[00:00:08] Speaker 04: We have a couple of changes that we want to make with respect to arguments this morning. [00:00:16] Speaker 04: We have four cases, SIF argument. [00:00:19] Speaker 04: One case is on the briefs. [00:00:25] Speaker 04: And as you know, this morning we reordered the argument so that both Polaris cases will be heard first, one after the other. [00:00:34] Speaker 04: The panel would like to have counsel limit their argument this morning to the constitutionality of the appointment of PTAC judges to that issue and not on the merits. [00:00:49] Speaker 04: And given that the parties are the same and council's pretty much the same, we'd like to hear that argument once. [00:00:55] Speaker 04: So both Polaris cases on that issue will be heard now. [00:01:00] Speaker 04: I'm gonna give you the same amount of time, 15 minutes per side, but of course it's an important issue, so if you require more time, I'll judge that as we go along and act accordingly. [00:01:13] Speaker 04: You will have to divide your time and let me know how much you want for rebuttal. [00:01:17] Speaker 04: And if you want to take a couple of seconds to confer on that issue. [00:01:23] Speaker 01: I'd like to reserve five minutes, Your Honor. [00:01:25] Speaker 04: Five minutes? [00:01:27] Speaker 04: Okay. [00:01:28] Speaker 04: Are we all set? [00:01:30] Speaker 04: All right, let's get going then. [00:01:47] Speaker 01: May it please the Court? [00:01:49] Speaker 01: I'd like to begin, if I may, obviously I'm happy to answer any questions the Court has, on discussing what I think the impact of the Arthrex decision is and why this Court should not follow the suggestion of Kingston and the government to hold this decision in abeyance, awaiting the issuance of the mandate in Arthrex. [00:02:12] Speaker 05: Well, how can we? [00:02:13] Speaker 05: I mean, to mandate, the Arthrex decision doesn't even apply until it mandates, does it? [00:02:21] Speaker 01: I've been looking at that. [00:02:22] Speaker 05: I mean, isn't that black-letter law that it's... I mean, certainly we are bound to follow it, but... That's my point. [00:02:28] Speaker 05: But it can't be sent back... Arthrex can't be sent back to the board until it mandates. [00:02:35] Speaker 05: Wouldn't it be really odd for us to send stuff back to the board before the lead case mandates? [00:02:42] Speaker 05: Let me just ask you a practical question, because my guess is this is what's going to happen if we send it back, and this is why the government's urging us not to do it. [00:02:49] Speaker 05: They are probably now considering, I'm sure they're considering whether to file a petition for re-registering on block, and that takes a lot of time, and the Justice Department has to go to the Solicitor General's office, and so they're going to do that. [00:03:02] Speaker 05: If we send this back, [00:03:04] Speaker 05: then they're going to end up filing a petition here too and doing the same exact thing. [00:03:09] Speaker 05: So why make everybody waste time filing multiple petitions? [00:03:13] Speaker 01: I understand the court's question. [00:03:15] Speaker 01: And just as this case would not go back until its mandate issues, [00:03:21] Speaker 01: That's the same with Arthrex and here. [00:03:23] Speaker 01: So you're not going to be sending this one back because the bandwidth. [00:03:26] Speaker 05: Exactly. [00:03:26] Speaker 05: But that's why I just ask you, why are we going to waste anybody's time? [00:03:30] Speaker 05: Because the government, if it chooses to file a petition for rehearing on bog, it's not going to let you go in this case and only do it in Arthrex. [00:03:37] Speaker 05: And so not only are they going to file petitions for rehearing, it's easy for them. [00:03:41] Speaker 05: They have to file one and copy it a half dozen times. [00:03:44] Speaker 05: You all have to spend your client's money responding to it in different cases. [00:03:48] Speaker 01: There's one very, very good reason. [00:03:50] Speaker 01: And that is because the Arthrex case is not a vehicle to raise the second of the two main issues it raises. [00:03:56] Speaker 01: The Arthrex case decision raises two large issues. [00:04:01] Speaker 01: One is of course the constitutionality of the current arrangement. [00:04:05] Speaker 01: The second is the efficacy of the cure that the Arthrex decision [00:04:11] Speaker 01: chose. [00:04:13] Speaker 01: The Arthrex case is not a vehicle for that appeal because all, as the Arthrex decision noted, all parties in that case agreed that the court's solution would work, that it would cure the constitutional deficiency. [00:04:28] Speaker 01: In this case, that's not true. [00:04:30] Speaker 01: We do not agree that the Arthrex cure solves the problem for two reasons. [00:04:36] Speaker 05: Well, I don't understand how that [00:04:38] Speaker 05: has any difference about whether we send it back now or not, because we're bound by Arthrex. [00:04:43] Speaker 01: You are bound by Arthrex, but we would file a petition for rehearing on Bonk. [00:04:47] Speaker 05: OK. [00:04:47] Speaker 01: And that petition for rehearing would raise two issues. [00:04:50] Speaker 01: And the Arthrex petition could only raise one, because all of the parties have previously taken a position as the ethics. [00:04:56] Speaker 05: Let me ask you this. [00:04:57] Speaker 05: Arthrex, I think it's clear, did not raise a constitutional challenge to the board. [00:05:02] Speaker 05: And there are some, I think, in the Fifth Circuit on Bonk case, they relied [00:05:07] Speaker 05: heavily on some of the cases finding that that didn't happen to provide no relief whatsoever. [00:05:14] Speaker 05: Did you raise this constitutional challenge to the board or did you raise it for the first time here? [00:05:18] Speaker 01: In 1831 it was raised before the board and in 1768 it was not. [00:05:23] Speaker 01: So that means, at least as to 1831, and I would argue we agree with the Arthrex decision about why you would not find a waiver for all the reasons that they laid out. [00:05:34] Speaker 05: Well, I get that. [00:05:35] Speaker 05: But isn't there's a difference? [00:05:36] Speaker 05: It seems to me when the Fifth Circuit was looking at it, they were looking at it in two different ways. [00:05:40] Speaker 05: Clearly, an appellate court can always reach an issue, even if they'd normally apply waiver, if they have a good reason for it. [00:05:48] Speaker 05: But I think they weren't just looking at the waiver doctrine. [00:05:51] Speaker 05: They were looking at whether you were entitled to a remedy or not if you raised it too late. [00:05:56] Speaker 01: And as to the too late point, I think the Arthrox decision answers that as well, which is this court is the first opportunity for relief. [00:06:05] Speaker 01: And that decision, I believe, is a correct one as a matter of law. [00:06:08] Speaker 05: Well, isn't that true in Lucia as well? [00:06:11] Speaker 05: I mean, Lucia, you can't say to the officer, you're unconstitutionally appointed, don't roll on this. [00:06:17] Speaker 05: Isn't that a fundamental baseline of administrative law? [00:06:23] Speaker 01: I'm not aware of a finding by... The answer is different depending on what the remedy is and what the board is. [00:06:30] Speaker 05: And here... Well, sure, the answer is always different. [00:06:33] Speaker 05: But the general rule, as I understand it, is if it's a constitutional challenge to the structure or the appointment or the like, the administrative body just can't declare itself unconstitutional. [00:06:44] Speaker 05: I agree with that. [00:06:45] Speaker 05: They can rule on... [00:06:47] Speaker 05: As applied constitutional challenge, I think there's all kinds of cases like that. [00:06:51] Speaker 05: And that's the problem we have here, certainly. [00:06:53] Speaker 05: I don't think the PTAB could declare itself unconstitutional. [00:06:56] Speaker 05: It's the problem. [00:06:57] Speaker 05: But it's the same problem in Luqi and some of those other cases that the Fifth Circuit was talking about. [00:07:02] Speaker 01: My point here is that it would be most helpful to the court through the en banc process. [00:07:08] Speaker 05: To let you file an en banc petition too. [00:07:10] Speaker 01: Because we can raise what may ultimately be the more important of the two issues, which is whether the constitutional cure works. [00:07:17] Speaker 01: And it's our view that it does not. [00:07:19] Speaker 01: When do we get to that issue? [00:07:22] Speaker 01: Thank you. [00:07:24] Speaker 01: The second issue is whether the cure works. [00:07:27] Speaker 01: And in my view, it does not work for two reasons. [00:07:29] Speaker 01: One is, I think there's a serious question as to whether the court has the judicial power to rewrite the statute to the extent that it did. [00:07:39] Speaker 01: I recognize the fuzziness of the test that that implies. [00:07:43] Speaker 01: It often depends on what you speculate the Congress would have liked. [00:07:47] Speaker 05: But isn't this, I mean, this seems to me to be not a great argument for you because when various courts have faced various appointment clause problems with inferior officers because they are [00:08:00] Speaker 05: removal provisions were too restrictive, this is exactly what a bunch of other courts have done. [00:08:05] Speaker 05: This is not a sticking out new territory, is it? [00:08:07] Speaker 01: So I think it is. [00:08:10] Speaker 01: The intercollegiate case is the only one I'm aware of. [00:08:13] Speaker 01: I can't say that it's the only one, but it's the only one I'm aware of where there was no form of review within the executive branch. [00:08:21] Speaker 01: If you look at First Enterprise Fund, that had some form of review as well. [00:08:27] Speaker 01: So there was a combination of the two. [00:08:29] Speaker 01: And my view is, and this goes to the second reason that I think the cure from the Arthrox decision is not sufficient, is that while this court followed the guidance of the D.C. [00:08:40] Speaker 01: Circuit in their collegiate, [00:08:42] Speaker 01: I think it's inconsistent with the guidance from the Supreme Court in Edmonds, Free Enterprise Fund, all of which say that the key issue on the distinction between a principal officer and an inferior officer is, is that officer rendering a final decision above the executive branch? [00:09:01] Speaker 01: That's the language from Edmunds. [00:09:03] Speaker 01: That's the holding from free enterprise funding. [00:09:05] Speaker 05: Wait. [00:09:05] Speaker 05: I think I'm misunderstanding what you're getting at. [00:09:08] Speaker 05: I thought you were going to argue that the fix was improper because it wasn't consistent with the intent of Congress. [00:09:15] Speaker 05: You're arguing that the fix doesn't go far enough. [00:09:18] Speaker 01: I'm arguing both. [00:09:19] Speaker 01: I did the first one first and the second one second. [00:09:21] Speaker 01: So the first one, I believe, there's a serious issue that hasn't been briefed, really. [00:09:27] Speaker 01: about the extent of the court's power to rewrite that statute. [00:09:31] Speaker 01: And as I said earlier, I recognize that. [00:09:32] Speaker 05: Sure, but that's the easier question. [00:09:34] Speaker 01: I agree. [00:09:35] Speaker 05: There's all the precedent that says, look and see whether Congress would rather have the scheme without the employment restriction or not. [00:09:42] Speaker 05: And I would move on to your second point, because I think that's a harder one. [00:09:46] Speaker 01: I agree. [00:09:47] Speaker 01: I wouldn't use the word rewrite. [00:09:49] Speaker 01: I'd use the word save. [00:09:50] Speaker 01: Yes, I understand the difference. [00:09:56] Speaker 01: This issue hasn't been fully briefed by anyone as far as I'm aware of. [00:10:01] Speaker 01: There is a reasonable basis to believe that when Congress laid out specifically that some PTAB employees and PTO employees are termable at will and then did not do so for the PTAB judges, that that supports an inference that that was a deliberate intentional choice and therefore reflective of their intent. [00:10:20] Speaker 01: As I say, that issue hasn't been briefed anywhere is fully yet. [00:10:24] Speaker 01: So I'm not capable of giving you chapter and verse on that. [00:10:27] Speaker 01: But I think there's a serious question. [00:10:28] Speaker 05: I don't know that that really helps you so much because it may mean that they originally intended them to be [00:10:35] Speaker 05: Only removal for cause, but then it faced with the question, which is always a separate question. [00:10:41] Speaker 05: Do you want the whole scheme to go out or do you want to change your mind on that? [00:10:44] Speaker 05: Then we look for evidence of that and I agree with you. [00:10:47] Speaker 01: That's, that's exactly the process. [00:10:49] Speaker 01: And what we're doing is we're sort of backing into the merits of our three exit that. [00:10:53] Speaker 01: At that point, we are a bit. [00:10:55] Speaker 01: That's the first part. [00:10:57] Speaker 01: I'll move to the second issue because I agree that's the more fundamental question. [00:11:00] Speaker 01: In my view, although the court followed the guidance and intercollegiate from the D.C. [00:11:04] Speaker 01: Circuit, the guidance from the Supreme Court is to the contrary and says that it's not enough merely to have terminability at will. [00:11:12] Speaker 01: that you must have some form of executive branch review. [00:11:16] Speaker 01: Otherwise, those APJs are rendering final decisions for the executive branch. [00:11:23] Speaker 01: And that's what Edmund says is the test. [00:11:25] Speaker 01: And here, the APJs are doing exactly that. [00:11:28] Speaker 01: They are called final written decisions. [00:11:30] Speaker 03: Well, supposing one accepts the argument the government made in Arthrex that [00:11:39] Speaker 03: I shouldn't use this word, but it's a shorthand, that the director has the ability to rig the result. [00:11:49] Speaker 01: They made that argument out of those words. [00:11:51] Speaker 00: Yes. [00:11:51] Speaker 01: And Arthrex, I think, properly rejected it because the director could rig the result only if the director chooses the people to do it. [00:12:01] Speaker 01: And chose knowing what they would want to do. [00:12:05] Speaker 01: I think the court would have serious due process concerns about running the PTO that way. [00:12:11] Speaker 05: Well, that's a different constitutional problem than an appointment clause problem, though. [00:12:15] Speaker 05: I mean, the director certainly has the authority to assign judges to the panels, right? [00:12:20] Speaker 05: He does have the right… No, there's no question about that. [00:12:21] Speaker 01: Right, and… There's no evidence he has the power to de-assign [00:12:25] Speaker 01: But he has the power to un or she has the power to unassigned to not assign. [00:12:30] Speaker 01: That's not clear. [00:12:30] Speaker 01: The Orthodox Court specifically said that's not clear in a footnote. [00:12:34] Speaker 05: Yeah, but there are other procedures that if he doesn't like the decision from the panel, he can. [00:12:40] Speaker 05: create a larger panel, right, and stack it. [00:12:44] Speaker 05: I know all these words. [00:12:46] Speaker 05: The Supreme Court hates all of this stuff, and I do think there might be presidential or due process problems with it. [00:12:52] Speaker 05: But that doesn't mean it doesn't give the director amount of control over the actual APJs. [00:13:00] Speaker 01: I don't think you save one constitutional violation by creating another. [00:13:03] Speaker 01: I don't think that's what Congress would have intended, and I don't think that's what the court should be doing. [00:13:08] Speaker 01: And in any event, that wouldn't cure the second more fundamental problem, which is that the Supreme Court cases, in my view, when you look at Edmonds, when you look at Freytag, and when you look at Free Enterprise Fund, all require some form of review. [00:13:22] Speaker 01: That is the point. [00:13:23] Speaker 01: Are these people rendering final decisions for the executive branch? [00:13:27] Speaker 01: That's the test in Edmonds. [00:13:29] Speaker 01: And if the answer to that is yes, [00:13:31] Speaker 01: In each of those cases, they were not an inferior officer. [00:13:35] Speaker 01: And then the question becomes, is terminability at will an effective or appropriate mechanism to achieve that result of real review? [00:13:44] Speaker 01: And I would argue it's neither. [00:13:46] Speaker 05: How does it play out in the Lucia scheme now? [00:13:49] Speaker 05: The problem there was they were appointed by the wrong person. [00:13:53] Speaker 05: Yes. [00:13:55] Speaker 05: Were they, was their further review there? [00:13:58] Speaker 01: They remanded back the further review by- No, no, no, I don't mean that. [00:14:01] Speaker 05: I mean, in that scheme was the hearing officer, whatever their title was in Lucia, that was improperly appointed. [00:14:08] Speaker 05: Was that decision reviewable further within the executive branch? [00:14:14] Speaker 05: Presumably, I mean, maybe it was, maybe it wasn't. [00:14:21] Speaker 05: If you don't know the answer, I don't want to waste up your time. [00:14:23] Speaker 05: I don't know the answer. [00:14:25] Speaker 05: I don't know the answer either. [00:14:26] Speaker 05: That's why I asked the question. [00:14:27] Speaker 05: Maybe somebody on the other side will help me. [00:14:31] Speaker 01: You've made, I believe, two points. [00:14:34] Speaker 01: And I think you said you had a third. [00:14:36] Speaker 01: The last point I wanted to make is the question of whether, if there is no supervisory review, an effective review, which I think admins and free enterprise all require, [00:14:47] Speaker 01: is terminability at will an effective or appropriate means to accomplish that end? [00:14:53] Speaker 01: And I think not for two reasons. [00:14:55] Speaker 01: One, if you're terminating after the final written decision is issued, it's issued. [00:15:02] Speaker 01: If you're relying on the interim effect of APJs being worried about being fired by issuing a decision based on a ground that they think the director might not like, [00:15:13] Speaker 01: That seems like a fairly blunt instrument and not a very appropriate way of doing it. [00:15:17] Speaker 01: And I think the idea that Congress would have wanted that system where APJs are constantly worried about their livelihoods and issuing decisions based on speculation about what might or might not [00:15:28] Speaker 01: appease the powers that be, as opposed to a straightforward system that had a level of review, I think the odds are Congress would not prefer that strange system. [00:15:38] Speaker 04: I found your opening statement intriguing because you said you were going to discuss the remedy, and I'm not sure you've gotten to it yet. [00:15:46] Speaker 04: What's the remedy? [00:15:47] Speaker 01: I believe the remedy is that required by Free Enterprise Fund and Edmunds and others, which is some form of effective, meaningful, substantive review of decisions within the executive branch before it becomes final and revealable by a court. [00:15:59] Speaker 05: So basically non-submissibility. [00:16:02] Speaker 05: Sorry? [00:16:02] Speaker 05: I mean, basically, the whole system goes down, right? [00:16:05] Speaker 05: I mean, we can't order... Oh, you can't order that, for sure. [00:16:09] Speaker 01: That has to be done by Congress. [00:16:11] Speaker 05: Right. [00:16:13] Speaker 05: It's not separable. [00:16:14] Speaker 01: In my view, it is not separable. [00:16:16] Speaker 04: So we have to strike the whole statute. [00:16:19] Speaker 01: I believe the only remedy, and that's why we asked for dismissal as opposed to remand, the only remedy is to declare it unconstitutional and let Congress fix it. [00:16:27] Speaker 01: And if I'm right about the importance of review, which the Supreme Court has repeatedly emphasized, that's something that this court can't fix, as the Arthrex Court acknowledged. [00:16:40] Speaker 01: And while I understand, for expediency and other reasons, that's a suboptimal state of affairs, it may be the appropriate state of affairs. [00:16:49] Speaker 01: And that means that Congress then has to go back and establish – and Congress then has to decide whether they want a system with an intermediate level of review. [00:16:58] Speaker 01: Maybe they do, maybe they don't. [00:17:00] Speaker 01: But that would be up to Congress, not the courts. [00:17:17] Speaker 04: It's Mr. Blanco, right? [00:17:19] Speaker 02: That's right, your honor. [00:17:20] Speaker 04: And you're going to split your time with Ms. [00:17:23] Speaker 04: Attorney Patterson? [00:17:25] Speaker 04: Yes. [00:17:26] Speaker 04: Okay, so she'll get five minutes, you'll get ten? [00:17:28] Speaker 04: That's right. [00:17:28] Speaker 04: Okay. [00:17:33] Speaker 02: Morning, your honors. [00:17:34] Speaker 02: May it please the court? [00:17:35] Speaker 02: Michael Belanco with Fish and Richardson on behalf of Kingston. [00:17:39] Speaker 05: I'd like to start with... Can I actually just direct you to your friend's last point, which is that when we're looking at remedy for these improper appointments, that at least some form of executive review of an interior office position has always been the touchdown. [00:17:58] Speaker 05: The case law in this area, I think, is [00:18:01] Speaker 05: very fact-dependent and not altogether clear. [00:18:04] Speaker 05: Are you aware of any cases where it wasn't a problem, even if there was no effective executive review? [00:18:12] Speaker 02: I think there are some cases suggesting that, Your Honor, and I think just to step back for a moment, the cases all suggest that, you know, Edmund says there's no exclusive criterion. [00:18:22] Speaker 02: I think it's a mosaic approach. [00:18:25] Speaker 02: We take a balancing act and we look at the different levers and see if there's more in one, less in another, and if they balance to, you know, overall [00:18:35] Speaker 02: support constitutionality. [00:18:37] Speaker 02: I would look at Edmund itself there. [00:18:40] Speaker 02: It's true that the military judges there, their opinions were subject to review by the Court of Appeals for the Armed Forces, but I note the review there was highly deferential. [00:18:52] Speaker 02: the review was not a true de novo, you know, look at this all together and be able to change anything that we'd like. [00:19:02] Speaker 02: The review was, I think on the facts, if there was any, you know, factual basis for the [00:19:11] Speaker 02: military judge's opinion, the higher court had to defer to those facts. [00:19:14] Speaker 02: So I think that suggests in and of itself that full review is not necessary. [00:19:20] Speaker 02: I think that's also the case in this court's massiest, I think I'm saying that correctly, decision where the Vaccine Act special masters, their decisions also received a deferential review. [00:19:32] Speaker 02: And just to make another point on review, I quibble a little bit with the suggestion that there isn't review at the agency of the APJ's decisions. [00:19:45] Speaker 02: I think there is for several reasons. [00:19:48] Speaker 02: The director has the authority to designate decisions as presidential, and through that, [00:19:55] Speaker 02: he can direct the outcome in a given case. [00:19:59] Speaker 02: The director also can issue binding policy guidance that could, in certain cases, be directed at the facts in that case. [00:20:08] Speaker 02: You can imagine a circumstance where a final written decision issues after it issues. [00:20:14] Speaker 05: On that last point, what's the statutory authority that allows the director to issue binding guidance [00:20:21] Speaker 05: that binds the APJs as opposed to the example. [00:20:26] Speaker 02: I think we see it in several places, Your Honor. [00:20:28] Speaker 02: I think section three gives the director broad control over the agency. [00:20:34] Speaker 02: And I want to make sure I quote the statute properly. [00:20:39] Speaker 02: So section three. [00:20:40] Speaker 05: I guess here's what I'm thinking of. [00:20:41] Speaker 05: And this is not related to this case necessarily. [00:20:44] Speaker 05: But when you say that, the director has been issuing lots and lots [00:20:50] Speaker 05: 101, as you know, guidelines on eligibility. [00:20:55] Speaker 05: That's right. [00:20:55] Speaker 05: And it is not clear to me whether the APJs think they need to follow that guidance or not. [00:21:03] Speaker 05: It seems, in your view, they need to follow that. [00:21:05] Speaker 05: They do. [00:21:05] Speaker 05: And a couple points. [00:21:06] Speaker 05: What happens when that guidance is openly inconsistent with precedent from our court? [00:21:11] Speaker 05: Who do the APJs have to follow? [00:21:14] Speaker 02: I believe the APJs are bound by the director's interpretation of 101. [00:21:23] Speaker 02: If that comes up to this court on appeal, of course, and it's wrong, then this court will reverse the decision. [00:21:28] Speaker 02: I believe the APJs, though, are bound by the director's policy time. [00:21:32] Speaker 05: I don't want to waste your time on this point. [00:21:33] Speaker 02: This is a very subsidiary point, but you can move on. [00:21:39] Speaker 04: If I could, your honor, unless there were more questions about the reviewability point, I do want to... If the board receives a decision and it comes up to us in review, are we to assume that the director has reviewed that particular decision and has decided whether or not to intervene? [00:22:00] Speaker 02: Every decision, not necessarily, but that doesn't take away from the director's power to review any decision. [00:22:08] Speaker 02: And in any case the director may review the decision. [00:22:12] Speaker 02: I don't think that the Constitution requires that in every single instance he has. [00:22:18] Speaker 02: Again, in cases like Edmond, deferential review where fact findings are not reviewed with much scrutiny on appeal held sufficient. [00:22:28] Speaker 02: So no, I don't believe that that would necessarily have to be the case, Your Honor. [00:22:34] Speaker 02: If I could just touch on what we mentioned in our 28-J letter, which is that our belief is that the proper, the most prudent course here is to hold any decision in this case in abeyance. [00:22:51] Speaker 02: I want to be careful with how I say this because I want to express my sincere respect for this court as an institution and its opinions, but the Arthrex opinion has not mandated. [00:23:02] Speaker 02: It's not final. [00:23:03] Speaker 02: And we disagree with the result reached in that opinion and believe that it's a candidate for a petition for rehearing. [00:23:12] Speaker 02: And I'm not saying that because... Can I ask you this? [00:23:15] Speaker 02: Sure. [00:23:15] Speaker 05: I think your friend [00:23:16] Speaker 05: agrees with you to a certain extent that the orthodox opinion is wrong to different points and thinks that he wants to be able to get a decision out now so he can raise his further points on rehearing you have your arguments [00:23:33] Speaker 05: Rather than issue a decision and have this all on bonk, and this is just my idea, I haven't cleared it with my colleagues and they may disagree, if you have further supplemental briefing that you want to do on the effect of artifacts on this case, why don't we just do it before we issue an actual decision rather than waiting for a decision and then on bonk? [00:23:53] Speaker 05: I can't promise you this. [00:23:54] Speaker 05: They have to agree. [00:23:55] Speaker 05: They may or may not. [00:23:56] Speaker 05: I'm probably annoying them by suggesting this in open court. [00:24:00] Speaker 05: I apologize. [00:24:01] Speaker 02: Well, allow your honors to confer on that point. [00:24:04] Speaker 02: If it's helpful to the court, we'd be happy to do that. [00:24:05] Speaker 05: It seems the most efficient way to go about it because your friend clearly has additional arguments that were not, I think, considered fully in Arthrex. [00:24:16] Speaker 05: And you have arguments about why it's wrong, and they have different arguments about why it's wrong. [00:24:22] Speaker 05: I suspect we're going to hear from the government about why it's wrong, too. [00:24:25] Speaker 03: And while Arthrex is staring decisis, that doesn't mean that we can't articulate our opinions about it. [00:24:37] Speaker 02: Certainly, Your Honors, and if additional briefing were helpful and then the court were to issue an opinion based on that supplemental briefing, [00:24:47] Speaker 02: I can say that I believe we would, ourselves, I can't speak for anyone else, seek rehearing if the case were decided on the basis of Arthur X. Well, a counsel can, pursuant to our rules, make additional filings, and it would be up to the court to decide whether it's going to set them or not. [00:25:07] Speaker 02: Fair point, Your Honor. [00:25:08] Speaker ?: Okay. [00:25:09] Speaker 04: Are you almost done? [00:25:11] Speaker 02: Unless there are additional questions from your honors, I think I've ceded the podium to the government. [00:25:16] Speaker 04: Okay. [00:25:17] Speaker 04: Thank you. [00:25:26] Speaker 04: Councillor Patterson, some of your time was used up by a colleague, but I'm going to restore you back here five minutes. [00:25:31] Speaker 00: Thank you. [00:25:32] Speaker 00: Thank you very much, Your Honour. [00:25:33] Speaker 05: So I'm going to talk to you about the remedy. [00:25:36] Speaker 05: I read your supplemental brief in Arteryx. [00:25:39] Speaker 05: It's a little confusing to me that you acknowledge that we can hear the Appointments Clause issue, even though it wasn't argued below, but then you argue they still shouldn't get a remedy because they didn't raise it below. [00:25:55] Speaker 05: I don't quite understand that. [00:25:57] Speaker 05: Why is that correct? [00:25:59] Speaker 05: I mean, if we're going to allow them to raise it for the first time on appeal, then isn't it an acknowledgment not only that it's a problem that's important, but it's a problem that needs to be remedied? [00:26:09] Speaker 00: We don't think forfeiture is an all or excusing forfeiture has to be an all or nothing proposition. [00:26:15] Speaker 00: And we think that follows from the Supreme Court's decisions in Lucia and Ryder, as well as the sort of traditional equitable principles that accompany crafting remedy. [00:26:23] Speaker 00: So even if at the front end, [00:26:26] Speaker 00: the court for various prudential reasons decides to reach a wave issue. [00:26:30] Speaker 00: We don't think that obliges it to go whole hog on the remedy. [00:26:34] Speaker 00: And I note that the Supreme Court's emphasis on a timely challenge being raised in Lucci and Reiter, that didn't come in any sort of front-end waiver discussion. [00:26:43] Speaker 00: It came in the remedial section. [00:26:45] Speaker 00: And so we think that as a matter of sort of equitable discretion, even if a court wants to clarify a question, we agree this is an important issue. [00:26:52] Speaker 00: It wants to get some precedent on the books and tell the agency how to conform with the Constitution. [00:26:58] Speaker 00: That doesn't mean that it needs to remand every forfeit a challenge. [00:27:01] Speaker 00: And that's actually where I'd like to start this morning about the effect of Arthrex. [00:27:06] Speaker 03: You know, the... I'd like to ask you a question about the effect of Arthrex, and that is, what other agencies or government entities are implicated? [00:27:18] Speaker 03: I know you've been thinking about it. [00:27:19] Speaker 00: And we will continue thinking about it for the next 42 days, Your Honor. [00:27:23] Speaker 00: We have 45 days to decide whether to file a rehearing petition. [00:27:26] Speaker 00: Of course, part of the reason that there is that extra time in a government case is because we do consult with other agencies. [00:27:32] Speaker 00: The Solicitor General's office [00:27:34] Speaker 00: makes the ultimate decision after looking around the government and thinking about all those consequences. [00:27:39] Speaker 00: So I can't give you a list today. [00:27:42] Speaker 00: I don't know if we'll ever file a hearing petition that includes such a list or not. [00:27:46] Speaker 03: But I think suffice it to... Well, there's a message back that there's interest in that question. [00:27:51] Speaker 00: Suffice it to say, this was a very important decision with striking down an act of Congress is always a very serious matter, even with a partial invalidation, that we will be looking at very seriously while the Solicitor General decides whether or not to seek rehearing en banc. [00:28:08] Speaker 00: But turning back to Arthrex, I just want to note the reasons that the Arthrex panel articulated for using its discretion to reach a waived issue [00:28:20] Speaker 00: I think don't necessarily apply to cases, follow-on cases. [00:28:25] Speaker 00: So Arthrex actually was not the first case to present a forfeited Appointments Clause challenge to the PTAP judges. [00:28:31] Speaker 00: The first case argued was a case called Trading Technologies, 181489. [00:28:36] Speaker 00: I believe Judge Wallach was on the panel. [00:28:38] Speaker 00: The panel did not reach the issue there. [00:28:40] Speaker 00: It issued a Rule 36 of Wormits. [00:28:42] Speaker 00: I think that shows that different panels can and do use their discretion differently. [00:28:48] Speaker 00: Now the Arthrex panel of course explained that because of the significance of this question, [00:28:54] Speaker 00: Because of the importance of answering this question, giving timely resolution to the many parties who were looking to the court, it decided to exercise its discretion to overlook the waiver. [00:29:07] Speaker 00: Now, in these cases, we have one preserved challenge where, of course, the court need not engage with the waiver question at all or the discretion regarding remedy that we discussed in our Arthrex supplemental brief. [00:29:19] Speaker 00: But in the other case, in the 18-17-68 case, [00:29:23] Speaker 00: We would urge this court to not exercise its discretion in that matter. [00:29:26] Speaker 05: So the harder question for me is, in the case where they preserve not only in their blue grape here, but at the agency, why wouldn't Legia require a remand there for a hearing before a new set of judges? [00:29:41] Speaker 00: Uh, that was also addressed in our supplemental brief. [00:29:44] Speaker 00: Um, of course, that is the remedy that's in place now. [00:29:47] Speaker 00: We, we acknowledge that's the remedy that's in place now. [00:29:49] Speaker 05: Again, we all recognize that that's, that's binding on us, but it also has been mandated and that there's, [00:29:58] Speaker 05: I mean, I'm sure you all had a very, very busy weekend. [00:30:00] Speaker 05: Sorry it happened so short on oral argument, but that's the way it goes. [00:30:05] Speaker 05: But clearly, lots of people have lots of questions about how it's going to play out. [00:30:09] Speaker 05: And so I'm just curious, because Arthrex didn't have the case where it was preserved at the agency, which is one of the touchstones for your analysis, at least, for equitable relief, as you call it, why wouldn't, assuming Arthrex holds up on the merits, [00:30:26] Speaker 05: at least in the case that they preserved at the agency, they get a remand to new judges. [00:30:31] Speaker 00: I think under Arthrex they would, Your Honor. [00:30:33] Speaker 05: No, no, no, but not under Archex, under – do you think Lucia requires – I guess I'm asking you, even if they preserved it at the agency, [00:30:44] Speaker 05: Does the government think remands for new hearings before new judges are necessary in any cases, not just certain cases? [00:30:52] Speaker 00: No, Your Honor. [00:30:53] Speaker 05: What's your argument for that, particularly distinguishing Lucia? [00:30:57] Speaker 00: So Lucia was the first case to order such a remedy. [00:31:01] Speaker 00: The court didn't say a lot about why it did it there, but subsequently an en banc panel of the Fifth Circuit and the Collins case [00:31:09] Speaker 00: has articulated a potential difference when there's four cases where at the relevant time there was what's later deemed an invalid removal restriction as opposed to when there's an officer who was actually never appointed at all. [00:31:22] Speaker 00: Lucia was the latter situation. [00:31:24] Speaker 00: The ALJ at the relevant time was not operating under a head of department appointment at all. [00:31:29] Speaker 05: Sure. [00:31:30] Speaker 05: That to me, if we're thinking of remedy as these a bunch of different factors, some laying against and some on, that distinction makes a lot of sense for me. [00:31:39] Speaker 05: But the problem with that Fifth Circuit case is the facts are also much different here. [00:31:44] Speaker 05: Are they not in that the actions taken by the unconstitutionally appointed officer were subject in some sense [00:31:52] Speaker 05: to further review. [00:31:55] Speaker 00: I don't know that that's necessarily the touchstone. [00:31:57] Speaker 00: I think at the slightly higher level of generality, the Fifth Circuit's intuition that those situations are different and might require a different exercise of remedial discretion is sound and would apply here. [00:32:08] Speaker 00: Now, I do on the question of what I will call hasty remands. [00:32:15] Speaker 04: Before you get to that, is it your position that, had the question been raised before the agency, that they could have ruled on their own unconstitutionality? [00:32:26] Speaker 00: I do think they could have addressed the issue, Your Honor, and addressed it fruitfully. [00:32:30] Speaker 00: Recall that in this case as an Arthrex, there was a dispute among the parties as to very basic questions about how the agency runs, what the director can do, even what removal regime exists. [00:32:42] Speaker 00: I think the Arthrex panel had to adjudicate a fight about specifically whether the ALJ removal standard applied or whether this was an APJ-specific or the efficiency of the service standard. [00:32:54] Speaker 00: Those are all issues that the agency could have, whether it would have or not, fruitfully addressed. [00:33:05] Speaker 05: factual and legal discussion, even if they can't rule an act of Congress unconstitutional. [00:33:10] Speaker 00: That's right, Your Honor. [00:33:11] Speaker 00: And I think that the Supreme Court's subsequent decision after DBC and Elgin really makes that clear, that where there are statutes that the agency is expert in administering, and certainly I would say that the USPTO is the expert in how the director exercises or could exercise authority in the USPTO, [00:33:28] Speaker 00: are all matters that the agency could have addressed. [00:33:33] Speaker 04: So you see no futility in raising that issue then? [00:33:35] Speaker 00: No, Your Honor, none. [00:33:36] Speaker 00: I also want to note that the Arthrex panel described what the appellant there was seeking was a constitutionally appointed board. [00:33:47] Speaker 00: I don't want to re-argue Arthrex here, but I think what a patent owner wants [00:33:51] Speaker 00: is the inverse in a lot of ways. [00:33:52] Speaker 00: It's not that they want a constitutionally appointed board. [00:33:55] Speaker 00: They just don't want their patent invalidated by an unconstitutional board. [00:34:00] Speaker 00: And if that's what they want, the agency, let's just suppose that the agency, when faced with an appointments class challenge, thought to itself, goodness, we've got a problem here. [00:34:09] Speaker 00: We want to shut it down. [00:34:10] Speaker 00: It could have simply declined to institute IPRs. [00:34:14] Speaker 00: This is not a situation where the agency is obliged to exercise its authority if it thought [00:34:21] Speaker 00: contrary to its actual belief, because we maintain that this is all constitutional, there was some sort of latent appointments clause defect in the way that it was established vis-a-vis these particular litigants. [00:34:34] Speaker 04: OK. [00:34:34] Speaker 04: I think you're right. [00:34:35] Speaker 04: That was addressed in Arthrex. [00:34:37] Speaker 00: It was addressed in Arthrex. [00:34:39] Speaker 00: Just a note on the remand question, we would urge the court to [00:34:46] Speaker 00: to not issue hasty remands. [00:34:49] Speaker 00: We may file a rehearing petition. [00:34:50] Speaker 00: The appellee, Smith and Nephew, and Arthrex may file a rehearing petition for precisely some of the reasons that Judge Hughes touched on, the sort of inefficiency for all involved of having to file multiple rehearing petitions in multiple cases that are remanded. [00:35:08] Speaker 00: I also want to note, I'm aware of one remand having already occurred. [00:35:13] Speaker 00: on Thursday, I believe it's a Uniloc case, 18-22-51, where the government was not given a chance to intervene per federal rule of appellate procedure 44. [00:35:27] Speaker 00: So we are actually not a party to that case that can fight remands. [00:35:31] Speaker 00: And of course, that we find a very troubling situation, where we were not permitted to use our statutory right under 24-03 to become a party [00:35:40] Speaker 00: where an act of Congress is being challenged and potentially invalidated in a way that results in a remand to us. [00:35:48] Speaker 04: Well, we recognize the need and the value of having the government's participation on this issue and also our own rule that requires that as well. [00:35:59] Speaker 00: I know I'm out of time, but if I could just mention one more issue. [00:36:03] Speaker 00: The remand in Arthrex, as we've discussed, of course, does not go into effect until after the chance or the disposition of any rehearing petitions. [00:36:12] Speaker 00: I just want to note we consider the effect of the opinion, just as it's binding precedent on this Court, just as this panel could not today issue a decision inconsistent with Arthrex, we think the effect of the Arthrex panel's constitutional ruling to go into effect immediately. [00:36:31] Speaker 00: So we do not understand the APJs to currently have any removal restrictions. [00:36:37] Speaker 00: out of respect for the Arthrex's panel's decision. [00:36:40] Speaker 00: We think those removal restrictions were invalidated as of last Thursday afternoon. [00:36:47] Speaker 00: The court has no further questions. [00:36:51] Speaker 03: That's an interesting comment. [00:36:55] Speaker 00: I'm not quite sure what we're asking the court to do. [00:36:57] Speaker 00: Ultimately, we'd like you to affirm, but we understand that at the moment with Arthrex in place, I guess I suppose what we're asking you to do is to hold off on disposing of this case [00:37:07] Speaker 00: until the fate of Arthrox is decided. [00:37:09] Speaker 04: Okay. [00:37:10] Speaker 04: We thank you for your argument. [00:37:13] Speaker 04: Mr. Powers, you have five minutes. [00:37:15] Speaker 01: Thank you, Your Honor. [00:37:17] Speaker 01: I'd like to begin by answering two questions. [00:37:19] Speaker 01: Keep it as fascinating as it's been so far. [00:37:23] Speaker 01: It's an interesting issue. [00:37:24] Speaker 01: I'd like to begin by answering two questions Judge Hughes posed. [00:37:27] Speaker 01: One is, in the Chia, was there any subsequent review capability? [00:37:31] Speaker 01: The answer is yes. [00:37:32] Speaker 01: The quote is, the commission can then review the ALJ's decision either upon request or suesponte. [00:37:37] Speaker 01: That's 138th Supreme Court at 2049. [00:37:42] Speaker 01: question that Your Honor raised was, isn't it more efficient to do this once as opposed to having a lot of different things doing it? [00:37:49] Speaker 01: We would be on the same schedule roughly as Arthrex if you issued a decision relatively promptly following Arthrex, and therefore the en banc timing would be relatively similar. [00:38:01] Speaker 01: off by maybe a week or so. [00:38:03] Speaker 01: That, and my earlier point, I think was just buttressed by the government's argument, that this case, this set of cases, is a much better vehicle for the court to consider en banc than Arthrex for two reasons now. [00:38:18] Speaker 01: One is there's no party in Arthrex to help the court understand the other side of the question of whether the Arthrex remedy is effective, because all parties there agreed it was. [00:38:27] Speaker 01: And that's a huge issue. [00:38:29] Speaker 01: But the second point, [00:38:31] Speaker 01: which Your Honor's discussed with the government at some length, is that in Arthrex there was a waiver question which affected, arguably at least according to the government, both the question of whether the case should be heard at all and the remedy. [00:38:46] Speaker 01: That's not true of the 1831 case, Polaris case. [00:38:50] Speaker 01: That is not true at all. [00:38:51] Speaker 01: So again, the 1831 case for sure is distinguishable on both of those grounds, and the 1768 case is distinguishable on the first more important ground. [00:39:02] Speaker 01: But that's why those cases are more appropriate vehicles for both on bond review, because you have someone able to make arguments and help the court [00:39:13] Speaker 01: address an issue that is going to be of paramount importance and it takes away an argument that might detract from those. [00:39:20] Speaker 01: And so I think for those two reasons, the appropriate path is to [00:39:26] Speaker 01: issue a decision in this case following Arthrex. [00:39:29] Speaker 01: We would then file a petition for en banc review on the issues that I've discussed, and presumably the government and Kingston would file an en banc review on the issues they disagree with. [00:39:41] Speaker 05: What makes a difference between issuing now and waiting until Arthrex mandates and then issuing the decision right after it mandates? [00:39:49] Speaker 01: I think there's no, there's no negative reason to do that. [00:39:52] Speaker 01: And the positive reason not to do that is you're wasting 45 days and having the cases off cycle. [00:39:58] Speaker 01: It's much better to have the petitions on block. [00:40:01] Speaker 01: arrive at the same time, so the court can consider them at the same time. [00:40:05] Speaker 01: If we're offset by 45 days or so, then I think it's more difficult for the court to coordinate that and decide what it wants to take up and how. [00:40:15] Speaker 01: And there's no positive reason to do that, because for the same reason that Arthrex doesn't go into effect until the mandate, the remand doesn't happen, et cetera, neither does ours. [00:40:26] Speaker 01: And if the mandate doesn't happen because there's an unbanked petition that's been granted in one case or the other, this mandate still hasn't issued. [00:40:33] Speaker 05: Well, the negative effect is that not, I mean, you're clearly willing because you have other arguments to brief re-hearing now. [00:40:42] Speaker 05: The negative effect is that if we do this in every single case where, as the government calls it a hasty remand, everybody's going to have to do this and there's going to be a lot of cases. [00:40:53] Speaker 05: Even if some private parties on the other side decide not to seek re-hearing, although I suspect most of them will, the government will have to until it makes its final decision. [00:41:05] Speaker 05: I mean, it seems to me like a – I'm not sure how many of those cases there are. [00:41:07] Speaker 01: There's Unalok and there's us. [00:41:11] Speaker 01: Your honors will know better than I how big a problem that is, but I'm not sure in terms of cases that are fully briefed and ready to go. [00:41:17] Speaker 01: I don't think there's that many. [00:41:18] Speaker 01: So we're really talking about what's going to happen in the next 35, 40 days. [00:41:22] Speaker 01: Okay. [00:41:23] Speaker 05: These two are the only ones you're aware of except Unalok, which the government, I think, appropriately objects remanded without their knowledge or ability to participate. [00:41:33] Speaker 01: And that's something the government can intervene to request something to happen in Uniloc. [00:41:36] Speaker 01: But that doesn't affect this case, where the government has had all of its rights and appeared repeatedly and stated its views quite clearly. [00:41:43] Speaker 01: I do want to address quickly a couple of points. [00:41:48] Speaker 01: Hesford Higson talks about this being a mosaic, and you don't need full plenary absolute de novo review. [00:41:54] Speaker 01: And I think there's some force to that. [00:41:56] Speaker 01: There are cases. [00:41:58] Speaker 01: that talk about meaningful review and why a particular level of review is meaningful. [00:42:03] Speaker 01: So I don't think the cases absolutely require, in all instances, de novo review. [00:42:09] Speaker 01: But in the cases where it wasn't de novo review, they also required full termination at will. [00:42:14] Speaker 01: Sure, but they have that now. [00:42:17] Speaker 05: That's something that we can fix. [00:42:19] Speaker 01: But there is no case that I'm aware of [00:42:21] Speaker 01: where full termination at will by itself was sufficient without some meaningful form of review. [00:42:27] Speaker 01: And counsel argues there's review in the sense of precedential decisions and things like that. [00:42:30] Speaker 01: Those were addressed at length in the decision. [00:42:35] Speaker 01: And I think that Arthrex disposed of that at the slip opinion of pages 9, 10, 11, 12, and 13 very effectively. [00:42:42] Speaker 01: I thought they analyzed it. [00:42:43] Speaker 05: What about the director's ability to intervene at this court? [00:42:48] Speaker 05: independently from the PTEP decision and confess error? [00:42:52] Speaker 01: That's not a review within the presidential branch. [00:42:55] Speaker 01: So the issue under Edmonds is, is that person, the APJ, speaking for the executive branch or not? [00:43:03] Speaker 01: And if there's not a level of review that's meaningful and substantive of that decision, then the answer is they are. [00:43:11] Speaker 01: And I'm aware of no Supreme Court case at all. [00:43:15] Speaker 01: which holds that without some meaningful substantive review of individual decisions. [00:43:21] Speaker 01: that you at that point can call them an inferior. [00:43:23] Speaker 04: But what about where the director exerts its discretion and elects you sit as a panelist on one of the reviews? [00:43:32] Speaker 01: Is there a meaningful review there? [00:43:34] Speaker 01: In that instance, that director is only one of three. [00:43:37] Speaker 01: And the review is being done by the board. [00:43:39] Speaker 01: That decision has no review. [00:43:42] Speaker 01: But that review is not by a board that is people like the director. [00:43:49] Speaker 01: It's two people who are unconstitutional. [00:43:52] Speaker 01: So the answer is there is no review by a constitutionally appropriate board before it comes to this court. [00:44:03] Speaker 01: The only other point I wanted to make, if I may, is the case that's cited by Kingston to support holding this case in advance, the Carnegie Mellon case, was really a quite different situation, yes? [00:44:15] Speaker 04: You're outside the scope of their argument. [00:44:19] Speaker 04: Okay, I was trying to address his abeyance point, but thank you. [00:44:22] Speaker 04: All right, thank you. [00:44:24] Speaker 04: We thank the party for their arguments. [00:44:28] Speaker 03: and every administrative law and CIVPROPROF in the United States thanks you too.