As October Term 2020 hurtles towards a thrilling conclusion (well, hopefully), Dan and Will break down two of Monday's decisions. They explore the separation of powers and severability in United States v. Arthrex and talk about antitrust law's implications for college sports in NCAA v. Alston.
As October Term 2020 hurtles towards a thrilling conclusion (well, hopefully), Dan and Will break down two of Monday's decisions. They explore the separation of powers and severability in United States v. Arthrex and talk about antitrust law's implications for college sports in NCAA v. Alston.
Welcome to Divided Argument, an unscheduled, unpredictable Supreme Court podcast. I'm Dan Epps.
And I'm Will Baude. Dan, they finally ran out of boring opinions.
Yeah, we're having a good run, although they did manage to get one boring-ish opinion out today. We're recording this on Monday, June 21st, reacting to the Court's Monday dump of three opinions, only two of which we're going to talk about. I think one of them, Goldman Sachs Group versus Arkansas Teacher Retirement System is not the most boring case ever, but it's a securities fraud class action class, and one on which we don't have a ton to say. But the other two are pretty good. We've got this NCAA case, which is about college athletes and antitrust law, and then we've got US versus Arthrex, which that's one you've been waiting for, I bet, Will.
I have, and I got to say, this is tough for me. I've mentioned this on a previous episode. I've been for the past two years actually, trying to work on a paper about severability doctrine and what courts actually do when they find statutes unconstitutional. And this is one of three cases that were pending this term about severability doctrine. The ACA case we talked about last week was another one, but the Court didn't really get into it. And here, the Court got into it. And I got to say, I'm still, so a part of my brain is still trying to work it all out in kind of the long term, a 100 page article that you'll see in eight months, hopefully.
Does this kill your article?
Nothing kills my articles, Dan.
Well, I don't know.
Being an originalist means never having to say you're wrong, because the Supreme Court said so.
Well, that's possibly true, but they could make it harder for you to write your article at least.
So we'll get there, but I'll just say, so I'm really thinking this through. I my well say some things here that I regret and have to take back in print later, but-
What makes this different than any other episode?
Usually, I don't care if I get anything wrong.
Okay, as you said, this case involves severability, but it also involves a kind of meaty substantive constitutional law question. So this is a case about the appointments clause, and it's about these administrative patent judges. They participate in these proceedings, that this is something the Court has dealt with a few times already, this procedure called inter partes review, which is something that as I understand, it does not have a long historical pedigree. It's something that was created in this statute called the America Invents Act. And it's a way that after a patent is issued, someone can go to the patent ... what's it called?
Trial and Appeal Board.
Yeah, the Patent Trial and Appeal Board-
... and say, "this is a bad patent, can you guys take another look at this?" And there's kind of like a little mini trial that happens where they determine whether the patent is invalid.
Right, I mean, so patent law's neither of our area of expertise I think as much as some of these other parts of the opinion. But as I understand it, when you apply for a patent, there's not a ton of scrutiny. I mean, you can have your application denied, but you can have your application granted without it necessarily being a super good patent, which can cause a lot of problems later in litigation, and litigation is expensive. So we have this extra procedure, this sort of, "Oops, we goofed," procedure. And so it's like-
It's simpler than having to go to court and maybe getting sued for infringement, or going to get some kind of declaratory judgment or something like that. This is designed to be a little bit more streamlined.
And this was controversial, and the Supreme Court upheld it against a separation of powers slash due process challenge in a case called Oil States where Justice Gorsuch dissented and he's still mad about it, as we'll talk about in a few minutes.
And that was an Article III issue, right?
I think it was formally Article III issue, although the Article III issues and the sort of due process issues blend together, because there's a way in which a patent is a property right, and normally, once you have a piece of property, even if there was something a little goofy in the way you got the piece of property, we don't come in 10 years later and say, "Oops, sorry. We're taking your house back. But we're taking your patent back."
It's constitutional in that way, but now we have a different constitutional challenge in this case to the inter partes review system. And specifically, it's about the way in which these judges, the administrative patent judges, work.
So called judges, so called judges.
Okay, yeah, yeah. This relates to a whole Twitter exchange you and I were on a week or two ago about who gets to be called judges when you're talking about the federal government. What's a federal judge? But yeah, these are people within the patent and trademark office, and their title is administrative patent judges. They're appointed by the secretary of commerce, but they have limitations on the removal, so they can't just be fired at will, and their decisions in these inter partes review cases are final.
Right, so there are four levels going on here as far as I can tell. So it's the president. He's the top, we all agree he's the top. Then there's the secretary of commerce, who's appointed by the president, confirmed by the Senate. Then we've got the director of the agency, who's the next level down from the secretary. And then we've got these APJs, the administrative patent judges, who are also appointed by the secretary, and are in some sense, inferior to the director, but not totally accountable to the director. Right? The director-
Because he can't just say, "Hey, I didn't like this decision. Go do it over again." He can do other stuff, like he can initiate a rehearing. They can initiate a rehearing and then he gets to decide who sits on the rehearing, and he can strip these judges of the ability to hear cases in the future, but he does not have-
And he can put himself on the hearing panel.
So they granted a rehearing, and then he put himself on the panel and found one guy who agreed with him, it's better than being a chief judge, but it still is not ...
He's got some workarounds. The one person you didn't mention in your hierarchy is the marshal of the Supreme Court who, as I understand it, kind of sits above the president, of course with the ability to initiate secret impeachments that happen in the Supreme Court basement. But we don't need to get into that.
That's a secret episode only for our Patreons.
Yeah, that is not for general consumption. Okay, and why would this be a problem? So you've got this hierarchy, you've got these administrative patent judges, they get to make these decisions. Canceling a patent, I mean, we've got cancel culture all the time, now we're canceling patents left and right. So why is that a problem, constitutionally, potentially?
Okay, because of the separation of powers and because of two sort of related rules that the majority is not super clear on how these two rules interact, but so one is the appointments clause. Appointments clause sets how officers get appointed, and it say that top line officers, most officers or some set of officers, have to be appointed by the president and confirmed by the Senate. And then a smaller set, so called inferior officers don't. They can be appointed separately by the heads of departments, so by the secretary of commerce. So that's how the APJs were appointed. They were appointed in the way that only inferior officers can be appointed. And so then there's a question, is what they're doing consistent with being a so-called inferior officer or not?
Okay, and so this should be an easy case, because Supreme Court in decades of case law has given us a super, super clear test on what an inferior officer versus a principal officer is, right?
Ha ha ha. Indeed, it has not. So I believe it has given us at least two tests, one of which is in the case Morrison versus Olson where the Supreme Court upheld the special prosecutor as an inferior officer. That special prosecutor's appointed by a special Court in DC. And a second case is a case called Edmond versus United States, where the Court upheld a set of military judges as inferior officers under a very different test. And I believe, just as [Thomas 00:08:33] say, but this raised my eyebrows for a second, although I think he's right. This is the first time the Court's ever said that there's an inferior officer problem. It's the first time they've ever said that there's a problem with somebody being characterized as an inferior officer. So this is crossing an line.
Yeah. And there have been other cases where the Court has said, "We think this person is a principal officer," right? But they aren't super clear on exactly why.
Yeah, I think so. But I'll just say, one of the things, the dissent flow, we're getting ahead of ourselves, is it's really not clear whether this inferior officer category is supposed to be really big or really small. So it's only triggered when Congress decides to take somebody outside of the default appointments process, president and Senate confirmation, and move them to the inferior category. So it's only really triggered when Congress sort of tries to trigger it. So there are a ton of people in the government who are Senate confirmed for whom we don't really know if Congress wanted to get rid of Senate confirmation, could they?
Because you can always go above and beyond, you can say ...
Stick to the Senate confirmation if you don't have to.
Now, in theory, there's also this third category of people who are just kind of employees, who are not officers of the United States. Although I understand that there may be some disagreement about how large that category should be, or maybe even whether that category exists.
Yeah, there is some disagreement about that, and the Court does have more precedent about that category, and at least a general test that if you exercise significant authority on behalf of the United States and are more than just a contractor, you fall under that category. And everybody here agrees, we're in the officer category, because people have to be appointed somehow, and the question is, how can they be appointed and what can they do?
So the second piece of this, just to bring it in, is the executive power clause. So article two vests the executive power in the President of the United States, and that's the only person mentioned at the vesting clause. Now, of course, there are tons and tons and tons of other people in the executive branch who exercise executive power, but the fact that in sort of an ultimate sense, the power all started with the president and had to be almost deeded out separately to everybody else in the executive branch, creates a set of separate problem with this ... Supreme Court has said in a bunch of opinions, means there has to be a certain kind of accountability, a certain kind of traceability, because anybody exercising executive power is ultimately doing it in the president's name. So we need to check whether these APJs are too far removed from the buck stops here.
Yeah, and these two issues tend to travel together, because it's sort of ... One is about the front end, how do these people get into the office? And the other is about the back end, basically really comes down to, can they be fired, and by whom?
Partly, not always. And this is a good case about it. So most of the time we have the second question, it's in a can they be fired case. It's, Congress has said somebody can only be fired for a cause, and then the question is that constitutional. But it's not necessarily the only piece of it, because after all, even if you could fire somebody, it would still be the question about, can you undo their decision? What if somebody had the power to make final decisions on behalf of United States, but they could be fired. Before you caught them, they bought Greenland, or something else that's a big deal.
It can't be undone.
So the Court usually ignores the second part, they usually ignore the kind of supervision requirement. But in this case, that's part of [crosstalk 00:11:56]
Yeah, that's interesting. I think maybe a lot of times you just assume that if someone serves at the pleasure of some other officer, that's basically the power to direct that person. But I guess there is the concern that someone could kind of do something they're not supposed to do and then bind the US in some permanent way.
Right. And the question is, you could think, yes, technically, they can do that, but threat of being fired means they almost never will do that. You could think, technically, they can't do that, it just doesn't come up very often. You could think Gary Lawson once wrote, "This is why the obsession with the power to fire people is not necessarily the right thing for formalist to focus on," because it's both broader than necessary and narrower than necessary. What we really care about is control, so all those different things are going on here. And that's part of why I find this a confusing case. In the way the Court question, do these APJs have too much discretion that places the, insulates them too much from politics ... is an easy question to answer. But in way, all the moving parts about how much is it from different version of the statute, and how much do these different clauses interact, makes my head hurt. And to be honest, I think they made the Chief Justice's head hurt too.
Yeah, and then also kind of affects what you think the right solution is, what the right remedy is, and we'll get to that in a second. Maybe it makes sense for us to kind of go through the arguments on both sides about the merits issue and then circle back to remedies, severability. Does that make sense?
Yeah, I think so.
Okay, we've laid out those two kind of potential issue, the kind of front end appointment, and then the kind of supervision point and as we said, these administrative patent judges, who I'm going to call APJs, consistent with how the opinion refers to them, makes me sound like I know what I'm talking about ... and we do decide there's a problem there, the majority opinion by Chief Justice Roberts decides there is a problem there. Where is it?
Good question. I'm not sure we know exactly. Here's the way the majority puts it. The majority puts it that the nature of their responsibilities I not consistent with their method of appointment. So I'm not sure the majority [inaudible 00:14:08] about this, but either the APJs are inferior officers, and therefore, they can't issue unreviewable decisions. Or the APJs issue unreviewable decisions, therefore they can't be inferior officers. But either way, the point is, they were appointed as inferior officers in the bottom category, and they're now issuing decisions that can't be reviewed by anybody else. Those two things together are not okay.
Yeah, there's this interesting part where the majority, which I guess it's not the majority at the moment, or is it still the majority?
[crosstalk 00:14:42], it's the end of part two.
End of part two, okay, so we still have the majority. Because Justice Gorsuch kind of steps off for part three of the opinion. But at the end of the part that's the majority, the Court says, "The principal dissent," which is the opinion by Justice Thomas, "repeatedly charged that we never say whether the APJs are principal officers who are not appointed in the manner required by the appointments clause, where instead, inferior officers exceeding the permissible scope of their duties under that clause."
Okay, and you'd think the next sentence would be, "Okay, here's the answer." Instead, the Court say, "But both formulations describe the same constitutional violation. Only an officer properly appointed to a principal office may issue a final decision binding the executive branch in the proceeding before us." So not going to tell us which of those exactly is the problem, but either way, it's a problem, unconstitutional, it need to be fixed in some way.
So I think this part is great. I mean, when thinking about the constitutional step, separating out the appointments clause inquiry and the sort of executive power clause inquiry is weirdly artificial and, now, the Court does the artificial inquiry sometimes, but and some ways, it seems clear and more helpful to just say these two things together create a problem. So we can imagine multiple ways you could structure the agency that would work out, appointment them differently, or give them different powers, but this combination is a problem. Now, the lack of clarity is-
... going to be a big problem when we talk abut the remedy or severability in a second, but for the merits-
Basically, it's okay to have them appointment by the head of the department, it's okay to have them somewhat insulated, but you can't do both. Is that ...
Yeah, if they were-
Or at least it's okay to have them not supervised directly by the secretary, but you can't do both.
Right. If they're principal officers, they don't need a supervisor, and if they're ... Yeah, exactly.
They don't need a supervisor who's not the president.
Right. So [crosstalk 00:16:39]
Could they still be insulated from for cause removal by the president at that point? Or that would be kind of controversial, right?
Under current precedent, you can insulate, you can have one layer of for cause removal. That's Humphrey's Executor. Now, Humphrey's Executor is controversial.
Yeah, but is that true for all possible duties that the principal officer could perform?
Depends on which precedent you look at.
So basically, that's the problem. And let's circle back in a second to how we're going to fix it. I think we're going to skip over Justice Gorsuch's concurring opinion for the moment, but we're going to come back to it, and I think we will go on to what the majority calls the principal dissent, which Justice Thomas' opinion.
Here, I think I would say Justice Breyer looking at this from kind of a higher kind of 10,000 feet up makes a pretty interesting argument for kind of constitutional flexibility. Basically, the founders laid out the constitution, they didn't resolve a lot of specific questions. He says something interesting, says on page six, he says, "The constitution is not a detailed tax code, and for good reason. The nation's desires and needs change, sometimes over long period of time. The 19th century judiciary may not have foreseen the changes that produced the new deal. We can't foresee off everything that's going to happen."
But basically, this is kind of a strong and interesting argument for not treating the constitution as super formally binding and providing a lot details, a little bit room for flexibility, letting Congress kind of make appropriate determinations about the right way to kind of divvy up executive power and so forth.
So two things I think are interesting about this. So one, Justice Breyer's been in dissent in a lot of the Court's recent separation of powers cases, and the Courts had a more formalist approach in these other executive power cases and judicial power cases. And Justice Breyer's been in dissent in a lot of them, so I think he's sort of bringing that together and saying, "Look, we're way too involved in this at this point. We're second guessing way too many sort of separation of powers structural choices."
And I do wonder, do you think the case ... I mean, I know you and I both believe that the Court needs to be pretty deferential to democratic choices, and we worry about judicial activism. Do you think the case for that kind of deference is stronger or weaker in the separation of powers context? I could imagine saying to Justice Breyer, "Look, when the question is substantive power, can Congress regulate health care?" Yes, broad deference. Maybe even when the question is individual rights, like does this new regulation violate free speech somehow, or violate due process somehow? Deference. But we're just thinking about the nuts and bolts of the mechanics, do we still need deference, or is that a place where it actually makes more sense to have a clear role?
I think it maybe depends on the specific separation of powers context we're talking about, and I think that there's some areas like the independent counsel statute where you can make a good argument that there's real dangers to democracy by having these basically independent counsels who are appointed. This comes up in Morrison versus Olson, who have this huge amount of power, can basically determine their own budgets, and just investigate forever and bring charges and so forth. And that does seem a little bit troubling, and we've seen some situations where that seems like it led to troubling and possibly anti-democratic results.
Case like this, I don't know, I'm a little bit less concerned about it. Maybe there's a difference between somewhere in here, I think it's Justice Breyer said something about this, that there's maybe a difference between these kinds of situations where kind of one branch is aggrandizing itself at the expense of another, versus just the situation we were talking about. How are we going to lay out different kinds of authority within the executive branch? Rather than, this isn't really kind of Congress totally hobbling the executive.
The other things is there is this strain in the separation of powers cases among the kind of more formalist justices, where they kind of extol the virtues of political accountability in terms of following the separation of powers. That doesn't do a lot for me, because the president has a lot of things on his plate, and voters have a lot of things to focus on. And I'm not convinced that there's ultimately that much political accountability, even in a world where there's kind of direct presidential control over these decisions.
You don't think we're going to see a lot of 2024 campaign ads about Biden's lack of control over the PTAB?
There's a lot of American politics that has surprised me over the last few years, so I'm willing to believe anything. But I do think that with the sprawling executive state and one president and one election every four years, I don't see a huge case that there's a lot of accountability happening either way. And then for me, it kind of comes down to kind of some matter of good government concerns. I mean, with respect to this here, I don't have strong priors about what the best arrangement is. The thing that I worry about is the kind of slippery slopes where all of a sudden, we say the civil service is now unconstitutional, which I think would be really bad.
The slippery slope you should be worrying about here I think is not the civil service, but is the social security administration and maybe the immigration judges. Because I do think, the one branch we haven't about much yet is the judiciary. But the one thing you could worry about is, the Court has said, "Okay we can take these cases out of the judiciary," even though they're kind of cases. But you might think it'd good if a doctrine that said, "Look, if you take them out of the judiciary, you got to keep them in the executive branch." And what Congress is trying to do here is to kind of create a JV judiciary. Like some people who are sufficiently from the executive branch, if they're not too executive, and we even call them judges, but they're not the actual judges we have. And that, I mean maybe hear that sign, maybe we don't like our judges right now or something, but that is the sort of the real concern I have, is the creation of the JV judiciary.
Yeah, and actually, there's some push to make them more of a JV judiciary. I was talking to my colleague administrative law expert extraordinaire, Ron Levin the other day, and he was saying a lot of administrative law judges have been pushing for kind of moving all LJs into kind of their own agency, give them more prestige. Yeah, which will be interesting, I think that would probably create a whole new mess of potential constitutional problems. But yeah, there's things to be concerned about there for sure.
The Court never says that, but that might be the one sort of substantive concern that explains some of this. Okay. What about Justice Thomas?
Okay, Justice Thomas, I thought this was ... and maybe, tell me if you disagree with this. I thought this didn't read like a totally classic Justice Thomas opinion to me. It had sort of a little bit more of kind of a functional, pragmatic, kind of common sense flavor to it, than a typical Justice Thomas opinion. Now, he does do a fair bit of originalism and history along the way. But he gets into kind of more practical stuff, he talks about the organization chart in the executive branch in the PTO, and he talks about the kind of practical ways in which the director of the PTO can supervise these administrative patent judges. I don't know. Did it seem ...
I love this dissent, but no, people forget, I think, that Justice Thomas is also, in addition to being a really good originalist, he's also just a really good sort of doctrinal lawyer, maybe because he often does the originalist thing. But yeah, here, part of what he's doing is taking the Court's previous cases, which did not provide much resolution here, and show the ways in which the majority is both sort of going beyond what the previous cases had said, and then also opening a lot of new questions.
I do like the part that the majority says, "The dissent tries to attack us on the precedent, but we feel like their heart's not really in it," which may be a version of your observation.
Yeah, and just one other thing to note before we get into it more, and this is effectively kind of a five-four case on the key constitutional issue. The three who joined Justice Thomas are liberal justices, Justices Breyer, Sotomayor and Kagan. So pretty interesting breakdown here.
And in terms of assignments, so if the initial line up was five-four, do we think the dissent assignment work the same way as the majority opinion? Like Justice Thomas says, "I'm going to assign myself the principal dissent."
Typically. Typically, they do.
I wonder what Justice Breyer thought on Justice Thomas [inaudible 00:25:14] saying, "I'm taking the dissent."
Maybe thought, "Let's wait and see if we can join this."
But then he wrote something that the liberals who have pretty different methodological approaches were pretty comfortable joining, I guess.
It has an originalist thing at the end.
Yeah, for sure. But it doesn't ...
So here's the ... I actually just thought, the most helpful thing is on page 13 of the Thomas dissent, where Justice Thomas talks about line drawing problems. When he says, "Look, interpreting the appointments clause to bar any non-principal officer from taking final action poses serious line drawing problems."
Yeah, this is really important.
"The majority assures that not every decision by an inferior officer must be reviewable, but this sparks more questions than it answers. One, can a line prosecutor offer a plea deal without sign-off from a principal officer? Two, if faced with a life-threatening scenario, can an FBI agent use deadly force to subdue a suspect? Three, or if an inferior officer temporarily fills a vacant office tasked with making final decisions, do those decisions violate the appointments clause? And are the courts around the country supposed to sort through lists of each officer's of employee's duties, categorize each one as principal or inferior, and then excise any that look problematic?"
And I was thinking about the line prosector example as a I was reading the majority. I was really glad that he flagged that.
Yeah. What is the answer, by the way?
I don't know. I think, I mean ...
I mean, if it's problematic for other PTAB to make a decision about a patent, [crosstalk 00:26:40] the final review of the director, surely the same thing has to be true for a line prosector giving somebody a sweetheart deal without [crosstalk 00:26:49]
Well, I guess the thing I don't know if whether that actually comes up in practice, or whether there has to be sort of formal sign-off by United States attorneys before something can be entered into binding the office.
Mm-hmm (affirmative). What about if it's less formal? I do think it happens that the line attorney may just show up in Court and not raise an argument.
You show up in Court for a sentencing, the defense attorneys say, "We'd like a below guidelines sentence." And the line attorney says, "I can't formally agree, but makes sense to us."
Yeah, that's interesting, that's interesting, because you are kind of forfeiting an argument, basically.
Can the US [crosstalk 00:27:26] learn about the next day, like march back in Court and say, "No, no, no, throw the book out [crosstalk 00:27:30]."
Trash. Yeah. No, that seems problematic.
And the third of these, the bit about the acting officer came up a lot recently. I don't know if you remember, a few years ago when everybody lost their minds when Whitaker was the acting attorney general?
Oh, yeah. That was a little wacky.
But this actually that issue as well.
Yeah. I mean, I guess you could draw a distinction between there are situations where someone just defacto is able to make final decisions, versus the situations where the law actually contemplates that they will. So with the line prosecutor, I mean, they're supposed to follow the instructions of the US attorney. And if the US attorney says, "I don't want you making any plea deals or forfeiting any arguments without me," even if they go ahead and do it, and then that's bad, but there's not necessarily a separation of powers violation, versus a system that says, "No, no, no, line prosecutors, they get to make the frontline decision, and their decisions may never be challenged by the US attorney." That seems like maybe you could say that's more problematic.
Although if that's right, which side of the line does this case fall on? Because after all, the director has as all these abilities ex ante to give directions to the APJs, and then he has a bunch of ... their decisions aren't exactly final, for the reasons we talked about, he has all these quasi-workarounds.
But the scheme does not seem to contemplate that he's going to dictate to them in advance, "Here's what you should do in this inter partes review."
Well, he can set policies for them to-
... I mean, the government kept insisting. This gives us one of the other parts of the majority opinion I liked, where they knowledge all these sort of things the director can do to sort of influence an inter partes review as a substitute, or for actually reviewing it. And they say at page 12, "That is not the solution, it is the problem. Even if the director succeeds at procuring his preferred outcome, such machinations blur the lines of accountability demanded by the appointments clause."
Yeah, and I thought that there was something to that.
Yeah, it just makes me think back to the prosecutor. It's the same thing.
It's like we'd say, "Look, the line attorney is the person on the line exercising power." There may be some machinations to let the supervisor keep them in line, but if it's a problem here ...
Yeah, but I mean, in any situation, someone who's inferior to someone else can always kind of go against the ... you can't be there, the US attorney can't be there in a Court with them at every moment. There's just too many people to supervise. So I still think there might be something to that distinction. But we got a lot more to talk about, so could we just ... before we go, what we do go not severability, can we just quickly talk about part four where Justice Thomas kind of goes through different kind of understandings of the principal inferior officer distinction from history? Do you understand all those?
All right. So Justice Thomas just says, "Look, we might at some point need to figure out what inferior officers really means," and looked at history to figure it out. One possibility is that it's a really narrow category, and he pulls up a little bit on a discussion from James Madison at the Constitutional Convention, in which everybody has to fall under the category of either a superior officer or an inferior officer.
The second possibility which I think the more interesting one, and I've heard voiced occasionally by a few friends of the show, but I've never seen somebody like Justice Thomas endorse it, is maybe inferior officer encompasses nearly everybody. Maybe even the heads of departments are inferior officers, in the sense that they're inferior to the president. So maybe what the constitution really means is everybody other than the specifically named people in the constitution, ambassadors and public ministers, maybe they all in theory could be inferior. Like if Congress, one, had to let the president appointment his own cabinet, they could.
And Justice Thomas even says, "The constitutional text in history provides some support for this rationale," and he goes through a possible reading of it. This is where I have to note, as far as I know the Supreme Court has never actually said that federal judges are not inferior officers. It's a general assumption that they're not, and there's a footnote in a case where the Court notes that it's a general assumption that they're not, but this is below the Supreme Court. But there's actually a not crazy textual and historical argument that at least lower Court [inaudible 00:31:40] be appointed by the president directly.
You mean by the Supreme Court? Because they are appointed by the president, directly.
Oh, interesting. Could they be appointed by the Supreme Court justices?
Courts of law? Yeah. [crosstalk 00:31:56]
Of course, we do this with magistrate, some people call them judges, magistrates are appointed by the District Courts, so they must be ... that's under the theory they're inferior officers.
And bankruptcy judges are appointed by the circuit, right?
I forget. The same thing, so the theory is they're inferior officers, [inaudible 00:32:11] by a district judge. Anyway. And there's a third possible test as well, I think he does.
Yeah, he does, but then I had trouble figuring out ... I saw two, but I was trying to figure out where the third one was. But we're not going to resolve that on this case today.
Good law article to write there.
Probably will produce more than one from various trying to flesh this out. But for better or for worse, we do have five votes for this being a constitutional violation. Justice Thomas's view on that does not prevail. And so now we come to the question of what to do about it, and then we have a different disagreement on the Court, because here, the Roberts opinion loses the majority, loses Justice Gorsuch in terms of what the appropriate remedy is, although Breyer agrees on the remedy.
So ultimately, so there's in theory, I think he could have joined that part of the opinion, sort of made it the opinion of the Court. But he at least reaches the same conclusion, and so the plurality, I guess you call it, their remedy is going to prevail. And so their remedy is kind of this narrow surgical excision, where they go in and say the solution is that now these decisions on inter partes review by the APJs, now those are going to be reviewable by the director of the PTO.
There's a section of the statute, 6C, that says that only the PTAB can rehear its own decisions. And the Court concludes that Section 6(c) cannot be constitutionally be enforced to the extent that its requirements prevent the director from reviewing final decisions rendered by APJs. So now, their decisions are not final, the director can review them. And then as to these specific parties, they conclude there should be a remand, so the director can decide whether to review this patent, which I bet you, he will not do.
Oh, and if he does, maybe he'll just come out the same way.
Okay. And maybe we should look at this through the lens of the Gorsuch, I guess, partial dissent, who says, basically takes kind of a more formalist view of severability, sort of building off of some stuff we were talking about in the last episode. Although I'm curious to see where you land on this, and sort of says, "Look, it's not our job ..." What the Court is doing is basically making a policy judgment. They're kind of just looking at the scheme, and we don't really know what Congress wanted to here. We don't have any kind of fallback provision, and kind of severability or inseverability provision. And so the right thing to do is just to sort of say, "This scheme is unconstitutional. Congress, go back and fix it," rather than doing this kind of policy-based inquiry, where it basically lets the Court rewrite the statute.
That what he says, that's all good, although I think he a little unfair to the majority. So severability inquiry used to be this kind of policy-based, what would be the best rule here, question. And Justice Gorsuch rightly says, "I don't want to do that," and he says, "We should do the traditional thing we used to do." Page six, "When the application of a statute violated the constitution, Courts simply declined to enforce the statute in the case or controversy at hand. So we should just say, "That shits not constitutional here, we don't enforce it here," and let somebody else sort out, or let Congress sort out how to fix the statute going forward.
The problem that Justice Gorsuch skates over, which he mentions earlier in his dissent is that there isn't just a statute here that violates the constitution. Nothing violates the constitution about giving the APJs unreviewable authority, if they're inferior officers or superior officers. Or, nothing violates the constitution about making the APJs inferior officers if they're not unreviewable. So there isn't just a statute that violates the constitution in the abstract, [crosstalk 00:36:00]
But there's a whole scheme, right?
It's a combination of statutes that violate the constitution in this particular case. And I think the majority is trying to respond to Justice Gorsuch. But what they say, they actually don't talk about excisions, they don't talk about surgery. They say, "All we have is the power to disregard an unconstitutional enactment. We give full effect to the statute whenever it's not repugnant to the constitution." And what they conclude is, all we have to do is not give effect to 6C. That's the statutory provision that leads to the constitutional violation in this case, and if we ignore it, it's fine.
Yeah, I agree with that, although there's a thing I just want to understand, is, if we just ignore that provision, is there some kind of default that the director would be able to review the decision? Or are they kind of imagining a different ... are they actually having to write a different statutory provision that it grants the director that authority?
They are imagining that's the default, because of the nature of executive power.
That absent something taking it away, that the executive will have it. And maybe that's a little creative, but they're imagining that default. And here's where things get interesting in multiple different ways. I mean, so Justice Gorsuch is writing this because he has been, for the past several years, he and Justice Thomas have been sort of waging war on the Court's severability doctrine, saying this more formalist approach, "We have to just not enforce the statute."
What's interesting is Justice Thomas and Justice Gorsuch disagree here. That happened a little bit in the ACA case last time. It wasn't totally clear, because the standing issue was there. But here again, they both sort of in theory have the same approach, and Justice Thomas is going in a different direction. Because as I understand Justice Thomas, and this blends the merits and severability a little bit together, he's taking the majority one further.
Justice Thomas would take the majority one better, because he would say, "Look, if the majority is right, that the only problem here is Section 6(c), that the director doesn't have the power to review these things, and if that provision's unenforceable, then problem solved. The director actually has the power to review these things. He didn't choose to use it. Nobody asked him to use it, but he has the power, and so there's just been no constitutional violation here at all." The problem is, in a way, self-correcting.
But that's not severability, that's just merits.
Well, they go together.
And actually, this is ... John Harrison had an amicus brief in this case, which is an amazing amicus brief that kind of was leading this way. So the federal circuit had said, "There was a constitutional violation, and we will cure it by holding these provisions of the statute unconstitutional, and once we hold them unconstitutional, that cures the violation." The point Harrison made and Justice Thomas is picking it up implicitly a little bit is courts don't cure constitutional violations by striking things down.
If the statute's unconstitutional, it's unconstitutional, it's not enforceable. The Courts might say that, and they might say, "Look, if the law wasn't applied correct in your case, you get a remand." But the majority doesn't have the power to fix anything. So if Section 6(c) was unconstitutional, it was unconstitutional all along, and we can all go home.
But that's different than what Justice Thomas is doing, because he's just saying, "I don't-"
I think he says that in the end. I mean, he thinks you don't even need to strike down Section 6(c). But I think he says in the dissent, that if the majority were right, they would still be wrong.
That's pretty interesting. Wonder if this is the last case we're going to see with inter partes review. There was another place where Gorsuch and Thomas disagreed was in Oil States, Justice Gorsuch wanted to scrap this whole thing, and Justice Thomas was in the majority, as I recall, saying it was fine.
Maybe so. I mean, so it's interesting. So this [inaudible 00:39:30] these statutes, the ACA, the America Invents Act, both enacted around the same time, I think, just keep giving rise to these serious Supreme Court decisions, kind of trying to wrestle with exactly how it works, whether it's constitutional, this solution cerates the next problem. Obviously, the ACA cases are sort of heavily politicized in a way that everybody know about, and the patent cases, I mean, my friends were ... patent law scholars get really worked up about them, but the rest of us just kind of turn to them and are kind of like, "Oh, that's interesting." But maybe this just happens whenever Congress enacts a new statute. And since Congress is never going to enact major stats again ...
It's not going to be a problem. The one other thing about this we didn't talk about was Justice Breyer's his quotation on page of seven of Ludwig Wittgenstein. He quotes the Tractatus Logico-Philosophicus where he says sort of at the very end of the Tractatus, "Whereof one cannot speak, thereof one must be silent." Oddly, he doesn't give a citation for this. Luckily, this was ... as a philosophy major, it's one thing I remember. He's talking about why the functional approach in separation of powers cases is better, it's more likely to prevent inappropriate judicial interference. It embodies, at least to agree, the philosopher's advice. And then he gives the quote, no citation.
We see more, I think ... There are not a lot of Wittgenstein citations in law, but I think if you're going to see them, you're more likely to see late citations to the philosophical investigation, rather than early Wittgenstein to the Tractatus. Wittgenstein, apparently, he really kind of changed his views on everything over the course of his quite impressive career. I don't know if Breyer has been reading Wittgenstein, but that should be a good ending of this discussion for us, Will. So whereof one cannot speak, thereof one must be silent, so let's go on.
You got it.
Okay. Other one we're going to talk about is National Collegiate Athletic Association v. Alston, the NCAA case, and this is an interesting one. And this is a case that I think could have been divisive on the Court. It maybe had the potential, or at least, people didn't really know heading in to the case how this might go. Turns out, this is a case that produces a lot of unanimity on the Court. It's an opinion by Justice Gorsuch, and then we have a quite interesting concurrence by Justice Kavanaugh, which I think is probably more interesting than the majority itself.
So this is an antitrust case, a Sherman Act case. Sherman Act is the original antitrust statute, it is a pretty spare statute, it doesn't have a lot of words, but gives Courts basically the ability to kind of declare things illegal restraints on trade. And the NCAA is, in a very real sense, a restraint on trade. It's an agreement by a bunch of schools and universities on a bunch of things, including kind of the rules of basketball and things like that. But also, on the rule that you can't pay student athletes, which is apparently a term that the NCAA made up in part to kind of avoid scrutiny from people advocating for workers' rights. But the rule tat you can't pay student athletes more than giving them kind of certain kinds of scholarships and a little bit of money for food and stuff like that. You can't pay them anything.
So now, you can pay them a little bit more.
So here, the case begins with a major lawsuit in federal Court where the groups of players were asking for a bunch of these rules to be set aside in the ground that they violate the Sherman Act. And the District Court opinion was kind of a mixed bag. It did not open up the kind of big compensation coffers, but it did say some of NCAA's limits on how much student athletes can get paid, especially for room and board and internships, the NCAA regulates everything.
And certain kinds of additional scholarships, like vocational scholarships.
Yup, that some of these went too far. And so the NCAA, because it doesn't like being told that it's done anything wrong, went to the Supreme Court to say, "No, no, no, we've got to have these limits." and I think, as I remember the argument, the limits involved in this case are not the biggest amount of money or the biggest deal, although they're important to the players. But I take it part of the reason the NCAA was concerned is because this opens the door.
This opens the door to possibility-
And interestingly, the players in the lower Court, they challenged on a POV denial of their injunction for the bigger problem, the limits on compensation more generally, but they didn't pursue that in the Court. They kind of took a more defensive tack. It looks like that was probably a smart strategy. I don't know if that made the difference, but it seems like it certainly didn't hurt, given how this case is going to come out.
So [inaudible 00:44:16] is not my area, although my impression before this case was argued was the way this works is as a legal realist matter, the NCAA gets a special exception from the Sherman Act that's not written into law and that nobody can really justify, but the justices don't want to change the nature of college sports. And I think the NCAA may have thought that's how it works too, and there's some previous decisions NCAA's won on kind of thin legal grounds, so I think they marched in here thinking they could just say, "Look, if we take the Sherman Act seriously, the next thing you know, college basketball players might be making up huge pro salaries," and that the Supreme Court would be horrified at that. But it's not what happened.
Yeah, and so historically, I think if you go back a couple of generations, you see the Court was way more differential to sports leagues and antitrust cases and you have these cases in baseball, recognizing that baseball has the special exemption from antitrust across the board, which, the rationale being, as I understand it, that baseball is not a business, it's a part-time, which is nonsense.
I think the rationale was that baseball games are not interstate commerce, because while you play baseball games all over the country, you only play any given baseball game in one state.
Yeah, that was maybe the original one, and then Flood v. Kuhn, there's this opinion by Justice Blackmun that I think only one other person joined, that the relevant part where he just writes this really long list of baseball players who are really great. So I think that-
Do you hate America, Dan?
I like baseball, I like baseball players. But more recently, I think the Court has sort of started to say, "Let's just be a little bit real about this." In one case they get cite, a case from about a little bit more than a decade ago was American Needle, where the various NFL teams had sort of made an agreement about licensing merchandise and American Needle, which wanted to sell merchandise and get licensing deals from individual teams, sort of said this is an illegal restraint on trade.
And NFL marched into Court and made this super aggressive argument that basically, "Even though the teams are separate legal entities and owned separately, we just have this categorical exemption that we should be treated as a single entity." And the Court was like, "No, I don't think so. I think we got to do some rule of reason analysis on that." And then similarly here, where it takes a look at this and is like, "No, you're not automatically going to be exempted just by virtue of what you do."
Now, one other thing about the majority before we get to the merits, is it has a number of pages of kind of history of college sports, which I thought was quite interesting.
Yeah, so people like to make fun of the Court when it does this, where it just goes on a lark about finding something interesting, and I think people like to make fun of Justice Gorsuch all the time. But did this bother you, or did you like the history of the Harvard-Yale Boat Race?
I like this, I thought this was interesting. I thought if it'd gone on any longer, I would've had a problem with it, but I thought this was enough. And I thought it was interesting because it did feel relevant, because one thing he talks about is how, historically, this has been a big business for a long time, and there actually was a lot of influence of money in college sports very early on. I [inaudible 00:47:24] of all these facts where basically college teams a century ago were hiring these ringers, and having them transfer in for a week, and things like that. So I thought that was interesting, I liked it.
Yeah, me too.
We're going to go on and talk about what happens. And so, as I understand it, the NCAA's basic argument is ... Yes, there's a lot of consensus in the case about what the relevant market is and the fact that these agreements are in some sense anti-competitive with respect to the labor market, that NCAA's market seems to be, "Well, this is really critical because we have to have these agreements because it differentiates us from other kinds of sport. And so it gives consumers more choices, because if we started paying players anything, would make everyone think the college sports are just like every other sport, and not want to watch us rather than the NBA or the NFL anymore." I think that's sort of what they're saying, which strikes me as just, honestly, laughable.
Well, why laughable? I do think that there is this ... sometimes in these antitrust cases we do, we do this. We take a step back and say, "Yes, looked at a micro level, what you're doing is anti-competitive, because you're making it harder for individual schools to complete for players. But on a macro level, you're making it easier for consumers to have two different choices on what game to watch." And if the NBA and NCAA basketball are more different, that gives more consumers more choices, and isn't that what we care about most? Why is that silly?
Well, I guess I find it silly for some of the reasons that Justice Kavanaugh's going to talk about, which we'll get to. But also just as I think the ... I can't remember if it's the majority or the Kavanaugh opinion notes, I mean, there already is a huge amount of money flowing into the people involved in these games. The coaches are making 10 or 11 million dollars a year, in some instances. The athletic directors are making a huge amount of money. And so, it strikes me as preposterous, the idea that, the fact that the athletes aren't making any money is the key thing that's causing people watch the games. I don't think that would change if we started letting player get paid.
Certainly, it would not change if we started let players get paid for vocational scholarships and post-grad internships, which was what was at issue here.
We'll find out. But here's the part I think is not silly, I think is that the rationale, this rationale that the reason people love to watch the NCAA is because the athletes don't get paid, I think that is the rationale that supports the broader restrictions against paying student athletes and all of the stuff.
Well, I don't like those either though.
Well, neither Justice Kavanaugh. So I think the one point the NCAA does have is that the majority pretends, "Oh, don't worry. This is just a little bit of money for vocational training. It's not letting star players get paid $1 million a year."
But they don't purport to be resolving that.
They just sort of say, "That's out of the case for right now."
But maybe they are. I guess that means if you don't buy this rationale now ... I mean maybe that's fine, but I think we may have just started sliding down a slope.
Yeah, you're saying that we're going to ultimately go where Justice Kavanaugh going to go.
Yeah, rejecting the NCAA's argument here logically leads to where Justice Kavanaugh's going to go. And we should be happy about that or sad about that, but we should know that's where we're going.
And so let's explain that, but I guess, just the last thing to say about the majority's doing, it's sort of saying on its own terms, "This justification you're offering just isn't good enough to at least prevent any review of this. These things have to be subject to the rule of reason, and the District Court did that, and this was basically reasonable." Right?
Okay, and that brings us ... I don't think I have ton else to say about the majority, but that brings us to the Justice Kavanaugh opinion. Of course Justice Kavanaugh was going to write something in a big sports law case. He's a big sports fan, or a baseball fan, as I recall, from the confirmation where one of the ... Before things got really crazy, one of the earlier scandals was, "Who paid for his baseball tickets?" Or whatever, I don't remember.
But he coaches basketball though, doesn't he?
Yeah, I think he coaches. Is it coaches his daughter's team? So he's a fan of a lot of sports, but I think he's thought a lot about this. And he wrote an opinion that struck me as quite persuasive and probably correct, where he basically says, "Yeah, I agree with all this, but I also think, NCAA, you are in real trouble with respect to all the other things you're restricting. Basically, I think you need to allow student athletes to get paid for real. And let me just kind of give you a really quick version of what that argument looks like. And you all should be on notice, maybe you should get on top of this."
Yeah, the NCAA must supply a legally valid, pro-competitive justification for its remaining compensation rules. And as I see it, the NCAA may lack such a justification. I love this, he goes through the sort of amateurism ... there's various arguments that previously, the Court ... and this is the funny part. Previously, the Court, I think would've accepted these at face value. And now, Justice Kavanaugh's walking through the NCAA's business model would be flatly illegal in almost any other industry in America.
A restaurant can't come together to cut cooks' wages on the theory that customers prefer to eat from low-paid cooks. Law firms cannot conspire to cabin lawyers' salaries in the name of providing legal services out of a love of the law. Hospitals cannot agree to cap nurses' income in order to create a purer form of helping the sick. News organizations cannot join forces to curtail pay to reporters to preserve a tradition of public-minded journalism. Movie studios cannot collude to slash benefits to camera crews to kindle a spirit of amateurism in Hollywood. Price fixing labor is price fixing labor.
He's got a point, right?
He does have a point.
I thought that was quite persuasive. He also has raised some distributional concerns, notes that there's a lot of money flowing to college sports, but it's all going to people at the top. It's not going to the athletes, and he notes, many of whom are African American. So I don't know, there's a lot to like here, whether you're a sports fan or labor and employment law.
So one tricky thing, which he does acknowledge is that ... and it makes his analogies I think a little weaker, is that playing college sports is a thing that many people do for free, and some people do for ... we have a huge amount of money for it. So if we do end up on Justice Kavanaugh's road, thinking through how this is going to work with respect to Title IX, where the money is different across men's sports and women's sports, for better or for worse. And that does seem to partly a reflection of customer preferences, although those are in turn shaped by also the choices the industry makes. And again, you have some people who would happily play for free and some wouldn't.
In a way, that's not necessarily true of the cooks. It isn't like you have a million people who just decide to work as a line cook for free, and then a few people who are amazing line cooks who make millions of dollars at it.
Although you do have people cook at home for free, and people who ...
I don't know.
But I only cook for my friends, I don't cook for strangers.
You never cook for me.
[crosstalk 00:54:28] what that says. Another thing, so I agree, there would be a lot to ... if they go that route, there would be a lot of things to work out and then another moving piece here is states are legislating in this area. Some states have passed legislation that says schools are not allowed to prevent athletes from getting money for licensing their likenesses and getting endorsements and things like that, and NCAA's having to deal with that. So the ground is really shifting here. I think it just sort of seems like a lot of people have started saying, "Come on, this is ridiculous. You've got to pay these folks something." And so I think this may kind of speed things up on that front a little bit more.
Yeah, we'll see. I mean, there is this passage at the end of Kavanaugh's opinion where he notes, "We don't have to do this in litigation. Legislation would be one option, or colleges and student athletes could engage in collective bargaining or negotiated agreements to work this out." We got to do something. Are you optimistic that either of those things is going to happen, that legislation's going to happen, or that the NCAA's going to read this opinion and get out in front of it? Or do you think they're just going to hold on, white-knuckled until a Court-
I think we might see more state level legislation. I don't think that we're necessarily going to see any federal legislation, for reasons we've already mentioned, that there just isn't that much.
What about just agreement? Like do the NCAA get this and say, "Okay, guys. I guess we got to get real."
I think that it's really hard to get people to voluntarily give up a lot of money. The NCAA is run by schools, it's not run by the players, and they're going to push back on having to suddenly pay athletes. Especially given that, it's like, do you pay them unlimited amounts? Does Duke pay its college basketball players $5 million a year, and then Gonzagas of the world can't compete anymore? I mean, there's some hard questions there. I think it would be wise for the NCAA to start getting out in front of this, because they clearly are in a place that is way behind public opinion, I think, and now also increasingly behind where the law is. But whether they do that or just keep fighting ... it does seem like there is ...
It does seem like there is ... I saw this in the American Needle case, I've seen this other places, this sense among lawyers who represent sports leagues, that, "We can do whatever we want. This is the good old days, the Courts are just blindly deferred." Maybe they haven't quite gotten the memo. I hope they get the memo after this opinion, especially given the last line of Justice Kavanaugh's concurrence, "The NCAA is not above the law." So no, he's not messing around here, and I don't know whether everybody else agrees with him, but nobody concurred to say he's wrong.
Right, the majority didn't really disagree with him, they just didn't take a position. I mean, my guess is that the NCAA will do basically nothing, they will end up back in Court, they will lose, and the Supreme Court will ultimately issue an opinion that quotes heavily from Justice Kavanaugh's concurrence here.
And we'll talk abut it.
Looking forward to it.
If only the NCAA lawyers had been listening to the show now, we could've saved them a lot of money.
Yeah, and we are available, NCAA, for consultation, reasonable rates. I think that's all we have to say about the opinions. We're not going to talk about this Goldman Sachs group case. Some interesting securities, fraud stuff there, but little bit outside of our core areas of interest, and we want to preserve your attention span, because there's going to be plenty more coming in the next week or so. So anything else? Do we have any feedback we want to talk about, Will?
I mean, a lot of our feedbacks we've been getting has been great, and I think we'll probably do some round up on it once the term is over. I just have to briefly note, last episode, we talked about the possibility that the Court was using some kind of stare decisis of returning avoidance in its decision in Fulton versus Philadelphia where they were citing, they were interpreting things a little creatively to avoid having to get it with an overturn, Employment Division versus Smith. Peter sent us a note pointing to one of Justice Barrett's articles as a law professor, in which she proposes the idea of the stare decisis avoidance canon, in which the Court would do more or less what it's done in Fulton. So, maybe she's the brains behind the operation. I don't know. That's all.
Quite possible. Yeah, and I'd read that article a while back, but that concept had already faded from my memory, so I thought that was a great comment it's like, "Oh, this thing that you talked about already exists and one of the Justices has already written about it." Bet he was like, "Oh, okay." Probably should've remembered that. So thank you, and I think that's all we got. So you want to lead us out, Will?
Thanks for listening. Thanks to all the people who have made this show possible and sent in feedback. Please stay tuned during the last busy week of the Court. We are looking forward to what comes next.
I am too. And please keep sending us feedback, firstname.lastname@example.org. Check out our merchandise we're selling, t-shirts, mugs, stickers and the like, that's at store.dividedargument.com. And please, if you have time, give us a rating and a review on the Apple Podcast app. That helps people find the show, it's still the main place that people discover podcasts, and it will boost our listenership. Our listenership is growing, but we want it to grow even further. We want it to grow so much further that we actually become an illegal monopoly that will be subject to antitrust scrutiny, much as the NCAA now is.
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