Sunday, January 13, 2013

Gunn v. Minton Argument Preview

The Supreme Court hears argument Wednesday in Gunn v. Minton, concerning whether federal courts have exclusive jurisdiction over state law malpractice claims where the underlying question involves patent law. This case has attracted far less attention than the other patent cases this Term, but it raises an important federal jurisdiction question, and the Court's opinion could have implications far outside patent malpractice cases—especially because the Court has held that the patent-related statute at issue, 28 U.S.C. § 1338(a) (giving the federal courts exclusive jurisdiction over "any civil action arising under any Act of Congress relating to patents"), should be interpreted in the same way as § 1331 (the source of federal question jurisdiction for actions "arising under" federal laws).

Minton, a patentee, sued his former lawyers (Gunn et al.) in Texas state court alleging malpractice in their representation of him in an earlier patent infringement suit. After Minton lost on summary judgment at the trial court, the Federal Circuit decided in Air Measurement that these kinds of cases fall within the exclusive "arising under" jurisdiction of § 1338(a). The Federal Circuit relied on the Supreme Court's decision in Grable, which held that "the question [for 'arising under' jurisdiction in § 1331] is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities." At Minton's request, the Texas Supreme Court then dismissed his case for lack of jurisdiction, agreeing with the Federal Circuit's analysis. The Federal Circuit has continued to follow this rule in patent malpractice cases (over Judge O'Malley's dissent).

An amicus brief from 11 law professors argues that the Court should overrule its decision in Grable and limit "arising under" jurisdiction to Justice Holmes's "cause of action" test from American Well Works: "A suit arises under the law that creates the cause of action." The author of a malpractice treatise and the AIPLA agree that patent malpractice cases should be outside "arising under" jurisdiction, but they think Grable was misapplied, not wrong—they argue that the embedded patent question in a malpractice claim is entirely hypothetical, not "disputed" and "substantial." The Intellectual Property Law Association of Chicago, however, argues that the Federal Circuit got it right, as do the lawyer defendants in another patent malpractice suit, who note that "[p]laintiffs' lawyers in general will want to file only in state court due to the uncertainty caused by judges who do not know patent law and state court juries who favor local plaintiffs." (The lawyer defendants swipe at the AIPLA for "not consult[ing] the views of [them] or other 'rank and file' attorneys of the AIPLA who face a dramatically rising number of legal malpractice claims arising out of their day-to-day representation of clients before the USPTO.") The Federal Circuit's rule is also supported by a coalition of national labs (who want uniform rules for Bayh-Dole patent issues); they argue that Congress has expressed a strong interest in nationally uniform patent laws, and that patent issues thus belong in federal courts whether they are "packaged as an infringement action or a state law contract or tort claim."

Grable was a unanimous decision in 2005—although four of those Justices have retired, and Justice Thomas wrote a concurrence stating that "no one has asked us to overrule" Smith or Merrell Dow (cases that had expanded "arising under" jurisdiction beyond Justice Holmes's rule), but that "[i]n an appropriate case, and perhaps with the benefit of better evidence as to the original meaning of § 1331's text, [he] would be willing to consider that course." The law professors' amicus brief thinks the whole SmithMerrell DowGrable line is wrong; in my federal jurisdiction class, we were taught that Smith made sense (where state law itself incorporated federal law, it could convey federal jurisdiction), but that the Court "messed everything up with a multi-factored triple bank shot" in Merrell Dow (at least, that's what my old class notes say). Given Grable's open elaboration of the functional policy considerations at issue, I wonder how the different policy considerations in patent law will come into play in Gunn. If patent malpractice cases were routinely brought in state courts, would lawyers have to consider both federal patent law and the (potentially erroneous) interpretation of federal patent law by their state in order to avoid malpractice liability? Federal court junkies, stay tuned!

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