No. 19-1434
Oral argument transcript · No. 19-1434 · October Term 2020
Official transcript (PDF) · Argument audio at the Supreme Court
Advocates
- Malcolm L. Stewart, Deputy Solicitor General, appearance
- Mark A. Perry, Washington, D.C., appearance
- Jeffrey A. Lamken, Washington, D.C., appearance
Transcript
From the Court's official transcript; speaker labels as in the transcript, with advocates' full names from its list of appearances.
Chief Justice Roberts: We will hear argument this morning in Case 19-1434, United States versus Arthrex, Incorporated, and the consolidated cases. Mr. Stewart. ORAL ARGUMENT OF MALCOLM L. STEWART ON BEHALF OF THE UNITED STATES
Malcolm L. Stewart: Mr. Chief Justice, and may it please the Court: In Edmond versus United States, this Court held that Coast Guard Court of Criminal Appeals judges were inferior officers. The Court based that conclusion on the combined supervisory powers of the Coast Guard Judge Advocate General and the Court of Appeals for the Armed Forces. Here, the mechanisms by which the PTO's director can supervise administrative patent judges substantially exceed the combined powers of the supervising officials in Edmond. The Judge Advocate General was authorized to promulgate rules of procedure for the Court of Criminal Appeals, and he could remove 1 individuals from their judicial assignments without cause. The PTO director can exercise those same two powers, but he has other important tools of control as well. The director can promulgate binding guidance concerning substantive patent law. He can designate particular board opinions as precedential, thus making those opinions binding on future panels. He can also decide whether any particular review will be instituted and which judges will sit on the panel. And he can de-institute a review even after it has been commenced. Arthrex focuses primarily on the purported absence of any mechanism by which the director can review a panel's final written decision. But the board can grant rehearing of any such decision, and the director is a member of the board and is authorized to decide which members will sit on any panel. The director, thus, can convene a new panel that consists of himself and two other members of his choosing to decide whether any final written decision will be reheard. The director's power over rehearings 1 is not plenary since he must exercise it jointly with two other board members. But, in Edmond, the review authority of the Court of Appeals for the Armed Forces was not plenary either since that court could not reassess the factual findings of the court of appeals -- from the Court of Criminal Appeals. Taken together, the director's supervisory powers are fully sufficient to render administrative patent judges inferior officers.
Chief Justice Roberts: Mr. Stewart, that was a long list of things that the director can do, but, of course, the one thing that he can't do is just change the decision of the APJ. And the rest of those things -- deciding whether to rehear, you know, stacking, in a non-pejorative way, the panels, rehearing, you know, guidance on hypothetical facts -- they all seem to be more or less ways of twisting the arms of the APJs. And so it is sort of direct -- directly opposite to what the Appointments Clause was designed to do, which is transparency and make it clear who's responsible. Here, you know, the director can 1 pressure the APJ, but, at the end of the day, he can say: Well, that's not my fault. That's what he wanted. Why isn't that true?
Malcolm L. Stewart: I think -- I'd say two things in response to that. The first are the supervisory mechanisms that we've identified are transparent. If the director issues binding guidance that says here's how the patent laws apply to particular fact patterns, that will be done in the director's own name and the director will have responsibility for it. But the --
Chief Justice Roberts: Yeah, but the -- the APJ is the one who's going to decide whether that so-called hypothetical applies in this particular case, and if he comes out with a different result, that's the executive decision, not the director's rule about hypotheticals.
Malcolm L. Stewart: Well, even if you focus on the mechanisms that are available after a final written decision is issued, the -- the board panel's decision will be the decision of the executive agency only if it is not reheard. And as I said in my opening, the director's power over rehearings is not plenary, 1 but it is substantial. And --
Chief Justice Roberts: Thank you, counsel. Justice Thomas.
Justice Thomas: Thank you, Mr. Chief Justice. Mr. Stewart, you said it's not plenary, but it's substantial. How would -- how would we define -- discern what is substantial?
Malcolm L. Stewart: Well, I think what the Court said in Edmond was that the mark of an inferior officer is that the inferior has a superior and is supervised at some level by Executive Branch officials who are appointed by the President and confirmed by the Senate. And we don't have a bright-line test for this. But the Court in Edmond said the fact that the Court of Appeals for the Armed Forces can't second-guess the factual determinations of the lower court is not sufficient to make those lower court judges principal officers. Things can slip through the cracks and supervision can, nevertheless, be sufficient. And that's essentially what we have here. Even if you just look at after-the-fact review, the 1 director has substantial control. But I think the Court should focus primarily on the mechanisms of control that are available in the first instance, issuing binding guidance and so forth, because the usual hallmark of supervisory authority is that the supervisor can tell the subordinate how to do the job before the subordinate does it. And the director has ample tools there.
Justice Thomas: Thank you.
Chief Justice Roberts: Justice Breyer.
Justice Breyer: I'm just curious, you may not have thought about this, but maybe the SG's office has, but, in PCAOB, if we go back to that, I dissented and had a very long appendix with dozens and dozens of people that I suddenly thought were -- they -- they seemed to be like here -- we used to call them hearing examiners, and, really, they used to be civil servants. All kinds of shapes and sizes in terms of powers, and they suddenly all became officers of the United States. But the majority said, we're not saying they all are. We're just talking about PCAOB. 1 So are these people officers of the United States? Why, is my answer. I'd like a line, if you've ever thought of one, between the statement in PCAOB in the majority, don't worry, they're not all officers of the United States. Have you thought of a -- of a distinction there between the long list in PCAOB and would it apply here?
Malcolm L. Stewart: I mean, we -- we've essentially acquiesced in the proposition that the board -- that administrative patent judges are officers rather than employees, as you'll recall from --
Justice Breyer: Yeah.
Malcolm L. Stewart: -- the brief in this case. There was a --
Justice Breyer: Yeah, yeah.
Malcolm L. Stewart: -- period -- there was a period when they were appointed by the director and were thought to be employees. Congress --
Justice Breyer: Yeah.
Malcolm L. Stewart: -- changed the statute. It -- it's not absolutely clear that that's so, but the mechanism of appointment is sufficient so long as they are inferior officers.
Justice Breyer: Yeah, that -- I thought you might have done that. And I wonder if, in the course of doing that, you thought of a line of some kind that might distinguish the dozens of people I put in that appendix from these people here and the majority in PCAOB.
Malcolm L. Stewart: Well, I think that the -- the Court has drawn the line in terms -- between "officer" and "employee" in terms of exercising substantial authority under the laws of the United States. Obviously, that's something very far from a bright line. I think it is significant in this regard that the removal provision that's applicable to administrative patent judges is the same removal provision that applies to officers and employees of the -- the PTO generally. The removal provision signals that Congress didn't intend for these officers to exercise any unusual level of independence from the director.
Chief Justice Roberts: Justice Alito.
Justice Breyer: Thank you.
Justice Alito: Mr. Stewart, suppose Congress enacted a statute providing that a 1 deputy solicitor general shall have the final and unreviewable authority to decide whether the United States will take an appeal in any case involving the interpretation or application of one particular provision of one particular regulatory statute. Suppose the SG can decide which deputy is to review each case that falls into this category, the SG or the attorney general can issue guidelines on the meaning of the provision and the standard to be applied in deciding to take an appeal, but, once a deputy -- a deputy makes a decision, let's say it's a decision not to appeal, nobody, not the attorney general or the President himself, can countermand that. Would that be constitutional?
Malcolm L. Stewart: I mean, I -- I think it would be a close call. You would obviously be looking at Morrison versus -- Morrison versus Olson in order to determine -- to assess the significance of the fact that the deputy's authority was limited to a narrow category of cases, and, certainly, the fact that the solicitor general could promulgate substantive standards that would bind the deputy in making 1 his decision might lead you to conclude that that person is still an inferior officer rather than a principal officer. But however that case would come out, here, the decision of an ordinary PTAB panel is not final and unreviewable within the agency. It is subject to rehearing. The director is a member of the board. The director can appoint a panel that includes other board members in order to determine whether rehearing shall be granted. So that -- that authority, as I've said, is not plenary but --
Justice Alito: Well, what if I change my hypothetical so that the -- all of the deputies collectively could review the decision of the -- this one deputy? Would that -- would that change it?
Malcolm L. Stewart: Well, if the solicitor -- I -- I think that would change it somewhat. I think it would change it more if you said the solicitor general can sit on a panel that will review the deputy's decision, and the solicitor general may sit on a panel with two other deputies and -- and theoretically could be outvoted, but the solicitor general will not 1 only issue guidance before the fact but can sit on the -- the board that determines whether the deputy's decision will be overridden. That -- that would --
Justice Alito: All right. Thank you, Mr. Stewart. Thanks.
Chief Justice Roberts: Justice Sotomayor.
Justice Sotomayor: Mr. Stewart, the other side's case comes down basically, I think, to just saying you're not an inferior officer if you can make final decisions that are unreviewable by the director. That's a fairly straightforward line. Yours is a bit more amorphous. I think it's what the Chief was getting to. But I think that what I want to understand is, what is your final test being judged against? Is it -- I mean, I thought I heard a little bit of the -- of it when you said the director is setting the policies and procedures. He is -- he or she is the person who controls the outcome in the sense of setting what the policies and procedures are. Am I right that that's your baseline?
Malcolm L. Stewart: That -- that's certainly 1 part of it. And I would agree that we don't have a bright-line test, but that's in part because this Court has emphasized that there is no exclusive criterion for determining inferior versus principal officer status. And what we are emphasizing is that the director has really two different forms of control. He can issue policy guidance that will be binding on board panels in cases generally, but the director also is a member of the board, can participate in the board's decision-making process in individual cases.
Justice Sotomayor: For my colleagues -- and there are some who don't like amorphous concepts or ones that don't have a -- a yardstick by which to measure -- what is the advantage of us keeping the Edmond's test?
Malcolm L. Stewart: I -- I think the advantage is that the government is so multifarious, there's such an enormous number of officers and employees within the Executive Branch that any attempt to -- to formulate a bright-line test would almost inevitably lead to anomalous results in some category -- categories of cases. 1 Even in 1787, the framers were concerned that it would be administratively inconvenient to require Senate confirmation for all officers. And since that time, the Executive Branch has grown enormously, but there's still just one President and there's still just one Senate. And the Court --
Justice Sotomayor: Thank you, counsel.
Chief Justice Roberts: Justice Kagan.
Justice Kagan: Mr. Stewart, you put a lot of weight on the ability of the director to be part of a board that rehears a decision. I -- I had thought that there was a -- a usual mechanism for rehearing a decision that didn't -- you know, that there's a sort of permanent rehearing board, which the director does not pick the other two members of.
Malcolm L. Stewart: Well, I think, typically, the rehearing petition filed by one of the parties would be addressed to the panel, and the panel could decide whether to rehear the case if it had -- if it believed that it had overlooked something. But, because the director is a member 1 of the board and chooses the composition of the panel, the board -- the director can always decide in an individual case, no, here, the rehearing panel will be different.
Justice Kagan: I'm -- I'm -- I'm sorry, you have to give me a little bit more about how this exactly works. That there's a decision of -- of a panel that the director doesn't like, and what does the director do?
Malcolm L. Stewart: The director could sua sponte convene a new panel, and what's called -- known as the Precedential Opinions Panel, or the POP, is the acronym, is presumptively composed of the director, the commissioner for patents, and the chief administrative patent judge. And that panel can sit to issue a binding decision, presuming -- assuming that two members of the panel vote to do so. That -- that's what --
Justice Kagan: Right. I think I was talking about that, that -- that presumptive panel with those particular three members. I mean, the director doesn't merely have full authority over the other two, doesn't -- does he? He doesn't -- the other two might disagree with him.
Malcolm L. Stewart: It -- it's -- it's true, and in that sense, the director's authority is not plenary. But, in Edmond as well, if the Court of Appeals for the Armed Forces disagreed with the factual findings of the Coast Guard Court of Criminal Appeals, there was really nothing that the CAAF could do about it. Factual determinations could slip through the cracks. And, here, the director can not only convene this panel; the director can issue policy guidance that explain the -- the rules of law as the director understands them, and other panel members are obliged to -- to go along. The only thing that really can slip through the cracks in the PTO setting is factual determinations with which the director might disagree but other board members might invoke -- might -- might --
Justice Kagan: Thank you, Mr. Stewart.
Chief Justice Roberts: Justice Gorsuch.
Justice Gorsuch: Good morning, Mr. Stewart. Last term, the Court, in Seila 1 Law, said that executive officials must always remain subject to the ongoing supervision and control of the elected President. Through the President's oversight, the chain of dependence is preserved so that low -- the lowest officers, the middle grade, and the highest all depend, as they ought, on the President and the President on the community. I -- I'm struggling to understand how that interpretation of our Constitution squares with your argument that not even the President of the United States, either himself or through his subordinates, can reverse a decision of APJs. Where -- where is the chain of dependence?
Malcolm L. Stewart: Well, the -- the President obviously appoints the director subject to Senate confirmation, and the director can be removed by the President. The director can --
Justice Gorsuch: I understand the removal, but I -- my question was focused on the supervision and control language in Seila Law.
Malcolm L. Stewart: Well, the -- the -- the President can issue kind of instructions to the 1 director and can terminate the director if the -- the director doesn't comply. The director has various supervisory mechanisms.
Justice Gorsuch: Again, that's removal, and my question was focused on supervision. If the President disagrees with the decision or one of his designees down the chain of dependence disagrees with the decision, there's no remedy that the President has, correct?
Malcolm L. Stewart: Well, there -- there is a prospective remedy in the sense that the --
Justice Gorsuch: I'm talking about the decision. I'm not talking about removal.
Malcolm L. Stewart: No, there is a -- there is a right of appeals to the -- the Federal Circuit. But I think --
Justice Gorsuch: That's --
Malcolm L. Stewart: -- the same thing --
Justice Gorsuch: -- that's a separate branch of government. I'm -- again, I'm talking within the Executive Branch, Mr. Stewart. There's -- there's no chain of dependence running to the President with respect to the supervision of a particular decision, is there?
Malcolm L. Stewart: There -- there is no ability to ensure that the factual findings of two other members of the panels -- panel could be overridden. But, certainly, Arthrex's position wouldn't change any of that. That is, holding that the APJs are principal officers who must be appointed by the President with Senate confirmation wouldn't give the President any greater power of control over their decisions in the event that they were inconsistent with the policy of the agencies.
Justice Gorsuch: We're -- we're back to removal. Thank -- thank you, Mr. Stewart.
Chief Justice Roberts: Justice Kavanaugh.
Justice Kavanaugh: Thank you, Chief Justice. And good morning, Mr. Stewart. I'm not sure this wolf comes as a wolf, Mr. Stewart, but I still think it may be a wolf, as Justice Scalia famously said, and he said, in those cases, it can be discerned by careful and perceptive analysis. So here's why -- here -- here's the sources of my concern on that front. First, 1 this structure is a real break from tradition, which we've said in cases like Free Enterprise Fund and many others, perhaps the most telling indication of a constitutional problem is the departure -- the lack of historical precedent. The lack of agency review of the ALJ decision by someone who's appointed by the President with advice and consent of the Senate is absent here and is ordinarily present and historically has been present. And then, second, the lack of accountability, as the Chief Justice said and Justice Gorsuch was just saying, these are multimillion, sometimes billion-dollar decisions being made not by someone who's accountable in the usual way that the Appointments Clause demands. And the director, on rehearing, does not have the unilateral power to reverse. So, you know, if Congress is going to do that, they can eliminate agency review and prevent removal at will, then it's easy to make these AL -- APJs presidentially appointed and Senate-confirmed. They haven't done that. Where -- where in that analysis have things -- has that analysis gone wrong?
Malcolm L. Stewart: I guess the -- the two or three things I would say are, first, it isn't unusual for administrative adjudicators to be appointed in the manner that's appropriate for inferior officers. Indeed, I think that --
Justice Kavanaugh: I -- I agree with that, but it is very unusual for them not to have agency review, as you well know.
Malcolm L. Stewart: It certainly is the norm for the -- the agency head to have the capacity to -- to review their decisions. But, as we know from Edmond, that doesn't have to be plenary review. The -- the Court in Edmond specifically addressed the fact that the Court of Appeals for the Armed Forces could not revisit the factual determinations of the Coast Guard Court of Criminal Appeals, and it said what's more important is that there is review, not that review is not plenary. And, in addition, the director has substantial authority to instruct the judges as to matters of law, as to the director's own interpretation of the patent laws, and can insist that the judges comply with that, those instructions. 1 The other thing I would say is, if you think that that is the constitutional problem and if you think the constitutional rule is some Senate-confirmed official has to have plenary authority to revisit the decisions of -- of the underlings, then the appropriate remedy would be to sever the provision in the statute that says only the board can grant rehearings.
Justice Kavanaugh: Thank you, Mr. Stewart.
Chief Justice Roberts: Justice Barrett.
Justice Barrett: Good morning, Mr. Stewart. On page 38 of your brief, you talk about the strength of the removal power, and you say that because there's an efficiency-of- service standard applicable here and because the director can promulgate regulations, the violation of which might be cause for firing, that those are ways in which the director can exercise some back-end control of the APJs with whom he's not happy with their performance. But isn't it the case, you know, as Arthrex points out, that APJs get the protection of the MSPB, which means that, at the end of the 1 day, the director is actually not the official in the Executive Branch that has the last word on the continuation in service?
Malcolm L. Stewart: It's certainly true that the APJs would have -- if they were removed from federal service altogether, they would have the protections of the MSPB. And I'd say two things about removal. First, in addition to removing APJs from federal service altogether, the director can remove them from their judicial assignments. And the Court in Edmond said that was an important power of control, and that doesn't carry with it a right to MSPB review.
Justice Barrett: Well, and I -- actually, I wanted to ask you about that. What does that mean to remove them from their judicial assignments when it's -- APJs' judicial assignments are what they do? Are they just benched without pay --
Malcolm L. Stewart: There are --
Justice Barrett: -- or benched with pay?
Malcolm L. Stewart: -- there are two things that could be done. First, they could be assigned tasks such as rulemaking, training 1 other employees, and APJs do sometimes perform those tasks. The second thing is Arthrex appears to concede that there's no constitutional problem with the PTAB adjudicating direct appeals from denial of patent applications. Arthrex acknowledges there's sufficient director control in that area that there's not a constitutional problem. And so particular APJs could very feasibly be assigned to that kind of adjudicative work rather than to inter partes review, and that would --
Justice Barrett: I mean, is that sufficient control? The director is unhappy with some of the decisions on review and rehearing, and so he says, okay, well, from now on, you can still do adjudicative -- adjudicatory work, but it's going to be, you know, this kind instead?
Malcolm L. Stewart: Yes, I mean, especially if the director thought the problem with these officials is that in inter partes reviews they are not being sufficiently compliant with the director's instructions. The other thing I would say about the 1 removal provision is that, in addition to providing a practical tool for control, the fact that the APJs are subject to the same removal protection as officers and employees generally indicates that Congress didn't intend for them to -- to have any sort of special independence from -- from the director.
Chief Justice Roberts: A minute to --
Justice Barrett: Thank you, Mr. Stewart.
Chief Justice Roberts: -- a minute to wrap up, Mr. Stewart.
Malcolm L. Stewart: Thank you, Mr. Chief Justice. This Court has emphasized that there is no exclusive criterion for inferior officer status, that the inquiry should examine all the tools of control taken together. Here, the director has substantial tools of control well before a final written decision is issued. The director has a power that the Judge Advocate -- neither the Judge Advocate General nor the Court of Appeals for the Armed Forces had in Edmond, namely, the -- the ability to issue binding instructions that will provide 1 rules of decision for administrative patent judges as they decide cases. Thank you, Mr. Chief Justice.
Chief Justice Roberts: Mr. Perry. ORAL ARGUMENT OF MARK A. PERRY ON BEHALF OF SMITH & NEPHEW, INC., ET AL.
Mark A. Perry: Mr. Chief Justice, and may it please the Court: Arthrex's proposal for a bright-line administrative review requirement rests on a single line from Edmond noting that the military judges couldn't render a final decision unless permitted to do so by other executive officers. The Court in that sentence was not announcing a requirement for inferior officer status. It was commenting on the narrow scope of CAAF review, which followed its observation that the JAG could not provide advance guidance to the military judges. In sharp contrast, the PTO director can and does give substantive guidance to APJs. He also has unilateral institution and assignment power, and he can order review of any board decision. Moreover, only the director takes 1 final actions by confirming or canceling patent claims. APJs can't render any decision unless the director permits them to do so. They are inferior officers.
Chief Justice Roberts: Mr. Perry, if you won one of these adjudications, you know, in a case involving a billion dollars, which you can have, as Justice Kavanaugh pointed out, you know, you're going to call your client and say, we won the adjudication, and they're going to celebrate. And the next day, you're going to have to call him and say, ah, the director has granted rehearing, he's appointed himself and two others just that think the same way he does to the panel, he's issued new guidance saying in a so-called hypothetical case that looks like ours it should come out the other way, and -- and the APJ who decided your case is sent to Siberia. You would say that that's not good news, and I -- it would make something of a charade out of the adjudication. Yet you're relying on all those powers to say that everything is -- is all right. I mean, it -- it -- it really doesn't 1 sound like any kind of adjudication that we would accept, you know, in a system characterized by due process.
Mark A. Perry: Mr. Chief Justice, whether or not there are due process considerations in any particular determination has nothing to do with the Appointments Clause question here, right? We have a structural allocation of power from the President through the Secretary through the director to the APJs that is being respected and being followed in the chain of command. Due process is a separate issue, not presented in the petition, not presented in this case. There may well be due process problems in other cases, but that's not a reason to dilute or pollute the Appointments Clause.
Chief Justice Roberts: Justice Thomas.
Justice Thomas: Thank you, Mr. Chief Justice. What would be your test for whether someone is an -- an inferior officer? The -- it seems to be almost a totality of the circumstances.
Mark A. Perry: Justice Thomas, the -- 1 the -- the principal officers sit at the right hand of the President. They -- the only ones this Court has recognized are the ambassadors and the cabinet officers, and the heads of agencies --
Justice Thomas: Yes.
Mark A. Perry: -- are one step removed. These individuals are three steps removed. So, you know, the Secretary definitely is. The director may be. The APJs definitely are not. And that's the chain of command that the Court has described over and over again. That would be one test. The other, the -- the Edmond totality- of-the-circumstances test is supervision and control. And these officials are supervised and controlled in everything they do.
Justice Thomas: And how much supervision and control are you talking about? Can it be partial supervision? Can it -- does it have to be absolute supervision? I don't -- it's really difficult to discern how much would be required under your test.
Mark A. Perry: Your Honor, the -- the ultimate test is whether the President and his 1 direct reports remain accountable for the operations of the agency. So, if the Congress were to give total free reign to a -- to a sleeper agent embedded within the agency, that might be a problem. But where the chain of command is preserved and the director and ultimately the Secretary and the President bear the responsibility and accountability, that is sufficient. And the totality of the circumstances here show that the latter is the case with respect to the Patent Office.
Justice Thomas: Thank you.
Chief Justice Roberts: Justice Breyer.
Justice Breyer: I'm just curious if you found other examples like the JAG example where the -- say the -- the Senior Executive Service, members of that have a lot of authority in dozens of different areas and in different kinds of officials, and did you find any good examples which would help you where they do have in certain areas authority that really seems pretty unreviewable?
Mark A. Perry: Well, Your Honor, many 1 executive officials, of course, have essentially unreviewable authority over narrow things. AUSAs, for example, get to make on-the-call decisions every day in court. And remember we're making very narrow decisions here. The ultimate -- what the Board decided in this case is that the priority date of this patent was May 8, 2014. That is not a decision that our constitution requires to be made by a principal officer or even reviewed by a principal officer. It's a narrow, case-specific, factual question that the board answered and we believe answered correctly. So -- so the answer to your question is, yes, there are many such officers, but -- but they are generally given the opportunity to decide narrow, case-specific, application-specific questions rather than broad questions of national policy. That -- that's the dividing line in our government.
Justice Breyer: Thank you.
Chief Justice Roberts: Justice Alito.
Justice Alito: Mr. Perry, your brief has a very interesting metaphor. You say that the test here is a Goldilocks test, is it -- is 1 it too hot? So -- and you also in your brief tick off all the ways in which there is control over -- over these APJs. So I -- I'm going to go through these, go through your list and eliminate them one by one, and you tell me the -- when to stop, when we get to the point where we've crossed the line and there's no longer sufficient control. All right. So let's say that the director does not control whether to institute IPRs in the first place. He does not control how many and which APJs sit on which panels. He does not provide exemplary applications of patent law to fact patterns that are binding on APJs. He does not control whether a panel's decision will be precedential. He does not direct whether a panel's decision will be reheard by controlling whether a Precedential Opinion Panel on which he sits votes to rehear a case. He does not control how many and which APJs rehear a case. He does not decide whether to dismiss an entire APR proceeding rather than allow a panel's decision to become final. 1 Where -- where along that line did -- did we cross the Rubicon?
Mark A. Perry: Your Honor, of course, the director has all those powers, and any one of them might be removed. If all of them were removed, then you'd have the sleeper agent I described. And every case has to be determined based on the powers Congress has actually conferred. And, here, the suite of powers together, including one the Court didn't mention, which is the director's final authority to confirm or cancel the patent claims, ensure that the political accountability rests at all times with the director, not with the APJs.
Justice Alito: But you can't tell me where along that line is the magic divider?
Mark A. Perry: Your Honor, if you want a magic divider, I would suggest it is the -- the relationship to the President. An officer three steps removed from the President is -- is never or almost never going to be a principal officer because he is a subordinate.
Justice Alito: Thank you.
Chief Justice Roberts: Justice 1 Sotomayor.
Justice Sotomayor: Counsel, Justice Gorsuch asked a question of your -- of -- of the assistant solicitor -- solicitor general about the right or the need to have someone in the direct control of the President. I'm assuming that that -- as I've been thinking about that question, I wonder, isn't that totally at odds with an adjudicatory system of any kind?
Mark A. Perry: Justice Sotomayor, there is a -- you know, an inherent tension in agency adjudicatory-type proceedings between adjudicative independence and presidential control, and that balance can be struck by Congress in many, many ways and throughout history has been struck in many, many ways so long as the channels of authority are preserved. I'll come back to what Mr. Stewart said, it's the advance offering of guidance is more important in this context. For example, the director can identify problems coming out of PTAB panels and direct future PTAB panels not to make those mistakes, preserves both the political accountability and avoids those due 1 process-type problems that may arise in individual circumstances. That is the essence of supervision, which is carried out every day at the PTAB and in the Patent Office.
Justice Sotomayor: Thank you, counsel.
Chief Justice Roberts: Justice Kagan.
Justice Kagan: Mr. Perry, Justice Kavanaugh mentioned to you that this is an unusual kind of structure with no automatic opportunity for review in the agency head. And I was -- I was just wondering, is -- is there a story behind this? I mean, how did this come to be? And is there anything that we should take from that, or is this just an unaccountably strange bird?
Mark A. Perry: It is the long and proud history of the Patent Office, Justice Kagan. The interference examiners, about whom Arthrex never wants to talk, going back to 1836, administrative agents have decided interferences, conflicts between two private parties over patentability, including priority date, the issue in this case, and they have always been appointed by the Secretary, in 1870, 1 in 1952, in 1975, in 2008. There's no question that those issues have always been decided by inferior officers, much of that time, since 1939, in the interference context, without director review. And -- and that's what has been carried forward into the modern tradition. So we have a patent-specific tradition. It comes out of the examination process, right? These are sort of super examiners or review examiners or second-level examiners, and that's -- and the examiners, of course, decide these same questions in the first line, and they're employees, not even officers. So the tradition we think that's relevant is that of the Patent Office. And the modern APJs are very much in line with a long, long history that, in fact, stretches all the way back to the founding.
Justice Kagan: And has Congress ever taken a look at this? Do we know that Congress has considered this and -- and knows what's going on? And has it ever reached a determination on the Appointments Clause question?
Mark A. Perry: We do know, Justice Kagan. 1 Congress for a brief period vested the appointment in the director and then changed it to the Secretary to avoid Appointments Clause problems -- there's a provision in the statute speaking of that -- and -- and specifically decided that they are inferior officers who can and should be appointed by the Secretary. And that determination, we think, is entitled to a certain amount of deference.
Justice Kagan: Thank you, Mr. Perry.
Chief Justice Roberts: Justice Gorsuch.
Justice Gorsuch: Mr. Perry, I understand you and your colleagues from the other side disagree a little bit over the patent interference question and the history here, but, in answer to Justice Kagan, is it -- is it fair to say that, yes, this is a rare bird in that in this area, maybe for historically contingent reasons maybe considered, maybe not, this is an unusual animal in the sense that there isn't final review in the agency head?
Mark A. Perry: Well, there is reviewability in the agency head, but, Justice Gorsuch, to directly answer your question, since 1 the APA was enacted in 1946, most agency adjudications follow either the APA 556, 557 categories or a close proxy. And the Patent Office doesn't. Of course, before that, there were many others. That's why the APA was enacted. And we would submit that the Appointments Clause is not a super APA. It doesn't require the President or Congress to follow the APA in any particular case.
Justice Gorsuch: Is that a long way of saying yes, that this area is, if not sui generis, very, very unusual?
Mark A. Perry: It is unusual, but it is also well and historically founded and -- and, until now, unchallenged.
Justice Gorsuch: Okay. And with respect to the soft power that -- that is sometimes emphasized that the director may have over appointing different APJs or extracting promises from certain APJs about how they'll rule, do you admit that there might well be due process problems there?
Mark A. Perry: We certainly think that the PTAB structure and -- and the decisions are 1 subject to due process constraints, and that would be a legitimate source of concern if those kinds of issues arose. There is no such question or allegation or concern in this case. This is -- this is only a structural Appointments Clause question. Absolutely, they are, of course, subject to the Due Process Clause and all of its constraints.
Justice Gorsuch: Thank you.
Chief Justice Roberts: Justice Kavanaugh.
Justice Kavanaugh: Thank you, Chief Justice. Good morning, Mr. Perry. You mentioned that the other side's argument rests on a single line from Edmond. That, of course, is the critical line from Edmond about the administrative judge context. Just to pick up on Justice Gorsuch, this does seem, and I think you acknowledged, a -- a significant departure from general historical practice since the APA, which is a yellow flag, if not a red flag. And then your test to try to deal with that seems to resurrect Morrison v. Olson's 1 test. I thought we'd gotten away from that in -- in Edmond. Justice Alito's questions pointed that out. And what I'm worried about -- this is the wolf. What I'm worried about is this gives a model for Congress to eliminate agency review of ALJ decisions and kind of fragment and take away from agency control going forward, because this -- however this came about, to Justice Kagan's question, this would be a model going forward, and that would allow Congress to give extraordinary power to inferior officers, which is not how our government is ordinarily structured. And then, to Justice Sotomayor's question, it seems like ALJs, there's two -- there's two fixes. You can go with the executive model of ALJs, which is the traditional have ALJs and have agency review or removability, it's usually agency review, not removability with ALJs; or you can make the APJs principal officers with presidential appointment and Senate advice and consent if you want a more judicial model. But, here, the -- this hybrid gives 1 enormous power to inferior officers, and it's really just out of the norm. Your response?
Mark A. Perry: Two responses, Justice Kavanaugh. First, this system fits neatly within, we would submit, Justice Scalia's dissent in Morrison versus Olson, particularly Footnote 4 and the surrounding text describing the role of subordinate officers and the interplay with removal powers. Second, I cannot emphasize enough that the director maintains the final authority under 318(b) to confirm or cancel any patent. The APJs do not cancel patents. The patent in this case is still valid. The board has declared it to be unpatentable, but the director has not canceled it. So, to this day, three years later, nothing has happened because the director, the politically appointed directly accountable to the President individual, has not taken the action specified by statute. The Congress has made a different determination here, but it is absolutely consistent with the dictates of the Appointments Clause.
Justice Kavanaugh: Thank you.
Chief Justice Roberts: Justice Barrett.
Justice Barrett: Good morning, Mr. Perry. So I want you to assume for the purposes of my question that you lose on the Appointments Clause issue, and I want to ask you about remedy. So, you know, the federal -- well, think about -- one unusual thing about the remedy here is that it's not one specific provision in this statutory scheme that's being challenged as unconstitutional. It's the way that they work together. You know, so we could, if we decided that it was unconstitutional, perhaps make all of the APJs subject to -- say they're principal officers, and so they have to be subject to presidential appointment, senatorial confirmation. We could say, listen, we're going to strike the provision in the statute that says only the PTAB may grant rehearings so that the director has that authority. We could make them maybe at-will employees, so they're removable at the discretion of the director without having to 1 go through the full process that we discussed before. That's a lot of discretion to give us in trying to shape a remedial -- a remedy here. Why should we even assert the authority to do that, to sever?
Mark A. Perry: Justice Barrett, the -- the -- from my perspective from -- from, you know, where we think the statute, of course, is constitutional -- and I don't mean to be flip -- but, if you tell me how we lose, we can tell you what the remedy is. So, for example, if the real problem here is the lack of agency reviewability, then the most direct line to a solution would be to sever the provision requiring board rehearing so that the director could unilaterally review. And there may be other remedies depending on where, if anywhere, the Court were to find a constitutional violation. It is not where the Federal Circuit found it. And it's certainly not where Arthrex has identified it, which is to take down this whole system. You know, they don't actually want presidential confirmation. They don't 1 actually want director review. What they want is for the Court to -- to blow up the whole thing because of a structural problem that, again, not to fight the hypothetical, we think doesn't exist.
Justice Barrett: Thank you.
Chief Justice Roberts: A minute to wrap up, Mr. Perry.
Mark A. Perry: Mr. Chief Justice, principal executive officers sit at the right hand of the President and make national policy. They are the ambassadors, the cabinet members, and the agency heads who have no superior other than the President. The APJs here are three steps away from the President. The chain of command runs through the Secretary of Commerce and the PTO Director. This Court has consistently recognized subordinate officials in general and administrative adjudicators in particular to be inferior officers. APJs carry out policy. They do not make it. Findings like these have been made by inferior officers since the Patent Office was created, and APJs carry on that 1 tradition. They are inferior officers. Thank you.
Chief Justice Roberts: Thank you, counsel. Mr. Lamken. ORAL ARGUMENT OF JEFFREY A. LAMKEN ON BEHALF OF ARTHREX, INC.
Jeffrey A. Lamken: Thank you, Mr. Chief Justice, and may it please the Court: Administrative patent judges do one thing: decide cases. Their decisions are the executive's final word resolving billion-dollar disputes affecting the innovation landscape. They can even overturn earlier decisions by their own agency head to grant a patent. No superior in the executive has authority to review their decisions, to overturn their exercise of government authority. Accountability suffers. If a principal officer has review authority but refuses to exercise it and overrule subordinates, the President and the public can hold him accountable for that choice. But the principal is not accountable if the answer is, I have no authority. Congress made my supposed underlings the final word. 1 Punishing APJs for decisions or guidance to prevent future error doesn't undo decisions already made. For parties, the decision remains the executive's final word. In 200 years, this Court has never upheld such a scheme. Edmond emphasizes review by presidentially appointed, Senate-confirmed officers. It's hard to imagine the Coast Guard judges there would be inferior officers if none of their decisions could ever be countermanded by a superior, which is why the Federal Circuit's remedy striking APJ tenure protection is no remedy at all. APJs would still be the final word of the executive for the cases they decide, and it subjects APJs to unseen, behind-the-scenes pressures through which superiors could evade accountability. How to fix the statute is for Congress. Solutions point in the opposite direction. Congress might want APJs to be presidentially appointed and Senate-confirmed, as examiners-in-chief were for 114 years. Congress might want to grant the director express authority to read board panel decisions. That's how Congress fixed the problem for the 1 Trademark Trial and Appeals Board, the TTAB, last year. But this Court can't pencil in those solutions. It's more respectful of Congress to allow Congress to choose how to structure the agency. I, of course, welcome the Court's questions.
Chief Justice Roberts: Thank you, Mr. Lamken. Why isn't it okay -- we've -- we -- I think Justice Gorsuch referred to this as the soft power of review. Why isn't -- under our precedents and basic principles, why isn't it okay that the executive allow the adjudicators a significant degree of leeway because they're just that? They're adjudicators, they're coming up with particular factual determinations, and you don't want the politically accountable people to have the authority to overturn those in -- in situations where billions of dollars are at stake, but, at the same time, in terms of basic patent rules and approaches and guidance, you do want them to have that responsibility. Why -- why isn't that a fair balance?
Jeffrey A. Lamken: Well, Mr. Chief Justice, the Constitution permits adjudication in the Executive Branch in part because some adjudication is executive in nature. But placing that function in the executive means that the key protections against executive overreach, which is accountability to the people for the decisions, has to be observed. Allowing unaccountable officers to decide those cases finally, stripping any accountable principal of authority to overturn them, defeats that structural protection. Now the standard model for agency structure achieves both the impartiality of the initial decision and allows for principal officer review, and it ensures that the principal officer review after the fact has a principal officer taking responsibility for his decision to overturn the impartial adjudicator. This, by contrast, comes up with a situation where you really -- it doesn't make sense because you really can't be an inferior officer. You cannot be an inferior adjudicator when there's no superior who can review any of your decisions ever.
Chief Justice Roberts: Well, not any of your actual decisions, but can certainly take actions that would redirect any mistakes that the director sees in how a particular case was handled for the implementation of patent policy according to the President's directives, the President's responsibilities.
Jeffrey A. Lamken: A regulation or -- or punishment of the APJ after the fact simply doesn't change the fact that the APJ's decision is the final word in the case, the final word of the executive. So, for the parties aggrieved by the loss of valuable rights, there's no superior they can go to to ask them to countermand that bad decision. For the public and aggrieved parties wanting to know who to hold accountable for the decision, there's just nobody. The principal office -- officer's response is, I have no authority to overturn those bad decisions, Congress stripped me of that power. That's the opposite of accountability. It's the nature of adjudication that you decide individual cases. If we're going to have accountability in adjudication, it 1 has to be accountability for individual cases. Structural protections like these protect individual liberty, so they have to apply in individual cases.
Chief Justice Roberts: What about the argument that, as a matter of practicality, which is something that the government has to take into account, what you're supposing is -- is really quite impractical? Hundreds and hundreds of administrative hearing examiners, as at least they used to be called, making these sorts of decisions, the notion of meaningful review of each one seems to me to be fanciful.
Jeffrey A. Lamken: Mr. Chief Justice, because the account -- the Appointments Clause is about accountability, what matters is legal authority. If the director thinks he's too busy to review a decision, if the director thinks they're too numerous to merit his attention, the public and the President can hold him accountable for that decision. But, if the director's answer is, I have no legal authority to review those decisions, then he is not accountable at all.
Chief Justice Roberts: Thank you, counsel. Justice Thomas.
Justice Thomas: Mr. Lamken, why does that accountability matter in this case? Are you saying that you would actually get a better decision from the director?
Jeffrey A. Lamken: Your Honor, yes, we believe we would get a better decision from the director. But what matters is for individuals to understand when they are making these decisions that they are subject to potential review and reversal by -- by their principal officer. Absent that oversight, there isn't sufficient guidance and control to ensure that they are inferior officers. In the end, we're ultimately entitled to a decision where a principal officer appointed by and accountable to the President has authority to review the decision. Absent that --
Justice Thomas: So how much review are you talking about? Is it -- can it be just pro forma review? Rubber-stamp review? How much review are you talking about to address 1 your concerns?
Jeffrey A. Lamken: I -- I think the -- it's the availability of review. This Court -- the lower federal courts don't cease to be inferior courts merely because this Court denies certiorari in the vast majority of cases. It is the availability of review that makes them inferior courts and this Court the Supreme Court. And so it doesn't have to be actual review in any case. But, in Ed -- in Edmond, for example, review is limited to issues of law, and if there is -- so long as there is sufficient evidence on every element of the offense, then the -- the higher court couldn't overturn it. And so, presumably, under proper circumstances, that would be an appropriate standard. But what you can't have is what we have here, which is not only can you not remove the lower -- the supposedly lower officers, but the director simply does not have authority to overturn their decisions no matter how vehemently he may disagree with -- he may disagree with them. In fact, he, at most, in any rehearing 1 sits on a panel of two -- three, where he is outnumbered two to one by other inferior officers.
Justice Thomas: So, if I understand you, if Congress amended the relevant provision and gave discretion to the director, you -- that would solve your problem?
Jeffrey A. Lamken: That's exactly how -- yes, that's exactly how Congress fixed the problem for the Trademark Trial and Appeals Board. It provided -- inserted an express provision saying that the director has authority to overturn board decisions with which the director disagrees. But this Court can't pencil in that sort of authority. The government attempts to get there by asserting that the Court should strike, for example, the -- the provision that says that only the board can grant a rehearing, but that wouldn't fix the problem at all. The only person that would --
Justice Thomas: Well, let me ask you one more question then. The -- assuming that Congress addresses the problem by providing the director with discretion, could the director 1 then delegate that authority to the APJs and the various structures within the organization to basically the way it exists now by statute, but the -- the director accomplishes that by delegation? Would that be okay?
Jeffrey A. Lamken: Your Honor, I think, since the statute authorizes his review, that would be permissible so long as it's consistent with the statute, because the public and the President could hold the director accountable for his --
Justice Thomas: So, I mean, if you could be in the exact same posture that you're in right now, as long as he does it by delegation rather than by statute?
Jeffrey A. Lamken: Well, it wouldn't be the exact same posture, Your Honor, because, if it's by delegation, he could always withdraw that delegation. If it's by delegation, he is accountable for having done the delegation. He cannot point his finger at Congress and say: Congress deprived me of the power to overturn that decision. It would be his choice to not review the decision, his choice to delegate, his choice for which he is accountable to the 1 President and the people of the United States.
Justice Thomas: Thank you.
Jeffrey A. Lamken: What's missing --
Chief Justice Roberts: Justice Breyer.
Justice Breyer: But following up on what Justice Thomas says, I mean, I don't -- why is this an unusual matter of delegation? I mean, after all, the government is filled with all kinds of different people. Doctors in practice may have final authority to decide at the Veterans Administration whether you're on your right day for an appointment. Sergeants will decide what hill to take in the Army. Inspectors general may decide who is a whistleblower and have absolutely unreviewable authority to send something over to Congress to say what that whistleblower said. There are many shapes and sizes. And some -- and Congress -- I mean, you're saying Congress can't restrict their authority at all, no matter what the shape and what the size? Or can they do it --
Jeffrey A. Lamken: Justice --
Justice Breyer: -- sometimes and not 1 do it other times? And if so, when?
Jeffrey A. Lamken: So, Justice --
Justice Breyer: I mean, it's just pretty complicated.
Jeffrey A. Lamken: -- Justice Breyer, I think when you're talking about an adjudication, what's critical is the authority of a principal officer to be able to overturn that -- the decision --
Justice Breyer: But not for a doctor, not for a whistleblower?
Jeffrey A. Lamken: No, for -- for policy decisions --
Justice Breyer: Ah.
Jeffrey A. Lamken: -- that sort of regulatory decision, it's often sufficient for you to have removal authority or the threat of removal, because those decisions can be overturned --
Justice Breyer: True, but --
Jeffrey A. Lamken: -- even once the --
Justice Breyer: -- I mean, what about the inspector general? Can the Congress there give him some unreviewable authority, send him a letter with a whistleblower?
Jeffrey A. Lamken: So, of course, anybody who has oversight can always overturn any -- that -- that sort of --
Justice Breyer: Let's say --
Jeffrey A. Lamken: -- executive authority.
Justice Breyer: -- Congress delegates to the inspector general the unreviewable power to decide whether to send a letter to Congress at the request of a whistleblower.
Jeffrey A. Lamken: Yeah, I don't think --
Justice Breyer: Can Congress do that or not on your theory?
Jeffrey A. Lamken: So I think that sending a letter to Congress may or may not be substantial governmental authority of the sort that would be --
Justice Breyer: Oh, okay, okay. But --
Jeffrey A. Lamken: -- be an issue here.
Justice Breyer: -- now we've got -- we're finding out what you're looking for, the other side is saying this: Given the complexity of the federal government, of course, there are going to be vast numbers of different cases, so we have three basic things to look at: What's 1 the position in respect to the President of the individual? What's the nature of that job? And what is the nature of the delegation of non-reviewable authority? I mean, even magistrates and lower court judges decide things without review, such as a denial of summary judgment. What's the nature of the authority delegated, what's the nature of the job, what's the distance from the President, and it all comes under the rubric policy. Is it taking too many policy matters away from the President? So an adjudicator will have more authority, possible. And so will a whistleblower, inspector general. And maybe somebody else won't. Maybe somebody in the Nuclear Regulatory -- do you see -- do you see what they're driving at? So what's your response to that?
Jeffrey A. Lamken: Justice Breyer, I think, when you have adjudications, it's just in the nature of adjudications that you decide individual cases. And if you're going to have accountability in those decisions, which you must if you're in the Executive Branch, that 1 accountability has to be for individual decisions. And if you -- if you have an -- a supposed underling with unreviewable authority to decide the matter, you do not have accountability of a superior. You simply can't be an inferior adjudicator if there is no superior who can review any of your decisions ever. The Constitution uses the word "inferior" only in the -- the context of the lower federal courts. Those courts are inferior because their decisions are subject to this Court's review. If there were courts out there where this Court would have no authority to review their decisions ever, under any circumstances, they might be lesser or coordinate courts. They wouldn't be inferior courts. For adjudication, being an inferior means having a superior who can review and overturn your decisions.
Chief Justice Roberts: Justice Alito.
Justice Alito: Mr. Lamken, let's assume that we agree with you that this current 1 scheme violates the Appointments Clause. You say in your brief we shouldn't go any further; we should leave it to Congress to decide what to do to fix the problem. But that really doesn't answer the question of what relief you should get in this case. I -- I assume you would not be satisfied if, at the end of this case, the only thing that you obtain is a declaration that the current scheme is unconstitutional, but nothing is done to disturb the decision of the board, right? You wouldn't be satisfied with that?
Jeffrey A. Lamken: Correct. That would be essentially an advisory opinion for us. Because the Court -- because the IPR system is unconstitutional, this case can't proceed, there's no constitutional mechanism to which this case can be remanded. Accordingly, the IPR really should be dismissed.
Justice Alito: Well, you -- you want us to go beyond simply saying that there was a violation and, Congress, you fix it as you see fit. You want us to grant -- you want the judiciary to grant you a form of relief, namely, a decision vacating the decision of the board. 1 That is a form of relief. Why is that a more modest form of relief -- a more modest form of relief than some of the alternatives, such as saying that you are entitled to have the director review the decision of the board?
Jeffrey A. Lamken: Your Honor, I think the -- the Court couldn't create that mechanism without rewriting the statute. And --
Justice Alito: We wouldn't -- we wouldn't rewrite the statute. What the Court would say is this is what the Constitution requires. The law is -- I mean, Professor Harrison makes this point repeatedly, and it seems like a convincing point. The law is a combination of what the Constitution requires and any statutory additions to what the Constitution requires. So, if the Constitution requires some alteration of the current statutory scheme, so be it. And that is an alteration that would possibly bring this into compliance with the Constitution.
Jeffrey A. Lamken: I think -- Your Honor, I believe there's, you know, the choice of how to 1 have these decisions made. Whether or not you elevate APJs to have them appointed by the President, to make them true principal officers, or, conversely, whether you would instead subordinate them to the director by making their decisions reviewable by the director, is a sort of fundamental policy choice this Court does not make. Congress --
Justice Alito: But -- but somebody has to make a choice about -- somebody in the judiciary has to make a choice about how this case ends. And I -- I -- I don't think you can -- I don't think it's an answer to say don't make any choice at all, just say that we win. That is a choice. That is a form of relief, is it not?
Jeffrey A. Lamken: Yes, yes. And it is a form of relief, for example, this Court gave in Sorrell. It said there's multiple possibilities of how the statute could be changed, but we are not the institution to be -- to doing it. The legislature has to make that change. And I think that's precisely the case here because the possible solutions point in diametrically opposite directions. One is to 1 make the officers -- to -- to make the APJs appointed by the President so that you have -- so they're true principal officers. The other would be to make them truly subordinate to the director by making their decisions not final and at least subject to the possibility of review by the director. But, since those and the multiple other possibilities point in such diametrically opposed directions, this Court should hold that this IPR cannot proceed because the system is not constitutional. And then any remedy beyond that, any revision to the statute would be a matter for Congress to -- to address.
Justice Alito: All right. Thank -- thank you.
Jeffrey A. Lamken: It's far more --
Justice Alito: Thank you, Mr. Lamken.
Chief Justice Roberts: Justice Sotomayor.
Justice Sotomayor: Counsel, I find it odd -- not odd to protect Congress's prerogative, but it's nothing that we do will tie Congress's hands. And one thing we do know is that they can change anything we do as a 1 temporary remedy, assuming we were to rule in your favor. But I -- I have a problem with our jurisprudence as -- as it's developed in this -- in -- in these cases. And the founding generation conceived of principal officers as synonymous with heads of departments. In early debates and enactments that structured executive department, heads of the department were -- were referred to as principal officers and other members as inferior officers. There's a whole history that many of those inferior officers took final decisions in a wide variety of areas. Yet that's the way we proceeded. The history also shows that early statutes gave non-principal officers the power to make final adjudicatory decisions on behalf of the executive. Your opposing counsel pointed out that as early as 1793, non-principal officers were given the power to adjudicate patent disputes, and in 1803, land commissioners were given the power to make final determinations as to a claimant's right to a tract of land. I personally read this history as 1 suggesting that principal officers were intended to be policymakers, and individuals who merely adjudicated claims based on said policies were not principal officers. So, for me, the person that has to be held responsible is not the individual ILJ -- or ALJ who is making a decision. It's the person who creates the policy. And for me, it's clear that APJs are not policymakers. All the policies are vested in the director. Precedential power is put in the director. The ALJs cannot influence the course of the law. That's only the director. So please tell me why the individual decision based on a quasi-law precedent and policy set by the director is a final decision that that director won't be held responsible for.
Jeffrey A. Lamken: Well, Your Honor, I think the short answer is, if the director has no authority to over -- overturn it, then the director isn't responsible for it. It's not his fault. And I think that in terms of history --
Justice Sotomayor: I -- I -- I'm having a problem with that. If the APJ makes a 1 mistake under the policy set by the director, that is going to be reviewed by the courts.
Jeffrey A. Lamken: Your Honor, it's -- these aren't -- these require applications of law to facts. There's credibility determinations. It doesn't make you an inferior officer simply because somebody in a coordinate branch could review your decisions. If that were the test, then the heads of departments and the members of the cabinet would be inferior officers also because their decisions can be reviewed by the courts. Under Edmond, to be an imperial -- inferior officer, you have to be subject to the supervision and control of a principal officer. That doesn't mean that you can only have one single head of agency principal officer in any -- in any agency. Madison, as we pointed out in our brief, expressly recognized the fact that you could have other principal officers --
Justice Sotomayor: Counsel --
Jeffrey A. Lamken: -- subordinate to the heads of department.
Justice Sotomayor: -- just one last 1 point. I just ignore the history under your view and --
Jeffrey A. Lamken: No.
Justice Sotomayor: -- what it teaches us.
Jeffrey A. Lamken: No, quite the opposite. I think the history, when -- of the arbitrators that you mentioned, they would decide just a single case, and that has two consequences. First, because an arbitrator doesn't have a continuing position, historically, they would not be treated as an officer at all, as the Alfmart and the 2007 OLC opinion made clear. They're like jurors. Jurors have important responsibilities for cases, but they're not officers. Second, because the role is only temporary and for a single case, such an arbitrator wouldn't be -- would at most be an inferior officer, as under Morrison.
Chief Justice Roberts: Justice Kagan.
Jeffrey A. Lamken: But whatever one thinks about --
Justice Kagan: Mr. Lamken, suppose that there was review by the director in this 1 case, but the review was under a clear error standard. Would that be enough?
Jeffrey A. Lamken: Your Honor, I think, consistent with Edmond, a clear error standard, legal, would probably be sufficient in light of the other means of control that the director has.
Justice Kagan: And -- and how about if it was under an egregious error standard?
Jeffrey A. Lamken: I think, Your Honor, at some point, where the authority of the director is so cut off that he is not able to say with any accountability that the final decision of the APJ represents the views of the United States, that this is a decision that he is willing to stand behind as the word of the PTO --
Justice Kagan: Well, then let's --
Jeffrey A. Lamken: -- then I think, at that point, you've got to --
Justice Kagan: -- let's think about what you just said in reference to Edmond. In Edmond, as you said -- and this is why you said a clear error standard would have to suffice -- the standard was is there 1 competent evidence in the record. Now, if I think about that standard, I mean, when is there not competent evidence in the record? So I guess I'm wondering how Edmond is at all consistent with some of the statements that you've been making this -- this morning? You said that, you know, it's -- it's -- if -- if the head of the agency can say he had no authority, the head of -- if the head of the agency can say it's not his fault, then that is -- then that dooms the system. But the CAAF could have said all those things: we have no authority, it's not our fault, there was competent evidence in -- in -- in the record. I mean, it wasn't very good evidence and the evidence in our view was outweighed by much better evidence, but it was competent, so it's not our fault.
Jeffrey A. Lamken: Your Honor, of course, the CAAF could also review all errors of law, and we would think that the PTO director would have to be able to do that as well.
Justice Kagan: Well, but with --
Jeffrey A. Lamken: But the one --
Justice Kagan: -- respect to many decisions, the -- the -- the critical question is what the evidence says, and, you know, putting aside whether there's -- there's de novo legal authority, you know, many decisions the CAAF would be able to say, you know, this was in the end a decision about the evidence, and we basically have no authority with respect to judgments about how good the evidence is. As long as there's, like, something there, we have to go along, it's not our fault.
Jeffrey A. Lamken: Well, Your Honor, I think the answer is that one thing that Congress can't do and still maintain you as an inferior officer is to say that your adjudicative decisions are not subject to review by any principal officer under any circumstances. That simply goes too far. And that's what we have here. Plus, where the case --
Justice Kagan: I mean, I -- I guess what I'm just wondering is whether this doesn't suggest that this question of review is something that's not an on/off switch as to this single issue but something that needs to be put into the mix and needs to be considered along 1 with all the other evidence of -- of -- of control that the agency head has. The reason why this competent evidence standard was okay in Edmond was not that, you know, it itself was there because, you know, competent evidence standard doesn't give you much. It was because it was combined with a raft of other things.
Jeffrey A. Lamken: I think Your Honor is correct in the sense that the ability to review -- of a principal officer to review the supposed inferior's decision is a critical but perhaps not always sufficient condition. But you really can't call them an inferior officer if the answer is for the superior, I have no authority to review your decisions at all under any circumstances.
Justice Kagan: If we're being --
Jeffrey A. Lamken: That wouldn't --
Justice Kagan: -- honest, Mr. Lamken, wouldn't you think that the director can probably get the precise result he wants in a higher percentage of these cases than the CAAF could have gotten in Edmond?
Jeffrey A. Lamken: No, Your Honor, I don't 1 think so, because, you know, for example, he cannot conceivably anticipate every conceivable factual scenario, every conceivable distinction, every single thing that an -- an adjudicator might come up with along the way.
Justice Kagan: Thank you, Mr. Lamken.
Jeffrey A. Lamken: Just --
Chief Justice Roberts: Justice Gorsuch. Justice Gorsuch?
Justice Gorsuch: Oh, I'm -- I'm sorry. Mr. Lamken, if you'd like to finish that answer, I'd -- I'd -- I'd be grateful to hear it.
Jeffrey A. Lamken: Yes. He couldn't possibly conceive -- come up with every conceivable along the way. And the idea of, you know, the fact that the government seems to try and contrive together ways that the government -- that -- excuse me, that the director could possibly control the outcomes, for example, front-running APJ decisions with pay-specific guidance, manipulating panel size or panel composition to achieve results, de-instituting to try and avoid bad decisions, all those 1 contrivances to try and give the director some sort of control just show that Congress didn't give the director the critical authority you need for adjudications: the authority to review and overturn decisions so he can stand behind them as the final word of the United States.
Justice Gorsuch: So, Mr. Lamken, in our last couple of cases, Seila Law and Free Enterprise, we were able to get in and get out rather cleanly, severing only the removal provisions, and, of course, that took care of the -- the constitutional problem there. Here, you -- you indicate that supervision is a real problem and more machinations are required. But the SG offers us a -- a -- what it thinks is a clean answer on I think it's about page 40 of its brief that we -- we just sever the provision in Section 6(c) that says only the PTAB may grant rehearing. Why -- why isn't that sufficient?
Jeffrey A. Lamken: Well, Your Honor, first, that's, of course, one of multiple options that point in opposite directions, but it wouldn't even fix the problem. Even if the director -- that would 1 somehow give the director the ability to grant a rehearing, despite the rule that the body with authority to decide cases initially usually has the authority to grant a hearing, not somebody else, but the director still wouldn't have unilateral authority to decide cases on rehearing. The statute still says decisions are issued in panels of three in which the director is, at best, outnumbered two to one.
Justice Gorsuch: All right. So we'd have to --
Jeffrey A. Lamken: So any --
Justice Gorsuch: -- we'd have to -- we'd have to blue-line not only that language in 6(c) that says only the PTAB, but you're also pointing out that first part of Section 6(c) that says shall be heard by three members, fine. Is -- is that -- would -- would -- would that do it?
Jeffrey A. Lamken: So, Your Honor --
Justice Gorsuch: Would that solve the problem.
Jeffrey A. Lamken: Right. I think, you know, Congress could rewrite the statute that way. But trying to take the director and re -- 1 and insert him above the board, where Congress made him only one member, trying to insert the director as a single decision-maker, where Congress provided for people to sit in panels of three, that isn't a surgical solution. That's vivisection.
Justice Gorsuch: Are there other --
Jeffrey A. Lamken: Congress --
Justice Gorsuch: -- are there other portions of the statute we'd have to eliminate or add to?
Jeffrey A. Lamken: No, but it would still rep -- I think that you would have to strike at least those two, but that would be a radical alteration of the scheme Congress established. Panels of three were an important protection against idiosyncratic thinking. They ensure a necessary breadth of expertise. They provide a check ensuring just -- that you have decision-makers with different backgrounds. And it would be a departure from historical practice of having the -- having the APJs sit in panels of three. But, ultimately, the problem is there's two opposite ways that one can go here. 1 One can elevate the APJs and provide for them to be presidentially appointed and be true principal officers, as examiners-in-chief were for 114 years, or you can try and subordinate them by making the director the final decision-maker and give him capacity to overturn decisions with which he disagrees.
Justice Gorsuch: Well, one --
Jeffrey A. Lamken: But that's --
Justice Gorsuch: -- one option you've given -- one option you've given us is to simply set aside the IPR determination, remand the case to the agency, and then wait for Congress to fix the problem. I'm sure some would argue that, well, that could take a long time. What -- what's your response to that?
Jeffrey A. Lamken: Well, Your Honor, so Congress, when it addressed the problem, it has already addressed the problem with respect to the Trademark Trial and Appeals Board. In addition, it -- Congress has already held hearings. It has before it ready-made solutions, one historical, more -- one more recent with the TTAB available, and there's only 750 of these IPRs currently pending, 1 approximately, which is a little more than three per IPJ. Congress could readily make it possible for these to be re-filed if it chose in a new and constitutional system. Ultimately, it's more deferential, it's more respectful of Congress to give Congress the ultimate authority and give Congress the choice of what it believes is the right answer for the structure for an agency responsible for technological innovation and important property rights. This Court shouldn't be placing a thumb on the scale and giving judicial imprimatur to one of multiple diametrically opposed solutions.
Justice Gorsuch: Thank you.
Chief Justice Roberts: Justice Kavanaugh.
Justice Kavanaugh: Thank you, Chief Justice. Good morning, Mr. Lamken. I want to follow up on some other of my colleagues' questions and then turn to severability. First, following up on the Chief's questions, my understanding of your position is 1 that you take the position that ALJs within the Executive Branch may be somewhat of an uneasy constitutional solution, but it's historically settled, we have tenure protection, plus agency review, and that gives due process but also gives ultimate agency control of policy. That's kind of the historically settled solution. You want to preserve that, correct?
Jeffrey A. Lamken: That's exactly right. And it was also that type of solution that persisted for hundreds of years in -- with respect to initial examinations and with -- with respect to interferences as well --
Justice Kavanaugh: Okay. Here --
Jeffrey A. Lamken: -- and with respect --
Justice Kavanaugh: -- here, the problem is Congress departed from that tradition by keeping the due process part without the agency review part, and you can either keep the review if you want to keep them as inferior officers, or if you want to avoid agency -- any agency review, Congress can do that too, but that, they'd have to do presidential appointment and Senate confirmation of the APJs, correct?
Jeffrey A. Lamken: That's right. If -- if 1 history means anything, this is an outlier. It's an aberration and an unconstitutional one at that.
Justice Kavanaugh: Okay. And then Justice Thomas asked about how it would be different if delegated, in other words, if the power of review were granted to the director and then it's delegated. Your answer to that, I think, was accountability, is that correct?
Jeffrey A. Lamken: I think that's right. When a principal officer has authority and then chooses to delegate it to another, assuming that that's consistent with the statute, that principal officer is then accountable for the choice to delegate. If the attorney general says, I am too busy to review these, I want somebody else to do it for me, the public and the President can hold him accountable for that choice.
Justice Kavanaugh: And then Justice Breyer asked about inspector generals. He asked about other officers too, but, on inspector generals, my understanding is those are presidential-appointed and Senate-confirmed, and 1 there actually would be a pretty big problem if they were not -- at least if they had tenure protection and were not presidential-appointed and Senate-confirmed. Do you have any different understanding of that?
Jeffrey A. Lamken: No, I wouldn't.
Justice Kavanaugh: Is the Morrison test still alive after -- for -- Morrison test for Appointments Clause purposes still alive after Edmond?
Jeffrey A. Lamken: So Morrison relied heavily on the fact that the officer was appointed for a limited duration and for a single task, a single investigation. Whatever one might think of that, it's a completely different matter entirely to have an entire branch of an agency with 200 or more permanent positions that are adjudicating case after case after case without the possibility, without authority and a principal officer to overturn their decisions.
Justice Kavanaugh: And in Edmond --
Jeffrey A. Lamken: And that's in the Executive Branch.
Justice Kavanaugh: -- just in Edmond -- just to clarify one thing, I think this comes from Justice Kagan's questions -- in Edmond, there was both review of some sort -- she asked you to pinpoint that -- but review of some sort but also removability at will, correct?
Jeffrey A. Lamken: That's right. They could be removed from their position and they have -- there was review of some sort. And, here, we have exactly the opposite --
Justice Kavanaugh: Let me --
Jeffrey A. Lamken: -- the absence of review.
Justice Kavanaugh: -- let me turn because I -- I've got to turn quickly to severability. So, if we agree with you on the merits, you want to then take down the whole system, and we've frowned upon that repeatedly. And severability, I mean, maybe something of a misnomer in some respects, really follows from the nature of the constitutional problem. We declare what the nature of the constitutional problem is. We say -- then we enter judgment, and then stare decisis means that that constitutional problem exists for all cases. Isn't the nature of the constitutional 1 problem here the lack of director review, which would mean us saying 6(c) is the constitutional problem?
Jeffrey A. Lamken: No, Your Honor, because the problem stems also from the fact that the officers are not appointed by the President and Senate-confirmed. Either one would be sufficient to address the problem. And it's not like separation-of-power cases where the officers just -- the single problem is the officer is not subject to presidential control, and, therefore, all the remedies involve subordinating the official, clipping their wings, so to speak, or striking a novel restriction on removal. Here, the problem is --
Chief Justice Roberts: Thank you, counsel. Justice Barrett.
Justice Barrett: Mr. Lamken, I want to pick up where Justice Kavanaugh left off on the remedy here and severability. So, on pages 56 and 57 of your brief, you cite Sorrell and Bowsher and Free Enterprise, and you cite them all for the -- the 1 proposition that if there are multiple ways to cure a constitutional problem in a statutory scheme, then the judiciary ought not be blue-penciling it. Can you think of any situation in which we have said, okay, well, there are multiple flaws in this scheme, but, you know, as Justice Kavanaugh was just saying, 6(c) seems to be the big problem, so we're going to think it's the cleanest to go that route? Are -- are you -- can you tell me the negative, that we've never done it?
Jeffrey A. Lamken: Oh, quite the contrary, Your Honor. In Sorrell, that's exactly what this Court did. It said there was at least five different things that are problematic combined, and it would be a matter of judicial policymaking in order to determine which of those should be removed. This -- it's exactly the same problem here because you have the --
Justice Barrett: Well, no, no, no, counsel, I -- I understand that we did that in Sorrell, but my question is, have we ever done what we didn't do in Sorrell?
Jeffrey A. Lamken: Which is to make a --
Justice Barrett: Yes --
Jeffrey A. Lamken: -- judicial policy choice?
Justice Barrett: -- to make one that makes sense. I mean, let's say that Justice Kavanaugh is right and that it seems very sensible and makes a lot of sense to solve this problem, assuming that we say there is one, by saying 6(c) is the problem, so that's -- that's the locus of the constitutional problem here, and we're going to say that that's what we're holding unconstitutional so that going forward, it's just that the PTAB can't have the final word.
Jeffrey A. Lamken: Well, the Court could just as easily say the locus of the constitutional problem is the fact that these officers are not appointed --
Justice Barrett: I understand that --
Jeffrey A. Lamken: -- by the President and Senate-confirmed.
Justice Barrett: -- Mr. Lamken, but what I'm asking is, can you cite a case -- or are you telling me that there is none? Can you 1 cite a case for the proposition where we have done just that? Understanding that that runs against what you want us to do here, I'm just asking, is there a negative? Is it the case that we've always had the position that we had in Sorrell and we've never said that when there might be multiple provisions working together that create a problem or multiple ways of solving it, that we haven't just chosen one that makes sense?
Jeffrey A. Lamken: Well, I think the -- the -- you're right, Your Honor, in the sense that this Court doesn't make that sort of judicial policy decision when the possibilities are multiple and they point in -- and they point in complete opposite directions. This Court recognizes that it's respectful of Congress to let Congress make the policy choice. And even if this Court could somehow decide that, as a policy matter, it wanted to do one thing or the other -- strike the -- the appointment mechanisms for the ALJs or somehow slice up the statute to try and reinsert the PTO director above the board -- it's not a matter of -- of surgical relief then.
Justice Barrett: Okay, Mr. Lamken --
Jeffrey A. Lamken: It is --
Justice Barrett: -- let me -- let me pivot to the Appointments Clause issue. So Justice Kagan was pointing out there are many way in which we would say that APJs are subordinate to the director, and it seems to me that one way to look at this case is to say that at a 10,000-foot level, if you look at front-end controls, you know, if you look at hiring and -- and firing and the ability of the director to set policy that the APJs must follow, in many respects, they're inferior officers, and we might say that Congress has given them this one authority, this case-specific review authority, that is one that is inconsistent with the inferior officer role. But it does -- it does seem odd, doesn't it, to say that they are principal officers because they exercise this one piece of authority that seems to go beyond what an inferior officer can do?
Jeffrey A. Lamken: Well, that, Your Honor, is Freytag. Freytag held that it may well be that a single officer has many responsibilities 1 to those of inferior officers, but if that officer has authority that goes beyond that for an inferior officer, if the officer is the final decision-maker for the Executive Branch where no -- he has no superior in that context, that officer is then a principal officer for all purposes and cannot continue in that office absent a proper appointment. That is Freytag's holding.
Justice Barrett: Thank you, Mr. Lamken.
Chief Justice Roberts: A minute to wrap up, Mr. Lamken.
Jeffrey A. Lamken: Certainly. For adjudicators to be officers and inferior officers, they have to have a superior who can overrule their decisions before they become the final word of the Executive Branch. Because APJs don't have that superior, they cannot be appointed as inferior officers. The current IPR regime is, as a result, unconstitutional. I know that Mr. Perry pointed to Section 318(b) and the fact that the director does the final action, but Section 318(b) points out that, in fact, the director is made 1 subordinate to the APJs because it says that the director shall issue and publish the certificate canceling any claim if the board finds the patent unpatentable. Severing APJ removal protections doesn't solve the problem because they still have no superior in the exercise of government authority. But how to fix this problem is a question for Congress because the possible solutions point in opposite directions. Congress might want them to be Senate- confirmed, as they were -- as examiners-in-chief were for 114 years, or it might want to subordinate them to the director, as Congress ordered for -- as Congress provided for trademark judges last year. Congress can provide an approach by amending the law, but this Court cannot simply rewrite the statute, and it shouldn't allow the Executive Branch to try and jerry-rig a solution through contriving a remedy. The respectful thing here is to let Congress to choose the path forward. The Court should hold the IPR regime unconstitutionally constituted. The IPR 1 proceedings against Arthrex, therefore, cannot continue and the IPR should be dismissed. Thank you.
Chief Justice Roberts: Thank you, counsel. Rebuttal, Mr. Stewart? REBUTTAL ARGUMENT OF MALCOLM L. STEWART ON BEHALF OF THE UNITED STATES
Malcolm L. Stewart: Thank you, Mr. Chief Justice. Mr. Lamken referred to this Court's ability to supervise lower courts by reviewing their judgments. But the principal means by which this Court supervises the lower courts is not by affirming or reversing a few dozen lower court judge -- judgments every year. The principal means of supervision is this Court issues precedential opinions that bind lower courts in future cases, and the Court typically tries to exercise its certiorari jurisdiction in such a way that the legal rulings and issues will address questions of law that are both important and recurring. And -- and similarly, in this case, it's important not to ignore the front-end 1 mechanisms that are available to the director to influence the outcome of board decisions. That -- that's so both because they are the most practically efficacious means of using the director's resources and because these are the means that are most often characteristic of the exercise of supervisory power. But, second, Mr. Lamken said that the director can't be held accountable if the board issues a decision that people believe are wrong -- is wrong, and that -- that's incorrect. The losing party in an IPR can always ask the director to convene a new panel to grant rehearing and to put the director himself on that panel, and if the director declines to take that step, he can be held accountable for allowing the panel decision to remain in place. That -- the only imperfection in the director's accountability and review authority is that the director could be outvoted by the other two members of the panel that he convenes, but those other two members of the panel would be bound by any directives of law that the director had issued. The only practical fear is that those 1 two people will disagree with the director's view of the facts, and to that extent, accountability is limited. But, as Justice Kagan's questions pointed out, that's exactly what was going on in Edmond, that in Edmond, people who thought that the facts had been determined incorrectly could only blame the Coast Guard Criminal -- Court of Criminal Appeals judges. They couldn't blame any Senate-confirmed officer. The -- the last thing I'd say is Mr. Perry referred to AUSAs and people in positions like that. They'll -- they'll go into court conducting trials. They'll have to make snap decisions about whether to object to particular evidence, how to respond if the judge disapproves their proposed line of questioning. As -- as a practical matter, these are decisions that often can't be undone after the fact, and so a blanket rule that an officer is a principal officer if he or she can do anything that binds the United States without being subject to -- to being countermanded by a Senate-confirmed officer, that would be unworkable. 1 Mr. Lamken attempts to confine the rule he is advocating to adjudicative officials, but there's really no principled basis for striking that limitation. Edmond makes clear that administrative adjudicators are subject to the same Appointments Clause principles as other federal officers. Thank you.
Chief Justice Roberts: Thank you, counsel. The case is submitted. (Whereupon, at 11:29 a.m., the case was submitted.)