Notice & Comment

Judicial Review Bars in the Patent System, Medicare, and Beyond, by Laura Dolbow

Throughout the administrative state, laws regularly bar judicial review. In an article forthcoming in the Vanderbilt Law Review, I locate 190 statutory provisions that expressly bar judicial review over agency actions. Although review bars expressly state that judicial review is not available, litigation disputes frequently arise about how broad a review bar really is. One common dispute is whether a review bar is limited to individual, case-by-case agency determinations or whether it also covers generally applicable policies about how an agency will exercise its discretion to reach a determination that is barred from review.

For example, a provision in the America Invents Act bars judicial review over Patent Office decisions about whether to institute post-grant review proceedings, called “IPRs.” The review bar clearly covers individual decisions that Patent Trial and Appeal Board (“PTAB”) judges make about whether to grant IPR petitions. Yet recently, in Apple v. Vidal, the Federal Circuit considered whether the review bar also covers challenges to the Patent Office’s binding guidance about factors that PTAB judges will consider when deciding whether to grant IPR petitions. 

The Federal Circuit concluded that the answer is: sort of. It held that the express review bar over IPR institution decisions precludes challenges to the substance of the Patent Office’s policy guidance, but not challenges to the procedures that the Patent Office Director used to issue guidance. Under this view, the plaintiffs cannot bring claims under the APA that the guidance is contrary to the statute or arbitrary and capricious. Plaintiffs can, however, bring a claim that the Patent Office did not comply with notice-and-comment requirements under the APA. The Federal Circuit remanded for the district court to consider whether notice-and-comment procedures are required. (It also held that the procedural choices are not committed to the agency’s discretion under Section 701(a)(2) of the APA.)

The practical impact of this decision may be limited in the patent world. First, the Patent Office Director has stated that the Patent Office plans to voluntarily undergo formal rulemaking about the policy soon anyway. Second, it is unclear the Patent Office’s policy guidance is the type of action that requires notice-and-comment procedures under the APA. In Lincoln v. Vigil, 508 U.S. 180, 196 (1993), for example, the Supreme Court held that policy statements about how an agency plans to exercise a discretionary power are exempt from notice-and-comment requirements under the APA. 

Yet even if the decision does not have much of an impact on patent practice, the decision may influence litigation over review bars in other contexts, such as Medicare. The Inflation Reduction Act bars judicial review over HHS decisions about the drugs eligible for the Medicare price negotiation program, and the maximum fair prices for those drugs. Given the review bar on individual price determinations, some have suggested that pharmaceutical companies may try to challenge HHS guidance about implementation of the Medicare price negotiation program. HHS recently issued initial guidance for its implementation of the Medicare price negotiation program. It is voluntarily providing a 30-day comment period and plans to issue revised guidance afterwards. If companies challenge the final guidance, they may point to the Federal Circuit’s recent decision as precedent for the notion that an express review bar does not cover procedural challenges.

In the Medicare context, however, the D.C. Circuit has consistently taken a different approach to express review bars. Just a few days before the Federal Circuit’s Apple v. Vidal decision, for instance, the D.C. Circuit issued an opinion about a Medicare review bar covering payments to hospitals that serve a disproportionate share of low-income patients. In Ascension Borgess Hospital v. Becerra, the D.C. Circuit held that an express review bar precluded judicial review of a claim that HHS was required to promulgate audit instructions through notice-and-comment rulemaking. This approach follows a long line of D.C. Circuit case law holding that express review bars preclude judicial review over both whether HHS decisions are arbitrary and capricious and whether they are procedurally deficient. See, e.g.Texas Alliance for Home Care Servs. v. Sebelius, 681 F.3d 402, 408-11 (D.C. Cir. 2012); Amgen, Inc. v. Smith, 357 F.3d 103, 113 (D.C. Cir. 2004). Under this approach, courts may consider claims that an agency action was ultra vires (i.e., clearly outside its statutory authority) and colorable constitutional claims, but not claims that an agency did not adequately explain its decision or should have followed notice-and-comment procedures.

Given that the Inflation Reduction Act review bars appear in the Medicare context, the D.C. Circuit cases interpreting Medicare statutes will be significant precedent. Yet there is some tension between the Federal Circuit approach and the D.C. Circuit approach to express review bars. Both courts have concluded that review bars preclude review over claims that an agency action is arbitrary and capricious. But they seem to take divergent approaches to whether express review bars preclude review over claims that agency actions are procedurally deficient or authorized by the statute.  The tension in these cases highlights the interpretation issues that arise when courts construe judicial review bars. 

Since review bars exist throughout the administrative state, these statutory construction issues will likely continue in other contexts as well. In the modern administrative state, it is inevitable that agency heads will delegate discretionary decisions to other agency officials, and they will often issue policy guidance about how to exercise that discretion. As Professors Gillian Metzger and Kevin Stack argue in their article Internal Administrative Law, such policy guidance can serve good governance values of transparency and consistency. Barring judicial review over such policy guidance may help encourage agencies to publicly issue guidance about how they will exercise discretion. Therefore, in future legislation, Congress should consider expressly stating whether review bars apply to guidance that agencies issue about how they will exercise their discretion. 

Laura Dolbow is a Sharswood Fellow at the University of Pennsylvania Carey Law School.

Print Friendly, PDF & Email