SMU Law Review


In the last five years, the Supreme Court has had a frenzied approach to judicial review of agency action, with two wings of the Court pulling it in opposite directions. The ideological divide of the Court on deference to agency action was on stark display in three recent cases dealing with the Patent and Trademark Office’s (PTO’s) new proceeding for reevaluating issued patents (inter partes review (IPR)). Specifically, in three vacillating opinions, the Court expanded, contracted, and then again expanded the scope of whether and to what extent a decision by the PTO Director to institute this new proceeding can be reviewed by the Judiciary. Aside from the problem of having inconsistent holdings in this “institution trio” of cases, the framework developed thereby was also artificial, easily manipulated, and unmoored from reality. The Court got everything completely backwards in its reasoning—depriving the agency of discretion in allocating its own resources or relying on its superior expertise when the agency refused to institute an IPR proceeding (i.e., an institution denial), while tying the hands of the Judiciary in deciding questions of an agency’s authority to act when the agency chose to grant review.

This Article argues that the Court should have instead decided the question of reviewability by focusing on the pragmatic approach proposed in Heckler v. Chaney, respecting the traditional administrative law divide between agency action and inaction. The Court should have considered, as it did in Heckler, congressional intent, comparative institutional competence of the agency versus the courts, and the separation of powers paradigm in deciding to review agency action and inaction. The more sensible answer is that the courts should only be prohibited from reviewing agency inaction (i.e., denial of IPR institution). This approach allows the PTO to best use its expertise and knowledge of its resources to decide whether and to what extent to deny institution of an IPR, while allowing the courts to review the PTO’s adherence to statutory requirements if the PTO does decide to institute an IPR.

The approach also presents a variety of pragmatic benefits, such as eliminating the institution trio’s line-drawing issues, reducing current agency incentives for developing shortcuts in denying institution, and providing a better balance of institutional burdens. This Article introduces an intriguing proposition that a more functional approach to agency action may, in other contexts, provide a potential compromise that satisfies both sides of the ideological divide in the Court.