NON-PARTY APPLE’S REPLY IN SUPPORT OF MOTION FOR RELIEF FROM 

MAGISTRATE JUDGE’S NONDISPOSITIVE PRETRIAL ORDER 

CASE NOS. 5:17-CV-00220-LHK-NMC & 5:17-MD-02773-LHK-NMC 

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BOIES SCHILLER FLEXNER LLP 

William A. Isaacson (Pro Hac Vice App. to be filed) 

DC Bar No. 414788, wisaacson@bsfllp.com 

Karen L. Dunn (Pro Hac Vice App. to be filed) 

DC Bar No. 1002520, kdunn@bsfllp.com 

Amy J. Mauser (Pro Hac Vice App. to be filed) 

DC Bar No. 424065, amauser@bsfllp.com 

1401 New York Avenue, N.W. 

Washington, DC 20005 

Telephone: (202) 237-2727 

Facsimile: (202) 237-6131 

BOIES SCHILLER FLEXNER LLP 

Edward H. Takashima, SBN 270945 

etakashima@bsfllp.com 

401 Wilshire Blvd., Suite 850 

Santa Monica, CA 90401 

Telephone: (310) 752-2400 

Facsimile: (310) 752-2490 

Attorneys for Non-Party APPLE INC. 

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

NON-PARTY APPLE INC.’S REPLY 

IN SUPPORT OF MOTION FOR 

RELIEF FROM MAGISTRATE 

JUDGE’S NONDISPOSITIVE 

PRETRIAL ORDER IMPOSING 

SANCTIONS 

Courtroom: 8, 4th Floor 

Judge: Hon. Lucy H. Koh 

IN RE QUALCOMM ANTITRUST 

LITIGATION

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

Case 5:17-cv-00220-LHK Document 533 Filed 02/02/18 Page 1 of 7
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NON-PARTY APPLE’S REPLY IN SUPPORT OF MOTION FOR RELIEF FROM 

MAGISTRATE JUDGE’S NONDISPOSITIVE PRETRIAL ORDER 

CASE NOS. 5:17-CV-00220-LHK-NMC & 5:17-MD-02773-LHK-NMC 

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On October 16, 2017, Magistrate Judge Cousins set December 15, 2017 as the date by 

which Non-Party Apple Inc. (“Apple”) was required to complete its document production. (ECF 

223.) Apple has already detailed its extensive efforts to comply with this deadline. (ECF 445.) 

Apple ramped up its document review team from 115 attorneys to 250 attorneys to 500 attorneys 

within two months; it produced certain categories of documents without any manual review, 

subject to clawback; and it attempted to expedite its review by employing a Technology-Assisted 

Review process, an attempt that was blocked by Qualcomm. As a result of these efforts, Apple 

was able to produce 2.6 million documents, totaling 16.5 million pages, within a two-month 

timeframe. (ECF 403 at 1.) 

Although it has not identified any prejudice based on Apple’s inability to complete its 

document production by December 15, Qualcomm argues that civil contempt sanctions are 

justified because Apple was unable—despite devoting substantial resources to the endeavor—to 

manually review over six million documents that hit on the Court-ordered search terms in a brief 

two-month window. (Id.) 

Qualcomm notably does not address any of the procedural errors underlying the sanctions 

order. Apple was not given notice that the Court was considering contempt sanctions prior to the 

December 20 hearing, and had no opportunity to present evidence of the steps it took to meet the 

Court’s deadline. See Int’l Union, United Mine Workers of America v. Bagwell, 512 U.S. 821, 

827 (1994); SEC v. Hyatt, 621 F.3d 687, 694 (7th Cir. 2010) (“Due process requires that a person 

facing contempt sanctions be given adequate notice and fair opportunity to be heard in civil 

contempt proceedings.”). Because Apple was not afforded these basic due process protections, 

reversal is required. 

Moreover, contempt sanctions are not warranted here because Apple took “all reasonable 

steps within [its] power to comply” with the Court-imposed deadline. In re Dual-Deck Video 

Cassette Recorder Antitrust Litig., 10 F.3d 693, 695 (9th Cir. 1993); see FTC v. Productive 

Mktg., Inc., 136 F. Supp. 2d 1096, 1107 (C.D. Cal. 2001). The Court’s failure to make any 

findings regarding—or even to consider—whether Apple took all reasonable steps towards 

compliance is an independent error that requires reversal. 

Case 5:17-cv-00220-LHK Document 533 Filed 02/02/18 Page 2 of 7
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NON-PARTY APPLE’S REPLY IN SUPPORT OF MOTION FOR RELIEF FROM 

MAGISTRATE JUDGE’S NONDISPOSITIVE PRETRIAL ORDER 

CASE NOS. 5:17-CV-00220-LHK-NMC & 5:17-MD-02773-LHK-NMC 

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I. Apple Was Not Given Adequate Notice or an Opportunity to Present Evidence 

Apple is indisputably a non-party in these actions. Although Qualcomm argues that 

“Apple cannot credibly claim the status of a disinterested third party,” (ECF 516 at 5), and 

Magistrate Judge Cousins has expressed his view that “Apple is not an uninvolved, uninterested 

third party,” (ECF 198 at 13:17-18), the relevant distinction is not between “disinterested” or 

“uninvolved” third parties, on the one hand, and other third parties and parties, on the other 

hand—it is between parties, who may be sanctioned under Rule 37, and non-parties, who may be 

sanctioned only based on contempt. See Pennwalt Corp. v. Durand-Wayland, Inc., 708 F.2d 492, 

494 (9th Cir. 1983) (“The only authority in the Federal Rules of Civil Procedure for the 

imposition of sanctions against a nonparty for failure to comply with a subpoena duces tecum is 

Rule 45[g].”); Poly-Med, Inc. v. Novus Sci. PTE Ltd., No. 17-CV-649-DMS-WVG, 2017 WL 

2291942, at *1 (S.D. Cal. May 25, 2017) (“The Court construes this as a motion for contempt 

sanctions as this is the only sanctions remedy allowed under Rule 45.”). Compare Fed. R. Civ. P. 

37(b) with Fed. R. Civ. P. 45(g). 

A non-party facing contempt sanctions is entitled to notice and “a real and full opportunity to 

explain his questionable conduct before sanctions are imposed.” Mireskandari v. Daily Mail & 

Gen. Tr. PLC, No. CV1202943MMMFFMX, 2013 WL 12114761, at *3 n.9 (C.D. Cal. Sept. 23, 

2013) (quoting Kraszewski v. State Farm Gen. Ins. Co., 130 F.R.D. 111, 114 (N.D. Cal. 1984) 

(addressing sanctions against a party); accord Bagwell, 512 U.S. at 827 (providing that civil 

contempt may be imposed “upon notice and an opportunity to be heard”). In addition, a “civil 

contempt proceeding . . . is a trial within the meaning of Fed. R. Civ. P. 43(a).” Hoffman ex rel. 

NLRB v. Beer Drivers & Salesman’s Local Union No. 888, 536 F.2d 1268, 1277 (9th Cir. 1976). 

Although the Court may “treat as true the facts set forth in uncontroverted affidavits,” id., to the 

extent there are any factual disputes, “witness testimony must be taken in open court,” and “civil 

contempt may not be tried on the basis of the affidavits alone,” Salamon v. Creditors Specialty Serv., 

Inc., No. C 11-172 CW, 2012 WL 4857810, at *3 (N.D. Cal. Oct. 11, 2012) (citing Pennwalt, 708 

F.2d at 495). 

Case 5:17-cv-00220-LHK Document 533 Filed 02/02/18 Page 3 of 7
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NON-PARTY APPLE’S REPLY IN SUPPORT OF MOTION FOR RELIEF FROM 

MAGISTRATE JUDGE’S NONDISPOSITIVE PRETRIAL ORDER 

CASE NOS. 5:17-CV-00220-LHK-NMC & 5:17-MD-02773-LHK-NMC 

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Here, Magistrate Judge Cousins raised the prospect of monetary contempt sanctions sua 

sponte for the first time during the December 20 hearing. (ECF 424 at 23 (“It occurs to me that 

another remedy could be a financial sanction per day for violation of the court order. That 

request was not made by Qualcomm.”).) Qualcomm had not requested any such sanction in its 

joint discovery statement (ECF No. 404); in fact, Qualcomm’s counsel admitted that he had not 

previously considered a monetary sanction: “I’ve not given the . . . option any thought just yet.” 

(Id. at 24.) Apple was forced to respond to the Court’s sanctions motion without any advance 

warning or opportunity to prepare its case other than a brief recess between portions of the 

December 20 hearing. That is not adequate notice. 

Because it did not have meaningful notice, Apple did not have “a real and full 

opportunity” to explain its conduct. Mireskandari, 2013 WL 12114761, at *3 n.9. Although 

Apple had submitted a handful of status reports concerning its document productions and 

addressed its compliance with the Court’s December 15 deadline in its December 16 discovery 

statement (ECF 404 at 5), Apple did not have an opportunity to offer affidavits or testimony 

concerning its efforts to satisfy the Court’s substantial completion deadline. While a full bench 

trial is not required in contempt proceedings, the law makes it clear that Apple should have been 

allowed to present evidence to defend its conduct and then offer testimony on any disputed 

factual issues. See Salamon, 2012 WL 4857810, at *3. Instead the Court imposed sanctions 

without hearing any evidence. The Court erred by treating Apple like a party, rather than a nonparty, and as a result did not afford Apple the due process protections to which it was entitled. As 

a result, the Court’s sanctions order should be overturned. 

II. Apple Took All Reasonable Steps to Meet the December 15, 2017 Deadline 

Contempt sanctions against a third party such as Apple require a finding not only that 

Apple failed “to obey the subpoena or an order related to it” but also that such failure was 

“without adequate excuse.” Fed. R. Civ. P. 45(g). Non-parties cannot be held in contempt if they 

“have performed all reasonable steps within their power to insure compliance with the court’s 

orders.” Stone v. City of San Francisco, 968 F.2d 850, 856 (9th Cir. 1992) (internal quotation 

marks omitted). In imposing a $25,000 per day sanction, Judge Cousins concluded that Apple 

Case 5:17-cv-00220-LHK Document 533 Filed 02/02/18 Page 4 of 7
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NON-PARTY APPLE’S REPLY IN SUPPORT OF MOTION FOR RELIEF FROM 

MAGISTRATE JUDGE’S NONDISPOSITIVE PRETRIAL ORDER 

CASE NOS. 5:17-CV-00220-LHK-NMC & 5:17-MD-02773-LHK-NMC 

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had not substantially completed its document production by December 15, but he made no 

findings concerning either the adequacy of Apple’s efforts to meet the deadline, or the feasibility 

of expecting any litigant—whatever its resources—to review millions of documents, including 

documents from fourteen attorney custodians, and produce relevant and non-privileged 

documents in just two months. (ECF 421.) 

A. Apple Did Not Concede that December 15 Was a Feasible Deadline 

Qualcomm contends that Apple cannot complain about the December 15 deadline because 

it suggested that date. In truth, however, in its portion of the October 6, 2017 joint statement, 

Apple proposed December 31 as the deadline, but indicated its willingness to try for December 

15, with the explicit understanding that such a deadline might not be feasible: 

Apple initially indicated that it thought December 31, 2017 would 

be a reasonable, if aggressive, target for the substantial completion 

of document production. Based on Qualcomm’s demands, Apple is 

making a best effort to substantially complete document production 

by December 15, 2017 . . . . If in the course of document 

production Apple believes it needs to revise its December 15, 2017 

target date, it is willing to inform Qualcomm and discuss timing 

further. 

(ECF 208 at 5.) Although at the October 11 hearing Apple ultimately had to agree to December 

15, Apple cannot be found to have volunteered December 15 as the deadline, or to have conceded

that reviewing and producing all documents by that date was achievable. 

Moreover, after the Court ordered Apple to use Qualcomm’s search terms, and Apple 

proceeded with its document review, Apple advised the Court and Qualcomm that it would be 

“[i]mpossible to [a]chieve” substantial completion by the December 15 deadline without 

employing a technology-assisted review system. (ECF 237 at 5.) Qualcomm vetoed Apple’s 

proposal to use such a system. (ECF 327 at 1.) After impeding Apple’s efforts to meet the 

production deadline, Qualcomm cannot reasonably claim that Apple’s conduct was dilatory and 

warrants sanctions. 

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NON-PARTY APPLE’S REPLY IN SUPPORT OF MOTION FOR RELIEF FROM 

MAGISTRATE JUDGE’S NONDISPOSITIVE PRETRIAL ORDER 

CASE NOS. 5:17-CV-00220-LHK-NMC & 5:17-MD-02773-LHK-NMC 

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B. Qualcomm Has Not Identified Additional, Reasonable Steps Apple Could Have 

Taken 

Apple described in its opening brief the substantial efforts it made to complete the review 

and production of documents as quickly as possible. (ECF 445.) Apple has satisfied its burden of 

establishing that it took all reasonable steps to comply with the Court’s order. Even Judge 

Cousins acknowledged that Apple had expended “great effort” to comply with the deadline. 

(ECF 424 at 58.) In light of this “great effort,” Apple should not be sanctioned merely because 

the Court-imposed deadline proved to be impossible. 

Qualcomm has identified no reasonable steps Apple could have taken to meet the 

production deadline. Its suggestion that Apple should have simply produced on December 15 all

documents that hit on search terms, even if Apple had not been able to review them, ignores the 

issue that Apple could not reasonably produce documents from its fourteen attorney custodians 

without reviewing them for privilege and work product issues, even though the Court entered a 

clawback order pursuant to Federal Rule of Evidence 502(d). Nor could Apple reasonably 

produce other documents it had identified as potentially privileged or subject to work product 

protection. Qualcomm also fails to note that Judge Cousins expressly rejected Qualcomm’s 

demand for the production of such documents without review. (ECF 424 at 23-24.) 

The only other step Qualcomm identifies is that Apple could have started its review 

sooner. But the relevant inquiry here should focus on whether there were any additional steps 

Apple could have taken between October 16, when the substantial completion deadline was set, 

and December 15 to meet the Court’s deadline. 

In light of the tremendous effort Apple expended to review and produce millions of 

documents in a tight window, Apple submits that it “performed all reasonable steps within [its] 

power to insure compliance with the court’s orders,” Stone, 968 F.2d at 856, and that a contempt 

sanction is not warranted. 

 For the reasons above, Apple respectfully requests that this Court reverse the sanctions 

order. 

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NON-PARTY APPLE’S REPLY IN SUPPORT OF MOTION FOR RELIEF FROM 

MAGISTRATE JUDGE’S NONDISPOSITIVE PRETRIAL ORDER 

CASE NOS. 5:17-CV-00220-LHK-NMC & 5:17-MD-02773-LHK-NMC 

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Dated: February 2, 2018 Respectfully submitted, 

By: /s/ Edward H. Takashima

William A. Isaacson 

wisaacson@bsfllp.com 

Karen L. Dunn 

kdunn@bsfllp.com 

Amy J. Mauser 

amauser@bsfllp.com 

BOIES SCHILLER FLEXNER LLP 

1401 New York Avenue, N.W. 

Washington, DC 20005 

Telephone: (202) 237-2727 

Facsimile: (202) 237-6131 

Edward H. Takashima 

etakashima@bsfllp.com 

BOIES SCHILLER FLEXNER LLP 

401 Wilshire Blvd., Suite 850 

Santa Monica, CA 90401 

Telephone: (310) 752-2400 

Facsimile: (310) 752-2490 

Attorneys for Non-Party APPLE INC.

Case 5:17-cv-00220-LHK Document 533 Filed 02/02/18 Page 7 of 7