Federal judge in Hytera-Motorola case retires with contempt question pending

U.S. District Court Judge Charles Norgle, who has adjudicated the Motorola Solutions civil case against Hytera Communications for more than four years, announced his retirement this week, apparently leaving a potentially expensive contempt-of-court motion against Hytera to be determined by another judge.

Norgle, 85, announced his retirement on Tuesday, which marked the 38th anniversary of his commission to the United States District Court for the Northern District of Illinois. Norgle joined the federal-court bench after the Senate overwhelmingly confirmed his nomination by President Ronald Reagan in 1984.

Norgle said it was “an honor and highest privilege to serve the country” as a federal judge, according to an article published by the Chicago Sun-Times.

In a March 2020 judgment, Norgle affirmed a unanimous jury finding that China-based Hytera Communications should pay $764.6 million for its use of DMR trade secrets and copyrighted software developed by Motorola, prior to the LMR giant being renamed Motorola Solutions. Norgle reduced this initial award amount to $543.7 million in January, noting that collecting $220.9 million of the original ruling “would constitute a double recovery.”

Most aspects of the civil case between Motorola Solutions and Hytera Communications have been appealed to the Seventh Circuit Court of Appeals—Hytera is scheduled to file its initial brief with the court on Nov. 14—but any remaining district-court decisions in the case will be made by Judge Martha Pacold, according to a court document release on Thursday.

Norgle’s caseload—hundreds of civil and criminal cases—were reassigned to 26 other judges in the federal district court, according to a court document released yesterday. The Hytera-Motorola dispute is one of 12 civil cases reassigned to Pacold, who also received five criminal cases in which Norgle was overseeing.

It is unclear how familiar Pacold is with the Hytera-Motorola civil case, which has been ongoing for more than five years and includes a significant amount of detailed evidence. Overall, the case has been the subject of 1,375 legal filings since Motorola Solutions initiated the lawsuit in March 2017.

Pacold, 43, has served in the United States District Court for the Northern District of Illinois since August 2019, when the Senate overwhelmingly confirmed her nomination in 2019. Trump also listed Pacold as a potential Supreme Court candidate in a statement made prior to the 2020 presidential election.

One key question in the Hytera-Motorola case that Pacold could address is a pending motion from Motorola Solutions asking that Hytera Communications be found to be in contempt of court for failing to pay $49 million in an initial royalty payment by the court-mandated deadline of July 31.

After missing the July 31 royalty-payment deadline, Hytera attorneys proposed that shares of China-based LMR vendor be put into an escrow—instead of the prescribed cash payment—until all appeals in the case have been exhausted.

Prior to his retirement, Norgle did not issue a ruling whether Hytera is in contempt of court or whether Hytera stock could be used as a substitute for cash in the royalty payment, based on the posted filings in the online database for the case. With Norgle’s retirement, these decisions presumably would fall to Pacold, unless there is some sort of legal determination that the matter should be decided by the appeals court.

Although the amount of Hytera’s initial royalty payment is a fraction of damages owed in the main case, the $49 million—a figure released by Hytera last month in a court filing—is significant and is an immediate obligation, while it may be years before the primary civil damages are due. After missing the July 31 deadline for the royalty payment, Hytera Communications offered to provide company stock as an alternative to making a cash payment.

In its Sept. 6 filing with the court, Hytera attorneys noted that “courts have approved deposits of [redacted] as security for judicial debts in lieu of cash or cash equivalents where the defendant’s ‘precarious financial situation’ prevents it from acquiring the required cash.”

Motorola Solutions attorneys have opposed Hytera’s stock-award notion, but Norgle did not decide the whether a stock award would be appropriate prior to his retirement, based on the filings available in the court’s online database.

Hytera also has another royalty-payment deadline looming at the end of this month. By Oct. 31, Hytera is required to make the initial lump-sum royalty payment plus royalties on any new sales of relevant DMR products during the third quarter this year.

Motorola Solutions has proposed that the district court hold Hytera in contempt for its non-payment on July 31 and grant an injunction prohibiting Hytera “from selling any two-way radio equipment worldwide—regardless of whether it is subject to the royalty order—unless and until all of Hytera’s past-due royalties are fully paid into escrow.” Norgle did not rule on the injunction proposal prior to his retirement, and that decision apparently will be left to Pacold.

In past legal filings, Hytera indicated that it may be unable to make its royalty payments, noting that the company’s finances have been strained further by the fact that the U.S. Department of Justice (DoJ) in February indicted the China-based LMR firm of criminal conspiracy to steal DMR trade secrets from Motorola (before the company was renamed Motorola Solutions). This 21-count indictment against Hytera Communications was followed in April by the identification of seven individuals who participated in the alleged criminal conspiracy.