Argument recap: Making patent law on the plains of Texas?
on Jan 17, 2013 at 1:14 pm
This week in Gunn v. Minton the Court entered the sordid world of legal malpractice. Specifically, the Justices are reviewing the willingness of the Texas Supreme Court to defer to the Federal Circuit’s holding that the exclusive federal jurisdiction over patent cases extends to claims of legal malpractice in patent cases.
The case presents a question redolent of a law-school federal courts exam. Claims for legal malpractice present a tort claim created by state law. But if the alleged malpractice occurred in a patent case, then the trial court often (and inevitably in some cases) will have to resolve issues of federal patent law. When, if ever, does that embedded federal question make the entire case “arise under” federal law so that it can be brought in federal court in the first instance?
All of you who got a decent grade in Federal Courts will recall Justice Holmes’s famous suggestion that a cause of action should always “arise under” the law that creates it. Although Justice Scalia praised the bar-review-outline certainty of that test in the Gunn argument, even he recognized that the Court has recognized so many exceptions – state-law causes of action that arise under federal law – that it is too late to hope for such a simple outlook on the problem.
The case before the Justices is particularly entertaining because of the machinations of the lawyers that represent Minton. In the first instance, respondent Minton hired petitioner Gunn to represent him in a patent suit against the National Association of Securities Dealers. When that suit ended poorly, Minton filed suit against Gunn for malpractice in a state court in Texas. When that suit also went poorly at trial, Minton had the nerve to argue on appeal that the state courts had no jurisdiction over the suit because the suit fell within the exclusive grant of jurisdiction over cases “arising under” patent law in 28 U.S.C. § 1338. In a testament to the Supremacy Clause, the Supreme Court of Texas followed the Federal Circuit’s adoption of a bright-line rule requiring all such cases to be brought in federal court, remanding the case to the trial court with instructions to dismiss it; this would have the effect of erasing Minton’s state-court defeat and allowing Minton to restart the malpractice case in a federal district court.
Arguing for petitioner Gunn (the law firm accused of malpractice), Jane Webre managed to keep her entire argument focused on a single point, with relatively little opposition from the Justices: the questions about patent law embedded in malpractice cases are not “substantial” because they are hypothetical, and thus will affect neither the PTO nor subsequent enforcement of the patent in question. Webre’s argument was noteworthy for the best quip of the day, Scalia’s joking allusion to the indeterminacy of arising-under doctrine – “we’re making it up anyway, right?”
The sledding was much harder for Thomas Michel, arguing for respondent Minton (the plaintiff). When he suggested in his opening that it was crucial to his case that federal courts have exclusive jurisdiction over cases “arising under” the patent laws, Justices Ginsburg and Kennedy suggested that his rule was quite broad if it swept into the federal courts all malpractice cases involving antitrust, copyright, and immigration law. His attempted retreat — suggesting that a rule limited to patent malpractice cases was more palatable because there would only be a small number of cases in that particular area – drew Justice Sotomayor’s inimitable scorn.
When Justice Sotomayor guided him to Gunn’s argument – that this should turn on “substantiality” of the federal issue — he rejected the premise of Webre’s argument and tried to establish the point that rulings in the malpractice case would have preclusive effect on the PTO. This time, it was Justice Scalia left incredulous, asking for “cases like that” and describing it as “a rather weird, weird situation” that Michel posited.
Michel then had a challenging interchange with Justices Ginsburg and Scalia about the limits of his rule. Taking him back to the early minutes of his presentation, Justice Ginsburg first asked him whether his position was that all patent questions must be resolved in federal court – a position plainly inconsistent with the statutory framework (which Webre had emphasized) that explicitly leaves permissive counterclaims to state courts. Surprisingly, Michel took quite a narrow position – he didn’t even argue that all patent malpractice claims belong in federal court. In his view, this particular case belongs in federal court because it is so much like the Grable case (a quiet title action regarding the title of land previously owned by the IRS). Thus, he argued, most patent malpractices would stay in state court. Only this Grable-clone case would need to be in federal court. Although Justices Scalia and Ginsburg pressed him hard to articulate a coherent doctrinal boundary, he stuck to his “on-all-fours-with-Grable” position.
If we take seriously the idea that the person the Justices question most closely is likely to lose then this looks like an easy winner for petitioner Gunn, whose attorney was left less constrained in her argument than any other attorney I’ve observed before the Court this year. Adding that to the Court’s natural skepticism about Federal Circuit overreaching makes this look like a strong candidate for prompt reversal.
A postscript for those interested in predicting opinion assignments – it’s worth noting that Justice Ginsburg was one of the most active questioners and also was the author of last year’s Mims opinion – the Court’s latest word on “arising-under” jurisprudence.