Keep your "Yankee From Olympus" -- Give me Sancho Panza from New Jersey!
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:: Wednesday, December 04, 2013 ::
Friends who know my penchant for cross-ideological coalitions (wail til I bring you the news of the glorious Scalia-Kagan alliance on the Confrontation Clause!) have called my attention to H.R. 3309 the Innovation Protection Act, introduced by the reliably conservative Rep. Robert Goodlatte (R.-Va.) and supported by the Obama administration.
The goal is to crack down on patent trolls. Though such persons and firms have come up with anodyne names for themselves ("non-practicing entities," "patent-assertion entities" - the latter is more candid), there remains, rightly, widespread opposition to what they do: buy up patents with no intention but to send out threat letters to companies that may (or then again may not) actually be using those patents. Patent trolls make billions in settlements that could otherwise go into job-creating, life-enhancing products. Patent nerds, of which I am not one, must correct me, but as I understand the matter, current legal rules allows patent trolls to state a claim without even specifying their patent or describing how the defendant is infringing. So it's a big but unproductive business.
Mr. Goodlatte's bill was voted out of the House Judiciary Committee on Nov. 20 with a 33-5 majority and a standing ovation. (Note to non-ironists: I made the ovation up. It's a Brit-polit thing; picked it up from a Britcom called "No Job For a Lady.")
But a funny thing happened on the way to the Floorum. Several conservative groups (e.g. AEI, through its tech-law blogger, Michael Rosen) have noticed that its reforms of legal procedure are somewhat radical. If my patent-nerd friends will tolerate an explanation by someone not of their brotherhood - but who does care about procedure - the problems are something like this.
1. Currently, patent plaintiffs (or trolls, if you insist) need not be very specific at the pleadings stage; that comes later, after discovery. Under the Goodlatte bill, extraordinary specificity about the patent, and about the defendant's alleged infringement, is required at the pleadings stage - i.e. to "get into court," as layfolk not-inaccurately put it. This is said to be necessary to keep out the trolls. It'll do that all right - and it will also keep out a lot of small inventors who are indeed making good use of their patents, thank you very much, but who can't afford to defend them against deep-pockets infringers.
2. "Loser pays." On Planet Tort Reform, there is a continent dedicated to the debate over whether American jurisdictions should adopt the "English rule," whereby the losing party bears court costs and, gulp, attorneys' fees for both sides. Nothing like it to filter out all but the most slam-dunk plaintiff cases, goes the argument in favor. But, goes the opposite argument, it also filters out (cue the "Slam the Courthouse Door" Blues) plaintiff cases that are meritorious yet not so lopsidedly so that they can easily be won on motion on the pleadings, or even at summary judgment (and of course discovery is costly). There should be room for a middle range of cases that actually have to be argued about (preferably in front of a jury). The English rule of course does not prohibit this, but makes getting there very high-risk.
That debate goes on; the Goodlatte bill settles it in favor of the English rule (loser pays) in patent infringement cases, as the strongest possible deterrent to the trolls. But, again - in patent infringement as in other causes of action, not all plaintiffs are trolls or opportunists, though some are. Perhaps more importantly, the Goodlatte bill doesn't quite go all the way in its adoption of the English rule: it allows courts to vary the statute's presumption of cost allocation under a "substantially justified"/"special circumstances" test.
What could be more reasonable than that? In litigation, almost anything. What this will do is guarantee post-verdict judicial review of cost-allocation in nearly every case (as AEI's Michael Rosen points out in the link supra); the emergence of a judicially-made law of "substantially justified" and "special circumstances" just for patent litigation cost allocation; and eventually, an entire section of the organized bar specializing in just this, with its own ABA section and its own annual conferences in exotic locations.
Really, it's public-spirited of the American Association for Justice (formerly ATLA) to oppose the Goodlatte bill: it could lose out on patent litigation in the short run, but in the long run, it could make out like bandits on the cost-allocation follow-up litigation. Except - the losers would be innovative firms too small to afford to fight big infringers over cost allocation, and such firms need lawyers. On this one, I'd take those lawyers' advice.
:: David Wagner 12:56 PM [+] ::
It chose for review the two cases that I chose to study with my First Amendment seminar, because they are the cases that stake out the most decisive position on each side: Hobby Lobby (10th Circuit, granting a preliminary injunction), and Conestoga Wood (3rd Circuit, denying one).
Though Conestoga Wood is closely owned by the Hahn family, of Mennonite faith and conviction, the 3rd Circuit's opinion tried to assure them and us that when they provided, through insurance, the types of contraceptives that function as abortifacients, they needn't worry: it's not the Hahns doing it, it's Conestoga Wood!
The corporate form separates the owners from the corporation for corporate purposes - but for all purposes? Would the 3rd Circuit's theory work in a human rights criminal trial ("It wasn't us supplying the lethal materials, it was our company")?
I recommend Judge Jordan's dissent in Conestoga. One issue he flags that Judge Tymkovich's majority opinion in Hobby Lobby does not is, just what is the "Institute of Medicine"? It's a private entity. Click on that website link for information on how wonderful it is ("self-serving," Judge Jordan notes). So, Congress made the law, delegated the details to an agency, the agency re-delegated key details to a private entity, which returned them to the agency, which then made them law. Does that pattern remind one of anything? A.L.A. Schechter, but with the HHS Secretary in place of the President?
:: David Wagner 4:18 PM [+] ::
:: David Wagner 7:02 PM [+] ::
Q.Isn’t it terribly frightening to believe in the Devil?
A. You’re looking at me as though I’m weird. My God! Are you so out of touch with most of America, most of which believes in the Devil? I mean, Jesus Christ believed in the Devil! It’s in the Gospels! You travel in circles that are so, so removed from mainstream America that you are appalled that anybody would believe in the Devil! Most of mankind has believed in the Devil, for all of history. Many more intelligent people than you or me have believed in the Devil.
:: David Wagner 6:04 PM [+] ::
:: David Wagner 3:35 PM [+] ::
Apparently the Republican Study Committee has endorsed a bill by Rep. Phil Roe of Tennessee, H.R. 3121. It lacks the "tribunals" of the Price bill, but its mandated changes in medical malpractice law are even more detailed. For example: a $250,000 cap on both non-economic and punitive damages, a definition of, and evidentiary standard for, punitive damages that in effect reserves them for intentional torts, and a rule against telling the jury about the damage caps.
Good arguments for and against all of these would be in play if they were being proposed by a state legislature as rules to govern med-mal suits within that state. But here it is Congress, proposing laws not only to govern suits in federal courts (which it can obviously do) but also in state courts, where a traditional state common-law cause of action - tort - is involved.
As with the Price bill, everything else about the Roe bill looks excellent (given the short time I've had to eyeball it). In moving it forward, though, I hope this particular GOP House, which took over the majority in January 2011 with claims of unprecedented concern for constitutionality of legislation, will ask itself questions about "fair-weather federalism."
Here is Rep. Roe's bill; see pp. 158 and following.
N.B. Yes, the very involvement of the federal government in health care in any way would probably have struck the generation of the Framers as beyond Congress's powers. For present purposes I'm assuming a lot of water under the bridge, and focusing on the federalism issue at hand that seems most acute: Congress telling state courts what their rules of decision are to be in a traditional matter of state, not federal, concern.
:: David Wagner 10:53 AM [+] ::
Well, Rep./Dr. Tom Price's Empowering Patients First Act, H.R. 2300, seems to have some momentum. It has many good features. But - and this is its relevance to a blog about constitutional law - it also has some features that make me squint a little.
Section 501 of the bill is about lawsuit reform. Fine. But if it this is to be done at the federal level, greater caution is needed, on federalist principle. This section of the bill imposes significant burden-of-proof rules on all courts dealing with “health care lawsuits,” including medical malpractice.
Which forces the question: under a properly constrained view of Congress's powers, does Congress have power to tell state courts what rules of law they are to apply in cases originating in state law? Is a federal law (or a section of one) made "in pursuance of" the Constitution if its primary function is to rewrite the states' tort law?
Section 501 also directs the HHS Secretary to form partnerships with certain named doctors' organizations “to develop guidelines.” Now, quite apart from how tired Obamacare should already have made us of federal legislation that "directs the HHS Secretary...," this should raise some more red flags for constitutional conservatives. In the heady days of the early New Deal, Congress authorized the President, to consult with business organizations in setting the wage and price levels under the National Industrial Recovery Act. The Supreme Court struck this down, in a unanimous decision – A.L.A. Schechter Poultry v. U.S. – a decision that has, it is true, never been replicated, but has also never been overruled or even questioned by the Supreme Court.
I don't mean that Title V of the Price Bill is unconstitutional in the same way the NIRA was; only that it pushes an envelope that has been found unconstitutional in the past, and found so for good reason. The Constitution makes Congress our lawmakers. Though this Non-Delegation Doctrine has proved difficult to enforce judicially, given that the executive branch has the enforcement power and all enforcement requires interpretation, one long "delegation step" further is taken when Congress directs a federal agency to work with outside parties (other than through the APA notice-and-comment process, of course.)
Attention should be paid as well Section 502: “Grants to Create Administrative Health Care Tribunals.” Back in Section 501 we found the bill telling state courts what rules to apply. Here it takes legal matters out of state courts – and away from state juries altogether – transferring them to new “tribunals.” Wasn't this one of the complaints against both HillaryCare and Obamacare – that they created too many unaccountable decision-making panels?
Creating “tribunals” (or even, to be more precise, giving states strong incentives to do so) does something very similar at the state level, and also forces us to reflect on another endangered value – that of the civil jury. Here, two conservative goals may clash. Yes, some civil juries have reached verdicts (not all of them in medical malpractice cases) that were based on strange legal theories, awarded disastrous damages based on them, and generally drove up insurance rates and discouraged innovation thereby. All the same, it should not be left to liberals to remind us how important our Framers thought civil juries were.
The original Constitution, as it came out of the Convention for ratification, already protected the right to a jury in criminal cases. The absence of similar protection for juries in federal civil trials was an objection, the force of which took the pro-ratification forces by surprise. As part of the promise-giving that assured ratification, the Bill of Rights added, in the Seventh Amendment, protection for the right to jury trial in most (in effect, all) federal civil cases as well.
Of course it applied only to the newly-created federal courts, and even today, the Seventh has not been “incorporated” in its entirely against the states. But states protect the right to civil juries in their state constitutions, and almost all did so in the 1789-91 period, crucial for evaluating the Bill of Rights.
I mentioned that Sec. 502 of the Price Bill gives incentives to form tribunals; it does not force states to do so. Problem gone? No. As a practical matter, states do what the federal government gives them grants to do. The Supreme Court considered, and unfortunately rejected, the argument that federal grants to states are de-facto coercion of state governments. South Dakota v. Dole. Despite Chief Justice Rehnquist's authorship, most conservative Court-watchers have felt this was wrongly decided – that it opens a wide back door for the dismantling of federalism.
But Congress need not use every power the Court has said it possesses. It need not even agree that it possesses every power the Court has said it does. From the Court allowing Congress to do by grant-making what it cannot do by direct legislation, it does not follow that Congress should do so.
"But isn't decision-making by expert tribunals a good thing?" Well on that hinges the whole rise of the administrative state, and the concurrent loss or real representative democracy, doesn't it? Interesting thing - the Founders thought juries were important to representative government, not just to deciding facts. Nosing them out of health care is scary; bad enought that Obamacare does so much of it.
Rep. Price deserves praise for his work, and most of his bill deserves passage. But federalism and civil juries are two constitutional values that should not suffer injury in the imperative fight to repeal and replace Obamacare.
:: David Wagner 6:39 PM [+] ::
When I'm not, I'll have some links.
:: David Wagner 5:38 PM [+] ::
One question I have is, why did Ginsburg join a restrictive opinion on standing, when expanding standing has long been one of her top agenda items (e.g. Laidlaw)?
One guess I'll throw into the mix is that if she refused and thereby allowed an opinion on the merits, Kennedy would not have gone her way and the opinion would not have been the one she wanted. This requires us to speculate that Kennedy, having gotten his lib on in Windsor, inclined toward a much more moderate holding in Perry, had the merits been reached.
:: David Wagner 5:43 PM [+] ::
I am very proud that two Regent Law graduates, one of them a student of mine, are representing her.
:: David Wagner 11:37 AM [+] ::
Prof. Bainbridge takes care of the matter here. I could say more - perhaps I will later, esp. about how choosing one at-the-time viable reading of the Constitution over a later, victorious one, as John Adams did re the Sedition Act, does not amount to "ignoring" the Constitution - but, spurred by a tweet from @walterolson, I realized that I have somewhat aggressively not cared what Prof. Seidman thinks about the Constitution for a long time, and New Year's Eve (also, still, the thick of the grading season) is hardly the time to change ways.
I have not yet eulogized Judge Bork, other than on Facebook, for (perceived) lack of time to do justice to the subject, so to speak. After grades are in, I hope.
:: David Wagner 8:51 PM [+] ::