In June 2022, the Federal Circuit overturned a $2.7B judgment for the plaintiff in Centripetal Networks v. Cisco, based on the failure of the presiding judge to recuse himself after he learned that his wife owned stock in the defendant. Similar attempts to reverse judgments due to purported conflicts of interest soon followed—including one from plaintiff CellSpin Soft Inc. Early last year, Northern District of California Judge Yvonne Gonzalez Rogers forcefully denied a motion to recuse in which CellSpin asserted that a ruling of noninfringement against Alphabet (Google) should be undone because the judge held interests in index funds that invested in the defendant, and due to alleged conflicts stemming from her husband’s employment. The Federal Circuit has now stepped in, upholding the judge’s rejection of that motion—though the appellate court did so primarily based on the plaintiff’s failure to raise the issue early enough. That delay, the Federal Circuit found, “raises obvious concerns of lack of equity and strategic misuse of recusal”.

This decision is just the latest of several setbacks for CellSpin. In 2018, Judge Gonzalez Rogers invalidated all four patents-in-suit under Alice, granting attorney fees for multiple defendants in a later order that faulted the plaintiff for not filing a “test case” because the patents were “manifestly directed to an abstract idea”. That setback was only temporary, as the Federal Circuit overturned the Alice decision and resulting fee award in 2019. Yet Judge Gonzalez Rogers would again criticize CellSpin’s litigation strategy in a June 2022 decision granting summary judgment of noninfringement for 2017 defendants Fitbit (acquired by Google in 2021), Fossil, Garmin, Nike, Nikon, and Under Armour. The court ruled that the plaintiff failed to “marshal the evidence necessary to defeat the defendants’ summary judgment motions”, suggesting that the failure is “perhaps a consequence of [CellSpin’s] decision to litigate this case with numerous defendants and accused products”.

In January 2023, while its appeal of that decision was still in its infancy, CellSpin additionally opted to challenge the lower court’s ruling through its recusal motion. The plaintiff argued that Judge Gonzalez Rogers must recuse herself because she invested in index funds that include holdings in Fitbit’s parent Google, which it contends is not a divestiture as required under the relevant recusal statute (28 U.S.C. § 455(f)), “akin to putting Cisco stock in a blind trust” as addressed in Centripetal. The plaintiff also alleged that the judge should recuse herself because her husband allegedly benefits from Google through his work with McKinsey (which uses Google Cloud) and Ajax Strategies (through which he purportedly works with Google-backed startups). CellSpin also sought recusal in the other 2017 cases, alleging that the court’s “determinations regarding Fitbit may have infected determinations regarding other defendants” (as later characterized by the Federal Circuit).

Judge Gonzalez Rogers emphatically denied that motion the following month, decrying it as a meritless “attack on the integrity of the judiciary” that showed a “measure of desperation” and was also “divorced from the law and the facts”.

After identifying various procedural and jurisdictional flaws with CellSpin’s motion, the district court flagged several other reasons that the motion should be rejected—including that CellSpin unduly delayed its request for recusal. Though Judge Gonzalez Rogers noted that the underlying statute (28 U.S.C. § 455) imposes no formal deadline, she nevertheless held that the motion was not reasonably prompt because Fitbit disclosed its “well-known merger” to the court nearly two years before CellSpin sought recusal, while the financial interests held by the judge and her husband that were here at issue had been respectively disclosed in 2012 and 2011. The fact that the plaintiff nevertheless continued to “strategically litigate[] this case through summary judgment” left the court with “little doubt” that this delay amounted to “gamesmanship”.

As for the substance of CellSpin’s arguments, Judge Gonzalez Rogers countered that not only had her husband’s employment at McKinsey already ended by the time of her summary judgment order, Google had never been a client of her husband’s there. Also unavailing were arguments relating to Ajax: Judge Gonzalez Rogers asserted that her husband had no equity interest in any of Ajax’s portfolio companies, and that any affiliations are either “attenuated” or “nonexistent”. Finally, Judge Gonzalez Rogers held that her interest in two Vanguard index funds, which include holdings in Google, Nike, Under Armour, Garmin, and Fossil, fall within § 455’s safe harbor for mutual or common investment funds, as similarly provided by the applicable ethical rules—reaching a similar conclusion for her interest in an additional McKinsey-managed “Special Situations Fund”.

CellSpin appealed that decision soon after, in February 2023. However, it only filed a notice of appeal in the district court docket for the Fitbit case. As a result, the Federal Circuit’s November 1 decision on appeal dispensed quickly with the case as to Nikon, holding that it did not have jurisdiction to hear the appeal for that defendant. The court found that CellSpin’s “argument that its single notice of appeal should apply to a separate case is unconvincing”, as the cases were docketed separately and the court entered its order denying the recusal motion in both actions.

With respect to Fitbit, the Federal Circuit opted not to “thoroughly probe the specifics” of CellSpin’s arguments relating to the investments held by Judge Gonzalez Rogers and her husband, nor those based on Google’s work with McKinsey during the period of her husband’s employment there—instead finding “no abuse of discretion in Judge Gonzalez Rogers’s conclusion that [CellSpin’s] motion was untimely”.

The Federal Circuit’s decision on this point echoed the same concerns raised by the lower court. For instance, it found that the “timing” of CellSpin’s recusal motion—filed nearly two years after Fitbit disclosed its acquisition by Google—“raises obvious concerns of lack of equity and strategic misuse of recusal”. The appellate court also noted that the plaintiff’s arguments regarding McKinsey cited disclosures made by Judge Gonzalez Rogers in 2011 as a judicial nominee, while evidence regarding the alleged Google-McKinsey collaboration had been available online since March 2022. As a result, the Federal Circuit concluded that CellSpin had not “remotely establish[d] that the information it relies on was unavailable with reasonable diligence substantially before the summary judgment ruling issued and the recusal motion was filed”. The court found the plaintiff’s arguments with respect to Judge Gonzalez Rogers’ investments to be similarly problematic: While CellSpin pointed to disclosures filed in 2021, the Federal Circuit countered (as had the district judge) that this same information had first been disclosed in 2012.

The Federal Circuit found that CellSpin’s arguments related to the employment of the judge’s husband with Ajax raised different timeliness issues, as he did not begin working there until March 2022. Given that the record was “unclear” to the court as to the husband’s relationship with Ajax, “and to Google’s relationship with Ajax”, the Federal Circuit remarked that such facts “may well have been less publicly available to [CellSpin] than were facts relating to the asserted bases for recusal discussed above”.

However, the Federal Circuit held that it did not need to reach the timeliness issue on this point, ruling instead that even if Judge Gonzalez Rogers had abused her discretion here, “that conclusion would not warrant vacating the summary judgment for Fitbit under the harmless-error standards set forth in Liljeberg v. Health Services Acquisition Corp.”. That case requires the court to consider “the risk of injustice to the parties in the particular case, the risk that the denial of relief will produce injustice in other cases, and the risk of undermining the public’s confidence in the judicial process”.

Here, the Federal Circuit found that there was no risk of injustice to the plaintiff by denying its motion for recusal as the result of a separate decision issued by the appellate court, also on November 1, that affirmed the noninfringement ruling for Fitbit, Fossil, Garmin, Nike, Nikon, and Under Armour. That decision found that Judge Gonzalez Rogers had not abused her discretion by barring CellSpin’s reliance on an infringement theory based on the accused products’ use of the OAuth authorization framework for being introduced too late (noting that the plaintiff had not sought to amend its infringement contentions to capture that theory).

That ruling has “preclusive effect” as to CellSpin’s infringement claims against Fitbit, the Federal Circuit held in this case. The reason, explained the court, stemmed from the fact that while CellSpin filed motions to recuse in the cases against Fossil and Garmin, it did not appeal the denial of the motions in those cases. Since the Federal Circuit’s noninfringement ruling did not depend on anything Fitbit-specific—and because CellSpin had presented its OAuth theory on appeal “as a single issue uniformly applicable to Fitbit, Garmin, and Fossil”—the court held that the plaintiff therefore “no longer has any argument that the district court’s grants of summary judgment for Garmin and Fossil were tainted by a lack of recusal”. As a result, the Federal Circuit affirmed Judge Gonzalez Rogers’ denial of CellSpin’s recusal motion in its entirety.

More on the recusal dispute in this case—and on the Centripetal litigation that prompted it—can be found at “Recusal Motions Citing Federal Circuit Conflicts Ruling Hit a Wall” (February 2023).