Lear, Inc. v. Adkins/Concurrence White

Mr. Justice WHITE, concurring in part.

The applicable provision of 28 U.S.C. § 1257 empowers us to review by writ of certiorari '(f)inal judgments or decrees rendered by the highest court of a State * *  * where any title, right, privilege or immunity is specially set up or claimed under the Constitution, treaties or statutes of, or commission held or authority exercised under, the United States.' Although Adkins disputes it, we have jurisdiction to consider whether a patent licensee is estopped to challenge the validity of the patent. The California Supreme Court ruled that he is and therefore he would not entertain attacks on Adkins' patent as a defense to his suit for royalties. Lear seeks review of that holding here. In my view, not only is the issue properly here but the Court has correctly decided it.

Although we have jurisdiction to review this state court judgment and to determine the licensee estoppel issue, it does not necessarily follow that we may or should deal with two other federal questions which come into focus once the licensee is free to challenge the patent. The first is whether the patent is valid. The second, which arises only if the patent is invalidated, is whether federal law forbids the collection of royalties which might otherwise be collectible under a contract rooted in state law. Although the Court does not deal with the first issue, it does purport to decide the second, at least in part. However, as either a jurisdictional or a policy matter, neither of these issues is properly before us in this case.

In the first place, we have no decision of the California Supreme Court affirming or denying, as a matter of federal law, that Adkins may not enforce his contract if his patent is held invalid. The California court held that the license agreement had not been terminated in accordance with its terms, that the doctrine of licensee estoppel prevented Lear from challenging the patent and that Lear was utilizing the teaching of Adkins' patent. There was thus no necessity or reason to consider whether the patent was invalid, or, if it was, whether either state or federal law prevented collection of the royalties reserved by the contract. Even if these issues hd been presented to the California Supreme Court, sound principles would have dictated that the court not render a decision on questions unnecessary to its disposition of the case. See, e.g., Southwestern Bell Telephone Co. v. Oklahoma, 303 U.S. 206, 212-213, 58 S.Ct. 528, 530, 82 L.Ed. 751 (1938).

There is no indication, however, that Lear, directly or by inference, urged in the California courts that if Adkins' patent were invalid, federal law overrode state contract law and precluded collection of the royalties which Lear had promised to pay. One of the defenses presented by Lear in its answer to Adkins' claim for royalties was that there had been a failure of consideration because of the absence of bargained-for patentability in Adkins' ideas. But failure of consideration is a state law question, and I find nothing in the record and nothing in this Court's opinion indicating that Lear at any time contended in the state courts that once Adkins' patent was invalidated, the royalty agreement was unenforceable as a matter of federal law.

Given Lear's failure below to 'specially set up or claim' the federal bar to collection of royalties in the event Adkins' patent was invalidated, and without the California Supreme Court's 'final judgment' on this issue, I doubt our jurisdiction to decide the issue. But even if jurisdiction exists, the Court should follow its characteristic practice and refuse to issue pronouncements on questions not urged or decided in the state courts.

In McGoldrick v. Compagnie Generale Transatlantique, 309 U.S. 430, 60 S.Ct. 670, 84 L.Ed. 849 (1940), the Court, while recognizing it had jurisdiction to determine whether a New York tax was an unconstitutional burden on interstate commerce, refused to consider whether the tax was a prohibited impost or duty on imports and exports, saying: '(I)t is only in exceptional cases, and then only in cases coming from the federal courts, that (the Court) considers questions urged by a petitioner or appellant not pressed or passed upon in the courts below. * *  * (D)ue regard for the appropriate relationship of this Court to state courts requires us to decline to consider and decide questions affecting the validity of state statutes not urged or considered there.' Id., at 434, 60 S.Ct., at 672.

Wilson v. Cook, 327 U.S. 474, 66 S.Ct. 663, 90 L.Ed. 793 (1946), reached a similar conclusion. There the Court denied a government contractor the benefit of the implied constitutional immunity of the Federal Government from taxation by the State, but at the same time declined to consider whether the state tax at issue placed a forbidden tax directly on the United States. This was because the Courtw as 'not free to consider' a ground of attack 'not presented to the Supreme Court of Arkansas or considered or decided by it,' even though the issue was in some measure related to one actually decided by the state courts and arose under the same implied constitutional immunity argument. Id., at 483, 66 S.Ct. at 668. Cf. Dewey v. Des Moines, 173 U.S. 193, 197-198, 19 S.Ct. 379, 380, 43 L.Ed. 665 (1899). The Court relied on McGoldrick and a long line of prior cases, including People of State of New York ex rel. Cohn v. Graves, 300 U.S. 308, 317, 57 S.Ct. 466, 469, 81 L.Ed. 666 (1937), where the Court had said: 'In reviewing the judgment of a state court, this Court will not pass upon any federal question not shown by the record to have been raised in the state court or considered there, whether it be one arising under a different or the same clause in the constitution with respect to which other questions are properly presented.'

The result is the same when a party has attempted to raise an issue in the state court but has not done so in proper or timely fashion. 'Questions first presented to the highest State court on a petition for rehearing come too late for consideration here * *  * .' Radio Station WOW v. Johnson, 326 U.S. 120, 128, 65 S.Ct. 1475, 1480, 89 L.Ed. 2092 (1945). 'Since the State Supreme Court did not pass on the question now urged, and since it does not appear to have been properly presented to that court for decision, we are without jurisdiction to consider it in the first instance here.' CIO v. McAdory, 325 U.S. 472, 477, 65 S.Ct. 1395, 1398, 89 L.Ed. 1741 (1945). And no different conclusion obtains when the federal question, although not yet presented to or decided by the state court, will probably or even certainly arise during further proceedings held in that court. See, e.g., NAACP v. Alabama, 357 U.S. 449, 466-467, 78 S.Ct. 1163, 1173-1174, 2 L.Ed.2d 1488 (1958); Hudson Distributors, Inc. v. Eli Lilly & Co., 377 U.S. 386, 394-395, 84 S.Ct. 1273, 1279, 12 L.Ed.2d 394 (1964).

Wholly aside from jurisdictional considerations or those relating to our relationships with state courts, there is the matter of our own Rule 23(1)(c), which states that '(o)nly the questions set forth in the petition or fairly comprised therein will be considered by the court.' See Flournoy v. Wiener, 321 U.S. 253, 259, 64 S.Ct. 548, 551, 88 L.Ed. 708 (1944). None of the questions presented by Lear's petition for certiorari comes even close to the issue to which the Court now addresses itself-an issue which will arise only if Lear can and does challenge the patent, if the patent is declared invalid, if Adkins nevertheless seeks to enforce the agreement, and if Lear interposes a defense based on federal law.

This seems a poor case for waiving our Rules. In the first place the question of validity has not been reached by the California Supreme Court, and when it is the patent may withstand attack. In that event there will be no necessity to consider the impact of patent law on the enforceability of a contract grounded in state law. Second, even if the patent is declared invalid, the state court, after the parties have addressed themselves to the issues, may accommodate federal and state law in a matter which would not prompt review here. Third, the parties themselves have neither briefed nor seriously argued the question in this Court, and we do not have the benefit of their views on what is surely a difficult question. The Court itself has flushed the issue, which it now deals with on a piecemeal basis. Like the question of patent validity, I would leave the consequences of invalidity to the state court in the first instance.