Christianson v. Colt Industries Operating Corp.
Opinion of the Court
delivered the opinion of the Court.
This case requires that we decide a peculiar jurisdictional battle between the Court of Appeals for the Federal Circuit and the Court of Appeals for the Seventh Circuit. Each court has adamantly disavowed jurisdiction over this case. Each has transferred the case to the other. And each insists that the other’s jurisdictional decision is “clearly wrong.”
HH
Respondent Colt Industries Operating Corp. is the leading manufacturer, seller, and marketer of M16 rifles and their parts and accessories. Colt’s dominant market position dates back to 1959, when it acquired a license for 16 patents to manufacture the M16’s precursor. Colt continued to develop the rifle, which the United States Army adopted as its standard assault rifle, and patented additional improvements. Through various devices, Colt has also maintained a shroud of secrecy around certain specifications essential to the mass production of interchangeable M16 parts. For example, Colt’s patents conceal many of the manufacturing specifications that might otherwise be revealed by its engineering drawings, and when Colt licenses others to manufacture M16 parts or hires employees with access to proprietary information, it contractually obligates them not to disclose specifications.
Petitioner Christianson is a former Colt employee who acceded to such a nondisclosure agreement. Upon leaving respondent’s employ in 1975, Christianson established petitioner International Trade Services, Inc. (ITS), and began selling M16 parts to various customers domestically and abroad. Petitioners’ business depended on information that Colt considers proprietary. Colt expressly waived its proprietary rights at least as to some of petitioners’ early transactions. The precise scope of Colt’s waiver is a matter of considerable dispute. In 1983, however, Colt joined petitioners as defendants in a patent-infringement lawsuit against two companies that had arranged a sale of M16’s to El Salvador.
Three days after their dismissal from the lawsuit, petitioners brought this lawsuit in the District Court against Colt “pursuant to Section 4 ... (15 U. S. C. § 15) and Section 16 of the Clayton Act (15 U. S. C. § 26) for damages, injunctive and equitable relief by reason of its violations of Sections 1 and 2 of the Sherman Act (15 U. S. C. §§ 1 & 2). . . .” App. 7. The complaint alleged that Colt’s letters, litigation tactics, and “[o]the[r]. . . conduct” drove petitioners out of business. In that context, petitioners included the following obscure passage:
“18. The validity of the Colt patents had been assumed throughout the life of the Colt patents through 1980. Unless such patents were invalid through the wrongful retention of proprietary information in contravention of United States Patent Law (35 U. S. C. § 112), in 1980, when such patents expired, anyone ‘who has ordinary skill in the rifle-making art’ is able to use the technology of such expired patents for which Colt earlier had a monopoly position for 17 years.
“19. ITS and anyone else has the right to manufacture, contract for the manufacture, supply, market and sell the M-16 and M-16 parts and accessories thereof at the present time.” Id., at 9.
Petitioners later amended their complaint to assert a second cause of action under state law for tortious interference with their business relationships. Colt interposed a defense that
Petitioners’ motion for summary judgment raised only a patent-law issue obliquely hinted at in the above-quoted paragraphs — that Colt’s patents were invalid from their inception for failure to disclose sufficient information to “enable any person skilled in the art. . . to make and use the same” as well as a description of “the best mode contemplated by the inventor of carrying out his invention.” 35 U. S. C. § 112. Since Colt benefited from the protection of the invalid patents, the argument continues, the “trade secrets” that the patents should have disclosed lost any state-law protection. Petitioners therefore argued that the District Court should hold that “Colt’s trade secrets are invalid and that [their] claim of invalidity shall be taken as established with respect to all claims and counterclaims to which said issue is material.” App. 58.
The District Court awarded petitioners summary judgment as to liability on both the antitrust and the tortious-interference claims, essentially relying on the § 112 theory articulated above. In the process, the District Court invalidated nine of Colt’s patents, declared all trade secrets relating to the M16 unenforceable, enjoined Colt from enforcing “any form of trade secret right in any technical information relating to the M16,” and ordered Colt to disgorge to petitioners all such information. 613 P. Supp. 330, 332 (CD Ill. 1985).
Respondent appealed to the Court of Appeals for the Federal Circuit, which, after full briefing and argument, concluded that it lacked jurisdiction and issued an unpublished order transferring the appeal to the Court of Appeals for the Seventh Circuit. See 28 U. S. C. § 1631. The Seventh Circuit, however, raising the jurisdictional issue sna sponte, concluded that the Federal Circuit was “clearly wrong” and transferred the case back. 798 F. 2d, at 1056-1057. 1062.
hH
As relevant here, 28 U. S. C. § 1295(a)(1) grants the Court of Appeals for the Federal Circuit exclusive jurisdiction over “an appeal from a final decision of a district court of the United States ... if the jurisdiction of that court was based, in whole or in part, on [28 U. S. C.] section 1338 . . . ,”
A
In interpreting § 1338’s precursor, we held long ago that in order to demonstrate that a case is one “arising under” federal patent law “the plaintiff must set up some right, title or interest under the patent laws, or at least make it appear that some right or privilege will be defeated by one construc
The most superficial perusal of petitioners’ complaint establishes, and no one disputes, that patent law did not in any sense create petitioners’ antitrust or intentional-interference claims. Since no one asserts that federal jurisdiction rests on petitioners’ state-law claims, the dispute centers around whether patent law “is a necessary element of one of the well-pleaded [antitrust] claims.” See Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U. S. 804, 813 (1986). Our cases, again mostly in the § 1331 context, establish principles for both defining the “well-pleaded . . . claims” and discerning which elements are “necessary” or “essential” to them. Under the well-pleaded complaint • rule, as appropriately adapted to § 1338(a), whether a claim “arises under” patent law “‘must be determined from "what necessarily appears in the plaintiff’s statement of his own claim in the bill or declaration, unaided by anything alleged in anticipation or avoidance of defenses which it is thought the defendant may interpose.’” Franchise Tax Board, supra, at 10 (quoting Taylor v. Anderson, 234 U. S. 74, 75-76 (1914)). See Louisville & Nashville R. Co. v. Mottley, 211 U. S. 149 (1908). Thus, a case raising a federal patent-law defense does not, for that reason alone, “arise under” patent law, “even if the defense is anticipated in the plaintiff’s complaint, and even if both parties admit that the defense is the only question truly at issue in the case.” Franchise Tax Board, supra, at 14.
B
Framed in these terms, our resolution of the jurisdictional issue in this case is straightforward. Petitioners’ antitrust count can readily be understood to encompass both a monopolization claim under §2 of the Sherman Act and a group-boycott claim under § 1. The patent-law issue, while arguably necessary to at least one theory under each claim, is not necessary to the overall success of either claim.
Section 2 of the Sherman Act condemns “[e]very person who shall monopolize, or attempt to monopolize . . . .” 15 U. S. C. § 2. The thrust of petitioners’ monopolization claim is that Colt has “embarked on a course of conduct to illegally extend its monopoly position with respect to the described patents and to prevent ITS from engaging in any business with respect to parts and accessories of the M-16.” App. 10. The complaint specifies several acts, most of which relate either to Colt’s prosecution of the lawsuit against petitioners or to letters Colt sent to petitioners’ potential and existing customers. To make out a § 2 claim, petitioners would
We can assume without deciding that the invalidity of Colt’s patents is an essential element of the foregoing monopolization theory rather than merely an argument in anticipation of a defense. But see 822 F. 2d, at 1547. The well-pleaded complaint rule, however, focuses on claims, not theories, see Franchise Tax Board, supra, at 26, and n. 29; Gully, 299 U. S., at 117, and just because an element that is essential to a particular theory might be governed by federal patent law does not mean that the entire monopolization claim “arises under” patent law.
Examination of the complaint reveals that the monopolization theory that Colt singles out (and on which petitioners ultimately prevailed in the District Court) is only one of several, and the only one for which the patent-law issue is even arguably essential. So far as appears from the complaint, for example, petitioners might have attempted to prove that Colt’s accusations of trade-secret infringement were false not because Colt had no trade secrets, but because Colt authorized petitioners to use them. App. 9-10 (“Contrary to the permission extended to ITS to sell Colt parts and accessories
The same analysis obtains as to petitioners’ group-boycott claim under §1 of the Sherman Act, which provides that “[e]very contract, combination ... , or conspiracy, in restraint of trade or commerce ... is declared to be illegal,” 15 U. S. C. § 1. This claim is set forth in the allegation that “virtually all suppliers of ITS and customers of ITS have agreed with Colt to refrain from supplying and purchasing M-16 parts and accessories to or from ITS, which has had the effect of requiring ITS to close its doors and no longer transact business.” App. 11. As this case unfolded, petitioners attempted to prove that the alleged agreement was unreasonable because its purpose was to protect Colt’s trade secrets from petitioners’ infringement and, given the patents’
h — I I — I
Colt offers three arguments for finding jurisdiction in the Federal Circuit, notwithstanding the well-pleaded complaint rule. The first derives from congressional policy; the second is based on Federal Rule of Civil Procedure 15(b); and the third is grounded in principles of the law of the case. We find none of them persuasive.
A
Colt correctly observes that one of Congress’ objectives in creating a Federal Circuit with exclusive jurisdiction over certain patent cases was “to reduce the widespread lack of uniformity and uncertainty of legal doctrine that exist[ed] in the administration of patent law.” H. R. Rep. No. 97-312, p. 23 (1981). Colt might be correct (although not clearly so) that Congress’ goals would be better served if the Federal Circuit’s jurisdiction were to be fixed “by reference to the case actually litigated,” rather than by an ex ante hypothetical assessment of the elements of the complaint that might have been dispositive. Brief for Respondent 31. Congress determined the relevant focus, however, when it granted jurisdiction to the Federal Circuit over “an appeal from ... a
B
Colt suggests alternatively that under Federal Rule of Civil Procedure 15(b)
We need not decide under what circumstances, if any, a court of appeals could furnish itself a jurisdictional basis unsupported by the pleadings by deeming the complaint
C
Colt’s final argument is that the Federal Circuit was obliged not to revisit the Seventh Circuit’s thorough analysis of the jurisdictional issue, but merely to adopt it as the law of the case. See also 822 F. 2d, at 1565 (Nichols, J., concurring and dissenting). “As most commonly defined, the doctrine
Colt is correct that the doctrine applies as much to the decisions of a coordinate court in the same case as to a court’s own decisions. See, e. g., Kori Corp. v. Wilco Marsh Buggies & Draglines, Inc., 761 F. 2d 649, 657 (CA Fed.), cert. denied, 474 U. S. 902 (1985); Perkin-Elmer Corp. v. Computervision Corp., 732 F. 2d 888, 900-901 (CA Fed.), cert. denied, 469 U. S. 857 (1984). Federal courts routinely apply law-of-the-case principles to transfer decisions of coordinate courts. See, e. g., Hayman Cash Register Co. v. Sarokin, 669 F. 2d 162, 164-170 (CA3 1982) (transfer under 28 U. S. C. § 1406(a)); Skil Corp. v. Millers Falls Co., 541 F. 2d 554, 558-559 (CA6) (alternative holding) (transfer under 28 U. S. C. § 1404(a)), cert. denied, 429 U. S. 1029 (1976); IB Moore’s ¶¶0.404[4.-5], 0.404[8]. Cf. Hoffman v. Blaski, 363 U. S. 335, 340-341, n. 9 (1960) (res judicata principles did not limit power of Court of Appeals to reconsider transfer decision not upset by coordinate court). Indeed, the policies supporting the doctrine apply with even greater force to transfer decisions than to decisions of substantive law; transferee courts that feel entirely free to revisit transfer decisions of a coordinate court threaten to send litigants into a vicious circle of litigation. See Hayman, supra, at 169; Chicago & N. W. Transp. Co. v. United States, 574 F. 2d 926, 930 (CA7 1978). Cf. Blaski, supra, at 348-349 (Frankfurter, J., dissenting).
HH <1
Our agreement with the Federal Circuit’s conclusion that it lacked jurisdiction, compels us to disapprove of its decision to reach the merits anyway “in the interest of justice.” 822 F. 2d, at 1559. “Courts created by statute can have no jurisdiction but such as the statute confers.” Sheldon v. Sill, 8 How. 441, 449 (1850). See also Firestone Tire & Rubber Co. v. Risjord, 449 U. S. 368, 379-380 (1981). The statute confers on the Federal Circuit authority to make a single decision upon concluding that it lacks jurisdiction — whether to dismiss the case or, “in the interest of justice,” to transfer it to a court of appeals that has jurisdiction. 28 U. S. C. § 1631.
The age-old rule that a court may not in any case, even in the interest of justice, extend its jurisdiction where none exists has always worked injustice in particular cases. Parties often spend years litigating claims only to learn that their efforts and expense were wasted in a court that lacked jurisdiction. Even more exasperating for the litigants (and wasteful for all concerned) is a situation where, as here, the litigants are bandied back and forth helplessly between two courts, each of which insists the other has jurisdiction. Such situations inhere in the very nature of jurisdictional lines, for as our cases aptly illustrate, few jurisdictional lines can be so finely drawn as to leave no room for disagreement on close cases. See, e. g., K mart Corp. v. Cartier, Inc., 485 U. S. 176 (1988); United States v. Hohri, 482 U. S. 64 (1987).
That does not mean, however, that every borderline ease must inevitably culminate in a perpetual game of jurisdictional ping-pong until this Court intervenes to resolve the underlying jurisdictional dispute, or (more likely) until one of the parties surrenders to futility. Such a state of affairs would undermine public confidence in our judiciary, squander
We vacate the judgment of the Court of Appeals for the Federal Circuit and remand with instructions to transfer the case to the Court of Appeals for the Seventh Circuit. See 28 U. S. C. § 1631.
It is so ordered.
Colt’s appeal to the Federal Circuit actually invoked 28 U. S. C. §§ 1292(a)(1) and (c)(1), which together grant the Federal Circuit exclusive jurisdiction over appeals from interlocutory orders “granting, continuing, modifying, refusing or dissolving [an] injunctio[n],” § 1292(a)(1), “in any case over which the court would have jurisdiction over an appeal under section 1295,” § 1292(c)(1).
Colt correctly points out that in this case our interpretation of § 1338(a)’s “arising under” language will merely determine which of two federal appellate courts will decide the appeal, and suggests that our “arising under” jurisprudence might therefore be inapposite. Since, however, § 1338(a) delineates the jurisdiction of the federal and state courts over cases involving patent issues, the phrase (like the identical phrase in § 1331) “masks a welter of issues regarding the interrelation of federal and state authority and the proper management of the federal judicial system.” See Franchise Tax Board of California v. Construction Laborers Vacation Trust, 463 U. S. 1, 8 (1983) (footnote omitted). See also Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U. S. 804, 810 (1986) (“[Djeter-minations about federal jurisdiction require sensitive judgments about congressional intent, judicial power, and the federal system”).
On the other hand, merely because a claim makes no reference to federal patent law does not necessarily mean the claim does not “arise under” patent law. Just as “a plaintiff may not defeat removal by omitting to
Rule 15(b) provides in relevant part:
“When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure to so amend does not affect the result of the trial of these issues.”
There is no reason to apply law-of-the-case principles less rigorously to transfer decisions that implicate the transferee’s jurisdiction. Perpetual litigation of any issue — jurisdictional or nonjurisdictional — delays, and
Concurring Opinion
with whom Justice Blackmun joins, concurring.
In a seminal case construing federal-question jurisdiction, Justice Cardozo wrote that “[w]hat is needed is something of
When Congress passed the Federal Courts Improvement Act in 1982 and vested exclusive jurisdiction in the Court of Appeals for the Federal Circuit to resolve appeals of claims that had arisen under the patent laws in the federal district courts, it was responding to concerns about both the lack of uniformity in federal appellate construction of the patent laws and the forum-shopping that such divergent appellate views had generated. Nonetheless, its definition of the Federal Circuit’s jurisdiction did not embrace all cases in which a district court had decided a patent-law question. Instead, it adopted a standard that requires the appellate court to decide whether the jurisdiction of the district court was based, in whole or in part, on a claim “arising under” the patent laws.
If a patentee should file a two-count complaint seeking damages (1) under the antitrust laws and (2) for patent infringement, the district court’s jurisdiction would unquestionably be based, at least in part, on § 1338(a). If, however, pretrial discovery convinced the plaintiff that no infringement had occurred, and Count 2 was therefore dismissed voluntarily in advance of trial, the case that would actually be litigated would certainly not arise under the patent laws for purposes of appellate jurisdiction. Even though the district court’s original jurisdiction when the complaint was filed had been based, in part, on § 1338(a), the case would no longer be one arising under the patent laws for purposes of Federal Circuit review when the district court’s judgment was entered. Conversely, if an original complaint alleging only an antitrust violation should be amended after discovery to add a patent-law claim, and if the plaintiff should be successful in proving that its patent was valid and infringed but unsuccessful in proving any basis for recovery under the antitrust laws, the district court’s judgment would sustain a claim arising under the patent laws even though the complaint initially invoking its jurisdiction had not mentioned it, and an appeal would properly lie in the Federal Circuit.
Whether the complaint is actually amended, as in the previous example, or constructively amended to conform to the proof, see Fed. Rule Civ. Proc. 15(b),
Title 28 U. S. C. § 1295(a)(1) grants the Federal Circuit appellate jurisdiction over final decisions of federal district courts whose jurisdiction “was based, in whole or in part, on section 1338 of this title.” Title 28 U. S. C. § 1338(a), in turn, grants the federal district courts “original jurisdiction of any civil action arising under any Act of Congress relating to pat
In this context, it is important to note that the “well-pleaded complaint” rule helps ferret out claims from issues, and says nothing about whether such separation should be made only on the basis of the original complaint.
Indeed, since it seems plain that no implied cause of action exists under § 112 — which, after all, merely describes the nature of the specifications that must be included with a patent application — a plaintiff’s attempt at gaining federal-court jurisdiction through a claim arising under § 112
“Rule 15. Amended and Supplemental Pleadings.
“(b) Amendments to Conform to the Evidence. When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues. ...”
“We need not decide under what circumstances, if any, a court of appeals could furnish itself a jurisdictional basis unsupported by the pleadings by deeming the complaint amended in light of the parties’ ‘express or implied consent’ to litigate a claim. Fed. Rule Civ. Proc. 16(b).”
Reference
- Full Case Name
- CHRISTIANSON Et Al. v. COLT INDUSTRIES OPERATING CORP.
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