Embedded federal questions, exclusive jurisdiction, and patent-based malpractice claims.

Author:Wilson, Christopher G.

TABLE OF CONTENTS INTRODUCTION I. MALPRACTICE AND PATENT ATTORNEYS A. The "Suit Within a Suit" B. Preemption Narrowly Construed: Rules, Regulations, and Ethical Codes for Patent Prosecution II. "ARISING UNDER" AND THE EMBEDDED FEDERAL QUESTION A. Recent Supreme Court Decisions Articulating the Meaning of "Arising Under". B. Patent Jurisdiction III. COURT DECISIONS APPLYING GRABLE TO PATENT-BASED MALPRACTICE CLAIMS WHEN CAUSATION RAISES INFRINGEMENT IV. UNDERSTANDING GRABLE, BALANCING FEDERAL INTERESTS, AND RELYING ON STATE COURTS A. Patent-Based Malpractice Claims Raising Substantive Issues Will Rarely Meet the First Prong of Grable B. Exercising Federal Jurisdiction over These Claims Would Contravene the Congressionally Approved Division of Labor for Malpractice Claims C. An Alternative Approach: Weighing the Potential for Disruption Against the Federal Interest at Stake CONCLUSION INTRODUCTION

"A suit arises under the law that creates the cause of action." (1) Scholars now understand Justice Holmes's quote as one of inclusion rather than exclusion, for which it was originally meant. (2) Indeed, it is well settled that at times a state law claim "arises under" federal law such that federal question jurisdiction is proper. (3) But underlying Holmes's comment is a widely held concern that exercising federal question jurisdiction over a state law claim turning on federal issues could invite a plethora of state filings into federal court. (4) In recent years, the Supreme Court has made efforts to clarify the doctrine and in the process trimmed back the instances in which a federal court should usurp authority over a state law claim.

Imagine a situation in which the individual plaintiffs sole theory of liability turns on federal law. Further suppose that one of the required elements of the plaintiffs claim is that she prove this federal violation. Plaintiffs confront this very situation when alleging malpractice against attorneys who handled their federal claims. For these plaintiffs, the federal issue is unavoidable. Malpractice, however, is a traditional state law claim. (5) An aggrieved client may now wonder whether she can bring her malpractice claim in the federal court that could have heard the underlying action or whether she must file in state court.

Yet the door to the federal courthouse is not so easily opened. The presence of a federal issue alone is insubstantial; the claim itself must "arise under" federal law. (6) Not surprisingly, the Supreme Court's most important decisions interpreting "arising under" occur in the context of 28 U.S.C. [section] 1331, the general federal question jurisdiction statute. (7) But the phrase appears in other jurisdictional statutes as well, namely [section] 1338, which applies to patents, copyrights, and trademarks. (8) The phrase's meaning is the same in both statutes. (9) Section 1338(a), however, throws a wrench in the works. Section 1338(a) confers exclusive jurisdiction on the federal courts for patent cases. (10) Should federal courts treat a patent-based malpractice suit as a patent case, governed exclusively by federal law, or as a state law professional negligence claim?

Two Supreme Court cases shed light on this problem. In Merrell Dow Pharmaceuticals, Inc. v. Thompson, (11) the Court failed to find federal question jurisdiction over a state law claim that relied on the violation of a federal statute as negligence per se. (12) Conversely, in Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, (13) the Court held that federal jurisdiction was proper over a state quiet title claim. (14) Read together these cases confirm that the Court sees the embedded federal question as a rare exception to the general rule of federal question jurisdiction. Courts should be reluctant to allow garden-variety state law claims into federal court even if they necessarily require a plaintiff to raise federal issues. The opposite result would be antithetical to the federalism concerns underlying the Court's federal question jurisprudence. Indeed, when there is no significant federal interest at stake, these federalism concerns counsel in favor of remand.

This Note argues that this skepticism against allowing a state claim into federal court should extend to an overwhelming majority of patent-based malpractice claims, despite the statutory grant of exclusive jurisdiction for patent cases. Part I will briefly explain patent-based malpractice and the peculiar problem of the "suit within a suit" requirement for causation analysis. Part II will then discuss relevant Supreme Court jurisprudence on "arising under" jurisprudence, the embedded federal question, and patent jurisdiction. Part III will highlight recent decisions by the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) allowing patent-based malpractice claims in federal court, as well as state court and Fifth Circuit decisions reaching the opposite conclusion. Part IV will apply the Court's current understanding of "arising under" to patent-based malpractice claims and argue that patent-based malpractice claims should rarely qualify for federal question jurisdiction. (15)


    In the last forty years, the number of malpractice claims has steadily increased. (16) However, until recently, patent-based malpractice claims were quite rare. (17) Whatever the cause, (18) aggrieved clients are bringing more claims against patent attorneys. (19) Considering the high stakes in patent litigation, it is natural for clients to seek recovery from someone when their expectations are not met. (20) Additionally, patent attorneys, unlike other attorneys, are required to display a certain level of technical skill in order to practice in front of the U.S. Patent and Trademark Office (USPTO). (21) Notwithstanding the heightened technical requirements, the attorney's fiduciary obligation to the client is no different than that of any other attorney. (22)

    From a doctrinal perspective, the term legal malpractice is in fact a wide umbrella for tort, contract, or both as causes of action by a client against a former attorney. (23) Generally, legal malpractice is a tort cause of action for a lawyer's violation of the duty to a client. (24) And to prevail, the plaintiff must show not only that her attorney violated this duty but also that the duty caused her injury and resulted in damage. (25)

    Whether pled as a tort or contract cause of action, there are numerous types of attorney errors that may form the basis for a malpractice action. The American Bar Association studies the number of malpractice claims filed and their bases, breaking the claims into four distinct groups: administrative errors, substantive errors, client relation errors, and intentional wrongs. (26) For a patent attorney--or any attorney, for that matter--the distinction can be crucial. At one end of the spectrum, the misconduct may involve missed deadlines, (27) misfiled applications, (28) or calendar management issues. (29) At the other end, the misconduct may include defective claim drafting, (30) unfamiliarity with the law or want of technical competence, (31) or defective patent infringement prosecution. (32) The nature of the error affects the degree to which a court must discuss patent issues. Almost all procedural errors will raise the patent issue as an incidental matter. (33) But there are also some substantive errors--such as failure to know patent law--that raise the patent issue collaterally and turn instead on the applicable standard of care. (34) Depending on the degree to which patent issues are present, the court will grapple with these questions in its causation analysis. (35) Causation may, in fact, be the most problematic issue in malpractice. (36) And it plays a central role in the jurisdictional question raised in this Note.

    1. The "Suit Within a Suit"

      For the plaintiff to recover against her attorney in a legal malpractice action, she must show what "should have" happened in the underlying action or matter "but for" the attorney's error. (37) This requirement is commonly referred to as the "suit within a suit" or "trial within a trial" element of malpractice. (38) This is more than just a creative label. The plaintiff is required to prove the claim that her attorney lost (39) and also that the attorney's negligence caused that loss. (40) In most cases, the cause-in-fact requirement amounts to a full-blown recreation of the underlying litigation, with the same witnesses and evidence that should have been presented. (41)

      As an illustration, assume that an attorney represented a plaintiff in a patent infringement suit but because of a missed filing deadline, the infringing defendant was able to raise a defense of invalidity. (42) If the client later sued the attorney for malpractice, then she would be required to prove that she should have won the underlying infringement suit absent the attorney's error to demonstrate that this caused her loss.

      Although the suit within a suit requirement is extensive, the disposition of the malpractice action often turns on a question of fact. Causation-in-fact will involve all the legal issues that would have been heard in the underlying action. Thus, if the question is whether an attorney's error caused a loss of claim, the issue may be a matter of law for the court. (43) But when the analysis depends on factual inquiries to determine whether the attorney's actions were a substantial factor (44) in the result or whether there would have been a better result without the attorney's error--requiring the plaintiff to prove the suit within a suit--the ruling turns on an issue of fact. (45) In addition, the question of proximate cause--whether the attorney's negligence caused the plaintiffs injury--usually raises a question of fact. (46)

      Though a malpractice suit is sometimes described as the "conceptual" equivalent of the underlying action, (47) this...

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