George Squillacote v. United States

747 F.2d 432, 1984 U.S. App. LEXIS 16908
Court of Appeals for the Seventh Circuit·Decided November 7, 1984·No. 83-1882·Published·Cited by 14 cases

Opinion

CUMMINGS, Chief Judge.

On consideration of the government’s petition for rehearing confessing error regarding this Court’s jurisdiction, we have concluded that under 28 U.S.C. § 1295(a)(2) the United States Court of Appeals for the Federal Circuit normally would have had exclusive jurisdiction of this appeal. This case, however, is not in the usual posture. It has been fully briefed, argued, and decided, and we have issued our published opinion, Squillacote v. United States, 739 F.2d 1208 (7th Cir.1984). Our examination of the Federal Courts Improvement Act of 1982 (the “Act” or the “FCIA”), on which the government bases its petition, convinces us that transfer of the case in this situation would thwart Congressional intent and that our retention of the case is consistent with the Act’s purposes. We therefore deny the government’s petition which presented the jurisdictional argument for the first time after losing the case on the merits.

I

Jurisdiction in the lower court was based on 28 U.S.C. § 1346(a)(2). Section 1295(a)(2) of title 28 would vest exclusive jurisdiction on appeal of such cases in the Court of Appeals for the Federal Circuit rather than in one of the regional Courts of Appeals,

except that jurisdiction of an appeal in a case brought in a district court under section 1346(a)(1), 1346(b), 1346(e), or 1346(f) of this title or under section 1346(a)(2) when the claim is founded upon an Act of Congress or a regulation of an executive department providing for internal revenue shall be governed by sections 1291, 1292, and 1294 of this title. 1

If the phrase “providing for internal revenue” modifies “Act of Congress” as well as “regulation of an executive department,” then the government is correct in asserting that we lack subject matter jurisdiction. Plaintiffs’ counsel, however, makes several persuasive arguments that would restrict the limiting phrase’s effect to the second phrase, “regulation of an executive department.” The two most significant of these arguments involve accepted principles of statutory construction. First, the disjunctive “or” between “Act of Congress” and “regulation of an executive department” indicates that the phrases are alternatives and should be treated separately. See, e.g., Azure v. Morton, 514 F.2d 897, 900 (9th Cir.1975). Second, the “doctrine of the last antecedent” would limit the phrase “providing for internal revenue” to its first antecedent, a “regulation of an executive department.” Federal Trade Commission v. Mandel Brothers, Inc., 359 U.S. 385, 389-390, 79 S.Ct. 818, 822-823, 3 L.Ed.2d 893; Azure, 514 F.2d at 900.

Nonetheless, we cannot accept plaintiffs’ reasoning. First, to require a dispute over an executive • regulation not pertaining to internal revenue to go on appeal to the Federal Circuit, while mandating that a dispute over the statute on which the regulation is based go on appeal to one of the regional circuits, makes no sense. In addition, the other categories excepted from the Federal Circuit’s exclusive jurisdiction involve either tax matters or matters in *434 volving peculiarly local law issues, such as suits to quiet title in land and tort claims against the government. See 28 U.S.C. §§ 1346(a), 1346(e), 1346(f), 1346(b). The categories are fairly narrow, and to permit appeal to the regional circuits on any matter involving an Act of Congress, when matters involving the Constitution and executive regulations not pertaining to internal revenue must go to the Federal Circuit, seems too anomalous a result to allow. Furthermore, rejecting plaintiffs’ argument accords with the decisions in Oliveira v. United States, 734 F.2d 760 (11th Cir.1984); Spagnola v. Stockman, 732 F.2d 908, 909 n.2 (Fed.Cir.1984) (footnote by Chief Judge Markey describing the exceptions clause at issue here as relating to “tax cases”); and Corwin v. Lehman, 724 F.2d 1577 (Fed.Cir.1984), certiorari denied, — U.S. -, 104 S.Ct. 2680, 81 L.Ed.2d 876.

Because the statutory language is ambiguous and because transferring the case at this late date is a drastic remedy, we do not end our inquiry with this conclusion. The Senate Report accompanying the Act states explicitly that “[t]he Committee intends for the jurisdictional language to be construed in accordance with the objectives of the Act.” S.Rep. 275, 97th Cong. 2d.Sess. 20, reprinted in 1982 U.S. Code Cong. & Ad.News 11, 30. 2 Our review of the broad purposes of the Act convinces us that we can effect those purposes only by denying, the government’s belated request.

II

The majority of the legislative history accompanying the enactment of the FCIA centers on the need for centralized review of patent appeals. See id. at 2-7, reprinted in U.S.Code Cong. & Ad.News 11, 12-17; 127 Cong.Rec. H8389-H8392 (1981) (Rep. Kastenmeier, bill co-sponsor); 127 Cong. Rec. S14692-14696, S14721-S14722 (Sen. Dole, bill co-sponsor). A second purpose, however, was to “improve[] the administration of the system by reducing the number of decision-making entities within the federal appellate system.” S.Rep. 275, supra, at 3, reprinted in 1982 U.S. Code Cong. & Ad. News 11, 13. Senator Dole, the co-sponsor of the Act, remarked in introducing the legislation that the “present system requires a case to be considered at two separate levels within the U.S. Court of Claims before a claimant’s rights can be fully adjudicated.” 127 Cong.Rec. S14692 (1981). The legislation addressed this fault by merging the Court of Claims with the Court of Customs and Patent Appeals into a new Article III forum, the Court of Appeals for the Federal Circuit. The bill, said Rep. Kastenmeier, the legislation’s sponsor on the House side, “substantially improves the administration of the law in the areas of patents, government contracts, trademark and international trade; * * * and results in improved functioning of the Federal appellate system.” Id. at H8389. He defined the bill’s purpose as being to alleviate the heavy caseload on the circuit courts and to provide uniformity in patent law. Id. at H8390.

In the current case no patent issues are at stake. Consequently the only statutory purpose that might be affected is the one of efficiency in the appeals process. That being so, insuring that our decision fulfills this intent gains in importance.

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George Squillacote v. United States, 747 F.2d 432, 1984 U.S. App. LEXIS 16908 (7th Cir. 1984).

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