Patent Law

Carlsbad Tech v. HIF Bio (Supreme Court 2009) 07-1437-1.pdf

This involves the power of a federal appellate court to review a district court order to remand a case back to state court. In its opinion, the Federal Circuit held that it lacked such power. The Supreme Court has now reversed that decision and instead followed lead of the Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits.

HIF first sued Carlsbad in California state court seeking a declaratory judgment of ownership and inventorship of various anti-angiogenesis drugs under California state law. The complaint also alleged various issues of slander, conversion, fraud, etc. The case was removed to federal court based on one federal RICO allegation. However, once that claim was dismissed, the district court refused to continue to exercise its supplemental jurisdiction to hear the remaining state claims -- thus remanding the case back to state court. The Federal Circuit refused to review the remand for an abuse of discretion - instead finding that it lacked subject matter jurisdiction to hear the appeal.

The Federal Circuit's outcome makes sense if you look at the statute. 28 U.S.C. §1447(d) says: ?An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise . . . .? However, the Supreme Court has clearly moved beyond the words of the statute in this situation. Here, the Supreme Court reversed -- finding that the remand may be appealed in federal court.

When a district court remands claims to a state court after declining to exercise supplemental jurisdiction, the remand order is not based on a lack of subject-matter jurisdiction for purposes of §§1447(c) and (d). The judgment of the Court of Appeals for the Federal Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.

On remand, the Federal Circuit will need to determine whether the remand was properly within the discretion of the lower court.

Although the decision was unanimous, the decision is accompanied by three concurring opinions by Justices Stevens, Scalia, and Breyer. Justice Stevens was honest about the court's failure to follow the text of the statute: "If we were writing on a clean slate, I would adhere to the statute?s text."

When the Federal Circuit's decision was issued in 2007, I noted that "[t]his case would have a good shot of being granted certiorari. Its impact on patent law, however, is nil." [Link]