Federal Circuit Denies Nimitz Motion to Stay Issuing Mandate

The U.S. Appeals Court for the Federal Circuit denied Nimitz Technologies’ motion to stay issuing the mandate in its denial of Nimitz's petition for a rehearing of its mandamus appeal, pending the filing of a mandamus or cert petition at the Supreme Court to have the case heard on attorny-client privilege grounds (see 2302030030), said a clerk’s order signed Tuesday (docket 23-103). Barring SCOTUS involvement, the denial would send the case back to Chief U.S. District Judge Colm Connolly in Delaware.

Nimitz has been trying to prevent Connolly from enforcing his Nov. 10 order (docket 1:21-cv-01247) for the company to produce bank records, emails and other materials for his investigation into any third-party funding that may have contributed to the filing of four Nimitz patent infringement lawsuits against Bloomberg, BuzzFeed, Cnet and Imagine Learning (see 2212230001).

Prompting Connolly’s order was testimony at a Nov. 4 evidentiary hearing in which the judge maintains he got few straightforward answers from Mark Hall, Nimitz's self-described sole owner. Hall raised Connolly’s eyebrows when he testified that he owns the patent being asserted in the four lawsuits, but that he paid nothing for it, according to a newly released transcript of the hearing.

Connolly ended the hearing by declaring that the testimony he heard “has to give pause to anybody who really is concerned about the integrity of our judicial system” and the “abuse of our courts,” according to the transcript. He criticized Hall's “lack of transparency as to who the real parties before the court are, about who is making decisions in these types of litigation,” said the transcript. As part of his investigation, Connolly’s order demanded that Nimitz produce documentation of Hall’s travel expenses to the Nov. 4 hearing from his home in Houston to ascertain who paid for the trip.

Connolly’s relationship with Nimitz has grown increasingly cantankerous, with no documents produced as the Federal Circuit twice denied the company’s petition for mandamus relief, and then refused its mandate-stay request. Nimitz asserts attorney-client privilege protects the materials Connolly is demanding. In court papers requesting the stay, Nimitz said it would file a mandamus or cert petition with SCOTUS to “preclude the disclosure of privileged communications to the district court, which is the adversary in this case.”

Four Supreme Court cases, dating to the 1981 decision in Upjohn v. U.S., 449 U.S. 383, 389, upheld the attorney-client privilege, said the Nimitz court papers. When the IRS issued petitioner Upjohn a summons for documents about the tax implications of improper payments to a foreign government, the company refused to produce them on grounds they were protected from disclosure by the attorney-client privilege and constituted the work product of attorneys prepared in anticipation of litigation. SCOTUS said the communications by Upjohn’s employees to counsel were covered by the attorney-client privilege “insofar as the responses to the questionnaires and any notes reflecting responses to interview questions are concerned.”