Target Training International, Ltd v. Stanek Rea
Filing
15
Memorandum Opinion and Order granting 7 Motion to Dismiss; and granting 11 Second Motion to Dismiss. TTI's Amended Complaint is dismissed. Signed by Judge Mark W Bennett on 3/05/2014. (src)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
CENTRAL DIVISION
TARGET TRAINING
INTERNATIONAL, LTD.,
No. C 13-3057-MWB
Plaintiff,
vs.
MICHELLE K. LEE,1 Deputy Under
Secretary for Commerce for Intellectual
Property and Director of the United
States Patent and Trademark Office,
MEMORANDUM OPINION AND
ORDER REGARDING
DEFENDANT’S MOTIONS TO
DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION
Defendant.
___________________________
TABLE OF CONTENTS
I.
INTRODUCTION........................................................................... 3
A.
PTO Proceedings ................................................................... 3
B.
The Action For Judicial Review ................................................. 9
II.
APPLICABLE STANDARDS .......................................................... 11
A.
Dismissal For Lack Of Subject Matter Jurisdiction Or For
Failure To State A Claim? ...................................................... 11
B.
Rule 12(b)(6) Standards For Dismissal For Failure To State
A Claim ............................................................................. 16
III.
THE DIRECTOR’S MOTIONS TO DISMISS ...................................... 20
A.
Judicial Review Of The Rule 183 Decision .................................. 20
1.
Arguments of the parties ................................................ 20
1
On January 13, 2014, Ms. Lee assumed the duties and functions of the Under
Secretary of Commerce for Intellectual Property and Director of the USPTO, a position
that is currently vacant. Accordingly, she is substituted as the proper defendant in this
case, pursuant to Rule 25(d) of the Federal Rules of Civil Procedure, in the place of
Margaret Focarino, the former Commissioner of Patents, who was named as the
defendant in the plaintiff’s Amended Complaint (docket no. 8).
The § 701(a)(2) exception............................................... 22
a.
Regional or Federal Circuit law? ............................. 22
b.
Scope of the exception .......................................... 23
c.
Applications of the exception .................................. 26
3.
Applicability of the § 701(a)(2) exception to a Rule
183 decision ............................................................... 32
TTI’s Due Process Claim ....................................................... 39
1.
Arguments of the parties ................................................ 39
2.
Analysis .................................................................... 40
2.
B.
IV.
CONCLUSION ............................................................................ 43
A
patent holder has brought this action for judicial review of a determination
by the United States Patent and Trademark Office (PTO) that an alleged
infringer’s inter partes reexamination request was filed on the last day before the statute
authorizing such proceedings expired.
The patent holder argues that the alleged
infringer’s inter partes reexamination request was not filed until two days later, when the
alleged infringer’s “Corrected Certificate of Service” was actually filed with the PTO.
The Director of the PTO has moved to dismiss “for lack of subject matter jurisdiction”
pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. The Director argues
that the PTO’s determination of the filing date of the inter partes reexamination request
was pursuant to a patent rule allowing the PTO to waive requirements not imposed by
statute, but only by agency regulations, “in an extraordinary situation, when justice
requires.” See 37 C.F.R. § 1.183. The Director argues that a decision pursuant to this
rule falls within the exception to judicial review for a decision “committed to agency
discretion by law” in 5 U.S.C. § 701(a)(2) of the Administrative Procedures Act (APA).
2
I.
INTRODUCTION
A.
PTO Proceedings
Plaintiff Target Training International, Ltd., (TTI), an Iowa corporation with its
headquarters and principal place of business in Scottsdale, Arizona, is the assignee and
owner of United States Patent No. 7,249,372 (the ‘372 patent).2 According to allegations
in TTI’s Amended Complaint, TTI is embroiled in litigation in the United States District
Court for the Southern District of Texas with non-party Extended Disc North America,
Inc. (EDNA), a United States company, and EDNA’s franchisor, non-party Extended
DISC International, Inc. (EDI), a Finnish corporation. In that action, TTI alleges a claim
of contributory infringement of the ‘372 patent by EDNA, and claims of direct and
contributory infringement of the ‘372 patent by EDI.
2
Although the nature of the ‘372 patent does not enter into the parties’ present
dispute, I note in passing that the ‘372 patent or “Bonnstetter patent” is entitled “Network
Based Document Distribution Method,” and is described in the Abstract as follows:
A method of distributing documents includes the step of
displaying the documents on a web site. Responses to the
documents are accepted on the web site. After the responses
have been accepted, they are processed into a report and the
report is returned to an interested party. It is to be understood
that the surveys or other forms to be completed by users could
be filled out on paper manually and the results could then be
entered into a computer and sent to the web site. The reports
could be electronically transmitted, and/or hard copies sent
via mail, overnight, or through other modes.
Amended Complaint, Exhibit 1 (the ‘372 patent), Abstract.
3
EDI initiated an ex parte reexamination proceeding concerning the ‘372 patent
with the PTO on April 4, 2011. See, e.g., Amended Complaint (docket no. 8), Exhibit
2 (Decision on Appeal of EDI’s ex parte reexamination request). The agency proceeding
of interest here, however, is an inter partes reexamination (IPReex) proceeding
concerning the ‘372 patent that EDNA purportedly filed with the PTO on September 14,
2012, and identified in PTO filings as “the ‘2307 proceeding.” TTI argues that EDNA’s
IPReex Request was actually filed on September 16, 2012, because that was the date that
all parts of EDNA’s IPReex Request, including an adequate certificate of service, were
filed with the PTO. TTI alleges that the actual filing date of EDNA’s IPReex Request
was one day after the statute authorizing an IPReex proceeding expired and was replaced
with a new statutory scheme authorizing an inter partes review (IPR) proceeding.3
3
As the Federal Circuit Court of Appeals explained in Abbott Labs. v. Cordis
Corp., 710 F.3d 1318 (Fed. Cir. 2013),
In 2011, Congress replaced inter partes reexamination with a
new proceeding called inter partes review. See Leahy–Smith
America Invents Act (“AIA”), Pub. L. No. 112–29, § 6(a),
125 Stat. 284, 299–304 (2011), to be codified at 35 U.S.C.
§§ 311–319 (2013). The purpose of this reform was to
“convert[ ] inter partes reexamination from an examinational
to an adjudicative proceeding”. . . .
Abbott Labs., 710 F.3d at 1326. More specifically,
Unlike the prior inter partes reexamination proceeding, which
was accomplished largely through submissions before a PTO
examiner, IPR under the AIA is conducted before a panel of
three of the technically-trained administrative judges
comprising the Patent Trial and Appeal Board (“PTAB”).
Rensselaer Polytechnic Inst. v. Apple, Inc., No. 1:13–CV–0633 (DEP), 2014 WL
201965, *2 (N.D.N.Y. Jan. 15, 2014) (slip op.) (citing 35 U.S.C. § 6(a), (c)). As to
4
initiating such a proceeding,
A petition may be filed by anyone who is not the patent owner
as long as the petitioner has not filed a civil action challenging
the validity of the patent, the petition is filed less than one
year after the petitioner was served with a complaint alleging
infringement of the patent, or the petitioner is not estopped
from challenging the claims. 37 C.F.R. § 42.101
Endotach, L.L.C. v. Cook Medical, Inc., No. 1:13–cv–01135–LJM–DKL, 2014 WL
301498, *3 (S.D. Ind. Jan. 28, 2014) (slip op.).
The new IPR proceedings are conducted within a fairly tight timeframe:
Once an entity or person files a petition for IPR, the USPTO
has three months from the date the patent holder files a
response to the petition to decide whether or not to institute a
review proceeding. 35 U.S.C. § 314(b). . . . Generally, the
IPR process takes between eighteen months and two years to
complete, presuming there is no appeal. 35 U.S.C. §§ 314(b)
& 316(a)(11).
Endotach, L.L.C. v. Cook Medical, Inc., No. 1:13–cv–01135–LJM–DKL, 2014 WL
301498, *3 (S.D. Ind. Jan. 28, 2014) (slip op.).
A federal district court has observed, “IPR affords at least three advantages to the
parties and the district court in any corollary civil action”: (1) speedier resolution; (2)
“a more stringent standard [‘a reasonable likelihood that the petitioner would prevail with
respect to at least 1 of the claims challenged in the petition’] than the previous ‘substantial
new question of patentability’ and thus provides some assurance that the delay suffered
as a result of IPR will be worthwhile”; and (3) “IPR imposes an estoppel requirement
that precludes the petitioner from asserting invalidity, during a later civil action, ‘on any
ground that the petitioner raised or reasonably could have raised during that inter partes
review,’ 35 U.S.C. § 315(e)(2), [and] [t]his critical limitation results in a more
streamlined litigation and reduces the likelihood of inconsistent judgments.”
PersonalWeb Techs., L.L.C. v. Facebook, Inc., Nos.: 5:13–CV–01356–EJD; 5:13–CV–
01358–EJD; 5:13–CV–01359–EJD, 2014 WL 116340, *2 (N.D. Cal. Jan. 13, 2014)
5
More specifically, TTI alleges that EDNA filed its IPReex Request concerning the
‘372 patent pursuant to then-existing versions of 35 U.S.C. §§ 311 and 312, with a
separate “Certificate of Service” stating that service of the Request had been made on
TTI by first class mail on September 14, 2012. The Director states, in her brief in
support of her original Motion To Dismiss (docket no. 7-1), at 2, the PTO found in
administrative proceedings, see Amended Complaint, Exhibit 5 (decision on request for
reconsideration at 6), and TTI apparently does not dispute, that EDNA’s initial “service”
of its IPReex Request was actually by parcel post, but applicable regulations required
service by first class mail. TTI alleges that, on September 15, 2012, the PTO’s electronic
filing system indicated the electronic filing of a “Second Certificate of Service,” stating
that “a second copy of the Request” had been served by mailing a document (with a stated
tracking number) on September 14, 2012. On September 16, 2012, the PTO’s electronic
filing system indicated the electronic filing of a “Corrected Certificate of Service,” stating
that copies of EDNA’s IPReex Request had been served by first class mail on September
14, 2012. Consequently, TTI alleges that the PTO initially assigned EDNA’s IPReex
Request a filing date of September 16, 2012.
(slip op.); Endotach, L.L.C., 2014 WL 301498 at *3 (“The statute provides that the
USPTO will not grant the petition unless ‘there is a reasonable likelihood that the
petitioner would prevail with respect to at least 1 of the claims challenged in the
petition.’” (citing 35 U.S.C. § 314(a)). Also, “one of [the IPR proceeding’s] touted
‘improvements’ over the former proceeding is to allow the limited use of depositions,”
and others are that it allows discovery and authorizes “section 24 subpoenas.” Abbott
Labs., 710 F.3d at 1326 (citing H.R.Rep. No. 112–98, pt. 1, at 46–47 (2011), and AIA
§ 6(a), 125 Stat. at 302, to be codified at § 316(a)(5)(A)).
The present action for judicial review does not require me to determine what effect
the replacement of IPReex actions with IPR actions might have on the underlying patent
dispute between TTI and EDNA. Nevertheless, it is plain that whether or not EDNA
filed a timely IPReex action is of considerable importance to TTI.
6
TTI alleges, however, that, at some point, the PTO unilaterally, without notice,
and without explanation adjusted the records regarding EDNA’s IPReex Request to
reflect a filing date of September 14, 2012, the last day that the IPReex statute was in
force. Consequently, on November 14, 2012, TTI filed its first petition (a “Rule 181
Petition,” pursuant to 37 C.F.R. § 1.181) requesting that the PTO change the filing date
of EDNA’s IPReex Request from September 14, 2012, back to September 16, 2012. On
November 28, 2012, EDNA filed a petition opposing TTI’s “Rule 181 Petition.”
Amended Complaint, ¶¶ 37-40, Exhibit 3 (Decision On Petitions Under 37 CFR 1.181
at 2). On December 7, 2012, while TTI’s “Rule 181 Petition” was pending, the PTO
issued an order granting IPReex of the ‘372 patent in the ‘2307 proceeding. Id. at ¶ 47,
Exhibit 3 (Decision On Petitions Under 37 CFR 1.181 at 2). The Director of the PTO’s
Central Reexamination Unit eventually denied TTI’s “Rule 181 Petition” on June 5,
2013. Id. at ¶ 51, Exhibit 3 (Decision On Petitions Under 37 CFR 1.181 at 7).
On June 25, 2013, TTI filed a Request for Reconsideration of the June 5, 2013,
denial and decision. Id. at ¶ 55, Exhibit 4. On September 6, 2013, the Director of the
Central Reexamination Unit dismissed TTI’s Request for Reconsideration and maintained
the “reassigned” filing date of September 14, 2012. Id. at ¶ 61, Exhibit 5 (Decision On
Petitions Under 37 CFR 1.181 (decision on TTI’s Request for Reconsideration)). The
“Decision” section of the September 6, 2013, ruling stated the following, in its entirety:
Patent owner (petitioner) requests reinstatement of September
16, 2012 as the filing date of the request. Petitioner disputes
affording the Request a filing date of September 14, 2012
because the certificate of service through first class mail was
not received by the Office on the same day the service itself
was rendered. Petitioner argues that there is no authority in
the Rules that Reexamination Request[s] can be filed piecemeal at the Office and obtain a filing date that precedes the
last piece or part to be filed. Petitioner supports these
7
arguments with the language of 37 CFR § 1.915 and 37
CFR § 1.919.
It is agreed that Rule 915 requires third party requester to
include a certificate of service in the Request and that Rule
919 requires that all parts of the Request must be received by
the Office to afford a filing date.
However, it is not agreed that the Office lacks authority to
afford the ‘2307 proceeding a filing date of September 14,
2012. As stated in Rule 183, “[I]n an extraordinary situation,
when justice requires, any requirement of the regulations in
this part which is not a requirement of the statutes may be
suspended or waived by the Director or the Director’s
designee, sua sponte, or on petition of the interested party.”
The statue (35 USC 311) governing the filing for inter partes
reexamination does not require the filing of a certificate of
service with the Request. The filing and the manner of filing
the certificate of service are solely required by regulation. As
such, these requirements can be suspended or waived under
the authority and conditions set forth in Rule 183.
In the instant proceedings, the record is clear that patent
owner was serviced [sic], not once but twice, with the Request
on September 14, 2012. Specifically, patent owner was
initially serviced [sic] by way of parcel post through the USPS
(as evidenced by “SECOND CERTIFICATE OF SERVICE”
filed September 14, 2012) and served again by way of first
class mail through the USPS (as evidenced by
“CORRECTED CERTIFICATE OF SERVICE” filed
September 16, 2012). As such, the Office deemed, sua
sponte, under the authority of Rule 183 that justice required
the ‘2307 proceeding be afforded a filing date of September
14, 2012.
Accordingly, patent owner’s petition is dismissed.
Amended Complaint, Exhibit 5 (Decision On Petitions Under 37 CFR 1.181 (decision
on TTI’s Request for Reconsideration), 5-6 (emphasis in the original)).
8
B.
The Action For Judicial Review
TTI now seeks judicial review, pursuant to the Administrative Procedures Act
(APA), 5 U.S.C. §§ 701-06, of the PTO’s refusal to reinstate a filing date of September
16, 2012, for EDNA’s IPReex Request. In both its original Complaint (docket no. 1),
filed October 21, 2013, and its Amended Complaint (docket no. 8), filed January 9, 2014,
TTI asserts two causes of action. The first part of TTI’s first cause of action is for
judicial review of the PTO’s denial of TTI’s “Rule 181 Petition,” that is, the September
6, 2013, denial of TTI’s petition for reconsideration of the PTO’s determination of the
filing date of EDNA’s IPReex Request. TTI alleges that the PTO’s decision to change
the filing date of EDNA’s IPReex Request from September 16, 2012, to September 14,
2012, without notice to TTI, was contrary to TTI’s constitutional right to notice and due
process, was unlawful, and should be set aside under the APA, 5 U.S.C. § 706(2)(B).
In the second part of its first cause of action, TTI also alleges that the PTO’s refusal to
reinstate the September 14, 2012, filing date, based on the PTO’s authority under “Rule
183,” 37 C.F.R. § 1.183, was arbitrary, capricious, an abuse of discretion, and should
be set aside under the APA, 5 U.S.C. § 706(2)(A). TTI’s second cause of action is for
a stay of agency proceedings or decision on EDNA’s IPReex proceeding pending review
by this court of the PTO’s challenged determination of the filing date of EDNA’s IPReex
Request.
On December 23, 2013, in response to TTI’s original Complaint, the Director
filed a Motion To Dismiss (docket no. 7) “for lack of subject matter jurisdiction” pursuant
to Rule 12(b)(1) of the Federal Rules of Civil Procedure. In that Motion, the Director
asserted that this court lacks subject matter jurisdiction over TTI’s action for judicial
review, because the challenged agency decision is expressly “committed to agency
discretion by law” and, thus, unreviewable, pursuant to 5 U.S.C. § 701(a)(2). On
January 9, 2014, TTI filed both its Response To Defendant’s Motion To Dismiss Pursuant
9
To Federal Rule Of Civil Procedure 12(b)(1) (docket no. 9) and its Amended Complaint
(docket no. 8), which TTI filed as a matter of course pursuant to Rule 15(a)(1)(B). On
January 16, 2014, the Director filed a Reply (docket no. 10), in further support of its
Motion To Dismiss.
Also on January 16, 2014, out of concern that the filing of TTI’s Amended
Complaint had rendered moot her Motion To Dismiss, the Director filed her Second
Motion To Dismiss (docket no. 11). In her Second Motion To Dismiss, the Director
opined that the Amended Complaint did not appear to change materially the allegations
in TTI’s original Complaint and offered nothing in response to the Director’s original
Motion To Dismiss. Consequently, rather than file a duplicate Motion To Dismiss and
supporting brief as her Second Motion To Dismiss, the Director incorporated by
reference into her Second Motion To Dismiss her original Motion To Dismiss, supporting
brief, and Reply. On January 27, 2014, TTI filed its Opposition To Defendant’s Second
Motion To Dismiss (docket no. 12). In its Opposition, TTI explained that it had filed its
Amended Complaint “to correct certain informalities in citation of statutes and
regulations,” and expressly agreed with the Director’s opinion that the Amended
Complaint does not materially change the issues before the court on the Director’s
Motions To Dismiss.
Consequently, TTI also incorporated into its Opposition To
Defendant’s Second Motion To Dismiss all of the briefing and arguments in TTI’s
original Response To Defendant’s Motion To Dismiss.
In its Response To Defendant’s Motion To Dismiss and its Opposition To
Defendant’s Second Motion To Dismiss, TTI requests oral arguments on the Director’s
Motions To Dismiss. TTI argues that oral arguments would provide background on the
earlier litigation and PTO re-examination, significantly clarify the issues in this case, and
be helpful in assisting me in my decision. My crowded schedule does not allow for the
timely scheduling of oral arguments on the pending Motions To Dismiss.
10
More
importantly, I find that the pertinent issues are narrow legal ones on which oral arguments
and additional background on the earlier litigation and PTO re-examination are unlikely
to have any benefit. Therefore, the pending Motions To Dismiss are deemed fully
submitted on the parties’ written submissions.
II.
A.
APPLICABLE STANDARDS
Dismissal For Lack Of Subject Matter
Jurisdiction Or For Failure To State A
Claim?
As noted above, the Director’s Motions To Dismiss seek dismissal “for lack of
subject matter jurisdiction.” Subject matter jurisdiction is a “threshold question” of law
to be determined by the court. Herden v. United States, 726 F.3d 1042, 1046 (8th Cir.
2013). Because federal courts are courts of limited jurisdiction, “[i]t is to be presumed
that a cause lies outside this limited jurisdiction, and the burden of establishing the
contrary rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins.
Co., 511 U.S. 375, 377 (1994) (citations omitted); Jones v. United States, 727 F.3d 844,
846 (8th Cir. 2013) (noting that the burden of proving subject matter jurisdiction “may
not be shifted to another party”). For the same reason, “parties may not enlarge that
jurisdiction by waiver or consent.” United States v. Afremov, 611 F.3d 970, 975 (8th
Cir. 2010). To the contrary, “[o]nly Congress may determine a lower federal court’s
subject-matter jurisdiction.” Kontrick v. Ryan, 540 U.S. 443, 452 (2004) (citing U.S.
CONST., art. III, § 1).4
4
Article III subject matter jurisdiction—encompassing such matters as standing,
see, e.g., Iowa League of Cities v. EPA, 711 F.3d 844, 869 (8th Cir. 2013), and ripeness,
see, e.g., Kennedy v. Ferguson, 679 F.3d 998, 1001 (8th Cir. 2012)—clearly is not at
issue here.
11
The Director seeks dismissal of TTI’s action “for judicial review for lack of
subject matter jurisdiction” pursuant to Rule 12(b)(1) of the Federal Rules of Civil
Procedure, which authorizes such a pre-answer motion. FED. R. CIV. P. 12(b)(1). The
Director contends that this court lacks subject matter jurisdiction, because the PTO’s
determination to adjust the filing date of EDNA’s IPReex Request to September 14, 2012,
falls within the exception to judicial review for a decision “committed to agency
discretion by law” in 5 U.S.C. § 701(a)(2) of the APA.
The problem with this purported challenge to subject matter jurisdiction—albeit a
problem that was not addressed by either TTI or the Director—is that “[t]he APA does
not create federal subject matter jurisdiction. Rather, a federal court has federal question
jurisdiction under 28 U.S.C. § 1331 over challenges to federal agency action.” Iowa
League of Cities v. EPA, 711 F.3d 844, 840 n.10 (8th Cir. 2013) (concluding that federal
subject matter jurisdiction for the judicial review action in that case required a
determination of whether the action for judicial review had been filed within 120 days
from the date of “promulgation” of an effluent limitation under the Clean Water Act, as
required by 33 U.S.C. § 1369(b)(1), not based on the waiver of sovereign immunity for
suits seeking judicial review of agency actions made reviewable by statute in the APA, 5
U.S.C. § 704).
More specifically,
The APA is not an independent jurisdictional provision.
Califano v. Sanders, 430 U.S. 99, 105–06, 97 S.Ct. 980, 51
L.Ed.2d 192 (1977). The APA is a procedural statute that
provides no substantive requirements but merely provides the
framework for judicial review of agency action. Preferred
Risk Mut. Ins. Co. v. United States, 86 F.3d 789, 792 (8th
Cir.1996). The Supreme Court’s recent proscription against
“drive-by jurisdictional rulings” compels us to make this
distinction in the interest of facilitating the clarity sought by
the Court. Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, –
12
–––, 130 S.Ct. 1237, 1244, 176 L.Ed.2d 17 (2010) (quotation
omitted); see also Oryszak v. Sullivan, 576 F.3d 522, 524–25
(D.C.Cir.2009) (explaining that a federal court has
jurisdiction under 28 U.S.C. § 1331 to hear a claim under the
APA, but because the APA does not apply to agency action
committed to agency discretion by law, a plaintiff who
challenges such an action cannot state a claim under the APA
and the court will properly grant a motion to dismiss the
complaint for failure to state a claim). When a plaintiff
complains about an action that is committed to agency
discretion by law, it does not mean that a court lacks subject
matter jurisdiction over the claim. Instead, it means that there
is no law to apply because the court has no meaningful
standard against which to judge the agency’s unfettered
exercise of discretion. Heckler v. Chaney, 470 U.S. 821, 830,
105 S.Ct. 1649, 84 L.Ed.2d 714 (1985); Oryszak, 576 F.3d
at 526.
Ochoa v. Holder, 604 F.3d 546, 549-50 (8th Cir. 2010) (emphasis added). Thus, an
agency’s motion to dismiss an action for judicial review on the ground that the challenged
agency action is “committed to agency discretion by law,” and, as such, is excepted from
judicial review pursuant to § 701(a)(2) of the APA, is not a Rule 12(b)(1) challenge to
subject matter jurisdiction. Rather, it is a challenge to the plaintiff’s ability to state a
claim upon which relief can be granted. Id. (citing Oryszak, 576 F.3d at 524-25, for this
proposition).
The en banc decision of the Eighth Circuit Court of Appeals in Tamenut v.
Mukasey, 521 F.3d 1000, 1005 (8th Cir. 2008) (en banc), concerning the effect of
§ 701(a)(2) on review of agency action—on which both TTI and the Director relied in
their briefs—is not to the contrary. As a panel of the court subsequently explained in
Ochoa,
In Tamenut v. Mukasey, 521 F.3d 1000, 1005 (8th
Cir.2008) (en banc), we held that “the BIA’s decision whether
to reopen proceedings on its own motion under 8 C.F.R.
13
§ 1003.2(a) is committed to agency discretion by law” and is
thus unreviewable by an appellate court. In Tamenut, after
making this determination we concluded that we “lack[ed]
jurisdiction” over Tamenut’s challenge to the BIA and we
dismissed the petition accordingly. 521 F.3d at 1005. More
precisely, the dismissal in Tamenut, while the proper
disposition, was due to our inability to review an agency
action “committed to agency discretion by law” under
§ 701(a)(2) of the Administrative Procedure Act (APA), not
because we lacked jurisdiction. Id. at 1003.
Ochoa, 604 F.3d at 549 (emphasis added). Indeed, nowhere does the majority decision
in Tamenut refer to lack of “subject matter jurisdiction,” rather than simply to lack of
“jurisdiction,” or to Rule 12(b)(1) of the Federal Rules of Civil Procedure, as the basis
for dismissal.
Although the Director has relied on Rule 12(b)(1) and “lack of subject matter
jurisdiction,” rather than Rule 12(b)(6) and “failure to state a claim upon which relief
can be granted,” as the ostensible bases for her Motions to Dismiss, nowhere do her
arguments appear to turn on Rule 12(b)(1) standards rather than Rule 12(b)(6) standards.5
5
Where, as here, the movant limits a purported jurisdictional attack pursuant to
Rule 12(b)(1) to the plaintiff’s complaint, the motion is a “facial challenge” to subject
matter jurisdiction. Jones, 727 F.3d at 846 (citing BP Chems., Ltd. V. Jiangsu Sopo
Corp., 285 F.3d 677, 680 (8th Cir. 2002)). On a facial challenge, “‘the court restricts
itself to the face of the pleadings, and the non-moving party receives the same protections
as it would defending against a motion brought under Rule 12(b)(6).’” Id. (quoting
Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990)).
Yet, even on a Rule 12(b)(6) motion, in addition to factual allegations in the
complaint itself, the court may consider matters attached to, incorporated into, or
embraced by the complaint, and certain other matters, as explained more fully in the body
of this decision. Consideration of such matters on a Rule 12(b)(1) “facial” challenge to
subject matter jurisdiction is also consistent with Osborn v. United States, 918 F.2d 724
14
Rather, her entire argument turns on whether or not the “committed to agency discretion
by law” exception to judicial review in 5 U.S.C. § 701(a)(2) is applicable. The same is
true of TTI’s response.
Therefore, I will consider the Director’s Motions To Dismiss under appropriate
Rule 12(b)(6) standards, not under Rule 12(b)(1) standards. See Ochoa, 604 F.3d at 549.
(8th Cir. 1990), the seminal Eighth Circuit decision distinguishing between “facial” and
“factual” challenges to subject matter jurisdiction. See 918 F.2d at 729 n.6 (“A court
deciding a motion under Rule 12(b)(1) must distinguish between a ‘facial attack’ and a
‘factual attack.’”). In Osborn, the court explained:
[W]hen the district court’s decision to dismiss for lack of
subject matter jurisdiction is based on the complaint alone, or
on the complaint supplemented by undisputed facts evidenced
in the record, the appellate court’s review is “limited to
determining whether the district court’s application of the law
is correct and, if the decision is based on undisputed facts,
whether those facts are indeed undisputed.” [Williamson v.
Tucker,] 645 F.2d [404,] 413 [(5th Cir.), cert. denied, 454
U.S. 897 (1981)]. If the court relied, however, on its own
determination of disputed factual issues, the appellate court
must then review those findings under the “clearly erroneous”
standard. Id. See also Eaton v. Dorchester Development, Inc.,
692 F.2d 727, 732 (11th Cir.1982) (the clearly erroneous
standard governs findings of jurisdictional fact).
Osborn, 918 F.2d at 730 (emphasis added). Thus, it is a request to resolve disputed
factual issues, not whether the court considers matters attached to, incorporated into by
reference, or embraced by the complaint that distinguishes a “factual” challenge from a
“facial” challenge to subject matter jurisdiction under Rule 12(b)(1).
15
B.
Rule 12(b)(6) Standards For Dismissal
For Failure To State A Claim
Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a pre-answer
motion to dismiss for “failure to state a claim upon which relief can be granted.” FED.
R. CIV. P. 12(b)(6). As the Eighth Circuit Court of Appeals has explained,
We review de novo the district court’s grant of a
motion to dismiss, accepting as true all factual allegations in
the complaint and drawing all reasonable inferences in favor
of the nonmoving party. See Palmer v. Ill. Farmers Ins. Co.,
666 F.3d 1081, 1083 (8th Cir. 2012); see also Fed.R.Civ.P.
12(b)(6). “To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)
(internal quotation omitted). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id.
Richter v. Advance Auto Parts, Inc., 686 F.3d 847, 850 (8th Cir. 2012); accord Freitas
v. Wells Fargo Home Mortg., Inc., 703 F.3d 436, 438 (8th Cir. 2013) (quoting Richter,
686 F.3d at 850); Whitney v. Guys, Inc., 700 F.3d 1118, 1128 (8th Cir. 2012) (stating
the same standards).
Although factual “plausibility” is ordinarily the central focus of Rule 12(b)(6)
motions to dismiss under this Twom-bal standard,6 various federal Circuit Courts of
6
The “Twom-bal standard” is my nickname for the “plausibility” pleading
standard established in the United States Supreme Court’s twin decisions on pleading
requirements, and standards for dismissal for failure to state a claim upon which relief
can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for
claims in federal court. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct.
1955, 167 L.Ed.2d 929 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009).
16
Appeals have expressly recognized, and the Eighth Circuit Court of Appeals has
suggested, that the Twom-bal standard still permits dismissal pursuant to Rule 12(b)(6)
of a claim that lacks a cognizable legal theory, in addition to permitting dismissal for
factual implausibility. See, e.g., Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir.
2013); Ball v. Famiglio, 726 F.3d 448, 469 (3d Cir. 2013) (a claim may be dismissed if
it is based on an “indisputably meritless legal theory”); Commonwealth Property
Advocates, L.L.C. v. Mortgage Electronic Registration Sys., Inc., 680 F.3d 1194, 1202
(10th Cir. 2011) (“Dismissal is appropriate if the law simply affords no relief.”); see
also Philadelphia Indem. Ins. Co. v. Youth Alive, Inc., 732 F.3d 645, 649 (6th Cir. 2013)
(recognizing that a claim must plead sufficient facts under a “viable legal theory”); cf.
Brown v. Mortgage Electronic Registration Sys., Inc., 738 F.3d 926, 933 n.7, 934 (8th
Cir. 2013) (noting the appellate court’s agreement “with the district court’s sound
reasoning that the facts pled do not state a cognizable claim under Arkansas law” and
holding that dismissal pursuant to Rule 12(b)(6) was appropriate, because Arkansas law
did not impose the purported duty on which an unjust enrichment claim and a state
statutory claim were based). It is precisely the lack of a cognizable legal theory for
judicial review of an agency action “committed to agency discretion by law” pursuant to
§ 701(a)(2) that is the proper basis for the Director’s Motions To Dismiss in this case.7
7
In cases in which factual “plausibility” really is the determinative issue, courts
consider “plausibility” under the Twom-bal standard by “‘draw[ing] on [their own]
judicial experience and common sense.’” Whitney, 700 F.3d at 1128 (quoting Iqbal, 556
U.S. at 679). Also, courts must “‘review the plausibility of the plaintiff’s claim as a
whole, not the plausibility of each individual allegation.’” Id. (quoting Zoltek Corp. v.
Structural Polymer Grp., 592 F.3d 893, 896 n.4 (8th Cir. 2010)). The Eighth Circuit
Court of Appeals has refused, at the pleading stage, “to incorporate some general and
formal level of evidentiary proof into the ‘plausibility’ requirement of Iqbal and
Twombly.” Id. Nevertheless, the question “is not whether [the pleader] might at some
17
Nevertheless, further discussion of the factual “plausibility” standard under Twombal is illuminating here, because it clarifies what parts of the record I may properly
consider. In assessing “plausibility,” as required under the Twom-bal standard, the
Eighth Circuit Court of Appeals has explained that courts “consider[ ] only the materials
that are ‘necessarily embraced by the pleadings and exhibits attached to the complaint.’”
Whitney, 700 F.3d at 1128 (quoting Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4
(8th Cir. 2003)). Thus, courts may consider “‘materials that are part of the public record
or do not contradict the complaint.’” Miller v. Redwood Toxicology Lab., Inc., 688 F.3d
928, 931 (8th Cir. 2012) (quoting Porous Media Corp. v. Pall Corp., 186 F.3d 1077,
1079 (8th Cir. 1999), and citing Illig v. Union Elec. Co., 652 F.3d 971, 976 (8th Cir.
2011)). A more complete list of the matters outside of the pleadings that the court may
consider, without converting a Rule 12(b)(6) motion to dismiss into a Rule 56 motion for
summary judgment, pursuant to Rule 12(d), includes “‘matters incorporated by reference
or integral to the claim, items subject to judicial notice, matters of public record, orders,
later stage be able to prove [facts alleged]; the question is whether [it] has adequately
asserted facts (as contrasted with naked legal conclusions) to support [its] claims.” Id.
at 1129. Thus,
[w]hile this court must “accept as true all facts pleaded by the
non-moving party and grant all reasonable inferences from the
pleadings in favor of the non-moving party,” United States v.
Any & All Radio Station Transmission Equip., 207 F.3d 458,
462 (8th Cir. 2000), “[a] pleading that offers ‘labels and
conclusions’ or ‘a formulaic recitation of the elements of a
cause of action will not do.’” Iqbal, 556 U.S. at 678, 129
S.Ct. 1937 (quoting [Bell Atl. Corp. v.] Twombly, 550 U.S.
[544,] 555, 127 S.Ct. 1955 [(2007)]).
Gallagher v. City of Clayton, 699 F.3d 1013, 1016 (8th Cir. 2012); Whitney, 700 F.3d
at 1128 (stating the same standards).
18
items appearing in the record of the case, and exhibits attached to the complaint whose
authenticity is unquestioned.’” Miller, 688 F.3d at 931 n.3 (quoting 5B CHARLES ALAN
WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357 (3d ed.
2004)).
Here, some of the exhibits attached to the Director’s first Motion To Dismiss are
also attached to TTI’s Amended Complaint. Compare Director’s Motion To Dismiss
(docket no. 7), Exhibits F and G; with Amended Complaint, Exhibits 3 and 5. Other
exhibits attached to the Director’s first Motion To Dismiss are copies of documents filed
in the agency proceedings before the PTO and each is expressly referenced in TTI’s
Amended Complaint. Compare Director’s Motion To Dismiss (docket no. 7), Exhibits
A-E; with Amended Complaint, ¶¶ 32, 36, 37-39, 40-46. TTI also states in its Response
To Defendant’s Motion To Dismiss (docket no. 9) at 2, in which it asserts that the
Director is making only a “facial” challenge to subject matter jurisdiction, that the
exhibits attached to and referenced in the Motion To Dismiss “are not in dispute and are
not outside the pleadings.” TTI then argues that such documents embraced by the
pleadings, whose content is alleged in the Complaint and whose authenticity is not
challenged, may be considered, even if they are not physically attached to the pleading,
citing Ashanti v. City of Golden Valley, 666 F.3d 1148, 1151 (8th Cir. 2012), which
states Rule 12(b)(6) standards.
Thus, TTI does not dispute, and I conclude, that I may properly consider all of
the exhibits attached to the Amended Complaint and to the Director’s first Motion To
Dismiss in resolving the question of whether or not TTI’s action for judicial review fails
to state a claim upon which relief can be granted.
All of these documents are
“undisputed” and are “embraced” by the Amended Complaint. Whitney, 700 F.3d at
1128; Miller, 688 F.3d at 931 n.3.
19
III.
THE DIRECTOR’S MOTIONS TO DISMISS
Having established the appropriate basis and standards for the Director’s Motions
To Dismiss, I turn to the merits of those motions. In her Motions To Dismiss, the
Director seeks dismissal of TTI’s claim for judicial review of the PTO’s September 6,
2013, decision pursuant to Rule 183 under the APA on the ground that the challenged
decision is unreviewable under § 701(a)(2). She also contends that TTI’s “due process”
claim is not colorable, so that it cannot overcome the exception to judicial review pursuant
to the APA. I will consider these arguments in turn.
A.
1.
Judicial Review Of The Rule 183
Decision
Arguments of the parties
The Director argues that the PTO’s decision setting the filing date of EDNA’s
IPReex action pursuant to Rule 183 is unreviewable, because the APA does not authorize
judicial review of everything that an agency may do. Specifically, the Director argues
that the APA expressly excepts from judicial review agency actions that are “committed
to agency discretion by law” in 5 U.S.C. § 701(a)(2). She contends that § 701(a)(2) bars
judicial review when the language of a statute or regulation that the agency relied upon
employs such broad terms that there is no meaningful standard against which to judge the
agency’s exercise of discretion. She argues that, here, the PTO relied on its Rule 183
authority,8 which permits the agency to waive requirements imposed only by regulations,
8
Both parties have been sloppy in their references to “rules,” “sections,” and
“regulations.” Patent “Rule 183” is 37 C.F.R. § 1.183. Contrary to the parties’ frequent
references to “section 183,” there is no “section 183” in the pertinent regulations in Title
37 of the Code of Federal Regulations, nor is there any “§ 183” of the Patent Act, 35
U.S.C. § 1 et seq., that might be pertinent here.
20
not by statute, “[i]n an extraordinary situation, when justice requires,” to deem EDNA’s
IPReex Request as filed on September 14, 2012, rather than September 16, 2012, when
EDNA filed the “Corrected Certificate Of Service” that completed EDNA’s IPReex
Request. The Director argues that the “highly deferential” standard stated in Rule 183
is not materially different from standards that the Supreme Court and the Eighth Circuit
Court of Appeals have found to be sufficiently deferential to prohibit judicial review.
She points out that the Federal Circuit Court of Appeals has expressly held that Rule 183
is cast in discretionary terms. She argues that there is simply no basis for this court to
determine whether the challenged PTO decision concerning the filing date of EDNA’s
IPReex Request was arbitrary or capricious or otherwise reversible under the APA.
In response, TTI argues that there is a strong presumption that agency actions are
reviewable under the APA. TTI contends that, in deciding whether § 701(a)(2) excepts
a particular agency action from judicial review, a court must review whether the
challenged agency action is of the type that Congress intended to be left to a reasonable
exercise of agency expertise. Thus, TTI argues that a court should also assess the
particular nature of the decision in order to decide whether it is a “reasonable exercise of
agency expertise.” TTI asserts that the inquiry here is whether the PTO’s decision to
deny TTI’s “Rule 181 Petition” based on the PTO’s authority under Rule 183 is
discretionary, without standard or guidance, and intended to be left to a “reasonable
exercise of agency expertise.” TTI contends that it was not such a decision, however,
because it should have been guided by the standards set forth in the regulation, which
allow suspension of an agency regulation only in an “extraordinary situation, when justice
requires.” TTI argues that application of this standard to a regulation related to service
of process and notice is not an issue that requires deference to a “reasonable exercise of
agency expertise.” Rather, TTI argues that the court could easily assess whether or not
the agency’s decision is consistent with the “extraordinary situation, when justice
21
requires” standard. TTI then distinguishes decisions on which the Director relies on the
grounds that they did not actually involve determinations of whether application of Rule
183 was unreviewable pursuant to § 701(a)(2) or did not address Rule 183 at all. TTI
argues that rules for service of process and waiver of such rules are not so specific to the
PTO that they require the “reasonable exercise of agency expertise.”9
In reply, the Director argues that TTI has failed to rebut the grounds for dismissal
set forth in her Motions and brief. As to TTI’s new or unanticipated arguments, the
Director contends that TTI relies on overruled precedent when it asserts that the court
must consider whether the challenged decision involved “agency expertise” when
assessing the scope of the § 701(a)(2) exception. Thus, the Director reiterates that the
only question is whether the standard for the agency’s decision involved a “meaningful
standard against which a court could judge the agency’s exercise of its discretion.” The
Director argues that Rule 183 provides no such “meaningful standard” and states no
“objective criteria,” so that it leaves to the PTO’s discretion the determination of whether
an “extraordinary situation” exists and whether “justice requires” the waiver of
requirements not imposed by statute.
2.
The § 701(a)(2) exception
a.
Regional or Federal Circuit law?
To determine whether or not TTI’s action for judicial review is legally cognizable,
despite the § 701(a)(2) exception to judicial review, I must first examine the scope of that
exception. I note that the Federal Circuit Court of Appeals has recognized that district
9
Leaping prematurely to the merits, TTI also argues that the agency’s decision to
deny TTI’s “Rule 181 Petition” and to invoke the PTO’s power under Rule 183 to waive
requirements for service of process for an IPReex action is arbitrary and capricious, that
the PTO did not set forth any adequate basis for this decision, and that, upon review, it
is clear that the PTO’s decision runs afoul of the requirements of Rule 183.
22
court decisions in judicial review actions pursuant to the APA “are taken to the pertinent
regional circuit,” not to the Federal Circuit Court of Appeals. Doe v. United States, 372
F.3d 1308, 1312 (Fed. Cir. 2004). The Federal Circuit Court of Appeals has not clearly
stated that the law of the regional circuit, rather than Federal Circuit law, also applies to
such decisions, however. Here, the parties do not contend that Federal Circuit law is
controlling on the scope of the § 701(a)(2) exception, and I will assume that Eighth Circuit
law is controlling.
b.
Scope of the exception
The Eighth Circuit Court of Appeals, en banc, recognized that “[t]here is a ‘basic
presumption of judicial review’ of final agency action, but this presumption may be
overridden in certain circumstances.” Tamenut v. Mukasey, 521 F.3d 1000, 1003 (8th
Cir. 2008) (en banc) (internal citations omitted). The “certain circumstances” in which
the presumption of judicial review may be “overridden” are set out in 5 U.S.C. § 701(a)
of the APA. Id.
Section 701(a) provides as follows:
(a) This chapter applies, according to the provisions thereof,
except to the extent that—
(1) statutes preclude judicial review; or
(2) agency action is committed to agency discretion by
law.
5 U.S.C. § 701(a). “Even where a jurisdiction-stripping statute does not preclude review
of a particular agency action [pursuant to § 701(a)(1)], . . . [a court] must still consider
whether that agency action is ‘committed to agency discretion by law’ under § 701(a)(2)
of the APA.” Tamenut, 521 F.3d at 1003 (citing Heckler v. Chaney, 470 U.S. 821, 830
(1985)).
As the en banc court also explained,
23
The “committed to agency discretion” exception is a
“very narrow exception” that “is applicable in those rare
instances where ‘statutes are drawn in such broad terms that
in a given case there is no law to apply.’” Citizens to Preserve
Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct.
814, 28 L.Ed.2d 136 (1971) (quoting S.Rep. No. 79–752, at
26 (1945)), abrogated on other grounds by Califano v.
Sanders, 430 U.S. 99, 105, 97 S.Ct. 980, 51 L.Ed.2d 192
(1977). The Supreme Court has explained that “review is not
to be had if the statute is drawn so that a court would have no
meaningful standard against which to judge the agency’s
exercise of discretion.” Chaney, 470 U.S. at 830, 105 S.Ct.
1649. The application of the “committed to agency
discretion” exception to judicial review “requires careful
examination of the statute on which the claim of agency
illegality is based.” Webster v. Doe, 486 U.S. 592, 600, 108
S.Ct. 2047, 100 L.Ed.2d 632 (1988). In conducting this
examination, we consider “both the nature of the
administrative action at issue and the language and structure
of the statute that supplies the applicable legal standards for
reviewing that action.” Secretary of Labor v. Twentymile Coal
Co., 456 F.3d 151, 156 (D.C.Cir.2006) (internal quotation
omitted). The absence of any statutory factors to guide the
agency’s decision-making process, in combination with the
open-ended nature of the inquiry, generally supports the
conclusion that the “agency action is committed to agency
discretion by law.” 5 U.S.C. § 701(a)(2); see Southern Ry.
Co. v. Seaboard Allied Milling Corp., 442 U.S. 444, 455, 99
S.Ct. 2388, 60 L.Ed.2d 1017 (1979); State of North Dakota
v. Yeutter, 914 F.2d 1031, 1035 (8th Cir.1990).
Tamenut, 521 F.3d at 1003-04; accord Friends of the Norbeck v. U.S. Forest Serv., 661
F.3d 969, 975 (8th Cir. 2011).
Because the determination of whether a statute or regulation commits the
challenged agency decision “to agency discretion by law” turns on whether or not there
is sufficient guidance for the agency’s exercise of its discretion, “this limitation does not
bar judicial review if the agency has an established policy governing its exercise of
24
discretion.” Abdelwahab v. Frazier, 578 F.3d 817, 821 n.6 (8th Cir. 2009) (citing INS
v. Yang, 519 U.S. 26, 32 (1996)). Indeed, as the Supreme Court explained in Yang,
Though the agency’s discretion is unfettered at the outset, if
it announces and follows—by rule or by settled course of
adjudication—a general policy by which its exercise of
discretion will be governed, an irrational departure from that
policy (as opposed to an avowed alteration of it) could
constitute action that must be overturned as “arbitrary,
capricious, [or] an abuse of discretion” within the meaning of
the Administrative Procedure Act, 5 U.S.C. § 706(2)(A).
Yang, 519 U.S. at 32 (emphasis added); accord Liadov v. Mukasey, 418 F.3d 1003,
1010-11 (8th Cir. 2008). The Eighth Circuit Court of Appeals has also recognized that
“judicial review may be circumscribed ‘where a procedural rule is designed primarily to
benefit the agency in carrying out its functions.’” Abdelwahab, 578 F.3d at 821 n.6
(quoting Ngure v. Ashcroft, 367 F.3d 975, 983 (8th Cir. 2004)).
Conspicuous by its absence from these statements of the standards for
determination of whether or not an agency decision falls within the § 701(a)(2) exception
to judicial review is any reference to consideration of whether the matter at issue is one
that falls within “agency expertise,” the centerpiece of TTI’s argument that § 701(a)(2)
is inapplicable to its claim for judicial review. This is so, for the excellent reason that
the Eighth Circuit Court of Appeals has expressly rejected such a standard—which it
described as “the Tuepker ‘pragmatic considerations’ approach,” after Tuepker v.
Farmers Home Admin., 708 F.2d 1329, 1332 (8th Cir. 1983)—nearly a quarter century
ago in State of North Dakota ex rel Bd. Of Univ. and School of Lands v. Yeutter, 914
F.2d 1031, (8th Cir. 1990).10 In Yeutter, the Eighth Circuit Court of Appeals based its
10
In Yeutter, the court explained “the Tuepker ‘pragmatic considerations’
25
rejection of an “agency expertise” or “pragmatic considerations” standard on two
Supreme Court decisions: (1) the decision in Heckler v. Chaney, 470 U.S. 821, 830
(1985), in which the Supreme Court placed “emphasis on statutory language as the source
of law to apply” to a determination of whether or not the § 701(a)(2) exception applies;
and (2) the subsequent decision in Webster v. Doe, 486 U.S. 592, 599-601 (1988), which
the Eighth Circuit Court of Appeals concluded “cannot be read as confining [the
consideration of the language and structure of the pertinent statute or regulation]
specifically to agency refusals to take enforcement action, or in general to contexts in
which a presumption of nonreviewability would apply.” 914 F.3d at 1033-35. In Yeutter,
the court was “constrained to conclude . . . that Chaney and Webster together render the
Tuepker ‘pragmatic considerations’ approach invalid.” Id. at 1034-35.
c.
Applications of the exception
Turning from statements of the scope of the exception to examples of its
application, I begin, again, with the en banc decision of the Eighth Circuit Court of
Appeals in Tamenut. At issue in Tamenut was a regulation, 8 C.F.R. § 1003.2(a), that
allowed the Board of Immigration Appeals (BIA) to reopen proceedings on its own
approach” by quoting the following from Tuepker:
In determining reviewability of an agency’s actions, a court
must look at the allegations raised in the complaint, together
with the governing statutes and regulations, and determine:
(1) whether the challenged agency action is of the type
Congress intended be left to a reasonable exercise of agency
expertise; and (2) whether the problem raised is one suitable
for judicial determination. It is only then that a court can
sufficiently ascertain whether there is ‘law’ to apply within
the meaning of Overton Park.
Tuepker, 708 F.2d at 1332; Yeuter, 914 F.2d at 1034 (quoting Tuepker, 708 F.2d at
1332).
26
motion. 521 F.3d at 1002. Tamenut, an alien subject to a removal order, had filed an
application for asylum, but an immigration judge had denied that application. Id. The
BIA denied Tamenut’s first motion to reopen as untimely, so Tamenut filed a second
motion to reconsider and reopen, including a request that the BIA reopen the proceedings
on its own motion. Id. In response, “[t]he BIA acknowledged it retained ‘limited
discretionary powers’ under § 1003.2(a) to reopen proceedings on its own motion, but
stated that this power is confined to ‘exceptional situations,’ and concluded that
Tamenut’s situation did not merit this relief.” Id. (citing Matter of J–J–, 21 I & N Dec.
976 (BIA 1997)). Tamenut then filed a petition for judicial review, “arguing that the
BIA abused its discretion by declining to reopen sua sponte, and that the BIA’s decision
violated the Due Process Clause.” Id. A panel of the court indicated that, if there had
been no prior controlling circuit law, it would have concluded that it “lack[ed]
jurisdiction,” but held that the BIA’s refusal to reopen sua sponte was subject to judicial
review.
Id.
The en banc court granted rehearing “to consider the jurisdictional
question,” id. at 1003, that is, whether § 701(a)(2) excepted the BIA’s decision from
judicial review.
See Ochoa, 604 F.3d at 549-50 (explaining that the § 701(a)(2)
exception, if applicable, means that the plaintiff cannot state a claim for judicial review,
not that the court lacks subject matter jurisdiction over such a claim); see also, supra,
Section II.A., beginning on page 11.
The en banc court concluded that the BIA’s decision fell within the § 701(a)(2)
exception to judicial review:
The statute governing motions to reopen speaks only to
motions filed by a party; it does not establish any standard to
guide the agency’s discretion whether to reopen on its own
motion. See 8 U.S.C. § 1229a(c)(7). The regulation
establishing the BIA’s authority to reopen sua sponte was
promulgated pursuant to a general grant of regulatory
authority that sets no standards for this decision. See 8 U.S.C.
27
§ 1103(g). The regulation itself, 8 C.F.R. § 1003.2(a),
provides no guidance as to the BIA’s appropriate course of
action, sets forth no factors for the BIA to consider in deciding
whether to reopen sua sponte, places no constraints on the
BIA’s discretion, and specifies no standards for a court to use
to cabin the BIA’s discretion. See Interstate Commerce
Comm’n v. Brotherhood of Locomotive Eng’rs, 482 U.S. 270,
282, 107 S.Ct. 2360, 96 L.Ed.2d 222 (1987); South Dakota
v. Ubbelohde, 330 F.3d 1014, 1027 (8th Cir.2003) (stating
that the “committed to agency discretion” exception applies
only where statutes do not “provide even minimal guidance
to limit agency discretion”). The use of permissive and
discretionary language in the first sentence of § 1003.2(a)
further supports the inference that the agency action is
unreviewable. See Southern Ry., 442 U.S. at 456, 99 S.Ct.
2388; Association of Irritated Residents v. EPA, 494 F.3d
1027, 1032–33 (D.C.Cir.2007).
We are mindful that the BIA has said it may reopen
proceedings on its own motion in “exceptional situations,” In
re J–J–, 21 I & N Dec. at 984, and that agency decisions
about the presence of “exceptional circumstances,” a similar
phrase, are reviewable for abuse of discretion in some
contexts, such as where the phrase is further defined by statute
or regulation. See, e.g., 8 U.S.C. § 1229a(e)(1) (“The term
‘exceptional
circumstances’
refers
to
exceptional
circumstances (such as battery or extreme cruelty to the alien
or any child or parent of the alien, serious illness of the alien,
or serious illness or death of the spouse, child, or parent of
the alien, but not including less compelling circumstances)
beyond the control of the alien.”). We agree with other
circuits, however, that there is no statutory, regulatory, or
case-law definition of “exceptional situation” applicable to the
BIA’s sua sponte power under § 1003.2(a), e.g., Ekimian,
303 F.3d at 1159, and that the use of the permissive term
“may” in the regulation further implies that the BIA is under
no obligation to reopen any particular case. Enriquez Alvarado, 371 F.3d at 249–50. Assuming that a settled course
of adjudication could establish a meaningful standard by
28
which to measure the agency’s future exercise of discretion,
the mere fact that the BIA has acknowledged the existence of
its authority to reopen sua sponte in what it deems to be
“exceptional situations” is not sufficient to establish a
meaningful standard for judging whether the BIA is required
to reopen proceedings on its own motion. See Calle–Vujiles,
320 F.3d at 474–75. Therefore, we hold that the BIA’s
decision whether to reopen proceedings on its own motion
pursuant to 8 C.F.R. § 1003.2(a) is committed to agency
discretion by law.
Tamenut, 521 F.3d at 1004-05; see also Liadov, 518 F.3d at 1010-11 (also concluding
that the § 701(a)(2) exception was applicable).11
11
In the post-Tamenut decision in Liadov, the Eighth Circuit Court of Appeals
explored when agency-imposed limitations on the agency’s discretion permit judicial
review of an agency’s decisions, making § 701(a)(2) inapplicable. In Liadov, the court
considered whether judicial review was available for an agency’s decision under 8 C.F.R.
§ 1003.1(c), a “complementary” regulation to the one at issue in Tamenut, because it
permitted the BIA to self-certify an appeal of an order of removal. Liadov, 518 F.3d at
1005-06, 1010. In Liadov, the aliens had petitioned for asylum, but their petition was
denied, and they had filed only an untimely appeal. Id. at 1005-06. The court’s analysis
was as follows:
In In re J–J–, 21 I & N Dec. 976, 984 (BIA 1997), the
BIA stated that it has “limited” discretionary power to reopen
or reconsider cases on its own motion under § 1003.2(a), but
cautioned that this power “is not meant to be used as a general
cure for filing defects or to otherwise circumvent the
regulations.” In this case, the BIA relied on J–J in stating that
it may certify a case to itself under § 1003.1(c) in “exceptional
circumstances,” thus confirming that the two regulations
serve complementary purposes. Liadov, 23 I & N Dec. at
993. In addition to relying on the judicial “unique
circumstances” doctrine of Atiqullah, the Liadovs argue that
the BIA abused its discretion in refusing to apply its own
29
“exceptional circumstances” exception to excuse their
untimely filing. The government responds that we “lack
jurisdiction to review” the BIA’s refusal to certify this case to
itself under § 1003.1(c) because that decision is “committed
to agency discretion” and the regulation “provides no
meaningful standard” for measuring the agency’s exercise of
discretion. See generally 5 U.S.C. § 701(a)(2); Heckler v.
Chaney, 470 U.S. 821, 830, 105 S.Ct. 1649, 84 L.Ed.2d 714
(1985).
The en banc court recently reviewed a BIA order
refusing to exercise its discretion under 8 C.F.R. § 1003.2(a)
to reopen a proceeding sua sponte in response to an alien’s
untimely motion to reopen. Based upon (1) the total absence
of statutory standards, (2) the absence of meaningful guidance
for applying the “exceptional circumstances” standard in the
regulation to the variety of circumstances in which the BIA
may invoke or may be asked to invoke this discretionary
power, and (3) the absence of a “settled course of
adjudication” that could establish a meaningful standard, we
joined ten other circuits in holding that the order was an
unreviewable action committed to agency discretion by law.
Tamenut v. Mukasey, 521 F.3d 1000, 1004–05 (8th Cir.
2008).
In this case, we consider the BIA’s refusal to invoke 8
C.F.R. § 1003.1(c), the complementary self-certification
regulation, in response to the Liadovs’ timely motion to
reopen. The effect of this ruling is to bar judicial review of
the removal order because of the Liadovs’ failure to exhaust
this administrative remedy. Thus, the situation is different
than in Tamenut, where the alien’s right to judicial review of
the final order of removal had expired. Had the BIA declared
that the time limit in § 1003.38(b) is non-mandatory and
subject to an exception for “extraordinary circumstances,” we
would review whether its decision not to invoke the exception
in a particular case was arbitrary and capricious. See Lara v.
30
In contrast to Tamenut, which found that the § 701(a)(2) exception was applicable
to the agency decision in question, in Friends of Norbeck, the Eighth Circuit Court of
Appeals concluded that the § 701(a)(2) exception was not applicable. In Friends of
Norbeck, the challenge was to an agency decision pursuant to 16 U.S.C. § 675, which
Trominski, 216 F.3d 487, 497–98 (5th Cir.2000); Oberstar,
987 F.2d at 504; Union Flights, Inc. v. Administrator, FAA,
957 F.2d 685, 687–88 (9th Cir.1992). The review would be
conducted, not under the judicially-created “unique
circumstances” doctrine, but for abuse of the agency’s
discretion in applying its own exception to a non-mandatory
time limit. However, both the BIA and the Attorney General
have steadfastly maintained that the time limit is mandatory,
and the BIA’s reference to its self-certification authority in
this case was a reaction to the unwarranted judicial demand
for an exception imposed by Oh and Sun rather than a change
of agency position. Therefore, the refusal to self-certify may
not be reviewed on the ground that the agency itself treats the
appeal time limit as non-mandatory.
If the BIA continues to maintain that its appeal time
limit is mandatory but routinely considers whether to use its
self-certification authority to revive an untimely appeal
because of “extraordinary circumstances,” there might well
develop a “settled course of adjudication” that would provide
a meaningful standard and thereby make the agency’s refusal
to self-certify in this context judicially reviewable under the
Heckler v. Chaney line of cases. See Calle–Vujiles v.
Ashcroft, 320 F.3d 472, 475 (3d Cir.2003); see also INS v.
Yueh–Shaio Yang, 519 U.S. 26, 32, 117 S.Ct. 350, 136
L.Ed.2d 288 (1996). But there is no such settled course at this
time. Thus, under Tamenut, the BIA’s refusal to self-certify
was an unreviewable action committed to the agency’s
discretion.
Liadov, 518 F.3d at 1010-11.
31
provides that the Norbeck Wildlife Preserve “be set aside for the protection of game
animals and birds, and be recognized as a breeding place therefor.” 661 F.3d at 975
(citing § 675).
The court in Friends of Norbeck concluded that § 675 provided
“standards, albeit broad ones, for the Forest Service’s decisions with respect to game
animals and birds and guidance to the courts for evaluating those decision.”
Id.
Unfortunately, the court did not further explain where those standards—albeit broad
ones—for the Forest Service’s decision could be found in the statutory language. It did,
however, cite in support of its conclusion its prior decision in Sierra Club-Black Hills
Group v. U.S. Forest Service, 259 F.3d 1281, 1285 (8th Cir. 2001). See Friends of
Norbeck, 661 F.3d at 975. The pertinent part of the decision in Sierra Club-Black Hills
Group appears to be the court’s statement that, while the mandate of the National Forest
Management Act (NFMA) is “to optimize overall diversity, the Norbeck Organic Act
[(NOA)] specifically designates the Norbeck Wildlife Preserve more narrowly ‘for the
protection of game animals and birds and . . . as a breeding place there[for].’” 259 F.3d
at 1285 (quoting 16 U.S.C. § 675). I surmise that the standard placed on agency
discretion in 16 U.S.C. § 675 that made the § 701(a)(2) exception inapplicable to agency
decisions pursuant to that statute was the “narrow” purpose of protecting certain animals
(specifically, game animals and birds) and their breeding places, rather than protecting
all wildlife for all purposes.
3.
Applicability of the § 701(a)(2) exception to a Rule 183 decision
As the PTO pointed out in the decision that TTI challenges here, the statue that
formerly governed the filing for IPReex proceedings, 35 U.S.C. § 311 (effective
November 2, 2002, to September 14, 2012), does not require the filing of a certificate of
32
service with an IPReex Request.12 Rather, the requirements for filing an IPReex request,
including the payment of a fee and “[a] certification by the third party requester that a
copy of the request has been served in its entirety on the patent owner,” come from Patent
Rule 915(a), (b)(6), and (d). 37 C.F.R. § 1.915(a), (b)(6), and (d). Furthermore, Patent
Rule 919 establishes the filing date of a request for IPReex, as follows:
(a) The filing date of a request for inter partes reexamination
is the date on which the request satisfies all the requirements
for the request set forth in § 1.915.
(b) If the request is not granted a filing date, the request will
be placed in the patent file as a citation of prior art if it
complies with the requirements of § 1.501.
12
What the former version of § 311 did provide was the following:
§ 311. Request for inter partes reexamination
(a) In general.—Any third-party requester at any time may
file a request for inter partes reexamination by the Office of a
patent on the basis of any prior art cited under the provisions
of section 301.
(b) Requirements.—The request shall—
(1) be in writing, include the identity of the real party
in interest, and be accompanied by payment of an inter
partes reexamination fee established by the Director
under section 41; and
(2) set forth the pertinency and manner of applying
cited prior art to every claim for which reexamination
is requested.
(c) Copy.—The Director promptly shall send a copy of the
request to the owner of record of the patent.
35 U.S.C. § 311 (expired).
33
37 C.F.R. § 1.919. There is no dispute that the part of EDNA’s IPReex Request that
certified proper service on TTI was not filed with the PTO until September 16, 2012,
two days after EDNA filed the other parts of its IPReex Request.
The PTO nevertheless deemed ENDA’s IPReex Request filed as of September 14,
2012, relying on Patent Rule 183 as its authority to do so in the September 6, 2013,
agency decision that TTI challenges here. Rule 183, that is, 37 C.F.R. § 1.183, provides
for suspension of Patent Rules, as follows:
In an extraordinary situation, when justice requires, any
requirement of the regulations in this part which is not a
requirement of the statutes may be suspended or waived by
the Director or the Director’s designee, sua sponte, or on
petition of the interested party, subject to such other
requirements as may be imposed. Any petition under this
section must be accompanied by the petition fee set forth in
§ 1.17(f).
37 C.F.R. § 1.183 (emphasis added). Because the filing requirements for an IPReex
request in Rules 915 and 919 are not requirements of former 35 U.S.C. § 311, the
Director (or the Director’s designee, here, the Director of the Central Reexamination
Unit) had the authority to waive the requirements of Rules 915 and 919, if EDNA’s filing
of its IPReex Request presented “an extraordinary situation, when justice require[d]”
such a waiver. The question is, does Rule 183 involve a decision “committed to agency
discretion by law,” such that the agency’s September 6, 2013, reaffirmance of its decision
to deem EDNA’s IPReex Request filed on September 14, 2012, is excepted from judicial
review by § 701(a)(2) of the APA?
I have found no federal court decision, and the parties have cited none, considering
whether the exercise of the PTO’s discretion under Rule 183 is excepted from judicial
review pursuant to § 701(a)(2). Thus, in the first instance, I must apply the guidance on
34
the scope of the § 701(a)(2) exception provided by Tamenut and other decisions of the
Eighth Circuit Court of Appeals.
I must conduct a “careful examination of the statute [or in this case, regulation]
on which the claim of agency illegality is based,” considering “both the nature of the
administrative action at issue and the language and structure of the statute [or regulation]
that supplies the applicable legal standards for reviewing that action.” Tamenut, 521
F.3d at 1003-04 (internal quotation marks and citations omitted). The plain language of
Rule 183 allows the agency to waive non-statutory requirements in its regulations, sua
sponte or upon the petition of an interested party, and does not establish any standard to
guide the agency’s discretion concerning whether or not to do so. See 37 C.F.R. § 1.183.
Although Rule 183 states the nebulous standard, “[i]n an extraordinary situation, when
justice requires,” the regulation itself sets forth no factors for the PTO to consider in
deciding whether or not to waive requirements of a regulation, places no constraints on
the PTO’s discretion, and specifies no standards for a court to use to cabin the PTO’s
discretion. Id. at 1004. The use of the permissive and discretionary language, “may be
suspended or waived,” in Rule 183 further supports the inference that the agency action
pursuant to that rule is unreviewable. Id.
Like the en banc court in Tamenut, I am mindful that this regulation expressly
states that requirements imposed by regulation may be waived in an “extraordinary
situation,” and that agency decisions about the presence of “exceptional circumstances,”
a similar phrase, are reviewable for abuse of discretion in some contexts, such as where
the phrase is further defined by statute or regulation. Id. Like the court in Tamenut,
considering the BIA’s authority under 8 C.F.R. § 1003.2(a), however, I conclude that
there is no statutory, regulatory, or case-law definition of “extraordinary situation” that
is applicable to the PTO’s sua sponte power to waive requirements imposed by
regulations under Rule 183. Id. at 1004-05. Again, the use of the permissive term “may”
35
in the regulation further implies that the PTO is under no obligation to waive or refrain
from waiving any requirements imposed by regulation. Id. Here, the parties have
pointed to no “settled course of adjudication” that could establish a meaningful standard
by which to measure the PTO’s future exercise of discretion under Rule 183, and the
mere fact that Rule 183 gives the PTO such authority is not sufficient to establish a
meaningful standard for judging whether the PTO was required or prohibited from
waiving requirements imposed by regulation in any particular instance. Cf. id. at 1005.
Thus, the guidance of Tamenut leads me to the conclusion that a Rule 183 decision
is committed to agency discretion by law and, consequently, excepted from judicial
review by § 701(a)(2).
Both Liadov and Friends of Norbeck lead me to the same conclusion. As explained
in Liadov, if the PTO had declared that the filing requirements for an IPReex action in
Rules 915 and 919, including the filing of a certificate of service, were non-mandatory
and subject to an exception for “an extraordinary situation,” I would review whether the
PTO’s decision not to invoke that “extraordinary situation” exception in EDNA’s case
was arbitrary and capricious. 518 F.3d at 1011. Such a review would not be under some
judicially-created “extraordinary situation” or “exceptional circumstances” doctrine, but
for abuse of the PTO’s discretion in applying its own exception to a non-mandatory
requirement. Id. However, both Rule 915 and Rule 919 are cast in mandatory terms:
Rule 915 states requirements that “must” be met, see 37 C.F.R. § 1.915; and Rule 919
states that the filing date “is” the date on which the request satisfies all the requirements
for the request set forth in Rule 915, see 37 C.F.R. § 1.919. Thus, the PTO’s application
of Rule 183 to waive these requirements of Rules 915 and 919 cannot be reviewed on the
ground that the PTO itself treats these requirements as non-mandatory. Id. Furthermore,
the parties have not pointed to any evidence that the PTO treats the requirements of Rules
915 and 919 as mandatory, but routinely considers whether to use its Rule 183 authority
36
to waive those requirements, so that there is no evidence of a “settled course of
adjudication” of the “extraordinary situation, when justice requires” exception that would
provide a meaningful standard for judicial review. Id.
The situation here is also distinguishable from the situation presented in Friends
of Norbeck, in which the Eighth Circuit Court of Appeals held that the § 701(a)(2)
exception was not applicable. 661 F.3d at 975. The “extraordinary situation, when
justice requires” standard is not simply a broad standard that, nevertheless, provides
sufficient guidance for the PTO’s decisions pursuant to Rule 183 or to the courts for
evaluating those decisions, see id., it is a nebulous standard, inviting the exercise of
complete discretion by the PTO. There is no hint of a narrowing of the purpose of Rule
183, such as could be perceived in 16 U.S.C. § 675, the statute at issue in Friends of
Norbeck, because, while there is a purpose stated in Rule 183, “when justice requires,”
it is only a hortatory purpose, not a specific one, like protecting specific animals (game
animals and birds) and a breeding place for them. Compare id.; Sierra Club-Black Hills
Group, 259 F.3d at 1285.
These additional Eighth Circuit decisions lead me, again, to the conclusion that
the PTO’s decision to apply Rule 183 to adjust the filing date of EDNA’s IPReex Request
is committed to the agency’s discretion by law and, as such, is excepted from judicial
review by § 701(a)(2).
I have found, and the parties have pointed to, some additional federal court cases
considering whether agency decisions based on regulations or statutes permitting an
agency to do something in “extraordinary” or “exceptional” “circumstances” or
“situations,” but none considering agency authority to do something “when justice
requires.” Only one of those decisions requires any further comment here, Burandt v.
Dudas, 528 F.3d 1329 (Fed. Cir. 2008), which TTI contends supports its contention that
a Rule 183 decision is subject to judicial review.
37
In Burandt, the Federal Circuit Court of Appeals considered an appeal of a grant
of summary judgment for the PTO on judicial review of the PTO’s denial of Burandt’s
request for a waiver, pursuant to Rule 183, of a requirement under 37 C.F.R. § 1.378(b)
to show unavoidable delay in paying a maintenance fee that would allow the Director to
accept late payment. 528 F.3d at 1331-32. The pertinent part of the decision in Burandt
is the following:
Lastly, we disagree with Burandt that reversal is
warranted because the district court erred in sustaining the
denial of his Rule 183 petition. Burandt filed a petition under
37 C.F.R. § 1.183, which provides that:
In an extraordinary situation, when justice requires,
any requirement of the regulations in this part which is
not a requirement of the statutes may be suspended or
waived by the Director or the Director’s designee, sua
sponte, or on petition of the interested party, subject to
such other requirements as may be imposed.
37 C.F.R. § 1.183. The PTO denied Burandt’s request for
waiver upon concluding that a showing of unavoidable delay
is required under § 1.378 and thus that the fee cannot be
waived. There is no error in the PTO’s denial or in the district
court’s upholding of that denial. Section 183 is cast in
discretionary terms, providing that the Director may waive a
requirement. He did not waive the fee requirement here, and,
for the reasons stated above, we find no error with respect to
that decision.
Burandt, 528 F.3d at 1335-36. The problem with TTI’s reliance on Burandt as standing
for the proposition that PTO decisions pursuant to Rule 183 are subject to judicial review
is that Burandt simply did not address whether a Rule 183 decision falls within the
exception to judicial review in § 701(a)(2). Furthermore, because the applicability of the
exception to judicial review in § 701(a)(2) is not a matter of subject matter jurisdiction,
but a matter of whether or not a party has stated a claim for judicial review upon which
38
relief can be granted, see Ochoa, 604 F.3d at 549-50; see also, supra, Section II.A.,
beginning on page 11, there was no obligation for any party or the court in Burandt to
raise the possibility that § 701(a)(2) excepted the Rule 183 decision at issue from judicial
review.
Because the § 701(a)(2) exception to judicial review is applicable here to the PTO’s
decision to invoke Rule 183 to waive the requirements of Rules 915 and 919 and to deem
EDNA’s IPReex Request filed as of September 14, 2012, TTI’s claim for judicial review
lacks a cognizable legal theory. As such, it is dismissed for failure to state a claim upon
which relief can be granted pursuant to Rule 12(b)(6). See, e.g., Somers, 729 F.3d at
959; Ball, 726 F.3d at 469; Commonwealth Property Advocates, L.L.C., 680 F.3d at
1202; see also Philadelphia Indem. Ins. Co., 732 F.3d at 649.
B.
TTI’s Due Process Claim
TTI also alleges that the PTO’s decision to change the date of filing of EDNA’s
IPReex Request from September 16, 2012, to September 14, 2012, without notice to TTI,
was contrary to TTI’s constitutional right of notice and due process, was unlawful, and
should be set aside under the APA, 5 U.S.C. § 706(2)(B). The Director also seeks
dismissal of this claim.
1.
Arguments of the parties
The Director argues that, to overcome § 701(a)(2)’s bar to APA review of
discretionary agency action, a constitutional claim must be “colorable,” that is, have
“some possible validity,” and that parties should not be allowed to evade the § 701(a)(2)
exception by “cloaking an abuse of discretion argument in constitutional garb.” More
specifically, the Director contends that a due process claim is not colorable if the plaintiff
points to nothing that calls into doubt the fundamental fairness of the procedure employed.
The Director argues that TTI neither does nor could point to anything that calls into doubt
39
the fundamental fairness of the PTO’s Rule 183 decision, where TTI was allowed to
challenge the Rule 183 decision and to move to reconsider the initial denial of its
challenge. The Director also argues that TTI’s due process claim appears so peripherally
in its complaint that it is an afterthought that cannot escape the application of § 701(a)(2).
In response, TTI argues that its due process claim is based on the lack of notice,
which impaired its due process right to be heard. Here, TTI argues, EDNA’s failure to
serve TTI properly and the Director’s decision to waive such service requirements
deprived TTI of proper notice. TTI also argues that the agency’s decision to change the
filing date sua sponte improperly deprived TTI of notice, because TTI was not properly
served until after the IPReex statute had expired and the new IPR statute had gone into
effect. Further, TTI argues, the Director’s arbitrary and capricious decision to change
the filing date to comport with an ineffective date of service and to deny TTI’s Rule 181
petition to remedy that error, citing authority under Rule 183, when no one had even
asked for such relief, deprived TTI of proper notice, which is a fundamental principle of
the due process clause. Thus, TTI asserts that its due process claim is colorable.
The Director did not reply to TTI’s arguments that TTI’s due process claim is
colorable.
2.
Analysis
As with the standards for the scope of the § 701(a)(2) exception, the standards
applicable to the part of the Director’s Motions To Dismiss seeking dismissal of TTI’s
due process claim are set forth in the en banc decision of the Eighth Circuit Court of
Appeals in Tamenut. In that case, the court observed that, even where a claim for judicial
review of an agency decision may be excepted from review by § 701(a)(2), a court
“generally do[es] have jurisdiction over any colorable constitutional claim.” Tamenut,
521 F.3d at 1005. The court also explained that, “[t]o be colorable, a constitutional
claim must have ‘some possible validity.’” Id. (quoting Torres–Aguilar v. INS, 246 F.3d
40
1267, 1271 (9th Cir. 2001)). On the other hand, “contentions [that] simply ‘cloak[ ] an
abuse of discretion argument in constitutional garb’ . . . are . . . insufficient to justify
judicial review.” Id. (quoting Onyinkwa v. Ashcroft, 376 F.3d 797, 799 n.1 (8th Cir.
2004)). In Tamenut, where the due process clause guaranteed that removal proceedings
will be “fundamentally fair,” “Tamenut quarrel[ed] with the BIA’s fact-specific
discretionary decision whether to reopen his case, but he point[ed] to nothing that call[ed]
into doubt the fundamental fairness of the procedures employed.” Id. Thus, the court
rejected Tamenut’s due process claim. Id.
Like the alien in Tamenut, TTI quarrels with the agency’s discretionary decision,
here, the PTO’s decision pursuant to Rule 183 to waive the filing requirements of Rules
915 and 919 and to deem EDNA’s IPReex Request filed as of September 14, 2012. Thus,
to that extent, TTI’s due process claim is simply an attempt to cloak an abuse of discretion
argument in constitutional garb, and, to that extent, it is insufficient to justify judicial
review. Cf. id. TTI contends, however, that it has also pointed to matters in the record
that call into doubt the fundamental fairness of the procedures employed.
See
id. Specifically, TTI points to EDNA’s failure to serve TTI properly and the Director’s
decision to waive such service requirements without prior notice and without any request
from anyone to do so.
TTI cannot dispute, however, that it received notice of EDNA’s IPReex Request
that had been served on September 14, 2012, even if it did not receive notice that fully
complied with Rules 915 and 919. Rule 183 permits the PTO to waive requirements
imposed by regulations sua sponte, and TTI admits in its pleadings that it received notice
of the PTO’s sua sponte action to adjust the filing date of EDNA’s IPReex Request.
Thus, the crux of TTI’s claim of a due process violation is that it was fundamentally
unfair because TTI did not receive prior notice of and a pre-decision opportunity to be
heard on the PTO’s sua sponte adjustment of the filing date of EDNA’s IPReex Request.
41
Assuming, without deciding, that TTI has an interest protected by due process,
see, e.g., Board of Regents v. Roth, 408 U.S. 564, 569–70 (1972) (“The requirements
of procedural due process apply only to the deprivation of interests encompassed by the
[Fifth] Amendment’s protection of liberty and property” and “the range of interests
protected by procedural due process is not infinite.”), a due process claim necessarily
involves the question of what process is due. Business Commc’ns, Inc. v. U.S. Dep’t of
Educ., 739 F.3d 374, 380 (8th Cir. 2013) (citing Morrissey v. Brewer, 408 U.S. 471,
481 (1972)).
As the Eighth Circuit Court of Appeals has explained, “Required
procedures may vary according to the interests at stake, but ‘[t]he fundamental
requirement of due process is the opportunity to be heard ‘at a meaningful time and in a
meaningful manner.’” Id. (quoting Mathews v. Eldridge, 424 U.S. 319, 333 (1976), in
turn quoting Armstrong v. Manzo, 380 U.S. 545, 552 (1965)). Due process may be
satisfied by adequate proceedings either pre-deprivation or post-deprivation. Id. at 38083; see also Buckingham v. Secretary of USDA, 603 F.3d 1073, 1082 (9th Cir. 2010)
(“[P]rocedural due process does not require that the notice and opportunity to be heard
occur before the deprivation.” (citing Parratt v. Taylor, 451 U.S. 527, 540 (1981),
overruled in part on other grounds by Daniels v. Williams, 474 U.S. 327 (1986)).
Here, TTI has pointed to nothing in its pleadings or its arguments demonstrating
that—in the circumstances of this case and in view of whatever interest TTI may have
that is protected by due process and impinged by the determination of the filing date of
EDNA’s IPReex Request—due process required prior notice of and a pre-decision
opportunity to be heard on the PTO’s sua sponte adjustment of the filing date of EDNA’s
IPReex Request. Furthermore, TTI admits in its pleadings that it had post-deprivation
opportunities to challenge the PTO’s sua sponte adjustment of the filing date of EDNA’s
IPReex Request. See Business Commc’ns, Inc., 739 F.3d at 380-83 (due process may be
satisfied by pre- or post-deprivation proceedings); accord Buckingham, 603 F.3d at 1082
42
(due process does not require pre-deprivation notice and proceedings). TTI availed itself
of those opportunities, not once, but twice, in its Rule 181 Petition and its petition for
reconsideration of the initial denial of its Rule 181 Petition. TTI challenges nothing about
those post-deprivation proceedings as “fundamentally unfair” except the ultimate
decision. In short, even to the extent that TTI attempts to state a due process claim based
on fundamental unfairness, it has done nothing more than “‘cloak[ ] an abuse of discretion
argument in constitutional garb,’” which is “insufficient to justify judicial review.”
Tamenut, 521 F.3d at 1005 (quoting Onyinkwa, 376 F.3d at 799 n.1). To put it another
way, the pleadings give rise to no plausible inference of unfairness nor do they call into
doubt the fundamental fairness of the procedures employed, id. at 1005, and they give
rise to no plausible inference that the agency action that TTI challenges violated TTI’s
due process rights. See Freitas, 703 F.3d at 438 (Rule 12(b)(6) standard); Whitney, 700
F.3d at 1128 (same); Richter, 686 F.3d at 850 (same).
Because TTI has stated no colorable due process claim, that is, a claim with some
possible validity, as it must to afford judicial review of agency action, see Tamenut, 521
F.3d at 1005, the Director’s Motions To Dismiss are granted as to that claim, as well.
IV.
CONCLUSION
Notwithstanding that the Director cited the wrong subsection of Rule 12(b) of the
Federal Rules of Civil Procedure as the basis for her Motions To Dismiss, it is plain that
TTI has failed to state claims upon which relief can be granted. TTI’s claims for judicial
review are excepted from judicial review by § 701(a)(2) of the APA, because the
challenged action was “committed to agency discretion by law.” TTI’s due process claim
is not colorable, so that it does not afford judicial review of the challenged agency action.
Because TTI’s claims for judicial review and violation of due process fail to state claims
43
upon which relief can be granted, TTI’s cause of action for a stay of agency proceedings
pending disposition of this action is moot.
THEREFORE, upon the foregoing, the Director’s December 23, 2013, Motion
To Dismiss (docket no. 7), and her January 16, 2014, Second Motion To Dismiss (docket
no. 11), construed as motions to dismiss for failure to state claims upon which relief can
be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, are
granted, and TTI’s Amended Complaint is dismissed.
IT IS SO ORDERED.
DATED this 5th day of March, 2014.
______________________________________
MARK W. BENNETT
U.S. DISTRICT COURT JUDGE
NORTHERN DISTRICT OF IOWA
44
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