them in light of the totality of circumstances. Broadcom sought to compel responses to similar requests.

Qualcomm objected to most of the requests and sought to limit their scope significantly.  Qualcomm also sought a protective order specifying who could view the documents, that the filings in the Remand Proceedings be sealed, and for clarification that any documents produced would be pursuant to the self-defense exception and not a result of any waiver by Qualcomm.

The court rejected Qualcomm’s attempts to limit the requests, especially in light of the Responding Attorneys’ needs to defend themselves against the imposition of sanctions, although it did recognize Qualcomm’s ability to withhold privileged communications with counsel who took over the representation after trial.  The court also addressed several of Qualcomm’s specific objections, but sustained only the request to exclude documents pertaining specifically to discovery procedures in other litigation.

However, recognizing the vulnerable position of Qualcomm, the court granted Qualcomm’s request for a protective order, which restricted the persons permitted to view the documents, limited the use of the documents to the Remand Proceedings and the attorneys’ defense of themselves before the State Bar, and clarified that the documents were produced subject to the court’s order and the self-defense exception to attorney-client privilege and not waived.

Regarding how best to carry out discovery, the parties agreed that Qualcomm would provide a list of custodians likely to have documents responsive to each request and that the parties would then meet and confer regarding search terms.  Qualcomm also agreed to provide the responsive documents in an electronic, searchable format.  The court then scheduled a telephonic hearing for Thursday, December 4th to monitor compliance and discuss deadlines and scheduling.

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