by Dennis Crouch
Minkin v. Gibbons P.C (Fed. Cir. 2012)
In yet another malpractice action, the Federal Circuit has granted itself jurisdiction and ruled in favor of the law firm defendant (here, Gibbons). Attorney malpractice is normally a state-law cause of action brought in state court. However, the Federal Circuit has increasingly claimed appellate jurisdiction over these cases based upon its arising under jurisdiction.
Federal Circuit Appellate Jurisdiction. As amended in the AIA, 28 U.S.C. § 1295 defines the Federal Circuit's appellate jurisdiction to include “exclusive jurisdiction” over “an appeal from a final decision” in “a civil action arising under . . . any Act of Congress relating to patents.”
The new statute overrules Holmes Group, Inc., v. Vornado Air Circulation Systems, Inc. 535 U.S. 826 (2002). In that decision, the Supreme Court held that the existence of a patent law issue in a counterclaim is insufficient to create Federal Circuit jurisdiction. The revised statute makes clear that the Federal Circuit has exclusive jurisdiction over appeals that only raise patent issues in “a compulsory counterclaim.”
The new statute does not change the “arising under” language itself. The Supreme Court interpreted that language in Christianson v. Colt Industries Operating Corp., 486 U.S. 800 (1988). In Christianson, the court wrote that the Federal Circuit's jurisdiction extended only to those cases in which a well-pleaded complaint established either (1) that the federal patent law created the cause of action or (2) that the plaintiff's right to relief necessarily depended upon resolution of a “substantial question of federal patent law.” (New statute is no longer bound by a “complaint.”).
In non-patent cases, the Supreme Court has placed some limitations on the exercise of arising under jurisdiction when the underlying cause of action is – as here – a state law claim. In Grable & Sons Metal Products v. Darue Eng'g, 545 U.S. 308 (2005), the court explained that the exercise of jurisdiction over state-law claims with an embedded issue of federal law should occur only when the state-law claim contains a federal issue that is “disputed” and “substantial,” and when the exercise of federal jurisdiction is “consistent with congressional judgment about the sound division of labor between state and federal courts.” Grable made clear that the mere presence of a disputed federal question is insufficient to create federal jurisdiction. Rather, a court must also assess “any disruptive portent in exercising federal jurisdiction.” This sentiment was repeated by the Court in the later case of Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 701 (2006) (“it takes more than a federal element ‘to open the ‘arising under’ door”).
In this case, the Gibbons firm handled prosecution of Minkin's U.S. Patent No. 6,012,363 (Extended Reach Pliers). Soon after Minkin went to market, one of his customers designed its own version of the device that avoided Minkin's patent claim. Minkin then sued Gibbons for negligence – arguing that the claims offered no meaningful protection for Minkin's invention. At trial expert witness Richard Gearhart presented an alternative claim that was arguably patentable. Because Gearhart did not present a patentability analysis under Section 103(a), the district court rejected the evidence as insufficient and awarded summary judgment for the law firm. On appeal, the Federal Circuit affirmed that finding. “We find that the 37-page Gearhart report contains nothing to assist the trier of fact with respect to the unique tests and proofs of § 103(a), and provides no insight into the question of whether the alternate claims would ultimately have been allowed by the PTO.”
Regarding Jurisdiction, the Federal Circuit noted that the malpractice claim (under N.J. Law) requires that the plaintiff prove that better representation would have resulted in a better outcome. Here, that proof requires analysis of patentability of a hypothetical claim and thus raises substantial a question of Patent Law and therefore the case falls within the exclusive jurisdiction of the Federal Circuit.
Writing in concurrence, Judge O'Malley again repeated her call for an en banc rehearing on the issue of jurisdiction.