November 23, 1998 – 8:45 a.m.
The regular meeting of the State Board of Examiners was held November 23, 1998 at 89:45 a.m. in the JRW East Conference Room.
1. Incident #980609 – Request for authorization to issue deficiency warrants in the amount of $232.26 for reimbursement of response costs incurred when assisting the Idaho Criminal Investigations Bureau in responding to a methamphetamine lab in Pocatello, Idaho on June 3, 1998, pursuant to Idaho Code § 39-7110.
2. Incident #980613 – Request for authorization to issue deficiency warrants in the amount of $2,088.13 for reimbursement of response costs incurred in a hazardous substance incident near Tamerac, Idaho on June 6, 1998, pursuant to Idaho Code § 39-7110.
3. Incident #980617 – Request for authorization to issue deficiency warrants in the amount of $607.22 for reimbursement of response costs incurred when assisting the Idaho Criminal Investigations Bureau in responding to a methamphetamine lab in Pocatello, Idaho on June 4, 1998, pursuant to Idaho Code § 39-7110.
4. Incident #980719 – Request for authorization to issue deficiency warrants in the amount of $726.29 for reimbursement of response costs incurred when assisting the Idaho Criminal Investigations Bureau in responding to a methamphetamine lab in Horseshoe Bend, Idaho on July 10, 1998, pursuant to Idaho Code § 39-7110.
5. Incident #980622 – Request for authorization to issue deficiency warrants in the amount of $372.20 for reimbursement of response costs incurred in a hazardous substance incident in Boise, Idaho on June 18, 1998, pursuant to Idaho Code § 39-7110. The paramedics expense of $872.58 is deferred and under advisement.
6. Incident #980726 – Request for authorization to issue deficiency warrants in the amount of $2,048.38 for reimbursement of response costs incurred when assisting the Idaho Criminal Investigations Bureau in responding to a methamphetamine lab in Kooskia, Idaho on July 10, 1998, pursuant to Idaho Code § 39-7110.
Request for authorization to pay 35.5 hours compensatory time for Dave Davies, IT Systems Analyst, accrued as of November 2, 1998. Mr. Davies is involved on high priority projects and his vacation leave balance is close to maximum allowed.
Request for authorization to pay 94 hours overtime for Michael R. Denney, Supervising Resource Manager, accrued this summer while on assignment as a member of the National Fire Prevention Team.
Request for authorization to reimburse Mr. Kenneth Crane $540.00 extra labor costs for the packing, loading and unloading in his promotional transfer from the Department of Lands office in Idaho Falls to Boise, pursuant to State Moving Policy, X. The Board of Examiners had previously approved moving expenses up to $5,000 and Mr. Crane's expenses came to less than $1,500.00.
Request for authorization to extend the 1385 hour limitation on temporary employees who were hired to work in disaster recovery for the Bureau of Disaster Services, pursuant to Idaho Code §67-5302(31). It normally takes from two or three years to close out a disaster. This request only encompasses employees who are working on disaster recovery and when the disaster is closed out, their appointment will be terminated.
13. Notification that Ms. Sue Flammia, of the firm of Flammia & Solomon, has been appointed to represent the Department of Health and Welfare, Bureau of Child Support, in child support suits, pursuant to Idaho Code § 67-1409.
14. Notification that Mr. Richard Skinner, of the firm of Skinner Fawcett, has been appointed to represent, as bond counsel, the Idaho Water Resources Board, pursuant to Idaho Code § 67-1409.
15. Notification that Mr. Merlyn W. Clark, of the firm of Hawley, Troxell, Ennis & Hawley, has been appointed to represent the Idaho Department of Health and Welfare in the Wikse v. Dept. of Health & Welfare, Case No. CV-OC-98-03123D, pursuant to Idaho Code § 67-1409.
16. Notification that Mr. Dennis L. Cain, of the firm of Beer & Cain, has been appointed to represent the Office of Attorney General in the Linda D. Whipple, Unemployment Insurance Claim, pursuant to Idaho Code § 67-1409.
17. Notification that Mr. Craig W. Mosman, of Mosman Law Offices, has been appointed to represent the Department of Correction in the Crawford v. Correction, Case No. 25033, pursuant to Idaho Code § 67-1409.
18. Notification that Mr. Frank P. Kotyk, of Cantrill, Skinner, Sullivan & King, has been appointed to represent the Department of Transportation in the Dachlet v. State of Idaho, et al., Case No. CV-PI-94-00017, pursuant to Idaho Code § 67-1409.
19. Notification that Mr. Robert G. Hamlin, of Hamlin & Sasser, P.A., has been appointed to represent the Real Estate Commission in the Nordling v. Jones, et al., CIV-98-0418-S-BLW, pursuant to Idaho Code § 67-1409.
Governor: The meeting of the State Board of Examiners will come to order. We have a Consent Agenda before us. Is there a motion?
Attorney General: Mr. Chairman, I would move for the adoption of the Consent Agenda.
Governor: That is one through 19. Is there discussion? There being none, all in favor will indicate by saying aye.
Opposed, nay. The Chair votes aye. The ayes have it. The motion is carried.
On behalf of the Information Technology Resource Management Council (ITRMC) request for authorization for the temporary removal of the $1,000 bonus cap for the IT related classifications (154 classified and non-classified listed in the attachment).
Governor: Regular Agenda. Department of Administration, number 20.
State Controller: Governor, we have a proposal from the Department of Administration representing the ITRMC, the Information Resource Management Council, regarding bonuses for specified information technology positions. There is a very well written letter in the file justifying. Also the director, Pam Ahrens, is here. She may want to respond to this. As you are aware from our prior conversations, this is a major problem in state government right now, being competitive for these information technology positions. A lot of this is being compounded by the Year 2000 situation but there are also a lot of other factors involved. It would probably be a good idea to listen to the director for a moment on this.
State Controller: She is accompanied by Miles Browne who is the henchman from the Information Technology Council.
Pam Ahrens: Good morning, Governor, members of the Board of Examiners. First let me say that I am here as the chairman of the Information Technology Resource Management Council and there are other Council members here as well in support of this request and would certainly be prepared to answer questions. J. D., of course. Linda Caballero, Director of the Department of Health and Welfare; Dwight Bower, Director, Department of Transportation; Craig Potcher is with the Department of Correction and handles their information systems. Also from the Department of Administration are Rick Thompson; our Deputy Attorney General Joanna Guilfoy; and Rebecca Fry, Human Resource Officer. You know Miles Browne.
The request is that the $1,000 bonus cap as defined in the Idaho Code be removed for one year and the list of classifications that we would like to apply that to, 154, are listed for you. There are about 850 employees that fit within that cap. I don't need to tell you that the state is experiencing HR crisis in the recruitment retention of IT staff and this situation is impacting state government's ability to provide services. According to some national consultants there are over 200,000 unfilled jobs in the nation in IT and that for those jobs in that classification their salaries are raising on a yearly basis about 20%, which is compared to about 4% for other classifications. The loss of state government IT professionals is occurring at an alarming rate and we have lost in the last twelve months 116 individuals, and just within the last few months, 21. The loss is creating a serious adverse impact on our ability to provide services to our citizens, let alone the Year 2000 project. We believe that this shortage is going to go on for quite some time. To give you a bit of an example we have provided you some pie charts with the experience the Department of Health and Welfare and the Department of Correction has had over the last few months.
As you know, Governor, we met on August 12, 1997 with all of your directors to discuss some strategies on how to alleviate the problem. We have implemented some of those strategies. One of those is the Information Technology Resource Management Council training program that we have going. It is a concept of growing our own. We have conducted 303 classes, and about 1,300 students have participated. The IPC has removed the hiring situation so that now we can hire off of resumes. We have numerous other strategies we will pursue. This one request is one of many. We are going to have to continue to be very aggressive with our recruitment and not just wait for people to come in off the street. We are going to have to go find the folks to continue. Council believes that this request enables state agencies to award multiple bonuses throughout the year for such recognition as milestones, project completion and longevity, to provide a mechanism by which to increase the employee's salary without increasing the base, provide greater flexibility in recruiting quality candidates and provide greater flexibility and incentive for retention of quality candidates. The temporary removal of the cap would be under the following guidelines. This request would be for IT related classifications only as listed in the attachment. The temporary exemption would be for one year only and a complete accounting and report would be submitted to the Board of Examiners at the end of this year regarding the usage of the bonuses. In summary, it is just one of many things we are going to have to do to have qualified staff for information technology. With that, sir, I would entertain if you would like to hear from the directors of other departments.
Governor: Thank you, Pam. I think that we have all received a lot of information concerning this problem and I certainly share your view that we cannot continue to let our best people get pirated away. That is within our ability. We cannot cover everything but I think we have to put up a fight for these folks. Sears alone has been taking a lot of our good ones. So I would certainly agree that we need this. What do you think, Pete?
Secretary of State: Governor, I agree. The Sub-Committee has studied this and I can vote along with the Sub-Committee's recommendation.
Attorney General: Governor, Pam, does this classification cover in-house information technology specialists? As an example, within the Office of the Attorney General?
Pam Ahrens: Governor, Mr. Attorney General, yes, it would. I think we talked about that in the other classifications and obviously your folks are non-classified. You have the list of classifications. There are over 154 different classifications.
Governor: Of course, there is the difficulty of defining it to the extent that it won't be abused.
Governor: The whole thing is dangerous ground and that is the only reluctance I have to get into it because you extend the definition far enough everybody is going to complain that runs a computer.
Pam Ahrens: May I make a comment to that line. Our major concern is not losing these people to state government, and defining state government as an enterprise-wide all the state government, all the elected officials, as you would in a corporate environment. These are people who also need career ladders if they go from one agency to another, but they stay with us as an employer. That is what we are after. We are not always going to be able to keep them in each department, but one of the complaints sometimes in state government is that there is no career ladder. What we are talking about is keeping these people that would be cross trained from one agency to the other and staying with state government.
State Controller: Governor, in respect to the situation the Attorney General has mentioned, as elected officials we don't have to follow the Personnel Commission's classifications. I think in most cases we try to because why invent the wheel. That has already been done. We have a request following this for a project related bonus system that was approved by the legislature, and part of the reason we are doing this even though we think this proposal will pass, is some of the people we are recommending giving bonuses to do not fall into these classifications. We didn't use that particular classification or these people had other classifications but yet were in an integral part of the Year 2000 conversion. So I think in the situation Al has raised we would have to come in on an individual case and say this person falls within this classification as defined by that particular elected officials. So I think there are some safety valves built in.
Governor: Darrell is pointing out here that if we want to be sure of what we are talking about under 20 in the second paragraph, the 154 classified and non-classified listed in the attachment, we could limit the motion to that if that is what we want.
Ben Ysursa: Governor, members of the Board of Examiners, the Sub-Committee discussed this item and the intent of our recommendation was that comparable positions in the non-classified positions would also be covered by this. Sometimes the Secretary of State, or Controller's, or Attorney General's Office, or other non-classified certainly have information technology people in there who are probably at the similar classifications but maybe not exact. The intent of the Sub-Committee was to treat them all the same.
Governor: I think that wisdom would have us stay on the side of caution here and limit the scope as much as we can to this original motion. We can always add to it later. If you open the doors too wide you may be sorry. What is the proposed motion?
Attorney General: The Sub-Committee's recommendation is outlined on the agenda that I have. $6,000 cap.
Governor: In the best of worlds nobody should be limited. That is, the managers should have the discretion to reward what they need to keep their good people but we do have a personnel system and a classified system that needs to be kept in its integrity as much as possible. Back before we started the Hay Plan there really wasn't wide discretion with bonuses if I recall correctly but there was the ability to give substantial and frequent raises to your favorites without any real basis. And that was abused to a great degree before they put the Hay Plan in.
State Controller: One thing you might consider if you would broaden this a little bit to include related positions in the non-classified positions. It is going to be reviewed in a year. There will be a report come to the Board of Examiners in a year and it can be reviewed and see what has been done.
Governor: What is your desire, Al?
Attorney General: Well, Governor, I can certainly understand the need. I have the same problem in the Office of the Attorney General dealing with attorneys. I think we are in a unique situation with the Year 2000 sneaking upon us, banks threatening to shut down and all sorts of things happening. I think it is exaggerated but the fact of the matter is people are paying big money to these computer wizards to anticipate the problem so I could go along with the Sub-Committee's recommendation of putting a cap of $6,000 per bonus per year.
Governor: The Chair would entertain a motion.
Attorney General: I would so move.
Secretary of State: I will second it.
Governor: Is there further discussion? All will signify by saying aye.
Opposed no, the ayes have it. The Chair votes aye.
Request for authorization to grant bonuses not to exceed $6,000 in accordance with House Bill No. 822, to provide one-time bonuses upon the satisfactory completion of the Year 2000 project by various divisions in the office.
State Controller: Governor, number 21 is a request from our office to grant bonuses not to exceed $6,000 pursuant to authority given to our office by the legislature in Section 8 of our appropriation bill for this current fiscal year upon satisfactory completion of the Year 2000 projects, and only to employees who have served in the office for more than a year. We are at that point now. We think we are pretty close with the satisfactory completion of the projects and our recommendation is that there are about 30 employees we are looking at who have had a major contribution. We got it done way ahead of schedule, way under budget. We have some very talented, dedicated employees. Most of the critical team has stuck with us. We have lost several of our newer programmers to Sears, primarily, but they have stuck with us and we feel they deserve this.
Governor: Is this strictly IT people or are some supervisory people and adjunct people?
State Controller: I don't believe there are any supervisory people involved. I think there are four employees in the Payroll Division and three employees in the Accounting Division that were specifically allocated to the Year 2000 problems for payroll or accounting to work with the folks in the Computer Center Division. The language in the appropriation bill gives us the discretion for any employees.
State Controller: Our office last year.
Secretary of State: House Bill 822.
State Controller: Yes. In Section 8 it says, "It is legislative intent that the moneys provided by this appropriation for the retention of employees deemed to be critical to the completion of the Year 2000 project be distributed in the form of one-time bonuses upon the satisfactory completion of the Year 2000 project, and shall not be distributed to employees who have been employed by the State Controller for less than one (1) year immediately prior to the distribution." And we feel that they have met that. Their loyalty in staying with us has really benefited the state.
Governor: I don't have a problem with the ones that are going to get pirated off somewhere else. But I am not sure that applies to all of them.
State Controller: Those other employees are just as valuable and…..
Governor: Well, maybe I think all of mine are just as valuable and everybody else does.
State Controller: They were specifically allocated for the Year 2000 project as it related to payroll or accounting. Those same skills are also in great demand. We are in a headquarters town and what they are doing here – the Boise Cascades, Hewlett Packards and Simplots are doing in their corporate headquarters also. But that is our recommendation.
Secretary of State: But not to exceed $6,000. It may be less.
State Controller: Oh, yes. It is actually going to allocated on percentage of effort. We have tried to allocate by percentage of effort in this.
Attorney General: J.D., what is the total dollars?
State Controller: $100,000. Part of it was allocated - $85,000 was allocated to the Computer Service Center, $8,000 to EIS and $7,000 to Accounting.
Secretary of State: That stays within the budget?
State Controller: Yes. That is how it was computed. That is how we got to $100,000.
Governor: Why are we required to act on that if it is in the budget?
State Controller: Because of other language in the Code we felt to err on the side of caution, we better bring it to the Board. There is a specific limit on $1,000 bonuses in the Code without an exemption by the Board.
Governor: The Code is set up to how much? The new language.
State Controller: There is no limit. We came up with the $6,000 idea as part of the ITRMC thinking on what should be done so we would be in sync with the rest of the state on this.
Secretary of State: As long as you stay within the budget and the legislature appropriates it, this is the maximum, and it could be less.
State Controller: Yes, in fact, most are less than that.
Governor: This is a one shot deal? They are going to average about 3 – you have 30 of them?
State Controller: There is $100,000. They have worked very hard.
Attorney General: I don't have a problem.
Governor: I need a motion.
Secretary of State: I will so move.
Governor: All in favor will indicate by saying aye.
Opposed, nay. The ayes have it.
State Controller: That completes the agenda except for the Informational Agenda.
23. Estimate of the State Insurance Fund expenses to be paid by sight draft for the month of October 1998.
Fund expended in September 1998.
24. Estimate of the Petroleum Storage Tank Fund expenses to be paid by sight drafts for the month of October 1998.
25. Estimate of the State Insurance Fund expenses to be paid by sight draft for the month of November 1998.
Fund expended in October 1998.
26. Estimate of the Petroleum Storage Tank Fund expenses to be paid by sight drafts for the month of November 1998.


The Colorado state code is in a public-access portal run by Lexis-Nexis, which does not allow direct linking. To access specific parts of the state code, go to the initial disclaimer page and search or navigate.
The Colorado Open Records Act (CORA), Colo. Rev. Stat. Ann. § 24-72-201 to § 24-72-309, is available at https://www.sos.state.co.us/pubs/info_center/files/CORA_Act.pdf.
The Colorado Public Records Act specifically states that "[n]othing in this article shall preclude the state or any of its agencies, institutions, or political subdivisions from obtaining and enforcing trademark or copyright protection for any public record, and the state and its agencies, institutions, and political subdivisions are hereby specifically authorized to obtain and enforce such protection in accordance with the applicable federal law; except that this authorization shall not restrict public access to or fair use of copyrighted materials and shall not apply to writings which are merely lists or other compilations." Colo. Rev. Stat. Ann. § 24-72-203.
The Colorado Attorney General has construed § 24-72-204(1)(b) (allowing records requests to be denied if contrary to a federal law) and § 24-72-205 (stating that a records custodian "may" furnish copies of records) to interact with federal copyright law as follows: "[r]equests to copy government documents can raise copyright questions. For example, some as-built drawings or other architectural drawings in government files might be protected by a copyright. While the custodian may allow inspection of such copyrighted materials, the custodian ordinarily will not copy such materials or allow others to copy them." Ken Salazar, "Colorado Open Records Act, Nineteen Frequently Asked Questions," No. 01-1 Alpha No. LW AG AGBAM, fn9.
Colorado has had a statutory right of access to public records going back at least to 1884. See Bean v. People, 7 Colo. 200, 2 P. 909, 910 (1884) (interpreting Section 667 of the General Statutes to require the public record office to make county records available for examination by anyone). Access was often, however, subject to the discretion of the record custodian. See Times-Call Publishing Co. Inc. v. Wingfield, 159 Colo. 172, 410 P.2d 511 (1966) (holding that people who are not parties or counsel in a case only have the right to view pleadings and papers in a pending case at the discretion of the court). The current Colorado Public Records Act dates from 1967 and is located at Colo. Rev. Stat. Ann. § 24-72-201. The Colorado constitution, while not including a right of access to public records generally, acknowledges the statutory right to access in an article added in 1992 creating a new government board. That amendment requires that "[t]he Board shall adopt rules permitting public access to its meetings and records which are no less restrictive than state laws applicable to state agencies." Colo. Const. art. XXVII, § 6(3). By requiring rules "no less restrictive" than existing law, the article expresses a greater concern for records' confidentiality than public access.
Access to certain vital records is limited to requestors with a "direct and tangible interest" in the records. Commercial use does not satisfy this criterion. Eugene Cervi & Co. v. Russell, 184 Colo. 282, 285, 519 P.2d 1189, 1190 (1974); see also, Colorado Open Records Act (Secretary of State guidance document).
In four instances in the Colorado statutes and court rules, records are referred to as "property of the state": Colo. Rev. Stat. Ann. § 12-2-130.5 ("all statements, records, schedules, working papers, and memoranda prepared by a certified public accountant in the employ of the state auditor's office, in the course of professional service to the legislative audit committee, shall be and remain the property of the state auditor's office"); CO ST MAG Rule 10 ("the notes and recordings shall be considered the property of the state"); CO ST CTY CT RCP Rule 380 ("All reporter's notes and electronic or mechanical recordings shall be the property of the state"); Colo. Rev. Stat. Ann. § 24-49.9-102 ("All electronically recorded proceedings of any public body of the state, as defined in section 24-6-402, and of all other types of meetings, sessions, conferences, or public events televised by the Colorado channel authority shall be the property of the state of Colorado and shall be public records under article 72 of this title"). Colorado law also allows the state attorney general to replevin records which should be in the custody of the state. Colo. Rev. Stat. Ann. § 24-80-109 ("On behalf of the state and the department of personnel, the attorney general may replevin any public records which were formerly part of the records or files of any public office of the territory or state of Colorado.").
Colorado Secretary of State, CORA information, available at http://www.sos.state.co.us/pubs/info_center/cora.html.
Colorado State Archives, available at https://www.colorado.gov/archives.
Reporters Committee for Freedom of the Press, Open Government Guide: Access to Public Records and Meetings in Colorado, available at http://www.rcfp.org/rcfp/orders/docs/ogg/CO.pdf.
Ashley Messenger, Dennis Pitman, Can States Use Copyright to Restrict the Use of Public Records?, Comm. Law., February 2013, at 4, 5.
Eugene Cervi & Co. v. Russell, 184 Colo. 282, 285, 519 P.2d 1189, 1190 (1974), available at http://scholar.google.com/scholar_case?case=12367317290679792026.
Bean v. People, 7 Colo. 200, 2 P. 909, 910 (1884).
Times-Call Publishing Co. Inc. v. Wingfield, 159 Colo. 172, 410 P.2d 511 (1966), available at http://scholar.google.com/scholar_case?case=17966659912828155843.
Colo. Rev. Stat. Ann. § 24-72-203.
Colo. Rev. Stat. Ann. § 24-72-204.
Colo. Rev. Stat. Ann. § 24-72-205.
Colo. Rev. Stat. Ann. § 24-72-101.
Colo. Const. art. XXVII, § 6, available at http://www.goco.org/sites/default/files/ARTICLE-XXVII-GOCO-Amendment_0.pdf.
Colo. Rev. Stat. Ann. § 2-5-115.
Colo. Rev. Stat. Ann. § 12-2-130.5.
Colo. Rev. Stat. Ann. § 24-49.9-102.
Colo. Rev. Stat. Ann. § 24-80-109.
CO ST MAG Rule 10.
CO ST CTY CT RCP Rule 380.
Ken Salazar, Colorado Open Records Act, Nineteen Frequently Asked Questions, No. 01-1 Alpha No. LW AG AGBAM, fn9, available at http://www.coloradoattorneygeneral.gov/sites/default/files/ag_opinions/2001/.pdf_2.
Colorado Open Records Act (Secretary of State guidance document), available at http://www.sos.state.co.us/pubs/info_center/files/CORA_Act.pdf.
Summit County Colorado, GIS Data Licensing Information, available at http://www.co.summit.co.us/index.aspx?nid=249.
Edward A. Pisacreta & Jonathan P. Mollod, Licensing and Commercialization Issues for Geographic Data, 45 Les Nouvelle 1, 5 (2010).
Letter from Carl Malamud to the President of the Colorado Senate, available at https://law.resource.org/pub/us/code/co/colorado.letter.pdf.
 Judicial opinions cannot be copyrighted. The Supreme Court in Banks v. Manchester, 128 U.S. 244, 9 S. Ct. 36, 32 L. Ed. 425 (1888) invalidated an asserted copyright by a private publisher, an Ohio citizen, for copyright in the state court reports, holding that any content written by a judge cannot be copyrighted because "[t]he whole work done by the judges constitutes the authentic exposition and interpretation of the law, which, binding every citizen, is free for publication to all, whether it is a declaration of unwritten law, or an interpretation of a constitution or a statute." See also Nash v. Lathrop, 142 Mass. 29, 35, 6 N.E. 559, 560 (1886) and Wheaton v. Peters, 33 U.S. 591, 668, 8 L. Ed. 1055 (1834). Only materials ancillary to the court opinion such as the "title-page, table of cases, head notes, statements of facts, arguments of counsel, and index" may be copyrighted. Callaghan v. Myers, 128 U.S. 617, 649, 9 S. Ct. 177, 185, 32 L. Ed. 547 (1888). Prior to 2011 Colo. Rev. Stat. Ann. § 2-5-115 said that "Colorado Revised Statutes and ancillary publications... shall be copyrighted." In 2011 the Colorado legislature revised this language to language more in line with Supreme Court precedent, and it now reads as quoted above. Changes such as this have been due in large part to open government initiatives such as that of Carl Malamud. See, e.g., Letter from Carl Malamud to the President of the Colorado Senate; see generally Public.Resource.Org.


text:
UNITED STATES v. ANDERSON March 29, 1996 No. 94-50521.
STIESBERG v. STATE OF CALIFORNIA March 29, 1996 No. 94-15875.
SMOLEN v. CHATER March 29, 1996 No. 94-35056.
LOVELL LOVELL v. POWAY UNIFIED SCHOOL DISTRICT March 29, 1996 No. 94-55715, 94-55717.
MORAN v. McDANIEL March 28, 1996 No. 96-99007.
INTER MODAL RAIL EMPLOYEES ASSOCIATION v. ATCHISON TOPEKA SANTA FE RAILWAY COMPANY March 27, 1996 Nos. 93-56400, 94-55188.
DAVE v. RAILS TO TRAILS CONSERVANCY March 27, 1996 No. 94-36071.
YANG v. IMMIGRATION AND NATURALIZATION SERVICE March 27, 1996 No. 94-70439.
MONTOYA ULLOA v. IMMIGRATION AND NATURALIZATION SERVICE March 26, 1996 No. 94-70535.
DAY v. McDONNELL DOUGLAS HELICOPTER COMPANY March 26, 1996 Nos. 92-15625, 92-16512.
UNITED STATES v. STRONG March 26, 1996 No. 95-30113.
RAINS v. CRITERION SYSTEMS INC March 26, 1996 No. 93-17168.
CAHILL v. LIBERTY MUTUAL INSURANCE CO March 25, 1996 No. 94-55943.
GOMEZ SABALLOS v. IMMIGRATION AND NATURALIZATION SERVICE March 22, 1996 No. 94-70534.
UNITED STATES v. REAL PROPERTY 874 GARTEL DRIVE WALNUT CALIFORNIA March 22, 1996 No. 94-56237.
UNITED STATES v. BROWNSTEIN March 21, 1996 No. 95-50046.
FOSSON v. PALACE WATERLAND LIMITED March 21, 1996 No. 94-55550.
UNITED STATES v. NOUSHFAR March 20, 1996 Nos. 94-30229, 94-30350 and 94-30353.
LOPEZ REYES v. IMMIGRATION AND NATURALIZATION SERVICE March 20, 1996 No. 94-70440.
BAZUAYE v. IMMIGRATION AND NATURALIZATION SERVICE March 19, 1996 No. 94-70480.
RAINSONG COMPANY v. FEDERAL ENERGY REGULATORY COMMISSION March 19, 1996 No. 93-71035.
HEISE v. FISHING COMPANY OF ALASKA INC March 19, 1996 No. 95-35194.
ROULETTE v. CITY OF SEATTLE March 18, 1996 No. 94-35354.
WESTERN RADIO SERVICES COMPANY INC v. ESPY March 18, 1996 No. 94-35605.
IN RE: George I. BENNY March 18, 1996 No. 94-16242.
BARBER v. WIDNALL March 14, 1996 No. 93-36200.
PARACOR FINANCE, INC., (fka Elders Finance, Inc.), a New York Corporation; Cargill Financial Services Corporation, a Delaware Corporation; Lutheran Brotherhood, a Minnesota Corporation; Farm Bureau Life Insurance Company, an Iowa Corporation, Pla March 13, 1996 No. 94-15633.
UNITED STATES v. RICARDO March 13, 1996 No. 94-10244.
UNITED STATES v. EWAIN March 12, 1996 No. 95-50133.
UNITED STATES v. INNIE March 11, 1996 No. 95-50116.
NEWELL v. SAUSER March 11, 1996 No. 94-35243.
UNITED STATES v. MENDOZA March 11, 1996 No. 95-50110.
SECURITIES AND EXCHANGE COMMISSION v. INTERLINK DATA NETWORK OF LOS ANGELES INC March 11, 1996 No. 94-56173.
SCHIFFER v. FEDERAL BUREAU OF INVESTIGATION March 8, 1996 No. 94-15472.
STROTHER v. SOUTHERN CALIFORNIA PERMANENTE MEDICAL GROUP STROTHER March 8, 1996 Nos. 94-56046, 94-56279.
GABOR v. FRAZER AKC March 7, 1996 No. 94-17133.
UNITED STATES v. WRIGHT March 7, 1996 No. 95-30054.
CREE v. WATERBURY March 6, 1996 No. 95-35102.
CONDOR INTERNATIONAL INC v. COMMISSIONER INTERNAL REVENUE SERVICE CONDOR INTERNATIONAL INC March 6, 1996 Nos. 93-70513, 93-70526.
UNITED STATES v. BEIERLE March 6, 1996 No. 95-35286.
COMPASSION IN DYING v. STATE OF WASHINGTON March 6, 1996 No. 94-35534.
UNITED STATES v. CASTRO March 5, 1996 No. 95-50480.
AL TORKI v. KAEMPEN March 5, 1996 No. 94-55538.
UNITED STATES v. GILLIAM March 5, 1996 No. 94-35290.
UNITED STATES v. PUTRA March 5, 1996 No. 94-10040.
UNITED STATES v. RUBIN March 5, 1996 No. 94-55627.
IN RE: MAYA CONSTRUCTION COMPANY March 5, 1996 No. 93-17195.
WEBSTER v. OMNITRITION INTERNATIONAL INC WEBSTER March 4, 1996 Nos. 94-16477, 94-16478.
ATCHISON TOPEKA AND SANTA FE RAILWAY COMPANY v. STATE OF ARIZONA March 4, 1996 No. 94-15850.
UNITED STATES v. McKOY UNITED STATES March 4, 1996 Nos. 95-10181, 95-10186.
UNITED STATES v. ALCARAZ GARCIA March 4, 1996 No. 95-50155.
TANG v. RENO March 4, 1996 No. 95-15421.
EMPLOYEE PAINTERS' TRUST; Western Washington Painters Defined Contribution Pension Trust; Western Washington Apprenticeship and Training Trust; International Brotherhood of Painters and Allied Trades; Painters District Council No. 5, Plaintiff March 1, 1996 Nos. 95-35044, 95-35103.
IN RE: KEEGAN MANAGEMENT CO. March 1, 1996 Nos. 94-15713, 94-16135.
UNITED STATES v. GORD March 1, 1996 No. 94-30386.

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39 The Colorado Lawyer 39 (January 2010), All rights reserved.
McKesson Information Solutions, Inc. v. Bridge Medical, Inc.37 was the second case to significantly alter the requirements for inequitable conduct for patent prosecution in recent years. In McKesson, the Federal Circuit noted that even when the same examiner is examining two co-pending applications, material office actions from one application need to be cited to the other. The court indicated that even a notice of allowance in one application can be material and might need to be cited.
1. The first application, U.S. application 07/205,527, was examined by Examiner Trafton and eventually issued as U.S. patent 4,857,716.38 It was the patent-in-suit.
As a practice tip, when parties determine not to cite an arguably material reference to a related case, they might want to draft a memo to the prosecution file for future reference. Because files are often transferred to other law firms when companies or patent portfolios are acquired, a practitioner also might want to keep a copy of the memo when the file is transferred. The rationale for this is that if the practice of the acquiring firm is to clean a file of all notes and memos when the patent issues, the memo explaining why a reference was not cited could inadvertently be discarded.
As a result of the Dayco, McKesson, and Larson cases, patent prosecutors now will need to consider whether office actions are material and in need of citation to other patent applications. Several practice pointers can be derived from these cases to assist the patent prosecutor.
1. Cite the existence of related patent applications to their counterpart examiners.
2. Cite references from related cases if they are material.
3. Cite office actions from related applications and re-examination proceedings if they are material.
4. Cite Notices of Allowance or Notices of Allowability if they might be relevant to a double-patenting rejection in a different application.
5. Do not assume that an examiner who is inspecting multiple applications owned by the same party will remember prior art or reasons for rejection from one case to the next.
6. If a decision is made not to cite what later might be argued to be material information, create a memo to the file explaining the reasoning not to cite it, so as to be able to prove that there was no intent to deceive an examiner by withholding the information.
7. Assign prosecution of related applications to the same law firm and preferably the same attorney within that firm to ensure consistent arguments and familiarity during prosecution.
8. If an examiner is verbally notified of material information, follow it up with a written submission or a memo to the prosecution file memorializing the fact.
9. Explain to support staff the importance of retaining any memoranda regarding these issues so that the memoranda are not accidentally thrown out at the conclusion of prosecution.
The Federal Circuit has made it easier to find a patent unenforceable for inequitable conduct in view of the Dayco–McKesson–Larson line of cases. Patent prosecutors should take note of the new requirement to cite material office actions, even to applications having a common examiner. Patent litigators and licensing attorneys also should review this line of cases to assess the impact on the strength of their positions during litigation or licensing.
1. Dayco Products, Inc. v. Total Containment, Inc., 329 F.3d 1358 (Fed.Cir. 2003).
2. McKesson Information Solutions, Inc. v. Bridge Medical, Inc., 487 F.3d 897 (Fed.Cir. 2007).
3. Larson Manufacturing Co. v. Aluminart Prods. Ltd., 559 F.3d 1317 (Fed.Cir. 2009).
4. See 37 C.F.R. § 1.56 (duty to disclose information material to patentability).
5. See U.S. Department of Commerce, U.S. Patent and Trademark Office (USPTO), Manual of Patent Examining Procedure (MPEP ),§§ 09.04(a),2001.05,and 2001.06 (8th ed.,Rev.7,ThomsonWest,2008).
6. Id. at § 609.
8. See Digital Control, Inc. v. Charles Mach. Works, 437 F.3d 1309, 1313 (Fed.Cir. 2006).
9. See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814 (1945).
10. See Burlington Industries Inc. v. Dayco Corp., 849 F.2d 1418 (Fed.Cir. 1988). See also McKesson, supra note 2 at 897, 926 (Judge Newman’s dissent,stating:“This court returns to the ‘plague’of encouraging unwarranted charges of inequitable conduct….”).
11. See Purdue Pharma L.P. v. Boehringer Ingelheim GMBH, 237 F.3d 1359, 1366 (Fed.Cir. 2001).
12. See Driscoll v. Cebalo, 731 F.2d 878, 884 (Fed.Cir. 1982).
13. See 37 C.F.R. § 1.56.
15. The USPTO conducts its examination of a patent application by issuing “office actions, ”which are written communications addressing the patentability of proposed patent claims. An examiner might issue several office actions during the examination process for a particular application.
16. Dayco, supra note 1 at 1367 (“This court has never addressed whether the prior rejection of a substantially similar claim in a copending United States application is material under the reasonable examiner standard.”). See also McKesson, supra note 2 at 897, 919 (“This court addressed the failure to disclose rejections in co-pending applications for the first time in Dayco.”).
17. Dayco, supra note 1 at 1361.
25. Id. (“A copending application may be material even though it cannot result in shorter patent term when it could affect the rights of the patentee to assign the issued patents.”).
27. Akron Polymer Container Corp. v. Exxel Container, Inc., 148 F.3d 1380 (Fed.Cir. 1998).
28. Dayco, supra note 1 at 1366.
36. Id. (“When prosecuting claims before the Patent Office, a patent applicant is, at least implicitly, asserting that those claims are patentable. A prior rejection of a substantially similar claim refutes, or is inconsistent with the position that those claims are patentable.”).
37. McKesson, supra note 2 at 897. A dissenting opinion was filed by Judge Newman.
41. Id. at 907 and 902. (U.S. patent application no. 07/205,527 was a continuation of U.S. application no. 06/862,278, and U.S. application no.07/078,195 was a continuation-in-part of U.S. application no. 06/862,278).
Finally, if information was specifically considered and discarded as not material, this fact might be recorded in an attorney’s file or applicant’s file, including the reason for discarding it. If judgment might have been bad or something might have been overlooked inadvertently, a note made at the time of evaluation might be an invaluable aid in explaining hat mistake was honest and excusable. Though such records are not required, they could be helpful in recalling and explaining actions in the event of a question of “fraud” or “inequitable conduct” raised at a later time.
50. McKesson, supra note 2 at 919.
55. U.S. Department of Commerce, USPTO, MPEP, §§ 2001.04 and 2001.06 (5th ed. Rev. 3, 1986); McKesson, supra note 2 at 923.
56. McKesson, supra note 2 at 925-26.
63. See Purdue, supra note 11.
64. McKesson, supra note 2 at 926.
65. Larson, supra note 3 at 1317.
72. Id. at 1333 and 1337.
76. Id. at 1338.The court stated: [A]lthough the previous office actions used the Johnson patent to reject the similar claims of the . . . Continuation, the Third Office Action explicitly explained, for the first time, that the Johnson patent shows “the screen is attached across its width . . . to the coupling element . . . thereby indicating that such extends into the tracks.” This was the first time that the examiner of the . . . Continuation conveyed such specific explanation about the Johnson patent.
78. Id. at 1339 (“The Fourth Office Action articulated a new rejection of the ‘extending into screen tracks limitation’ in view of the Johnson and Kemp patents.”).
81. Star Scientific v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed.Cir. 2008).
82. Larson, supra note 3 at 1340 and 1366, citing Star Scientific, supra note 81.
83. Larson, supra note 3 at 1341, citing M. Eagles Tools Warehouse v. Fisher Tooling Co., 439 F.3d 1335, 1341 (Fed.Cir. 2006) (“When the absence of a good faith explanation is the only evidence of intent, however, that evidence alone does not constitute clear and convincing evidence warranting an inference of intent.”).
85. Id. (“At that point, the court must balance the substance of those threshold levels—with a higher level of materiality permitting a lower level of intent, and vice versa.”). Emphasis in original.
Intellectual Property and Technology Law articles are sponsored by the CBA Intellectual Property and Technology Law and Policy Sections. They provide information of interest to intellectual property and technology attorneys who advise clients on protecting and exploring various forms of intellectual property in the marketplace.
I thought the following C-Span videos from the George Washington Law and Federal Circuit Bar Association’s “The National Appellate Court Celebration and Introspective Symposium” held on March 18, 2009 were very interesting.
In an unusual disposition in Sensormatic Electronics LLC v. Von Kahle, et al., 2009-1193 (Fed. Cir. Feb. 17, 2010), the Federal Circuit issued an “order” affirming the district court with a brief explanation of the issues on appeal, rather than a perfunctory Rule 36 Judgment containing no explanation. It will be interesting to see if the court follows up with a Rule 36 Judgment. Absent a judgment by the panel, I’m curious whether the losing party is procedurally in a position to request a panel rehearing, request rehearing en banc, or petition for certiorari.
The court’s order is available here: [Read].
At the district court, the defendant asserted inequitable conduct by the inventors for failure to cite during original examination a reference that was later cited by an examiner during a reexamination of the patent. The inventors stated that they did not believe the reference was material and therefore did not cite the reference to the PTO in the original prosecution of the patent. The district court judge found the inventors’ testimony credible and therefore made a factual finding that the inventors did not have the requisite intent for inequitable conduct. In the “order” above, the Federal Circuit “affirmed” the district court.
The ultimate question of inequitable conduct is committed to the discretion of the district court and we review the court’s determination that the patentee engaged in inequitable conduct for abuse of discretion. Modine Mfg. Co. v. Allen Group, Inc., 917 F.2d 538, 541 (Fed. Cir. 1990), cert. denied, 500 U.S. 918 (1991). An abuse of discretion occurs when (1) the court’s decision is clearly unreasonable, arbitrary, or fanciful, (2) the court’s decision is based on an erroneous construction of the law, (3) the court’s factual findings are clearly erroneous, or (4) the record contains no evidence upon which the court rationally could have based its decision. Nilssen v. Osram Sylvania, Inc., 504 F.3d 1223, 1229 (Fed. Cir. 2007).
In order to establish inequitable conduct, the party challenging the patent is required to establish by clear and convincing evidence that the patent applicant “(1) either made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the U.S. Patent and Trademark Office.” Symantec Corp. v. Computer Assoc. Int’l, Inc, 522 F.3d 1279, 1296 (Fed. Cir. 2008) (quoting Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007). Both intent and materiality are questions of fact, and must be proven by clear and convincing evidence. Young v. Lumenis, Inc., 492 F.3d 1336, 1344 (Fed. Cir. 2007). We review a district court’s findings on the threshold issues of materiality and intent for clear error. Pfizer, Inc. v. Teva Pharms. USA, Inc., 518 F.3d 1353, 1366 (Fed. Cir. 2008). Under the clear error standard, the court’s findings will not be overturned in the absence of a “definite and firm conviction” that a mistake has been made. Id. “Once threshold findings of materiality and intent are established, the district court must weigh them to determine whether the equities warrant a conclusion that inequitable conduct occurred.” Flex-Rest, LLC v. Steelcase, Inc., 455 F.3d 1351, 1363 (Fed. Cir. 2006) (quoting Purdue Pharma, 438 F.3d at 1128).
One of the issues asserted by the appellant/defendant in the oral argument of Sensormatic was that one of the inventors (who was accused of inequitable conduct by the defendant) stated at trial that if he had it to do over again, he would not cite the reference in question to the examiner. [Listen]. This assertion went unchallenged — during oral argument at least.
The statement of “If I had it to do over again, I’d do it again” may sound familiar to those familiar with the McKesson v. Bridge Medical, 487 F.3d 897 (Fed. Cir. 2007) case. The patent attorney accused of inequitable conduct in that case stated that if he had it to do over again he would not have cited the information in question. In McKesson, however, the district court judge found intent and the Federal Circuit affirmed. In Sensormatic, the district court judge found no intent and the Federal Circuit has now affirmed. Hence, this demonstrates the significance of the “clear error” standard of review for the intent prong in inequitable conduct cases and the importance of prevailing at the district court level.
For those of you that are concerned that judges might put too much emphasis on statements in the Abstract and Summary of a patent, you might find this part of the Sensormatic oral argument interesting in that some of the judges appeared willing to read in a limitation of “abruptness” into the claims without first identifying some sort of textual “hook” from the claims. [Listen] and [Listen]. The inventors asserted that they understood the claims to include an abruptness limitation even though that language apparently does not appear in the claims.
You can listen to the entire oral argument in Sensormatic here: [Listen].
When filing a brief with the Federal Circuit the parties are allowed to denote material appearing in their briefs as confidential. Similarly, material presented in the Joint Appendix can be marked confidential. At oral argument, the judges of the Federal Circuit will often ask the parties if these confidential markings are still applicable for two reasons: (1) so that the judges are free to ask questions about the material in open court and have it recorded; and (2) so that the judges know what can be published in any written opinion.
In one case from several years ago, counsel for an intervenor in the case was present at oral argument but was not taking part in the oral argument itself. He was called up to address the confidentiality issue and Judge Bryson remarked that this was like the attorney nightmare where one is called out of the audience to argue a case: [Listen].
The way in which the elements are arranged or combined in the claim must itself be disclosed, either expressly or inherently, in an anticipatory reference. “Anticipation requires the presence in a single prior art disclosure of all elements of a claimed invention arranged as in the claim.” Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548 (Fed. Cir. 1983). The requirement that the prior art elements themselves be “arranged as in the claim” means that claims cannot be “treated . . . as mere catalogs of separate parts, in disregard of the part-to-part relationships set forth in the claims and that give the claims their meaning.” Lindemann Maschinenfabrik GMBH v. Am. Hoist & Derrick Co., 730 F.2d 1452, 1459 (Fed. Cir. 1984). “[U]nless a reference discloses within the four corners of the document not only all of the limitations claimed but also all of the limitations arranged or combined in the same way as recited in the claim, it cannot be said to prove prior invention of the thing claimed and, thus, cannot anticipate under 35 U.S.C. § 102.” Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008) (emphasis added).
The concept of “inherent disclosure” does not alter the requirement that all elements must be disclosed in an anticipatory reference in the same way as they are arranged or combined in the claim. “[A]nticipation by inherent disclosure is appropriate only when the reference discloses prior art that must necessarily include the unstated limitation . . . .” Transclean Corp. v. Bridgewood Servs., Inc., 290 F.3d 1364, 1373 (Fed. Cir. 2002). “Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient.” Cont’l Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264, 1269 (Fed. Cir. 1991) (quoting In re Oelrich, 666 F.2d 578, 581 (CCPA 1981)); see also Trintec Indus., Inc. v. Top-U.S.A. Corp., 295 F.3d 1292, 1295 (Fed. Cir. 2002) (“Inherent anticipation requires that the missing descriptive material is ‘necessarily present,’ not merely probably or possibly present, in the prior art.” (quoting In re Robertson, 169 F.3d 743, 745 (Fed. Cir. 1999))). For a claim to be anticipated, each claim element must be disclosed, either expressly or inherently, in a single prior art reference, and the claimed arrangement or combination of those elements must also be disclosed, either expressly or inherently, in that same prior art reference.
In contrast, the evidence here shows, at best, that the Palm defendants taught their customers each step of the claimed method in isolation. Nowhere do the manual excerpts teach all of the steps of the claimed method together, much less in the required order. Accordingly, it requires too speculative a leap to conclude that any customer actually performed the claimed method. Indeed, the very same record evidence upon which E-Pass attempts to rely also shows that the accused PDAs are general-purpose computing devices that can be used for a variety of purposes and in a variety of ways. In comparison, the device at issue in Moleculon was intended to be used in only one way—to practice the infringing method—and that method was explicitly taught by the proffered instructions. Id. If, as E-Pass argues, it is “unfathomable” that no user in possession of one of the accused devices and its manual has practiced the accused method, see E-Pass Repl. Br. at 16, E-Pass should have had no difficulty in meeting its burden of proof and in introducing testimony of even one such user. Having failed to meet that burden, E-Pass has no basis to overturn the district court’s decision.
You can listen to the entire E-Pass oral argument here: [Listen].
You can read the court’s E-Pass opinion here: [Read].
You can listen to the oral argument in Therasense here: [Listen].
You can read the court’s Therasense opinion here: [Read].
Typically during oral argument the appellant and appellee are each given fifteen minutes to argue their respective cases. When there is more than one appellant or appellee, the allotted time must be shared. The sharing of oral argument time is most often clumsy, ineffective, and discouraged by the judges. Rather, it is more persuasive when one attorney argues all the issues. Because attorneys represent individual clients and not entire sides of a case, however, sharing of time will undoubtedly continue so that each attorney can ensure that his or her client is fairly represented.
As a heads up to those facing this issue in the future, it is possible to move for additional time to be shared among multiple parties on one side. For example, in E-Pass Technologies, Inc. v. 3COM Corp. et al., 2006-1356 (Fed. Cir. Jan. 12, 2007) the Federal Circuit granted the three appellees ten minutes each for a total of thirty minutes rather than the typical fifteen minutes for all appellees. This is what Chief Judge Michel remarked at that time: [Listen].
Director David Kappos is looking for your suggestions on updating the MPEP [Link].
The MPEP was a topic of discussion in the oral argument of Boehringer Ingelheim v. Barr Labs, 2009-1032 (Fed. Cir. January 25, 2010) decided just recently. In this sound bite, Judge Prost asks counsel about the meaning of “consonance” in MPEP section 804.01 and Judge Dyk inquires whether the meaning of consonance given by the MPEP is too narrow: [Listen].
Readers might be familiar with Dr. Mehmet Oz, an author and expert on health matters who is often featured on “The Oprah Winfrey Show.” It looks like Dr. Oz might also be eagerly awaiting the Supreme Court’s decision in Bilski v. Kappos, as he has his own business method patent application pending at the PTO. The title of the application is “System and Method for Determining a Measure of Human Beauty” [Link to application].
The Federal Circuit will soon decide the case of Medtronic Navigation, Inc. v. BrainLab. That case concerns the issue of whether it was proper to sanction Medtronic and its attorneys $4.4M for their opponent’s attorney fees, due to conduct during a jury trial.
Judge Matsch, who presided over the Medtronic Navigation trial, recently awarded attorneys fees to another party in another patent case in his court. In CCC Group, Inc. v. Martin Engineering, Inc., 05-cv-00086-RPM-MJW (D. Colo. January 19, 2010), Judge Matsch awarded attorneys fees to the defendant and found the patents at issue unenforceable due to inequitable conduct.
It will be interesting to see if this decision is appealed. I will have to study the decision further; but, one statement in the opinion seems to indicate that it was purportedly deceitful and misleading to include as Fig. 1 in a patent a drawing that was an oversimplification of the prior art.
You can read the district court’s opinion here: [Read].
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Wednesday, Sep 19, 2007 --- Bankrupt copper mining company Asarco LLC has urged a bankruptcy court to quash a $68 million claim by Texas officials for environmental damage to the state's coast, a claim it argues was filed too late.
In an objection lodged with the court on Friday, Asarco said the damage claim filed in July 2006 by the Texas attorney general on behalf of the state's natural resource trustees was barred by the statute of limitations. The claim, just one of scores against the bankrupt copper producer for environmental damage, relates to the company's Corpus Christi facility, which processed mineral ore in the production if zinc.
The Tucson, Ariz.-based company, which no longer operates the facility, argues the state was aware of the release of toxins from the site more than three years before making a claim to the court. Claims under the Comprehensive Environmental Response, Compensation and Liability Act, otherwise known as Superfund, have a three-year statute of limitations, and that statute begins to run on discovery of a possible claim, Asarco told Judge Richard Schmidt.
“The Trustees had knowledge of the alleged release and losses well before July 14, 2003, three years prior to filing a claim,” the company said. The state's knowledge was outlined in the attorney general's own proof of claim and expert report, Asarco told the court, both of which contained surveys, notices, memoranda and orders from the state warning the site was releasing dangerous metals into the Corpus Christi harbor and bay.
“It is undisputed that the state possessed knowledge of the alleged loss and its connection the alleged releases of hazardous substances at the site long before 2003,” said Asarco.
Even assuming the court were to rule that the claim was not time-barred, all portions of the state's claim relating to damage that occurred before the December 1980 effected date of Superfund were barred, the company added. Last month, Judge Schmidt approved a $31 million settlement between Asarco and the federal government over cleanup at its hazardous California Gulch smelter site in Leadville, Colorado.
The company had slammed Asarco's haste in settling the California Gulch claims, saying the debtors had entered into an agreement despite expert analysis showing the claims were highly inflated.
“Alarmingly, the California Gulch settlement may be just the first of many settlement seeking to resolve the environmental claims that are the subject of the ongoing estimation proceeding and that are asserted in the aggregate amount of over $6.77 billion,” said the company, which lost power over Asarco in December 2005, when the court approved a corporate governance stipulation which shook up the board of directors and effectively excluded it from participation in governance matters.
Asarco, which has been active in mining, smelting and refining for over a century, still faces environmental claims at nearly 100 other sites. Those claims have been asserted by the federal government, state governments, Indian tribes and private parties. The company also faces more than 95,000 asbestos-related personal injury claims, court documents have revealed, with the total value of all claims estimated to be potentially as high as $25 billion. Asarco filed for Chapter 11 protection on Aug. 9, 2005, listing assets and liabilities in excess of $100 million.
On June 11th, the U.S. Supreme Court decided a closely watched environmental case that may have significant financial implications for both the federal government and private industry. The case, United States v. Atl. Research Corp., is the second of two cases that have considered whether private parties can recover costs incurred to cleanup contaminated sites under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) when the cleanup effort was voluntarily carried out, rather than compelled by a lawsuit or government order. These two cases are extremely important for parties who pay more than their fair share to cleanup contaminated sites, as they set forth how parties can recover from others who are also liable, but have not taken action to address environmental contamination of the relevant site. The ability of parties to recover costs from other potentially responsible parties or “PRPs" is a critical public policy issue in terms of encouraging parties to take action to remediate contaminated sites.
In the first of the two cases, Cooper Indus., Inc. v. Aviall Serv., Inc., the Court held that private parties who voluntarily clean up sites could seek contribution under § 113 of CERCLA only after having been sued under CERCLA or entering into a settlement agreement with the government resolving CERCLA liability. The upshot of the Aviall case is that a party thatconducts a purely voluntary cleanup will typically not be able to recover under § 113 against other PRPs.
In Atlantic Research, however, the Supreme Court reviewed the general cost recovery provision in § 107 of CERCLA. Prior to Aviall, § 107 was typically used only by a governmental body or a private party to sue for cleanup costs when the plaintiff was not otherwise liable for the cleanup, i.e. when the plaintiff was “innocent.” Before Aviall, the weight of authority held that no private cost recovery or contribution action was available under § 107 for parties who themselves were PRPs. After Aviall, the lower courts were divided on the issue.
The Supreme Court’s decision in Atlantic Research allows parties that engage in voluntary cleanup actions to recover their costs from other liable parties under CERCLA § 107 even if they have not been sued by other parties and even if they themselves are liable for cleanup costs. This outcome is a welcome one because private parties will no longer be deterred from cleaning up contaminated sites.
A more in depth analysis of the Atlantic Research case will be forthcoming.
The U.S. Supreme Court has decided to hear a closely watched environmental case that may have significant financial implications for both the federal government and private industry. The case, U.S. v. Atlantic Research Corp., is Part II of a duo of cases that consider whether companies can recover costs incurred to cleanup contaminated sites under the Comprehensive Environmental Response, Compensation and Liability Act, when the cleanup effort was voluntarily carried out, rather than compelled by a lawsuit or government order.
In Part I of the two cases, Cooper Industires, Inc. v. Aviall Industries, Inc., the court ruled that parties who voluntarily cleaned up a hazardous waste site could not recover from other parties, including the government, under Section 113 of CERCLA--the contribution section of the federal Superfund cleanup statute, which allows one private party to sue another liable party, including governmental bodies.
In Part II, the Atlantic Research case, the court will review Section 107, the general cost recovery provision of the statute, which is typically used by a government body or private party to sue for cleanup costs when the plaintiff is not otherwise liable for the cleanup. The federal appeals courts are divided as to whether a private party liable under CERCLA can recover the share of costs other are responsible for under the Act. Thus, the Supreme court may rule as to the ability of parties to bring cases at all when they voluntarily perform cleanup without first being sued or being the subject of a governmental enforcement order.
While voluntary cleanup has been growing, promoted by industry and government alike, the federal government has argued in its briefs to restrict the ability of such volunteers to recover their costs from other liable parties, primarily because the government itself is often a liable party. This is simply bad public policy, exercised by a Justice Department more motivated by winning cases than helping responsible companies recover their costs when they step up and cleanup up a hazardous waste site while other entities and governmental bodies stand by and do nothing.
We will have to await the Supreme Court's ruling as to whether private cost recovery actions are permissible under Section 107 of CERCLA. If the court rules that plaintiffs cannot recover under Section 107 for voluntary actions or otherwise, then calls for a fix from Congress will grow to amend the statute to allow such contribution or direct actions in order to encourage private parties to conduct cleanup of hazardous waste sites without being subject to litigation or government order.


Most of the concerns over Matthew Whitaker, recently tweeted into office as acting attorney general, have centered on what he might do to the Mueller investigation. In this brief post, I consider some of the potentially broader effects on the Department of Justice, starting with the Foreign Intelligence Surveillance Act and expanding outward. For President Trump, who I believe typically views the world through the straw-sized aperture of his own self-interest, Whitaker’s loyalty, demonstrated through often-expressed hostility toward Robert Mueller’s investigation, is an affirmative reason to appoint him. Largely irrelevant to the president, I believe, are any risks the appointment poses for the Justice Department’s other activities in law enforcement and national security. For those of us who take a wider view, however, what are those risks? And what do they tell us about whether this appointment was sensible?
1. To begin with a question I have been asked repeatedly, can Whitaker approve FISA applications? The statute requires traditional FISA applications to be approved by “the Attorney General”—see, for example, 50 U.S.C. § 1804(a)—a term defined in § 1801(g) to “mean the Attorney General of the United States (or Acting Attorney General), the Deputy Attorney General, or, upon the designation of the Attorney General, the Assistant Attorney General designated as the Assistant Attorney General for National Security under section 507A of title 28.” (Absent valid approval, any evidence resulting from the authorized surveillance might be suppressed on motion by an aggrieved party, preventing it from being used in trial.) Many other FISA actions similarly require the approval of or action by the attorney general, including annual certifications under 50 U.S.C. § 1881a, the FISA Amendments Act, where the same definition of “Attorney General” applies under 50 U.S.C. § 1881. As far as FISA’s plain language is concerned, therefore, the “Acting Attorney General” can approve FISAs.
Notably, in 1978, Congress rejected the government’s proposal, based on a “need to lessen the administrative burden on the Attorney General,” to include an assistant attorney general in the definition of “Attorney General.” Based on “the assurance of Attorney General Bell . . . that he would personally continue to approve applications under [FISA] until standards of review have been well established,” Congress enacted “a modified version of the Administration’s proposal. It provides authority for the Attorney General (or the Acting Attorney General) or the Deputy Attorney General — rather than a specially designated Assistant Attorney General — to approve applications.” The volume of FISA work has grown since 1978, and particularly since 2001, and Congress later expanded the definition of “Attorney General” to include the assistant attorney general for national security in the USA Patriot Improvement and Reauthorization Act of 2005.
At any rate, by saying in 1978 that the deputy attorney general will “most often” be the acting attorney general, Congress implicitly left room for another official to be the acting attorney general. Accordingly, FISA is essentially agnostic about who is or is not the “Acting Attorney General” so long as they are duly appointed consistent with the law. I am reasonably confident that this will be Justice Department’s conclusion.
2. Marty Lederman has done a great job explaining the various early arguments, pro and con, as to whether Whitaker is, as a matter of statutory or constitutional law, duly appointed as the acting attorney general. He identifies two main reasons why Whitaker’s appointment may be unlawful: a statutory argument that the president improperly relied on the Federal Vacancies Reform Act (FVRA), 5 U.S.C. § 3345, when succession should instead be governed by the Department of Justice Succession Act, 28 U.S.C. § 508; and a constitutional argument that Whitaker’s appointment violates the Appointments Clause because he does not currently hold any position for which he was confirmed by the Senate. The Justice Department's Office of Legal Counsel (OLC) has released a 20-page memo arguing that there is no statutory or constitutional problem with the appointment. Larry Tribe and John Yoo, not often in agreement, have recently written that it is unconstitutional. For now, at least, I don’t have anything to add to these various explanations and arguments on the merits of the appointment. It is enough to say that there are serious scholars on both sides of the issues.
Even considering OLC’s long memo, however, what follows from Lederman’s summary is that the Justice Department’s National Security Division should not, unless absolutely necessary, bring any FISA applications to Whitaker. If there is even a 1 percent chance of a problem with Whitaker’s appointment that might make FISA applications vulnerable to challenge, they should stick to Rod Rosenstein and/or John Demers, the deputy attorney general and acting attorney general for national security, who are unquestionably able to approve the FISAs (assuming Demers has been properly designated). Those two officials are also surely far more sophisticated about FISA than is Whitaker (as I have pointed out, he has said that Marbury v. Madison was wrongly decided). Even if the risk of invalidation with respect to an application signed by Whitaker is low-probability, it could be very high-consequence, and it is wise to avoid such risks whenever possible.
3. It may be, however, that the risk is broader than something as direct and discrete as a FISA application signed by Whittaker. One case frequently cited against the legitimacy of Whitaker’s appointment is NLRB v. S.W. General, Inc., in which the Supreme Court rejected President Obama’s appointment of the acting general counsel of the National Labor Relations Board (NLRB) because it violated the FVRA. Justice Clarence Thomas concurred to explain that “the Appointments Clause” of the Constitution also “likely prohibited [the] appointment” because the acting general counsel, a principal officer, was not confirmed by the Senate, along with other reasons (including that he had held office for three years). This view has obvious implications for Whitaker.
The Supreme Court did not address the remedy for the statutory appointments violation that it found because the NLRB (which lost below) did not raise the issue in its petition for certiorari. The underlying opinion by the U.S. Court of Appeals for the D.C. Circuit, however, did address remedies, as it ultimately voided an NLRB enforcement action concerning unfair labor practices because the complaint over those actions was brought while the acting general counsel was in office in violation of the FVRA. The reasoning that led the D.C. Circuit to this conclusion could present major problems for the Justice Department if it faces similar challenges to its actions due to Whitaker’s potentially unlawful appointment.
The FVRA prescribes a strong remedy for most violations of its requirements: There is a general rule that, as the Supreme Court explained, “actions taken in violation of the FVRA are void ab initio”—meaning that they “shall have no force and effect” and “may not be ratified” after the fact. But the statute exempts from that remedy “the General Counsel of the National Labor Relations Board,” as the D.C. Circuit noted. The labor board argued that this made the acting general counsel’s actions merely “voidable, not void,” and presented two arguments as to why the actions should not be voided—arguments similar to those that the Justice Department might advance if Whitaker’s appointment were found to be invalid. (None of the prevailing theories against Whitaker’s appointment alleges that he was appointed in violation of the FVRA itself.) The D.C. Circuit assumed without deciding that the NLRB was correct on the effect of the FVRA exemption but ultimately rejected both of its arguments as to why the complaint of unfair labor practices should not be voided.
The D.C. Circuit rejected the NLRB’s reliance on the “de facto officer” doctrine, which, as its name suggests, is a legal rule that validates exercises of apparent authority even in the absence of actual authority. Although the doctrine has “feudal” origins, in its current form it gives way when the complaining party brings a timely objection to the officer’s status and the agency or department involved has reasonable notice of the claimed defect. The court found it sufficient to satisfy those requirements that the company that was the subject of the unfair labor practices complaint, known as Southwest, had raised the appointment issue as a defense before the administrative law judge and again before the NLRB itself. (Other plaintiffs who did not timely raise such objections have not been as fortunate.) Whitaker’s appointment, however, has generated huge publicity; OLC’s memo reflects the Justice Department’s awareness of the legal challenges; and many litigants are going to raise the issue in order to preserve it for further review. The de facto officer doctrine is therefore unlikely to solve the Justice Department’s problems if Whitaker’s appointment is indeed improper.
The D.C. Circuit also rejected the NLRB’s claim that the acting general counsel’s improper appointment was harmless error. Although the disputed complaint had issued during the tenure of the acting general counsel, the labor board itself later adopted the recommended order of the administrative law judge’s finding against Southwest based on the complaint. The NLRB therefore argued that the FVRA error was harmless by analogy to prior decisions finding that certain errors in a criminal indictment may be rendered harmless by a subsequent jury verdict of guilt.
The court rejected the analogy, noting precedent that “issues of separation of powers are structural errors that do not require a showing of prejudice because it will often be difficult or impossible for someone subject to a wrongly designed scheme to show that the design—the structure—played a causal role in his loss.” The court explained that in such cases, “Demand for a clear causal link to a party’s harm would frustrate the prophylactic goal of the separation of powers — i.e., establishing high walls and clear distinctions because low walls and vague distinctions will not be judicially defensible in the heat of interbranch conflict.” If a reviewing court finds Whitaker’s appointment improper and takes that approach to the scope of the remedy, the Justice Department may be in big trouble.
The NLRB General Counsel is statutorily independent from the Board, and he has final authority over the issuance of ULP complaints. He essentially exercises prosecutorial discretion: he need not issue a complaint even if he believes a ULP was committed. Moreover, the General Counsel sets the enforcement priorities for the NLRB and generally supervises its lawyers. During oral argument, the Board conceded that, if the General Counsel's office were vacant, the NLRB would not be issuing complaints. The Board nonetheless argued that, because the type of ULP charged against Southwest was not of substantial legal interest to [the] Acting General Counsel . . . that particular complaint did not require submission to the General Counsel’s Office for review beforehand. Southwest rightly points out, however, that a different General Counsel may have imposed different requirements and procedures during his tenure. Accordingly, notwithstanding the final Board order, we cannot be confident that the complaint against Southwest would have issued under an Acting General Counsel other than [the one improperly appointed by President Obama].
Much of this paragraph ought to be of concern to the Justice Department today. The unfair labor practices judgment was invalid, the D.C. Circuit found, because it was issued during the tenure of the improperly appointed acting general counsel. It did not matter that the general counsel did not personally review or approve the complaint, because he “essentially exercises prosecutorial discretion,” he “sets the enforcement priorities” for the agency and he “generally supervises its lawyers.” It was sufficient for the court that a different acting general counsel, properly appointed, might have reviewed and disapproved the complaint.
Interested litigants can be expected to argue that this analysis applies to actions taken during the tenure or pursuant to the authority of an improperly appointed acting attorney general, whether or not the acting attorney general was personally involved in the relevant Justice Department decision or action. (Litigants have tried similar tactics in the past regarding the actions of U.S. attorneys whom they argued were improperly appointed.) At least as much as the NLRB’s general counsel, the acting attorney general exercises prosecutorial discretion, sets enforcement priorities for his agency and generally supervises its lawyers. Indeed, as spelled out in 28 U.S.C. § 509, with very few exceptions, “[a]ll functions of other officers of the Department of Justice and all functions of agencies and employees of the Department of Justice are vested in the Attorney General.” (28 U.S.C. § § 516 and §533 contain similar provisions regarding the attorney general’s powers.) Whether or not Whitaker personally makes or takes a particular decision or action, therefore, some will say it is sufficient that a different attorney general, properly appointed, might have done so and reached the opposite decision. Smart litigants will also attempt wherever possible to provoke or trigger the personal involvement of the acting attorney general in their cases, in order to strengthen their claims for later.
Of course, if necessary, the Justice Department will respond that S.W. General is distinguishable and might also identify other arguments to limit the remedy for an improper appointment. One possible difference between S.W. General and Whitaker’s case concerns the statutory bases of power exercised by subordinates of the acting general counsel (under, for example, 29 U.S.C. §§ 153(d), 154) and the acting attorney general (under, for example, 28 U.S.C. §§ 503, 509-510 and 519). Certain subordinates of the attorney general are themselves statutorily charged with performing important functions in ways not expressly contingent on the attorney general and in ways that may be distinguishable from the distribution of authority within the NLRB. For example, as noted above, regardless of who is or is not the acting attorney general, the deputy attorney general is clearly authorized to sign FISA applications. See also 18 U.S.C. §§ 2516 (Wiretap Act), 2709(b) (ECPA National Security Letter). Exercises of these and other independent authorities might be insulated from any infirmities arising from Whitaker’s appointment, despite the acting attorney general’s supervisory authority. Perhaps that same logic would extend to actions by the assistant attorneys general, most of whom merely “assist the Attorney General” under 28 U.S.C. § 506—the assistant attorney general for national security has certain independent powers when designated by the president under 28 U.S.C. § 507A—or by the U.S. attorneys, who have the duty to “prosecute for all offenses against the United States” within their districts under 28 U.S.C. § 547(1), albeit subject to the attorney general’s plenary control.
Whatever distinctions exist between the lines of authority within the two agencies, the D.C. Circuit seems to have been able to imagine the huge abyss that a high-profile and improper Justice Department appointment might open. For that reason, I think, it was careful near the end of its analysis to note that its conclusion about the acting general counsel of the NLRB “does not control whether the ineligibility of an official with prosecutorial responsibilities in other contexts should be considered harmless.” More significant than the theoretical escape hatch created by that sentence, however, may be the recognition that the logic of the court’s opinion made it necessary.
My purpose here, of course, is not to assess authoritatively the legal arguments for and against the scope of the remedy for an improper appointment of Matthew Whitaker, any more than it is to assess authoritatively the arguments for and against his appointment in the first instance. Ultimately, if a court concludes some years from now that Whitaker was improperly appointed, I do not really believe that it will release all persons convicted or sentenced in federal court, dismiss all Justice Department civil judgments and invalidate all FISA surveillance conducted during those years. But what the D.C. Circuit’s decision and other authorities cited above may suggest is that the problems resulting from an acting attorney general’s improper appointment are not surgically limited to discrete acts like signing a FISA and that their outer limits may in fact be hard to discern. That, in turn, means that litigants may also try to get discovery into the inner workings and deliberations of the Justice Department to determine whether and to what extent Whitaker was personally involved in their cases (and as noted above, smart litigants will do whatever they can to provoke his involvement ahead of time to lay the groundwork for such claims).
4. This brings me back to the narrower point that I am trying to make here, concerning the absurdity of Whitaker’s appointment. I hope someone will point out why the concerns outlined above are overblown. But again, even if there is only a 1 percent (or lesser) chance of a really drastic remedy, then it is highly irresponsible to have appointed Whitaker. The FVRA and 28 U.S.C. § 508 together set a default rule that the deputy attorney general becomes acting attorney general, and the FVRA grants the president a fallback option to appoint another Senate-confirmed individual to fill the role. There is no need, therefore, to resort to the third option and appoint Whitaker, in an action that some legal scholars—including John Yoo, not known for supporting limits on presidential power—believe is unconstitutional. It is bad enough that Whitaker has expressed extreme views that make him a poor choice for the job; it is much worse that the appointment was plainly motivated by the president’s desire to limit an ongoing investigation in which he himself is a subject; and it is very revealing of the president’s selfishness (and/or carelessness) that, in his zeal to achieve that result, he might be putting in play a much broader set of the Justice Department’s significant activities.
I am very grateful for the timely and excellent input of Scott R. Anderson. Any remaining errors are mine alone.