If case you were thinking you might have missed a big property case that made its way to the Supreme Court, fear not. All of the above issues were raised in the course of yesterday's arguments in a patent case.
As the transcript in Oil States Energy Services, LLC v. Greene's Energy Group, LLC, reveals, the issue in that case is whether the Patent and Trademark Office's Patent Trial and Appeal Board is unconstitutional because it can deprive a patent holder of its rights without the benefit of adjudication in an Article III court. A patent is property (yes, it is a creature of statute, and not a common law right, but it is property), and the owners of patents can't be deprived of their property except in an Article III court. Or so the Petitioner's argument goes.
If that issue sounds familiar, it is. In Brott v. United States, No. 17-712 (cert petition filed Nov. 6, 2017), the Court is being asked to consider whether inverse condemnation cases against the federal government must be considered by an Article III court, and a jury. Brott is a rails-to-trails case, and as followers of this blog know, these claims, when they exceed $10,000, must be raised in the Article I Court of Federal Claims, where you get the case tried by a judge, and not a jury. The jurisdiction of the CFC was conferred by Congress in the Tucker Act. Brott challenged that setup (complaint here), arguing that the self-executing nature of the Fifth Amendment's Just Compensation Clause requires both an Article III court, and a jury.
Both the District Court and the Sixth Circuit disagreed. (We filed an amicus brief in the Sixth Circuit supporting the property owner.) The Supreme Court now has the case, where it is being asked to resolve this Question Presented:
Can the federal government take private property and deny the owner the ability to vindicate his constitutional right to be justly compensated in an Article III Court with trial by jury?
Sounds a lot like the issue in Oil States, no?
Indeed, Brott's counsel (our colleague Thor Hearne and his team), along with Pacific Legal Foundation, filed an amicus brief in Oil States, arguing that Congress cannot confer judicial power on non-Article III tribunals (like the PTAB), especially when someone's property is at stake. And while patents are a form of property, surely real property interests are even better property, and neither can be taken away without the benefit of a jury.
Yesterday's Oil States arguments hit on some of these issues, if only tangentially. For example Chief Justice Roberts posed this question to Petitioner's counsel:
CHIEF JUSTICE ROBERTS: What is - what is the relationship between your position and the takings clause? The government can certainly diminish the value of your property rights quite extensively when it comes up with new -- new regulation.You have a lot that you think you could have built a mansion on, and then the government passes a law and you can only build a shed on it and -- and yet we often say -- or give the government a lot of leeway in saying that -- that they don't have to pay compensation.So, if the government can restrict your property right in real property to that extent, why can't it do so with respect to patent rights?
Transcript at 12.
Justice Breyer also saw hints of the takings issue:
JUSTICE BREYER: So -- so is that -look, the answer -- what I'm thinking, quite seriously, is saying should we leave open, assuming I basically agree with you, but leave open the question of what happens if there has been huge investment?That, I think, is what was dividing -what was worrying Brandeis in Crowell. I -- I think that -- that we don't face it here in this case, and it seems to me it would be properly raised more likely under either a takings clause or the due process clause probably.
Transcript at 55.
Justice Gorsuch saw the issue much more starkly, suggesting that private rights (like patents and property) can only be taken in Article III forum:
JUSTICE GORSUCH: Why not -- why not, though, Ms. Ho, just simply say the question is whether there's a private right involved? In answering Justice Kagan's questions and Justice Breyer's questions, you struggled with how much of an adjudication does an inquisitorial process have to have before it becomes an adjudication. Why does that matter at all?If -- if you really want to stake your ground and think McCormick's right, why not just say anytime a private right is taken by anyone, it has to be through an Article III forum?
Transcript at 23.
We don't think Oil States will necessarily take care of the Brott issue, although depending on the outcome in Oil States, the Court could, conceivably, GVR Brott in light of that case. But we'll see. In the meantime, we'll be preparing an amicus brief in Brott in support of the property owners.
More about Oil States in this report: "Supreme Court deeply divided on patent review process."