On January 7th, Magistrate Major released a 42 page Order issuing over $8.5 million in sanctions against Qualcomm and referring 6 of its lawyers (out of 19 who were at risk) to the California Bar for investigation of possible ethics violations. Qualcomm Inc. v. Broadcom Corp, 05cv1958-B (January 7, 2008).

If you haven’t been following this case, you might want to give it some thought. The Order provides a veritable ethics primer on electronic discovery and the Magistrate’s took aim at every level of the food chain, from new associate to senior partner. I can’t say I agree with all her conclusions but they cannot be ignored.

The rules governing eDiscovery are coming of age and the old shibboleth “See No Evil, Hear No Evil,” will get you into trouble. In the Southern District of California at least, what you don’t know can hurt you as much as what you do.

A Tangled Web

I wrote extensively about the case in the September 2007 issue of Law Technology Today. In a nutshell, Qualcomm and its lawyers got into trouble on the last day of a lengthy patent trial when a key witness admitted there were several emails critical to the case that had not been produced. During post trial proceedings, it came to light that a lot more relevant emails and other documents hadn’t been produced—over 300,000 pages of juicy stuff. The trial court went ballistic and referred the matter to Magistrate Major for further investigation and a recommendation on sanctions.

The hearings before Magistrate Major must have been interesting. On one hand you have lawyers from two major firms trying to protect their professional and personal reputations. On the other, you have Qualcomm with new counsel asserting attorney-client privilege and ordering the fallen attorneys to keep their proverbial mouths shut. Within the ranks you have associates trying to advance their futures with their respective firms without taking the fall for their senior partners. Criminal lawyers entered their appearance on behalf of the attorneys. Presumably the attorneys realized that we might be talking more than a written censure.

The results thus far haven’t been pretty. Along with the $8.5 million in monetary sanctions, the Magistrate all but tied a bow around the referral for ethical violations for the unlucky six. In addition, she tagged another five Qualcomm in-house attorneys and ordered them to appear in chambers to develop a “comprehensive Case review and Enforcement of Discovery Obligations protocol.” That is about as bad as being ordered to stay after school and write on the chalk board “I won’t hide evidence again,” a few hundred times. Or at least as embarrassing.

It was the opinion that interested me the most. Writing at length (this was 42 pages after all), the Magistrate addressed a lot of issues that come up regularly in electronic discovery and took some positions that ought to concern every professional out there.

Here is my take on five lessons every lawyer should take away from the latest Qualcomm decision. You might not agree with every conclusion drawn here and you may be right. But, you better be prepared to deal with them if your practice involves contentious discovery (and what trial practice doesn’t).

1. You Better Check Your Witnesses’ Computer Before Allowing Him/Her to Testify.

I don’t recall being taught in law school that I had a duty to check my witnesses’ computer before allowing him or her to testify. The Qualcomm decision suggests maybe you better. And you don’t get off the hook just because you are a lowly associate.

During discovery, the company offered two company representatives (30(b)(6) witnesses) to testify about documents and company knowledge. Each testified that Qualcomm did not participate in the Joint Video Team (JVT) standards body’s work—which was at the heart of the case. Later, the court discovered that both had emails on their computers flatly contradicting their assertions.

Who should have checked witness computers? The opinion suggests that Qualcomm did the document collections (no outside vendor is mentioned). Were the lawyers required to audit Qualcomm’s collection work or supervise it. According to the court, the answer is yes.

According to the Court:

Attorneys Leung, Mammen and Batchelder are responsible for the initial discovery failure because they handled or supervised Qualcomm’s discovery responses and production of documents. The Federal Rules impose an affirmative duty upon lawyers to engage in discovery in a responsible manner and to conduct a “reasonable inquiry” to determine whether discovery responses are sufficient and proper.

Opinion at 27 lines 3-9.

What is the take away here. Does that mean an attorney has a duty to double check a client’s collection efforts? In the old days of paper discovery we regularly relied on clients to collect relevant documents. Does the Qualcomm decision change that rule? If so, discovery is going to get even more expensive. Outside forensic consultants are going to be required, to protect the lawyers if nothing else. They are going to have to certify their efforts and look in every nook and cranny. Clients will have to pay for these certifications as well as the related attorney oversight.

2. It Doesn’t Help to be a Lowly Associate

The team working on this phase of discovery included a senior partner, a senior associate and an associate. The lawyer handling these depositions, Kevin Leung, was an associate, which often happens as these are often considered less important depositions.

Should a junior associate on a big case be responsible for checking his witnesses computers? Forensics isn’t a subject normally covered in law school and most associates wouldn’t know how to handle this. More important, was Leung responsible for making sure that his superiors or their client properly checked witness computers. If so, how was he supposed to make that happen. Associates are supposed to be seen not heard in most big law firms. Indeed, most partners don’t even want to see them, let alone take orders from them.

Leung’s attorney argued that he raised concerns about the thoroughness of the production to his superiors. The court cut him no slack.

If Leung was unable to get Qualcomm to conduct the type of search he deemed necessary to verify the adequacy of the document search and production, then he should have obtained the assistance of supervising or senior attorneys. If Mammen and Batchelder were unable to get Qualcomm to conduct a competent and thorough document search, they should have withdrawn from the case or taken other action to ensure production of the evidence.

Opinion at 27 note 10.

Since when does an associate get to determine what level of search is deemed necessary to verify the adequacy of a document search? I recognize that associates are full members of the bar but rarely do they get to call the shots on big litigation. If Leung raised concerns with his superiors, that should be enough. Put the responsibility on the people at the top. The buck should stop there.

3. Whatever You Do, Don’t Be Cutesy When You Question Your Witnesses.

This case unraveled on the last day of trial. That’s when Qualcomm witness Viji Raveendran admitted on cross that there were relevant emails showing Qualcomm participation in the JVT. It unraveled for partner Lee Patch several days earlier when he first learned that Raveendran had some interesting emails that had not been produced.

While preparing Raveendran for trial, a junior associate, Adam Bier, learned that she had over 20 emails on her computer that buried Qualcomm’s case, or at least its main defense. Taking the first step down the primrose path, the legal team decided not to produce them on the grounds they were “not responsive to Broadcom’s requests.” They also did nothing further to check whether their might be more of these bad boys laying around in the vault.

Most important for this point, Patch still called Raveendran as their last witness. With confidence based on careful coaching (I assume), Patch asked Raveendran whether “she had ‘any knowledge of having read’ any emails” from the JVT mailing list. Opinion at 9, line 25-26. She conveniently answered “no,” maybe because she did not call actually reading them. However, she clearly had received them, which was more than enough to kill the case for legal purposes.

On cross, and maybe with a lucky shot, opposing counsel asked her whether she had ever received emails of this type. That’s when the bottom fell out. She admitted truthfully that she had. She also noted that they were pulled from her production by the attorneys and all heck broke out. Patch was nailed for “carefully [tailoring] his questions to ensure that Raveendran did not testify about the unproduced emails.” Opinion at 30, line 10-12.

What do you make of this? Arguably Patch asked Raveendran a question that she could answer honestly in a way that helped his case. He did not go further and have her clarify the limits of her answer; he left that work for opposing counsel to do or not do.

It used to be the rule that an attorney could not ask a question and let his client give an answer which he to be untrue. If we follow the logic of this extension, the rule is broadened to include incomplete or misleading answers. If you know there is more to be gleaned from the story, i.e. she may not have read the emails but she certainly received them, you better take your seat and keep your mouth closed.

I think Patch made the situation worse at a sidebar conference when he took the position that the documents had not been produced because they weren’t requested. Talk about asking for trouble. The documents were clearly within the ambit of Broadcom’s discovery requests and any argument to the contrary seemed like a loser to me.

The lesson is this: Don’t be cute with testimony but if you get caught don’t try to bull your way out of it. When the game’s up, stop playing.

4. The Smarter They Are, The Harder They Fall

Clearly puzzled as to how discovery violations of this magnitude could happen with big-firm lawyers in big-stakes litigation, the court offered several hypotheses:

1. Qualcomm intentionally hid the documents from counsel and did it so effectively that they never suspected.
2. The lawyers were so inept or disorganized that they never suspected the documents were hidden.
3. Qualcomm shared the documents with counsel (at least some of them) who worked with Qualcomm to keep them hidden.
4. Qualcomm hid the documents, the lawyers suspected their client but took no action.

Unfortunately for the lawyers, the court immediately rejected options one and two, one of which might have gotten them off the hook. Damning with faint praise, the Magistrate stated:

It is inconceivable that these talented, well-educated, and experienced lawyers failed to discover through their interactions with Qualcomm any facts or issues that caused (or should have caused) them to question the sufficiency of Qualcomm’s document search and production. Qualcomm did not fail to produce a document or two; it withheld over 46,000 critical documents that extinguished Qualcomm’s primary argument of non-participation in the JVT. In addition, the suppressed documents did not belong to one employee, or a couple of employees who had since left the company; they belonged to (or were shared with) numerous, current Qualcomm employees, several of whom testified (falsely) at trial and in depositions. Given the volume and importance of the withheld documents, the number of involved Qualcomm employees, and the numerous warning flags, the Court finds it unbelievable that the retained attorneys did not know or suspect that Qualcomm had not conducted an adequate search for documents.

Opinion at 24-25, lines 18-23, 1-12.

The court was left with options 3 and 4, and neither was comfortable for the attorneys. Because there was no evidence that Qualcomm ever told any of the lawyers about the missing documents, the court dismissed option 3. Instead, It concluded that the lawyers must have suspected funny business from Qualcomm but took no corrective action.

As the Magistrate put it:

Thus, the Court finds it likely that some variation of option four occurred; that is, one or more of the retained lawyers chose not to look in the correct locations for the correct documents, to accept the unsubstantiated assurances of an important client that its search was sufficient, to ignore the warning signs that the document search and production were inadequate, not to press Qualcomm employees for the truth, and/or to encourage employees to provide the information (or lack of information) that Qualcomm needed to assert its non-participation argument and to succeed in this lawsuit. These choices enabled Qualcomm to withhold hundreds of thousands of pages of relevant discovery and to assert numerous false and misleading arguments to the court and jury.

Opinion at 26, lines 1-12. The court then went on to determine which attorneys on the legal team it wanted to tag.

The warning here is that the big firm pedigree can cut both ways. Although there was no evidence that any of the lawyers were aware of the Qualcomm documents until the end, that didn’t stop the court. Laying out each attorney’s work and educational background, the court essentially said they were too smart to allow discovery violations of this magnitude to happen.

5. The Legal Team May Be Responsible for Your Client’s Collection Efforts.

In naming individual attorneys to be sanctioned, the Magistrate repeatedly voiced the theme that the attorneys are responsible to supervise their clients collection and production of documents. I guess that fits with the notion that attorneys are officers of the court but it should make you think.

As is often the case with big corporations, outside counsel worked with a number of internal counsel, all of whom were members of the bar and likely had excellent credentials. I practiced for 20+ years and often found myself in the same situation. I passed on production requests to my counterpart in corporate legal and waited for the response. While I may have discussed strategically who needed to be included in the collection, I don’t recall ever telling my client what to do or second guessing them. Perhaps I should have.

Picking one example, here is what the court said:

Attorneys Bier, Mammen and Patch are responsible for the discovery violation because they also did not perform a reasonable inquiry to determine whether Qualcomm had complied with its discovery obligations.

Opinion at 28, lines 9-11.

In a similar fashion, the court dinged several of the attorneys for not conducing a reasonable inquiry into Qualcomm’s discovery production before making their argument that the case should be dismissed because there was no evidence to support it.

This presents a bit of a Catch 22. If there is no evidence produced to support an opponent’s case, you have the right if not the obligation to point that out to the court and hope for dismissal. In this case the court is suggesting that more is required. You may have to go back to your client and conduct additional sweeps to confirm that there is no evidence.

When is that required? It is easy to look back in hindsight here and say: “C’mon guys, you had to know something was up here.” But what about your garden variety case where the clients sends over the files and says “That’s all there is.” Do we now have a duty to send in the storm troopers.

You Can’t Trust Your Colleagues?

The court nailed six attorneys in this matter ranging from senior partner to junior associate. In doing so, the Magistrate candidly pointed out that the current discovery rules did not provide a direct avenue for her to sanction most of the attorneys. Rather, Rule 26 (g) only imposes liability on the attorney signing the discovery response. In this case the person signing the pleadings was a young associate. And, Rule 37 imposes liability only for failure to comply with a discovery order. It does not address a situation where there was no motion to compel because no one knew that documents had been held back.

Undaunted, Magistrate Major created a new rule of conduct for the attorneys, one which may give you pause:

[T]he Court believes the federal rules impose a duty of good faith and reasonable inquiry on all attorneys involved in litigation who rely on discovery responses executed by another attorney. … Attorneys may not utilize inadequate or misleading discovery responses to present false and unsupported legal arguments and sanctions are warranted for those who do so. … The facts of this case also justify the imposition of sanctions against these attorneys pursuant to the Court’s inherent power.

Opinion at 26 note 9.

I don’t want to take this too far but the implication here is that you may be referred for sanctions if you participate in a case where your colleagues haven’t met their discovery responsibilities. You may not have signed the pleading or examined the witness yet you could still be in hot water. Be careful is all I am saying.

I first wrote about this case as “A bad day at the office.” As the hearings progress, the situation just seems to get worse and worse. Qualcomm is out $10 million and has lost its patent enforcement rights. Lawyers from two firms are facing sanctions, not to mention the specter of contribution claims from their client. Somewhere there had to be a moment when all this could have been reversed. No doubt the pressure was intense—big client, big case, big win in the offing. But, somebody should have stepped up and said “No, No, No.” That’s why they get paid the big bucks.