The judge who heard the sanctions part of the Qualcomm case set out a program for devising an action plan to prevent future disclosure violations. UK companies may like to measure their own preparedness against it.
On 30 January I finished a post about the sanctions judgment in Qualcomm v Broadcomm, promising two further articles about it – one on the comprehensive Case Review and Enforcement of Discovery Obligations (“CREDO”) program which Magistrate Judge Barbara Major ordered as part of the judgment, and one expanding on the implications of the judgment for UK lawyers.
I was immediately assailed by a reader who suggested that by the title to the first article – The implications of Qualcomm for UK lawyers – I had already promised more than I had delivered in respect of the latter point. That was possibly true, but I reckoned that 2,000 words on the judgment itself was enough to be getting on with. Other things have kept me busy since then and I have not got back to it.
There were further developments on the sanctions side of this case last week, so I thought I had better cover the original CREDO point. The first round, at least, of the “comprehensive case review” has taken place. What were its intentions, and why may it be relevant to those who practice in this area in the UK?
First, for those who cannot face my 2,000 words on the subject, what was the judgement about? Briefly, it emerged in the closing stages of a patent action that Qualcomm had failed to disclose some documents relevant to a key assertion. They lost on the point anyway, so the subsequent emergence of 46,000 documents on the subject did not affect the outcome, but did give rise to a judicial investigation into the conduct of the lawyers, both those in house and the retained lawyers. The primary upshot was that certain named attorneys were reported to their professional body and cash sanctions were imposed in the same sum as had already been awarded against Qualcomm for costs – $8,568,633.24 – less the sum actually paid in costs.
Explaining why she did not impose sanctions over and above the sum already ordered, Magistrate Judge Barbara Major said that if lessons were not learnt from costs penalties of that order then nothing she could add would get the message across. That and other observations made it clear that she was more concerned to focus on encouraging a different approach to standards and ethics than in heaping penalties on the participants. Thus arose the order that all those involved on the Qualcomm side should participate in CREDO – a Comprehensive Case Review and Enforcement of Discovery Obligations program.
The hoped-for end-result was to be a protocol, described as follows:
At a minimum, the CREDO protocol must include a detailed analysis
1) identifying the factors that contributed to the discovery violation (e.g., insufficient communication (including between client and retained counsel, among retained lawyers and law firms, and between junior lawyers conducting discovery and senior lawyers asserting legal arguments); inadequate case management (within Qualcomm, between Qualcomm and the retained lawyers, and by the retained lawyers); inadequate discovery plans (within Qualcomm and between Qualcomm and its retained attorneys); etc.),
(2) creating and evaluating proposals, procedures, and processes that will correct the deficiencies identified in subsection (1),
(3) developing and finalizing a comprehensive protocol that will prevent future discovery violations (e.g., determining the depth and breadth of case management and discovery plans that should be adopted; identifying by experience or authority the attorney from the retained counsel’s office who should interface with the corporate counsel and on which issues; describing the frequency the attorneys should meet and whether other individuals should participate in the communications; identifying who should participate in the development of the case management and discovery plans; describing and evaluating various methods of resolving conflicts and disputes between the client and retained counsel, especially relating to the adequacy of discovery searches; describing the type, nature, frequency, and participants in case management and discovery meetings; and, suggesting required ethical and discovery training; etc.),
(4) applying the protocol that was developed in subsection (3) to other factual situations, such as when the client does not have corporate counsel, when the client has a single in-house lawyer, when the client has a large legal staff, and when there are two law firms representing one client,
(5) identifying and evaluating data tracking systems, software, or procedures that corporations could implement to better enable inside and outside counsel to identify potential sources of discoverable documents (e.g. the correct databases, archives, etc.), and
(6) any other information or suggestions that will help prevent discovery violations.
There are an awful lot of words there, but what they boil down is this – what went wrong as between Qualcomm and its internal and external legal team, what can be done to make sure it does not happen again, and what plans and systems and software should be in place to make sure that companies and their lawyers can identify potential sources of discoverable documents?
I have referred in a post called Discovering what to do about e-Disclosure to a recent Kroll survey which suggests that over 70% of companies do not know where their potentially disclosable data is. Other recent surveys, notably one by Deloitte, have reached similar conclusions. The message coming from the UK courts is that judges will expect a close focus on the issues (and therefore on the documents which lie behind the issues) at a much earlier stage than has been the case. If the regulator arrives at 8:00 in the morning, there is even less time to start wondering what documents you possess and where they are. Even if you know where they are, can you identify the privileged ones in the time it takes the regulator to fill his black sacks?
Although the litigation readiness message is simple – start now to be ready for urgent demands for disclosure of electronic documents – the task is clearly not. No-one will argue, I think, with the advice that the first step in litigation is for the lawyers to sit down with the appropriate people at the client to identfy the electronic sources urgently. Someone, somewhere, is doing just that as I write. The client is nervously holding a client care letter which sets out the lawyers’ charging rates, and recalling the board meeting at which it was decided to defer taking steps to do anything about this (or perhaps the decision not to put it on the agenda at all).
Magistrate Judge Barbara Major’s summary of her CREDO action plan may have originated from an extreme example of neglect (I follow her in declining to attribute baser intentions to those involved although at least one person I know thinks that a token week in prison might have focused some minds) but it would perhaps be a good agenda item for the next meeting with the lawyers.