Fed Circuit en banc asserts jurisdiction over patent legal malpractice cases

In Byrne v. Wood, Herron & Evans, LLP the U.S. Court of Appeals for the Federal Circuit continued its wrong-headed assertion that legal malpractice claims arising from patent cases are in federal jurisdiction and must be reviewed by the Federal Circuit under its exclusive appellate jurisdiction over patent cases.  Judge O'Malley dissented:

It is time we stop exercising jurisdiction over state law malpractice claims.  I dissent from the court’s refusal to consider this matter  en banc so that the case law through which we have expanded the scope of our jurisdiction to these purely state law matters can be reconsidered and revamped.   

The reasons for O'Malley's dissent are obvious. Under Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 809 (1988), federal jurisdiction under 28 U.S.C. § 1338 exists if “the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.”
The Federal Circuit has exercised jurisdiction

when the adjudication of the malpractice claim requires the court to address the merits of the plaintiff’s underlying patent infringement lawsuit,”  Warrior Sports, Inc. v. Dickinson Wright, P.L.L.C., 631 F.3d 1367, 1371 (Fed. Cir. 2011), and when a “claim drafting error is a necessary element of the malpractice cause of action,”  Immunocept, LLC v. Fulbright & Jaworski, LLP, 504 F.3d 1281, 1285 (Fed. Cir. 2007).  

But the case within a case issue does not "resolve" any question of federal patent law.  It simply requires that a fact be proven: that the underlying case had merit and that the defendant attorney was negligent.  No patent law question is decided.  Based on this misunderstanding the Federal Circuit has preempted state law claims, arrogating to itself supervisory authority over lawyers who are licensed in the states.
The Federal Circuit asserts:

State court decisions imposing attorney discipline for conduct before the PTO and in federal patent litigation based on an incorrect interpretation of patent law are almost certain to result in differing standards for attorney conduct and to impair the patent bar’s ability to properly represent clients in proceedings before the PTO and in the federal courts. 

But as O'Malley argues:

“[T]he mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction.”   Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 813 (1986).  (1) the federal issue, even if present and disputed, is not “substantial”; and (2) exercising jurisdiction would upend the appropriate federal-state division of judicial labor.
As explained below, this court’s erroneous approach to both of those considerations has caused it to extend its jurisdiction improperly to patent-related malpractice claims. "

Dissenting, Judge O'Malley elaborates:

Federal Circuit case law on this issue has been out of  step with that of other federal and state courts.  In postGrable cases involving state law tort claims that involve any federal law other than patent law, courts correctly follow a restrictive approach to federal question jurisdiction in finding that such cases belong in state court.  Indeed, even where state law claims involve federal law questions over which federal courts have exclusive jurisdiction (e.g., Sherman Act, copyright), other areas of § 1338 jurisdiction (e.g., trademark, copyright), areas that are uniquely federal in nature (e.g., federal criminal law, federal tax code, aviation standards), or more gardenvariety federal issues (e.g., Title VII, Age Discrimination in Employment Act (“ADEA”)), courts consistently find that such claims do not invoke federal court jurisdiction.  

- GWC


'via Blog this'