The justices of the U.S. Supreme Court appeared reluctant Wednesday to make a federal case out of a legal malpractice claim arising from a patent suit.
The case of Gunn v. Minton began when securities broker Vernon F. Minton, who developed and patented a telecommunications software program, sued a software company for patent infringement. The court granted summary judgment in favor of the defendant, but Minton hired new counsel to pursue the case on a new legal theory. The court denied Minton’s motion for reconsideration because the new argument was not asserted during the first action. The Federal Circuit affirmed.
Minton then sued his original attorneys for legal malpractice in state court, arguing that the negligent failure to argue the second theory had cost him a potential settlement or trial verdict worth as much as $100 million.
The lawyers, arguing that they were not legally required to assert the second theory, won on summary judgment, and Minton appealed. While the appeal was pending, the Federal Circuit decided Air Measurement Technologies, Inc. v. Akin Gump Strauss Hauer & Feld, holding that when “establishing patent infringement is a necessary element of a [state] malpractice claim stemming from alleged mishandling of . . . earlier patent litigation … federal resolution of the issue was intended by Congress,” and thus federal courts possess exclusive “arising under” jurisdiction of the malpractice claim.
The Texas Supreme Court subsequently reversed, concluding that the state court had no jurisdiction over the case.
The Supreme Court granted the attorneys’ petition for certiorari.
‘Substantial state interests’
Jane Webre of the Austin, Texas, office of Scott, Douglass & McConnico argued on behalf of Minton’s attorneys that state courts are capable of deciding cases based primarily in state law, even where elements of federal law are involved.
“Certainly the state courts are going to be deciding the occasional federal issue here and there,” Webre said. “But let’s not make a federal case out of each and every state tort claim that might have an embedded federal issue.”
Webre, who was only occasionally interrupted by questions from the justices, said that there are “substantial state interests” in a state developing “its own state law and its own state courts.”
“There is also a state interest in governing the relationship between attorney and client that happens through the legal malpractice process,” Webre said.
Justice Antonin G. Scalia noted that federal court rulings wouldn’t bind the state courts. “They are not going to mess up Texas law in that regard,” Scalia noted. “They may get this case wrong, but…”
“You are right that it will not substantially adversely impact Texas state law, but that’s an illustration of a substantial state interest,” Webre said.
When Webre pressed for a general rule that malpractice claims would never be deemed to arise from federal law regardless of the underlying legal issue, Scalia bristled.
“I like bright line rules,” Scalia said, “but you are proving a negative. The burden is on you to prove a negative, that there is no situation that malpractice cases involving patents [would trigger federal jurisdiction.] A hard road to hoe.”
‘What’s the difference?’
Thomas M. Michel of the Fort Worth, Texas office of Griffith, Jay & Michel argued on Minton’s behalf that the case “rests entirely on an issue of patent law” that requires federal jurisdiction.
Justice Ruth Bader Ginsburg wondered if that meant every malpractice claim arising from a federal matter would be barred from state court. “Say, an antitrust claim or a copyright claim?” she asked.
“No, Your Honor,” Michel said.
“Then what’s the difference between antitrust and patent?” Ginsburg asked.
“Antitrust has a state analogue,” Michel explained.
“Then take immigration law,” said Justice Sonia M. Sotomayor. “Don’t get in the weeds.”
“Immigration law may be a different area where there is exclusive federal court jurisdiction in that area, possibly,” Michel said.
“Copyright law,” Ginsburg persisted. “Why doesn’t what you said work the same way in those fields?”
“There are distinctions in the area of patent law versus any other area of the law,” Michel said. “That’s why it’s unique from antitrust, trademark, civil rights, securities, employment. [In those areas], even if they are exclusive in federal court jurisdiction, some of those underlying issues are basically based” in state law.
A decision is expected later this term.