Argument preview: Making a federal case out of legal malpractice claims
on Jan 15, 2013 at 1:32 pm
For the second consecutive year, the Court is considering the extent of federal jurisdiction over cases that “arise under” federal law. Last year, in Mims v. Arrow Financial Services, LLC, the Court considered when a cause of action created by federal law “arises under” federal law. This was the easy part of the question, because the answer is “almost always.” This year, in Gunn v. Minton, the Court faces the much more difficult problem – when a cause of action created by state law arises under federal law.
Although Justice Holmes famously suggested the simple test that a cause of action should always “arise under” the law that creates it, the Court has during the intervening century felt compelled on several occasions to recognize exceptions, causes of action that “arise under” federal law even though they are created by state law. The most recent came in 2005 in Grable & Sons Metal Products v. Darue Engineering – a suit to determine title to land acquired from the IRS, where the issue in the case was whether the IRS properly took the land from a taxpayer. Grable, to some at least, presented a surprising expansion of arising-under jurisdiction after decades in which the Court seemed most reluctant to extend federal jurisdiction over state-created causes of action.
Gunn presents a malpractice dispute. Minton hired Gunn to represent him in a patent suit against the National Association of Securities Dealers, which did not go well. Subsequently, Minton filed suit against Gunn for malpractice in a state court in Texas. When the trial court ruled against Minton, Minton (who had brought suit in state court in the first place) had the nerve to argue on appeal that the state courts had no jurisdiction over the suit. Specifically, he contended that the grant of exclusive jurisdiction over cases “arising under” patent law in 28 U.S.C. § 1338 deprived the state courts of jurisdiction to resolve the malpractice suit that he had initiated there. Following the lead of the Federal Circuit, the Supreme Court of Texas agreed and held that the case should be dismissed for want of jurisdiction.
The most important thing to recognize about “arising under” doctrine is that it is almost entirely a judicial artifact. There is little or nothing of congressional intent to be parsed here. The Justices use that language to develop policy about what types of disputes should be brought in federal, as opposed to state court. The doctrine is almost unimaginably vague; the issue in this case boils down to the question of whether the issues of patent law that are necessarily relevant to an action for malpractice in a patent case are so “substantial” as to warrant federal jurisdiction.
The strongest argument in support of federal jurisdiction is the importance of uniform interpretation of the federal patent laws. This is one of the few areas where Congress has called for exclusive federal jurisdiction, and its decision to centralize appellate adjudication in the Federal Circuit underscores the importance of having a single nationwide authority on issues related to patents.
On the other hand, the Federal Circuit’s bright-line rule that all patent malpractice cases must be brought into federal court plainly sweeps a large number of cases that raise no difficult or important questions of patent law into federal court. Moreover, because any determinations about patents in the malpractice context are hypothetical, they are unlikely to have any precedential or preclusive effect on the actual enforcement of any patent.
This case presents the first major opportunity for the Court to choose between two pictures of Grable: the first step in a new expansion of arising-under jurisdiction, or an oddity driven by the strange and compelling facts of that case. Although the importance of exclusive federal authority over patents should make the case a close one, my bet is that in the end the Court will view the case predominantly through the Federal Circuit lens. And that lens presents this as another example of what several of the Justices regard as the Federal Circuit’s excessive penchant for jurisdictional aggrandizement, ripe for reversal by the Justices.