Klein v. Peterson

• Citation: 696 F. Supp. 695,8 USPQ 2d 1434
• Decision Date: 16 August 1988
• Docket Number: 87-2950.,Civ. A. No. 87-2661
• Parties: Arthur O. KLEIN, Plaintiff, v. Donald W. PETERSON, Defendant.
• Court: U.S. District Court — District of Columbia

696 F. Supp. 695

8 USPQ 2d 1434

Arthur O. KLEIN, Plaintiff, v. Donald W. PETERSON, Defendant.

Civ. A. Nos. 87-2661, 87-2950.

United States District Court, District of Columbia.

August 16, 1988.

William J. Carter, Carr, Goodson, Lee & Foret, Washington, D.C., for plaintiff.

Nathan Dodell, Asst. U.S. Atty., Washington, D.C. (Harris A. Pitlick, Associate Sol., Patent & Trademark Office, Office of the Sol., Arlington, Va., of counsel), for defendant.

MEMORANDUM AND ORDER

HAROLD H. GREENE, District Judge.

This matter is before the Court pursuant to 35 U.S.C. § 32 and Local Rule 213, which provides that a person "suspended or excluded from practice before the Patent Office may file a petition in this court against the Commissioner of Patents for review of such action...."

On August 20, 1984, a disciplinary proceeding, Nakamura v. Klein, was instituted in the Patent and Trade Office (PTO) against plaintiff pursuant to 35 U.S.C. § 32 and 37 CFR 1.348 (1984). Plaintiff was charged with four counts of misconduct arising out of the handling of eleven papers in ten separate patent applications, and in giving false answers in PTO Requirements for Information relating to two of the ten applications, in violation of 37 CFR §§ 1.344 and 1.56, DR 1-102(A)(4), and DR 6-101(A)(3) of the Code of Professional Responsibility of the American Bar Association.

On June 24, 1985, following an extensive period of discovery, an eight day hearing was had before an Administrative Law Judge (ALJ). Plaintiff was afforded the opportunity to put on a defense and to cross-examine the PTO's witnesses, and the parties were then given leave to file post-hearing submissions. On December 2, 1985 defendant moved to reopen or supplement the record based on newly discovered evidence. After requiring the PTO to disclose the new evidence to plaintiff, the hearing was reopened and the evidence submitted to the record. No testimony was taken at that one day session.

On May 2, 1986, the ALJ entered a Recommended Decision, holding that each of the charges was proven by clear and convincing evidence. The parties then filed exceptions to the Recommended Decision with the Deputy Commissioner, who was to review the ALJ's determination. The Deputy Commissioner on August 28, 1987 entered a decision in the disciplinary proceeding, which was withdrawn soon thereafter upon motion of the Solicitor. An Amended Decision, the decision under review in this case, was entered on October 19, 1987, essentially adopting the ALJ's recommendations and suspending plaintiff from practice before the PTO for a period of seven years. Execution of the last five years of suspension was suspended, and plaintiff was placed on probation for five years. The imposition of sanctions under the Decision was stayed pending appeal.

Plaintiff challenges the validity of the proceedings below on three grounds: (1) that the disciplinary process to which he was submitted was per se violative of due process; (2) that the proceedings were conducted in an arbitrary and capricious manner, and were therefore violative of due process; and (3) that the Solicitor failed to carry the burden of proving the charges by clear and convincing evidence. These arguments will be considered in turn.

It is clear that procedural due process is required in attorney discipline cases. See In re Ruffalo, 390 U.S. 544, 88 S.Ct. 1222, 20 L.Ed.2d 117 (1968). Plaintiff contends that the statutes and regulations governing disciplinary proceedings within the PTO are impermissibly vague in that they fail to clearly establish proper procedural safeguards and guidelines, applicable standards of conduct, or standards of proof, and that they are therefore per se violative of due process. But this conclusion is not compelled by precedent, as plaintiff suggests. The Supreme Court has held that administrative agencies should be "free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties." FTC v. Pottsville Broadcasting Co., 309 U.S. 134, 143, 60 S.Ct. 437, 441, 84 L.Ed. 656 (1939). Rather, the question whether plaintiff was deprived of his right to due process must be answered by an examination of the proceedings conducted against him.

A review of the administrative record shows that plaintiff was provided adequate notice of the charges, was able to depose those PTO officers involved with the investigation, was given the right to put on a defense and to confront adverse witnesses. Although plaintiff was denied access to some of the documents relating to his investigative file,¹ and to the complete files of previously adjudicated PTO disciplinary proceedings,² that denial did not constitute a violation of his due process rights. As plaintiff concedes, parties to agency proceedings are not entitled to pre-hearing discovery. See Silverman v. CFTC, 549 F.2d 28, 33 (7th Cir.1977). Discovery must be granted only if in the particular situation a refusal to do so would so prejudice a party as to deny him due process. See e.g., Withrow v. Larkin, 421 U.S. 35, 46, 95 S.Ct. 1456, 1464, 43 L.Ed.2d 712 (1975). The Court finds that the adverse rulings of the ALJ regarding discovery did not materially harm plaintiff and that no infringement of his due process rights flowed therefrom.

Plaintiff also alleges affront to his due process rights by reason of the ALJ's grant of defendant's Motion to Reopen or Supplement the Record, forcing plaintiff "to combat late evidence produced out of the context of the hearing" which he "was not in the position to fully analyze ... and to prepare a complete rebuttal." Plaintiff's Brief at 60. However, the new evidence offered by defendant consisted solely of checks, with pages of accompanying documents, from plaintiff's own law firm. Defendant's Brief at 53. Furthermore, plaintiff was given the evidence prior to the hearing and was permitted to defend against it in any manner he desired.³ The Court finds no error in the decision or the procedure regarding the reopened hearing.

Plaintiff has raised numerous other issues relating to alleged due process violations, all of which the Court has considered and deemed to be without merit.⁴ In particular, the Court finds the various rulings of the ALJ before, during, and after the hearing to be well within his sound discretion and not constituting any deprivation of due process. The disciplinary proceedings, as instituted against Klein, were neither per se nor in their application violative of plaintiff's constitutional right to due process.

Plaintiff also challenges the Deputy Commissioner's determination on substantive grounds, claiming that the PTO failed to show by clear and convincing evidence his guilt as charged.

The function of the Court in a case of this nature is not that of a trier of fact. Rather, the responsibility of the Court is "to review what has been done to determine whether or not a fair hearing has been had and whether there is substantial evidence to support the action of the Patent Office." Cupples v. Marzall, 101 F.Supp. 579, 582 (D.D.C.1952), aff'd, 204 F.2d 58 (D.C.Cir.1959); see also 5 U.S.C. § 706. The scope of review does not contemplate de novo analysis of determinations below involving factual disputes; particularly when reviewing questions necessitating an evaluation of witness credibility, the Court will accord great deference to the finder of fact. Judicial review in these types of patent proceedings is limited to determining whether, on the basis of the evidence, the agency had substantial evidence to rule as it did.

Plaintiff takes exception with the Patent Office's finding of intentional conduct, as required to satisfy the charges, from evidence which shows only gross negligence. The law of this Circuit is clear that fraud or dishonesty may not be inferred from mere negligence. In the proper circumstances, however, gross negligence may lead to a finding of inequitable conduct.⁵ Jaskiewicz v. Mossinghoff, 822 F.2d 1053, 1058 (D.C.Cir.1987). Whether intent should properly be inferred from a party's gross negligence is a matter of fact. No single factor or combination of factors can always be said to require an inference of intent to mislead; yet an individual facing...