We're back! Our trial was a success, Nate is back from his travels, and things have cooled down enough for us to resume regular posts this week.
While we were tied up, there was some progress in the Mavexar cases. If you recall, Chief Judge Connolly had ordered the sole member of Backertop, a Mavexar-related LLC, to appear in-person in Delaware to answer for the entities' potential fraud on the Court. She objected, stating that she would not appear.
Since then, the July 20 hearing occurred, and as promised she did not appear—although her counsel, and counsel for Backertop, did show up. The transcript for that hearing is below.
The Court discussed the production to date, and how certain things seemed to be missing:
THE COURT: . . . Now, it does strike me, though, in light of the productions from counsel and some of the issues that were raised at the hearing in June, that it appears that Backertop, your client, has not complied with the document production order.
Do you contest that?
MR. FINGER: I can't say or not. I have not seen the documents.
THE COURT: For instance, as I discussed with Mr. Chong and Mr. Burns last time, there's attachments missing from e-mails. There are documents referenced in e-mails that weren't included.
The other thing is we have the benefit of productions from other related Mavexar cases, and it's clear from the production in those cases that we must be -- that we don't have all the documents.
And then there's just common sense. There's -- unless there's just really no normal business-type dealings here, it's just very apparent that there's no written communications about matters you'd expect to see written communications.
Is it possible everything was conducted by phone? I suppose so.
MR. FINGER: Especially in a small company.
THE COURT: Could be. But anyway, the point is, we also had text messages produced in at least one other related case, and, again, if the parties were acting consistently with all Mavexar-related LLCs, you would expect to have seen text messages.
But I'm not making any definitive ruling. What I'm saying is that that's hanging out there, and if you, for instance, knew that, in fact, yes, Backertop had not produced all the documents consistent with the order, it would be helpful to get that on the record and wrap everything up all at once.
Chief Judge Connolly also set a hearing date for a follow-up civil contempt hearing for the witness who did not appear—and counsel argued that any such hearing would be invalid:
THE COURT: All right. So it seems to me what I ought to do is set a hearing for good cause as to why she should not be held in contempt.
* * *
THE COURT: Well, I want to make sure you're afforded and [the LLC member are] afforded process. It may be, if I set a good cause hearing, are you just going to file something that says, we're not showing up again? Do you know?
MR. FINGER: Well, I suppose, Your Honor, to -I haven't given it a lot of though, but I think my reaction would be, basically, to respond, arguing that the order from which Your Honor is seeking a contempt ruling is invalid.
It's the same arguments that we've made in the objection, only now, I guess, organized in the context of a response.
The Court raised "coercive measures" to compel her attendance:
THE COURT: . . . The way I look at it is this, I want to make sure we comport with due process, and if your position isn't going to change and there's no justification that you haven't already brought to my attention -- . . . I would imagine I'm going to hold her in civil contempt and impose coercive measures to try to get her to comply with a Court order. Clearly, the Court is empowered to do that. . . . She is going to be given an opportunity to show good cause why she shouldn't be held in contempt for disobeying a Court order.
The Court held a contempt hearing on August 1 for both the Backertop LLC member and her husband, who was an attorney working for Mavexar who is the sole owner of Creekview IP LLC, another Mavexar-related entity that Judge Connolly is investigating.
Neither witness showed. I expect we'll have more updates on this in the near future, when the Court responds.
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