CIOs, In-House Counsel Have Lessons To Learn From Qualcomm As Well

Posted by Gregg Mayer on Monday, March 10th, 2008   

Much of the blogosphere and legal discussions about the recent e-Discovery sanctions against Qualcomm focus on the amount of the sanction - $8.5 million – and the problems with six outside lawyers retained by the company.  Just last week, the district court lifted sanctions against those six outside lawyers to allow them the opportunity to fully defend themselves, although the sanctions against Qualcomm and its in-house team stand. 

In fact, the court in sanctioning Qualcomm made a specific point of noting that Qualcomm had an extensive in-house legal staff but the company simply “lacked the desire” to properly conduct e-Discovery.  The court listed the in-house failures:

Qualcomm employees were integral participants in hiding documents and making false statements to the court and jury. Qualcomm’s in-house lawyers were in the unique position of (a) having unlimited access to all Qualcomm employees, as well as the emails and documents maintained, possessed and used by them, (b) knowing or being able to determine all of the computers and databases that were searched and the search terms that were utilized, and (c) having the ability to review all of the pleadings filed on Qualcomm’s behalf which did (or should have) alerted them to the fact that either the document search was inadequate or they were knowingly not producing tens of thousands of relevant and requested documents.

As part of the sanctions, the Qualcomm in-house counsel have to participate in a court-ordered detailed analysis to identify all of the factors that contributed to the discovery problems, as well as evaluating proposals to ensure those problems do not happen again. The analysis program is known as CREDO (“Case Review and Enforcement of Discovery Obligations”).

As Qualcomm illustrates, in-house lawyers have a distinct responsibility to ensure companies comply with e-Discovery, even if outside counsel have been retained. The Qualcomm court explained that in-house lawyers are in the best position to understand a company’s organizational structure, know the extent of archived email and other ESI, and know the employees whose computers should be searched. In-house lawyers are simply better positioned to understand e-Discovery issues than any other lawyers involved in litigation.

Consequently, in-house lawyers should work with IT staff to understand how a company archives email and other ESI. CIOs should help spearhead this effort. Ignoring the e-Discovery implications of improper ESI disclosures is far more costly than investing in detailed e-Discovery management before a lawsuit ever happens.

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