Gunn v. Minton
568 U.S. ____ (2013) (2013)
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Rule of Law:
A state law claim alleging legal malpractice in the handling of a patent case does not "arise under" federal patent law for purposes of 28 U.S.C. § 1338(a) because the embedded federal issue is not substantial to the federal system as a whole.
Facts:
- Vernon Minton developed a computer program and telecommunications network for securities trading called TEXCEN.
- In March 1995, Minton leased the TEXCEN system to a securities brokerage firm, R. M. Stark & Co.
- More than a year after leasing the system, Minton applied for a patent for an interactive securities trading system based substantially on TEXCEN, which was issued in January 2000.
- Minton, represented by attorney Jerry Gunn and other petitioners, subsequently sued NASD and NASDAQ for patent infringement.
- In the infringement lawsuit, the defendants argued Minton's patent was invalid under the "on sale" bar because he had leased his invention more than one year before filing his patent application.
- Gunn and Minton's other attorneys failed to timely raise the "experimental use" exception, a potential defense to the "on sale" bar.
- As a result, Minton's patent was declared invalid, leading Minton to believe that his attorneys' failure had cost him the lawsuit.
Procedural Posture:
- Vernon Minton filed a legal malpractice action against his former attorneys, Jerry Gunn et al., in a Texas state trial court.
- The trial court granted summary judgment in favor of the attorneys.
- Minton appealed to the Court of Appeals of Texas, which affirmed the trial court's judgment, finding state court jurisdiction was proper.
- Minton then appealed to the Supreme Court of Texas.
- The Supreme Court of Texas reversed the Court of Appeals, holding that the claim involved a substantial federal issue and thus fell under exclusive federal jurisdiction.
- Gunn and the other attorneys (petitioners) successfully petitioned the U.S. Supreme Court for a writ of certiorari.
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Issue:
Does a state law claim for legal malpractice, which is based on an alleged error in handling a prior patent case, 'arise under' federal patent law for purposes of exclusive federal jurisdiction under 28 U.S.C. § 1338(a)?
Opinions:
Majority - Chief Justice Roberts
No. A state law legal malpractice claim does not arise under federal patent law simply because it requires resolution of a patent law issue. Applying the four-part test from Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., the Court found that while the claim necessarily raises and actually disputes a federal patent issue (the 'case-within-a-case' analysis of the experimental-use exception), the federal issue is not 'substantial' in the sense required for federal jurisdiction. The substantiality inquiry looks to the importance of the issue to the federal system as a whole, not just to the parties in the case. Here, the patent law question is purely hypothetical and backward-looking; its resolution in state court will not alter the patent's invalidity, undermine the uniformity of patent law, or establish binding precedent for future patent cases. Furthermore, exercising federal jurisdiction would disrupt the congressionally approved balance between federal and state courts, as states have a strong and traditional interest in regulating the legal profession and adjudicating malpractice claims.
Analysis:
This decision significantly clarifies the 'substantiality' prong of the Grable test for federal question jurisdiction. It establishes that for a federal issue embedded within a state law claim to warrant federal jurisdiction, it must have systemic importance to federal law, not merely be outcome-determinative for the specific litigants. Gunn v. Minton effectively carves out state legal malpractice claims from the scope of exclusive federal patent jurisdiction, reinforcing the traditional role of state courts in regulating the legal profession. This precedent ensures that state courts will continue to hear the vast majority of professional negligence cases, even those that require interpretation of complex federal statutes, thereby preserving the intended balance between the state and federal judiciaries.
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