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QUALCOMM'S RESPONSE TO APPLE'S MOTION FOR RELIEF 

Case Nos. 17-cv-0220-LHK-NMC & 17-md-2773-LHK-NMC

CRAVATH, SWAINE & MOORE LLP 

Gary A. Bornstein (pro hac vice) 

gbornstein@cravath.com 

Yonatan Even (pro hac vice) 

yeven@cravath.com 

825 Eighth Avenue 

New York, New York 10019-7475 

Telephone: (212) 474-1000 

Facsimile: (212) 474-3700 

KEKER, VAN NEST & PETERS LLP 

Robert A. Van Nest, SBN 84065 

rvannest@keker.com 

633 Battery Street 

San Francisco, CA 94111-1809 

Telephone: (415) 676-2289 

Facsimile: (415) 397-7188 

MORGAN, LEWIS & BOCKIUS LLP 

Richard S. Taffet (pro hac vice) 

richard.taffet@morganlewis.com 

101 Park Avenue 

New York, NY 10178-0060 

Telephone: (212) 309-6000 

Facsimile: (212) 309-6001 

Attorneys for Defendant 

QUALCOMM INCORPORATED 

Additional counsel in the signature block. 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

FEDERAL TRADE COMMISSION 

Plaintiff, 

v. 

QUALCOMM INCORPORATED, a 

Delaware corporation, 

Defendant. 

Case No. 5:17-CV-00220-LHK-NMC 

DEFENDANT QUALCOMM 

INCORPORATED’S RESPONSE TO 

NON-PARTY APPLE INC.’S MOTION 

FOR RELIEF FROM MAGISTRATE 

JUDGE’S NONDISPOSITIVE PRETRIAL 

ORDER IMPOSING SANCTIONS 

Courtroom: 8, 4th Floor 

Judge: Hon. Lucy H. Koh 

Date: February 15, 2018 

 

IN RE QUALCOMM ANTITRUST 

LITIGATION 

Case No. 5:17-MD-02773-LHK-NMC 

Case 5:17-cv-00220-LHK Document 516 Filed 01/26/18 Page 1 of 8
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QUALCOMM'S RESPONSE TO APPLE'S MOTION FOR RELIEF 

Case Nos. 17-cv-0220-LHK-NMC & 17-md-2773-LHK-NMC

Magistrate Judge Cousins’s December 21, 2017 Order (ECF No. 421) (“Sanctions 

Order”) follows a long history of delay by Apple and repeated failures to meet Court-ordered 

deadlines necessary for Qualcomm to obtain discovery in a timely way. After two rounds of 

briefing regarding Apple’s dilatory conduct, Judge Cousins set production deadlines “to avoid 

the need for a request for [a] continuance or for either party to be prejudiced in any way by being 

jammed up”. (10/11/2017 Hrg. Tr. 9:6-7.) Contrary to Apple’s claim that the December 15 

deadline at issue in the Sanctions Order was unreasonable, Apple itself suggested that date for 

substantial completion of its document production. (Id. at 7:11-12.) Nevertheless, Apple 

concedes that as of the deadline, it still had yet to finish review of millions of documents. 

Accordingly, Judge Cousins found after two more rounds of briefing that, “Apple[ was] on fair 

notice of the deadline and of the expectations, and it hasn’t met them”, and that further delay 

would “impact[] the FTC, all these third parties, a number of experts and attorneys, and Judge 

Koh as well.” (12/20/2017 Hrg. Tr. 58:4-5, 20-21.) Qualcomm respectfully submits that the 

Sanctions Order was not “clearly erroneous” or “contrary to law” under Fed. R. Civ. P. 72. 

I. Background 

Apple’s motion ignores or obscures key facts leading to the Sanctions Order. 

Apple repeatedly dragged its feet in the discovery process, both before and after Judge Cousins 

set the December 15 substantial completion deadline. As Judge Cousins noted, “we’re in a 

problem of Apple’s making, not mine.” (12/20/2017 Hrg. Tr. 58:25-59:1.) 

A. Apple’s Delay in Collecting Documents and Negotiating the Scope of Review. 

Apple delayed in collecting documents for review. The parties began negotiations 

over the subpoenas on June 19, and Apple first proposed a set of document custodians on July 

18. (ECF No. 208.) After lengthy delays by Apple in providing information Qualcomm needed 

to assess Apple’s proposal (see ECF No. 208), Qualcomm and Apple ultimately agreed on a set 

of document custodians on September 15. (ECF No. 209-1.) But for reasons Apple has never 

explained, it was still collecting documents from some of these custodians through December 1 

and did not report completing its collection until December 15. (ECF Nos. 366, 403.) 

Case 5:17-cv-00220-LHK Document 516 Filed 01/26/18 Page 2 of 8
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QUALCOMM'S RESPONSE TO APPLE'S MOTION FOR RELIEF 

Case Nos. 17-cv-0220-LHK-NMC & 17-md-2773-LHK-NMC 

Apple also delayed in negotiating the scope of its review. Despite multiple 

requests from Qualcomm, it took Apple over six weeks to propose the search terms that it would 

use. (ECF No. 208.) Apple’s proposal was grossly deficient, lacking even common terms used 

for the products at issue (e.g. “chipset”) as well as codenames commonly used by the parties. 

(Id.) Qualcomm was forced to rewrite Apple’s proposal, and Apple took another three weeks to 

respond to Qualcomm’s terms. During these negotiations, Apple repeatedly stated that it was 

“running metrics” on the various proposals—but it refused to provide those metrics to 

Qualcomm. (10/11/2017 Hrg. Tr. 14:5-22.) Rather than object to the search terms as 

burdensome because of the number of documents they captured, Apple asserted that the 

proposed search terms did not “fit” the document requests closely enough. (ECF No. 212.) 

B. Judge Cousins Established Production Deadlines. 

After reaching impasse on search terms, and without yet having received any 

documents, Qualcomm sought intervention from the Court to: (1) set a date certain by which 

Apple would be required to complete production; and (2) adjudicate the search terms in dispute. 

At a hearing on October 11, Judge Cousins asked Apple to propose a substantial 

completion date for its production and privilege log, to which it responded: “We would suggest 

December 15th and the end of the year respectively”. (10/11/2017 Hrg. Tr. at 7:11-12.) Judge 

Cousins accepted Apple’s proposal and set December 15 for the substantial completion of 

Apple’s document production. (ECF No. 239.) Judge Cousins also ordered Apple to submit 

periodic status reports and ordered an interim production deadline “[s]o it’s not we wait until 

midnight on December 14th and then have a landslide of document production”. (10/11/2017 

Hrg. Tr. 8:14-15.) He required Apple by November 17 to complete its review of, and production 

of documents from, 50% of the documents that hit the search terms. (ECF No. 239.) As to the 

search terms, Judge Cousins found that “Apple has had months to run its search metrics and to 

propose a workable solution” and therefore rejected Apple’s “belated assertions of burden”. (Id.) 

C. Apple’s Belated Attempt To Introduce a TAR Model. 

On November 3, hours before submitting its first required status report, Apple 

Case 5:17-cv-00220-LHK Document 516 Filed 01/26/18 Page 3 of 8
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QUALCOMM'S RESPONSE TO APPLE'S MOTION FOR RELIEF 

Case Nos. 17-cv-0220-LHK-NMC & 17-md-2773-LHK-NMC 

sent Qualcomm a one-page letter stating that it intended to use a technology-assisted review 

(“TAR”) model for its production. (ECF No. 287.) After four months of tedious negotiations 

and two rounds of briefing over the search terms Apple would use, this was the first time Apple 

had mentioned using TAR—a point that Apple concedes. (Id. at 4.) Apple defends this sudden 

change of course by contending that TAR processes are superior to manual attorney review, but 

that is a red herring. Apple did not propose to substitute TAR for manual review; it intended to 

use TAR as an additional means to exclude documents from production. Under Apple’s 

proposal, it would first exclude documents using search terms, then exclude more documents 

using TAR, and then exclude yet more documents through manual review. (Id.) Qualcomm 

objected to this improper triple-screen and to Apple’s last-minute introduction of a TAR model 

that Qualcomm would have no time to assess. (Id.) At a November 15 hearing, Judge Cousins 

noted his “concern [about] the timing of this kind of new approach” and said “it’s particularly 

unfair because I ordered a certain timeline and methodology of production, and so Qualcomm is 

really being disadvantaged by this change”. (11/15/2017 Hrg. Tr. 3:18-19, 22-23; 12:5-7.) 

Apple now contends that the volume of documents generated by the search terms 

was so large that Apple could not meet the December 15 deadline without using TAR. That is 

not correct. First, the volume of documents should not have been a surprise when Apple 

suggested the December 15 deadline. Apple claimed to have been “running metrics” on the 

search terms for months, so it should have known how many documents they would capture. 

Second, Apple was slow to “expand[] its document review team” and did not do so in earnest 

until weeks after the December 15 deadline was set. (ECF No. 445 at 2.) Third, Apple and 

Qualcomm stipulated to (and Judge Cousins entered) a Rule 502(d) Order allowing production of 

documents without review and without waiver of privilege. Indeed, Apple did not produce any

documents that had been subjected to manual review until December 12. (See Declaration of 

Gary A. Bornstein (“Bornstein Decl.”), dated Jan. 26, 2018, at ¶ 4.) 

D. Apple Violated Both Production Deadlines. 

Apple failed to meet both production deadlines Judge Cousins had set. By 

Case 5:17-cv-00220-LHK Document 516 Filed 01/26/18 Page 4 of 8
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QUALCOMM'S RESPONSE TO APPLE'S MOTION FOR RELIEF 

Case Nos. 17-cv-0220-LHK-NMC & 17-md-2773-LHK-NMC 

November 17, Apple was required to review 50% of the documents hit by the search terms and 

produce the responsive documents therefrom, but Apple had reviewed and produced from only 

approximately 10% of those documents. (ECF No. 320.) At a November 27 hearing, Judge 

Cousins gave Apple the benefit of the doubt, opting to “wait and see” how Apple’s production 

would develop. (11/27/2017 Hrg. Tr. 20:20.) Apple then failed to meet the December 15 

substantial completion deadline, conceding that it had not produced responsive documents from 

a “bucket” of 1.3 million documents that had undergone only initial review, in addition to 

215,000 documents that it had yet to review at all and another 1 million documents that required 

further privilege review. (12/20/2017 Hrg. Tr. 21:25-22:8.)1 Following Apple’s proffer, Judge 

Cousins found “that Apple [had] not satisfied the substantial completion deadline of 

December 15th” and issued the Sanctions Order. (12/20/2017 Hrg. Tr. 23:10-12.) 

II. Argument 

Civil contempt sanctions may be imposed if Apple violated a specific court order, 

and Apple fails to demonstrate that it took “every possible step to comply with the subpoena and 

to articulate reasons why compliance was not possible.” Poly-Med, Inc. v. Novus Scientific PTE 

Ltd., No. 17-cv-649-DMS-WVG, 2017 WL 2291942, at *3 (S.D. Cal. May 25, 2017). A court 

may also consider a non-party’s “history of noncompliance” with prior orders. Id. 

Here, Apple conceded in its December 16 submission (ECF No. 404) and at the 

December 20 hearing that after the expiration of the substantial completion deadline, Apple still 

had millions of documents to review. (12/20/2017 Hrg. Tr. 21:25-22:8.) There is no dispute 

that Apple failed to meet the December 15 deadline that Apple itself had suggested. 

Apple argues that sanctions were nevertheless improper because the Court and 

Qualcomm failed to identify other steps that Apple could have taken to comply. (ECF No. 445 

 

1

 Apple’s initial privilege calls were plainly overbroad, further undermining the completeness of 

its production. On January 24, 2018—more than one month after the substantial completion 

deadline—Apple produced over 145,000 documents on which it downgraded its initial privilege 

calls, and Apple has stated that there are more such documents to come. Thus, Apple’s assertion 

that Qualcomm suffered no prejudice is incorrect; Qualcomm’s ability to prepare for depositions 

has been impaired—and is still being impaired—by Apple’s delay. (Bornstein Decl. at ¶¶ 8-9.)

Case 5:17-cv-00220-LHK Document 516 Filed 01/26/18 Page 5 of 8
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QUALCOMM'S RESPONSE TO APPLE'S MOTION FOR RELIEF 

Case Nos. 17-cv-0220-LHK-NMC & 17-md-2773-LHK-NMC 

at 4.) But Qualcomm proposed the Rule 502(d) stipulation—which Apple agreed to and the 

Court so-ordered—to facilitate Apple’s compliance. Regardless, the burden lies with Apple to 

establish it had taken all such steps, and its record of delays, plus its breach of the November 17 

deadline, demonstrates it did not take all reasonable steps to timely produce documents. PolyMed, 2017 WL 2291942, at *3. Judge Cousins had ample basis to evaluate Apple’s efforts to 

meet the December 15 deadline, including four status reports from Apple (ECF Nos. 269, 318, 

366, 403), three rounds of briefing from Apple and Qualcomm (ECF Nos. 287, 320, 327, 404), 

and three in-person hearings. That record shows Apple’s repeated delays in negotiating the 

scope of the subpoena, delays in collecting documents for review, delays in staffing its document 

review team, last-minute efforts to narrow the scope of its production, and failure to meet the 

first milestone that Judge Cousins had set—despite the entry of the Rule 502(d) Order. Given 

that record, the Sanctions Order was not “clearly erroneous” or “contrary to law” under Rule 72. 

Apple invokes its “non-party” status in the actions to receive credit for 

“shoulder[ing] the discovery burdens of a party.” (ECF No. 445.) But as Judge Cousins noted, 

given the ongoing litigation between Apple and Qualcomm, “Apple is not an uninvolved, 

uninterested third party” but has “a strong commercial interest in the proceeding” in which the 

“FTC is standing in the shoes or is fighting Apple’s fight on its behalf”. (8/31/2017 Hrg. Tr. 

13:17-18.) Notably, Apple has a purported common interest agreement with the FTC, asserting 

“a common interest in, among other things, coordinating their litigation against Qualcomm.” 

(ECF No. 404.) Apple cannot credibly claim the status of a disinterested third party.2

III. Conclusion 

Qualcomm respectfully requests that the Sanctions Order be affirmed. 

 

2

 Apple’s claim that the sanctions are “unduly harsh” (ECF No. 445 at 5) is without merit. 

Sanctions may be used to induce obedience with a court order, see LifeScan Scotland, Ltd. v. 

Shasta Technologies LLC, No. 11-cv-04494-WHO, 2013 WL 4604746, at *3-*4 (N.D. Cal. Aug. 

28, 2013), and Judge Cousins expressly considered “proportionality principles” to “further 

encourag[e]” Apple to comply. (12/20/2017 Hrg. Tr. 58:23-59:8.). The sum of $25,000 per day 

is a reasonable amount for a litigant with Apple’s vast resources. Cf. Gucci America, Inc. v. Li, 

No. 10-cv-4974 (RJS), 2015 WL 7758872, at *6 (S.D.N.Y. Nov. 30, 2015) ($50,000/day 

sanction against Bank of China to incentivize compliance with subpoena). 

Case 5:17-cv-00220-LHK Document 516 Filed 01/26/18 Page 6 of 8
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6 

QUALCOMM'S RESPONSE TO APPLE'S MOTION FOR RELIEF 

Case Nos. 17-cv-0220-LHK-NMC & 17-md-2773-LHK-NMC 

Dated: January 26, 2018 Respectfully submitted, 

/s/Gary A. Bornstein

Gary A. Bornstein 

Yonatan Even 

CRAVATH, SWAINE & MOORE LLP 

Worldwide Plaza 

825 Eighth Avenue 

New York, NY 10019-7475 

Tel: (212) 474-1000 

Fax: (212) 474-3700 

gbornstein@cravath.com 

yeven@cravath.com 

Robert A. Van Nest 

Asim M. Bhansali 

Eugene M. Paige 

KEKER, VAN NEST & PETERS LLP 

633 Battery Street 

San Francisco, CA 94111-1809 

Tel: (415) 676-2289 

Fax: (415) 397-7188 

rvannest@keker.com 

abhansali@keker.com 

epaige@keker.com 

Richard S. Taffet 

MORGAN, LEWIS & BOCKIUS LLP 

101 Park Avenue 

New York, NY 10178-0060 

Tel: (212) 309-6000 

Fax: (212) 309-6001 

richard.taffet@morganlewis.com 

Willard K. Tom 

MORGAN, LEWIS & BOCKIUS LLP 

1111 Pennsylvania Ave. NW 

Washington, DC 20004-2541 

Tel: (202) 739-3000 

Fax: (202) 739 3001 

willard.tom@morganlewis.com 

Case 5:17-cv-00220-LHK Document 516 Filed 01/26/18 Page 7 of 8
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QUALCOMM'S RESPONSE TO APPLE'S MOTION FOR RELIEF 

Case Nos. 17-cv-0220-LHK-NMC & 17-md-2773-LHK-NMC 

Donn P. Pickett 

Geoffrey T. Holtz 

MORGAN, LEWIS & BOCKIUS LLP 

One Market, Spear Street Tower 

San Francisco, CA 94105-1126 

Tel: (415) 442-1000 

Fax: (415) 442-1001 

donn.pickett@morganlewis.com 

geoffrey.holtz@morganlewis.com 

Attorneys for Qualcomm Incorporated

Case 5:17-cv-00220-LHK Document 516 Filed 01/26/18 Page 8 of 8