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Qualcomm Inc. V. Broadcom Corp.: 9,259,985 Reasons to Comply with Discovery Requests

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Qualcomm Inc. V. Broadcom Corp.: 9,259,985 Reasons to Comply with Discovery Requests Richmond Journal of Law & Technology Volume XV, Issue 3 QUALCOMM INC. V. BROADCOM CORP.: 9,259,985 REASONS TO COMPLY WITH DISCOVERY REQUESTS By: Kristen McNeal∗ Cite as: Kristen McNeal, Note, Qualcomm Inc. v. Broadcom Corp.: 9,259,985 Reasons To Comply with Discovery Requests, 15 RICH. J.L. & TECH. 10, http://law.richmond.edu/jolt/v15i3/article10.pdf. I. INTRODUCTION [1] Evolving technology has advanced communication throughout the business industry. Corporations use various communication methods to initiate conversation, propose business ventures, and relay correspondence from one place to another. Quite naturally, with the development of different means of communication, various innovations in the legal profession have materialized and gained popularity. One of these innovations is electronic discovery.1 [2] When compared to conventional discovery means, electronic discovery is more proficient, less time consuming, and more easily organized;2 however, in some circumstances, it can pose difficulties if performed inefficiently or improperly. Under these circumstances, courts ∗ University of Richmond, T.C. Williams School of Law, J.D. candidate 2010. 1 FED. R. CIV. P. 26(f)(3)(C) (labeling electronic discovery as “disclosure or discovery of electronically stored information, including the form or forms in which it should be produced”); see Junk v. Aon Corp., No. 07 Civ. 4640(LMM)(GWG), 2007 WL 4292034, at *1 n.1 (S.D.N.Y. Dec. 3, 2007) (stating that a party referred to electronic discovery as “software capable of ‘retriev[ing], preserv[ing], documenting and produc[ing] electronic communications, records, and files’”). 2 See The E-Discovery Standard, APPLIED DISCOVERY’S ELECTRONIC DISCOVERY NEWSLETTER (LexisNexis Applied Discovery), Apr. 2004, at 1-2, available at http://www.lexisnexis.com/applieddiscovery/lawLibrary/newsletter/EDS_Apr04.pdf. 1 Richmond Journal of Law & Technology Volume XV, Issue 3 must enforce sanctions against those who willfully engage in improper discovery antics or conduct considered unethical, disobedient, or done in bad faith.3 [3] The imposition of sanctions on attorneys, parties, or both, dates back decades; thus, it is not an issue that has developed over the past few years.4 Early last year in Qualcomm Inc. v. Broadcom Corp.,5 the United States District Court for the Southern District of California imposed one of the highest monetary discovery sanction awards in history on Qualcomm Inc. (Qualcomm) for failure to comply with discovery obligations.6 Sanctions were imposed,7 but the case has been partially vacated and recently remanded to the magistrate court for further proceedings pertaining to the sanctioned attorneys.8 This note argues that the United States District Court for the Southern District of California properly imposed monetary and disciplinary sanctions on Qualcomm and its attorneys. A. SCOPE AND PURPOSE [4] This note contains three main focuses. First, it examines the historical background of the law preceding the Qualcomm decision as it pertains to the imposition of sanctions. Second, this note explores the facts of Qualcomm and analyzes the district court’s rationale in determining its decision. Finally, the note concludes with a discussion of the future 3 See generally Chambers v. NASCO, 501 U.S. 32 (1991) (holding that sanctioning those who abuse judicial processes with bad-faith conduct is within the discretion of the court); Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980) (holding that the court has the inherent power to assess attorneys’ fees); Nat’l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639 (1976) (affirming a court’s discretion to impose extreme sanction of dismissal for bad-conduct on part of parties and their attorneys). 4 See generally Chambers, 501 U.S. 32; Roadway Express, Inc., 447 U.S. 752; Nat’l Hockey League, 427 U.S. 639. 5 Qualcomm Inc. v. Broadcom Corp. (Qualcomm I), No. 05cv1958-B (BLM), 2008 WL 66932 (S.D. Cal. Jan. 7, 2008). 6 Id. at *1, *20. 7 See id. at 17. 8 Qualcomm Inc. v. Broadcom Corp. (Qualcomm II), No. 05cv1958-RMB (BLM), 2008 WL 638108, at *3 (S.D. Cal. Mar. 5, 2008). 2 Richmond Journal of Law & Technology Volume XV, Issue 3 effects of the Qualcomm decision as it relates to various stages of discovery. B. HISTORICAL BACKGROUND 1. DEFINITION AND IMPOSITION OF SANCTIONS [5] According to Black’s Law Dictionary, a sanction is “[a] penalty or coercive measure that results from failure to comply with a law, rule, or order.”9 Rule 11 of the Federal Rules of Civil Procedure requires attorneys and parties to make true and good faith representations to the court and authorizes the court to impose sanctions on an attorney, law firm, or party if the court determines that the rule has been violated.10 Furthermore, with respect to provisions governing discovery, Rule 26 of the Federal Rules of Civil Procedure requires a signature on all discovery requests and responses.11 This signature certifies that the signing attorney or party, to the best of his knowledge and after a reasonable inquiry, verifies the validity of the discovery request or response.12 Rule 26 also gives courts the authority to impose sanctions, including reasonable expenses and attorney’s fees, on the person certifying the discovery request or response, the party on whose behalf the certifier is acting, or both.13 Additionally, Rule 37 allows a party to file a motion to compel an opposing party who has failed to comply with a discovery request to respond accordingly.14 This rule also provides for sanctions against a 15 party that fails to abide by a discovery order. 2. JUDICIAL AUTHORITY AND PRECEDENT INVOLVING THE IMPOSITION OF SANCTIONS [6] In recent times, courts have imposed sanctions on attorneys, a party, or both, when misconduct or unethical behavior occurs. These sanctions 9 BLACK’S LAW DICTIONARY 1368 (8th ed. 2004). 10 FED. R. CIV. P. 11. 11 FED. R. CIV. P. 26(g)(1). 12 FED. R. CIV. P. 26(g)(1). 13 FED. R. CIV. P. 26(g)(3). 14 FED. R. CIV. P. 37(a). 15 FED. R. CIV. P. 37(b)(2)(A). 3 Richmond Journal of Law & Technology Volume XV, Issue 3 have included the payment of large amounts of attorney’s fees and costs as well as disciplinary actions, particularly when large and affluent corporations are involved.16 To impose these sanctions, the courts have used rule-based authority derived from the Federal Rules of Civil Procedure.17 In addition to the authority given by the Federal Rules of Civil Procedure, federal courts possess inherent power to impose sanctions on attorneys and parties who abuse the judicial process.18 [7] In Fink v. Gomez,19 the United States Court of Appeals for the Ninth Circuit stated three sources of authority that allow courts to sanction a party or its attorneys for improper conduct.20 The first source of authority derives from Rule 11 of the Federal Rules of Civil Procedure, which refers to pleadings, motions, and other court documents that are signed, filed, or submitted to the court.21 The second source of authority is 28 U.S.C. § 1927, which penalizes those who unreasonably and purposely prolong litigation.22 The third source is the court’s inherent power.23 The Fink court relied on the principles set out by the Supreme Court in Roadway Express, Inc. v. Piper24 and maintained that the courts have inherent power to impose sanctions, including attorneys’ fees, for “willful disobedience of a court order . or when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons . .”25 [8] In 1991, the Supreme Court reaffirmed the Roadway principles when it decided Chambers v. NASCO, Inc.26 In Chambers, Supreme Court Justice White held that the inherent power of courts to impose sanctions 16 See generally Chambers v. NASCO, 501 U.S. 32 (1991) (holding that the excessive sanctioning for attorney’s fees and costs for bad-faith conduct was appropriate). 17 Id. 18 See id. at 48-49 & n.13. 19 239 F.3d 989 (9th Cir. 2001). 20 Id. at 991. 21 Id. (citing FED. R. CIV. P. 11). 22 Id. (citing 28 U.S.C. § 1927). 23 Id. 24 Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980). 25 Fink, 239 F.3d at 991 (quoting Roadway Express, Inc., 447 U.S. at 766). The Fink court stated that the Roadway court also “noted that a court ‘certainly may assess [sanctions] against counsel who willfully abuse judicial processes.’” Id. (quoting Roadway Express, Inc., 447 U.S. at 766). 26 See Fink, 239 F.3d at 991-92; see also Chambers v. NASCO, Inc., 501 U.S. 32 (1991). 4 Richmond Journal of Law & Technology Volume XV, Issue 3 had not been displaced with the enactment of 28 U.S.C. § 1927 and the Federal Rules of Civil Procedure.27 Chambers, the petitioner, entered into a contract with respondent NASCO to sell a television station.28 When Chambers changed his mind and breached the contract, NASCO initiated a cause of action seeking specific performance of the contract to sell the television station and a temporary restraining order to prevent an alienation or encumbrance of the property.29 Chambers subsequently committed several delaying actions to deprive the district court of jurisdiction and prolong litigation.30 Chambers asserted several more efforts to prevent the sale of the television station and was consequently held in contempt.31 [9] NASCO finally moved for sanctions pursuant to the court’s inherent powers and after a full briefing and hearing, the court determined that sanctions against Chambers were appropriate “‘for the manner in which this proceeding was conducted in the district court from . the time that plaintiff gave notice of its intention to file suit to [now].’”32 In his defense, Chambers argued that 28 U.S.C.
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