Inter Partes Review violates public rights analysis – that causes Congressional deviation from the constitution – removing it solves

Stern v. Marshall announced one straightforward legal standard to inform future “public rights” analyses: the “historical antecedents” test. If a claim existed at common law in 1789, its resolution implicates the “judicial power,” and a non-Article III tribunal may not finally adjudicate it at the trial level.

Article III could neither serve its purpose in the system of checks and balances nor preserve the integrity of judicial decisionmaking if the other branches of the Federal Government could confer the Government’s “judicial Power” on entities outside Article III. That is why we have long recognized that, in general, Congress may not “withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty.” Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 18 How. 272, 284, 15 L.Ed. 372 (1856). When a suit is made of “the stuff of the traditional actions at common law tried by the courts at Westminster in 1789,” Northern Pipeline, 458 U.S., at 90, 102 S. Ct. 2858 (Rehnquist, J., concurring in judgment), and is brought within the bounds of federal jurisdiction, the responsibility for deciding that suit rests with Article III judges in Article III courts. The Constitution assigns that job – resolution of “the mundane as well as the glamorous, matters of common law and statute as well as constitutional law, issues of fact as well as issues of law” – to the Judiciary. Id., at 86-87, n.39, 102 S. Ct. 2858 (plurality opinion).

131 S. Ct. at 2609 (emphases added).

The decision nonetheless went on to recognize that Article III precedent “has not been entirely consistent,” leading it to expend considerable effort to show that after applying the “historical antecedents” test to the facts at bar, the result ended up consistent with “the various formulations of [the ‘public rights’ exception] that appear in this Court’s opinions.” Id. at 2611. Here lies the problem. As Justice Scalia’s concurrence foreshadows, this summation of how the Stern v. Marshall outcome harmonized with every “not . . . entirely consistent” holding of the past has led reasonable jurists to believe that there were no less than seven distinct legal standards announced in the majority opinion. See id. at 2621 (Scalia, J., concurring). After ignoring the “historical antecedents” holding and seizing on two or three of the six other “formulations” discussed in the walkthrough, it is no wonder that the Federal Circuit’s analysis ended up incorrect.

Nor is there any question that inter partes review fits the “historical antecedents” test. “Patent validity was a common law action tried to a jury in Eighteenth Century England. An action to repeal and cancel a patent was pled as the common law writ of scire facias.” In re Tech. Licensing Corp., 423 F.3d 1286, 1292-93 (Fed. Cir. 2005) (Newman, J., dissenting) (listing cases). In repeal actions (which analogize to IPR proceedings), though commenced in chancery, a common law jury served as factfinder. Id. And in the United States, “jury trials of issues of patent validity appear from the early days of the nation’s jurisprudence.” Id. (citing Ex parte Wood, 22 U.S. (9 Wheat.) 603, 614-15 (1824) (Story, J.)).

The opportunity now exists, through this case, to clear the air and prevent future lower court (or Congressional) confusion. The Stern v. Marshall dissent disagreed with what it called the majority’s “formulaic” approach, and instead of the “historical antecedents” standard would have applied the “pragmatic” standard announced in Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833 (1986). Id. at 2625-26 (Breyer, J., dissenting) (describing five factors that should be weighed together). Commentators have held the respective standards of the majority and dissent to be incommensurable foils of one another. E.g., Rothwell, supra, at 332 n.243. However, Schor itself reveals that they both may exist side-by-side.

The respective standards harmonize in the context of waiver and consent. In Schor, the Court reached and applied the five-factor standard only after drawing a distinction between “personal” right aspects of Article III, and “structural” right aspects. The Court held that waiver or consent had occurred on the facts of the case, and thus the “personal” right aspect was no longer in play. The five-factor standard – under which it is more difficult to show an Article III violation – acts as a backstop when waiver exists, to protect structural interests of our system of government notwithstanding the actions of private litigants. Thus, where there has been no waiver or consent to an improper tribunal (as with the facts of Stern v. Marshall), Schor remains entirely consistent with application of the “historical antecedents” test to protect the “personal” rights at stake. Conversely, when there is waiver or consent, the pragmatic Schor factors still hold sway. This explains why the Schor factors came back into play in Wellness Int’l Network, Ltd. v. Sharif, 135 S. Ct. 1932, 1942-47 (2015), where this Court tackled how bankruptcy courts should treat a waived “Stern claim.”

This case falls on the Stern v. Marshall side of the fence, in the sense that no one disputes that Petitioners had no choice about being dragged into a Patent Office tribunal by a litigation adversary. As such, the Court should use this case to make explicit the analysis above, and resolve once and for all that the supposed conflict between the Stern “historical antecedents” standard and the Shor five factor standard is illusory. At the same time, the Court has the opportunity to restore certainty about the “historical antecedents” test itself, holding with absolute clarity that this single standard applies to Congressional agency delegations, no less than Congressional bankruptcy delegations. And it applies to federal law claims that meet the test, no less than state law claims. This would prevent future confusion of the type that led to the Federal Circuit’s erroneous and dangerous deviation from correct constitutional law.