E-Discovery Ethical Rules Remain Unchanged
Published: January 23, 2008
Lawyers can’t turn around without being bombarded with CLE brochures announcing yet another e-discovery workshop. Electronic discovery is a new medium for storing information, but the time-tested rules concerning an attorney’s ethical duty to the court and opposing counsel in connection with discovery have not changed. On January 7, 2008, Magistrate Judge Barbara L. Major on the United States District Court, Southern District of California, issued an order granting sanctions against Qualcomm Incorporated and several of its attorneys in connection with discovery abuses. ( See Qualcomm Incorporated v. Broadcom Corporation, U.S.D.C., S.D. Cal. Case No. 05-CV-1958-B (BLM). The Qualcomm decision commands the attention of all corporate counsel and litigators involved in the discovery process. As stated by Magistrate Judge Major, the decision “provide[s] a roadmap to assist counsel and corporate clients in complying with their ethical and discovery obligations and conducting the requisite ‘reasonable inquiry.’”
Plaintiff Qualcomm sued defendant Broadcom alleging Broadcom’s infringement of several Qualcomm patents. Broadcom filed a counterclaim alleging inequitable conduct and waiver. Broadcom’s waiver defense was based upon Qualcomm’s participation in the Joint Video Team (“JVT”) in 2002 and early 2003 during which the digital video signals standards were adopted. Whether Qualcomm participated in the JVT in 2002 and early 2003 was a crucial fact because, if Qualcomm did participate, it would have to have granted royalty-free licenses to its technology.
Broadcom served document demands requesting all documents reflecting Qualcomm’s participation in the JVT and also requesting any emails received or sent by Qualcomm setting standards for processing digital video signals. Qualcomm, in response to those document demands, said that it produced all non-privileged documents it located after a reasonable inquiry.
Broadcom also took the deposition of the person most knowledgeable under Rule 30(b)(6). The court found the counsel’s conduct during the preparation and designation of the PMK to be extremely troubling. Qualcomm initially designated one PMK who did not have personal knowledge concerning Qualcomm’s participation, or lack of participation, in the JVT in late 2002 to early 2003 despite being so designated. Qualcomm recognized this deficiency and designated a new representative. That new representative testified falsely that Qualcomm did not participate until December 2003. Broadcom was able to impeach the witness with the only email it had in its possession dated December 2002, reflecting Qualcomm’s earlier participation. Nevertheless, Qualcomm and its counsel continued to deny any earlier participation in the JVT and even doubted that the December 2002 email was even received by Qualcomm.
While preparing a witness for trial, the trial team reviewed the witness’s laptop and discovered 27 separate emails dating back to August 6, 2002, which made it clear that Qualcomm had been involved with the JVT and in establishing the standards for digital signals prior to late 2002. The Qualcomm trial team decided not to produce the emails yet call the witness at trial, asking carefully-tailored questions if the witness had ever “read” emails from the JVT. During cross-examination, Broadcom’s attorney asked if the witness ever received such emails, to which she answered truthfully that she had. Broadcom demanded the immediate production of the emails.
Even after knowing of the 21 emails, trial counsel argued a motion in limine to exclude the one December 2002 email in Broadcom’s possession by arguing there was no evidence that the email was actually sent to Qualcomm and that there was no evidence of anything ever being sent. Trial counsel made these representations to the court after he had been made aware of the 21 emails on the witness’s computer.
Broadcom immediately demanded the production of all emails after the witness admitted she had several on her laptop. In a side-bar conversation, trial counsel, despite having participated in the decision not to produce them, told the court that he had seen the emails and was not even sure if Broadcom had previously requested or if they fell within a previously request of Qualcomm. Qualcomm turned over the 21 emails over the lunch hour.
The jury returned verdicts in favor of Broadcom, finding that Qualcomm was guilty of inequitable conduct and the patents were unenforceable due to waiver.
The court ordered a post-trial investigation into the discovery abuses. Qualcomm objected to the investigation and argued that it had performed an adequate search for documents. Despite Qualcomm’s argument that it conducted an adequate search, the post-trial investigation revealed that a simple word search of archived emails searching for “JVT” and other single search terms readily revealed the existence of 46,000 documents containing over 300,000 pages. Qualcomm’s in-house counsel wrote a letter to the court advising it of these further findings, apologizing to the court for not conducting a more thorough search earlier, and further acknowledging that the located documents were inconsistent with argument made by counsel at trial.
The court focused on Federal Rule 26(g)(2), which provides for sanctions against individual attorneys who failed to comply with their ethical obligations. Rule 26(g)(2) provides that every discovery response must be signed by an attorney and that the attorney’s signature “constitutes a certification that to the best of the signer’s knowledge, information, and belief, formed after a reasonable inquiry,” the response is consistent with the rules of law. The courts have confirmed that Rule 26(g)(2), like Rule 11, requires that the court impose “an appropriate sanction” on the attorney if a discovery response is not formed after a reasonable inquiry and therefore is without substantial justification.
Qualcomm argued in opposition to the sanctions that at no time did Broadcom file a motion to compel the production of documents. The court gave no weight to this argument, noting that the responding attorney has a duty to respond to discovery in good faith and the court will not require the asking party to file motions if the responding party affirms that it will produce all responsive documents. This is especially the case here, where Qualcomm had already affirmed that it would produce all non-privileged responsive documents. Litigants are not required to file motions to compel in order to preserve their rights in the event the opponents fail to properly discharge their obligations to produce relevant information.
The court emphasized that the parties and the attorneys have a duty to respond to discovery in good faith. That good faith must be after a reasonable inquiry, which will be dependent upon individual facts and circumstances. The court noted that, in the age of electronic discovery where clients and attorneys cannot physically touch each document, the attorneys must work closely with their clients to ensure that the attorney and the client have discharged their duty to respond in good faith after reasonable inquiries. “Attorneys must take responsibility for ensuring that their clients conduct a comprehensive and appropriate document search.”
The attorneys at Qualcomm produced no substantial justification for their failure to produce the 46,000 documents. This lack of justification is reinforced by the fact that trial counsel did not disclose the 21 emails when found, surgically asked questions of the witness to avoid disclosing that she had received the 21 emails, and did not voluntarily search for any additional documents after locating the first 21.
In view of all the factors, the court noted the following factors influencing its decision on sanctions: Trial counsel did not properly designate the Rule 30(b)(6) deponents; did not require a search of archived emails; did not give the 30(b)(6) witness relevant documentation; and, did nothing to ensure that the witness would be knowledgeable. The attorney has the obligation to ensure that the Rule 30(b)(6) witness is fully knowledgeable of the facts upon which he/she will testify. Secondly, Qualcomm’s attorney repeatedly argued that the court and the jury should to ignore the December 2002 email that Broadcom had obtained and repeatedly tried to discredit that the email ever existed in an effort to distort the evidence. Qualcomm even brought a motion for summary judgment, offering testimony that it had not participated in the JVT during 2002 and had not received any information from the JVT.
The court issued sanctions against Qualcomm and several of its attorneys; this article will focus on the duties of the attorneys and the sanctions imposed on them. The court relied upon the Rules of Professional Conduct, Rule 5-200, which provides that a lawyer shall not seek to mislead the judge or jury by a false statement of fact or law, and Rule 5-220, that a lawyer shall not suppress evidence when the lawyer or the lawyer’s client has a legal obligation to reveal or produce. The court, in reviewing the rules and in reviewing counsel’s activities, referred several attorneys to the State Bar for investigation. The court emphasized that it was inconceivable that Qualcomm had actively and successfully hidden this information so effectively from its lawyers that the lawyers could not know or suspect that suppressed documents existed. The court also immediately rejected any thought that the retained attorneys were so inept or disorganized that they could not have discovered this information if a reasonable inquiry had been made. The court then questioned whether there was sufficient evidence that the counsel actively participated with Qualcomm to hide the documents and all evidence of Qualcomm’s early involvement in the standards. The court noted that Qualcomm continued to exert the attorney-client privilege and, therefore, evidence on this issue was limited, although there was circumstantial evidence based on trial counsel’s failure to disclose the 21 emails promptly upon their discovery.
Ultimately, the court found the evidence supported a finding that Qualcomm did not tell its retained lawyers about the evidence. The lawyers suspected there was additional evidence or information but chose not to conduct a reasonable search. This was not a case where only one or two smoking-gun documents were not found, but instead 46,000 critical documents had not been produced. These documents were not from just one employee, but dozens of employees, several of whom testified falsely at trial and in depositions.
The court noted that different attorneys had different levels of culpability, but emphasized that lead counsel are responsible for the activities of the individuals working under their direction and that junior attorneys have an ethical obligation to comply with the rules and the ethical obligations independent of what they may be instructed by supervising attorneys. Emails and other electronic discovery impose differing challenges which attorneys must overcome in order to discharge their discovery obligations. The ethical rules and discovery obligations have not changed with e-discovery – an attorney must still make a reasonable inquiry and may sign a discovery response only if it is “formed after a reasonable inquiry.”
Dale is a shareholder with Weintraub Genshlea Chediak practicing in the Litigation and Intellectual Property Sections. Dale has a broad range of litigation experience in all areas of business, intellectual property and real estate litigation. He has tried over forty jury trials to conclusion and has had numerous court trials and binding arbitrations since his admission to practice law in 1981.