Qualcomm Round 2: Outside Lawyers May Use Client's Confidential Information In Fighting Against Sanctions
By Ronald C. Wernette
(Qualcomm Inc. v. Broadcom Corp., S.D. Cal., No. 05CV1958-RMB (BLM), 3/5/08).
The latest chapter in this instructive E-Discovery sanctions case was issued on March 5, 2008. The take-away for inside and outside counsel to consider in your own decisions about how to deal with inevitable sanctions motions concerning discovery: caution in triggering application of the "self-defense" exception to attorney-client privilege. That is, if a client chooses to defend itself against potential sanctions by pointing the finger of blame at its outside counsel, the result will likely be a partial waiver of the client's attorney-client privilege; outside counsel may then defend itself against potential sanctions by using all available evidence including that which it otherwise would have been barred from using by the client's attorney-client privilege. That includes taking client depositions and calling client witnesses.
Overturning a sanctions order against six attorneys who represented Qualcomm Inc. in patent litigation, the U.S. District Court for the Southern District of California held that the self-defense exception to the attorney-client privilege is applicable because there was "accusatory adversity between Qualcomm and its retained counsel regarding the issue of assessing responsibility for the failure of discovery." As a result, the lawyers should have been permitted to use Qualcomm's otherwise protected information in opposing the possible imposition of sanctions for their role in the discovery process that resulted in a failure to produce relevant electronic documents.
In the prior proceedings resulting in sanctions against the individual outside attorneys in January 2008 (click here to see prior article), the Magistrate Judge had upheld Qualcomm's assertion of attorney-client privilege and did not allow the accused attorneys to defend themselves with otherwise privileged evidence and information. District Court Judge Rudi Brewster held that the "self-defense" exception to Qualcomm's assertion of attorney-client privilege should have been applied because Qualcomm had filed declarations in defending itself against sanctions that created an adversarial relationship with its outside counsel. On remand the outside attorneys may use otherwise privileged information, including taking depositions and calling witnesses. While Brewster opened the door for the sanctioned Qualcomm outside attorneys to defend themselves fully, the court at the same time closed the door on further sanctions for Qualcomm or any of its employees. Meanwhile, the "sanction" of the outside attorneys' participation in the CREDO process, along with Qualcomm's in-house attorneys, was undisturbed (click here to see prior article concerning the CREDO process sanction).
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Ronald C. Wernette, author, is a partner with the law firm of Bowman and Brooke LLP, where he concentrates on commercial, tort and product liability litigation, and advises clients on electronic discovery, electronic information management, compliance and retention/destruction policies and protocols. Ron can be reached at 248.687.5319 or at ron.wernette@det.bowmanandbrooke.com.
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