Court Opinion

ID: 803757
Source: CourtListenerOpinion
Date Created: 2012-07-06 15:09:44+00
Date Added: 2024-06-11T15:19:23.033157
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
              __________________________

         GENERAL ELECTRIC COMPANY,
                  Appellant,

                           v.
     INTERNATIONAL TRADE COMMISSION,
                 Appellee,

                          AND

     MITSUBISHI HEAVY INDUSTRIES, LTD.,
 AND MITSUBISHI POWER SYSTEMS AMERICAS,
                    INC.,
                 Intervenors.
              __________________________

                      2010-1223
              __________________________

   Appeal from the United States International Trade
Commission in Investigation No. 337-TA-641.

              __________________________

         ON PETITION FOR PANEL REHEARING
             __________________________

    JAMES A. WORTH, Attorney, Office of General Counsel,
United States International Trade Commission, of Wash-
ington, DC, filed a combined petition for rehearing and
rehearing en banc for appellee. With him on the petition
GENERAL ELECTRIC   v. ITC                                  2

were JAMES M. LYONS, General Counsel, and WAYNE W.
HERRINGTON, Assistant General Counsel.

    MARK G. DAVIS, Weil, Gotshal & Manges LLP, of Wash-
ington, DC, filed a response to the petition for appellant.
With him on the response was ANISH R. DESAI.
              __________________________

 Before RADER, Chief Judge, NEWMAN AND LINN, Circuit
                       Judges.
Order for the court filed by Chief Judge RADER. Dissent
filed by Circuit Judge NEWMAN.

RADER, Chief Judge.

                            ORDER

    A combined petition for panel rehearing and rehearing
en banc was filed by the International Trade Commission
(ITC). A response was invited by the panel and filed by
General Electric Company. The petition for panel rehear-
ing, response, and reply were considered by the panel that
heard the appeal.

    Upon consideration thereof,

    IT IS ORDERED THAT:

    (1) ITC’s petition for panel rehearing is granted for the
limited purpose of withdrawing Part III of the opinion. The
panel offers no decision on the questions raised in Part III,
which may arise in a future case.

    (2) The previous opinion in this appeal issued February
29, 2012 and reported at Gen. Elec. Co. v. Int’l Trade
3                                  GENERAL ELECTRIC   v. ITC

Comm’n, 670 F.3d 1206 (Fed. Cir. 2012), is withdrawn and
replaced with the revised opinion accompanying this order.

    (3) The petition for rehearing en banc has been circu-
lated to the full court.

                                  FOR THE COURT

     July 6, 2012                 /s/ Jan Horbaly
        Date                      Jan Horbaly
                                  Clerk
United States Court of Appeals for
       the Federal Circuit
                __________________________

           GENERAL ELECTRIC COMPANY,
                    Appellant,

                              v.
       INTERNATIONAL TRADE COMMISSION,
                   Appellee,

                             AND

       MITSUBISHI HEAVY INDUSTRIES, LTD.,
 AND    MITSUBISHI POWER SYSTEMS AMERICAS,
                       INC.,
                    Intervenors.
                __________________________

                        2010-1223
                __________________________

   Appeal from the United States International Trade
Commission in Investigation No. 337-TA-641.
              __________________________

NEWMAN, Circuit Judge, dissenting from the panel action
on rehearing.

    In its now withdrawn opinion, the court criticized the ac-
tion of the International Trade Commission whereby the
Commission removed the issues of infringement and validity
of the ’985 patent from judicial review. These issues had
been fully investigated, fully tried, and finally decided in the
GENERAL ELECTRIC   v. ITC                                    2

ITC’s Final Initial Determination and were not reviewed by
the full Commission, thus becoming a final Commission
decision and appealable to the Federal Circuit. Nonetheless,
the court now grants the Commission’s request and ratifies
the Commission’s authority to negate the finality of these
final decisions, thereby forestalling judicial review and
impeding the expeditious resolution of ITC proceedings, as
required by statute and as the Commission represents to the
public.

    The ’985 patent is one of several patents for whose in-
fringement General Electric sought remedy in the ITC in
accordance with 19 U.S.C. §1337. The Commission unilater-
ally, without prior notice, prevented completion of the Section
337 action, even as the Commission issued the Final Deter-
mination that is the subject of this appeal. My colleagues
now grant the Commission’s request on rehearing, and
withdraw the court’s expression of concern for the Commis-
sion’s short-cut of its statutory obligations. I must, respect-
fully, dissent.

Judicial review of ITC decisions

    The validity and infringement of the ’985 patent were
fully litigated and decided in the proceedings before the
administrative law judge, whose Final Initial Determination
included extensive findings of fact and conclusions of law.
Section 337 provides that the final decision of the ALJ is
subject to judicial review unless superseded by a decision of
the full Commission. My colleagues now ratify the Commis-
sion’s bar of judicial review of issues decided by the ALJ, by
declining to “take a position” on such issues after noticing
them for Commission review. The result is that this action,
whose complaint was filed in 2008, cannot receive full judi-
cial review and final resolution. We thus remand to the
Commission for undefined further proceedings, for which one
3                                      GENERAL ELECTRIC   v. ITC

may be confident only of further delay, cost, and burden to
the parties, the Commission, and this court.

    Such piecemeal actions are contrary to the purposes of
Section 337 to provide expeditious resolution of charges of
unfair competition in importation. Piecemeal litigation is
also disfavored as a matter of national policy. As the Court
stated in McLish v. Roff, 141 U.S. 661, 665-66 (1891):

        From the very foundation of our judicial system
    the object and policy of the acts of congress in rela-
    tion to appeals and writs of error . . . have been to
    save the expense and delays of repeated appeals in
    the same suit, and to have the whole case and every
    matter in controversy in it decided in a single appeal.

This policy is manifested in appellate practice requiring
finality of all contested issues, and the limited procedures for
partial appeal. See Cobbledick v. United States, 309 U.S.
323, 325 (1940):

    Since the right to a judgment from more than one
    court is a matter of grace and not a necessary ingre-
    dient of justice, Congress from the very beginning
    has, by forbidding piecemeal disposition on appeal of
    what for practical purposes is a single controversy,
    set itself against enfeebling judicial administration.
    Thereby is avoided the obstruction to just claims that
    would come from permitting the harassment and cost
    of a succession of separate appeals from the various
    rulings to which a litigation may give rise, from its
    initiation to entry of judgment. To be effective, judi-
    cial administration must not be leaden-footed. Its
    momentum would be arrested by permitting separate
    reviews of the component elements in a unified
    cause.
GENERAL ELECTRIC   v. ITC                                   4

Here, all of the contested issues concerning the ’985 patent,
although tried and decided by the ALJ, were not permitted to
be presented to this court when relevant to final decision.
This procedure fails the requirement that Section 337 actions
be expeditiously completed. And since, by 28 U.S.C. §1659,
the respondent is entitled to a stay of the district court
proceedings, as here occurred in General Electric Co. v.
Mitsubishi Heavy Industries, Ltd., No. 2:09-cv-00229, (S.D.
Tex.), Dkt. No. 10 (Oct. 5, 2009) (stay of proceedings), a
patent holder with a presumptively valid patent is barred
from independent resolution and potential remedy in the
federal courts. The Commission’s removal from appeal of the
finally decided issues of validity and infringement is a nega-
tion of the Commission’s responsibility to provide expeditious
resolution of importation issues involving intellectual prop-
erty rights.

    On investigation by the Commission and after full trial,
the ALJ held that the Mitsubishi turbines infringe the ’985
patent, that the ’985 patent is valid, and that inequitable
conduct had not been shown. The Notice of Commission
Determination to Review a Final Initial Determination of the
Administrative Law Judge 74 Fed. Reg. 52,975 (Oct. 15,
2009) stated that the Final Initial Determination would be
reviewed by the full Commission except for the issues of
importation and the intent element of inequitable conduct.
That is the posture in which full Commission received the
ALJ’s decision for review.

    As elaborated by 19 C.F.R. §210.42, the ALJ’s initial de-
termination is subject to review by the full Commission, and
becomes the Commission’s determination unless the Com-
mission orders review:

    19 C.F.R. §210.42 Initial determinations.
    ...
5                                      GENERAL ELECTRIC   v. ITC

    (h)(2) An initial determination under §210.42(a)(1)(i)
    shall become the determination of the Commission 60
    days after the date of service of the initial determina-
    tion, unless the Commission within 60 days after the
    date of such service shall have ordered review of the
    initial determination or certain issues therein or by
    order has changed the effective date of the initial de-
    termination.

The Commission’s final determination is appealable to the
Federal Circuit, as set forth in §1337(c):

    19 U.S.C. §1337(c) Determinations; review.

    . . . . Any person adversely affected by a final deter-
    mination of the Commission under subsection (d), (e),
    (f), or (g) of this section may appeal such determina-
    tion, within 60 days after the determination becomes
    final, to the United States Court of Appeals for the
    Federal Circuit for review in accordance with chapter
    7 of Title 5.

In the Commission the “presiding employee” is the ALJ, and
the ALJ’s decision “becomes the decision of the agency”
unless it is superseded by an agency decision:

    5 U.S.C. §557 Initial decisions; conclusiveness; review
    by agency; submissions by parties; contents of deci-
    sions; record.
    ...
    (b) . . . When the presiding employee makes an initial
    decision, that decision then becomes the decision of
    the agency without further proceedings unless there
    is an appeal to, or review on motion of, the agency
    within time provided by rule. On appeal from or re-
    view of the initial decision, the agency has all the
GENERAL ELECTRIC   v. ITC                                      6

    powers which it would have in making the initial de-
    cision except as it may limit the issues on notice or by
    rule.

The Commission does not dispute the applicability of these
provisions to its proceedings. Yet the Commission insists
that it can remove finally decided issues from judicial review
simply by stating that the full Commission “takes no posi-
tion” on issues that were finally decided by the ALJ. That
position is in conspicuous tension with the statutes and
regulations, and with unambiguous precedent. In Darby v.
Cisneros, 509 U.S. 137, 146 (1993) the Court explained that
“[w]hen an aggrieved party has exhausted all administrative
remedies expressly prescribed by statute or agency rule, the
agency action is ‘final for the purposes of this section’ and
therefore ‘subject to judicial review.’” (quoting 5 U.S.C. §704).
 No provision of Section 337 or the Administrative Procedure
Act authorizes the ITC to bar the routine judicial review of
issues that were fully tried and finally decided by the ALJ
and not reviewed by the full Commission.

Expeditious proceedings in the ITC

     Expeditious adjudication is the hallmark of proceedings
of the International Trade Commission. This goal pervades
the statute, which requires the Commission to establish
target completion dates:

    19 U.S.C. §1337(b) Investigation of violations by
    Commission

    (b)(1) . . . The Commission shall conclude any such
    investigation and make its determination under this
    section at the earliest practicable time after the date
    of publication of notice of such investigation. To
    promote expeditious adjudication, the Commission
7                                     GENERAL ELECTRIC   v. ITC

    shall, within 45 days after an investigation is initi-
    ated, establish a target date for its final determina-
    tion.

Although an earlier statute set a deadline of one year (18
months for complicated cases) the 1994 replacement with the
phrase “the earliest practicable time” was accompanied by
the statement that “the Committee expects that, given its
experience in administering the law under the deadlines in
current law, the ITC will nonetheless normally complete its
investigations in approximately the same amount of time as
is currently the practice.” S. Rep. 103-412, at 119 (1994).

    Similarly, the legislative record for the 2008 regulatory
amendments to the Commission’s Rules describes the
amendments as “procedural rules” promulgated “in order to
increase the efficiency of its section 337 investigations.”
Rules of General Application and Adjudication and Enforce-
ment, 73 Fed. Reg. 38,316, 38,316 (July 7, 2008). The discus-
sion and public comment concerned the Commission’s
proposals to ease the deadlines for completing its proceed-
ings; commentators stated their concern about loss of the
expedition on which they relied for Section 337 actions. The
ITC Trial Lawyers Association stressed the advantages of
“speedy adjudication”:

    [O]ne of the great advantages of Section 337 proceed-
    ings is their speedy adjudication. The role that the
    Commission and Section 337 have achieved as one of
    the key forums for protection of valuable U.S. intel-
    lectual property rights rests on the speed and high
    quality of its adjudicatory process.

Comment to Notice of Proposed Rulemaking, ITC Doc. No.
296282, at 6 (Mar. 31, 2008). The Intellectual Property
Owners Association also commented on the Commission’s
GENERAL ELECTRIC   v. ITC                                      8

proposed authority for enlargement of target dates, stating
that:

    IPO members place much value in the Commission’s
    prompt and effective resolution of Section 337 inves-
    tigations ‘at the earliest practicable time.’ (quoting
    19 U.S.C. §1337(b)).

Comment to Notice of Proposed Rulemaking, ITC Doc. No.
296810, at 2 (Mar. 31, 2008). The Commission’s response
was to reassure the public that it expected to continue to
meet the existing deadlines in most investigations. No
mention was made of the possibility of eliminating finality
and precluding judicial review of finally decided issues. The
regulation on which the Commission now relies to preclude
judicial review is as follows, with emphasis added to the 2008
amendment:

    19 C.F.R. §210.45 Review of initial determinations
    on matters other than temporary relief.
    ...
    (c) Determination on review. On review, the Com-
    mission may affirm, reverse, modify, set aside or re-
    mand for further proceedings, in whole or in part, the
    initial determination of the administrative law judge.
     In addition, the Commission may take no position on
    specific issues or portions of the initial determination
    of the administrative law judge. The Commission
    also may make any findings or conclusions that in its
    judgment are proper based on the record in the pro-
    ceeding. If the Commission's determination on re-
    view terminates the investigation in its entirety, a
    notice will be published in the Federal Register.

The concerned communities were not told that the Commis-
sion intended, by this amendment, to authorize itself to
9                                     GENERAL ELECTRIC   v. ITC

remove finally decided issues from access to the judicial
review provided in 19 U.S.C. §1337(c). Such a bombshell
would surely have occasioned comment.

    The consequences of this practice are manifest in this
case, for all contested issues concerning the ’985 patent were
investigated by the Commission, tried to the ALJ, and de-
cided by Final Initial Determination, deciding all of the
issues raised by General Electric and Mitsubishi and the
Commission, in the complaint and in defense. In the Matter
of Certain Variable Speed Wind Turbines and Components
Thereof, Inv. No. 337-TA-641, USITC Pub. 4202 (Aug. 7,
2009), 2010 WL 5176683. On appeal, this court reverses the
Commission’s ruling on the domestic industry requirement
for the ’985 patent, but by the Commission’s procedure the
final rulings on validity and infringement are not included in
this appeal. Thus this proceeding, initiated on March 31,
2008, must be returned to the Commission, defeating the
requirement of §1337(b)(1) that “[t]he Commission shall
conclude any such investigation and make its determination
under this section at the earliest practicable time.”

    The Commission states that this anomalous procedure
was approved by this court in Beloit Corp. v. Valmet Oy, 742
F.2d 1421 (Fed. Cir. 1984). That is incorrect. In Beloit the
prevailing party before the Commission sought to raise
certain issues on appeal to the Federal Circuit, and this court
held that the prevailing party has no standing to appeal, see
American Telephone & Telegraph Co. v. Int’l Trade Comm’n,
626 F.2d 841, 842 (CCPA 1980) (“Since the ITC determined
that there was no §1337 violation by Bell, Bell is without
standing to appeal.”). The court also observed that the issues
sought to be appealed had not been reviewed by the full
Commission. That special situation did not and could not
negate the finality of final ALJ determinations, and could not
deprive the losing party of final and full judicial review. The
GENERAL ELECTRIC   v. ITC                                    10

rhetoric in Beloit does not support the weight with which the
Commission endows it.

    Issues decided by Final Initial Determination and not re-
viewed by the full Commission are determinations of the
Commission in accordance with 19 C.F.R. §210.42(h), and on
appeal are entitled to judicial review when relevant to final
resolution. No statutory provision contemplates, or hints at,
excluding fully litigated and finally decided dispositive issues
from the judicial review established in 19 U.S.C. §1337(c), 19
C.F.R. §210.42(h), 19 C.F.R. §210.45(c), the Administrative
Procedure Act, and other provisions governing ITC proceed-
ings. See Warner Bros., Inc. v. Int’l Trade Comm’n, 787 F.2d
562, 564 (Fed. Cir. 1986) (the Commission cannot preclude
“meaningful judicial review”). The disservice to the parties
and the public looms large, and the benefit to the Commis-
sion is elusive.

The Federal Circuit’s obligation

    Instead of simply ratifying this aberrant procedure and
accepting its consequences, at a minimum the court should
take the case en banc and obtain input from the communities
that Section 337 is designed to serve. The delays in Commis-
sion finality and judicial resolution are manifest in this case.
 Instead of setting the inquiry aside for “a later case,” the
issue of statutory compliance requires resolution.