MARK W. BENNETT, District Judge.
TABLE OF CONTENTS I. INTRODUCTION ....................................................................... 929A. PTO Proceedings ................................................................. 929B. The Action For Judicial Review ................................................. 932
II. APPLICABLE STANDARDS .............................................................. 934A. Dismissal For Lack Of Subject Matter Jurisdiction Or For Failure To State A Claim? ............................................................. 934B. Rule 12(b)(6) Standards For Dismissal For Failure To State A Claim ....................................................................... 936III. THE DIRECTOR'S MOTIONS TO DISMISS ................................................ 938A. Judicial Review Of The Rule 183 Decision ...................................... 9381. Arguments of the parties .................................................. 9382. The § 701(a)(2) exception ............................................. 940a. Regional or Federal Circuit law? ........................................ 940b. Scope of the exception ................................................. 940c. Applications of the exception ........................................... 9423. Applicability of the § 701(a)(2) exception to a Rule 183 decision .......... 945B. TTI's Due Process Claim ....................................................... 9481. Arguments of the parties .................................................. 9492. Analysis .................................................................. 949IV. CONCLUSION ................................................................ 951
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).
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).
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.
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 C.F.R. § 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 C.F.R. § 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 C.F.R. § 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
Amended Complaint, Exhibit 5 (Decision On Petitions Under 37 C.F.R. § 1.181 (decision on TTI's Request for Reconsideration), 5-6 (emphasis in the original)).
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,
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 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. 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.
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, 114 S.Ct. 1673, 128 L.Ed.2d 391 (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, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (citing U.S. CONST., art. III, § 1).
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, 861 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,
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,
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.
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.
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,
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,
Nevertheless, further discussion of the factual "plausibility" standard under Twom-bal 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
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.
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.
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
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 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."
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
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 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.
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:
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, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985)).
As the en banc court also explained,
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 discretion." Abdelwahab v. Frazier, 578 F.3d 817, 821 n. 6 (8th Cir. 2009) (citing INS v. Yang, 519 U.S. 26, 32, 117 S.Ct. 350, 136 L.Ed.2d 288 (1996)). Indeed, as the Supreme Court explained in Yang,
Yang, 519 U.S. at 32, 117 S.Ct. 350 (emphasis added); accord Liadov v. Mukasey, 518 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).
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 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:
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).
As the PTO pointed out in the decision that TTI challenges here, the statute 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 service with an IPReex Request.
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.
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 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
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 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
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.
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:
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 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.
TTI also alleges that the PTO's decision to change the date of filing of EDNA's
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 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.
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 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."
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.
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, 92 S.Ct. 2701, 33 L.Ed.2d 548 (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, 92 S.Ct. 2593, 33 L.Ed.2d 484 (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, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), in turn quoting Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 14 L.Ed.2d 62 (1965)). Due process may be satisfied by adequate proceedings either pre-deprivation or post-deprivation. Id. at 380-83; 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, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), overruled in part on other grounds by Daniels v. Williams, 474 U.S. 327, 106 S.Ct. 662, 88 L.Ed.2d 662 (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
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.
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 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
Amended Complaint, Exhibit 1 (the `372 patent), Abstract.
Abbott Labs., 710 F.3d at 1326. More specifically,
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 initiating such a proceeding,
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:
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." Personal-Web 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) (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.
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 (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:
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).
Gallagher v. City of Clayton, 699 F.3d 1013, 1016 (8th Cir.2012); Whitney, 700 F.3d at 1128 (stating the same standards).
Tuepker, 708 F.2d at 1332; Yeutter, 914 F.2d at 1034 (quoting Tuepker, 708 F.2d at 1332).
Liadov, 518 F.3d at 1010-11.
35 U.S.C. § 311 (expired).