Halvonik v. Kappos

Decision Date03 January 2011
Docket NumberCivil Action No. 09–00326 (CKK).
Citation759 F.Supp.2d 31
PartiesJohn P. HALVONIK, Petitioner,v.Hon. David J. KAPPOS, Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office, Respondent.
CourtU.S. District Court — District of Columbia

OPINION TEXT STARTS HERE

John P. Halvonik, Rockville, MD, pro se.Fred Elmore Haynes, U.S. Attorney's Office, Washington, DC, for Respondent.

MEMORANDUM OPINION

COLLEEN KOLLAR–KOTELLY, District Judge.

Petitioner John P. Halvonik (Halvonik), an attorney proceeding pro se,1 commenced this action on February 19, 2009 against Respondent David J. Kappos (Kappos), in his official capacity as the Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office (the USPTO),2 seeking review of a decision excluding Halvonik from practicing as an attorney before the USPTO for a period of five years. Presently before the Court are Kappos' [27] Motion for Judgment of Affirmance and Halvonik's [33] Motion for Judgment of Reversal. For the reasons set forth below, the Court shall GRANT Kappos' Motion for Judgment of Affirmance, DENY Halvonik's Motion for Judgment of Reversal, and DISMISS this action in its entirety.

I. BACKGROUND

Congress vested the USPTO with the statutory authority to promulgate regulations “govern[ing] the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office.” 35 U.S.C. § 2(b)(2)(D). Pursuant to that authority, the USPTO has enacted a Code of Professional Responsibility (the “Code”), 37 C.F.R. §§ 10.20 et seq. , which includes a number of Disciplinary Rules that are “mandatory in character and state the minimum level of conduct below which no practitioner [before the USPTO] can fall without being subjected to disciplinary action.” Id. § 10.20(b). If an attorney fails to comply with the Code, the USPTO has the authority, upon conducting an appropriate hearing, to “suspend or exclude, either generally or in any particular case, [the attorney] from further practice before the Patent and Trademark Office.” 35 U.S.C. § 32.

A. The Commencement Of Disciplinary Proceedings Against Halvonik

Halvonik is an attorney and was—prior to the resolution of the disciplinary proceedings at issue in this action—registered to practice and represent others in the prosecution of patent applications before the USPTO. On June 28, 2006, having received client complaints directed towards Halvonik, the USPTO's Office of Enrollment and Discipline (the “OED”) initiated disciplinary proceedings against Halvonik, charging him with various counts of professional misconduct in violation of the Code.3 See Compl. & Notice of Proceedings (June 28, 2006), at AR1–6.4 Halvonik responded to the charges in writing. See Answer (Sept. 18, 2006), at AR9–11. The parties then proceeded to conduct discovery and engage in an extensive motion practice on the administrative level.

A two-day hearing was held before Administrative Law Judge Barbara A. Gunning (the “ALJ”) on September 19 and 20, 2007, which Halvonik attended representing himself. See Hr'g Tr. (Sept. 19, 2007), at AR12–357; Hr'g Tr. (Sept. 20, 2007), at AR358–628. On July 31, 2008, after affording the parties an opportunity to submit post-hearing briefing, the ALJ issued a thorough forty-four page decision (the “Initial Decision”). See Initial Decision (July 31, 2008), at AR629–673. Finding that Halvonik had committed multiple willful and egregious acts of professional misconduct in violation of the Code—including, but not limited to, commingling client and personal funds, failing to promptly refund client fees that had not been earned, and neglecting to prosecute client matters in a timely manner—the ALJ concluded that excluding Halvonik from practice before the USPTO for a period of five years was the appropriate sanction. Id. at AR640–72.

B. Halvonik's “Appeal” Of The ALJ's Initial Decision

By regulation, a party aggrieved by an administrative law judge's initial suspension or exclusion order may appeal that decision to the Director of the USPTO (the “Director”):

Within thirty (30) days from the date of the initial decision of the administrative law judge under § 10.154, either party may appeal to the [Director] * * * An appeal or cross-appeal by the respondent will be filed and served with the [OED] in duplicate and will include exceptions to the decisions of the administrative law judge and supporting reasons for those exceptions.

37 C.F.R. § 10.155(a) (emphasis added).5 Any such administrative appeal is decided by the Director or his designee, who “may affirm, reverse or modify the initial decision or remand the matter ... for such further proceedings as the [Director] may deem appropriate.” Id. § 10.156(a).

Consistent with this procedural framework, the ALJ's Initial Decision in this case concluded with the following notice, appearing in bold text:

Pursuant to 37 C.F.R. § 10.155, any appeal by Respondent from this Initial Decision ... must be filed in duplicate with the [OED] ... within thirty (30) days of the date of this Decision. Such appeal must include exceptions to the Administrative Law Judge's Decision. Failure to file such an appeal in accordance with Section 10.155 above will be deemed to be both an acceptance by Respondent of the Initial Decision and that party's waiver of rights to further administrative review.

Initial Decision (July 31, 2008), at AR672 (emphasis altered). Halvonik filed a Notice of Appeal within the designated thirty-day period, a document which stated, in one sentence: Respondent hereby appeals the final decision of the ALJ in the above referenced case.” Notice of Appeal (Sept. 2, 2008), at AR674. Halvonik neither identified exceptions to the ALJ's Initial Decision nor supplied the reasons for his appeal.6Id.

Subsequently, the OED filed a brief requesting that the ALJ's Initial Decision be affirmed. See OED's Reply to Resp't's Appeal (Oct. 1, 2008), at AR675–696. The OED argued that the Initial Decision should be affirmed on substantive grounds because it was supported by clear and convincing evidence, and on procedural grounds because Halvonik failed to identify any reversible error in his Notice of Appeal. Id. Halvonik responded on November 10, 2008. See Response to OED's Reply (Nov. 10, 2008), at AR697–714.

On January 21, 2009, the Director, through his designee, the General Counsel for the USPTO, issued a decision affirming the ALJ's Initial Decision in its entirety (the “Final Decision”) on purely procedural grounds. See Final Decision (Jan. 21, 2009), at AR715–718. Specifically, the Director concluded that, although timely, Halvonik's appeal “failed to satisfy the regulatory requirements for appeal”—namely, in that Halvonik failed to include exceptions to the ALJ's decision below as required by 37 C.F.R. § 10.155(a). Final Decision (Jan. 21, 2009), at AR717. In so finding, the Director emphasized that the [t]he requirement that an appeal include the exceptions on which the appellant relies reflects the public interest in the prompt resolution of disciplinary matters.” Id.

C. The Present Action

Halvonik commenced this action on February 19, 2009 pursuant to 35 U.S.C. § 32 and Local Rule LCvR 83.7, seeking review of the decision to exclude him from practicing as an attorney before the USPTO for a period of five years. See Petition for Review (Feb. 19, 2009), Docket No. [1].

On March 9, 2010, Kappos filed a Motion for Judgment of Affirmance, the thrust of which is that, in issuing the Final Decision, the Director properly concluded that Halvonik failed to comply with the procedural requirements for an administrative appeal. See Resp't's Mot. for J. of Affirmance, Docket No. [27]. On April 19, 2010, Halvonik filed an opposition. See Pet'r's Opp'n to Resp't's Mot. for J. of Affirmance (“Pet'r's Opp'n”), Docket No. [34]. Kappos elected not to file a reply. The motion is therefore fully briefed and ripe for adjudication.

Separately, on April 21, 2010, Halvonik filed a Motion for Judgment of Reversal. See Pet'r's Mot. for J. of Reversal (“Pet'r's Mem.”), Docket No. [33]. While this action is ostensibly a challenge to the Director's Final Decision, see Petition for Review (Feb. 19, 2009), at 1, Halvonik's arguments in support of reversal are directed towards alleged errors in the ALJ's Initial Decision. Indeed, the lion's share of Halvonik's motion is dedicated to the assertion that the ALJ “incorrectly concluded [that he] had violated a fiduciary duty and because a violation of such duties are [sic] very serious, the penalty in this case should be reduced.” Pet'r's Mem. at 21. Kappos filed an opposition to Halvonik's motion on May 10, 2010. See Resp't's Opp'n to Pet'r's Cross–Mot. for J. of Reversal, Docket No. [36]. Halvonik elected not to file a reply, rendering the motion fully briefed and ripe for adjudication.

II. LEGAL STANDARD

The District Court for the District of Columbia serves as the exclusive forum for individuals petitioning for review of a decision suspending or excluding them from practice before the USPTO. Franchi v. Manbeck, 972 F.2d 1283, 1288 (Fed.Cir.1992). By Local Rule,7 petitions must be filed “within 30 days after the date of the order recording the [Director's] action.” Local Rule LCvR 83.7. The administrative record of the proceedings below “constitute[s] the sole basis for the court's review,” id., and the action must be affirmed on the grounds originally stated by the agency—the reviewing court may not attempt to supply a reasoned basis for the decision where none is given, Motor Vehicle Mfrs. Ass'n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). Because the USPTO, and not the federal courts, “is vested with the responsibility to protect the public from unqualified practitioners before the Patent Office,” the reviewing court's function is a limited one, confined to “deter...

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