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36. Is the court likely to grant the attorney's motion to dismiss?
A client sued his former attorney in federal court for malpractice. The client had retained the attorney to file and prosecute U.S. patent applications. The client alleged that if the attorney had not omitted from the client's patent application a portion of the computer source code for the client's invention, the resulting U.S. patent would not have been held invalid for indefiniteness. The malpractice claim requires analysis of U.S. patent law and proof of the patent's invalidity. Claims arising under U.S. patent law are within the exclusive jurisdiction of the federal courts. In response to the former client's complaint, the attorney moved to dismiss for lack of subject-matter jurisdiction.
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28 U.S.C. § 1331 grants original jurisdiction over federal question cases. This grant extends to all civil actions arising under the Constitution, laws, or treaties of the United States. In the vast majority of federal question cases, federal law will be the source of the cause of action. This federal question must be presented in the plaintiff's complaint as part of a well-pleaded complaint.
An «embedded federal issue» is either:
(i) a federal law issue that will be central to determining whether a defense asserted or expected to be asserted by the defendant is valid; OR
(ii) a federal law issue whose resolution will help determine the validity of the plaintiff's state law claim, even though the direct source of the plaintiff's claim is state law.
An example of the latter is when the plaintiff asserts a state law legal malpractice claim and the core issue (whether the defendant committed malpractice) depends on some aspect of federal law that was relevant in the underlying case that gave rise to the malpractice claim. But see Gunn v. Minton, 568 U.S. 251 (2013) (finding that «state legal malpractice claims based on underlying patent matters will rarely, if ever, arise under federal patent law. .. . Although such cases may necessarily raise disputed questions of patent law, those cases are by their nature unlikely to have the sort of significance for the federal system necessary to establish jurisdiction) (emphasis added).
If there IS an embedded federal issue, the case will qualify for federal question jurisdiction despite it being a state law claim. While the plaintiff should always place the federal question at the center of the complaint, the fact that an issue of federal law might be somehow relevant in deciding the case does not necessarily mean that an «embedded federal issue» exists.
To determine if there is an embedded federal issue, courts consider whether:
(i) the embedded federal issue will be necessarily raised in the federal case;
(ii) the federal issue will be actually disputed in the case;
(iii) the federal issue embedded is substantial; AND
(iv) allowing this exception will not disrupt the federal-state balance of judicial decision-making.
D is correct. Federal subject-matter jurisdiction extends to any case in which a well-pleaded complaint asserts either a cause of action arising under federal law or a state law claim where a plaintiff's right to relief depends on the resolution of a substantial question of federal law. It is necessary to determine whether the federal element is essential to the plaintiff's case.
Here, the claim is based on state malpractice law. The embedded federal issue is not sufficiently substantial to support federal jurisdiction because it presents only a hypothetical question: Would the inclusion of a piece of computer source code in the patent application have prevented the patent from being held invalid for indefiniteness? The plaintiff's right to relief does not depend on the resolution of a substantial, disputed question of federal patent law. Even though the question correctly states that patent law claims are within the exclusive jurisdiction of the federal courts, the small patent law analysis, in this case, is not outcome determinative. This fact pattern is based on Gunn v. Minton, where the Court held that state malpractice claims based on federal patent law are not considered substantial enough to establish subject-matter jurisdiction in federal courts.
A is incorrect. As stated above, the plaintiff's right to relief does not depend on the resolution of a substantial, disputed question of federal law, as established by the Supreme Court in Gunn v. Minton.
B is incorrect. Federal patent law does not completely preempt the plaintiff's malpractice claim in this case. The patent issue involved is not a substantial, disputed question of federal patent law that would support federal jurisdiction.
C is incorrect. A claim based on state law might still arise under federal law in some instances. Not all state law-created claims are automatically blocked from federal court. In this case, the claim is not allowed because there is not a substantial, disputed question of federal patent law that would support federal jurisdiction.