To enforce his Standing Order requiring third-party litigation funding disclosures, Chief Judge Colm Connolly sua sponte directed the non-practicing entity plaintiff in Nimitz Technologies LLC v. Bloomberg (and several related cases) to appear at hearings on the accuracy of corporate disclosure requirements and compliance with the litigation funding orders. Mem. Order, Nimitz Tech. LLC v. Bloomberg L.P., No. 22-cv-413-CFC, DI 16 (D. Del. Sept. 13, 2022). The Court further ordered the managing member of Nimitz Technologies LLC (“Nimitz”) to appear in person on November 4, 2022 “to determine whether Plaintiff has complied with the Court’s standing order regarding third-party litigation funding.” The Court then stayed the case pending the outcome of the evidentiary hearing.
After the hearing, citing concern about “the accuracy of statements in the filings”, the Court issued an Order requiring Nimitz to produce to the Court: (1) counsel retention agreements; (2) all communications that plaintiff’s managing member had with notorious entities Mavexar, IP Edge, and Linh Dietz, regarding several topics including the formation of plaintiff, plaintiff’s assets, the asserted patent, settlement or potential settlement, and travel arrangements of the managing member to the court ordered hearing; (3) monthly statements for the bank accounts held by plaintiff; and (4) documents relating to plaintiff’s use, lease, or ownership of its residence in Frisco, Texas. Mem. Order, Nimitz Tech. LLC v. Bloomberg L.P., No. 22-cv-413-CFC, DI 27 (D. Del. Nov. 10, 2022).
On November 16, 2022, Nimitz filed a petition for a writ of mandamus with the Federal Circuit asking for reversal of Chief Judge Connolly’s Memorandum Order and for it to “terminate its judicial inquisition of the Petitioner.” The brazen petition, filed by Delaware attorney George Pazuniak, accuses Chief Judge Connolly of conducting “the hearing in a manner of a prosecuting attorney examining an adverse witness at trial.” The petition further accuses the Chief Judge of pursuing “its own crusade to enforce its own version of patent policy without regard that its policy defies governing law.”
The specific issues before the Federal Circuit are: (1) whether the district court abused its discretion by entering its Standing Order requiring disclosure of third-party litigation funding as it is irrelevant to issues before the Court; (2) whether the Memorandum Order contradicts the Patent Act and Rules of Civil Procedure by seeking to identify the real party in interest that Congress deemed irrelevant; and (3) whether the Memorandum Order violates Petitioner’s attorney-client privilege and work product immunity. The Federal Circuit issued an order staying Chief Judge Connolly’s Memorandum Order pending further action from the Federal Circuit and issued a briefing schedule.
The survival of Chief Judge Connolly’s Standing Order may be at issue in the Federal Circuit. However, the Federal Circuit stayed only the Memorandum Order, not the Standing Order requiring disclosure of third-party litigation funding in general. So, for now, the Standing Order is alive and well. Clients still need to consider what needs to be disclosed under this Order and be aware of the Court’s fervent enforcement of its Standing Orders.
Additionally, Delaware litigants should be aware that on the same day he issued the Order in Nimitz, Chief Judge Connolly issued a new Standing Order requiring all parties filing or removing an action based on diversity jurisdiction to file within 14 days a Certification of Citizenship of Organizational Entities. This Order requires identification of “the name and citizenship of every owner, member, and partner of every party to the case that is a joint venture, limited liability corporation, partnership, or limited liability partnership, proceeding up the chain of ownership until the name and citizenship of every individual and corporation with a direct or indirect interest in every party has been identified.”
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