Good morning everyone. Will Milliken here. I’m a director in Sterne Kessler’s Trial and Appeals Group and I am here live*-tweeting this morning’s arguments in United States v. Arthrex.
*But I am not a cat.
#AppellateTwitter #Arthrex 1/
*But I am not a cat.
#AppellateTwitter #Arthrex 1/
This case concerns the constitutionality of the Patent Trial and Appeal Board. It’s a big deal for those of us who practice patent law: the PTAB is a MAJOR feature of patent litigation today. The decision here could have very significant impacts. 2/
A few disclaimers to start off: First, these tweets are intended to convey general information only, and should not be construed as a legal opinion or as legal advice. 3/
Second, all trenchant observations and insightful commentary are attributable to the firm; any inaccuracies, dumb comments, or bad jokes are attributable solely to me personally. 4/
Finally, Sterne Kessler filed an amicus brief on behalf of TiVo Corporation in support of Arthrex in this case. 5/
If you’d like to listen to the arguments in real time, you can access a live stream from most any major news outlet. I will be listening via CSPAN: c-span.org/video/?507933-… 6/
It’s worth noting that we have the pandemic to thank for being able to listen to these arguments live (and being able to live-tweet them!). When the Court moved from in-person arguments to telephonic ones, it made live audio available for the first time. 7/
The move from in-person to telephonic also saw some changes in format. 8/
When arguments were in person, the questioning was basically a free-for-all: any Justice could jump in at any time with a question. (This is the default format in appellate courts.) 9/
Now, with the telephonic arguments, the Justices ask questions one at a time, in order of seniority, starting with the Chief Justice and ending with Justice Barrett. 10/
Most people view the new format as having both pros and cons. 11/
Pros: all nine Justices are likely to ask questions. This can provide a better indication of where the Court as a whole is leaning in a given case. And some of the Justices who were quiet in the in-person format ask very good questions. (Looking at you, Justice Thomas.) 12/
Cons: this format makes it harder for argument to serve as a conversation among the Justices that is facilitated by the attorneys, which some experienced advocates say is the best function of a Supreme Court oral argument. 13/
The constitutional provision to know is the Appointments Clause, which provides, as relevant here, that principal officers must be appointed by the President with the advice and consent of the Senate. “Inferior officers” can be appointed in other ways. 15/
The issue here is the constitutionality of the appointments of the Administrative Patent Judges of the Patent Trial & Appeal Board, which hears, among other things, inter partes review. 16/
Inter partes reviews (IPRs) are basically an administrative mechanism for a third party to challenge the validity of an issued patent. 17/
This case started when Smith & Nephew filed an IPR challenging Arthrex’s patent. The PTAB found the patent invalid. On appeal to the Federal Circuit, Arthrex argued that APJs’ appointments are unconstitutional. 18/
Arthrex’s argument was that APJs are principal officers, meaning they have to be appointed by the president and confirmed by the Senate. But APJs are in fact appointed by the Secretary of Commerce. 19/
The Federal Circuit agreed with Arthrex that APJs are principal officers and thus that their appointments were unconstitutional. #AppellateTwitter #Arthrex #SCOTUS 20/
To fix the problem, the Federal Circuit “severed” APJs’ for-cause employment protections from the statute and invalidated them. The court held that making APJs removable at will rendered them inferior officers who could be appointed by the Secretary of Commerce. 21/
First, are APJs principal or inferior officers? Second, if they are principal officers, did the Federal Circuit properly fix the constitutional problem by severing and invalidating their tenure protections? 23/
I’ll sometimes refer to these two issues in shorthand as the “merits” question and the “remedy” question. 24/
The US and Smith & Nephew have argued that APJs have been inferior officers all along and so there was no constitutional problem to begin with. If there was a constitutional problem, however, the US & S&N agree with the Federal Circuit’s remedy. 25/
Arthrex has argued that the Federal Circuit was right on the merits but that the severability remedy was improper. The task of fixing the constitutional problem, Arthrex says, belongs to Congress, not the courts. 26/
One thing to keep in mind: the Court needs to reach the remedial question only if it decides there was a constitutional problem in the first place. 27/
So, to the extent the questions focus on the merits, that’s potentially a good sign for the US & S&N; to the extent the questions focus on severability/remedy, that’s potentially a good sign for Arthrex. 28/
This observation, as with all of the observations today, comes with the caveat that oral argument is not a perfect indicator of which way the Court is leaning. (Sometimes, it’s not even a good indicator.) So take the prognosticating with an ample amount of salt. 29/
We're now just a couple of minutes away from argument. A reminder that you can follow along live at c-span.org/video/?507933-… or most any other major news outlet's website. #AppellateTwitter #Arthrex #SCOTUS /30
The Chief Justice calls the case, and Malcolm Stewart, representing the United States, begins his opening argument. /32
Stewart begins by emphasizing the parallels between APJs and administrative judges in a prior Supreme Court case, Edmond, where the Supreme Court found the judges to be inferior officers. /33
He also emphasizes various mechanisms of administrative oversight that the Director can use to supervise APJs. /34
CJ Roberts notes that the Director cannot actually review individual APJ decisions, and asks why that does not suggest that they are principal officers. /35
Roberts appears to be suggesting that the APJ is responsible for the decision, not the Director, which might indicate that the APJ should be deemed a principal officer. /36
Stewart emphasizes the other ways that the Director can exercise influence, such as by issuing policy guidance. /37
J Breyer asks how to distinguish an "officer of the United States" from a mere employee. /38
Stewart notes that the US concedes that APJs are at least officers of the United States--the question is whether they are principal or inferior officers. /39
Breyer appears to be suggesting that there may be some types of administrative judges who are not "officers of the United States" at all. /40
J Alito asks a hypothetical: what if a Deputy SG has the final authority to decide whether to take an appeal from an adverse judgment in a particular kind of case. Would that be constitutional? /41
Stewart's response is a bit of a hedge, but he emphasizes that unlike in the hypo, APJs' decisions are not final because they are subject to rehearing. /42
J Sotomayor asks Stewart to describe the US's proposed test for distinguishing principal and inferior officers. /43
Stewart emphasizes that there is no bright-line test; it's a contextual inquiry. (Arthrex's argument, in contrast, is that if you can issue a final decision on behalf of the Executive Branch, you are a principal officer, period.) /44
Sotomayor asks, why isn't a clear rule better? Stewart responds that a more context-dependent inquiry is necessary to account for the many different types of situations in which this issue could arise. /45
J Kagan asks a question about the mechanics of the rehearing procedure. Stewart responds that the Director can convene a rehearing panel of his choosing. /46
Kagan notes that the Director cannot tell the other members of the panel how to vote. Stewart agrees, but says that plenary authority is not required. /47
J Gorsuch (who, it is worth noting, has been the Justice most overtly hostile to the IPR regime in the past), asks how the PTAB's structure can be reconciled with the hierarchical structure of the Executive Branch established in the constitution. /48
J Gorsuch is suggesting that this structure creates a gap in the chain of command--the President is not directly accountable for APJs' decisions. /49
J Kavanaugh alludes to Scalia's famous opinion in Morrison v. Olsen that the independent counsel there was (I'm paraphrasing" a wolf in wolf's clothing. /50
Kavanaugh suggests that the PTAB's structure is a sharp break from the standard administrative adjudication model, and asks why that should not give the Court some pause. /51
Stewart acknowledges that intra-agency review of administrative judge decisions in the norm, but says that it is not constitutionally required. He also falls back to say that, if it is, the proper remedy is to sever the requirement that only the Board can grant rehearing. /52
It's worth noting that, while he was on the DC Circuit, Justice Kavanaugh wrote an influential concurring opinion that suggested that an administrative actor who can render a final decision on behalf of the Executive Branch is a principal officer. /53
CJ Roberts gives Stewart a minute to close. He emphasizes that there is no exclusive criterion for distinguishing between principal and inferior officers and that the Director has many tools for control of APJs. /54
CJ Roberts asks, doesn't it make a "charade" out of the adjudication if the Director can just decide to rehear it and then appoint a panel of his choosing to make it come out the way he wants? /56
Perry suggests that any improper conduct of that sort could be the subject of an as-applied challenge under the Due Process clause. /57
Justice Thomas asks another question about how to draw the line between principal and inferior officers. At least some Justices seem troubled by the somewhat amorphous nature of the US & S&N's proposed "totality of the circumstances" test. /58
J Breyer asks for examples of executive officials who, like APJs, have essentially unreviewable authority. /59
This is related to J. Kavanaugh's question about whether the PTAB model is a departure from past practice. Perry says that there are many administrative actors who essentially have final authority to act on behalf of the Executive Branch. /60
Alito alludes to S&N's argument in its brief that the principal-vs-inferior-officer test is a "Goldilocks inquiry"--is the porridge too hot, too cold, or just right? /61
Alito asks how much the Director's authority to control APJs could be restricted and still have APJs qualify as inferior officers. This is another question that appears to be looking for a more concrete test. /62
J Sotomayor alludes to Gorsuch's question about the need for a direct line of authority from the President down through the Executive Branch. Isn't this inconsistent with the idea of an impartial adjudication if the adjudicator's decision can be reversed for political reasons?/63
J Kagan asks another question about the seemingly anomalous nature of this structure, where an administrative judge decides a case without the prospect of review by the agency head. /64
Perry responds that the current structure is consonant with the way the PTO has been structured for a long time. (The parties briefed at length the question of which way the history cuts, but it hasn't come up much in the argument yet.) /65
J Gorsuch again asks about the unusual nature of this regime. Perry eventually concedes that it is unusual, at least as compared to administrative adjudications conducted pursuant to the APA. /66
J Kavanaugh echoes the same theme. He also says that S&N's proposed test seems to be resurrecting the rejected legal test from Morrison v. Olson. /67
We appeared to have some audio issues, but they are fixed now. Perry is emphasizing that APJs cannot finally cancel patents--only the Director can do that. /68
Justice Barrett asks the first question about remedy. /69
She notes that the constitutional violation found here was the result of many provisions working together, which means that there are a lot of potential ways the problem could be fixed. How is the Court to choose among them? /70
Perry says: "if you tell me how we lose, I'll tell you what the remedy is." /71
In other words, if the problem is the lack of reviewability, we read the statute to allow the Director to review APJ decisions. If the problem is the removal protections, you invalidate them (like the Federal Circuit did). Etc. /72
Perry closes, and now Jeff Lamken, counsel for Arthrex, is up. #AppellateTwitter #SCOTUS #Arthrex /73
Lamken emphasizes that APJs' primary duty is deciding cases, and he argues that they are principal officers because no one can directly review the manner in which they exercise that core function. This was the principal theme of Arthrex's briefing. /74
He also touches on remedy, and says that, because there are so many potential fixes, the job of choosing among them should be left to Congress. /75
CJ Roberts asks why isn't it OK for the Executive to allow the adjudicators a significant amount of leeway? A contrary rule would seem to conflict with the goal of having an independent and impartial adjudicator. /76
Lamken responds that the standard model of adjudication is preferable because the initial decider is impartial, and then the reviewing principal officer--who is ultimately responsible for the decision--is politically accountable. /77
This was another central them of Arthrex's brief: the remedy the Federal Circuit crafted, Arthrex argues, resulted in a regime that promotes neither impartiality nor accountability. /78
CJ Roberts asks, wouldn't it be impractical to require "meaningful review" of every administrative adjudication by a principal officer? /79
J Thomas asks why accountability matters here--does Arthrex think it would get a better decision from the Director? /80
Lamken says yes, and he also suggests that, regardless, the Director would then bear political responsibility for the decision. /81
Thomas asks how much review is needed? Lamken says the principal officer must have the power to review, even if he or she doesn't exercise it. He analogizes to SCOTUS's certiorari jurisdiction. /82
Thomas asks if it would fix the problem to give the Director the option to review APJ decisions. Lamken says yes, but the prerogative of implementing that fix belongs to Congress, not the courts. /83
Thomas appears to be skeptical of Lamken's argument that giving the Director the option to review would result in a constitutionally meaningful distinction. /84
J Breyer asks how Arthrex's proposed test would apply to other types of officers (i.e., not adjudicators). /85
This line of questioning lays bear a tension here: on one hand, the US/S&N's proposed test is a little amorphous and hard to administer. On the other hand, given the wide variety of governmental functions, laying down a bright-line test is exceedingly difficult. /86
Lamken suggests that Arthrex's proposed test is correct for officers who do adjudications: if what you do is decide cases, you are a principal officer unless someone else can review your exercise of that duty. /87
Alito asks a question about remedy (one of the relatively few so far). What relief should Arthrex get if the Court agrees that there is a constitutional problem? /88
(S&N has argued that all Arthrex should get, even if it wins on the merits, is a declaratory judgment.) /89
Lamken says the Court should order that the proceeding be dismissed. Alito asks why more modest relief--i.e., requiring the Director to review the Board's decision--wouldn't be more appropriate. /90
Alito alludes to an amicus brief that suggested this remedy. /91
J Sotomayor suggests that an adjudicator who decides cases based on set policies is not a principal officer--instead, the person who sets the policy is the principal officer. /92
Lamken responds that, if the Director doesn't have the ability to overturn the decision, he is ultimately not responsible for it. /93
Sotomayor follows up and notes that, if the APJ applies the law incorrectly, the courts can correct that. Lamken responds that court review is not sufficient because that is a different branch of government. /94
Lamken gets in a James Madison reference. I'm surprised it took this long for someone to mention a Founding Father. 95/
Kagan asks if it would be enough for the Director to be able to review under a "clear error" or "egregious error" standard. 96/
I'll note as an aside here that the vast majority of questions have focuses on the principal-versus-inferior-officer line, not the severability question. 97/
Kagan appears to be suggesting that Edmond blessed a very deferential standard of review ("competent evidence") and that Arthrex's argument about the primacy of review is difficult to square with that. 98/
Kagan also asks that, practically speaking, can't the Director usually get the result he wants in these cases? Lamken says no. 99/
Gorsuch asks Lamken to continue that line of thought, and Lamken takes advantage, arguing that the US and S&N are forced to come up with lots of strained and "contrived" ways to show that the Director can influence outcomes. 100/
Gorsuch now asks about severability: why isn't it enough to just sever the provision saying that only the Board itself can grant rehearing? 101/
Lamken says that this is only one of many options, and that it doesn't fix the problem anyway. 102/
Gorsuch is providing Lamken a good opportunity here to emphasize that choosing among the possible severability remedies here is not the proper task of a court--an argument which may resonate with some of the Justices who don't love the Court's severability doctrine. 103/
J Kavanaugh asks if Lamken agrees that the standard model of agency review in the APA is constitutional. Lamken says yes. 104/
But he emphasizes again that the PTAB's structure strays from the standard model. This goes back to a theme that was very prevalent in the questioning during Perry's argument. 105/
After a couple more merits questions, Kavanaugh turns to severability: he notes that the Court frowns on striking down statutes in their entirety. 106/
Justice Barrett follows up on this point. She asks if there is any situation in which the Court has ever chosen among multiple possible severability remedies. 107/
Lamken doesn't directly answer the question, but he re-emphasizes that this sort of "blue-penciling" is not the proper role of courts. 108/
Barrett now pivots back to the merits. She asks, isn't it odd to deem APJs principal officers just because they have authority to issue final decisions in this one narrow class of cases? 109/
Lamken again emphasizes, both in response and in his closing, that deciding cases is what APJs do, and they are not subject to sufficient supervision in this core function. 110/
Lamken's closing also emphasizes Arthrex's argument that Congress is the proper actor to fix the constitutional problem. 111/
Now Stewart (for the US) is up in rebuttal. 112/
Stewart takes on the analogy to the Supreme Court's certiorari jurisdiction, suggesting that the Director has similar authority through his ability to set forth binding policy guidelines (just like SCOTUS sets forth binding rules of law in its decisions). 113/
Stewart also notes that, as a practical matter, non-principal executive actors make effectively unreviewable (or at least un-doable) decisions all the time. 114/
And that's all for today! Predicting outcomes based on oral argument is always an extremely speculative business, and I would say that's particularly so here. Both sides received tough questions. 115/
Thank you for joining Sterne Kessler's inaugural #SCOTUS live-tweet! Stay tuned for further analysis of the argument and the eventual decision in this closely-watched case. I'll now turn the feed back over to the professionals :) #Arthrex #AppellateTwitter
• • •
Missing some Tweet in this thread? You can try to
force a refresh
