No Judges Allowed: The Effect of Oil States Energy Services, LLC v. Greene’s Energy Group, LLC on Administrative Agency Review of Granted Rights

By Gabriella D’Agostini*

On November 27, 2017, the United States Supreme Court heard oral arguments in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC.[i] The primary issue on appeal was whether inter partes review (“IPR”) —an adversarial process used by the United States Patent and Trademark Office (“USPTO”) that analyzes the validity of existing patents—impermissibly circumvents protections guaranteed by Article III and the Seventh Amendment of the Constitution.[ii] Regardless of the Supreme Court’s ultimate decision on the constitutionality of IPR,[iii] its decision will most likely extend beyond the realm of patent law and have implications for all administrative agencies that partake in after-the-fact review of granted rights. For instance, the United States Citizenship and Immigration Services (“USCIS”) post-issuance review of green cards is arguably materially analogous.

IPR is an administrative adjudicative proceeding conducted by the Patent and Trial Appeal Board (“PTAB”) of the USPTO in which the PTAB reviews the validity of a patent after the patent has been issued.[iv] IPR was instituted by the America Invents Act in an effort to allow faster and more efficient post-grant patent challenges with the benefit of litigation-style procedures.[v] In response to a patent infringement lawsuit filed by Oil States Energy Services, LLC (“Oil States”) alleging that Greene’s Energy Group, LLC (“Greene’s Energy”) infringed its patent, Greene’s Energy petitioned the PTAB for IPR.[vi] The PTAB concluded that Oil States’ patent, which was previously approved by the USPTO, was invalid.[vii] Oil States appealed the PTAB’s decision to the United States Court of Appeals for the Federal Circuit, arguing that IPR violates Article III and the Seventh Amendment by depriving property owners of their right to adjudication in an Article III court with a jury present.[viii] The Court of Appeals affirmed the PTAB’s decision without issuing an opinion.[ix] As a result, Oil States appealed to the Supreme Court, which granted certiorari on June 12, 2017.[x]

In defense of the PTAB’s decision, Greene’s Energy argued that Congress was allowed to assign the matter to an administrative agency because patent rights were public and, thus, were “revocable privileges” that did not need to be determined in an Article III court.[xi] Greene’s Energy further argued that even if the Seventh Amendment right to a jury trial applied to administrative proceedings, it would not apply to the revocation of patent rights, as the invalidity defense is equitable in nature and thus can be determined by a judge without a jury present.[xii]

Although the Supreme Court has not yet ruled on this issue, the decision will have implications beyond the realm of intellectual property. A Supreme Court holding regarding Article III will have broad implications on the administrative state’s ability to unilaterally revoke granted rights without the interference of the federal judicial system.[xiii] For example, the forthcoming Oil States decision may affect the authority of USCIS to rescind green card status from lawful permanent residents (“LPRs”) to which it has already granted green card status.

USCIS grants permanent residence, or green card status, to immigrants who plan to live and work permanently in the United States.[xiv] In limited circumstances, USCIS retains the right to initiate rescission proceedings against a LPR if USCIS determines that the LPR was not eligible for an adjustment of status at the time permanent residence was granted.[xv] Under the current system, if USCIS decides to initiate rescission proceedings against a LPR, it is a requirement that an adversarial hearing is held before an immigration judge who determines whether the rescission claim is meritorious.[xvi] Although immigration judges are employed by the Executive Office of Immigration Review (“EOIR”)—which is a component of the Department of Justice—they are not employees of USCIS and, more importantly, they preside over hearings that are held in open court.[xvii]

However, the Supreme Court’s decision in Oil States may expand or contract the authority of USCIS to carry out its current green card rescission procedure.

If the Supreme Court strikes down the constitutionality of IPR because it does not occur in Article III courts, it may invalidate the authority of USCIS to conduct rescission proceedings for LPRs outside of Article III courts. Immigration courts are not Article III courts, as they derive their authority from congressional legislation, rather than from Article III of the Constitution.[xviii] Consequently, an Oil States holding that invalidates IPR may also invalidate USCIS rescission proceedings in immigration court because both proceedings are administered through agency adjudication, rather than adjudication in Article III courts.

In contrast, if the Supreme Court upholds the constitutionality of IPR outside of Article III courts, it may reaffirm the status quo of USCIS’s execution of rescission proceedings through administrative hearings. Moreover, such a holding may inspire USCIS to depart from administrative hearings in open court and, following in the footsteps of the USPTO, create an executive board within the agency that has the power to rescind green card status unilaterally and ex parte from LPRs. Not only would this structure deprive LPRs from making their cases regarding why they should maintain permanent residence, but it will also remove any interagency oversight from the adjudication process—as EOIR administrative law judges will no longer review the actions of USCIS.[xix] As a result, it would likely diminish the transparency of USCIS decisions and undermine the accountability of the agency.[xx]

Alternatively, if the Supreme Court holds that IPRs are unconstitutional under the Seventh Amendment because of a lack of a sitting jury, its holding would unlikely extend beyond USPTO IPR to USCIS rescission proceedings because the Supreme Court has yet to hold that non-citizens are guaranteed the right to a civil jury under the Seventh Amendment[xxi] or that possession of a green card is a property right.[xxii] Thus, a holding centering on Article III is likely to have a more widespread effect on other agencies.

With the Supreme Court addition of Justice Gorsuch, who is an avid critic of administrative deference, the scale may tip in favor of upholding the authority of Article III courts over agency tribunals.[xxiii] Only time will tell, but present-day administrative agency adjudication may very well see a fundamental change.

*Gabriella D’Agostini is a Junior Editor on MJEAL. She can be reached at gmdagost@umich.edu.


The views and opinions expressed in this blog are those of the authors only and do not reflect the official policy or position of the Michigan Journal of Environmental and Administrative Law or the University of Michigan.

[i] Transcript of Oral Argument at 1, Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, No. 16-712 (U.S. Nov. 27, 2017).

[ii] Issue, Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, SCOTUSblog (Nov. 27, 2017), http://www.scotusblog.com/case-files/cases/oil-states-energy-services-llc-v-greenes-energy-group-llc/.

[iii] See id.

[iv] See Inter Partes Review, U.S. Patent and Trademark Office (July 17, 2014, 6:57 PM), https://www.uspto.gov/patents-application-process/appealing-patent-decisions/trials/inter-partes-review.

[v] WilmerHale, A Practical Guide to Inter Partes Review, http://www.wilmerhale.com/uploadedfiles/wilmerhale_shared_content/wilmerhale_files/events/wilmerhale-webinar-ipr1-20jun13.pdf (last visited Feb. 13, 2018).

[vi] Legal Info. Inst., Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, https://www.law.cornell.edu/supct/cert/16-712 (last visited Feb. 13, 2018).

[vii] Id.

[viii] Id.

[ix] Id.

[x] Id.

[xi] Id.

[xii] Id.

[xiii] See id.

[xiv] Green Card, U.S. Citizenship and Immigration Servs., https://www.uscis.gov/greencard (last updated Sept. 29, 2017).

[xv] 8 C.F.R. § 246.1 (2018).

[xvi] See U.S. Citizenship and Immigration Servs., USCIS Adjudicator’s Field Manual § 26.1 (Redacted Public Version 2013).

[xvii] Hon. Denise Noonan Slavin & Hon. Dana Leigh Marks, Conflicting Roles of Immigration Judges: Do You Want Your Case Heard by a “Government Attorney” or by a “Judge?”, 16 Bender’s Immigration Bulletin 1785, 1786 (2011).

[xviii] TRAC Immigration Report, TRAC Immigration, http://trac.syr.edu/immigration/reports/194/include/side_4.html (last visited Feb. 20, 2018).

[xix] See Megan Davy et al., Who Does What in U.S. Immigration (Dec. 1, 2005), https://www.migrationpolicy.org/article/who-does-what-us-immigration.

[xx] Cf. Nina A. Mendelson, Disclosing “Political” Oversight of Agency Decision Making, 108 Mich. L. Rev. 1127, 1131, 1137 (2010).

[xxi] See Amy Sherman, Do Undocumented Immigrants Have Constitutional Rights?, Politifact (Mar. 29, 2017, 3:08 PM), http://www.politifact.com/florida/statements/2017/mar/29/florida-immigrant-coalition/do-undocumented-immigrants-have-constitutional-rig/.

[xxii] Cf. Allison B. Tirres, Ownership Without Citizenship: The Creation of Noncitizen Property Rights, 19 Mich. J. Race & L. 1, 50 (2013).

[xxiii] Cf. Daniel Fisher, Gorsuch Takes (Another) Shot at Administrative Agencies, Chief Executive, https://chiefexecutive.net/gorsuch-takes-another-shot-administrative-agencies/ (last visited Feb. 21, 2018).

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