Reply Brief — White v. Jeffrey Mining Machinery Co.

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Office - Supreme Coust, US.

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wa AUG 7 1984

ALEXAND! os +. STEVAS

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Supreme Court of the Wnited States

OCTOBER TERM, 1983

LETCHER T. WHITE,

Petitioner

V.

JEFFREY MINING MACHINERY COMPANY,

JEFFREY GALION, INC., and

DRESSER INDUSTRIES, INC.,

Respondents

REPLY BRIEF OF PETITIONER IN SUPPORT OF

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

GRAEME W. BUSH,

Counsel of Record

DANIEL N. SHAVIRO

CAPLIN & DRYSDALE, CHARTERED

One Thomas Circle, N.W.

Washington, D.C. 20005

(202 ) 862-5000

YANCEY WHITE

WHITE, HUSEMAN, PLETCHER & POWERS

P.O. Drawer 2707

Corpus Christi, Texas 78403

Attorneys for Petitioner

Of Counsel:

JOHN F. BOOTH

CRUTSINGER & BOOTH

1000 Thanksgiving Tower

Dallas, Texas 75201

BEST AVAILABLE COPY

TABLE OF CONTENTS

Page

REPLY BRIEF OF PETITIONER IN SUPPORT OF

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

PAT EEEIET, seeiinnreicsncanccnnsviictnineiersscaenannesinnsinin l

I. The Federal Circuit Is Following a Policy and

Practice of Violating the Limitations on Its Fact-

EE roe Re ee eee

II. |The Federal Circuit Meant What It Said When It*

Stated That It Was Not Applying the Con-

stitutionally Mandated Standard for Reviewing

ARE RRC SMES ee ats Seeree ae Pmt ee 5

SFI bicttstesensdtnndiansbenaieinenisnncuinnnsente Saati 6

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TABLE OF AUTHORITIES

CASES

Baginsky v. United States, 697 F.2d 1070 (Fed. Cir.

1983), cert. denied, 104 S.Ct. 423 (1983)... eee.

Brady v. Southern Railroad, 320 U.S. 476 (1943) ..........

Continental Ore Co. v. Union Carbide & Carbon Corp.,

370 U.S. 690 (1962) ............. i iicnnanbcaaiieietiadpeinaniieas

Hughes Aircraft Co. v. United States, 717 F.2d 1351

CH, Cay, BGS) wnncinecnsssriccnsecinescenexereceveseminnssunsnesenciveinn

Jones v. Hardy, 727 F.2d 1524 ( Fed. Cir. 1984) .............

Litton Systems, Inc. v. Whirlpool Corp., 728 F.2d 1423

CF. Cole. BDI) erin vncccnsensscsnsvascerssecensccnsenercinensssunicsnnsans

RCA Corp. v. Applied Digital Data Systems, Inc., 730

F.2d 1440 (Fed. Cir. 1984), petition for cert. filed,

Mo. 64-8 CUS. Fraly 5, USG4) .....2...scssevesccisascesepnsvcencvansee

Rohm and Haas Co. v. Crystal Chemical Co., 722 F.2d

1556 (Fed. Cir. 1983), petition for cert. filed, No. 84-

1 CUS. Fraby S, 19GA) ........cccccrccccecereessssscncesonsessenssennsseess

T. P. Laboratories, Inc. v. Professional Positioners, Inc.,

724 F.2d 965 (Fed. Cir. 1984), petition for cert. filed,

No. 83-1939 (U.S. April 2, 19646) ..........ercccccecscrccesecens.

W. L. Gore & Associates, Inc. v. Garlock, Inc., 72\ F.2d

1540 (Fed. Cir. 1983), petition for cert. filed, No. 84-

Z CUD. Telly Z, UGDE) ncnnecsesrccsscccscccsccnssonssesscnneronssusccsesnne

CONSTITUTIONAL PROVISIONS

inn SUI 0. ss gcgnaliapuaubamelennneeunaianauuen

STATUTES AND RULES

Federal Rule of Civil Procedure 52(a) ............... Viernes

IN THE

Supreme Court of the United States

OcTOBER TERM, 1983

LETCHER T. WHITE.

Petitioner

Vv.

JEFFREY MINING MACHINERY COMPANY,

JEFFREY GALION, INC., and

DRESSER INDUSTRIES, INC..,

Respondents

REPLY BRIEF OF PETITIONER IN SUPPORT OF

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

In the Petition for a Writ of Certiorari, petitioner showed

that the Court of Appeals for the Federal Circuit, in reversing

the jury verdicts in petitioner’s favor, expressly refused to

accord the deference to jury fact-findings that the Supreme

Court has held is constitutionally required by the Seventh

Amendment. The respondents’ brief in opposition attempts to

respond to this showing both by arguing that the Federal

Circuit has, in other cases, purportedly recognized the limita-

tions On its fact-finding powers, and by seeking to explain away

the critical portion of the opinion below in which the court

rejected the constitutionally mandated standard of review.

However, neither of these arguments by the respondents can

withstand scrutiny. The relevant facts show, first, that the Court

of Appeals for the Federal Circuit has established a practice of

repeatedly violating the limitations on its fact-finding powers,

and second, that the Federal Circuit’s rejection of the Seventh

Amendment standard in the present case was totally without

precedent and cannot be rationalized.'

I. The Federal Circuit Is Following a Policy and Practice of

Violating the Limitations on Its Fact-Finding Powers.

The constitutional and procedural limitations on the power

of an appellate court to engage in de novo review of facts found

below are clear. Under the Seventh Amendment, findings of

fact by a jury cannot be reversed upon appeal unless, viewing

the evidence in the light most favorable to the nonmoving party

and giving it the benefit of all reasonable inferences in its favor,

no reasonable person could have reached the jury’s conclusion.@

Under Federal Rule of Civil Procedure 52(a), fact-findings by

a trial court cannot be reversed unless those findings are

determined to be “clearly erroneous.”

Respondents attempt to show the Federal Circuit’s adhie-

rence to the limitations on its fact-finding powers by citing

cases, other than the present one, in which the Federal Circuit

duly noted the above rules. However, while the present case is

perhaps the clearest instance in which the Federal Circuit has

openly disavowed the limitations on its powers, the case is far

from unique in terms of the Circuit’s actual course of action.

Rather, an examination of other decisions by the Federal

Circuit reveals a settled policy of weighing evidence de novo

and a studied practice of rejecting fact-findings reached below,

without the mandated deference, when necessary to reach a

desired result.

At present, there are at least four other petitions for a writ —

of certiorari pending before this Court that concern the Federal

Circuit’s disregard for the limitations on its fact-finding pow-

1 Our research has not revealed another case in the history of American

jurisprudence which has held, as did the court in White v. Jeffrey, thata jury’s

determinations of fact, in the absence of legal error, are not entitled to a

JNOV standard of review.

2 See, e.g., Continental Ore Co. v. Union Carbide & Carbon Corp., 370

U.S. 690 (1962); Brady v. Southern Railroad, 320 U.S. 476, 479-80 (1943).

3

ers.3 In each of these cases, the Federal Circuit overturned trial

court findings on indisputably factual issues* without properly

observing Rule 52(a). The Court’s approach to de novo fact-

finding in these cases can only be described as casual. For

example, it reverses lower court findings when “not per-

suaded” 5 or when a legal error “may have contributed” & to

the lower court’s factual determination. The Court then

determines what, in its view, it is “reasonable to conclude.” 7

particularly when it considers the factual issues ‘uncomplicated

and not difficult to resolve.” §

These cases, in which a writ of certiorari has been re-

quested, are not the only ones in which the Federal Circuit has

disregarded the limitations on its fact-finding powers. See, é.g.,

Litton Systems, Inc. v. Whirlpool Corp., 728 F.2d 1423, 1444

(Fed. Cir. 1984) (reversing trial court findings as to the

similarity of two design patents, apparently on the theory that

the trial court’s error of law permitted de novo consideration of

the facts); Jones v. Hardy, 727 F.2d 1524, 1531 (Fed. Cir.

1984) (engaging in de novo consideration of the facts per-

taining to the issue of whether a patent was invalid for

3 7.P. Laboratories, Inc. v. Professional Positioners, Inc., 724 F.2d 965

(Fed. Cir. 1984), petition for cert. filed, No. 83-1939 (U.S. April 2, 1984);

W.L. Gore & Associates, Inc. v. Garlock, Inc., 721 F.2d 1540 ( Fed. Cir. 1983),

petition for cert. filed, No. 84-2 (U.S. July 2, 1984): Rohm and Haas Co. vy.

Crystal Chemical Co., 722 F.2d 1556 ( Fed. Cir. 1983), petition for cert. filed,

No. 84-1 (U.S. July 5, 1984); RCA Corp. v. Applied Digital Data Systems,

Inc., 730 F.2d 1440 (Fed Cir. 1984), petition for cert. filed, No. 84-8 (US.

July 5, 1984). See also Baginsky v. United States, 697 F.2d 1070 ( Fed. Cir.

1983), cert. denied, 104 S.Ct. 423 (1983).

4In 7.P. Laboratories, supra, the issue was what technology a prior

invention had used, in relation to the issue of whether a public use of an

invention constituted “experimental” use. In Gore, supra, the issues included

the technical meaning of certain terms used in a patent and the scope of the

prior art. In Rohm and Haas Co., supra, the issue was a patent applicant's

actual state of mind with respect to the issue of fraud. In RCA Corp., supra,

the issue was whether an invention had been anticipated by the prior art, and

depended in large part on the determination of what technology a prior

invention had used.

5 Gore, supra, at 1554.

6 Jd. at 1553.

7 Id. at 1555S.

8 Baginsky, supra, at 1074.

4

obviousness ); Hughes Aircraft Co. v. United States, 717 F.2d

1351, 1364-66 (Fed. Cir. 1983) (weighing the facts de novo in

the course of reversing a trial court finding of noninfringe-

ment )

In White’s Petition for a Writ of Certiorari, he noted that

the Federal Circuit appears to misunderstand the limited fact-

finding powers possessed by an appellate court, as compared

with the broader fact-finding power formerly exercised by its

predecessor courts, the Court of Claims and the Court of

Customs and Patent Appeals. This problem has surfaced as

well in cases involving the review of nonjury verdicts under

Rule 52(a). See Baginsky v. United States, 697 F.2d 1070

(Fed. Cir. 1983), cert. denied, 104 S. Ct. 423 (1983), in which

the Federal Circuit elected to resolve a factual issue left open by

the court below instead of remanding the case for further

proceedings. As the dissenting judge on the panel observed:

... [T]he majority finds it appropriate to usurp the

function of the Claims Court and make its own de

novo factual findings. The majority fails to recognise

that this court and the Claims Court are not a single

court with both original and appellate jurisdiction as

was a predecessor court, the Court of Claims.

Baginsky, supra, at 1077 (Kashiwa, J., dissenting ).

White’s Petition also noted the court’s readiness, in the

present case, to make a drastically inaccurate claim that there

were no disputed facts as a “fig leaf ”’ for its factual redetermi-

nations. Once again, the error was not an isolated one. See

Baginsky, supra, at 1074, in which the court took the positon

that it can resolve factual issues whenever, in its view, the facts

are “uncomplicated and not difficult to resolve.”” See also Jones

v. Hardy, supra at 1534, in which Judge Kashiwa rebutted the

majority’s claim that the facts were undisputed and noted that

the court, purportedly in the interest of judicial economy (the

same ground relied upon in White v. Jeffrey), had engaged in

impermissible de novo consideration of disputed factual issues.

In summary, the Federal Circuit’s willingness in the

present case to exceed the limitations on its fact-finding powers

a

is not, as the respondents would have it, an isolated phenome-

non. Rather, the present case is part of a recurrent pattern in

which the Federal Circuit has chosen to exercise fact-finding

powers that it does not possess. This practice requires imme-

diate correction by the Supreme Court before further harm is

done to litigants’ mghts and to proper practice in the Federal

Circuit.

Il. The Federal Circuit Meant What It Said When It Stated

That It Was Not Applying the Constitutionally Mandated

Standard for Reviewing Jury Verdicts. °

In addition to arguing that the Federal Circuit has not

exceeded its powers of appellate review in other cases, respond-

ents also attempt to defend the court’s decision in the present

case. In particular, respondents seek to explain away the court’s

statement that it was not applying the constitutionally man-

dated standard because “the jury was not here required to

evaluate the question of obviousness in light of the invention as

claimed...” (Petition, Appendix B at page 9b n. 6).

While respondents express their conviction that the above

statement does not mean that the court was not applying the

constitutionally mandated standard, they are unable to decide

what it does mean. In particular, they cannot decide whether

the court purportedly did apply the standard, but without

benefit to White, or whether it purportedly did not have to

apply the standard. Compare Respondents’ Brief at page 7

(“[The Court of Appeals] reviewed the evidence, viewing all

facts in the light most favorable to the prevailing party.. .”’)

with Respondents’ Brief at page 12 (**.. . there was no evidence

to be viewed in the light most favorable to White and... there

were no reasonable inferences which could be drawn from the

evidence in favor of White.”’).

Neither of the two contradictory explanations advanced by

the respondents can justify the court’s decision. As was

documented in detail in the Petition for a Writ of Certiorari (at

pages 17-23), the facts were substantially disputed, and the

court consistently failed to view the facts favorably to White (or

even, in some cases, consistently with the record). Respondents

6

cannot—and have not even attempted to—rebut these show-

ings, and rely instead on bare conclusory assertions.

The Respondents’ Brief, at page 16, disputes petitioner's

explanation that the court’s rejection of the Seventh Aimend-

ment standard “seems to proceed from a de novo factual

determination that the White patent did not disclose a shortwall

device.” Respondents describe this interpretation of the court's

holding as “concocted” by petitioner without any suppor. In

fact, however, as respondents well know, the issue of whether

the patent disclosed a shortwall device was argued at length not

only at trial but on brief to the Federal Circuit. This issue was

the single most prominent point of dispute betweer the parties

relating to the claims of the White patent. Thus, petitioner's

interpretation provides the best available explanation of the

Federal Circuit’s cryptic statement of its reasons for rejecting

the constitutionally mandated standard of review. However,

petitioner’s suggested explanation need not be correct in order

for the court’s violation of the Seventh Amendment to be clear.

There was no permissible basis for disregarding the mandated

standard, and the court failed to articulate clearly the grounds

for its holding to the contrary. The Federal Circuit’s willingness

to reject the Seventh Amendment standard without a mean-

ingful explanation only underlines the importance of granting a

writ of certiorari in order to instruct it more fully about tts

constitutional obligations.

CONCLUSION

The Federal Circuit's opinion here makes plain that patent

litigants face the prospect of appellate redetermination of

factual issues found favorably to them by the jury. Moreover,

other cases decided in the Federal Circuit and discussed in this

brief, including those as to which a petition for a writ of

certiorari is pending, demonstrate that the problem is not

limited to jury trials or to patent litigants. Rather, the Federal

Circuit has adopted a settled practice of impermissible de novo

redetermination of factual issues resolved in the trial court.

The Seventh Amendment issue raised in the present case is

closely related to the issue under Rule 52(a) raised in this and

~4

other pending petitions for a writ of certiorari to the Federal

Circuit. Thus, this petition and the others discussed herein 9

should be treated consistently. Since the White petition is the

only one that arises out of a jury trial, a grant of the White

petition, in addition to a grant of at least one of the other

petitions raising the Rule 52( a) issue, is necessary for this court

to define the full scope of the Federal Circuit's fact-finding

power. '0

Respectfully submitted,

GRaAEME W. Bush,

Counsel of Record

DANIEL N. SHAVIRO

CaPpLIN & DRYSDALE, CHARTERED

One Thomas Circle, N.W.

Washington, D.C. 20005

(202) 862-5000

YANCEY WHITE

WHITE, HUSEMAN, PLETCHER & POWERS

P.O. Drawer 2707

Corpus Christi, Texas 78403

Attorneys for Petitioner

Of Counsel:

JOHN F. BooTH

CRUTSINGER & BOOTH

1000 Thanksgiving Tower

Dallas, Texas 75201

% See page 3 n. 3, supra.

0 Alternatively, if certiorari is granted with respect to any of the other

petitions raising the Rule 52(a) issue, and since an appellate court's fact-

finding powers are even more limited in a jury than in a non-jury case, the

decision in White v. Jeffrey should be vacated and the case remanded to the

Federal Circuit for further consideration consistent with the decision under

Rule 52(a).