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Posted on | May 15, 2008 | No Comments

2008-1348 Qualcomm v. Broadcom
SD/CA 05-cv-1958

Qualcomm appeals from Judge Rudi Brewster’s Order of 05 March 2008 finding a Self-Defense Exception to the Attorney-Client Privilege.  This order permits Qualcomm’s trial counsel to disclose otherwise privileged information in defending themselves against sanctions.

Coverage of this case–and sanctions–has been wide and extensive (e.g., WSJ).  In a nutshell, Qualcomm sued Broadcom for infringement.  The jury found that
Broadcom did not infringe and, in an advisory capacity, found the patents
unenforceable due to inequitable conduct and waiver based on Qualcomm’s
conduct before the Joint Video Team (JVT), a standard setting body.  After the verdict, Qualcomm produced
approximately 230,000 pages of documents that had been concealed during
litigation.  The court subsequently found it an
exception case and awarded Broadcom over $9 million in fees, expenses,
etc., and prejudgement interest.  These issues are the subject of CAFC appeal 2007-1545.

As part of this process, 6 of Qualcomm’s attorneys were cited and sanctioned by the court.  They objected to the sanctions, arguing that they had been deprived of due process because they could not defend themselves from the allegations because of Qualcomm’s assertions of the attorney-client privilege.

The court agreed.  Although it had previously rejected the attorneys’ claim that the self-defense exception applied, the court found changed circumstances now supported the exception:

Qualcomm filed four declarations of employees, in spite of the fact it had maintained its position of invoking attorney-client privilege. All four declarations were exonerative of Qualcomm and critical of the services and advice of their retained counsel. None were filed under seal.

This introduction of accusatory adversity between Qualcomm and its retained counsel regarding the issue of assessing responsibility for the failure of discovery changes the factual basis which supported the court’s earlier order denying the self-defense exception to Qualcomm’s attorney client privilege. Meyerhofer v. Empire Fire & Marine Ins. Co., 497 F.2d 1190, 1194-95 (2d Cir. 1974); Hearn v. Rhay, 68 F.R.D. 574, 581 (E.D. Wash. 1975); First Fed. Sav. & Loan Ass’n v. Oppenheim, Appel, Dixon & Co., 110 F.R.D. 557, 560-68 (S.D.N.Y. 1986); A.B.A. Model Rules of Prof. Conduct 1.6(b)(5) & comment 10.

Accordingly, the court’s order denying the self defense exception to the attorney-client privilege is vacated. The attorneys have a due process right to defend themselves under the totality of circumstances presented in this sanctions hearing where their alleged conduct regarding discovery is in conflict with that alleged by Qualcomm concerning performance of discovery responsibilities. See, e.g., Miranda v. So. Pac. Transp. Co. , 710 F.2d 516, 522-23 (9th Cir. 1983).

The exception applying, the communications and conduct relevant to the topic area of records (electronic or other) discovery pertaining to JVT and its parents, its ad-hoc committees, and any other topic regarding the standards setting process for video compression technology is not privileged information.

Documents:

2008-1348_Order_re_Privilege.pdf

Update: 28 May 2008.  The Qualcomm attorneys subject to the sanction motion have cross-appealed the court’s order on jurisdiction.  They had challenged the jurisdiction of the magistrate to consider the matter–the district court ruled that the sanctions were related to discovery matters, a subject well within the magistrate’s jurisdiction.  2008-1380 and 1381.

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