National Insurance Law Forum : Insurance Litigation Lawyer & Attorney : National Insurance Law Forum : Insurance Coverage, Bad Faith Litigation

Request and Production of Electronically Stored Information. A party must specifically request the production of ESI and may specify the form in which it is produced. Consistent with the requirements applicable to other document requests, the Act requires the requesting party to specify what categories of information it is seeking when requesting production of ESI and may request to copy, test, or sample the responding party's ESI.  A party responding to a request for ESI should produce it in the form requested or, if the responding party objects or there is no form of production specified, produce the ESI in the form in which it is ordinarily maintained or in a reasonably usable form.

Inaccessible ESI. A party objecting to the production of ESI on the grounds that it is not reasonably accessible and would cause an undue burden must set forth a specific objection rather than boilerplate language. This requires a party to identify the types of ESI that are not reasonably accessible. On a motion to compel, the burden is on the responding party to demonstrate the undue burden or expense.

Cost Shifting. Generally, the party producing ESI must bear the costs of production. However, if a party objects and demonstrates that data is not reasonably accessible because of undue expense, a court may order production "for good cause" and shift the costs to the demanding party.

Safe Harbor for Destruction of ESI. There is a safe harbor provision.  The court "shall not impose sanctions on a party" for the destruction of ESI pursuant to a "routine, good faith" operation of a document/electronic information destruction policy. The provision does not alter a party's obligation to preserve ESI when it is on notice of litigation.

Claims of Privilege and Work Product. If a party producing ESI notifies the other parties that ESI subject to a claim of privilege or work product was inadvertently produced, the other parties shall either return the privileged information or present it to the court under seal for a determination of the privilege claim. A party challenging the assertion of a claim of privilege or work product cannot use or disclose the privileged information until the challenge is resolved.

Differences between the California and Federal Rules include that:

• In the federal system, the parties must meet at the beginning of the case to discuss discovery issues, including the preservation and production of ESI. The new California rules do not mandate these early meet and confer requirements or the related federal initial disclosure requirements. (However, many Judges require parties to meet and confer on discovery, especially prior to requesting court intervention.)
• California’s safe harbor is potentially broader (at least in theory) than its federal counterpart, which only mentions "lost" information. 

Qualcomm v. Broadcom was a patent infringement case tried in the U.S. District Court in 2007. Broadcom filed a counterclaim alleging Qualcomm's patents were not enforceable due to waiver.  The waiver defense was predicated on Qualcomm's participation in a Joint Video Team ("JVT") in 2002 and early 2003 when the JVT was setting standards for the technology at issue. Qualcomm's participation in setting the standards would have required it to disclose certain patents and prohibited Qualcomm from suing for infringement of those patents.

Broadcom sent discovery seeking information about Qualcomm's participation in the JVT.  Qualcomm's written responses did not raise any issues.  However, witnesses produced for deposition as most knowledgeable about Qualcomm's participation in the JVT were not adequately prepared by Qualcomm for their depositions and Qualcomm did not search their computers for relevant emails or documents in preparation for the depositions (or to respond to the written discovery requests).  Consequently, the witnesses testified falsely about Qualcomm's involvement in the JVT. One denied any involvement and the other asserted Qualcomm participated only in late 2003 and after.

At Trial, Qualcomm aggressively advocated the position it did not participate in the JVT during a critical period.  While preparing one of Qualcomm's witnesses for Trial, a junior associate found 21 emails on the witness' computer that had not previously been produced.  Some of the emails were sent to JVT email groups and dated back to 2002.  Qualcomm's Trial team discounted the impact these emails, concluding the emails were not responsive to Broadcom's discovery requests, and decided not to produce them.  Counsel did not investigate further to determine if other emails had not been produced.

In seeking to avoid admission of certain evidence, Qualcomm's attorneys affirmatively argued there were no emails sent to the JVT email groups. Trial counsel did not elicit from witnesses information that might have revealed the emails. However, during Broadcom’s cross-examination, the witness disclosed the existence of the emails.  Thereafter, Qualcomm produced the emails during a lunch break after the witness testified.

During post-Trial proceedings, the Judge found Qualcomm and its counsel had acted inequitably by concealing its patents from the JVT and later concealing its involvement in the JVT from Broadcom, the Court, jury and opposing counsel during litigation. Finding the case was “exceptional” within the meaning of the patent laws, the Trial Judge granted Broadcom's motion for attorneys' fees and court costs, awarding Broadcom $8.5 million in fees and costs, plus interest.

Qualcomm's attorneys continued to argue post-Trial that the 21 emails were not responsive to Broadcom’s discovery requests. However, eventually, Qualcomm agreed to search the current and archived emails of five Trial witnesses, and thereafter admitted there were thousands of responsive documents that had not been produced. Qualcomm conceded some of the documents contained facts inconsistent with Qualcomm's position at Trial and in the post-Trial proceedings.   Qualcomm later expanded its search to the email accounts of 21 employees and found a total of 46,000 emails (over 300,000 pages) that had been requested by Broadcom but not produced.

Broadcom brought a motion for discovery sanctions against Qualcomm and its attorneys that was referred to Magistrate Judge Major. Judge Major concluded there was "clear and convincing" evidence Qualcomm "intentionally" engaged in conduct designed to prevent Broadcom from learning about Qualcomm’s participation in the JVT. Judge Major imposed over $8.5 million in attorneys fees and costs as sanctions on Qualcomm, subject to a credit for amounts paid on the attorneys fee award issued by the trial court. Judge Major sanctioned six attorneys.  In sanctioning a junior attorney, the Judge suggested that a junior attorney with concerns about a client’s search for responsive documents should take his or her concerns to a more senior attorney who, in turn, would ultimately be obligated to withdraw if the client refused to conduct an adequate search for responsive documents. The Judge also noted that junior attorneys need to be properly supervised and trained for the tasks to which they are assigned.