Qualcomm “No Sanctions” Order Issued

The long-awaited lawyer sanctions order was just entered in the Qualcomm case by U.S. Magistrate Judge Barbara L. Major, copy attached. Thanks to a good friend behind the scenes for getting this to me so quickly. Those hoping for a strong sanctions order against the attorneys caught hiding the ball will be disappointed by this decision. The title of the order says it all: ORDER DECLINING TO IMPOSE SANCTIONS AGAINST THE RESPONDING ATTORNEYS AND DISSOLVING THE ORDER TO SHOW CAUSE.

Here is Judge Major’s concluding paragraph:

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.

It is hard to believe this is the same judge who in earlier opinions provided excruciating details of the discovery misconduct of these same attorneys. It kind of makes you wonder who the prosecutor was here? Who can or will appeal the Magistrate’s order?

Judge Major tries to explain her turn-about with the following initial comments in the order, saying that she has:

… thought long and hard about this case. 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.

So now Judge Major concludes the attorneys “made significant efforts to comply with their discovery obligations” and this causes her to do a complete 180. The rest of her opinion contains a list of all of the errors made by counsel, errors that she ultimately forgives because of the “significant efforts” they made. She summarizes the Qualcomm  errors with language that harks back to Zubulake’s famous Cool Hand Luke quote and other language found in the Zubulake saga.

The fundamental problem in this case was an incredible breakdown in communication. The lack of meaningful communication permeated all of the relationships (amongst Qualcomm employees (including between Qualcomm engineers and in-house legal staff), between Qualcomm employees and outside legal counsel, and amongst outside counsel) and contributed to all of the other failures. The Court was not presented with any evidence establishing that either in-house lawyers or outside counsel met in person with the appropriate Qualcomm engineers (those who were likely to have been involved in the conduct at issue and who were likely to be witnesses) at the beginning of the case to explain the legal issues and discuss appropriate document collection. Moreover, outside counsel did not obtain sufficient information from any source to understand how Qualcomm’s computer system is organized: where emails are stored, how often and to what location laptops and personal computers are backed up, whether, when and under what circumstances data from laptops are copied into repositories, what type of information is contained within the various databases and repositories, what records are maintained regarding the search for, and collection of, documents for litigation, etc. Finally, no attorney took supervisory responsibility for verifying that the necessary discovery had been conducted (including ensuring that all of the correct locations, servers, databases, repositories, and computers were correctly searched for potentially relevant documents) and that the resulting discovery supported the important legal arguments, claims, and defenses being presented to the court. These fundamental failures led to the discovery violations.

In other words, the attorneys completely ignored their Zubulake duties. But wait, there’s more. Judge Major essentially found this was a discovery project with no leader and no management, and yet they supposedly made reasonable efforts:

Another factor that contributed to the discovery failure was a lack of agreement amongst the participants regarding responsibility for document collection and production. … Qualcomm paralegals advised Leung that they believed there was no need to search the witnesses’ individual files or laptops because the information was likely to duplicate information and documents contained in other corporate  repositories that already were being searched.

No one was in charge. Who’s on first? It appears as if Qualcomm’s legal department was in charge, the paralegals no less, who said there was no need to look at the files on witness computers. Reminds me of a Jedi mind trick: These are not the droids you’re looking for. But wait, there is still more:

These failures were exacerbated by an incredible lack of candor on the part of the principal Qualcomm employees.

Judge Major than goes on to examine the language of Rule 26(g), the Rule 11 of discovery, and somehow concludes that these attorneys made reasonable efforts, including a reasonable inquiry, and thus should not be sanctioned. I certainly agree with the analysis, and indeed have said recently, that the law does not demand perfection, only reasonable efforts. It is also true that you can make reasonable efforts and still lose, or in this case, not find electronic evidence. Still, in view of all of the errors delineated here, and the several previous opinions in Qualcomm, I cannot see how Judge Major could conclude that the efforts made by these attorneys were reasonable. Apparently the reasonable man standard is very malleable and varies considerably from court to court, and state to state. I would not count on leniency like that outside of California, or even outside of  San Diego.

Congratulations to defense counsel here for their good lawyering. They successfully painted the accused lawyers as innocents, who tried and made some blunders, but always acted in good faith and reasonably. These are not the droids you’re looking for. But if they are not, who is?

I suppose the judge may have thought that the Qualcomm Six had already been punished enough. Still, the message here is risky. You could assume from this holding that the Zubulake duty will not be enforced, even when it nearly results in a fraud on the court, with “over 200,000 pages of relevant emails, memoranda, and other company documents” hidden from pretrial disclosure. Qualcomm Inc. v. Broadcom Corp., No. 05-CV-1958-B(BLM) Doc. 593 (S.D. Cal. Aug. 6, 2007). It is true that the lawyers for Qualcomm violated the Zubulake duty of diligent inquiry and were not sanctioned, but you should not let this lull you into a false sense of security. I could cite dozens, if not hundreds of other cases where lesser misconduct in fact did lead to sanctions against attorneys.

Anyone else have any ideas as to how to reconcile this latest opinion with all of the others in the Qualcomm saga? Is it just much easier to act reasonably in e-discovery in California than in New York? Is the bar lower? What is the message here to the Bar on the Zubulake duty of diligence? What happened to Rule 26(g)? Has a low standard for reasonability once again made it irrelevant?  What about the ethical duties of competence, candor toward the tribunal, and fairness to opposing party and counsel? Who was the prosecutor here anyway? Qualcomm? Did the court appoint anyone to fill that role objectively? I think not, but could be wrong. All of your comments are welcome to help explain the Qualcomm puzzle.

3 Responses to Qualcomm “No Sanctions” Order Issued

  1. […] Ralph Losey’s e-Discovery Team: The long-awaited lawyer sanctions order was just entered in the Qualcomm case by U.S. Magistrate […]

  2. […] for discovery misconduct relating to their defense of their corporate client came down (click here for Mr. Losey’s post). Here is a link to the April 2, 2010 Order. If you’re short on […]

  3. You’re right. It was a very big disappointment!

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