Nimitz Blasts Federal Circuit for ‘Destruction’ of Attorney-Client Privilege

The Dec. 8 decision of the U.S. Court of Appeals for the Federal Circuit denying Nimitz Technologies mandamus relief from its dispute with a district judge (see 2212090027) is contrary to four Supreme Court decisions safeguarding the law of attorney-client privilege, said Nimitz in its Dec. 21 combined petition (docket 23-103) for panel rehearing or rehearing en banc.

Nimitz sought mandamus relief to vacate the Nov. 10 order of Senior U.S. District Judge Colm Connolly in Delaware to produce bank records, emails and other documents for his investigation into third-party funding of four Nimitz patent infringement lawsuits, including materials Nimitz maintains are protected by attorney-client privilege. The Nimitz petition is noncompliant with Federal Circuit rules for two procedural flaws, said the court in a Dec. 22 notice. It gave Nimitz until Dec. 30 to cure the defects or risk having its petition stricken.

The petition “requires an answer to a precedent-setting question of exceptional importance: whether the district court may require that a litigant provide attorney-client privileged documents to the judge that is investigating the party, where the crime/fraud exception to the attorney-client privilege has not been, and could not be, invoked,” said Nimitz attorney George Pazuniak of O’Kelly & O’Rourke. The district court “did not require production to determine in camera whether the documents are privileged, but to substantively consider the documents as part of the district court’s investigation,” he said.

Nimitz’s privileged documents “would be disclosed to the district court which is admittedly investigating the party and its counsel,” said Pazuniak. “This is an abrogation of the attorney-client privilege that so violates the common law of the privilege that no authority can be cited in support of the proposition,” he said.

The Federal Circuit’s Dec. 8 decision “is unprecedented and destructive of the venerable common law attorney client privilege,” said Pazuniak. “It is equivalent to allowing a federal prosecutor or grand jury to subpoena attorney-client communications from the party being investigated, for use in the investigation.” Pazuniak used similar language Dec. 21 to defy Connolly’s order to show cause why Nimitz shouldn't be sanctioned for its failure to comply with his order for document production after the Federal Circuit lifted its stay (see 2212220036).

There are few exceptions “to the otherwise well-established common law principle that a client can withhold privileged communications from any third-party, including courts,” said Pazuniak. Connolly’s court “is not acting as a neutral factfinder determining whether a communication is privileged” but demands the right “to use the privileged communications in its investigation,” he said. Connolly’s “destruction’ of the attorney-client privilege, and the Federal Circuit decision upholding it, “is an unprecedented and unsupportable exception to the Supreme Court’s consistent protection of the privilege,” he said.

The “process demanded” by Connolly’s district court and approved by the Federal Circuit “is unheard of in the annals of the common law from all that appears in diligent review of the law,” said Pazuniak. “That the district court won’t disclose the documents to the public is “meaningless,” he said. The disclosure to the district court “is itself a violation of the privilege because the privileged documents are intended to be considered on their merits,” he said. The district court is conducting the investigation, “and, thus, is in an adversarial relationship with Nimitz, and is in the same relationship vis-a-vis Nimitz as would [be] any Defendant,” he said.