Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01041/USCOURTS-ca13-15-01041-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 

---

United States Court of Appeals 

for the Federal Circuit ______________________ 

TESCO CORPORATION,

Plaintiff

v.

NATIONAL OILWELL VARCO, L.P., OFFSHORE 

ENERGY SERVICES, INC., FRANK’S 

INTERNATIONAL, LLC,

Defendants-Appellees

v.

GLENN A. BALLARD, JR., JOHN F. LUMAN, III,

Interested Parties-Appellants

______________________ 

2015-1041

______________________ 

Appeal from the United States District Court for the 

Southern District of Texas in No. 4:08-cv-02531, Judge 

Keith P. Ellison.

______________________ 

Decided: October 30, 2015

______________________ 

 JOHN WESLEY RALEY, III, Raley & Bowick, LLP, 

Houston, TX, argued for defendant-appellee National 

Oilwell Varco, L.P. Also represented by ROBERT MCGEE 

BOWICK, JR., BRADFORD TURNER LANEY. 

Case: 15-1041 Document: 28-2 Page: 1 Filed: 10/30/2015
2 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

 CLAYTON JAMES BUSHMAN, Bushman & Associates, 

Houston, TX, for defendant-appellee Offshore Energy 

Services, Inc. Also represented by ERIN WERNER. 

 LESTER L. HEWITT, Attorney at Law, Houston TX, for

defendant-appellee Frank’s International, LLC. Also

represented by SARAH J. RING, DAVID R. CLONTS, JAMES L.

DUNCAN, III, ASHLEY M. BROWN, Akin, Gump, Strauss, 

Hauer & Feld, LLP, Houston, TX; REX S. HEINKE, Los 

Angeles, CA. 

 GRANT HARVEY, Gibbs & Bruns, Houston, TX, argued 

for interested parties-appellants. Also represented by 

JEFFREY C. KUBIN, AYESHA NAJAM; WILLIAM F. LEE,

RICHARD WELLS O’NEILL, KATIE SAXTON, MICHAELA P.

SEWALL, CAITLIN LOOBY, Wilmer Cutler Pickering Hale 

and Dorr LLP, Boston, MA.

______________________ 

Before NEWMAN, O’MALLEY, and CHEN, Circuit

Judges.

O’MALLEY, Circuit Judge.

Plaintiff Tesco Corporation (“Tesco”) and interested 

parties-appellants Glenn A. Ballard, Jr. and John F. 

Luman, III (collectively “the Attorneys”) filed this appeal 

from a decision of the United States District Court for the 

Southern District of Texas dismissing Tesco’s patent 

infringement suit with prejudice pursuant to the court’s 

inherent authority to sanction. Tesco Corp. v. Weatherford Int’l, Inc., No. H-08-2531, 2014 WL 4244215 (S.D. 

Tex. Aug. 25, 2014) (“Sanctions Order”). During the 

pendency of the appeal, Tesco and defendant-appellees 

National Oilwell Varco, L.P., Offshore Energy Services, 

Inc., and Frank’s Casing Crew & Rental Tools, Inc. (collectively “NOV”) entered into a settlement resolving all 

outstanding issues. The Attorneys also participated in

the settlement, with the parties and all counsel signing 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 3

mutual releases. The Attorneys contend that, despite the 

settlement, the harm to their reputation from the district 

court’s opinion justifies our continued jurisdiction over the 

appeal. Because we find that there is no remaining case 

or controversy to adjudicate, we dismiss the appeal.

BACKGROUND

I 

 Tesco filed a complaint against NOV for infringement 

of U.S. Patent Nos. 7,140,443 and 7,377,324 on August 19, 

2008. These patents involve a tool used in well drilling 

technology—an apparatus and method for handling

sections of pipe used for lining a well bore. Id. at *1. The 

purportedly innovative aspect of the technology is the 

location of the point of connection for “link arms,” which 

connect the Case Drilling System to the drill pipe that 

will be placed in the well bore. U.S. Patent No. 7,377,324 

col.1 l.31 – col.2 l.27. In the prior art systems, the link 

arms attached to the top drive of a Case Drilling System, 

but the patents-at-issue described a Case Drilling System 

with the link arms attached to the lower pipe engaging 

apparatus. Id. By lowering the point of connection, the 

link arms could better reach and grab sections of the pipe. 

In response to Tesco’s complaint, NOV filed an answer, counterclaims, and a request for attorney’s fees 

under 35 U.S.C. § 285. NOV subsequently filed a series of 

motions to compel requesting, in part, information about 

any relevant documents that evidence what occurred 

during the six month period prior to the on-sale bar date 

of November 2002. Tesco claimed that it had already 

disclosed all relevant documents, but nevertheless eventually released a series of printed invoices for brochures 

created shortly before November 2002. In light of these 

invoices, NOV specifically requested any information 

about the brochures, including the brochures themselves,

but Tesco denied the continuing existence of these brochures. During a status conference, the district court 

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4 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

asked Tesco about the brochures, and Ballard, Tesco’s 

attorney, insisted that Tesco had produced all responsive 

documents. Joint Appendix (“J.A.”) 10703. Up until trial, 

NOV continued to file motions requesting the brochures, 

and Tesco continued to deny their existence. At the pretrial conference, the district court again reiterated his 

concern about possible non-production of documents, 

stating that “if there are documents that have been produced to others but not the adversaries, that’s, obviously, 

very serious conduct.” J.A. 20111–12.

 Trial began on October 25, 2010. On October 28, 

NOV cross-examined one of the named inventors of the 

patents-at-issue, Kevin Nikiforuk. NOV questioned 

Nikiforuk about an image in Exhibit 851, which NOV 

claimed was the missing brochure from August 2002 that 

Tesco contended no longer existed. NOV explained that it 

found the brochure in a box of documents from a prior 

litigation between Tesco and one of the defendants, and 

placed the document in their pretrial exhibit list. During 

questioning, Nikiforuk agreed that, even though he could 

not see the image clearly, the link arms in the image were 

attached to the pipe engaging apparatus. The district 

court instructed Nikiforuk not to speculate, and to answer 

only if he authoritatively could identify the connection 

point. Nikiforuk again stated that the image appeared to 

show the claimed invention. 

Tesco objected to this testimony and asked that it be 

stricken as speculative and irrelevant. Ballard then 

requested time to determine why the brochure was not 

produced during discovery and if it actually represented

the claimed invention. The next day, Ballard informed 

the court that Tesco had produced a low-resolution, blackand-white, single-page version of the brochure during 

discovery, and argued that none of the defendants had 

asked for a clearer version of the produced document. 

Ballard then told the court that the image in the brochure 

did not show the claimed invention. In response, NOV 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 5

requested a curative instruction and a sanction switching 

the burden of proof due to Tesco’s failure to disclose an

original, legible version of the brochure. Certain defendants also refused an offer of a mistrial because they did 

not want to give Tesco the opportunity to prepare Nikiforuk for a new trial, insisting that they preferred entry of 

judgment to a new trial. Ballard agreed to continue to 

investigate the brochure over the weekend. J.A. 20724.

On November 1, Ballard explained that he had done 

further research on the brochure, and that Luman had 

contacted the alleged designers of the brochure. Ballard 

then made the following declaration to the court:

As I told the Court, I would get to the bottom of 

this August brochure issue, 4008, over the weekend. We did so. We found the animator who actually did the rendering in question. That 

animator is Don Carr [sic]. He says unequivocally 

that this is not the invention in the brochure. We 

explained that in the papers we filed this morning. He left Tesco four years ago. We didn’t have 

his name until this weekend. He lives in Canada. 

But if the trial -- if they want to continue to maintain that 4008 is the invention, we’re going to 

want to call him at some point in the trial.

J.A. 20885 (emphasis added). Ballard again argued that 

Tesco sufficiently produced the image in black-and-white 

form, but the district court disagreed, stating that the 

black-and-white version was not equivalent to the color 

version, especially with regards to the point of connection 

for the link arms. Ballard then continued:

I hope to put – I think the issue has been put to 

bed. It’s not the image. I can call Don Carr [sic] to 

tell you that. We also talked to a guy last night, 

Jim Orcherton, who was also an individual who 

worked on the rendering. We didn’t have time to 

put this in our papers. This was late last night. 

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6 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

He also confirms that it’s not the tool. And so we 

could call both of them.

J.A. 20888 (emphasis added). Ballard reiterated that, 

based on the statements of Karr and Orcherton, “there is 

no doubt that [the image in the brochure is] not Mr. 

Nikiforuk’s invention.” J.A. 20897. Ballard made this 

same assertion to the jury in his closing argument. 

In light of the non-production of the original brochure, 

the district court sanctioned Tesco by reversing the burden of proof on validity, and setting the burden to be a 

preponderance of evidence. The jury concluded that NOV 

infringed the relevant claims of the patents-at-issue, 

found certain of those claims to be not invalid, and found 

that the brochure was not enabling. 

II

After trial, the district court issued an April 12, 2011 

order permitting post-trial discovery on the brochure. 

NOV filed what the parties characterize as post-trial

summary judgment motions of invalidity under 35 U.S.C. 

§ 102(b) and § 103 based on, inter alia, what it asserts

was disclosed in the brochure.1 NOV also filed further

motions to compel regarding the brochure, alleging bad 

faith on the part of Tesco. The court held a series of 

hearings regarding the brochure. The district court 

denied NOV’s post-trial summary judgment motion

regarding the on-sale bar on October 19, 2012, Tesco v. 

Weatherford Int’l, Inc., 904 F. Supp. 2d 622 (S.D. Tex. 

2012), but granted NOV’s post-trial summary judgment 

1 These motions more appropriately should be 

characterized as motions for judgment as a matter of law 

pursuant to Federal Rule of Civil Procedure 50, not as 

Rule 56 motions for summary judgment.

 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 7

motion for obviousness on December 6, 2012,2 Tesco Corp. 

v. Weatherford Int’l, Inc., 904 F. Supp. 2d 638 (S.D. Tex. 

2012). The court did not base the obviousness determination on the brochure, but instead relied on an obvious-totry analysis. Id. at 643 n.2.

NOV continued its post-trial motions practice with a 

focus on its request for attorney’s fees under § 285. Tesco 

filed a motion seeking judgment in its favor regarding the 

exceptional case determination, arguing that a “trial” was 

unnecessary because all relevant allegations regarding 

litigation misconduct had already been heard by the 

court.3 During a June 4, 2013 hearing, the court asked 

Ballard if he currently believed that the brochure disclosed the invention, and Ballard admitted that it did, but 

reiterated that Karr and Orcherton had told Luman 

during trial that the brochure did not disclose the invention. At the same hearing, the district court expressed its 

2 Tesco attempted to appeal the district court’s 

summary judgment decision. The district court contacted 

our court, however, informing the Clerk of Court that the 

appeal was premature because he had not yet resolved a 

pending counterclaim seeking a declaration of unenforceability of the patents on inequitable conduct grounds or 

ruled on NOV’s request for attorney’s fees. After briefing 

by both parties, we dismissed the appeal as premature. 

Order at 3, Tesco Corp. v. Nat’l Oilwell Varco, L.P., Nos. 

2013-1155, -1262 (Fed. Cir. Oct. 3, 2013).

3 NOV filed what it characterized as a “counterclaim” for attorney’s fees under § 285. Though that 

procedural posture was odd, since a motion under § 285 

can be filed without the assertion of an affirmative claim, 

the parties treated it as if it were a true counterclaim 

upon which they believed the court would conduct a trial. 

Of course, while a hearing may or may not have been 

needed, no “trial” was required.

 

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8 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

concerns that Tesco may have brought suit without doing

the necessary due diligence to find a brochure that could 

have been invalidating. 

III

NOV deposed both Karr and Orcherton near the end 

of 2013, focusing on the discussions between 

Karr/Orcherton and the Attorneys during trial. Karr 

testified that he did not say that the brochure failed to 

disclose the invention. J.A. 40391. Karr explained that, 

when he first spoke with Luman, he informed Luman that 

he could not tell definitively where the link arms connected to the Case Drive System in the brochure because of 

the low resolution of the image. J.A. 40391; see also 

Sanctions Order, at *4–5 (presenting further relevant 

portions of Karr’s deposition testimony). Once Luman 

sent Karr a higher resolution picture three days later—

still during the trial—Karr says he then told Luman that 

the image did show the invention. He further informed 

Luman that he did not prepare the image. Orcherton also 

was asked about the image, and this conversation with 

Luman, and Orcherton responded that he explained to 

Luman that he had no knowledge of who did the rendering of the image in the brochure. J.A. 40406. 

After discovery was completed, the district court set a 

trial date of March 17, 2014, for the exceptional case 

“counterclaim,” and held a motions hearing on February 

21, 2014, to discuss, in part, the litigation misconduct 

issue. 

IV

On August 25, 2014, the district court issued an order

sua sponte dismissing the case with prejudice under the 

court’s inherent authority based on counsel’s inaccurate 

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representations “to the Court during trial.”4 Sanctions 

Order, at *1. The court found that Karr and Orcherton’s 

testimony was “contrary to the representations Tesco 

made to the Court during trial.” Id. The court concluded 

that Karr did not “unequivocally” state that the brochure 

did not include the invention. The court found that the 

representation to the court during trial justified a finding 

of bad faith. Id. The court said that had Karr and Orcherton’s actual statements been reported to the court, it 

may have entered judgment for NOV at that point in the 

trial. Id. Indeed, the Attorneys concede on appeal that 

they knew that the brochure disclosed the invention 

within days of telling the court that it did not and knew 

that Karr did not prepare the rendering, despite telling 

the court he did. See note 6, infra. 

The court said it had an “independent obligation to 

safeguard . . . the proceedings before it.” Id. It reasoned 

that the brochure “might very well have been case dispositive.” Id. The court explained that a lesser sanction 

would be insufficient. Id. at *7. The court went on to 

emphasize, however, that: 

The Court reaches its decision with great reluctance. The Court is entirely confident that the 

conduct that it finds so troubling is entirely out of 

character for the attorneys. However, the conduct 

is serious and has had significant and costly ramifications to the Court and Defendants.

Id. The court did not award fees to NOV at this time, but 

said it was reserving the question of whether fees might 

be appropriate for later consideration in light of its Au4 Since the court already had entered judgment 

against Tesco on invalidity grounds, it appears that this 

dismissal was meant to operate as an alternative basis for 

that judgment.

 

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10 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

gust 25 findings. Tesco and the Attorneys again filed

notices of appeal.5 During the pendency of the appeal, 

Tesco, with new counsel, reached a settlement and a 

mutual release with all defendants, including a release of 

the request for attorney’s fees under § 285. Oral Argument at 29:04–29:48, Tesco v. Nat’l Oilwell Varco, L.P., 

No. 15-1041 (Fed. Cir. July 7, 2015). Tesco subsequently 

dismissed their appeal. Order at 2, Tesco Corp. v. Nat’l 

Oilwell Varco, L.P., No. 15-1040 (Fed. Cir. April 23, 2015). 

The Attorneys joined the settlement, including the mutual releases. Appellants Reply Br. 6-7. The Attorneys 

maintain, however, that the releases they executed explicitly carved out the Attorneys’ right to continue to pursue 

this appeal. 

DISCUSSION

I 

We determine our jurisdiction over a case or controversy according to Federal Circuit law, not regional circuit 

law. Nisus Corp. v. Perma-Chink Sys., 497 F.3d 1316, 

1318 (Fed. Cir. 2007) (“We resolve questions as to our 

jurisdiction by applying the law of this circuit, not the 

regional circuit from which the case arose.”); Sanders 

Assocs., Inc. v. Summagraphics Corp., 2 F.3d 394, 395 

(Fed. Cir. 1993) (“[B]ecause the appealability of the sanction order relates directly to the issue of our own jurisdiction, this court will determine its own jurisdiction to hear 

this appeal.”); Woodard v. Sage Prods. Inc., 818 F.2d 841, 

844 (Fed. Cir. 1987) (en banc) (“This court has the duty to 

determine its jurisdiction and to satisfy itself that an 

5 The parties do not mention any formal ruling on 

or dismissal of the inequitable conduct counterclaims. It 

was clearly mooted by the court’s invalidity judgment, 

however, and would, thus, no longer affect our jurisdiction 

over this appeal.

 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 11

appeal is properly before it.”). “We may, of course, look 

for guidance in the decisions of the regional circuit to 

which appeals from the district court would normally lie,

as well as those of other courts. However, our decision to 

follow another circuit’s interpretation . . . results from the 

persuasiveness of its analysis, not any binding effect.” 

Woodard, 818 F.3d at 844.

The Attorneys argue that there remains an Article III 

case or controversy because the statements made in the 

district court’s opinion constitute a sanction against the 

Attorneys, and the subsequent reputational harm to the 

Attorneys is a sufficient injury-in-fact to justify our jurisdiction. The Attorneys further claim that the district 

court erred, as a procedural matter, in issuing a sanctions 

order under its inherent authority without providing the 

Attorneys notice and an opportunity to be heard. The 

Attorneys believed that the result of the hearings held in 

early 2014 would be, at worst, a trial on NOV’s exceptional case motion, and they claim to have been taken by 

surprise by the sanctions order. On the merits of the 

sanctions order, the Attorneys argue that the district 

court erred in finding bad faith because Ballard relied on 

Karr’s statements during trial when Ballard made the 

representations to the court about the brochure, and Karr 

was equivocal during his deposition testimony about what 

he told Luman. According to the Attorneys, the deposition evidence of Karr and Orcherton was an insufficient 

basis upon which to premise an exercise of the court’s 

inherent authority. They contend, moreover, that this is 

especially true because the court chose to dismiss the case 

with prejudice. 

NOV responds that, due to the settlement agreement, 

there is no enduring case or controversy. All parties 

mutually released each other, including the Attorneys, 

from any further liability, and NOV claims that statements made in an opinion issuing formal sanctions 

against Tesco, not the Attorneys, cannot justify our jurisCase: 15-1041 Document: 28-2 Page: 11 Filed: 10/30/2015
12 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

diction. NOV also argues that the Attorneys received

more than sufficient due process, including multiple

opportunities to recant their statements to the court, and 

that the trial court informed the Attorneys on multiple 

occasions that he was considering issuing sanctions for 

litigation misconduct. And for the merits of the sanctions 

order, NOV asserts that the district court acted well 

within its inherent powers.6

Because we conclude that there is no on-going case or 

controversy sufficient to justify our jurisdiction, we decline to engender a discussion of either the sufficiency of 

the district court’s notice before entering the order, or the 

merits of the district court’s use of its inherent authority 

to dismiss the case.7 

6 At oral argument, the Attorneys contended that, 

even though they admit they knew during trial that the 

statements made to the district court turned out to be 

incorrect, they had no affirmative duty to correct the 

misimpression to the court under the Texas Disciplinary 

Rules of Professional Conduct. Oral Argument at 41:50–

42:15, Tesco Corp. v. Nat’l Oilwell Varco, L.P., No. 15-

1041, available at http://oralarguments.cafc.uscourts.gov/

default.aspx?fl=2015-1041.mp3. 7 The dissent argues that it is “unfair” to describe 

the background facts giving rise to this appeal and then 

dismiss the appeal on jurisdictional grounds. What the 

dissent fails to recognize is that, like all judgments, a 

legal determination regarding our jurisdiction—or lack 

thereof—over this appeal turns on the facts presented. As 

our cases in this area reveal, even fine factual distinctions 

can alter the jurisdictional analysis. As noted later, the 

dissent’s failure to recognize the importance of factual 

distinctions to legal outcomes is further evidenced by its 

citation to cases that are materially factually distinguishable from this one. 

 

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III 

Article III, section 2 of the Constitution extends the 

“judicial Power of the United States” to an enumerated 

list of cases or controversies. Under this framework, a 

party must have standing to resolve the dispute, and

there must be an on-going case or controversy throughout

the trial and appeals. Lujan v. Defenders of Wildlife, 504 

U.S. 555, 560–61 (1992) (recognizing three elements 

necessary for a federal court to have Article III standing: 

(1) an injury-in-fact that is “actual or imminent, not 

conjectural or hypothetical”; (2) “a causal connection 

between the injury and the conduct complained of”; and 

(3) a likelihood that the “injury will be redressed by a 

favorable decision”). We have generally held that nonparties “may not appeal from judgments or other actions of a 

district court.” Nisus, 497 F.3d at 1319. We have made 

an exception, however, for an attorney “held in contempt 

or otherwise sanctioned by the court in the course of 

litigation,” concluding that, once the court has specifically 

punished an attorney, the injury “becomes personal to the 

sanctioned individual and is treated as a judgment 

against him.” Id. 

This appeal presents two questions that must be resolved in order for us to have jurisdiction over the dispute: 

(1) can the sanctions order that was explicitly issued 

against Tesco be considered a formal reprimand against 

the Attorneys so as to provide them with standing to 

pursue this appeal; and (2) what is the effect of the settlement by all parties on the redressability of the Attorneys’ request for relief? In order for us to have 

jurisdiction over this appeal, we would have to conclude 

that the order was the equivalent of a formal reprimand

against the Attorneys and that we can redress the injury 

to their reputation. Because we do not find we can redress the Attorneys’ claimed injury, we need not decide 

whether the sanctions order in this case is the type of 

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14 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

reprimand that could confer standing to pursue this 

appeal.

A 

We have twice recently addressed the appealability of 

a sanctions order. In Precision Specialty Metals, Inc. v. 

United States, 315 F.3d 1346 (Fed. Cir 2003), we held that 

we had jurisdiction when the Court of International Trade 

formally reprimanded a Department of Justice attorney. 

In an unpublished opinion, the Court of International 

Trade found that the attorney violated Rule 11 of the 

Rules of the Court of International Trade due to misrepresentations made to the court, including the omission of 

language from quotations. Id. at 1349–50. The Court of 

International Trade opinion concluded with the statement: “Accordingly, the court hereby formally reprimands 

her.” Id. The Court of International Trade did not, 

however, impose any monetary sanctions. Id. 

On appeal, we concluded that “we have jurisdiction to 

review the Court of International Trade’s formal reprimand of [an attorney] for attorney misconduct.” Id. at 

1352 (noting that the reprimand was “explicit and formal, 

imposed as a sanction”). We explained that a formal 

reprimand, even without monetary sanctions, could have 

a “seriously adverse effect . . . upon a lawyer’s reputation 

and status in the community and upon his career.” Id. 

Because of this, we concluded that the attorney had 

standing to appeal the order independently of any appeal 

by the parties. Id. at 1352–53. We noted, however, that 

our jurisdiction did have limits—“judicial statements that 

criticize the lawyer, no matter how harshly, that are not 

accompanied by a sanction or findings, are not directly 

appealable.” Id. at 1352; see also id. at 1353 (“Nothing in 

this decision should be taken as suggesting . . . that other 

kinds of judicial criticisms of lawyers’ actions, whether 

contained in judicial opinions or comments in the courtroom, are also directly reviewable.”).

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We again addressed our jurisdiction over an appeal 

from a potential sanction against an attorney in Nisus. In 

Nisus, the district court concluded that the patent-atissue was unenforceable because of inequitable conduct, 

in part due to the actions of one of the attorneys who 

prosecuted the patent and participated in the trial as a 

witness. 497 F.3d at 1318. The parties settled, but the 

prosecuting attorney appealed the inequitable conduct 

determination and the denial of his motion to intervene in 

the litigation. Id. We recognized that:

[A] court’s power to punish is not exercised simply 

because the court, in the course of resolving the 

issues in the underlying case, criticizes the conduct of a nonparty. Critical comments, such as in 

an opinion of the court addressed to the issues in 

the underlying case, are not directed at and do not 

alter the legal rights of the nonparty. We recognize that critical comments by a court may adversely affect a third party’s reputation. But the 

fact that a statement made by a court may have 

incidental effects on the reputations of nonparties 

does not convert the court’s statement into a decision from which anyone who is criticized by the 

court may pursue an appeal.

Id. at 1319. We reiterated our conclusion in Precision 

Specialty Metals that criticisms of attorneys intended to 

be “a formal judicial action” are appealable, but not other 

kinds of judicial criticisms. Id. at 1320. Because the 

district court did not enter any formal judicial action 

against the attorney, we concluded that we did not have 

jurisdiction over the appeal. Id. at 1321. We held that:

[A]bsent a court’s invocation of its authority to 

punish persons before it for misconduct, actions by 

the court such as making adverse findings as to 

the credibility of a witness or including critical 

language in a court opinion regarding the conduct 

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16 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

of a third party do not give nonparties the right to 

appeal either from the ultimate judgment in the 

case or from the particular court statement or 

finding that they find objectionable. 

Id. Allowing appeals based solely on concerns about 

professional reputation would open the floodgates to

appeals “by any nonparty who feels aggrieved by some 

critical statement made by the court.” Id. at 1320.

Precision Specialty Metals and Nisus thus require a 

formal sanction or reprimand to justify our jurisdiction 

over an appeal by an attorney from an order criticizing 

the attorney’s conduct. The Attorneys argue that the 

present order should be considered the equivalent of a 

formal reprimand because the dismissal was predicated 

on the conduct of the Attorneys. The Attorneys further 

say that having their client’s case dismissed is more 

harmful to them than would be a small monetary sanction, which they contend surely would justify the exercise 

of our jurisdiction under Precision Specialty Metals. NOV 

responds that Nisus makes clear that, when counsel’s 

conduct is criticized in the course of rendering judgment 

against a party, that counsel lacks standing to pursue an 

appeal. The present case does not fit nicely within the 

facts of either Precision Specialty Metals or Nisus, however. 

Neither Precision Specialty Metals nor Nisus addressed the effect of a subsequent settlement agreement. 

If Tesco, NOV, and the Attorneys had not entered into a 

settlement absolving all parties of any further liability, 

we would be required to determine if the statements made 

in the district court order are functionally equivalent to a 

formal reprimand, and thus provide the Attorneys with 

the standing necessary to pursue this appeal. The intervening settlement, however, renders that determination 

unnecessary to the resolution of this appeal.

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B 

Our court has not previously determined the effect of 

an intervening settlement on an appeal of an order containing critical statements about the conduct of an attorney. Our sister circuits have, however, addressed the 

effect of a change in circumstances which removes or 

moots the underlying judgment. We agree with their 

conclusion that an intervening settlement can abrogate

the case or controversy justifying appellate jurisdiction.

For example, in In re Williams, 156 F.3d 86, 87 (1st 

Cir. 1998), the United States Court of Appeals for the 

First Circuit had to determine if “a trial court’s published 

findings of attorney misconduct [are] . . . independently 

appealable, notwithstanding that the monetary sanctions 

imposed by the court for that conduct have been nullified.” There, a bankruptcy court judge imposed Rule 37(b) 

sanctions against the government and two government 

attorneys for failing to timely produce certain documents 

during discovery. Id. at 88. In his opinion, the bankruptcy judge “harshly criticized” the two attorneys, and ordered them to each pay $750 to the court. Id. But on 

reconsideration, the judge vacated one of the monetary 

sanctions, and instructed that the other attorney pay the 

$750 to the aggrieved party, not the court. Id. The bankruptcy judge refused, however, to vacate his findings, and 

the district court also declined to vacate any of the bankruptcy court’s factual findings. Id. at 89.

The First Circuit concluded that it did not have jurisdiction to review the factual finding from the original 

bankruptcy judge’s opinion. Id. at 89–92. Once the 

monetary sanctions were removed from the case, the only 

remaining “sanctions” were the statements made in the 

published opinion that had not been vacated. Id. at 89. 

The court recognized the reputational harm such statements could have on the attorneys, but reiterated that 

“federal appellate courts review decisions, judgments, 

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18 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

orders, and decrees—not opinions, factual findings, reasoning, or explanations.” Id. at 90. Because the monetary 

sanctions were ameliorated and no reprimands were 

imposed, the court found it “lack[ed] jurisdiction to consider the propriety of the offending findings.” Id. The 

attorneys argued that the court should hold that “harsh 

words that reflect adversely on a lawyer’s professionalism 

always should be treated as a reprimand (and, therefore, 

as a sanction),” but the court concluded that trying to 

draw a line between “routine judicial commentary” and 

“commentary that is inordinately injurious to the lawyer’s 

reputation” would be too burdensome to manage effectively. Id. at 91. The court did not want to invite litigation 

over the issue of when statements become sufficiently

harsh, and the court could not determine how to limit this 

analysis to just statements made against attorneys and 

not other third parties. Id. (“Lawyers, witnesses, victorious parties, victims, bystanders—all who might be subject 

to critical comments by a district judge—could appeal 

their slight if they could show it might lead to a tangible 

consequence such as a loss of income.” (quoting Bolte v. 

Home Ins. Co., 744 F.2d 572, 573 (7th Cir. 1984)) (internal 

quotation marks omitted)). The First Circuit said it did 

not want to turn an appellate court into “some sort of 

civility police charged with enforcing an inherently undefinable standard of what constitutes appropriate judicial 

comment on attorney performance.” Id.; see also Weissman v. Quail Lodge, Inc., 179 F.3d 1197, 1200 (9th Cir. 

1999) (agreeing with the court in Williams that “words 

themselves do not constitute sanctions” and do not independently trigger a right to appeal). 

The United States Court of Appeals for the Seventh 

Circuit reached a similar conclusion in Clark Equipment 

Co. v. Lift Parts Manufacturing Co., 972 F.2d 817 (7th 

Cir. 1992). The district court awarded attorney’s fees and 

costs to be paid by the sanctioned attorney due to the 

attorney’s role in contributing to the absence of a crucial 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 19

witness at trial and for re-arguing an issue that had 

previously been resolved. Id. at 818. The attorney immediately appealed the sanctions, but the parties entered a 

settlement during the pendency of the appeal that included a commitment by one of the parties to pay all of the 

attorney’s fees owed by the offending attorney. Id. The 

court recognized that district courts have an interest in 

guaranteeing that the rules of procedure were followed, 

but that interest cannot keep a compensatory consent 

award “alive for appeal after the parties have settled.” Id. 

at 819 (“[T]he beneficiary of a compensatory sanction may 

bargain away the court’s interest in seeing its rules 

enforced.”). The court explained how, normally when an 

appeal becomes moot, the appellate court vacates the 

district court’s judgment and remands with instructions 

to dismiss the complaint. Id. But, because of the settlement, the court clarified that there was no need to dismiss 

the complaint or vacate the judgment. It pointed out that 

the attorney was requesting that the court vacate the 

opinion, not the judgment. Id. at 819–20. The court 

declined to take that step, explaining that appellate 

courts review judgments, not opinions. Id. 

We agree with the reasoned analysis of our sister 

circuits. The Attorneys, in essence, face a redressability 

problem. Once all parties entered into the settlement 

agreement, no party—except the Attorneys for reputational reasons—had any enduring interest in the underlying order dismissing the case with prejudice. The case 

was, for all purposes, complete, considering that the 

settlement resolved the outstanding motion for attorney’s 

fees under 35 U.S.C. § 285. The fact that the sanction 

was directed at Tesco in the opinion, not the Attorneys, 

further supports the conclusion that no party retains an 

interest in the judgment by the district court. Our options 

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20 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

for redressing the reputational injury of the Attorneys are

therefore greatly limited.8

Walker v. City of Mesquite, 129 F.3d 831 (5th Cir. 

1997) is not to the contrary. In Walker, the Fifth Circuit 

merely concluded that the court had jurisdiction to hear 

an appeal of a formal sanctions order premised solely on 

damage to the attorney’s reputation. Id. at 832 (“We have 

heretofore held that monetary penalties or losses are not 

an essential for an appeal.”). We have similarly held that 

our jurisdiction does not require a monetary sanction. See 

Precision Specialty Metals, 315 F.3d at 1352–53. Although Walker may be relevant to determining when 

formal non-monetary sanctions which have not been 

vacated or mooted by later developments are sufficient to 

justify appellate jurisdiction, Walker does not provide

insight into the redressability issues faced by the Attorneys.

Nor do the other cases upon which the dissent relies 

help the Attorneys’ cause. Fleming & Associates v. Newby 

& Tittle, 529 F.3d 631 (5th Cir. 2008), was concerned with 

a district court’s continuing authority to impose sanctions 

predicated on counsel’s misconduct even after a case has 

settled. The Fifth Circuit simply affirmed the trial court’s 

right to impose non-compensatory sanctions in such 

circumstances and its own ability to review any sanction 

so imposed. Id. at 640. Perkins v. General Motors Corp., 

965 F.2d 597 (8th Cir. 1992) was to the same effect. 

Neither case dealt with a circumstance where no sanction 

8 We note that the parties, but not the intervening 

attorney, in Nisus also settled their dispute prior to 

appeal. Rather than decide the question of whether the 

district court’s dismissal order amounted to the type of 

formal judicial action over which we could exercise jurisdiction, we instead decide this case on redressability 

grounds. 

 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 21

remained in place. Indeed, both recognized that sanctions 

designed to compensate a party for the harm it incurred 

because of the misconduct of its adversary or its counsel—

such as the burden shifting sanction and dismissal order 

at issue here—are mooted by any subsequent settlement. 

Kirkland v. National Mortgage Network, Inc., 884 

F.2d 1367 (11th Cir. 1989), Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263 (7th Cir. 1983), Grider v. 

Keystone Health Plan Central, Inc., 580 F.3d 119 (3rd Cir. 

2009), Sheppard v. River Valley Fitness One, L.P., 428 

F.3d 1, 6 (1st Cir. 2005), and Obert v. Republic Western

Insurance Co., 398 F.3d 138, 143 (1st Cir. 2005), remand 

order modified, 2005 U.S. App. LEXIS 4793 (1st Cir. Mar. 

24, 2005), were all cases where formal sanctions and/or 

reprimands were imposed upon counsel, leaving an order 

in place which could be reviewed and presumably vacated. 

For example, Sheppard v. River Valley Fitness One, 428 

F.3d at 6, involved a monetary sanction against an attorney for misrepresenting his client’s settlement in a closely 

related case to the plaintiff. Although the dissent cites 

Sheppard as demonstrating that the First Circuit permits 

review of “factual findings by themselves (i.e. unattached 

to any sanctions),” the court in fact preceded this statement with, “if an appellate tribunal has jurisdiction to 

review [a sanctions] order, its examination will encompass 

the underlying findings.” Id. (emphasis added). The court 

affirmed the monetary sanction in that case, but vacated 

a single factual finding accompanying it. In Obert v. 

Republic Western Insurance Co., 398 F.3d 138, 143 (1st 

Cir. 2005), remand order modified, 2005 U.S. App. LEXIS 

4793 (1st Cir. Mar. 24, 2005), the attorneys appealed 

orders sanctioning their conduct. The court granted 

review of formal rulings that the attorneys violated state 

ethics rules and Rule 11, while confirming that the settlement of the underlying case mooted the award of 

attorneys’ fees and the revocation of pro hac vice status. 

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22 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

The only two cases where it appears reputational injury without more was deemed sufficient to justify the 

exercise of jurisdiction, Butler v. Biocare Medical Technologies, Inc., 348 F.3d 1163 (10th Cir. 2003) and Johnson 

v. Board of County Commissioners, 85 F.3d 489 (10th Cir. 

1996)—both out of the Tenth Circuit—lacked any discussion of the redressability concern upon which our decision 

is predicated. This is perhaps understandable since, in 

both cases, the district courts’ orders were affirmed, 

obviating the need to assess what relief the court of 

appeals might fashion. 

The Attorneys request that we remedy their injury in 

one of three ways: (1) vacate the underlying order; (2) 

remove the district court’s finding of bad faith; or (3) 

remand for a full hearing on litigation misconduct. There 

is no need to vacate the district court’s judgment and 

underlying order because the settlement rendered that 

step unnecessary by making the judgment moot. See

Clark Equip., 972 F.2d at 819–20. And we decline to 

address the predicate findings in the trial court’s opinion. 

As the court in Williams correctly explained, and we have 

noted in many contexts, Courts of Appeals review judgments, not opinions. 156 F.3d at 90; cf. OSRAM Sylvania, 

Inc. v. Am. Induction Techs., Inc., 701 F.3d 698, 707 (Fed. 

Cir. 2012) (“we review judgments not opinions”); Mangosoft, Inc. v. Oracle Corp., 525 F.3d 1327, 1330 (Fed. Cir. 

2008) (same); Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 

1530, 1540 (Fed. Cir. 1983) (“We sit to review judgments, 

not opinions.”). We also will not remand for a full hearing 

on litigation misconduct. That would be an unnecessary 

use of the district court’s and the parties’ resources. 

Although the Attorneys claim that a full hearing would 

allow them the opportunity to clear their name, we have 

no authority to order a court to conduct a hearing in a 

case that is closed and cannot be reopened. 

We agree that statements made in a judicial opinion 

can harm the reputation of attorneys, and that an attorCase: 15-1041 Document: 28-2 Page: 22 Filed: 10/30/2015
TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 23

ney’s reputation is one of his or her most valuable assets. 

But that concern alone is insufficient to justify our jurisdiction where there is no judgment that remains. There is 

no remaining sanction which could be vacated or punishment imposed upon the Attorneys which could be reversed. There is simply no Article III case or controversy

that allows us to redress any reputational harm the 

Attorneys may have suffered. 

CONCLUSION

Because we find that, in light of the settlement entered by all parties to the litigation, including the Attorneys, there remains no on-going case or controversy, we 

dismiss the appeal for lack of jurisdiction.

DISMISSED

Case: 15-1041 Document: 28-2 Page: 23 Filed: 10/30/2015
United States Court of Appeals 

for the Federal Circuit ______________________ 

TESCO CORPORATION,

Plaintiff

v.

NATIONAL OILWELL VARCO, L.P., OFFSHORE 

ENERGY SERVICES, INC., FRANK’S 

INTERNATIONAL, LLC,

Defendants-Appellees

v.

GLENN A. BALLARD, JR., JOHN F. LUMAN, III,

Interested Parties-Appellants

______________________ 

2015-1041

______________________ 

Appeal from the United States District Court for the 

Southern District of Texas in No. 4:08-cv-02531, Judge 

Keith P. Ellison.

______________________ 

NEWMAN, Circuit Judge, dissenting.

The issue on this appeal is whether these two 

sanctioned attorneys should have, and do have, the right 

and opportunity to “clear their name” by appealing the 

sanctions order. My colleagues on this panel hold that 

they do not, for the reason that “a full hearing on 

litigation misconduct” would be “an unnecessary use of 

Case: 15-1041 Document: 28-2 Page: 24 Filed: 10/30/2015
2 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

the district court’s and the parties’ resources.” Maj. Op. 

at 22. Thus this court holds that an appeal to bring out 

potentially mitigating information is not available.

These sanctioned attorneys ask for the opportunity to 

provide privileged records that they say will clear their 

name, stating that these records were proffered to the 

district court judge, who declined to receive them. These 

sanctioned attorneys are surely entitled to an appeal (or 

remand to the district court, as alternatively requested). 

Precedent in all of the other circuits would so allow, and 

fundamentals of due process so require. From my 

colleagues’ contrary ruling, I respectfully dissent.

I 

A lawyer’s reputation is the lawyer’s most valuable 

asset. These two lawyers were publicly sanctioned, with 

imposition of the most severe punishment: dismissal of 

the client’s case with prejudice. The reason was that two 

witnesses testified contrary to what these lawyers had, 

three years earlier, told the trial judge would be the 

witnesses’ testimony concerning a Tesco brochure related 

to the patented device.

The panel majority refuses the attorneys’ request for 

appeal or proceedings to allow them to provide these 

privileged records. My colleagues cite “jurisdictional” 

grounds, stating that the case is over because the parties 

“settled.” Every other circuit that has considered this 

aspect has held that settlement does not bar an attorney’s 

right to appeal a sanctions order.

The panel majority not only rules that no appeal is 

available and that the proffered exculpatory evidence 

cannot be received, but the majority also presents, in 

prejudicial and pejorative detail, the statements of 

counsel that led to their sanctions. If this issue is to be 

retried only in appellate dictum, the victims should at 

least have the opportunity to tell their side of the story. 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 3

The closest that the Appellants have gotten to this 

opportunity is in their appellate brief, where they 

summarize this history:

The Sanctions Order found that AttorneyAppellants had willfully misled the district court . 

. . . The district court’s finding was based upon its 

decision to credit the 2013 post-trial deposition 

testimony of one former Tesco employee above and 

against Attorney-Appellants’ own in-trial 

statements made in 2010. Specifically, on 

November 1, 2010, Mr. Ballard relayed to the 

district court the contents of several out-of-court 

conversations Mr. Luman had with two witnesses 

and described their expected testimony.

Appellant’s Br. 2. These witnesses later diverged from 

the described testimony, leading the district court to 

impose sanctions and to dismiss the Tesco case with 

prejudice. The Appellants summarize these events: 

Three years later, when deposed, one of the 

witnesses apparently remembered these 

conversations differently, and the other did not 

remember them at all, even though 

contemporaneous evidence not only showed that 

their conversations occurred but also supported 

what Attorney-Appellants conveyed to the district 

court. Without reviewing this evidence, the 

district court concluded on the basis of what one 

witness could remember years later that 

Attorney-Appellants must therefore have lied to 

the court.

Appellant’s Br. 2–3. This appeal arises from the district 

court’s refusal to review the proffered evidence that, 

according to the sanctioned attorneys, would show that 

they did not misrepresent what they were told by the two 

witnesses. The Appellants raise due process concerns as 

to the sanctions procedure, and summarize:

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4 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

The district court entered the Sanctions Order 

without conducting a trial or even a show cause 

hearing on the issues covered by the order, and 

without reviewing the contemporaneous evidence 

offered to the district court no less than three 

times for in camera inspection.

Appellant’s Br. 3. The district court dismissed the case 

with prejudice “outright,” an action that the Supreme 

Court has called “a particularly severe sanction.” 

Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991).

The Appellants describe their proffer of evidence as 

follows:

The deposition testimony that forms the sole 

evidentiary basis for the Sanctions Order did not 

accurately reflect what the witnesses had said 

years earlier. Attorney-Appellants could have 

proven so with their privileged notes and emails 

from 2010 had the district court given them notice 

and an opportunity to do so.

Appellant’s Br. 4. My colleagues on this panel refuse to 

review this evidence, or to require the district court to 

review it, stating that we do not have jurisdiction of this 

appeal at all, because the case was settled. Nonetheless, 

my colleagues describe, in exhaustive detail, the course of 

the proceedings below, apparently to demonstrate 

counsels’ malfeasance. Not only is no mention made of 

the proffered exculpatory information, but the majority 

reiterates selected parts of the district court’s criticisms, 

reinforcing the injury while denying the requested 

hearing.

Precedent and due process require that sanctioned 

attorneys be permitted appellate review of the sanctions 

order. In the Fifth Circuit, whose law controls this 

procedural issue, the imposition of attorney sanctions is 

subject to the processes of law. Hazeur v. Keller Indus., 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 5

1993 U.S. App. LEXIS 38258, *12 (5th Cir. Jan. 11, 1993) 

(“[W]hen a district court imposes sanctions under its 

inherent authority, due process considerations 

undoubtedly are implicated.”) (citing Roadway Express v. 

Piper, 447 U.S. 752, 767 (1980)). With all respect to my 

colleagues, their one-sided approach to this appeal, where 

they deny jurisdiction due to settlement, but nonetheless 

make adverse findings while simultaneously denying all 

opportunity of exculpation, is not only prejudicial, but also 

unfair.

The majority argues that this dissent “fails to 

recognize” the “fine factual distinctions” upon which 

sanctions are based. Maj. Op. at 12 n.7. On this ground, 

the majority justifies ignoring the vast body of precedent 

in which sanctioned attorneys have had the right and 

opportunity to defend their reputations. To the contrary, 

precedent demands that fine facts be found. My concern 

is that the district court repeatedly refused to receive the 

Appellants’ proffered evidence, although that evidence 

could affect the factual weight and perhaps even change 

the conclusion.

The appellate obligation is to assure an adequate and 

fair factual foundation to which the law is applied. I 

dissent for precisely this reason: the incompleteness of the 

record renders the sanction possibly unfair. All of the 

precedents that I cite are founded on the position that 

when the trial judge issues a reprimand, it is incumbent 

on the appellate tribunal to assure that the processes of 

law are fully recognized.

II

On the question of loss of appellate jurisdiction based 

on settlement, my colleagues err in ruling that there is no 

jurisdiction to review the issue of sanctions. The Supreme 

Court has made it clear: “It is well established that 

federal courts may consider collateral issues after an 

action is no longer pending.” Cooter & Gell v. Hartmarx 

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6 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

Corp., 496 U.S. 384, 395 (1990). See also Willy v. Coastal 

Corp., 503 U.S. 131, 139 (1992) (a district court’s 

sanctions regarding violations of the court’s rules are 

sustainable, and reviewable by appellate courts, even 

where the court is later held to lack jurisdiction over the 

case).

The appealability of a severe sanction, such as 

dismissal with prejudice, is recognized in all of the 

circuits. Appealability is not defeated by an intervening 

settlement. The courts have reasoned that settlement 

does not “moot” an attorney sanction, for the reputational 

damage is perpetual.

As the district court resides within the Fifth Circuit, I 

start with their decisions. The Fifth Circuit, like all the 

other circuits, recognizes that injury to an attorney’s 

professional reputation is a cognizable and legally 

sufficient cause for appellate review, for reputation is the 

attorney’s “most important and valuable asset.” Walker v. 

City of Mesquite, 129 F.3d 831, 832–33 (5th Cir. 1997).

In Fleming & Associates v. Newby & Tittle, 529 F.3d 

631 (5th Cir. 2008) the district court had awarded 

attorney fees as a sanction for improper procedures 

concerning an expert report; the parties then settled, and 

agreed that each side would bear its own attorney fees. 

The district court nonetheless wrote a written opinion 

that described attorney misconduct during the 

proceedings. Id. at 641. The circuit court held that the 

sanctions order, and its appealability, survive settlement, 

stating that “[w]e should not deprive the . . . counsel of 

the right to equity when the party he represents chose to 

settle its suit.” Id. at 638 n.3. The court concluded that 

“any nonmonetary portion of the sanctions not rendered 

moot by settlement is appealable for its residual 

reputational effects on the attorney.” Id. at 640.

Other circuits have dealt with the effect of settlement 

on the appeal of an attorney sanction. The First Circuit 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 7

explicitly allows review of “factual findings by themselves 

(i.e. unattached to any sanctions)” due to the ‘“serious 

practical consequences’ they may have on counsel’s 

reputation.” Sheppard v. River Valley Fitness One, L.P., 

428 F.3d 1, 6 (1st Cir. 2005) (quoting Obert v. Republic W. 

Ins. Co., 398 F.3d 138, 143 (1st Cir. 2005), remand order 

modified, 2005 U.S. App. LEXIS 4793 (1st Cir. Mar. 24, 

2005). In Obert, the First Circuit held that while 

settlement had mooted the sanctions imposed, “given the 

substance of the underlying rulings, the reputations of

counsel are affected by the findings that individual 

counsel and their firms violated state ethics rules or Rule 

11,” the “serious practical consequences of such 

findings . . . [were] sufficient to avoid mootness.” 398 F.3d 

at 142–143. Here, the district court’s action of dismissal 

of the entire case underscores the seriousness of the 

charges to which the Appellants were not permitted to 

respond.

In Cheng v. GAF Corp., 713 F.2d 886, 890 (2d Cir. 

1983), counsel was sanctioned by the district court for 

filing an inappropriate motion. The Second Circuit 

recognized that “[i]f the case is settled, or if appellant 

succeeds on the merits, it is not clear that appellant's 

lawyer will be able to appeal.” To address this concern, 

the Second Circuit permitted an immediate appeal of the 

fee award.

The Second Circuit has also considered a situation 

close on its facts to the case at bar, and declined to hold 

that settlement mooted the attorney’s right to appeal from 

a sanction, “because his reputation—the basis of the

attorney’s livelihood—is at stake and, unlike his client, he 

did not voluntarily enter into the settlement in question.” 

Agee v. Paramount Commc’ns, Inc., 114 F.3d 395, 399 (2d 

Cir. 1997).

Also contrary to the majority’s ruling herein, the 

Eighth Circuit directly ruled that settlement does not 

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8 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

moot the appeal of an attorney sanction. In Perkins v. 

General Motors Corp., 965 F.2d 597 (8th Cir. 1992), the 

court rejected the argument that “the district court lost 

jurisdiction to enforce the sanctions when the parties 

settled the case.” Id. at 599. The court held that the 

district court had authority to levy the sanction and the 

circuit court had authority to review it, stating that, even 

though there was no monetary consequence, “[t]he 

interest in having rules of procedure obeyed does not 

disappear merely because an adversary chooses not to 

collect the sanctions.” Id. 

The Eighth Circuit brought pragmatic reasoning to 

the effect of settlement of the underlying case, on the 

right of an attorney to appeal a sanction order:

If an attorney is unable to appeal a sanction order 

after the underlying case has been settled, the 

attorney is left with no avenue of challenging the 

sanction order. The law encourages parties to 

settle disputes. An attorney must be free to settle 

cases when settlement is in the client’s best 

interest. The refusal to grant jurisdiction over an 

appeal of sanctions after the underlying suit has 

been settled thrusts a personal conflict upon the 

attorney—by settling a case in the client’s interest 

he may have to forfeit a personal right to appeal 

the sanctions levied against him.

Id. at 600.

The circuits have also held that an attorney has 

standing to appeal a sanctions order, based on the injury 

to professional reputation, whether or not other 

punishment is also levied. In Butler v. Biocare Medical

Technologies, Inc., 348 F.3d 1163 (10th Cir. 2003), the 

court stated “we believe that the position taken by the 

majority of the circuits, that an order finding attorney 

misconduct but not imposing other sanctions is 

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 9

appealable under §1291 even if not labeled as a 

reprimand, is the proper position.” Id. at 1168.

The circuits stress the reputational aspect of 

sanctions awards in cases that were settled. In Gruder v. 

Keystone Health Plan Central, Inc., 580 F.3d 119, 133 (3d 

Cir. 2009) the court agreed that “the settlements did not 

moot the appeals because the Appellants experienced (and 

continue to experience) reputational harm.”

In Johnson v. Board of County Commissioners, 85 

F.3d 489 (10th Cir. 1996), the court held that “settlement 

of an underlying case does not preclude appellate review 

of an order disqualifying an attorney from further 

representation insofar as that order rests on grounds that 

could harm his or her professional reputation.” Id. at 492.

In Kirkland v. National Mortgage Network, Inc., 884 

F.2d 1367 (11th Cir. 1989) the court held that an 

attorney’s appeal of an order revoking his pro hac vice

status survived dismissal because “the ‘brand of 

disqualification’ on grounds of dishonesty and bad faith 

could well hang over his name and career for years to 

come.” Id. at 1370.

The cases cited by the majority do not support their 

position that settlement removes the sanction from 

appellate review. The majority relies primarily on In re 

Williams, 156 F.3d 86 (1st Cir. 1998), where the court 

held a bankruptcy judge’s sanctions order unappealable 

on the facts of that case, the court explaining that 

appealability of the sanction “depends on whether the 

findings comprise a decision, order, judgment, or decree.” 

Id. at 89. The court observed that the monetary fine 

against counsel had been withdrawn, and let stand the 

chastisement of counsel. The court held that since there 

was no consequence and no punishment, there was no 

appeal.

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10 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

Although my colleagues recognize that in Williams

there was no adverse consequence to the criticism of 

counsel “[b]ecause the monetary sanctions were 

ameliorated and no reprimands were imposed,” Maj. Op. 

at 18, the panel majority nonetheless holds that Williams

supports non-appealability for absence of jurisdiction. 

There is, however, a critical space separating the 

Williams ruling that without a formal reprimand or other 

adverse consequence, ordinary criticism of an attorney is 

not appealable. In contrast, in the case at bar, the 

ultimate sanction of dismissal of the client’s case was 

imposed, accompanied by a published Sanctions Order 

recounting the transgressions by counsel.

The other cases that the majority says supports its 

bar to appeal, are inapposite here. In Bolte v. Home 

Insurance Co., 744 F.2d 572 (7th Cir. 1984), the circuit 

court found that only because no sanctions were actually 

imposed by the district court upon settlement and 

dismissal was the issue moot. Here, sanctions, harsh 

sanctions, were imposed. And even there, the court 

questioned whether defamatory statements alone were 

never sufficient to raise a claim for appellate relief, citing 

to Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263 

(7th Cir. 1983), where the court alluded that the 

reputational damage to attorneys in that case was an 

argument worth consideration. Id.

The panel majority also relies on Weissman v. Quail 

Lodge, Inc., 179 F.3d 1194 (9th Cir. 1999). The district 

court statements at issue in Weissman and the present 

appeal are far apart. In Weissman, the district court 

stated the attorney’s behavior reflected “a serious lack of 

professionalism and good judgment.” Id. The circuit 

court found that that statement did not constitute a 

formal reprimand and so avoided appellate review. Here, 

in contrast, the district court issued a separate Sanctions 

Order, accompanied by the dramatic act of dismissing the 

client’s case with prejudice.

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 11

Also in Clark Equipment Co. v. Lift Parts 

Manufacturing Co., 972 F.2d 817 (7th Cir. 1992), after the 

client agreed to pay the entire attorney fee sanction levied 

against the offending attorney, the court declined to 

accept the attorney’s appeal of the sanction, the court 

stating that the entire consequence of his transgression 

had been “bargained away.” Id. at 819. Yet still, the 

circuit court found sufficient purchase to vacate the 

district court’s judgment to the extent it imposed 

sanctions. On the facts of that case, the circuit court’s 

treatment was not a matter of “jurisdiction” but of 

pragmatic judicial wisdom.

In sum, there is no support for the majority’s general 

theory that there is no “jurisdiction” to appeal an 

otherwise appealable sanction, after the case has been 

settled. Review of all the circuits reveals a logical pattern 

whereby the integrity of the judicial process is preserved 

not only by authorizing the imposition of sanctions, but 

also by assuring due process in the imposition itself. And 

when there is a settlement, the courts have recognized 

that jurisdiction is present, and have reviewed the 

imposition of sanctions as appropriate to the specific 

situation.

In today’s ruling the Federal Circuit stands alone. 

Indeed, this panel stands alone among Federal Circuit 

rulings.

III

The law of this circuit is also on the side of judicial 

review. In Precision Specialty Metals, Inc. v. United 

States, 315 F.3d 1346 (Fed. Cir. 2003), this court stated 

that “a judicial reprimand is likely to have a serious 

impact upon a lawyer’s professional reputation and 

career,” and is “directly appealable” when “accompanied 

by a sanction or findings.” Id. at 1352–53. We elaborated 

in Nisus Corp. v. Perma-Chink Sys., holding that 

Precision Specialty Metals made “clear that the phrase 

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12 TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 

‘sanctions or findings’ referred to the formal imposition of 

the court’s inherent power to penalize those who appear 

before it.” 497 F.3d 1316, 1321 (Fed. Cir. 2007) (quoting

Precision Specialty Metals, 315 F.3d at 1352).

Here, the attorneys were “before the court as a 

participant in the underlying litigation, and the court’s 

action was directed at regulating proceedings before the

court or over which the court had supervisory authority.” 

Id. Indeed, this court has “taken the position that a 

court’s order that criticizes an attorney and that is 

intended to be ‘a formal judicial action’ in a disciplinary 

proceeding is an appealable decision.” Id. at 1320. 

The majority seeks to avoid the issue of “whether the 

district court’s dismissal order amounted to the type of 

formal judicial action over which we could exercise 

jurisdiction . . . instead deciding this case on 

redressability grounds.” Maj. Op. at 20 n.8. That issue is 

at the heart of this matter, for a district court’s dismissal 

of the underlying action with prejudice based on alleged 

attorney misconduct is a sanction accompanying a judicial 

reprimand, and is directly appealable as provided in 

Precision Specialty Metals and Nisus. 

IV

The district court invoked its inherent power to 

punish what it saw as bad faith and willful misconduct. 

Such power is available “only if clear and convincing 

evidence supports the court’s finding of bad faith or willful 

abuse of the judicial process.” In re Moore, 739 F.3d 724, 

729–30 (5th Cir. 2014). The issue is not whether the 

district court has such inherent disciplinary power, but 

whether these sanctioned attorneys are entitled to appeal 

and to bring forth privileged documents to defend 

themselves. My colleagues hold we do not have 

jurisdiction to consider this issue.

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TESCO CORPORATION v. NATIONAL OILWELL VARCO, L.P. 13

Common to all circuits is the requirement that 

sanctionable behavior must be established by clear and 

convincing evidence on the record as a whole. There 

cannot be clear and convincing evidence without an 

opportunity to present contrary evidence. Although my 

colleagues state that the Appellants had adequate 

opportunity to “recant their statements to the court,” it 

was not until three years after these attorneys’ 

conversations, that the witnesses were deposed.

The Fifth Circuit explains that: “For this court to 

affirm inherent power sanctions on grounds other than 

those expressly chosen by the imposing court would 

constitute an encroachment upon that court’s discretion 

unwarranted by the concerns for order and necessity 

inherent in their use.” Crowe v. Smith, 151 F.3d 217, 240 

(5th Cir. 1998). The Appellees, scouring the record for 

damaging communications not mentioned by the district 

court, have presented grounds upon which the majority’s 

affirmance affixes this court’s imprimatur, exceeding this 

safeguard—again, while insisting that we do not have any 

jurisdiction at all.

My colleagues ignore the vast body of circuit 

reasoning, and instead hold that “a full hearing on 

litigation misconduct” would be “an unnecessary use of 

the district court’s and the parties’ resources.” Maj. Op. 

at 22. Indeed, some aspects of due process of law do 

consume resources. The settlement did not eradicate the 

right of these Appellant attorneys to appeal the sanction 

against them. They have the right to clear their name in 

appropriate further proceedings. From my colleagues’ 

contrary ruling, I respectfully dissent.

Case: 15-1041 Document: 28-2 Page: 36 Filed: 10/30/2015