Discovery Duties in e-Stored Information

by Lesley Anne Hawes May/June 2008
Not sure about your discovery duties when using e-stored information? The Qualcomm case illustrates that applying these general discovery duties in practice may not be as easy as the familiar general “due diligence” requirement suggests. While the ink is drying on the Qualcomm decision, it may be a good time for companies and their counsel to reassess their own case management and discovery procedures in light of the lessons learned.

In October 2005, Qualcomm Inc. filed suit against Broadcom Corp. for patent infringement. [Qualcomm Incorporated v. Broadcom Corporation, U.S.D.C., Southern Dist. of Cal. Case No. 05cv1958-B (BLM).] By August 2007, Qualcomm had not only lost the litigation but also had been ordered to pay every penny of attorneys’ fees and costs, expert witness fees, travel expenses and all other litigation expenses Broadcom incurred in defending the action — more than $8.5 million in total, plus post-judgment interest. What was this huge award based on? A finding by the District Court by clear and convincing evidence that Qualcomm had participated in a plan to wrongfully conceal material evidence from the court, the jury and opposing counsel during the litigation.

The court also found that Qualcomm’s attorneys had participated in “an organized program of litigation misconduct.” The district judge referred the issue of sanctions to the magistrate judge assigned to the case, and in January 2008, the magistrate judge issued a 42-page order, which among other things, identified six attorneys representing Qualcomm who were to be sanctioned for participating in the litigation misconduct and referred to the state bar for disciplinary proceedings.

The root of these extraordinary orders in the Qualcomm case was the failure by Qualcomm to produce thousands of pages of documents in discovery, consisting primarily of electronically stored information (ESI) and, in particular, e-mails. In simplified terms, Broadcom asserted in defense of the patent infringement suit that Qualcomm had waived its patent rights by participating in a Joint Video Team (JVT) in 2002 and 2003, a standards-setting organization that created the standard for video coding.

Qualcomm filed suit against Broadcom in 2005 alleging Broadcom infringed Qualcomm’s patents by manufacturing and selling products that comply with a video-coding standard subject to Qualcomm’s patents. That standard, the H.264 standard, was created by the JVT, and if Qualcomm participated in the body that created the standard prior to the standard’s release in May 2003 by the JVT, Broadcom argued that such participation demonstrated that Qualcomm had waived its right to assert exclusive rights under those patents.

Broadcom issued multiple rounds of written requests for production of documents to Qualcomm during the discovery phase of the case. These discovery requests specifically sought all documents pertaining to any participation by Qualcomm in the JVT, all communications Qualcomm received pertaining to the JVT and similar records encompassing the time frame of 2002 and 2003, among other documents. While Qualcomm produced thousands of pages of documents, at trial it became clear that one of Qualcomm’s employees in fact had received e-mails from the JVT in 2002 and 2003, and the 21 
e-mails received by that employee between 2002 and 2003 concerning the JVT were never produced to Broadcom during discovery.

As further investigation of this failure unfolded, it was ultimately determined that approximately 46,000 documents, comprising more than 300,000 pages of records had not been produced to Broadcom during the litigation, evidence that addressed Broadcom’s defense of waiver and Qualcomm’s knowledge of and participation in the JVT when the JVT was setting the video-coding standard that was subject to Qualcomm’s patents and its claim of infringement.

The magistrate judge’s decision cites certain egregious acts and omissions that suggested a possible conscious or at least a reckless disregard of information available to the company and its lawyers that should have alerted them to the potential that other relevant documents material to the case and responsive to Broadcom’s discovery existed that should have been investigated and located.

However, the decision also seems to recognize that at least in part the failure by any of the many, many attorneys to realize that further research and investigation of Qualcomm’s records was required was the result of the fact that the records in question were largely in electronic form, particularly e-mails. Perhaps most important, it was not clear that there was any systematic set of procedures established to conduct a comprehensive search of records and identification of employees with potential knowledge or documents pertaining to the issues in litigation.

In 2006, the discovery provisions of the Federal Rules of Civil Procedure were revised to address specifically the duties of parties to litigation in preserving, identifying and producing electronically stored information. ESI may take many forms, from electronic mail to accounting data and any other information stored on a computer or computer system that is in the possession or custody or under the control of a party.

Parties in litigation are specifically authorized under the revised Federal Rules of Civil Procedure to seek ESI in discovery, and parties responding to discovery are required by these rules to conduct a “diligent search” to locate and produce all ESI responsive to proper, relevant discovery requests that are not otherwise subject to protection from discovery under a privilege or other similar basis.

As in the case of all types of discovery, the Federal Rules of Civil Procedure impose a continuing duty on parties to supplement their discovery responses and to amend and correct discovery responses that the party later discovers were incomplete, misleading or inaccurate. The difficulty in comprehensively identifying, locating and preserving all sources of ESI potentially relevant to pending litigation and in obtaining and preparing the ESI for production in discovery has been the subject of numerous articles and seminars since the revised discovery rules became effective.

In the case of Qualcomm, while there were many acts and omissions noted by the court in support of its sanctions decision, certain key concerns that all litigants can examine and learn from in dealing with ESI and discovery in litigation in general should be highlighted. First, a diligent search for potential information that should be produced in response to discovery requires counsel and the responsible officers of the corporation to make independent inquiries of personnel and conduct searches that the party can demonstrate are designed to effectively locate the requested records. Qualcomm could not make such a showing by specific evidence that it had instructed its personnel to search for and locate the types of records requested for the time period at issue, a fact highlighted in the ruling imposing sanctions.

The efforts made to locate documents responsive to the discovery and relevant to the claims and defenses in the case should also be clearly documented to prove the company’s diligence and that the company asked the “right” questions to uncover the information. The absence of this documented proof of the nature and scope of the company’s search for relevant, responsive records can suggest, as it did in Qualcomm, that the company may have deliberately failed to ask the “right” questions so as to avoid locating documents that would have been revealed through the correct searches.

Second, neither attorneys nor officers of the corporation can rely on unsubstantiated assertions by personnel as to the existence or non-existence of records but again must be able to document what records were sought and reviewed, the methods and procedures used to locate records, and how the company and its lawyers assured themselves that the methods and procedures used to find the records were sufficient to obtain all of the documents relevant to the claims and defenses if they existed. Third, both the company’s officers and its attorneys must assert claims and defenses in litigation based on a reasonable, diligent investigation of the underlying facts and evidence, again not based on unsubstantiated assertions of certain personnel of the party litigant.

Fourth, if the company or its attorneys discover documents and ESI that should have been turned over in discovery but were not, particularly evidence that undermines the company’s claim, it is essential that the information be disclosed. Rule 11 of the Federal Rules of Civil Procedure imposes duties on both counsel and the party litigants not to assert positions that are factually unfounded or legally without merit. If counsel or the party discover material evidence omitted from disclosure that should have been disclosed or as to which discovery responses are required to be amended under the discovery rules, the longer the delay in making such disclosures and amendments, the greater the risk that the party and its counsel will be perceived as concealing information and improperly continuing to advocate a false position in violation of Rule 11.

While clearly the party and counsel should make a thorough investigation of the evidence to determine its genuineness and evaluate the nature and scope of additional disclosures or amendments required, the court in Qualcomm noted that Qualcomm’s counsel resisted the disclosure of the omitted records and continued to advocate positions for Qualcomm that ultimately were proven to be inaccurate by the records it failed to produce. The Qualcomm order dramatically illustrates the potential adverse consequences of delay and resistance to correcting discovery omissions. These are some of the key lessons of the Qualcomm case that all litigants can examine and learn from.

The Qualcomm case also illustrates that applying these general discovery duties in practice may not be as easy as the familiar general “due diligence” requirement suggests. In apparent recognition of this fact, the court also required Qualcomm to develop with its counsel an in-depth analysis of the failures that led to the discovery misconduct in that case and to develop case management and discovery protocols to avoid the occurrence of similar misconduct in future litigation. While the ink is drying on the Qualcomm decision, it may be a good time for companies and their counsel to reassess their own case management and discovery procedures in light of the lessons of the Qualcomm case.

Lesley Anne HawesLesley Anne Hawes is a partner with McKenna Long & Aldridge, LLP, a full-service law firm of 400 lawyers and public policy advisors with offices in Atlanta, Brussels, Denver, Los Angeles, Philadelphia, San Diego, San Francisco and Washington, DC. The firm provides business solutions in the areas of corporate law, government contracts, intellectual property and technology, complex litigation, public policy and regulatory affairs, international law, real estate, environmental, energy and finance as well as bankruptcy and creditor’s rights. To learn more about the firm and its services, visit

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