Apple v. Samsung: Samsung's Request for Stay of Discovery Orders Denied Where Magistrate Judge Made No Ruling on Privilege Issues and the Scope of the Compelled Information Was Not Overly Broad

by Jeffer Mangels Butler & Mitchell LLP
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As a result of Samsung's alleged violation of the protective order, Magistrate Judge Grewal previously ordered Samsung to produce to Apple emails and communications by Samsung employees that would shed light on the scope of the alleged protective order violation and to make available for deposition various witnesses by October 16, 2013. Samsung appealed from the Magistrate Judge's order to the district court.

Samsung's motion raised three arguments: (1) the order would "improperly abrogate privilege and work-product protection," (2) the order may "require Samsung to violate other protective orders," and (3) the order's "scope of compelled information is grossly overbroad." The district court rejected each argument.

On the first issue regarding privilege, the district court found that "Magistrate Judge Grewal did not make any ruling on privilege, either on the record at the hearing or in Order One. Citing one of Magistrate Judge Grewal's statements at the hearing, Samsung argues that Judge Grewal suggested that allowing Samsung's e-discovery third party vendor Stroz Friedberg to access the documents waived the attorney-client privilege. Samsung Motion One at 4 (citing Hearing Transcript, ECF No. 2485, Case No. 11-CV-01846, at 41-42 which is a statement by Magistrate Judge Grewal: "You are telling me [Stroz is] independent on the one hand, and on the other hand you are saying you can disclose all sorts of privilege and work product information to them without any waiver [of privilege] whatsoever.") The Court finds that this statement does not constitute a ruling on privilege and does not provide a basis upon which to infer that Order One sub silentio found a waiver of privilege. Samsung's claim that Order One abrogates Samsung's claim for privilege or applies the crime-fraud exception to privilege, see Samsung Motion One at 2-3, is unfounded because Magistrate Judge Grewal did not issue any privilege ruling."

On the protective order issue, the district court also disagreed, noting that "Samsung's second argument is similarly unavailing. Samsung objects to providing information and testimony about the use of confidential information in proceedings before the ITC or other courts on the grounds that "[t]hese proceedings are subject to their own protective orders." Samsung Motion One at 4. The Court is not persuaded. To the extent that these other proceedings have their own protective orders, the Court finds that the interests underlying Order One, namely investigating and remedying alleged protective order violations and preventing and deterring ongoing or future protective order violations in this case, outweigh any possible dilemma Samsung will face by having "to choose between coordinate courts." Samsung Motion One at 4 (citation omitted). Samsung cites no law in the Ninth Circuit that holds that a magistrate judge or district judge may not order discovery regarding information that is allegedly covered by a protective order in another tribunal. Thus, the Court rejects Samsung's second argument and finds that Order One is not clearly erroneous or contrary to law on this basis."

In terms of the overbroad argument, the district court also disagreed with Samsung, particularly given the current state of the facts. "Samsung's last argument is that Order One is "overly broad" because Order One requires Samsung to produce all emails and communications relating not just to the Apple-Nokia license that was apparently disclosed to Samsung employees, but also to Apple's other three license agreements that Apple produced to Samsung during discovery. Samsung Motion One at 5. Samsung claims that the "millions of dollars" Samsung will spend to comply with Order One would be disproportionate to the benefit of this discovery in terms of shedding light on the alleged violation of the protective order. Id. at 1, 5. The Court rejects Samsung's argument, as Magistrate Judge Grewal's decision regarding the scope of the discovery was not clearly erroneous or contrary to law. On the contrary, Order One is a highly appropriate and necessary mechanism for determining answers to basic questions that Samsung has been unable to provide thus far. Namely, the discovery compelled by Order One has been necessitated by Samsung's deficient investigation into the improper disclosures for the past three months. Quinn Emanuel was placed on notice of its alleged violation of the protective order when Nokia filed a motion for a protective order on July 1, 2013, along with the accompanying declaration from Nokia's Chief Intellectual Property Officer which highlighted how Dr. Ahn had told Nokia that Dr. Ahn had knowledge of the terms of the Apple-Nokia licensing agreement. ECF No. 647, Case No. 12-CV-00630; Hearing Transcript, ECF No. 2485, Case No. 11-CV-01846, at 8, 10, 35, 50. Despite the fact that three months had passed since the alleged violation came to Quinn Emanuel's attention, Samsung and Quinn Emanuel still had no answers for Magistrate Judge Grewal at the hearing regarding the extent of the disclosures, to whom they were made and what was disclosed, and how the disclosed information has been used and is currently being used. See generally Hearing Transcript, ECF No. 2485, Case No. 11-CV-01846, at 24-70. As Magistrate Judge Grewal noted, "[E]ven though three months [have passed], Samsung is unable to provide evidence on even the most basic questions, such as: who has now had access to the confidential licensing information? For what purpose? When? Where? How? Has Samsung relied on any of the confidential information in taking any position before any other court or jurisdiction? Exactly what steps has Samsung taken to prevent dissemination and use of the confidential information in the future? In each instance, the only response available seems to be, 'We're working on it.'" Order One at 4. Samsung's lack of information after three months is inexcusable, and necessitates Court-supervised discovery."

Accordingly, the district court denied any relief from the Magistrate Judge's order.

Apple, Inc. v. Samsung Electronics Co., Ltd., Case No. 11-CV-01846-LHK (N.D. Cal. Oct. 15, 2013)

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Jeffer Mangels Butler & Mitchell LLP
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