At this point it's clear that Chief Judge Connolly's standing orders regarding initial disclosures and litigation funding are no joke, and plaintiffs need to comply with them or risk consequences.
Today, the Court took the further step of requiring the owners of plaintiff entities in at least 14 cases to appear in-person for evidentiary hearings regarding compliance with his standing orders.
The orders today generally took the following form:
Whereas the amended corporate disclosure forms Plaintiff filed in the above-captioned cases identify [owner name(s)] as Plaintiff s owner; and
Whereas the Court has concerns about whether Plaintiff has complied with the Court's standing order regarding third-paty litigation funding [or about the accuracy of the …
We've talked a lot about Judge Connolly's April 2022 standing orders on disclosure statements and litigation funding, including earlier this month when we Judge Connolly stayed an action after a plaintiff failed to fully comply with those orders.
(Plaintiff in that action, by the way, filed an updated disclosure statement claiming it has no knowledge to disclose—we'll have to see how the Court responds to that).
Yesterday, it happened again, but it was triggered by a clever filing by a defendant. In Longbeam Technologies LLC v. Amazon.com, Inc., C.A. No. 21-1559-CFC (D. Del.), the Court put an order on the docket for the parties to comply with its standing orders:
ORAL ORDER: The parties are directed to certify within five days that they have complied with Chief Judge Connolly's April 18, 2022 Standing Order Regarding Disclosure Statements Required by Federal Rule of Civil Procedure 7.1. The parties are also reminded of their obligation to comply with Chief Judge Connolly's April 18, 2022 Standing Order Regarding Third-Party Funding Arrangements. Ordered by Judge Colm F. Connolly on 5/13/2022. (nmf) (Entered: 05/13/2022)
In response, plaintiff filed an updated Rule 7.1 statement but, as far as I can tell, no litigation funding
We posted earlier this year about Judge Connolly's new standing orders requiring plaintiffs to disclose litigation funding and Rule 7.1 disclosure requirements for certain entities such as LLCs.
In that post, we pointed out that "the language seems to apply to existing cases, but there is no explicit deadline for compliance. Personally, though, I'd probably get moving..."
Apparently, counsel for the parties in VLSI Technology LLC v. Intel Corporation, C.A. No. 18-966 (D. Del.) do not read the blog.
About two weeks ago, the Court issued oral orders in VLSI directing the parties to comply with his standing orders:
ORAL ORDER: It is HEREBY ORDERED that each party shall …
Last month, we wrote about Chief Judge Connolly's new standing order for diversity cases, requiring plaintiffs to disclose the citizenship of LLCs on both sides so that the Court can determine whether it has diversity jurisdiction.
Today, Judge Connolly denied a motion to alter or amend a judgment in a diversity action where he had issued a similar order and dismissed the case based on the Plaintiff's own "on information and belief" representation.
In Harbor Associates Limited Partnership v. Micron Devices, LLC, C.A. No. 20-1706-CFC (D. Del.), the Court sua sponte issued an order asking for plaintiffs to identify their members and those of one of the defendants, to ensure that the Court had diversity jurisdiction:
To ensure that the Court has subject matter jurisdiction over this matter, Plaintiffs . . . shall within one week identify the name and citizenship of every member of [a plaintiff LLC], and [defendant] Micron Devices, LLC. If any of [the two LLCs'] members are noncorporate entities, Plaintiffs shall also identity the name and citizenship of every member of those entities, proceeding up the chain of ownership until Plaintiffs have identified the name and citizenship of every individual and corporation with a direct or indirect interest in [the LLCs].
D.I. 24. In response, the plaintiffs identified themselves as Florida entities, D.I. 25, and stated on information and believe that one member of one defendant LLC was also a Florida citizen:
Upon information and belief, Laura Perryman is a member of [defendant] Micron Devices, LLC. . . . Upon information and belief, Ms. Perryman is a citizen of Florida.
D.I. 26. In response, the Court dismissed the case, holding that it lacked jurisdiction:
Consistent with their complaint, Plaintiffs identified Florida as the citizenship of the members of the plaintiff entities. D.I. 25. They also identified Laura Perryman as a member of Defendant Micron Devices, LLC and they say that she too is a citizen of Florida. D.I. 26. This Court therefore lacks diversity jurisdiction over this action.
D.I. 26, 27.
Can We Just . . . Click Undo on That?
Apparently not realizing what was about to happen when they made those statements to the Court, plaintiffs quickly moved for relief ...
A requirement to disclose third-party litigation funding arrangements on the docket;
A requirement in diversity cases to disclose the name and citizenship of every individual and corporation with a direct or indirect interest in every party;
An order expanding disclosure requirements under Federal Rule of Civil Procedure 7.1 for non-governmental joint ventures, LLCs, partnerships, and LLPs;
A requirement for the defendant in ANDA cases where there was a Paragraph IV certification to produce the ANDA when responding to the complaint;
The above are numbered only for reference below.
Each of these orders explicitly applies only in Chief Judge Connolly cases.
The District of Delaware today issued guidance on the submission of "highly sensitive documents" today, following the recent breaches of government computer systems by malicious intruders. Similar orders have been issued across the country.
The procedures indicate that parties must file a motion for a document to be treated as including highly sensitive information, and the motion must be granted before the procedures are used. Once granted, the documents must be submitted in paper or via a secure drive.
Luckily, these new procedures address only a sub-category of sealed information, and do not impact current procedures other than for documents with highly sensitive information. Highly sensitive information is defined as follows:
This blog is for general informational purposes. It is not an offer to perform legal services, and should not be considered a substitute for legal advice. Nothing in this blog should be construed as forming an attorney-client relationship. If you have legal questions, please consult counsel in your jurisdiction.
