Post by John Golden
In both a patent case and a copyright case from soon-to-end October Term 2015, the U.S. Supreme Court continued a long struggle to define the proper bounds of trial court discretion in various contexts. See generally Henry J. Friendly, Indiscretion About Discretion, 31 Emory L.J. 747, 748–50 (1982). Such questions of trial court discretion commonly relate to questions about the proper nature of equity or equity-like reasoning in district court decision-making, questions that are presumably of interest to a number of readers of this blog.
Questions about trial court discretion have recently had particular prominence in patent law. In this area, an ever-growing string of Supreme Court decisions has, over the course of a decade, rejected what the Court has perceived as excessively rigid rules developed by the U.S. Court of Appeals for the Federal Circuit. See David O. Taylor, Formalism and Antiformalism in Patent Law Adjudication: Rules and Standards, 46 Conn. L. Rev. 415, 464–65 (2013). The newest addition to the string came in June in Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016). In an opinion by Chief Justice Roberts, the Court rejected as “unduly rigid” a Federal Circuit rule permitting the enhancement of patent damages for willful infringement only when the infringer’s conduct was objectively reckless with respect to violation of relevant patent rights. Id. at 1932 (internal quotation marks omitted).
But three days after the Court issued its opinion in Halo, the Court’s decision in Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979 (2016), made clear that the Court’s willingness to abrogate rules curtailing trial court discretion is not restricted to patent law or to the case law of the Federal Circuit more generally. In Kirtsaeng, the Court vacated a decision by the U.S. Court of Appeals for the Second Circuit on the (non)shifting of attorney fees in a copyright case. Id. at 1989. In an opinion by Justice Kagan for a unanimous Supreme Court, the Court explained that “the Court of Appeals’ language at times suggests a finding of reasonableness [of a losing party’s legal position] raises a presumption against granting fees … and that goes too far in cabining how a district court must structure its analysis and what it may conclude from its review of relevant factors.” Id. Echoing language from patent decisions that have rejected the Federal Circuit’s formulation of rules focusing on this or that factor or subset of factors, the Court emphasized that “objective reasonableness can be only an important factor in assessing fee applications—not the controlling one.” Id. at 1988. In the Court’s view, “[a]lthough objective reasonableness carries significant weight, courts must view all of the circumstances of a case on their own terms, in light of the Copyright Act’s essential goals.” Id. at 1989.
Kirtsaeng’s emphasis on totality-of-the-circumstances analysis might suggest to some that the Supreme Court has embraced a vision of trial court discretion in which the existence of meaningful discretion is largely incompatible with general restriction or guidance from courts of appeal. Cf. Mark P. Gergen, John M. Golden & Henry E. Smith, The Supreme Court’s Accidental Revolution? The Test for Permanent Injunctions, 112 Colum. L. Rev. 203, 217–19 (2012). The Court insists, however, that this is not the case. In particular, the Court continues to cite as good authority a 2005 opinion, also penned by Chief Justice Roberts, in which the Court indicated that “an objectively reasonable basis” for removal of a case from state court should generally be grounds for denying the shifting of attorney fees under 28 U.S.C. § 1447(c) despite a court’s later determination that removal was in fact improper, Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). See Kirtsaeng, 136 S. Ct. at 1985–86; Halo, 136 S. Ct. at 1931–32. The Court’s holdings in Halo and Kirtsaeng can be distinguished from this prior decision’s embrace of a “general rule,” Martin, 546 U.S. at 141, based on specific statutory language, perceptions about relevant statutory policy, and/or the extent to which the relevant legal rule appears to reserve (or to have reserved) meaningful room for district courts “to consider whether unusual circumstances warrant a departure from the rule in a given case,” id.
But though the Court continues to suggest that appellate review and the accumulated weight of prior decisions can ultimately “channel” trial court discretion, Halo, 136 S. Ct. at 1932 (internal quotation marks omitted); see also Kirtsaeng, 136 S. Ct. at 1986, the Court has been somewhat evasive with respect to how lower tribunals can properly recognize and articulate such channeling without the Court’s later determining that trial court discretion has been unduly constrained. Part of the problem might be that there is no magic formula for a proper articulation. In ensuring an adequate form of district court discretion, the Court’s concern appears not necessarily to be bound to the particular wording of any legal rule or instruction but instead to show sensitivity to how relevant appellate and trial courts appear to have applied any particular wording in practice. Hence, in Kirtsaeng, the Court mused that part of the problem with the Second Circuit’s approach was that, although in theory it did not make objective reasonableness necessarily dispositive, in practice “hardly any decisions in that Circuit have granted fees when the losing party raised a reasonable argument (and none have denied fees when the losing party failed to do so).” 136 S. Ct. at 1989.
Nonetheless, the Court’s recent opinions on discretion might leave too much to reading between their lines. These opinions might even encourage unhealthy levels of non-transparent reasoning by lower tribunals that feel pressure to present the appearance of conducting case-by-case totality-of-the-circumstances analysis even while arguably laudably but perhaps also perfunctorily generating consistent results for broad classes of fact patterns. Can the academy or practicing bar suggest a better way to ensure proper reservation and application of trial court discretion in a multiplicity of legal regimes?