James Constant, Plaintiff-appellant, v. Stephen Wilson and Robert Hillman, Defendants-appellees.james Constant, Plaintiff-appellant, v. Robert Hillman, Defendant-appellee.james Constant, Plaintiff-appellant, v. Hitachi America, Ltd., Texas Instruments, Inc., Analogdevices, Inc., Nec Electronics, Inc., Spensley Horn Jubas &lubitz, Sheppard Mullin Richter & Hampton, Hopgood Calimafdekalil & Blaustein, and Robert Hillman, Defendants- Appellees.james Constant, Plaintiff-appellant, v. Marcian Hoff, Robert Hillman, Intel, Inc., Texasinstruments, Inc., Blakely, Sokoloff, Taylor &zafman and Baker, Smith & Mills,defendants-appellees, 856 F.2d 202 (Fed. Cir. 1988)

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U.S. Court of Appeals for the Federal Circuit - 856 F.2d 202 (Fed. Cir. 1988) Aug. 25, 1988

Before EDWARD S. SMITH, NIES and PAULINE NEWMAN, Circuit Judges.

EDWARD S. SMITH, Circuit Judge.


DECISION

Appellant James Constant filed four lawsuits (the fraud cases) against most of the participants in a previous lawsuit (the patent case), alleging fraud in the procurement of the judgment on the patent case. The United States District Court for the Central District of California dismissed the fraud cases against the judge and special master, and granted summary judgment in favor of all remaining defendants on all issues. The court also imposed sanctions under Fed. R. Civ. P. 11. We affirm the decision of the district court. We also impose sanctions under Fed. R. App. P. 38 because we find this appeal to be frivolous.

OPINION

I. The Earlier Patent Case.

The four cases on appeal are the outgrowth of previous litigation. In the earlier patent case, Constant, in 1985, sued 14 high technology companies for infringements of his United States patents Nos. 3,950,635 (the '635 patent) and 4,438,491 (the '491 patent). The complaint also contained several other theories of recovery and challenged the constitutionality of 35 U.S.C. § 282. Constant conducted his case pro se, as he has in the litigation now on appeal. The district court dismissed all counts except the infringement claims. The defendants filed counterclaims asking to have the patents declared invalid. Judge Wilson,1  with the agreement of all parties, appointed a special master, Robert E. Hillman, to make recommendations to the court concerning motions for summary judgment on issues of patent invalidity. After the special master issued recommendations, concluding that the patents were invalid, the court independently determined that there were no material issues of contested facts and entered summary judgment declaring all claims of both patents to be invalid under 35 U.S.C. §§ 102(b) and 103.

Constant appealed to this court. He contested not only the judgments of invalidity, but also the dismissal of his constitutional claims, the legality of a summary judgment, the role and conduct of the special master, and several procedural rulings of the district court. This court has now ruled against him on all issues. Constant v. Advanced Micro-Devices, Inc., 7 USPQ2d 1057 (Fed. Cir. 1988) (Constant I) .

II. The Fraud Cases.

In October and November 1987, while the appeal of the patent case was pending before this court, Constant filed four overlapping lawsuits against various parties in the patent litigation alleging fraud in the procurement of the judgment in that case, and a variety of tortious activities such as misrepresentation, injurious falsehood, and interference with property and contract rights. In Constant v. Hillman (CV-87-06592-R), the defendant was Robert E. Hillman, a patent attorney who served as a special master in the patent case. In Constant v. Wilson (CV-87-07315-R), Constant sued Hillman and The Honorable Steven V. Wilson, the judge who presided over the later phases of the patent case. In Constant v. Hoff (CV-87-06766-R), the defendants were Hillman, two of the defendants in the patent case (Intel, Inc., and Texas Instruments, Inc.), the law firms that represented them in the patent case, and Marcian Hoff, an expert witness for Intel, whose deposition was relied upon by the court when it invalidated the '491 patent. In Constant v. Hitachi, (CV-87-07046-R), the defendants were again Hillman and the defendants in the patent case (Intel, Texas Instruments, Hitachi of America, Ltd., Analog Devices, Inc., and NEC Electronics, Inc.), together with their lawyers.

The district court (Real, C.J.) dismissed the cases against Hillman and Judge Wilson on the grounds of judicial immunity. The court granted summary judgment in favor of the remaining defendants on all issues, and also imposed sanctions against Constant in the form of attorney fees under Fed. R. Civ. P. 11.

The four cases on appeal arise from a single set of factual circumstances and overlap in the parties, theories of recovery, grounds for the dismissals, and basis for the sanctions. In view of the duplicative nature of the cases, in this opinion they will all be considered together.

III. Jurisdiction.

A threshold question is whether this court has jurisdiction to hear these appeals. The Government, representing Hillman and Judge Wilson, argues that this court lacks jurisdiction. The only arguable source of jurisdiction for this court to consider this appeal is 28 U.S.C. § 1295(a)-(1) which empowers this court to entertain appeals of final decisions of a district court where the lower court's jurisdiction "was based, in whole or in part, on section 1338 of [title 28]." Section 1338 grants federal district courts original jurisdiction over "any civil action arising under any Act of Congress relating to patents." The Government points out that Constant's complaint does not explicitly allege jurisdiction based on any statute relating to patents.2  The Government urges that this court dismiss the appeals for lack of jurisdiction, and then decline to transfer the cases under 28 U.S.C. § 1631 since it would not be in the "interest of justice." See Galloway Farms, Inc. v. United States, 834 F.2d 998, 1001 (Fed. Cir. 1987). The practical effect of such a dismissal would be that appellant would not be able to appeal to the Ninth Circuit because the time for filing an appeal has elapsed and, therefore, all decisions of the district court would stand as final.

This court has the inherent jurisdiction to determine its own jurisdiction. C.R. Bard, Inc. v. Schwartz, 716 F.2d 874, 877, 219 USPQ 197, 200 (Fed. Cir. 1983). Substance, not form, controls our evaluation of pleadings to determine jurisdiction. "Implicit in our mandate is the authority to recharacterize pleadings which would improperly evade the intent of Congress." Chemical Engineering Corp. v. Marlo, Inc., 754 F.2d 331, 333, 222 USPQ 738, 740 (Fed. Cir. 1984); see also Williams v. Secretary of Navy, 787 F.2d 552, 558 (Fed. Cir. 1986).3  Close analysis of the pleadings is especially appropriate in cases such as this where the pleadings were drafted by a pro se appellant who is not an attorney. See Haines v. Kerner, 404 U.S. 519, 520 (1972).

Jurisdiction of the district court arises in part under the patent laws, and thus provides jurisdiction for an appeal to this court under 28 U.S.C. § 1295(a) (1), in:

cases in which a well-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.

Christianson v. Colt Industries Operating Corp., 56 U.S.L.W. 4625, 4627 (U.S. June 17, 1988). The well-pleaded complaint rule provides that jurisdiction arises from the plaintiff's cause of action, and not from plaintiff's defenses to counterclaims or plaintiff's answers to the defendant's affirmative defenses. Louisville & N. R.R. v. Mottley, 211 U.S. 149 (1908).

Although Constant's complaints do not explicitly request relief provided by the patent laws, when his complaints are construed under the liberal pleadings standard of Haines v. Kerner, we find that this court has jurisdiction over these appeals under two alternative theories: (1) these cases must be treated as, in effect, motions or proceedings that are properly part of a previous case, Constant I, over which this court has jurisdiction or (2) penetrating behind the wording of the complaints to the substance, "patent law is a necessary element of one of the well-pleaded claims." Christianson, 56 U.S.L.W. at 4627.

First, this court has subject matter jurisdiction under 28 U.S.C. § 1295(a) over entire cases, including dependent nonpatent issues. Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 1429, 223 USPQ 1074, 1080-81 (Fed. Cir. 1984); Panduit Corp. v. All States Plastic Manufacturing Co., 744 F.2d 1564, 1573, 223 USPQ 465, 470 (Fed. Cir. 1984). Our jurisdiction extends not only to the final decisions of the district court in the main case under 28 U.S.C. § 1291 but also to certain other final orders such as interlocutory decisions made appealable under 28 U.S.C. § 1292. A ruling of a district court under Fed. R. Civ. P. 60(b) is final and appealable. Ashland Oil, Inc. v. Delta Oil Products Corp., 806 F.2d 1031, 1032, 1 USPQ2d 1073, 1074 (Fed. Cir. 1984). These cases presently on appeal properly are construed, in their substance, as motions to reopen the judgments in the patent suit, Constant I, on grounds of fraud under Rule 60(b) (3). The decisions of the trial court are, in effect, denial of these motions over which we have jurisdiction.

Second, even though the patent laws are not explicitly invoked in the complaints, when the substance of the complaints is analyzed under the liberal pleadings standard of Haines v. Kerner, then we find that this court has section 1295(a) jurisdiction over the appeals from the district court cases under the well-pleaded complaint rule.

Examination of the complaints in the four "fraud" cases reveals that there are critical allegations that turn on construction of the patent laws, which Constant must prove to support his rights to relief:

(1) Each complaint asserts that the "fraud" and "falsehoods" of Hillman, a defendant in all four cases, consisted of the reports that he submitted as a special master on the validity of Constant's patents and his testimony about the contents of those reports. The recommendations of the special master discussed both factual and legal positions about the validity of the '635 and '491 patents. Those recommendations were adopted by the district court and formed the framework for the decisions that both patents were invalid. The judgment of invalidity of the patents was reviewed by this court in Constant I and was affirmed. Constant I, 7 USPQ2d at 1061-65. No court could find Hillman's statements to be false or to constitute elements of tortious acts without construing and applying the patent laws, particularly 35 U.S.C. §§ 102(b) and 103, to the facts of the patent case. Constant's case could only be sustained if a court were to find that the applicable portions of the patent statute mean something different from the interpretation of the district court as affirmed by this court. Many allegations against the other defendants also depend inextricably on first finding that Hillman's recommendations to the court were "false" and thus require the same construction of the patent laws.

(2) In Constant v. Hoff, the sole "fraud" alleged against Dr. Hoff, an expert witness in the patent case, was his testimony that, in his opinion, the '491 patent was anticipated by Intel's exhibit 5. None of the statements attacked by Constant concerns the truth or falsehood of facts. The statements involve questions of claim construction, such as whether the word "computer" in the preamble of claims in the '491 patent is a limitation and, if so, whether a claimed computer requires a program to be enabling. (This court has affirmed the district court's rulings against Constant on these issues. Constant I, 7 USPQ2d at 1062-63.) Clearly, construction of the patent laws is required to determine whether Constant has any cause of action against Dr. Hoff. The cases against all of the other defendants in Constant v. Hoff depend essentially on whether the same opinions of Dr. Hoff and Hillman are "false," which cases in turn require interpretation of the patent laws.

(3) The complaint in Constant v. Wilson asks the court to declare the judgment in the patent case to be void because the district court lacked jurisdiction. Constant contends that the federal courts lack jurisdiction to invalidate any patent in an infringement suit because 35 U.S.C. § 282 is unconstitutional, and that the Patent Office has exclusive jurisdiction to decide the validity of patents. These theories were rejected by the district court in the patent case, and we affirmed in Constant I, 7 USPQ2d at 1058-59. This question clearly arises under the patent laws.

Thus, Constant is asserting rights that could not exist under one construction of the patent laws but might exist under an opposite construction. In each of these cases, "patent law is a necessary element of one of the well-pleaded claims." Christianson, 56 U.S.L.W. at 4627. Jurisdiction, therefore, exists for this court to decide the appeals of the four fraud cases even though the complaints do not explicitly invoke the patent laws.

This does not imply that this court should assume jurisdiction over every case involving charges of fraud in the procurement of a judgment in a patent case. We have jurisdiction in these particular cases because these cases depend on allegations that, although cloaked in terms of fraud, actually turn only on legal issues that would be sustained by one construction of the patent laws and defeated by an opposite construction.

IV. The Merits.

There are multiple reasons for affirming the decisions of the district court. The district court correctly ruled that the judge and the special master are both absolutely immune from liability. See Butz v. Economou, 438 U.S. 478, 508-17 (1978); Pierson v. Ray, 386 U.S. 547, 553-54 (1967). Judicial immunity extends not only to the judge, but also to all participants who perform an integral part in the judicial process. Butz, 438 U.S. at 512. A special master is a judicial officer. In re Gilbert, 276 U.S. 6, 9 (1928); Fed. R. Civ. P. 53. A special master is thus entitled to absolute immunity for acts performed within the scope of his official duties. We have reviewed the actions of the special master and found that they were all properly within the limits of his appointment. Constant I, 7 USPQ2d at 1061. Constant's lawsuits present exactly the type of vexatious and frivolous suits against judges and judicial personnel that the doctrine of judicial immunity is designed to guard against. See Forrester v. White, 108 S. Ct. 538, 544 (1988). The cases cited by Constant to argue for qualified immunity or the inappropriateness of a dismissal under Fed. R. Civ. P. 12(b) (6) are inapposite and are generally harmful to his case.

We also note that had it been permissible to inquire into the merits of Constant's complaints against the judge and the special master, he would have lost on all issues. The rulings by Judge Wilson and the actions of the special master of which Constant complains were reviewed by this court and were found to be entirely proper. Constant I, 7 USPQ2d at 1060-61, 1065. Other than disagreeing with the special master's legal recommendations, Constant's charge of "fraud" is based on his view that Hillman was unqualified to serve as a special master and that Hillman knowingly misrepresented himself as qualified. This court has specifically affirmed the lower court's finding that Hillman was well qualified to serve as a special master for that litigation. Id. at 1061. We have also reviewed and affirmed Judge Wilson's rulings concerning the special master which rulings Constant now improperly tries to label as "fraud." Id. at 1060-61.

In his summary judgment orders, Chief Judge Real correctly determined that Constant's cases were an impermissible collateral attack on the previous judgments invalidating the '491 and '635 patents and were barred by the doctrine of res judicata. The proper course for a dissatisfied litigant to redress legal errors is through appeal, not collateral attack on the judgment in a separate lawsuit. MGA, Inc. v. General Motors Corp., 827 F.2d 729, 731-32, 3 USPQ2d 1762, 1763 (Fed. Cir. 1987), cert. denied, 108 S. Ct. 705 (1988). Even though a second suit "has an independent purpose and contemplates some other relief, it is a collateral attack if it must in some fashion overrule a previous judgment." Miller v. Meinhard-Commercial Corp., 462 F.2d 358, 360 (5th Cir. 1972).

Relitigation of claims and issues through collateral attack is barred by the principles of res judicata. MGA, 827 F.2d at 731-32, 3 USPQ2d at 1763; Young Engineers, Inc. v. United States International Trade Commission, 721 F.2d 1305, 1314-15, 219 USPQ 1142, 1150-51 (Fed. Cir. 1983). Res judicata is a broad term referring to both claim preclusion and issue preclusion (collateral estoppel). Id. at 1314, 219 USPQ at 1150; Restatement (Second) of Judgments Sec. 13 (1982). Issue preclusion bars a litigant from relitigating issues that were actually litigated by him in a previous lawsuit if:

(1) the issue is identical to one decided in the first action; (2) the issue was actually litigated in the first action; (3) resolution of the issue was essential to a final judgment in the first action; and (4) plaintiff had a full and fair opportunity to litigate the issue in the first action. [Footnote omitted.]

A.B. Dick Co. v. Burroughs Corp., 713 F.2d 700, 702, 218 USPQ 965, 967 (Fed. Cir. 1983), cert. denied, 464 U.S. 1042 (1984).

As discussed in Part III, supra, the "fraud" cases actually seek to reverse the invalidation of Constant's patents in the earlier patent case. Constant's complaints also explicitly seek to relitigate various issues of the district court in that case concerning the special master, discovery, whether the proceedings of the patent action violated Constant's right to due process, the constitutionality of 35 U.S.C. § 282, the constitutionality of summary judgments, the applicability of 42 U.S.C. § 1985(3) as a cause of action in the patent suit, and the certification of a class action on behalf of inventors. Relitigation of all of these issues is barred by the principles of res judicata.

The district court correctly determined that Constant failed to raise any issue of extrinsic fraud as required to set aside a prior judgment, Wood v. McEwen, 644 F.2d 797, 801 (9th Cir. 1981), cert. denied, 455 U.S. 942 (1982), and that he failed to plead fraud with the particularity required by Fed. R. Civ. P. 9(b). Miscellaneous Service Workers v. Philco-Ford Corp., 661 F.2d 776, 782 (9th Cir. 1981). The court properly dismissed the claims under 42 U.S.C. § 1983 for lack of state action, Haldane v. Chagnon, 345 F.2d 601, 604-05 (9th Cir. 1965), and the claims under section 1985(3) for lack of the requisite racial- or class-based animus. United Brotherhood of Carpenters v. Scott, 463 U.S. 825, 839 (1983).

V. Sanctions.

The district court imposed sanctions in the form of attorney fees because it found Constant's claims to be frivolous, unreasonable, and without merit, and found that they had subjected the court and the defendants to needless annoyance, expense, and harassment. An award of attorney fees is justified where groundless lawsuits are pursued merely as a reprisal against prevailing litigants and officers of the court, Cook v. Peter Kiewit Sons Co., 775 F.2d 1030, 1036-37 (9th Cir. 1985), cert. denied, 476 U.S. 1183 (1986), and where litigation is pursued after it becomes clear that it is unreasonable to do so. Christiansburg Garment Co. v. Equal Employment Opportunity Commission, 434 U.S. 412, 422 (1978). Under these standards, the imposition of Rule 11 sanctions was clearly justified. It is clear from the record that these lawsuits were intended to harass judicial officers and prevailing litigants in the patent suit.

Many of Constant's attempts to punish the participants in the patent case are rather scurrilous. For example, the complaints allege that " [a]s a result of Hillman's wanton, willful, knowing and deliberate acts, Mr. Hillman has, on information and belief, received payments and other benefits from defendants [in the patent case]." Thus, Constant attempted to impart an air of impropriety to the fact that the corporate defendants have had to pay the fees for Hillman's services as a special master. In the usual course of events the plaintiff and defendants would have split the fees for the special master. Because of the disparity of resources between the pro se plaintiff and the corporate defendant, the district court allowed Constant's motion to require that the defendants bear the entire burden. This is one of several instances in which, after accepting the benefits of special allowances and dispensations from the court because of his pro se status, appellant has twisted the meaning of these generous acts into an appearance of impropriety and conspiracy.

Constant's arguments that the court should have taken relative wealth into account do not require reversal. This issue was not raised in the district court, and Constant has provided no evidence showing an inability to pay. The district court had discretion in determining the amount of sanctions, and we see no abuse of discretion in the amount set by that court. Stewart v. American International Oil & Gas Co., 845 F.2d 196, 202 (9th Cir. 1988).

Constant's appeals to this court were similarly frivolous, subjected the appellees to burdensome legal expenses, and caused unnecessary work for this court. It should have been clear from the opinion of the district court and from the imposition of sanctions that further prosecution of these lawsuits would be unreasonable and frivolous. This court has the power to sanction such frivolous appeals under Fed. R. App. P. 38. Zuger v. United States, 834 F.2d 1009, 1010 (Fed. Cir. 1987); Devices for Medicine, Inc. v. Boehl, 822 F.2d 1062, 1069, 3 USPQ2d 1288, 1294 (Fed. Cir. 1987); Asberry v. United States Postal Service, 692 F.2d 1378, 1382, 215 USPQ 921, 921 (Fed. Cir. 1982). Accordingly, we impose a sanction of $2,000 against appellant James Constant for bringing these frivolous appeals, and require him to pay to the private appellees both reasonable attorney fees and costs incurred by them on this appeal.

 1

The case was brought in the United States District Court for the Central District of California, and was initially heard before The Honorable Pamela A. Rymer. The case was transferred to The Honorable Steven V. Wilson on December 16, 1985. Although the cases appealed here represent a collateral attack on rulings by both judges, only Judge Wilson was named as a defendant

 2

The complaint alleged jurisdiction pursuant to 28 U.S.C. § 1331 (federal question jurisdiction arising from constitutional claims), 28 U.S.C. § 1332 (diversity), 28 U.S.C. § 1343 (civil rights claims), and "pendent jurisdiction" arising from the previous case. The Government strenuously objects to the propriety of pendent jurisdiction in this case. The complaint does allege jurisdiction under 35 U.S.C. § 154 (patent holder has the right to exclude others from making, using, and selling), and Sec. 261 (a patent shall have the attributes of personal property), but these sections of the statute are relevant to jurisdiction, if at all, only in the context of Constant's constitutional theories which we have found to be erroneous

 3

There is no evidence here that Constant intentionally drafted his pleadings to evade the jurisdiction of the Federal Circuit. Indeed, he has brought his appeals to this court