The Voting Rights Act of 1965

The 1965 Enactment

By 1965, concerted efforts to break the grip of voter disfranchisement in certain states had been under way for some time, but had achieved only modest success overall and in some areas had proved almost entirely ineffectual. The murder of voting-rights activists in Philadelphia, Mississippi, gained national attention, along with numerous other acts of violence and terrorism. Finally, the unprovoked attack on March 7, 1965, by state troopers on peaceful marchers crossing the Edmund Pettus Bridge in Selma, Alabama, en route to the state capitol in Montgomery, persuaded President Johnson and Congress to overcome Southern legislators’ resistance to effective voting rights legislation. President Johnson issued a call for a strong voting rights law and hearings began soon thereafter on the bill that would become the Voting Rights Act.

Congress determined that the existing federal anti-discrimination laws were not sufficient to overcome the resistance by state officials to enforcement of the 15th Amendment. The legislative hearings showed that the U.S. Department of Justice’s efforts to eliminate discriminatory election practices by litigation on a case-by-case basis had been unsuccessful in opening up the registration process; as soon as one discriminatory practice or procedure was proven to be unconstitutional and enjoined, a new one would be substituted in its place and litigation would have to commence anew.

President Johnson signed the resulting legislation into law on August 6, 1965. Section 2 of the Act, which closely followed the language of the 15th amendment, applied a nationwide prohibition against the denial or abridgment of the right to vote on the literacy tests on a nationwide basis. Among its other provisions, the Act contained special enforcement provisions targeted at those areas of the country where Congress believed the potential for discrimination to be the greatest. Under Section 5, jurisdictions covered by these special provisions could not implement any change affecting voting until the Attorney General or the United States District Court for the District of Columbia determined that the change did not have a discriminatory purpose and would not have a discriminatory effect. In addition, the Attorney General could designate a county covered by these special provisions for the appointment of a federal examiner to review the qualifications of persons who wanted to register to vote. Further, in those counties where a federal examiner was serving, the Attorney General could request that federal observers monitor activities within the county’s polling place.

The Voting Rights Act had not included a provision prohibiting poll taxes, but had directed the Attorney General to challenge its use. In Harper v. Virginia State Board of Elections, 383 U.S. 663 (1966), the Supreme Court held Virginia’s poll tax to be unconstitutional under the 14th Amendment. Between 1965 and 1969 the Supreme Court also issued several key decisions upholding the constitutionality of Section 5 and affirming the broad range of voting practices that required Section 5 review. As the Supreme Court put it in its 1966 decision upholding the constitutionality of the Act:

Congress had found that case-by-case litigation was inadequate to combat wide-spread and persistent discrimination in voting, because of the inordinate amount of time and energy required to overcome the obstructionist tactics invariably encountered in these lawsuits. After enduring nearly a century of systematic resistance to the Fifteenth Amendment, Congress might well decide to shift the advantage of time and inertia from the perpetrators of the evil to its victims. South Carolina v. Katzenbach, 383 U.S. 301, 327-28 (1966).

The 1970 and 1975 Amendments

Congress extended Section 5 for five years in 1970 and for seven years in 1975. With these extensions Congress validated the Supreme Court’s broad interpretation of the scope of Section 5. During the hearings on these extensions Congress heard extensive testimony concerning the ways in which voting electorates were manipulated through gerrymandering, annexations, adoption of at-large elections, and other structural changes to prevent newly-registered black voters from effectively using the ballot. Congress also heard extensive testimony about voting discrimination that had been suffered by Hispanic, Asian and Native American citizens, and the 1975 amendments added protections from voting discrimination for language minority citizens.

In 1973, the Supreme Court held certain legislative multi-member districts unconstitutional under the 14th Amendment on the ground that they systematically diluted the voting strength of minority citizens in Bexar County, Texas. This decision in White v. Regester, 412 U.S. 755 (1973), strongly shaped litigation through the 1970s against at-large systems and gerrymandered redistricting plans. In Mobile v. Bolden, 446 U.S. 55 (1980), however, the Supreme Court required that any constitutional claim of minority vote dilution must include proof of a racially discriminatory purpose, a requirement that was widely seen as making such claims far more difficult to prove.

The 1982 Amendments

Congress renewed in 1982 the special provisions of the Act, triggered by coverage under Section 4 for twenty-five years. Congress also adopted a new standard, which went into effect in 1985, providing how jurisdictions could terminate (or “bail out” from) coverage under the provisions of Section 4. Furthermore, after extensive hearings, Congress amended Section 2 to provide that a plaintiff could establish a violation of the Section without having to prove discriminatory purpose.

Voting Rights and Discrimination FAQ

What federal law protects me from discrimination in voting?

The Voting Rights Act of 1965 protects every American against racial discrimination in voting. This law also protects the voting rights of many people who have limited English skills. It stands for the principle that everyone’s vote is equal, and that neither race nor language should shut any of us out of the political process. You can find the Voting Rights Act in the United States Code at 42 U.S.C. 1973 to 1973aa-6.

Where did the Voting Rights Act come from?

Congress passed the Voting Rights Act in 1965, at the height of the civil rights movement in the South, a movement committed to securing equal voting rights for African Americans. The action came immediately after one of the most important events of that movement, a clash between black civil rights marchers and white police in Selma, Alabama. The marchers were starting a 50-mile walk to the state capital, Montgomery, to demand equal rights in voting, when police used violence to disperse them. What happened that day in Selma shocked the nation, and led President Johnson to call for immediate passage of a strong federal voting rights law.

What does the Voting Rights Act do?

The Voting Rights Act bans all kinds of racial discrimination in voting. For years, many states had laws on their books that served only to prevent minority citizens from voting. Some of these laws required people to take a reading test or interpret some passage out of the Constitution in order to vote, or required people registering to vote to bring someone already registered who would vouch for their “good character.” The Voting Rights Act made these and other discriminatory practices illegal, and gave private citizens the right to sue in federal court to stop them. In recent times, courts have applied the Act to end race discrimination in the method of electing state and local legislative bodies and in the choosing of poll officials.

Will the Voting Rights Act expire?

No. The Voting Rights Act is a permanent federal law. Moreover, the equal right to vote regardless of race or color is protected by the Fifteenth Amendment to the U.S. Constitution, which has been part of our law since the end of the Civil War. And in case after case, our courts have held that the right to vote is fundamental. Voting rights will not expire.

However, some sections of the Voting Rights Act need to be renewed to remain in effect. When Congress amended and strengthened the Voting Rights Act in 1982, it extended for 25 more years–until 2007–the preclearance requirement of Section 5, the authority to use federal examiners and observers, and some of the statute’s language minority requirements. So, for those sections to extend past 2007, Congress will have to take action. But even if these special provisions are not renewed, the rest of the Voting Rights Act will continue to prohibit discrimination in voting.

What is Section 5 of the Voting Rights Act?

Section 5 is a special provision of the statute (42 U.S.C. 1973c) that requires state and local governments in certain parts of the country to get federal approval (known as”preclearance”) before implementing any changes they want to make in their voting procedures: anything from moving a polling place to changing district lines in the county.

Under Section 5, a covered state, county or local government entity must demonstrate to federal authorities that the voting change in question (1) does not have a racially discriminatory purpose; and (2) will not make minority voters worse off than they were prior to the change (i.e. the change will not be “retrogressive”).

Section 5 applies to all or parts of the following states:

  • Alabama
  • Alaska
  • Arizona
  • California
  • Florida
  • Georgia
  • Louisiana
  • Michigan
  • Mississippi
  • New Hampshire
  • New York
  • North Carolina
  • South Carolina
  • South Dakota
  • Texas
  • Virginia

What kinds of racial discrimination in voting are there, and what does the Voting Rights Act do about them?

The Voting Rights Act is not limited to discrimination that literally excludes minority voters from the polls. Section 2 of the Act (42 U.S.C. 1973) makes it illegal for any state or local government to use election processes that are not equally open to minority voters, or that give minority voters less opportunity than other voters to participate in the political process and elect representatives of their choice to public office. In particular, Section 2 makes it illegal for state and local governments to “dilute” the votes of racial minority groups, that is, to have an election system that makes minority voters’ votes less effective than those of other voters. One of many forms of minority vote dilution is the drawing of district lines that divide minority communities and keep them from putting enough votes together to elect representatives of their choice to public office. Depending on the circumstances, dilution can also result from at-large voting for governmental bodies. When coupled with a long-standing pattern of racial discrimination in the community, these and other election schemes can deny minority voters a fair chance to elect their preferred candidates.

To show vote dilution in these situations, there must be a geographically concentrated minority population and voting that is polarized by race, that is, a pattern in which minority voters and white voters tend to vote differently as groups. It must also be shown that white voters, by voting as a bloc against minority-choice candidates, usually beat those candidates even if minority voters are unified or cohesive at the polls.

Anyone aggrieved by minority vote dilution can bring a federal lawsuit to stop it. If the court decides that the effect of an election system, in combination with all the local circumstances, is to make minority votes less effective than white votes, it can order a change in the election system. For example, courts have ordered states and localities to adopt districting plans to replace at-large voting, or to redraw their election district lines in a way that gives minority voters the same opportunity as other voters to elect representatives of their choice.

Is it prohibited to draw majority-minority districts?

No. Over 30 years ago the Supreme Court held that jurisdictions are free to draw majority-minority election districts that follow traditional, non-racial districting considerations, such as geographic compactness and keeping communities of interest together. Later Supreme Court decisions have held that drawing majority-minority districts may be required to ensure compliance with the Voting Rights Act.

While it remains legally permissible for jurisdictions to take race into account when drawing election districts, the Supreme Court has held that the Constitution requires a strong justification if racial considerations predominate over traditional districting principles. One such justification may be the need to remedy a violation of Section 2 of the Voting Rights Act. While such a remedy may include election district boundaries that compromise traditional districting principles, such districts must be drawn where the Section 2 violation occurs and must not compromise traditional principles more than is necessary to remedy the violation.

What other voting rights laws exist?

The National Voter Registration Act of 1993 (often referred to as the “motor voter” law) requires states to make voter registration opportunities available when people apply for or receive services at a variety of government agencies, from driver’s license offices to social services agencies and public benefits offices. The law says states must not take voters off the rolls merely because they have not voted, and it requires states to keep their voter rolls up to date by removing the names of voters who have died or moved away. It may be found at 42 U.S.C. 1973gg to 1973gg-10.

The Uniformed and Overseas Citizens Absentee Voting Act of 1986 (42 U.S.C. 1973ff to 1973ff-6) requires states to make sure that members of our armed forces who are stationed away from home, and citizens who are living overseas, can register and vote absentee in federal elections.

The Voting Accessibility for the Elderly and Handicapped Act of 1984 (42 U.S.C. 1973ee to 1973ee-6) requires polling places across the United States to be physically accessible to people with disabilities.

Does the Voting Rights Act protect language minorities?

Yes. The Voting Rights Act makes it illegal to discriminate in voting based on someone’s membership in a language minority group. The idea behind the Voting Rights Act’s minority language provisions is to remove language as a barrier to political participation, and to prevent voting discrimination against people who speak minority languages. The Justice Department enforces these protections by bringing lawsuits in federal court, by sending federal observers to monitor elections, and by working with local jurisdictions to improve their minority language election procedures.

Many jurisdictions with people of Hispanic, Native American, and Alaskan Native heritage are covered by Section 5 of the Act.

The Voting Rights Act further protects minority language group members by requiring particular jurisdictions to print ballots and other election materials in the minority language as well as in English, and to have oral translation help available at the polls where the need exists. The formulas for determining which jurisdictions must do this are based on the share of the local population in need. The Act requires bilingual election procedures in various states and counties for voters who speak Spanish, Chinese, Filipino, Japanese, Vietnamese, and more than a dozen Native American and Alaskan Native languages.

A Shock to the Core: The Supreme Court Pries Jurisdiction Away from the Bankruptcy Courts on Counterclaims to Proofs of Claim, and Possibly More – Stern v. Marshall

On Thursday, the Supreme Court in a 5-4 decision ruled in Stern v. Marshall [1] that the congressional grant of jurisdiction to bankruptcy courts to issue final judgments on counterclaims to proofs of claim was unconstitutional. For the litigants, this decision brought an end to an expensive and drawn out litigation between the estates of former Playboy model Anna Nicole Smith and the son of her late husband, Pierce Marshall, which Justice Roberts writing for the majority analogized to the fictional litigation in Charles Dickens’ Bleak House. For bankruptcy practitioners, it is yet another chapter in an even more epic saga – that of the back-and-forth between Congress and the Supreme Court over the jurisdictional limits of the nation’s bankruptcy courts. Instead of offering finality, the decision only raises more questions about how far the Court’s reasoning will extend, and what the implications will be for practice under the Bankruptcy Code.

Background: Broad Bankruptcy Court Jurisdiction in 1978 Reform Act Ruled Unconstitutional by Supreme Court in 1982; Congress Adopts “Emergency Rule” in Response in 1984

Few who practiced then can forget the effect of the Supreme Court’s 1982 decision in Northern Pipeline [2] on the statutory regime enacted by Congress in the still-nascent Bankruptcy Code, which had gone into effect in October of 1978. The Code was a sweeping reform of the nation’s bankruptcy laws which involved elevating the previous “referees” in bankruptcy to the title of judges, and granting them the power to exercise the United States District Court’s jurisdiction over “all civil proceedings arising under title 11 [i.e., the Bankruptcy Code] or arising in or related to cases under title 11.”[3] A plurality of the Supreme Court in Northern Pipeline declared this grant of jurisdiction to bankruptcy courts under the new Bankruptcy Code unconstitutional, leaving courts and practitioners to wonder whether the Code would be thrown out the window.

The Northern Pipeline Court reasoned that granting such broad jurisdiction to bankruptcy courts was unconstitutional because bankruptcy courts were not “Article III courts – that is, courts whose authority derives from Article III of the Constitution. Article III courts come with two principal safeguards prescribed in Article III, Section 1 of the Constitution: lifetime appointment and the inability of Congress to reduce the judges’ salaries. These safeguards are intended to ensure the courts’ independence from the other branches of government, and are thus an implementation of the separation of powers principles underlying the Constitution in general. United States District Courts are Article III courts. Bankruptcy courts, on the other hand, are Article I courts. The Northern Pipeline Court held that assigning bankruptcy courts the jurisdiction of the district courts violated Article III of the Constitution because it removed “essential attributes of the judicial power” from the Article III courts.[4]

In response, Congress enacted a new statutory scheme, embodied in 28 U.S.C. §§ 157 and 1334, which was based on the so-called “Emergency Rule” developed by the district courts after Northern Pipeline. Under this scheme, United States District Courts have original jurisdiction over matters arising under, arising in or related to cases under the Bankruptcy Code, but district courts can refer these matters to the bankruptcy courts (a referral that is now automatic in all districts). Bankruptcy courts are given the power to issue final judgments in all “core proceedings” arising under the Bankruptcy Code, or arising in a case under the Bankruptcy Code. As to other, “non-core” matters related to a case under the Bankruptcy Code, bankruptcy courts can only issue proposed findings of fact and conclusions of law for de novo review by the district court, unless the parties otherwise consent. This statutory scheme went into effect in 1984.

History of Stern v. Marshall

Stern v. Marshall presented the Supreme Court with the opportunity to review the statutory scheme adopted by Congress in 1984. The model and actress Anna Nicole Smith had filed for bankruptcy in Los Angeles after the death of her billionaire husband, J. Howard Marshall, in 1995. Bitter litigation that had begun even before her husband’s death continued in the bankruptcy court between Smith and her late husband’s son, Pierce Marshall, over their competing claims to the Marshall estate.

In Smith’s bankruptcy case, Pierce filed both a proof of claim for defamation and an adversary complaint seeking a determination that his defamation claim was nondischargeable. Smith filed a compulsory counterclaim for tortious interference by Pierce with the gift she expected from her late husband. The bankruptcy court held a trial and granted judgment to Smith in the amount of $447 million.

Appeals and parallel litigation ensued, all of which cannot be described here, or in a manuscript of less than ten volumes. In short, after the entry of the bankruptcy court’s extraordinary judgment Pierce prevailed in a separate trial on the merits in Texas state court. Thereafter, Smith prevailed in a de novo review of the bankruptcy court’s judgment in federal district court in Los Angeles, though her $447 million judgment was reduced to $44 million. In this second round before the Supreme Court, the issue was very simple – did the bankruptcy court have jurisdiction to enter a final judgment on Pierce’s counterclaim? If so, that judgment would be the first final judgment in the matter and would thereby have a preclusive effect under principles of res judicata on the later Texas judgment in Pierce’s favor. If not, the Texas judgment would be the first final judgment and preclude the later district court judgment in Smith’s favor. In an earlier appeal, the Supreme Court had determined that the probate exception to federal jurisdiction did not apply in the case to render void the bankruptcy court judgment, sending the matter back to the Ninth Circuit to determine whether the bankruptcy court judgment had a preclusive effect on the Texas court contrary judgment based on other principles.

Supreme Court’s Holding

The Supreme Court held that while Smith’s compulsory counterclaim to Pierce’s proof of claim was clearly a “core proceeding” under the language of 28 U.S.C. § 157(b)(2)(C), the statute itself was unconstitutional. The Court held that Congress cannot grant to the bankruptcy courts (as Article I courts) the power to issue final judgments on common law causes of action like Smith’s counterclaim that are not resolved in the process of ruling on the proof of claim. The Court reasoned that any suit that is “the stuff of the traditional actions at common law tried by the courts at Westminster in 1789, and is brought within the bounds of federal jurisdiction,” is within the exclusive jurisdiction of Article III courts. Permitting Congress to take such actions out of Article III courts’ jurisdiction would frustrate the separation of powers principles of Article III and render that Article ineffective.[5]

The Court rejected the argument put forward by Smith that the so-called “public rights” exception applied and permitted Congress to grant bankruptcy courts the authority to issue final decisions on counterclaims like Smith’s. The Court found that Smith’s counterclaim did not fall under any of the formulations of the public rights exception for several reasons, including: (i) Smith’s counterclaim did not flow from a federal statutory scheme, (ii) Smith’s counterclaim was not completely dependent upon adjudication of a claim created by federal law, (iii) Pierce did not truly consent to bankruptcy court jurisdiction, since he had nowhere else to go but bankruptcy court if he wished to recover from Smith’s bankruptcy estate; and (iv) the case did not involve a situation where a specialized subset of matters was assigned to a special administrative agency, but rather a situation where a common law action was sought to be determined by a court with broad substantive jurisdiction.[6]

Potential Implications of Stern v. Marshall

The Supreme Court’s holding was limited to one subsection of 28 U.S.C. § 157(b) – in particular subsection (b)(2)(C) which provides that counterclaims to proofs of claim are core proceedings. Indeed, the Court asserted that its holding does not “meaningfully change[] the division of labor in the current statute,”[7] though in the same breath it also stated that a statute’s efficiency or convenience will not save it if it is contrary to the Constitution.[8]

However, the Court’s reasoning is broad, and can potentially be applied to other subsections, such as section 157(b)(2)(H) pertaining to fraudulent conveyance actions, which the Supreme Court has previously held to be “quintessentially suits at common law,”[9] and/or section 157(b)(2)(K), pertaining to determinations of the validity, extent and priority of liens, which are generally determined by state law.

Also, even if limited to section 157(b)(2)(C), counterclaims by the estate are a common occurrence in bankruptcy. As the dissent noted, the Court’s ruling may lead to gamesmanship between creditors and debtors in litigation over proofs of claim, with the proof of claim being decided in the bankruptcy court and a parallel proceeding occurring in the district court. All of this would lead to increased costs and delay – neither of which a typical debtor or creditor can afford. Writing for the dissent, Justice Breyer referred to this as “a constitutionally required game of jurisdictional ping-pong” which will lead to “inefficiency, increased cost, delay and needless additional suffering among those faced with bankruptcy.”[10]

A Potential Fix: Bankruptcy Courts as Article III Courts

Historically, Congress has rewritten or substantially revised the nation’s bankruptcy laws approximately once every 40 years – witness the Bankruptcy Act of 1898, followed by the Bankruptcy Act of 1938, followed yet again by the Bankruptcy Reform Act of 1978. The Bankruptcy Code itself has been amended in significant respects on multiple occasions, including in 1984, 1994 and 2005. The potentially inefficient jurisdictional system following the Supreme Court’s ruling in Stern v. Marshall may be cause to take up the drafting pen yet again. This time, Congress may consider taking a step it deliberately refrained from taking in 1978 and 1984 – that is, providing for bankruptcy courts to be Article III courts by making bankruptcy judges appointed for life and immune to salary reductions by Congress. This would avoid the core/non-core mire altogether in favor of a system of clarity and efficiency that should benefit most debtors and creditors, and well as the bankruptcy courts and district courts.

U.S. Supreme Court Upholds Government Ethics Law Over First Amendment Challenge

The Supreme Court of the United States has given much needed guidance on the question of how the First Amendment applies to state ethics laws. The Court’s 8-1 opinion in Nevada Commission on Ethics v. Carrigan held that the First Amendment did not prohibit the enforcement of a Nevada statute requiring members of legislative bodies – including a city or town council – to recuse themselves when voting on a matter where the legislator’s independence could be questioned by a reasonable observer.

In Carrigan, the state ethics commission applied the statute to hold that a member of a town council should have recused himself from voting on a hotel project because a close friend and campaign manager worked as a consultant on the project. The Nevada Supreme Court struck down the statute by finding it to be an overbroad restriction on the council member’s core political speech. The U.S. Supreme Court disagreed, holding that a state could place restrictions on local legislative bodies that prevent members from voting on issues in which they have a personal stake. Relying on historical evidence showing that many states and Congress had imposed such restrictions since the founding, the Court held that this type of ethics statute did not restrict the legislator’s personal speech but instead protected the public position the legislator held. The Court also suggested that restrictions on speech during city or town council meetings would be subject to review only under the less stringent standard for “time, place and manner” restrictions.

The opinion can be found at: http://www.supremecourt.gov/opinions/10pdf/10-568.pdf

The GAO Holds It Possesses Jurisdiction Over Bid Protests of Civilian Agency Task and Delivery Order Awards

Many believed that the Government Accountability Office’s (“GAO’s”) jurisdiction over bid protests of civilian agency task and delivery order awards valued at over $10 million expired on May 27, 2011. This belief was based on the fact that certain broadened jurisdiction over civilian agency task and delivery order protests granted by the 2008 National Defense Authorization Act (“2008 Act”) expired on that date. With the expiration of the broadened jurisdictional grant found in the 2008 Act, many thus contended that a contractor would not be able to protest a civilian agency task or delivery order award at the GAO unless the protest alleged that the order exceeded the scope, period or maximum value of the underlying contract. Protests of Department of Defense task and delivery order awards valued at over $10 million were not similarly affected because Congress extended the GAO’s exclusive, broadened jurisdiction over these protests through the 2011 National Defense Authorization Act.

The House of Representatives and the Senate introduced bills in March 2011 to level the playing field by providing the GAO with exclusive jurisdiction over civilian agency task and delivery order awards valued at over $10 million. See H.R. 899;  S. 498. The Senate recently passed its version of the bill. The bill must still pass the House and be signed by the President before it becomes law. But, the GAO did not wait. Rather, based on a plain meaning of the 2008 Act, the GAO recently held that it now possesses jurisdiction over bid protests of civilian agency task and delivery order awards. See Technatomy Corp., B-405130, June 14, 2011.

The GAO provided the following rationale for its decision:

The Competition in Contracting Act (“CICA”) provided the GAO with authority to decide bid protestsincluding protests in connection with task and delivery order awardsSee id. at p. 2. In 1994, Congress changed that jurisdiction with the passage of the Federal Acquisition Streamlining Act (“FASA”), which barred protests against individual task and delivery order awards, unless the protest alleged that the order exceeded the scope, period or maximum value of the underlying contractSee id. at pp. 2-3.

In 2008, Congress again fiddled with the jurisdiction of the GAO, in this instance, replacing the FASA provision with the 2008 Act. The 2008 Act again barred protests against individual task and delivery order awards but included exceptions to that bar where the awards were valued at over $10 million or the allegation was that the award exceeded the scope, period or maximum value of the underlying contracts. See id. at p. 3. The 2008 Act’s broadened grant of authority, however, contained a three year sunset period. See id. at pp. 3-4. Importantly, as drafted, the sunset provision of the 2008 Act applied to the entire statutory subsection, which included (a) the bid protest bar, (b) the exception for protests alleging that the order exceeded the scope, period or maximum value of the underlying contract, as well as the (c) the new broadened exception that allowed protests of orders valued at over $10 million. See id. at p. 4. The GAO concluded that since this entire subsection ceased to exist on May 27, 2011, the GAO thereafter regained jurisdiction over bid protests of civilian agency task and delivery order awards under its original CICA jurisdictionSee id. at pp. 4-5.
*  *  *  *  *

The legislative process continues to move forward. The suspense over what would happen in the interim to the protest jurisdiction over task and delivery orders issued by civilian agencies, however, has been lifted. We now know that, even as we await Congressional action, the GAO will continue to entertain jurisdiction over bid protests challenging civilian agency task and delivery order awards

Supreme Court Unanimously Maintains High Hurdle for Invalidity Defense

June 9th, the Supreme Court unanimously ruled1 that an accused infringer must prove its invalidity defense by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P’ship, — S. Ct. — 564 U.S. —, 2011 WL 2224428, slip op. at 1, 16 (June 9, 2011).2 In a case of first impression, the Court determined that this standard applies even when the United States Patent and Trademark Office (“Patent Office”) did not consider the evidence of invalidity currently before the jury in the patent examination process. Id. The hurdle for proving invalidity historically has been high and now remains high.

According to Justice Sotomayor (who wrote for the majority), “Congress specified the applicable standard of proof in 1952 when it codified the common-law presumption of patent validity.” Id. at 20. “Nothing . . . suggests that Congress meant to depart from that understanding to enact a standard of proof that would rise and fall with the facts of each case.” This decision thus keeps in place decades of existing jurisprudence and will continue to allow patent owners to value their portfolios based on past practices. Although accused infringers can take certain steps to minimize negative effects of the clear-and-convincing standard, “[a]ny recalibration of the standard of proof” is now solely in the hands of Congress. Id.

Historical Basis of Proving Invalidity

To receive patent protection, a claimed invention must meet the statutory requirements of patentability. The claimed invention, for example, must fall within certain patentable subject matter (§ 101), be novel (§ 102), be nonobvious (§ 103), and be disclosed in the patent application in sufficient detail to meet the enablement, best mode, and written description requirements (§ 112). Thus, the Patent Office issues a patent for a claimed invention only if its examiners determine that the claimed invention meets all of the statutory requirements. Once issued, a patent holder has the exclusive right to exclude others from using the claimed invention for the term of the patent.

An accused infringer, however, can escape liability for infringement by proving that the patent is invalid (i.e., that the Patent Office should not have issued it in the first place). Under § 282, however, “[a] patent shall be presumed valid” and “[t]he burden of establishing invalidity of a patent . . . rest[s] on the party asserting such invalidity.” 35 U.S.C. § 282. For over thirty years, the Federal Circuit has interpreted that section to require “a defendant seeking to overcome this presumption [to] persuade the factfinder of its invalidity defense by clear and convincing evidence.” Microsoft Corp., 2011 WL 2224428, slip op. at 3. According to Judge Rich, a principal drafter of the 1952 Patent Act, “Section 282 creates a presumption that a patent is valid and imposes the burden of proving invalidity on the attacker” by clear and convincing evidence. Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.3d 1350, 1360 (Fed. Cir. 1984). “That burden is consistent and never changes.” Id.

Microsoft Unsuccessfully Challenged Federal Circuit’s Long-Standing Precedent

In 2007, i4i sued Microsoft claiming that Microsoft Word infringed its patent for an improved method for editing computer documents. Microsoft Corp., 2011 WL 2224428, slip op. at 4. In addition to denying infringement, Microsoft argued that § 102(b)’s on-sale bar rendered i4i’s patent invalid due to i4i’s sale of a software program, S4, prior to the filing of the i4i patent application. Id. The parties agreed that i4i had sold the S4 program prior to the filing of the patent at issue but looked to the jury to determine whether S4 embodied the claimed invention. Id. Relying on the undisputed fact that S4 was never presented to the Patent Office, Microsoft objected to i4i’s proposed instruction requiring the jury find proof of invalidity by clear and convincing evidence. Id. In its place, Microsoft requested a jury instruction limiting its burden of proof, “with regard to its defense of invalidity based on prior art that the examiner did not review during the prosecution of the patent-in-suit” to a “preponderance of the evidence.” Id. at 6 (internal quotation marks and citation omitted).

The District Court rejected Microsoft’s proposed instruction and instructed the jury that “Microsoft has the burden of proving invalidity by clear and convincing evidence.” Id. (internal quotation marks and citation omitted). Based on this instruction, the jury found that Microsoft had willfully infringed i4i’s patent and that Microsoft had failed to prove its invalidity defense. The Court of Appeals for the Federal Circuit affirmed, concluding that “the jury instructions were correct in light of [the] court’s precedent, which requires the challenger to prove invalidity by clear and convincing evidence.” i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 848 (Fed. Cir. 2010).

Supreme Court Rejected Microsoft’s Arguments—Invalidity Must Be Proved by Clear and Convincing Evidence

Microsoft sought certiorari from the Supreme Court as to (1) whether “a defendant in an infringement action need only persuade the jury of an invalidity defense by a preponderance of the evidence” and (2) whether “a preponderance standard must apply at least when an invalidity defense rests on evidence that was never considered by the [Patent Office] in the examination process.” Id. at 5-6. The answer to both of Microsoft’s questions is a clear and unqualified no.

In reaching this decision, the Court started with a common axiom of statutory interpretation: “Where Congress has prescribed the governing standard of proof, its choice controls absent ‘countervailing constitutional constraints.'” Id. at 6 (citing Steadman v. SEC, 450 U.S. 91, 95 (1981)). It then asked the next logical question—”whether Congress made such a choice” when it enacted § 282. To answer this question, the Court first analyzed the plain language of statute. The Court noted that the statute “establishes a presumption of patent validity, and it provides that a challenger must overcome that presumption to prevail on an invalidity defense”; however, the Court recognized that “it includes no express articulation of the standard of proof.” Id. Nevertheless, the Court concluded that Congress used the term “presumed valid” according to its settled meaning in the common law—a term encompassing “not only an allocation of the burden of proof but also an imposition of a heightened standard of proof.” Id. at 7-8.3

“The common-law presumption, in other words, reflected the universal understanding that a preponderance standard of proof was too ‘dubious’ a basis to deem a patent invalid.” Microsoft Corp., 2011 WL 2224428, slip op. at 8. Accordingly, when Congress declared that a patent is “presumed valid,” “the presumption encompassed not only an allocation of the burden of proof but also an imposition of a heightened standard of proof.” Id. Based on this wide-spread understanding of the common law term, the Court refused to conclude “that Congress intended to drop the heightened standard of proof from the presumption simply because § 282 fails to reiterate it expressly.” Id. at 9 (internal quotation marks and citation omitted). Rather, the Court concluded that it “‘must presume that Congress intended to incorporate’ the heightened standard of proof, ‘unless the statute otherwise directs.'” Id. (quoting Neder v. United States, 527 U.S. 1, 23 (1999)). Simply put, “[t]he language Congress selected reveals its intent not only to specify that the defendant bears the burden of providing invalidity but also that the evidence in support of the defense must be clear and convincing.” Id. at 12 n.7.

Notably, the Court rejected Microsoft’s attempts to distinguish nearly century’s worth of otherwise clear case law: “Squint as we may, we fail to see the qualifications that Microsoft purports to identify in our cases.” Id. at 10. Likewise, the Court rejected Microsoft’s argument that the Federal Circuit’s interpretation of § 282 must fail, because applying that interpretation of the phrase “presumed valid” renders superfluous the statute’s additional phrase, “[t]he burden of establishing invalidity of a patent . . . shall rest on the party asserting such invalidity.” Id. at 12. Although Justice Sotomayor (writing for the majority) seems to agree with Microsoft that the Federal Circuit’s interpretation renders some of the statute superfluous, the Court reminded Microsoft that “the canon against superfluity assists only where a competing interpretation gives effect ‘to every clause and word of a statute.'” Id. (citing Duncan v. Walker, 533 U.S. 167, 174 (2001)). The Court thus found the rule inapplicable here, where “no interpretation of § 282—including the two alternatives advanced by Microsoft—avoids excess language.” Id. at 13.

In addressing Microsoft’s second, more limited argument, the Court rejected Microsoft’s request for a variable standard of proof:

Our pre-1952 cases never adopted or endorsed the kind of fluctuating standard of proof that Microsoft envisions. And they do not indicate, even in dicta, that anything less than a clear-and-convincing standard would ever apply to an invalidity defense raised in an infringement action. . . . Nothing in § 282’s text suggests that Congress meant to depart from that understanding to enact a standard of proof that would rise and fall with the facts of each case.

Id. at 15-16.

Accused Infringers Have Options

The accused infringer, however, is not without options. Although the Court steadfastly affirmed the heightened standard of proof, it recognized that “new evidence supporting an invalidity defense may carry more weight in an infringement action than evidence previously considered by the [Patent Office].” Id. at 17. Indeed, the Patent Office’s judgment may lose significant force if it did not have all the material facts before it. Id. In turn, this may make it easier for the accused infringer to satisfy its burden (e.g., to use the new evidence to persuade the jury of a patent’s invalidity by clear and convincing evidence). Id. Accordingly, if faced with new evidence of invalidity, an accused infringer should consider taking the following actions:

  1. Request a jury instruction on the effect of new evidence not considered by the Patent Office. When requested, such an instruction “most often should be given.” Id. “When warranted, the jury may be instructed to consider that it has heard evidence that the [Patent Office] had no opportunity to evaluate before granting the patented.” Id.
  2. If the parties dispute whether the evidence presented to the jury differs from the evidence previously before the Patent Office, seek an instruction mandating that the jury consider that question. Id. at 18. “The jury may be instructed to evaluate whether the evidence before it is materially new, and if so, to consider that fact when determining whether an invalidity defense has been proved by clear and convincing evidence.” Id. (citing Mendenhall v. Cedarapids, Inc., 5 F.3d 1557, 1563-64 (Fed. Cir. 1993)).
  3. Remember that the clear and convincing standard of proof is an evidentiary standard that applies only to questions of fact to the trial court. Microsoft Corp. v. i4i Ltd. P’ship, — S. Ct. — 564 U.S. —, 2011 WL 2224428, at *12 (June 9, 2011) (Breyer, J., concurring). Accordingly, separate “factual and legal aspects of an invalidity claim . . . by using instructions based on case-specific circumstances that help the jury make the distinction.” Id. at *13. In addition, use interrogatories and special verdicts “to make clear which specific factual findings underlie the jury’s conclusions.” Id. “By preventing the ‘clear and convincing’ standard from roaming outside its fact-related reservation, courts can increase the likelihood that discoveries or inventions will not receive legal protection where none is due.” Id.

Conclusion

Despite Microsoft’s valiant challenge, yesterday’s unanimous opinion keeps the hurdle high for parties trying to show that a patent is invalid. Although accused infringers are not without their options, any modification of the clear and convincing standard itself now requires an Act of Congress.

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1All eight participating Justices concurred in the judgment.  Justice Sotomayor delivered the opinion of the Court, in which Justices Scalia, Kennedy, Ginsburg, Breyer, Alito, and Kagan joined.  Justice Breyer filed a concurring opinion, in which Justices Scalia and Alito joined.  Although Justice Breyer joined the Justice Sotomayor opinion in full, he wrote separately to emphasize that the clear and convincing standard of proof applies only to questions of fact, not to questions of law.  Justice Thomas filed an opinion concurring only in the judgment.  According to Justice Thomas, the heightened standard of proof applies because § 292 is silent and therefore does not alter the common-law rule.  Chief Justice Roberts took no part in the consideration or decision of the case.
2This case marks the third patent-law case released by the Supreme Court during the past two weeks.  Earlier this week, the Court ruled that the Bayh-Dole Act does not eclipse inventors’ rights. See Board of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., 563 U.S. —, 2011 WL 2175210 (June 5, 2011).  On May 31, 2011, the Supreme Court ruled that induced infringement of a patent required knowledge that the induced acts constituted patent infringement.  See Global-Tech Appliances, Inc. v. SEB S.A., — S. Ct. —, 2011 WL 2119109 (May 31, 2011).  Each of these cases affirmed the Federal Circuit.
3Indeed, the Court concluded that by the time Congress enacted the 1952 Patent Act, “a common core of thought” unified the decisions of courts across the country:

“[O]ne otherwise an infringer who assails the validity of a patent fair upon its face bears a heavy burden of persuasion, and fails unless his evidence has more than a dubious preponderance.  If that is true where the assailant connects himself in some way with the title of the true inventor, it is so a fortiori where he is a stranger to the [claimed] invention, without claim of title of his own.  If it is true where the assailant launches his attack with evidence different, at least in form, from any theretofore produced in opposition to the patent, it is so a bit more clearly where the evidence is even verbally the same.”

Id. (citing Radio Corp. of Am. v. Radio Eng’r Labs, Inc., 293 U.S. 1, 8 (1934).  As Justice Cardozo put it, “there is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence.”  Radio Corp. of Am., 293 U.S. at 2.