## Facts

- John F. Novak owned EnviroWave Energy, LLC, which developed technology for converting scrap tires into diesel fuel and carbon dust without using heat.
- Novak sought patent protection for the technology and shared confidential information with Keith Welch and John Farneman under nondisclosure agreements.
- Novak later believed Welch and Farneman used EnviroWave’s confidential information to develop a competing system and to file their own patent application containing information obtained under the nondisclosure agreements.
- Novak sued Welch and Farneman; the case was removed to the U.S. District Court for the Southern District of Ohio, with Judge Algenon L. Marbley presiding.
- The court previously denied Novak’s request for a preliminary injunction.
- At the parties’ request, the court held a settlement conference on June 27, 2011, with Judge Marbley acting as mediator.
- Edward Bacome, a nonparty who had a financial interest in the defendants’ company, attended the settlement conference.
- At the outset of the conference, Judge Marbley disclosed that he was acquainted with the Bacome family and that Bacome’s wife had been an associate at the judge’s former law firm (Vorys), where the judge had been a partner and had mentored her.
- Judge Marbley stated he believed he could mediate fairly and offered the parties the option to stop and use a different mediator; neither side objected, and they proceeded.
- The parties reached a settlement at the June 27 conference, and the material terms were placed on the record, with instructions to reduce the agreement to writing.
- The parties later disputed the scope and details of certain settlement terms; a further conference on August 25, 2011 did not resolve the disagreements.
- Defendants moved to enforce the recorded settlement agreement, and Novak moved to recuse Judge Marbley and requested an evidentiary hearing, arguing (1) the judge should not decide enforcement of a settlement he mediated and (2) the judge was biased due to his relationship with the Bacomes, including alleged expressions of sympathy for Bacome.

## Issues

1. Whether 28 U.S.C. § 455 requires a judge to recuse from deciding a motion to enforce a settlement that the judge previously mediated.
2. Whether the judge’s disclosed acquaintance with a nonparty investor and prior professional relationship with the investor’s spouse (including mentoring) creates disqualifying bias or an appearance of partiality under § 455.
3. Whether, even if § 455 does not mandate disqualification, the judge should recuse to avoid reasonable questions about impartiality and keep the case moving.

## Decision

- The court concluded that neither of Novak’s theories established that § 455 required recusal, rejecting the claim that mediation alone disqualifies a judge from later enforcement proceedings and rejecting the claim of bias tied to the Bacomes.
- Nonetheless, the court granted Novak’s motion to recuse and recused itself from further participation in the case.
- The court ordered the matter referred for reassignment so that all further proceedings, including enforcement issues, would be handled by a different judge.

## Legal Principles

- Under 28 U.S.C. § 455(a), disqualification is required when a judge’s impartiality might reasonably be questioned, applying an objective standard based on the facts.
- Under 28 U.S.C. § 455(b)(1), disqualification is required for personal bias or prejudice, which is not shown by ordinary professional familiarity or attenuated relationships.
- Judicial participation in settlement discussions, even active mediation, does not automatically require recusal from later disputes about the settlement; absent “deep-seated favoritism or antagonism,” a judge may rule despite having mediated.
- Judges are expected to separate what they learned in settlement discussions from what must be decided in later proceedings, and a party’s after-the-fact dissatisfaction with settlement negotiations does not itself show bias.
- Timely disclosure of a relationship and the parties’ decision to proceed without objection are factors weighing against a finding that recusal is legally required.
- Even when disqualification is not mandatory, a judge may step aside in the interest of maintaining confidence in the court and avoiding collateral litigation over impartiality.

## Conclusion

Novak v. Farneman is a recusal decision in which the court held that § 455 did not compel disqualification merely because the judge mediated the parties’ settlement or knew a nonparty investor’s family, especially after full disclosure and no contemporaneous objection, but the judge nevertheless recused to prevent continued disputes over impartiality and to allow another judge to handle settlement-enforcement proceedings and the remainder of the case.


Novak v. Farneman, 2011 U.S. Dist. LEXIS 114398 (2011)