Opposition Brief — Cedars-Sinai Medical Center v. O'Leary

No. 93-1450

Iu the Supreme Court of the United States

OCTOBER TERM, 1993

CEDARS-SINAI MEDICAL CENTER, ET AL., PETITIONERS

Vv.

HAZEL O’LEARY, SECRETARY OF ENERGY

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

Drew S. Days, III

Solicitor General

FRANK W. HUNGER

Assistant Attorney General

VITO J. DIPIETRO

THOMAS J. BYRNES

WILLIAM C. BERGMANN

Attorneys

Department of Justice

Washington, D.C. 20580

(202) 514-2217

QUESTION PRESENTED

Whether the court of appeals correctly applied the

two-part test set forth in Abbott Laboratories y.

Gardner, 387 U.S. 136 (1967), in concluding that

petitioners’ challenge to a Department of Energy de-

termination of government patent rights, made pur-

suant to 42 U.S.C. 5908, was not ripe for adjudica-

tion.

TABLE OF CONTENTS

Page

i semeaeovenetscnies 1

ET ce

Statement ......... A SR Be Ad I 2

AE EE eC ae 6

EE iiaidddunaeua iedanedeiics 12

TABLE OF AUTHORITIES

Cases:

Abbott Laboratories v. Gardner, 387 U.S. 136

(1967) . eas . 4,7,8

Air New Zealand Ltd. v. “CAR, 7126 F.2d 832 (D. C.

ah OR ER EE OS Oe 6, 10

Alascom, Inc. v. FCC, 727 F.2d 1212 (D.C. Cir.

SRLS RE Se 10

American Fed’n of Gov’t Employees v. FLRA, 750

fe To) SD | | 9

American Trucking Ass’ns V. ICC, 747 F.2d 787

(D.C. Cir. 1984) _.. 10

ANR Pipeline Co. Vv. FERC, 876 F.2d 124 (D.C.

a anit weitisbiaamens 6,9

Baltimore Gas & Elec. Co. v. ICC, 672 F.2d 146

i cpnbasaiiiuieuewmuaonnes 10

Consolidation Coal Co. v. Federal Mine Safety &

Health Review Comm’n, 824 F.2d 1071 (D.C.

El ns 9,11

Eagle-Picher Indus., Inc. v. United States EPA,

ES a 10

EPA V. National Crushed Stone Ass'n n, 449 U.S. 64

(1980)... a 8

Gardner V. Toilet. Goods Ass’n, 387 U.S. 167

IT OE RR See ee be eee 7,8

Goodman V. Lukens Steel Co., 482 U.S. 656 (1987) .. 11

Harrison V. PPG Indus., Inc., 446 U.S. 578 (1980)... 5

Her Majesty the Queen v. United States EPA, 912

F.2a 1525 (D.C. Cir. 1900). --cveccecececcoseeee 10

(TIT)

IV

Cases—Continued: Page

National Recycling Coalition, Inc. v. Browner, 984

F.2d 1248 (D.C. Cir. 1998) ................................ 10

National Recycling Coalition, Inc. v. Reilly, 884

F.2d 1431 (D.C. Cir. 1989) 10-11

Pacific Gas & Elec. Co. v. State Energy Resources

Conservation & Dev. Comm’n, 461 U.S. 190

esidtamieuishudean ee Se) 7

Poe Vv. Ullman, 367 U.S YT .f: ) mee - 8

Public Citizen, Ine. v. U.S. Nuclear Regulatory

Comm'n, 940 F.2d 679 (D.C. Cir. 1991). 9

Regional Rail Reorganization Act Cases, 419 U. S.

REE a Le ne Ewa ee 7

Reno v. Catholic Social Serve., Inc., 113 Ss. Ct.

Ee Se ee, 7

South Carolina Elec. & Gas Co. v. ICC, 734 F.2d

Se ee ts ID ook ore i ee ee 10

Tenneco Gas V. FERC, 969° F.2d 1187 (D.C. Cir.

DO Micernicacar nla a ey Se he ies kn 9

Tennessee Gas Pipeline “>. v. FERC, 736 F.2d 747

(D.C. Cir. 1984) _... Ce Re Dee a a A 10

Thunder Basin Coal Co. v. Reich, 114 8. Ct. 771

(1994) . bh 12

Thomas V. Union Carbide Agric. ‘Preds. Co., “473

ae OI ey ye ey &

Toilet Goods Ass’n V. Gordner, 387 U.S. 158

GI AERA Le OO NTN ins OAS ey ee PE 6, 7,8

United States v. Doe, 465 U.S. 605 (1984)... 11

United States v. Fausto, 484 U.S. 439 (1988) ...... 11

Western Elec. Co. v. Piezo Technology, Inc., 860

F.2d 428 (Fed. Cir. 1988)... 3

Statutes:

Administrative Procedure Act, 5 U.S.C. 701-706. 4

Comprehensive Environmental Response, Compen-

sation and Liability Act, 42 U.S.C. 9601 et seq... 10

Federal Nonnuclear Energy Research and Develop-

ment Act of 1974, Pub. L. No. 93-577, § 9, 88

Stat. 1878 (42 U.S.C. 5908) 00. 3, 11

ie Sc ne 3

42 U.S.C. 5908 (m) (2) 222 eee ceceeececeeeeeee ee 3

Statutes—Continued: Page

i MITE ics sla cuconcudasenasnesssloneedandeaes 11

Cs ee) bee sie do eee ST 4

aa Nh)” ees tee) 3

Miscellaneous:

Erwin Chemerinsky, Federal Jurisdiction (1989) .. 8

ee

In the Supreme Court of the United States

OCTOBER TERM, 1993

No. 93-1450

CEDARS-SINAI MEDICAL CENTER, ET AL., PETITIONERS

Vv.

HAZEL O’ LEARY, SECRETARY OF ENERGY

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App.

A1-A27) is reported at 11 F.3d 1573. The opinion of

the district court (Pet. App. B1-B8) is unpublished.

JURISDICTION

The judgment of the court of appeals was entered

on December 13, 1993. The petition for a writ of

certiorari was filed on March 11, 1994. The jurisdic-

tion of this Court is invoked under 28 U.S.C.

1254(1).

(1)

2

STATEMENT

1. In June, 1983, petitioner Warren S. Grundfest,

M.D., conducted an experiment in the field of laser

angioplasty at the Argonne National Laboratory, a

government-owned facility operated by the Univer-

sity of Chicago under contract with the Department

of Energy (DOE), with the participation of Dr.

Dieter M. Gruen, an employee of the Argonne facility

who had arranged Dr. Grundfest’s visit to the facil-

ity." Following the experiment, both Dr. Grundfest

and Dr. Gruen filed applications to patent the laser

angioplasty technique. Ralph Linsker, a third party

who took no part in the Argonne experiment, also

sought to patent a similar invention. Pet. App. A3-

A4, B2-B3.

On August 18, 1987, United States Patent No.

4,686,979, entitled “Excimer Laser Phototherapy for

the Dissolution of Abnormal Growth,” was issued to

the government, as assignee of Dr. Gruen’s applica-

tion. Following the issuance of the patent, petitioner

Cedars-Sinai Medical Center (Cedars’—Dr. Grund-

fest’s employer and the assignee of his patent appli-

cation—initiated an Interference action in the Patent

and Trademark Office (PTO) to determine who first

invented the laser angioplasty technique.* On Sep-

'Laser angioplasty is a technique through which laser

energy is used to treat clogged arteries. Pet. App. F22.

In the course of the experiment at the Argonne facility, Dr.

Gruen made the critical suggestion that the excimer laser be

selected from among the many lasers present at the Argonne

facility. Jd. at F27.

2 An Interference is a quasi-judicial proceeding before the

PTO’s Board of Patent Appeals and Interferences to deter-

3

tember 10, 1991, the PTO’s Board of Patent Appeals

and Interferences (Board) declared (accepted for

determinaton) Interference No. 102,459 (the Inter-

ference) between Dr. Grundfest, Dr. Gruen, and

Linsker.’ Pet. App. A3-A4, B2-B3.

2. Section 9 of the Federal Nonnuclear Energy

Research and Development Act of 1974, Pub. L. No.

93-577, 88 Stat. 1878, provides inter alia that when

any invention is made in the course of an arrange-

ment OF understanding with the Secretary of Energy

(Secretary), and the Secretary determines that the

invention was made with a contribution by the govern-

ment or the use of government facilities, title to the

invention shall vest in, and any patents on the inven-

tion shail issue to, the United States. 42 U.S.C. 5908

(a) and (m)(2). On December 10, 1991, because of

the Interference initiated by petitioners, and pur-

suant to Section 5908, the DOE rendered and served

upon petitioners a Determination that, if in fact it

was Dr. Grundfest who invented the laser angioplasty

technique, the invention was made in the manner

specified in Section 5908 (the Determination). Pet.

App. F27-F30. The Determination stated that peti-

tioners had 30 days to request reconsideration of the

matter. Jd. at F29-F30. Petitioners failed to do so.

Id. at A5.

2. Petitioners subsequently filed suit in the United

States District Court for the Central District of Cali-

mine questions of priority of invention and patentability.

See 35 U.S.C. 135; Western Elec. Co. v. Piezo Technology,

Inc., 860 F.2d 428, 431 (Fed. Cir. 1988).

The Interference action is still pending. A decision by

the Board in favor of either Dr. Gruen or Linsker will con-

stitute a rejection of petitioners’ patent application. 35 U.S.C.

135.

fornia. Pet. App. F1-F21. Petitioners sought both to

have the Determination set aside on various grounds

under the Administrative Procedure Act, 5 U.S.C.

701-706, and to have a declaratory judgment rendered

on several issues under 28 U.S.C. 2201. Pet. App.

F17-F19. The district court, after applying the two-

pronged test for ripeness set forth in Abbott Labora-

tories v. Gardner, 387 U.S. 136 (1967), dismissed

petitioners’ complaint, without prejudice, as unripe.

Pet. App. B1-B8.

With respect to the “fitness for judicial resolution”

prong of the Abbott Laboratories test, the district

court concluded that petitioners’ suit was premature

due to the pending Interference. The court reasoned

that if the Board ultimately awards the patent to

either Dr. Gruen or Linsker, the Determination would

be without consequence.* Under the “hardship to the

parties” prong of the Abbott Laboratories test, the

district court concluded that petitioners would suffer

no ill effects if a judicial decision were deferred until

resolution of the Interference. The district court spe-

cifically considered and rejected petitioners’ argument

that the Determination clouded title to their foreign

patents and impaired their ability to license those

patents. Pet. App. B6-B7.

4. The court of appeals affirmed. Pet. App. Al-

A27. Applying the first prong of the Abbott Labora-

tories ripeness test, the court of appeals agreed with

the district court that, with respect to petitioners’

4The court also expressed the view that the Board might

resolve the issues raised in the Determination. Pet. App. B6.

However, both the Board and the Commissioner of Patents

and Trademarks subsequently adopted the position that the

Board lacks the authority during an Interference to decide

patent ownership questions. Jd. at A16 n.10, C3, D2-D3, E3.

~~ ss a .

5

domestic patent rights, “the effects of the Determina-

tion have yet to be felt in any concrete sense” and

that “due to the pending Interference, judicial resolu-

tion of the issues presented would not in any way

alleviate the current cloud” over those rights. Pet.

App. Al7. The court of appeals concluded, however,

that petitioners’ case was fit for judicial resolution

because the Determination clouded petitioners’ foreign

patent rights and could adversely affect their ability

to license those patents. In this regard, the court

noted the Interference was immaterial to petitioners’

foreign patent rights. The court of appeals therefore

held that the first prong of the Abbott Laboratories

test was satisfied. Pet. App. A18-A20.

Turning next to the “hardship to the parties” prong

of the Abbott Laboratories test, the court of appeals

determined that petitioners “ha[ve] not demonstrated

any immediate harm with respect to its foreign pat-

ent rights.” Pet. App. A26 n.14. The court of appeals

noted that petitioners’ complaint and supporting affi-

davits contained only conclusory statements about its

efforts to license its fcreign patent rights and that

“Tejonclusory statements, standing alone, are insuffi-

cient to carry [petitioners’] burden to prove hard-

ship under the second prong of the Abdott Labora-

tories test.” Id. at A25. Because petitioners failed to

satisfy the second prong of the Abbott Laboratories

test, the court of appeals held that the district court

had properly dismissed the case without prejudice as

unripe. Pet. App. A27.

5The court of appeals noted that “the issue before the

Board is priority of invention, an issue which is irrelevant

under the pertinent first-to-file foreign patent laws and which

cannot by itself affect the issue of who first filed the applica-

tion for patent.” Pet. App. A18.

EE ———

6

ARGUMENT

1. Petitioners contend (Pet. 9-15) that the court

of appeals misapplied the Abbott Laboratories test.

In their view, satisfaction of the first prong of that

test compels the conclusion that a case is ripe for

adjudication and obviates the need to consider the

second prong. Petitioners’ argument is incorrect.°

® Petitioners also suggest (Pet. 10-11) that the courts below

should not have employed the Abbott Laboratories test at all,

on the theory that the test applies only in the context of pre-

enforcement challenges to agency regulations. That claim,

however, was not considered by either of the courts below.

Petitioners have never before questioned the applicability of

the Abbott Laboratories test (quite the contrary is true, see

Pet. C.A. Br, 15-24), and neither of the courts below suggested

that the test might be inapplicable here. In any event, al-

though the Abbott Laboratories test did arise in the context

of preenforcement review of agency regulations, the test has

been applied outside of that context. For example, in Air

New Zealand Ltd. v. CAB, 726 F.2d 832 (D.C. Cir. 1984),

the court considered an airline’s challenge to a proviso con-

tained in an agency order granting the airline authority to

provide limited service between Los Angeles, London, and

New Zealand. Applying the Abbott Laboratories test, then-

Judge Scalia, stating that the “doctrine has strong applica-

tion here,” id. at 835, determined for the court that the air-

line’s challenge was not ripe. See also ANR Pipeline Co. Vv.

FERC, 876 F.2d 124, 130-131 (D.C. Cir. 1989) (dismissing

as unripe under Abbott Laboratories a challenge to a proviso

in a certificate authorizing the transportation of imported

natural gas).

Petitioners also suggest (Pet. 11-12) that Abbott Labora-

tories is inapplicable here because (1) the Determination was

a final agency action and (2) their challenge raises purely

legal issues. Those facts, however, do not make the Abbott

Laboratories test inapplicable. In Toilet Goods Ass’n V.

Gardner, 387 U.S. 158 (1967), this Court held that a chal-

lenge to an agency regulation was not ripe, notwithstanding

7

a. Assuming arguendo that the first prong of the

Abbott Laboratories test was satisfied in this case,

there was no legal error in dismissing the suit as

unripe on the basis of the second prong alone. The

basic rationale of the ripeness doctrine “is to prevent

the courts, through avoidance of premature adjudica-

tion, from entangling themseives in abstract disagree-

ments over administrative policies, and also to protect

the agencies from judicial interference until an ad-

ministrative decision has been formalized and its

effects felt in a concrete way by the challenging par-

ties.” Abbott Laboratories, 387 U.S. at 148.7 In

Abbott Laboratories, which has been described as the

“leading discussion of the doctrine,” Pacific Gas &

Elec. Co. v. State Energy Resources Conservation &

Dev. Comm’n, 461 U.S. 190, 201 (1983), the Court

laid out a two-part test for assessing the ripeness of a

legal challenge.* Under that test, a court must “evalu-

ate both the fitness of the issues for judicial decision

and the hardship to the parties of withholding court

consideration.” 387 U.S. at 149 ( emphasis added).

As this language suggests, a would-be plaintiff must

the Court’s express recognition of the fact that the regulation

was a “final agency action” and the suit presented “a purely

legal question.” Id. at 162, 163.

7? Although it also has a prudential aspect, the doctrine in

some of its applications is compelled by the Constitution’s

“case or controversy” requirement. See Reno v. Catholic

Social Servs., Inc., 113 S. Ct. 2485, 2495 n.18 (1993); Regional

Rail Reorganization Act Cases, 419 U.S. 102, 138 (1974).

*The Abbott Laboratories test was applied in two other

cases decided on the same day. See Toilet Goods Ass’n V.

Gardner, 387 U.S. 158 (1967); Gardner v. Toilet Goods Ass'n,

387 U.S. 167 (1967).

8

satisfy both prongs of the test for a suit to be ripe.

See also id. at 153 (“Where the legal issue presented

is fit for judicial resolution, and where a regulation

requires an immediate and significant change in the

plaintiffs’ conduct of their affairs with serious penal-

ties attached to noncompliance, access to the courts

* * * must be permitted.”) (emphasis added) ; Toilet

Goods Ass’n v. Gardner, 387 U.S. 158, 164 (1967)

(“[T]he test of ripeness, as we have noted, depends

not only on how adequately a court can deal with the

legal issue presented, but also on the degree and

nature of the regulation’s present effect on those seek-

ing relief.”) (emphasis added); Poe v. Ullman, 367

U.S. 497, 508-509 (1961) (“Justiciability * * * is the

resultant of many subtle pressures, including the

appropriateness of the issues for decision by this

Court and the actual hardship to the litigants of deny-

ing them the relief sought.”); Erwin Chemerinsky,

Federal Jurisdiction § 2.4, at 108 (1989) (“{T]he

Court’s decisions seem to indicate that both [ripeness ]

requirements must be met.””). Moreover, in every case

in which this Court has applied the Abbott Labora-

tories test and concluded that a dispute was ripe for

review—including Abbott Laboratories itself—this

Court has addressed both the fitness and hardship

prongs of the test.® If it is true, as petitioners con-

tend, that a dispute is ripe if it satisfies the fitness

9 See Thomas v. Union Carbide Agric. Prods. Co., 473 U.S.

568, 581 (1985); Pacific Gas, 461 U.S. at 201-203; EPA V.

National Crushed Stone Ass’n, 449 U.S. 64, 72 n.12 (1980);

Gardner V. Toilet Goods Ass’n, 387 U.S. 167, 170-174 (1967) ;

Abbott Laboratories, 387 U.S. at 148-156; see also Harrison

v. PPG Indus., Inc., 446 U.S. 578, 603 (1980) (Stevens, J.,

dissenting) .

9

prong alone, the Court’s hardship analysis in each of

these cases was superfluous.

b. Petitioners argue (Pet. 12-13, 15) that, by

dismissing their suit solely on the basis of the second

prong of the Abbott Laboratories test, the court of

appeals utilized an approach contrary to that em-

ployed in the D.C. Circuit. There is, however, no

such conflict.

The D.C. Circuit generally follows the rule that a

plaintiff must satisfy both the fitness and hardship

prongs of the Abbott Laboratories test and has on

numerous occasions dismissed cases on the basis of

the hardship prong alone. See Tenneco Gas v. FERC,

969 F.2d 1187, 1211 (D.C. Cir. 1992) (“Although

Athlone [Indus. v. Consumer Prods. Safety Comm'n,

707 F.2d 1485 (D.C. Cir. 1983)] supports the pipe-

line petitioners as to the fitness of their claim, they

still must show that delay in settling the civil penal-

ties issue will cause them to suffer a hardship.’’) ; Pub-

he Citizen, Inc. v. U.S. Nuclear Regulatory Comm’n,

940 F.2d 679, 684 (D.C. Cir. 1991) (“[E]ven as-

suming that the claim is close enough to fitness for

review that a showing of hardship would enable us to

eke out a ripeness finding, petitioners have not shown

any such hardship.”); ANC Pipeline Co. v. FERC,

876 F.2d 124, 131 (D.C. Cir. 1989) (“We may as-

sume without deciding that the issue is fit for judicial

review. * * * We can, however, find no hardship to

Great Lakes in postponing review.”) ; Consolidation

Coal Co. v. Federal Mine Safety & Health Review

Comm’n, 824 F.2d 1071, 1082 (D.C. Cir. 1987) (re-

jecting the suggestion “that ‘fitness for review’ alone

is always sufficient to make a claim ripe’).

10 See also American Fed’n of Gov’t Employees v. FLRA,

750 F.2d 148, 144 (D.C. Cir. 1984); American Trucking

ps

It is true that, in a narrow category of cases, the

D.C. Circuit has dispensed with the hardship test.

This exception to the general rule originated in Eagle-

Picher Indus., Inc. v. United States EPA, 759 F.2d

905 (1985). In that case, Eagle-Picher sought to

challenge an EPA regulation adopted pursuant to the

Comprehensive Environmental Response, Compensa-

tion, and Liability Act (CERCLA), 42 U.S.C. 9601

et seq., but failed to bring the challenge within 90

days of the regulation’s promulgation, as an appli-

cable CERCLA provision required. Eagle-I icher ar-

gued that the lateness of its challenge should be ex-

cused on the ground that, had it filed suit within the

90-day period, the suit would not have been ripe.

The D.C. Circuit disagreed. After concluding that

the issue would have been fit for judicial resolution

within the 90-day period, the court declared that

“Tw]e need not proceed in this case to the second

prong of the Abbott Laboratories test,”’ because

“Tw]here the first prong of the ripeness test is met

and Congress has emphatically declared a preference

for immediate review, * * * no purpose is served by

proceeding to the second prong.” 759 F.2d at 918

(emphasis added)." The Eagle-Picher exception

oe

Ass’ns V. ICC, 747 F.2d 787, 790 (D.C. Cir. 1984); Tennessee

Gas Pipeline Co. v. FERC, 736 F.2d 747, 749 (D.C. Cir.

1984); South Carolina Elec. & Gas Co. v. ICC, 734 F.2d

1541, 1545 (D.C. Cir. 1984); Alascom, Inc. V. FCC, 727 F.2d

1212, 1217 (D.C. Cir. 1984); Air New Zealand Ltd. v. CAB,

726 F.2d 832, 888 (D.C. Cir. 1984); Baltimore Gas & Elec.

Co. v. ICC, 672 F.2d 146, 149 (D.C. Cir. 1982).

11 Accord National Recycling Coalition, Inc. Vv. Browner,

984 F.2d 1243, 1249 (D.C. Cir. 1993); Her Majesty the Queen

v. United States EPA, 912 F.2d 1525, 1533 (D.C. Cir. 1990);

National Recycling Coalition, Inc. Vv. Reilly, 884 F.2d 1431,

11

plainly does not apply here, since there is nothing in

42 U.S.C. 5908 suggesting that Congress favored im-

mediate challenges to patent right determinations.

Petitioners do not contend otherwise.

2. Petitioners also contend (Pet. 15-22) that, as-

suming they were required to show hardship under

the second prong of the Abbott Laboratories test, they

have done so. That is a fact-specific question that

both lower courts have resolved against petitioners.

Further review of that factual claim is unwarranted.

See, e.g., Goodman v. Lukens Steel Co., 482 U.S. 656,

665 (1987); United States v. Doe, 465 U.S. 605, 614

(1984). In addition, the Federal Circuit, which has

exclusive appellate jurisdiction in cases relating to

the patent laws, see 28 U.S.C. 1295(a) (1); Pet. App.

AT7-A8, has particular expertise in the subject matter

of this suit. “Because of the unique character of the

Federal Circuit,” its conclusion in this case that ad-

judication of petitioners’ challenge to the Determina-

tion should be withheld pending the outcome of the

Interference is “entitled to special deference.” United

States v. Fausto, 484 U.S. 439, 464 n.11 (1988)

(Stevens, J., dissenting).

8. Petitioners’ contention (Pet. 19-21) that their

property has been taken without due process is with-

out merit. The district court expressly dismissed peti-

tioners’ complaint without prejudice. Pet. App. B8.

Therefore, they are at complete liberty to refile their

complaint at such time as their suit is ripe. It does

not deny petitioners due process to postpone review

of the Determination pending the outcome of the In-

terference when there is no evidence of hardship in

1434 (D.C. Cir. 1989); Consolidation Coal Co., 824 F.2d at

1081.

12

so doing. Cf. Thunder Basin Coal Co. v. Reich, 114

S. Ct. 771, 781-782 (1994).

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

DreEw S. Days, III

Solicitor General

FRANK W. HUNGER

Assistant Attorney General

Vito J. DIPIETRO

THOMAS J. BYRNES

WILLIAM C. BERGMANN

Attorneys

JUNE 1994

W oG. &. GOVERNMENT PRINTING OFrice, 1994 301157 86160