Opinion ID: 6346492
Heading Depth: 4
Heading Rank: 2

Heading: is required by statute to be per-

Text: formed by the applicable officer (and only that officer); or (B) (i) (I) is established by regulation; and (II) is required by such regula- tion to be performed by the ap- plicable officer (and only that officer); and (ii) includes a function or duty to which clause (i)(I) and (II) applies, and the applicable regulation is in effect at any time during the 180- day period preceding the date on which the vacancy occurs. 5 U.S.C. § 3348(a)(2) (emphases added). This statutory language is unambiguous: the FVRA applies only to functions and duties that a PAS officer alone is permitted by statute or regulation to perform. It does not apply to delegable functions and duties. Other circuits agree. Schaghticoke Tribal Nation v. Kempthorne, 587 F.3d 132, 135 (2d Cir. 2009) (holding the FVRA did not prohibit an inferior officer from performing a function of a PAS officer who had resigned because the agency’s regulations permitted the PAS officer to delegate that function); Stand Case: 18-2140 Document: 193 Page: 11 Filed: 05/27/2022 ARTHREX, INC. v. SMITH & NEPHEW, INC. 11 Up for Cal.! v. U.S. Dep’t of Interior, 994 F.3d 616, 622 (D.C. Cir. 2021) (observing FVRA applies to “exclusive duties”). 2 The legislative history, as is often the case, demonstrates the competing considerations that went into the statute’s adoption. On one hand, the FVRA’s sponsors expressed a desire for the law to apply in nearly all circumstances. One sponsor “hope[d] that the Senate would make the Vacancies Act ‘so tight, so air-tight, that no department can find a crack or crevice anywhere through which to creep.’” S. Rep. No. 105-250, at 9 (1998) (quoting statement of Senator Robert Byrd). Likewise, another sponsor said the law was meant to “cover all situations when the officer cannot perform his duties.” 144 Cong. Rec. 27,496 (1998) (statement of Senator Fred Thompson). The Senate Committee on Governmental Affairs stated that “[t]he purpose of [the FVRA] is to create a clear and exclusive process to govern the performance of duties” in an acting capacity. S. Rep. No. 105-250, at 1. It also said, “The bill applies to all vacancies in Senate-confirmed positions in executive agencies with [only] a few express exceptions.” Id. at 2; see also id. at 15–17 (describing exceptions). And it repeatedly rejected a narrow interpretation that agencies vested with general delegation authority were exempt from the FVRA. See, e.g., id. at 3–4. On the other hand, commenting on the specific statutory provision at issue here, 5 U.S.C. § 3348(a)(2), the Committee stated: The bill defines “function or duty” of the office as those functions or duties that (1) are established by 2 We acknowledge that these decisions are not binding on us and that Stand Up’s observation may be dictum. See 994 F.3d at 622 n.2 (“Appellants have not raised their FVRA claims on appeal . . . .”). Nevertheless, these cases support our interpretation. Case: 18-2140 Document: 193 Page: 12 Filed: 05/27/2022 12 ARTHREX, INC. v. SMITH & NEPHEW, INC. statute and are required to be performed only by the applicable officer; (2) are established by regulation and are required to be performed only by the appli- cable officer; [or] (3) were established by regulation and were required to be performed only by the ap- plicable officer at any time in the 180 days preceding the vacancy . . . . S. Rep. No. 105-250, at 17–18 (emphases added). The Committee elaborated, “The functions or duties of the office that can be performed only by the head of the executive agency are therefore defined as the non-delegable functions or duties of the officer . . . .” Id. at 18 (emphasis added). And it clarified that “[d]elegable functions of the office could still be performed by other officers or employees.” Id. It appears this was a compromise to address concerns that a broader definition could “cause an unintended shutdown of the Federal agency within which the vacancy exists due to administrative paralysis.” Id. at 30–31. These competing narratives in the legislative history cannot alter the plain language of the statute that was adopted, which provides that the FVRA applies only to non-delegable functions and duties. 5 U.S.C. § 3348(a)(2). Arthrex is correct that this reading of § 3348(a)(2) renders the FVRA’s scope “vanishingly small.” Oral Arg. at 4:58–5:13. 3 The government readily admits that only “a very small subset of duties” are non-delegable. Id. at 37:21–37. The Department of Justice agrees: “Most, and in many cases all, the responsibilities performed by a PAS officer will not be exclusive.” Guidance on Application of Fed. Vacancies Reform Act of 1998, 23 Op. O.L.C. 60, 72 (1999). Pertinent here, the government contends that the FVRA imposes no constraints whatsoever on the PTO because all the Director’s duties are delegable. Oral Arg. at 3 Available at https://oralarguments.cafc.uscourts. gov/default.aspx?fl=18-2140_03302022.mp3. Case: 18-2140 Document: 193 Page: 13 Filed: 05/27/2022 ARTHREX, INC. v. SMITH & NEPHEW, INC. 13 36:44–53 (Q: “Are there any functions or duties that a Director at the PTO has that in your view are not delegable?” A: “No, I don’t believe there are any.”); id. at 38:38–57 (“When you ask the question whether . . . the FVRA imposes constraints as opposed to an affirmative grant of authority to President Biden as it pertains to the Patent and Trademark Office, I’d say no . . . .”). We find it disquieting that the government views the FVRA as impacting such a “very small subset of duties” and not impacting the PTO at all. That does not, however, justify departing from the plain language of the statute. N.C. Dep’t of Transp. v. Crest St. Cmty. Council, Inc., 479 U.S. 6, 14 (1986) (“[I]f one must ignore the plain language of a statute to avoid a possibly anomalous result, the short answer is that Congress did not write the statute that way.” (cleaned up)). Moreover, Congress chose the limiting language of § 3348(a)(2) knowing full well that “many [PAS officers] lack any meaningful statutory duties.” S. Rep. No. 105-250, at 18. We can neither rewrite the statute nor supplant Congress’ judgment. Furthermore, adopting Arthrex’s position would have significant consequences. Arthrex does not dispute S&N’s assertion that, in the last decade alone, the PTO has issued more than 668,000 patents signed by an inferior officer filling in for the Director. Construing the FVRA to apply to delegable duties would call the validity of those patents into question. It would also cast doubt on all the IPR decisions the PTO issued during the Commissioner’s tenure performing the Director’s delegable functions. See 5 U.S.C. § 3348(d)(1) (“An action taken by any person who is not acting under section 3345, 3346, or 3347 . . . shall have no force or effect.”). The impacts of such a decision would, moreover, reverberate far beyond the PTO. The universe of delegable PASofficer duties is expansive, potentially encompassing every Executive agency. Oral Arg. at 41:03–13 (noting there are Case: 18-2140 Document: 193 Page: 14 Filed: 05/27/2022 14 ARTHREX, INC. v. SMITH & NEPHEW, INC. more than 1,000 PAS offices across the government); id. at 4:58–5:13 (“In the real world, every agency has general delegation authority, and it applies to the vast and overwhelming majority of the agency’s functions.”); Guidance on Application of Fed. Vacancies Reform Act of 1998, 23 Op. O.L.C. at 72 (“Most, and in many cases all, the responsibilities performed by a PAS officer will not be exclusive.”). Indeed, when Congress “delegates authority to a federal officer or agency, subdelegation to a subordinate federal officer or agency is presumptively permissible absent affirmative evidence of a contrary congressional intent.” Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023, 1031 (Fed. Cir. 2016) (quoting U.S. Telecom Ass’n v. FCC, 359 F.3d 554, 565 (D.C. Cir. 2004)); see also Kobach v. U.S. Election Assistance Comm’n, 772 F.3d 1183, 1190–91 (10th Cir. 2014) (“Our sibling circuits that have spoken on this issue are unanimous in permitting subdelegations to subordinates, even where the enabling statute is silent, so long as the enabling statute and its legislative history do not indicate a prohibition on subdelegation.” (collecting cases)). As between the exceedingly broad scope that Arthrex proposes and the exceedingly narrow scope that the plain text of § 3348(a)(2) demands, we must choose the latter. Arthrex argues that our interpretation “read[s] § 3347(b) out of the statute entirely.” Oral Arg. at 11:02– 14. We do not agree. Section 3347(b) merely provides that a statute granting the head of an agency “general authority . . . to delegate [his] duties” does not exempt the agency from the FVRA. Construing the FVRA to apply only to nondelegable duties does not render this provision superfluous. If, for example, Congress grants an agency head general delegation authority but specifies that certain duties are non-delegable, § 3347(b) makes clear that the FVRA still applies to those non-delegable duties. And if no statute or regulation precludes delegation of a specific duty, the FVRA would not apply for that reason, not because of a statutory grant of general delegation authority. We Case: 18-2140 Document: 193 Page: 15 Filed: 05/27/2022 ARTHREX, INC. v. SMITH & NEPHEW, INC. 15 therefore reject Arthrex’s argument that our reading of § 3348(a)(2) conflicts with § 3347(b). The plain language of the statute limits the scope of the FVRA to non-delegable functions and duties. The FVRA does not, therefore, restrict who may perform a PAS officer’s delegable duties when he is absent. 2 Applying the statute to this case, we must determine whether reviewing rehearing requests is a delegable duty of the Director or a duty that the Director, and only the Director, must perform. In Arthrex, the Supreme Court held that the Director (or Acting Director) must have the ability to rehear decisions of the Board. 141 S. Ct. at 1987 (“If the Director were to have the ‘authority to take control’ of a PTAB proceeding, APJs would properly function as inferior officers.” (quoting Go-Bart Importing Co. v. United States, 282 U.S. 344, 354 (1931))). It did not hold that the Director must rehear every Board decision, nor did it require the Director to issue a decision in response to every rehearing request. “To be clear, the Director need not review every decision of the PTAB. What matters is that the Director have the discretion to review decisions rendered by APJs.” Id. at 1988. We conclude that under the Patent Act this discretion includes the discretion to delegate review of rehearing requests. The Patent Act bestows upon the Director a general power to delegate “such of the powers vested in the [PTO] as the Director may determine.” 35 U.S.C. § 3(b)(3)(B). There is nothing in the Patent Act indicating that the Director may not delegate this rehearing request review function. Arthrex identifies no statute, regulation, or other law that limits the Director’s delegable duties or suggests that rehearing requests are not delegable. Arthrex cites 35 U.S.C. § 6(c), which provides that “[o]nly the Patent Trial and Appeal Board may grant Case: 18-2140 Document: 193 Page: 16 Filed: 05/27/2022 16 ARTHREX, INC. v. SMITH & NEPHEW, INC. rehearings.” On its face, the statute does not even permit the Director to grant rehearing, much less assign that authority exclusively to him. The Supreme Court, however, held that § 6(c) “cannot constitutionally be enforced to the extent that its requirements prevent the Director from reviewing final decisions rendered by APJs.” Arthrex, 141 S. Ct. at 1987. “The Director accordingly may review final [Board] decisions” notwithstanding § 6(c). Id. 4 The Supreme Court held that the Director may review final Board decisions. That is all the Appointments Clause requires, that the Director have the option to review, if she so chooses, a final Board decision. That the Appointments Clause requires that a PAS have review authority does not mean that a principal officer, once bestowed with such authority, cannot delegate it to other agency officers. Given the language of the statute, the Director’s general grant of delegation authority, and the absence of any language suggesting that rehearing requests must be reviewed by the Director and only the Director, we conclude that, for purposes of the FVRA, the duty to decide rehearing requests is delegable. Arthrex argues that the Director’s general delegation authority cannot alone satisfy the FVRA. Appellant’s Supp. Reply Br. 7–8. According to Arthrex, Congress enacted § 3347(b) of the FVRA specifically to foreclose this argument. Id. (citing, e.g., S. Rep. No. 105250, at 17). There are two problems with Arthrex’s 4 Arthrex argues that after the Supreme Court’s decision, § 6(c) now “permits the Director—and only the Director—to exercise a unilateral power to review Board decisions.” Appellant’s Supp. Br. 22. But § 6(c) contains no such limitation. The statute permits the Board to grant rehearing, and the Supreme Court’s Arthrex decision concluded that the Director may also grant rehearing. Nothing in § 6(c) permits the Director (and only the Director) to rule on rehearing requests. Case: 18-2140 Document: 193 Page: 17 Filed: 05/27/2022 ARTHREX, INC. v. SMITH & NEPHEW, INC. 17 argument. First, § 3347(b) does not actually apply to the Director at all. It provides that the general delegation authority of “the head of an Executive agency” is not a basis to evade the FVRA. (Emphasis added). Because the PTO is a subagency of the Department of Commerce, see 35 U.S.C. § 1(a), it is not an “Executive agency” under the FVRA. See 5 U.S.C. § 105 (“For the purpose of this title, ‘Executive agency’ means an Executive department, a Government corporation, and an independent establishment.”); 5 U.S.C. § 101 (listing the Department of Commerce as an Executive department). Second, even when there exists general delegation authority, Congress can still exempt specific duties or functions and thereby require those to be performed by the PAS officer. We are not, therefore, relying upon the Director’s general delegation authority alone in holding that the FVRA does not apply here. Rather, our decision rests on the absence of any statute or regulation or law permitting only the Director to decide rehearing requests. We hold that the Commissioner’s order denying Ar- threx’s rehearing request on the Director’s behalf did not violate the FVRA. The FVRA does not restrict who may perform the delegable functions and duties of an absent PAS officer. And the Director’s authority to decide requests for rehearing Board decisions is delegable. 5