author: Chief Justice Roberts

text:
    ENGQUIST v. OREGON DEPARTMENT OF AGRICULTURE et al.
    CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
    No. 07-474.
    Argued April 21, 2008
    Decided June 9, 2008

      Neal Katyal argued the cause for petitioner. With him on the briefs were David H. Remes, Jeffrey C. Wu, Virginia A. Seitz, Jeffrey T Green, Quin M. Sorenson, Craig A. Crispin, and Sarah O'Rourke Schrup.

      Janet A. Metcalf, Assistant Attorney General of Oregon, argued the cause for respondents. With her on the brief were Hardy Myers, Attorney General, Peter Shepherd, Deputy Attorney General, and Mary H. Williams, Solicitor General.

      Lisa S. Blatt argued the cause for the United States as amicus curiae urging affirmance. With her on the brief were former Solicitor General Clement, Acting Solicitor General Garre, Acting Assistant Attorney General Bucholtz, and Irene M. Solet

      Briefs of amici curiae urging reversal were filed for the Lambda Legal Defense and Education Fund, Inc., et al. by William M. Hohengarten, Jon W. Davidson, Susan L. Sommer, Steven R. Shapiro, and Gary D. Buseck; for the National Association of Police Organizations, Inc., et al. by William John Johnson and J. Michael McGuinness; for the National Education Association et al. by John M. West, Michael D. Simpson, Harold Craig Becker, and Jonathan R Hiatt; for the National Employment Lawyers Association by Kathleen Eldergill; for the National Fraternal Order of Police by Larry H. James and Christina L. Corl; for Richard Epstein et al. by Aaron M. Panner; and for Meir J. Westreieh by Mr. Westreich, pro se.

      Briefs of amici curiae urging affirmance were filed for the Commonwealth of Pennsylvania et al. by Thomas W. Corbett, Jr., Attorney General of Pennsylvania, John G. Knorr III, Chief Deputy Attorney General, and Calvin R. Koons, Senior Deputy Attorney General, by Roberto J. Sdnchez-Ramos, Secretary of Justice of Puerto Rico, and by the Attorneys General for their respective States as follows: Bill McCollum of Florida, Mark J. Bennett of Hawaii, Lisa Madigan of Illinois, Tom Miller of Iowa,
        Mike McGrath of Montana, Catherine Cortez Masto of Nevada, Marc Dann of Ohio, W. A Drew Edmondson of Oklahoma, Lawrence E. Long of South Dakota, Robert E. Cooper, Jr., of Tennessee, Mark Shurtleff of Utah, Robert M. McKenna of Washington, and Bruce A. Salzburg of Wyoming; for the League of California Cities et al. by Brian P. Walter; for the National Conference of State Legislatures et al. by Richard Ruda; and for the National School Boards Association by Francisco M. Negrón, Jr., Naomi Gittins, Lisa E. Soronen, Elizabeth Eynon-Kokrda, and Kenneth W. Hartman.

   Chief Justice Roberts

delivered the opinion of the Court.

The question in this case is whether a public employee can state a claim under the Equal Protection Clause by alleging that she was arbitrarily treated differently from other similarly situated employees, with no assertion that the different treatment was based on the employee’s membership in any particular class. We hold that such a “class-of-one” theory of equal protection has no place in the public employment context.

I

Anup Engquist, the petitioner in this case, was hired in 1992 by Norma Corristan to be an international food standard specialist for the Export Service Center (ESC), a laboratory within the Oregon Department of Agriculture (ODA). During the course of her employment, Engquist experienced repeated problems with Joseph Hyatt, another ODA employee, complaining to Corristan that he had made false statements about her and otherwise made her life difficult. Corristan responded by directing Hyatt to attend diversity and anger management training.

In 2001, John Szczepanski, an assistant director of ODA, assumed responsibility over ESC, supervising Corristan, Hyatt, and Engquist. Szczepanski told a client that he could not “control” Engquist, and that Engquist and Corristan “would be gotten rid of.” When Engquist and Hyatt both applied for a vacant managerial post within ESC, Szczepanski chose Hyatt despite Engquist’s greater experience in the relevant field. Later that year, during a round of across-the-board budget cuts in Oregon, Szczepanski eliminated Corristan’s position. Finally, on January 31, 2002, Engquist was informed that her position was being eliminated because of reorganization. Engquist’s collective-bargaining agreement gave her the opportunity either to “bump” to another position at her level, or to take a demotion. She was found unqualified for the only other position at her level and declined a demotion, and was therefore effectively laid off.

Engquist subsequently brought suit in the United States District Court for the District of Oregon against ODA, Szczepanski, and Hyatt, all respondents here, alleging violations of federal antidiscrimination statutes, the Equal Protection and Due Process Clauses of the Fourteenth Amendment, and state law. As to Engquist’s equal protection claim, she alleged that the defendants discriminated against her on the basis of her race, sex, and national origin. She also brought what is known as a “class-of-one” equal protection claim, alleging that she was fired not because she was a member of an identified class (unlike her race, sex, and national origin claims), but simply for “arbitrary, vindictive, and malicious reasons.” App. 10.

The District Court granted the respondents’ motion for summary judgment as to some of Engquist’s claims, but allowed others to go forward, including each of the equal protection claims. As relevant to this case, the District Court found Engquist’s class-of-one equal protection claim legally viable, deciding that the class-of-one theory was fully applicable in the employment context. Civ. No. 02-1637-AS (D Ore., Sept. 14,2004), App. 49, 58, 2004 WL 2066748, *5. The court held that Engquist could succeed on that theory if she could prove “that she was singled out as a result of animosity on the part of Hyatt and Szczepanski” — i. e., “that their actions were spiteful efforts to punish her for reasons unrelated to any legitimate state objective” — and if she could demonstrate, on the basis of that animosity, that “she was treated differently than others who were similarly situated.” Ibid.

The jury rejected Engquist’s claims of discrimination for membership in a suspect class — her race, sex, and national origin claims — but found in her favor on the class-of-one claim. Specifically, the jury found that Hyatt and Szczepanski “intentionally treat[ed] [Engquist] differently than others similarly situated with respect to the denial of her promotion, termination of her employment, or denial of bumping rights without any rational basis and solely for arbitrary, vindictive or malicious reasons.” App. to Pet. for Cert. 3-4. The jury also found for Engquist on several of her other claims, and awarded her $175,000 in compensatory damages and $250,000 in punitive damages.

The Court of Appeals reversed in relevant part. It recognized that this Court had upheld a class-of-one equal protection challenge to state legislative and regulatory action in Village of Willowbrook v. Olech, 528 U. S. 562 (2000) (per curiam). 478 F. 3d 985, 992-993 (CA9 2007). The court below also acknowledged that other Circuits had applied Olech in the public employment context, 478 F. 3d, at 993 (citing cases), but it disagreed with those courts on the ground that our cases have routinely afforded government greater leeway when it acts as employer rather than regulator, id., at 993-996. The court concluded that extending the class-of-one theory of equal protection to the public employment context would lead to undue judicial interference in state employment practices and “completely invalidate the practice of public at-will employment.” Id., at 995. The court accordingly held that the class-of-one theory is “inapplicable to decisions made by public employers with regard to their employees.” Id., at 996.

Judge Reinhardt dissented, “agreeing] with the other circuits that the class-of-one theory of equal protection is applicable to public employment decisions.” Id., at 1010. We granted certiorari to resolve this disagreement in the lower courts, 552 U. S. 1136 (2008), and now affirm.

II

Engquist argues that the Equal Protection Clause forbids public employers from irrationally treating one employee differently from others similarly situated, regardless of whether the different treatment is based on the employee’s membership in a particular class. She reasons that in Olech, supra, we recognized in the regulatory context a similar class-of-one theory of equal protection, Brief for Petitioner 14-15; that the Equal Protection Clause protects individuals, not classes, id., at 15-17; that the Clause proscribes “discrimination arising not only from a legislative act but also from the conduct of an administrative official,” id., at 17; and that the Constitution applies to the State not only when it acts as regulator, but also when it acts as employer, id., at 23-29. Thus, Engquist concludes that class-of-one claims can be brought against public employers just as against any other state actors, id., at 29-32, and that differential treatment of government employees — even when not based on membership in a class or group — violates the Equal Protection Clause unless supported by a rational basis, id., at 32, 39-45.

We do not quarrel with the premises of Engquist’s argument. It is well settled that the Equal Protection Clause “protect[s] persons, not groups,” Adarand Constructors, Inc. v. Peña, 515 U. S. 200, 227 (1995) (emphasis deleted), and that the Clause’s protections apply to administrative as well as legislative acts, see, e. g., Raymond v. Chicago Union Traction Co., 207 U. S. 20,35-36 (1907). It is equally well settled that States do not escape the strictures of the Equal Protection Clause in their role as employers. See, e. g., New York City Transit Authority v. Beazer, 440 U. S. 568 (1979); Harrah Independent School Dist v. Martin, 440 U. S. 194 (1979) (per curiam); Massachusetts Bd. of Retirement v. Murgia, 427 U. S. 307 (1976) (per curiam). We do not, however, agree that Engquist’s conclusion follows from these premises. Our traditional view of the core concern of the Equal Protection Clause as a shield against arbitrary classifications, combined with unique considerations applicable when the government acts as employer as opposed to sovereign, lead us to conclude that the class-of-one theory of equal protection does not apply in the public employment context.

A

We have long held the view that there is a crucial difference, with respect to constitutional analysis, between the government exercising “the power to regulate or license, as lawmaker,” and the government acting “as proprietor, to manage [its] internal operation.” Cafeteria & Restaurant Workers v. McElroy, 367 U. S. 886, 896 (1961). This distinction has been particularly clear in our review of state action in the context of public employment. Thus, “the government as employer indeed has far broader powers than does the government as sovereign.” Waters v. Churchill, 511 U. S. 661, 671 (1994) (plurality opinion). “[T]he extra power the government has in this area comes from the nature of the government’s mission as employer. Government agencies are charged by law with doing particular tasks. Agencies hire employees to help do those tasks as effectively and efficiently as possible.” Id., at 674-675. See also Connick v. Myers, 461 U. S. 138, 150-151 (1983) (explaining that the government has a legitimate interest “in ‘promoting] efficiency and integrity in the discharge of official duties, and [in] maintaining] proper discipline in the public service’” (quoting Ex parte Curtis, 106 U. S. 371, 373 (1882); alterations in original)). “The government’s interest in achieving its goals as effectively and efficiently as possible is elevated from a relatively subordinate interest when it acts as sovereign to a significant one when it acts as employer.” Waters, supra, at 675 (plurality opinion). Given the “common-sense realization that government offices could not function if every employment decision became a constitutional matter,” Connick, supra, at 143, “constitutional review of government employment decisions must rest on different principles than review of . . . restraints imposed by the government as sovereign,” Waters, supra, at 674 (plurality opinion).

In light of these basic principles, we have often recognized that government has significantly greater leeway in its dealings with citizen employees than it does when it brings its sovereign power to bear on citizens at large. Thus, for example, we have held that the Fourth Amendment does not require public employers to obtain warrants before conducting a search of an employee’s office. O’Connor v. Ortega, 480 U. S. 709, 721-722 (1987) (plurality opinion). See also id., at 732 (Scalia, J., concurring in judgment). Although we recognized that the “legitimate privacy interests of public employees in the private objects they bring to the workplace may be substantial,” we found that “[ajgainst these privacy interests . . . must be balanced the realities of the workplace, which strongly suggest that a warrant requirement would be unworkable.” Id., at 721 (plurality opinion). We have also found that the Due Process Clause does not protect a public employee from discharge, even when such discharge was mistaken or unreasonable. See Bishop v. Wood, 426 U. S. 341, 350 (1976) (“The Due Process Clause of the Fourteenth Amendment is not a guarantee against incorrect or ill-advised personnel decisions”).

Our public employee speech cases are particularly instructive. In Pickering v. Board of Ed. of Township High School Dist. 205, Will Cty., 391 U. S. 563, 568 (1968), we explained that, in analyzing a claim that a public employee was deprived of First Amendment rights by her employer, we must seek “a balance between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees.”

We analyzed the contours of this balance more fully in Connick v. Myers, supra. We explained that the First Amendment protects public employee speech only when it falls within the core of First Amendment protection — speech on matters of public concern. We recognized that the “‘First Amendment does not protect speech and assembly only to the extent it can be characterized as political,’” and that the government therefore could not generally prohibit or punish, in its capacity as sovereign, speech on the ground that it does not touch upon matters of public concern, id., at 147 (quoting Mine Workers v. Illinois Bar Assn., 389 U. S. 217, 223 (1967)). But “[w]hen employee expression cannot be fairly considered as relating to any matter of political, social, or other concern to the community, government officials should enjoy wide latitude in managing their offices.” Connick, 461 U. S., at 146. As we explained, “absent the most unusual circumstances, a federal court is not the appropriate forum in which to review the wisdom of a personnel decision taken by a public agency allegedly in reaction to the employee’s behavior.” Id., at 147 (citing Bishop, supra, at 349-350).

Our precedent in the public employee context therefore establishes two main principles: First, although government employees do not lose their constitutional rights when they accept their positions, those rights must be balanced against the realities of the employment context. Second, in striking the appropriate balance, we consider whether the asserted employee right implicates the basic concerns of the relevant constitutional provision, or whether the claimed right can more readily give way to the requirements of the government as employer. With these principles in mind, we come to the question whether a class-of-one theory of equal protection is cognizable in the public employment context.

B

Our equal protection jurisprudence has typically been concerned with governmental classifications that “affect some groups of citizens differently than others.” McGowan v. Maryland, 366 U. S. 420, 425 (1961). See, e. g., Ross v. Moffitt, 417 U. S. 600, 609 (1974) (“ ‘Equal protection’ . . . emphasizes disparity in treatment by a State between classes of individuals whose situations are arguably indistinguishable”); San Antonio Independent School Dish v. Rodriguez, 411 U. S. 1, 60 (1973) (Stewart, J., concurring) (“[T]he basic concern of the Equal Protection Clause is with state legislation whose purpose or effect is to create discrete and objectively identifiable classes”). Plaintiffs in such cases generally allege that they have been arbitrarily classified as members of an “identifiable group.” Personnel Administrator of Mass. v. Feeney, 442 U. S. 256, 279 (1979).

Engquist correctly argues, however, that we recognized in Olech that an equal protection claim can in some circumstances be sustained even if the plaintiff has not alleged class-based discrimination, but instead claims that she has been irrationally singled out as a so-called “class of one.” In Olech, a property owner had asked the village of Willow-brook to connect her property to the municipal water supply. Although the village had required only a 15-foot easement from other property owners seeking access to the water supply, the village conditioned Olech’s connection on a grant of a 33-foot easement. Olech sued the village, claiming that the village’s requirement of an easement 18 feet longer than the norm violated the Equal Protection Clause. Although Olech had not alleged that the village had discriminated against her based on membership in an identifiable class, we held that her complaint stated a valid claim under the Equal Protection Clause because it alleged that she had “been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment.” 528 U. S., at 564 (citing Sioux City Bridge Co. v. Dakota County, 260 U. S. 441 (1923), and Allegheny Pittsburgh Coal Co. v. Commission of Webster Cty., 488 U. S. 336 (1989)).

Recognition of the class-of-one theory of equal protection on the facts in Olech was not so much a departure from the principle that the Equal Protection Clause is concerned with arbitrary government classification, as it was an application of that principle. That case involved the government’s regulation of property. Similarly, the cases upon which the Court in Olech relied concerned property assessment and taxation schemes. See Allegheny Pittsburgh, supra; Sioux City Bridge, supra. We expect such legislative or regulatory classifications to apply “without respect to persons,” to borrow a phrase from the judicial oath. See 28 U. S. C. §453. As we explained long ago, the Fourteenth Amendment “requires that all persons subjected to . . . legislation shall be treated alike, under like circumstances and conditions, both in the privileges conferred and in the liabilities imposed.” Hayes v. Missouri, 120 U. S. 68, 71-72 (1887). When those who appear similarly situated are nevertheless treated differently, the Equal Protection Clause requires at least a rational reason for the difference, to ensure that all persons subject to legislation or regulation are indeed being “treated alike, under like circumstances and conditions.” Thus, when it appears that an individual is being singled out by the government, the specter of arbitrary classification is fairly raised, and the Equal Protection Clause requires a “rational basis for the difference in treatment.” Olech, 528 U. S., at 564.

What seems to have been significant in Olech and the cases on which it relied was the existence of a clear standard against which departures, even for a single plaintiff, could be readily assessed. There was no indication in Olech that the zoning board was exercising discretionary authority based on subjective, individualized determinations — at least not with regard to easement length, however typical such determinations may be as a general zoning matter. See id., at 565 (Breyer, J., concurring in result). Rather, the complaint alleged that the board consistently required only a 15-foot easement, but subjected Olech to a 33-foot easement. This differential treatment raised a concern of arbitrary classification, and we therefore required that the State provide a rational basis for it.

In Allegheny Pittsburgh, cited by the Olech Court, the applicable standard was market value, but the county departed from that standard in basing some assessments on quite dated purchase prices. Again, there was no suggestion that the “dramatic differences in valuation” for similar property parcels, 488 U. S., at 341, were based on subjective considerations of the sort on which appraisers often rely, see id., at 338-342, 345. Sioux City Bridge, also cited in Olech, was the same sort of case, recognizing an equal protection claim when one taxpayer’s property was assessed at 100 percent of its value, while all other property was assessed at 55 percent, without regard to articulated differences in the properties. See 260 U. S., at 445-447.

There are some forms of state action, however, which by their nature involve discretionary decisionmaking based on a vast array of subjective, individualized assessments. In such cases the rule that people should be “treated alike, under like circumstances and conditions” is not violated when one person is treated differently from others, because treating like individuals differently is an accepted consequence of the discretion granted. In such situations, allowing a challenge based on the arbitrary singling out of a particular person would undermine the very discretion that such state officials are entrusted to exercise.

Suppose, for example, that a traffic officer is stationed on a busy highway where people often drive above the speed limit, and there is no basis upon which to distinguish them. If the officer gives only one of those people a ticket, it may be good English to say that the officer has created a class of people that did not get speeding tickets, and a “class of one” that did. But assuming that it is in the nature of the particular government activity that not all speeders can be stopped and ticketed, complaining that one has been singled out for no reason does not invoke the fear of improper government classification. Such a complaint, rather, challenges the legitimacy of the underlying action itself — the decision to ticket speeders under such circumstances. Of course, an allegation that speeding tickets are given out on the basis of race or sex would state an equal protection claim, because such discriminatory classifications implicate basic equal protection concerns. But allowing an equal protection claim on the ground that a ticket was given to one person and not others, even if for no discernible or articulable reason, would be incompatible with the discretion inherent in the challenged action. It is no proper challenge to what in its nature is a subjective, individualized decision that it was subjective and individualized.

This principle applies most clearly in the employment context, for employment decisions are quite often subjective and individualized, resting on a wide array of factors that are difficult to articulate and quantify. As Engquist herself points out, “[u nlike the zoning official, the public employer often must take into account the individual personalities and interpersonal relationships of employees in the workplace. The close relationship between the employer and employee, and the varied needs and interests involved in the employment context, mean that considerations such as concerns over personality conflicts that would be unreasonable as grounds for ‘arm’s-length’ government decisions (e. g., zoning, licensing) may well justify different treatment of a public employee.” Brief for Petitioner 48. Unlike the context of arm’s-length regulation, such as in Olech, treating seemingly similarly situated individuals differently in the employment context is par for the course.

Thus, the class-of-one theory of equal protection — which presupposes that like individuals should be treated alike, and that to treat them differently is to classify them in a way that must survive at least rationality review — is simply a poor fit in the public employment context. To treat employees differently is not to classify them in a way that raises equal protection concerns. Rather, it is simply to exercise the broad discretion that typically characterizes the employer-employee relationship. A challenge that one has been treated individually in this context, instead of like everyone else, is a challenge to the underlying nature of the government action.

Of course, that is not to say that the Equal Protection Clause, like other constitutional provisions, does not apply to public employers. Indeed, our cases make clear that the Equal Protection Clause is implicated when the government makes class-based decisions in the employment context, treating distinct groups of individuals categorically differently. See, e. g., Beazer, 440 U. S., at 593 (upholding city’s exclusion of methadone users from employment under rational-basis review); Martin, 440 U. S., at 199-201 (classification between teachers who had complied with a continuing-education requirement and those who had not is rational and does not violate the Equal Protection Clause); Murgia, 427 U. S., at 314-317 (upholding a mandatory retirement age — a classification based on age — under rational-basis review). The dissent’s broad statement that we “ex-cep[t] state employees from the Fourteenth Amendment’s protection against unequal and irrational treatment at the hands of the State,” post, at 610 (opinion of Stevens, J.), is thus plainly not correct. But we have never found the Equal Protection Clause implicated in the specific circumstance where, as here, government employers are alleged to have made an individualized, subjective personnel decision in a seemingly arbitrary or irrational manner.

This is not surprising, given the historical understanding of the nature of government employment. We long ago recognized the “settled principle that government employment, in the absence of legislation, can be revoked at the will of the appointing officer.” McElroy, 367 U. S., at 896. The basic principle of at-will employment is that an employee may be terminated for a “‘good reason, bad reason, or no reason at all.’” Reply Brief for Petitioner 27. See Andrews v. Louisville & Nashville R. Co., 406 U. S. 320, 324 (1972) (“[T]he very concept of ‘wrongful discharge’ implies some sort of statutory or contractual standard that modifies the traditional common-law rule that a contract of employment is terminable by either party at will”). Thus, “[w]e have never held that it is a violation of the Constitution for a government employer to discharge an employee based on substantively incorrect information.” Waters, 511 U. S., at 679 (plurality opinion). See also Connick, 461 U. S., at 146-147 (“[Ordinary dismissals from government service ... are not subject to judicial review even if the reasons for the dismissal are alleged to be mistaken or unreasonable” (citing Board of Regents of State Colleges v. Roth, 408 U. S. 564 (1972); Perry v. Sindermann, 408 U. S. 593 (1972); and Bishop, 426 U. S. 341)). “And an at-will government employee . . . generally has no claim based on the Constitution at all.” Waters, supra, at 679 (plurality opinion). See, e. g., Bishop, supra, at 349-350.

State employers cannot, of course, take personnel actions that would independently violate the Constitution. See supra, at 598-600. But recognition of a class-of-one theory of equal protection in the public employment context — that is, a claim that the State treated an employee differently from others for a bad reason, or for no reason at all — is simply contrary to the concept of at-will employment. The Constitution does not require repudiating that familiar doctrine.

To be sure, Congress and all the States have, for the most part, replaced at-will employment with various statutory schemes protecting public employees from discharge for impermissible reasons. See, e. g., 5 U. S. C. § 2302(b)(10) (2006 ed.) (supervisor of covered federal employee may not “discriminate ... on the basis of conduct which does not adversely affect the performance of the employee or applicant or the performance of others”). See also Brief for United States as Amicus Curiae 20-21. But a government’s decision to limit the ability of public employers to fire at will is an act of legislative grace, not constitutional mandate.

Indeed, recognizing the sort of claim Engquist presses could jeopardize the delicate balance governments have struck between the rights of public employees and “the government’s legitimate purpose in ‘promot[ing] efficiency and integrity in the discharge of official duties, and [in] main-tainting] proper discipline in the public service.’ ” Connick, supra, at 150-151 (quoting Ex parte Curtis, 106 U. S., at 373; alterations in original). Thus, for example, although most federal employees are covered by the Civil Service Reform Act of 1978, 92 Stat. 1111, Congress has specifically excluded some groups of employees from its protection, see, e. g., 5 U. S. C. § 2302(a)(2)(C) (excluding from coverage, inter alia, the Federal Bureau of Investigation, the Central Intelligence Agency, and the Defense Intelligence Agency). Were we to find that the Equal Protection Clause subjects the government to equal protection review for every allegedly arbitrary employment action, we will have undone Congress’s (and the States’) careful work.

In concluding that the class-of-one theory of equal protection has no application in the public employment context— and that is all we decide — we are guided, as in the past, by the “common-sense realization that government offices could not function if every employment decision became a constitutional matter.” Connick, supra, at 143. If, as Engquist suggests, plaintiffs need not claim discrimination on the basis of membership in some class or group, but rather may argue only that they were treated by their employers worse than other employees similarly situated, any personnel action in which a wronged employee can conjure up a claim of differential treatment will suddenly become the basis for a federal constitutional claim. Indeed, an allegation of arbitrary differential treatment could be made in nearly every instance of an assertedly wrongful employment action — not only hiring and firing decisions, but any personnel action, such as promotion, salary, or work assignments — on the theory that other employees were not treated wrongfully. See 478 F. 3d, at 995. On Engquist’s view, every one of these employment decisions by a government employer would become the basis for an equal protection complaint.

Engquist assures us that accepting her view would not pose too much of a practical problem. Specifically, Engquist argues that a plaintiff in a class-of-one employment case would have to prove that the government’s differential treatment was intentional, that the plaintiff was treated differently from other similarly situated persons, and that the unequal treatment was not rationally related to a legitimate government purpose. Brief for Petitioner 36-39. And because a “governmental employment decision is . . . rational whenever the discrimination relates to a legitimate government interest,” it is in practice “difficult for plaintiffs to show that the government has failed to meet this standard.” Id., at 41. Justice Stevens makes a similar argument, stating “that all but a handful [of class-of-one complaints] are dismissed well in advance of trial.” Post, at 615.

We agree that, even if we accepted Engquist’s claim, it would be difficult for a plaintiff to show that an employment decision is arbitrary. But this submission is beside the point. The practical problem with allowing class-of-one claims to go forward in this context is not that it will be too easy for plaintiffs to prevail, but that governments will be forced to defend a multitude of such claims in the first place, and courts will be obliged to sort through them in a search for the proverbial needle in a haystack. The Equal Protection Clause does not require “[t]his displacement of managerial discretion by judicial supervision.” Garcetti v. Ceballos, 547 U. S. 410, 423 (2006).

In short, ratifying a class-of-one theory of equal protection in the context of public employment would impermissibly “constitutionalize the employee grievance.” Connick, 461 U. S., at 154. “The federal court is not the appropriate forum in which to review the multitude of personnel deci-. sions that are made daily by public agencies.” Bishop, 426 U. S., at 349. Public employees typically have a variety of protections from just the sort of personnel actions about which Engquist complains, but the Equal Protection Clause is not one of them.

The judgment of the Court of Appeals is affirmed.

It is so ordered.

Justice Stevens, with whom Justice Souter and Justice Ginsburg join, dissenting.

Congress has provided a judicial remedy for individuals whose federal constitutional rights are violated by state action, 42 U. S. C. § 1983. In prior cases, we have refused to craft new remedies for the violation of constitutional rights of federal employees, Bush v. Lucas, 462 U. S. 367 (1983), or for the nonconstitutional claims of state employees, Bishop v. Wood, 426 U. S. 341 (1976). But refusal to give effect to the congressionally mandated remedy embodied in §1983 would be impermissible. To avoid this result, the Court today concludes that Engquist suffered no constitutional violation at all, and that there was thus no harm to be remedied. In so holding, the Court — as it did in Garcetti v. Ceballos, 547 U. S. 410 (2006) — carves a novel exception out of state employees’ constitutional rights. In Garcetti, the Court created a new substantive rule excepting a category of speech by state employees from the protection of the First Amendment. Today, the Court creates a new substantive rule excepting state employees from the Fourteenth Amendment’s protection against unequal and irrational treatment at the hands of the State. Even if some surgery were truly necessary to prevent governments from being forced to defend a multitude of equal protection “class of one” claims, the Court should use a scalpel rather than a meataxe.

I

Our decision in Village of Willowbrook v. Olech, 528 U. S. 562 (2000) (per curiam), applied a rule that had been an accepted part of our equal protection jurisprudence for decades: Unless state action that intentionally singles out an individual, or a class of individuals, for adverse treatment is supported by some rational justification, it violates the Fourteenth Amendment’s command that no State shall “deny to any person within its jurisdiction the equal protection of the laws.”

Óur opinion in Olech emphasized that the legal issue would have been the same whether the class consisted of one or five members, because “the number of individuals in a class is immaterial for equal protection analysis.” Id., at 564, n. The outcome of that case was not determined by the size of the disadvantaged class, and the majority does not — indeed cannot — dispute the settled principle that the Equal Protection Clause protects persons, not groups. See ante, at 597.

Nor did the outcome in Olech turn on the fact that the village was discriminating against a property owner rather than an employee. The majority does not dispute that the strictures of the Equal Protection Clause apply to the States in their role as employers as well as regulators. See ante, at 597. And indeed, we have made clear that “the Equal Protection and Due Process Clauses of the Fourteenth Amendment, and other provisions of the Federal Constitution afford protection to employees who serve the government as well as to those who are served by them, and § 1983 provides a cause of action for all citizens injured by an abridgment of those protections.” Collins v. Harker Heights, 503 U. S. 115, 119-120 (1992).

Rather, the outcome of Olech was dictated solely by the absence of a rational basis for the discrimination. As we explained:

“Our cases have recognized successful equal protection claims brought by a ‘class of one,’ where the plaintiff alleges that she has been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment. In so doing, we have explained that ‘[t]he purpose of the equal protection clause of the Fourteenth Amendment is to secure every person within the State’s jurisdiction against intentional and arbitrary discrimination, whether occasioned by express terms of a statute or by its improper execution through duly constituted agents.’ “ ... [Olech’s] complaint also alleged that the Village’s demand was ‘irrational and wholly arbitrary’ .... These allegations, quite apart from the Village’s subjective motivation, are sufficient to state a claim for relief under traditional equal protection analysis.” 528 U. S., at 564, 565 (some internal quotation marks and citations omitted).

Here, as in Olech, Engquist alleged that the State’s actions were arbitrary and irrational. In response, the State offered no explanation whatsoever for its decisions; it did not claim that Engquist was a subpar worker, or even that her personality made her a poor fit in the workplace or that her colleagues simply did not enjoy working with her. In fact, the State explicitly disclaimed the existence of any workplace or performance-based rationale. See, e. g., Reply Brief for Petitioner 17, 19. The jury proceeded to find that the respondents intentionally treated Engquist “differently than others similarly situated with respect to the .. . termination of her employment... without any rational basis and solely for arbitrary, vindictive or malicious reasons.” App. to Pet. for Cert. 3-4. The jury’s verdict thus established that there was no rational basis for either treating Engquist differently from other employees or for the termination of her employment. The State does not dispute this finding. Under our reasoning in Olech, the absence of any justification for the discrimination sufficed to establish the constitutional violation.

The majority nonetheless concludes, based on “unique considerations applicable when the government acts as employer,” that the “class-of-one” theory of equal protection is not applicable in the public-employment context. Ante, at 598. Its conclusion is based upon speculation about inapt hypothetical cases, and an incorrect evaluation of the importance of the government’s interest in preserving a regime of “at-will” employment. Its reasoning is flawed on both counts.

II

The majority asserts that public-employment decisions should be carved out of our equal protection jurisprudence because employment decisions (as opposed to, for example, zoning decisions) are inherently discretionary. I agree that employers must be free to exercise discretionary authority. But there is a clear distinction between an exercise of discretion and an arbitrary decision. A discretionary decision represents a choice of one among two or more rational alternatives. See 1 H. Hart & A. Sacks, The Legal Process: Basic Problems in the Making and Application of Law 162 (Tent, ed. 1958) (defining discretion as “the power to choose between two or more courses of action each of which is thought of as permissible”). The choice may be mistaken or unwise without being irrational. If the arguments favoring each alternative are closely balanced, the need to make a choice may justify using a coin toss as a tiebreaker. Moreover, the Equal Protection Clause proscribes arbitrary decisions— decisions unsupported by any rational basis — not unwise ones. Accordingly, a discretionary decision with any “reasonably conceivable” rational justification will not support an equal protection claim; only a truly arbitrary one will. There is therefore no need to create an exception for the public-employment context in order to prevent these discretionary decisions from giving rise to equal protection claims.

The hypothetical situations posited by the majority do not prove otherwise. The hypothetical traffic officer described in the Court’s opinion, ante, at 603-604, had a rational basis for giving a ticket to every speeder passing him on the highway. His inability to arrest every driver in sight provides an adequate justification for making a random choice from a group of equally guilty and equally accessible violators. As such, the Court is quite correct in stating that “allowing an equal protection claim on the ground that a ticket was given to one person and not others, even if for no discernible or articulable reason, would be incompatible with the discretion inherent in the challenged action.” Ante, at 604. If there were no justification for the arrest, there would be no need to invoke the Equal Protection Clause because the officer’s conduct would violate the Fourth Amendment. But as noted, a random choice among rational alternatives does not violate the Equal Protection Clause.

A comparable hypothetical decision in the employment context (e. g., a supervisor who is required to eliminate one position due to an involuntary reduction in force and who chooses to terminate one of several equally culpable employees) also differs from the instant case insofar as it assumes the existence of a rational basis for the individual decision. The fact that a supervisor might not be able to explain why he terminated one employee rather than another will not give rise to an equal protection claim so long as there was a rational basis for the termination itself and for the decision to terminate just one, rather than all, of the culpable employees.

Instead of using a scalpel to confine so-called “class of one” claims to cases involving a complete absence of any conceivable rational basis for the adverse action and the differential treatment of the plaintiff, the Court adopts an unnecessarily broad rule that tolerates arbitrary and irrational decisions in the employment context.

Ill

The majority’s decision also rests on the premise that “[t]he Constitution does not require repudiating th[e] familiar doctrine” of at-will employment. Ante, at 606. In the 1890’s that doctrine applied broadly to government employment, see McAuliffe v. Mayor of New Bedford, 155 Mass. 216, 29 N. E. 517 (1892), but for many years now “ ‘the theory that public employment which may be denied altogether may be subjected to any conditions, regardless of how unreasonable, has been uniformly rejected.’ ” Keyishian v. Board of Regents of Univ. of State of N Y, 385 U. S. 589, 605-606 (1967). Indeed, recent constitutional decisions and statutory enactments have all but nullified the significance of the doctrine.- See, e. g., Elrod v. Burns, 427 U. S. 347 (1976); Rutan v. Republican Party of III., 497 U. S. 62 (1990); see also 5 U. S. C. § 2302(b)(10) (2006 ed.) (supervisor of covered federal employee may not “discriminate ... on the basis of conduct which does not adversely affect the performance of the employee or applicant or the performance of others”). Accordingly, preserving the remnants of “at-will” employment provides a feeble justification for creating a broad exception to a well-established category of constitutional protections.

IV

Presumably the concern that actually motivates today’s decision is fear that governments will be forced to defend against a multitude of “class of one” claims unless the Court wields its meataxe forthwith. Experience demonstrates, however, that these claims are brought infrequently, that the vast majority of such claims are asserted in complaints advancing other claims as well, and that all but a handful are dismissed well in advance of trial. Experience also demonstrates that there are in fact rare cases in which a petty tyrant has misused governmental power. Proof that such misuse was arbitrary because unsupported by any conceivable rational basis should suffice to establish a violation of the Equal Protection Clause without requiring its victim also to prove that the tyrant was motivated by a particular variety of class-based animus. When the allegations of a complaint plainly identify “the proverbial needle in a haystack,” ante, at 608, a federal court should not misconstrue the Constitution in order to make it even easier to dismiss unmeritorious claims.

* * *

In sum, there is no compelling reason to carve arbitrary public employment decisions out of the well-established category of equal protection violations when the familiar rational review standard can sufficiently limit these claims to only wholly unjustified employment actions. Accordingly, I respectfully dissent.

      Section 1983 provides that “[e]very person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress ....”

       But for this disclaimer, the lower court could have dismissed the claim if it discerned “any reasonably conceivable state of facts that could provide a rational basis for the [State’s actions],” even one not put forth by the State. FCC v. Beach Communications, Inc., 508 U. S. 307, 313 (1993). The disclaimer, however, negated that possibility.

       Moreover, equal protection scrutiny is not incompatible with at-will employment since courts applying rational-basis scrutiny are able to rely on any conceivable reason for government action, and the government therefore need not explain its actual reason for terminating or disciplining the employee.

       Prior to the Ninth Circuit’s decision in this case, “class of one” claims arising in the public-employment context were permitted by every court that was presented with one. Yet there have been only approximately 150 cases — both in the district courts and the courts of appeals — addressing such claims since Olech.


source: Caselaw Access Project

author: Justice Thomas

license: Public Domain

text:
    QUANTA COMPUTER, INC., et al. v. LG ELECTRONICS, INC.
    CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
    No. 06-937.
    Argued January 16, 2008
    Decided June 9, 2008

      Maureen E. Mahoney argued the cause for petitioners. With her on the briefs were J Scott Ballenger, Barry J. Blonien, Melissa B. Arbus, Vincent K. Yip, Peter Wied, and Maxwell A. Fox.

      Deputy Solicitor General Hungar argued the cause for the United States as amicus curiae in support of petitioners. With him on the brief were former Solicitor General Clem

      ent, Assistant Attorneys General Keisler and Barnett, Deanne E. Maynard, Catherine G. O’Sullivan, David Seidman, Mark R. Freeman, James A. Toupin, Stephen Walsh, Shannon M. Hansen, and Heather F. Auyang.

      Carter G. Phillips argued the cause for respondent. With him on the brief were Virginia A. Seitz, Jeffrey T Green, Jeffrey P Kushan, Rachel H. Townsend, and Quin M. Sorenson

      Briefs of amici curiae urging reversal were filed for the American Antitrust Institute by Albert A. Foer and Richard M. Brunell; for the Automotive Engine Rebuilders Association et al. by Seth D. Greenstein and Stefan M. Meisner; for the Computer & Communications Industry Association by Jonathan Band; for the Consumers Union et al. by Fred von Lohmann, Jason Schultz, and Marc N. Bernstein; for Dell Inc. et al. by Andrew J. Pincus and Carl J. Summers; for Gen-Probe Inc. by Beth S. Brinkmann, Ketanji Brown Jackson, Brian R. Matsui, and David C. Doyle; for International Business Machines Corp. by Traci L. Lovitt and Michael A. Carvin; for Motorola, Inc., by Russell E. Levine; and for Nokia Corp. et al. by Kathleen M. Sullivan and David L. Cohen.

      Briefs of amici curiae urging affirmance were filed for Aerotel, Ltd., et al. by Michael J. Doyle; for AmberWave Systems Corp. by Song K. Jung, Lawrence S. Ebner, Adrian P. Motto, Megan B. Hoffman, and Bryan P. Lord; for iBiquity Digital Corp. by Roderick R. McKelvie, Robert A. Long, Jr., Richard L. Rainey, and Theodore P. Metzler, Jr.; for InterDigital Communications, LLC, et al. by Kenneth C. Bass III and Robert G. Sterne; for MPEG LA LLC by Garrard R. Beeney, Ann McLean Jordan, and Kenneth Rubenstein; for Papst Licensing GmbH & Co. Kg by Lawrence Rosenthal, Steven E. Feldman, and Leonard Friedman; for Rembrandt IP Management, LLC, by Aaron M. Fanner; for QUALCOMM Inc. by Richard W. Clary; for Various Law Professors by F. Scott Kieff; for Wi-LAN, Inc., by Robert E. Goodfriend, James N. Willi, and Joel L. Thollander; and for Yahoo! Inc. by Christopher J. Wright, Timothy J. Simeone, Joseph K. Siino, and Lisa G. McFall.

      Briefs of amici curiae were filed for the American Intellectual Property Law Association by Jeffrey I. D. Lewis; for the American Seed Trade Association by Gary Jay Kushner and Lorane F. Hebert; for the Biotechnology Industry Organization by Patricia A. Millett and Thomas C. Goldstein; for CropLife International by Seth P. Waxman, Paul R. Q. Wolfson, and Sambhav N. Sankar; for the Intellectual Property Owners Association by Gary M. Hoffman and Kenneth W. Brothers; for the Licensing Executives Society (U. S. A. & Canada), Inc., by Joel E. Lutzker; for NCR Corp. by Morgan Chu and Laura W. Brill; and for Technology Properties Limited by Roger L. Cook.

   Justice Thomas

delivered the opinion of the Court.

For over 150 years this Court has applied the doctrine of patent exhaustion to limit the patent rights that survive the initial authorized sale of a patented item. In this case, we decide whether patent exhaustion applies to the sale of components of a patented system that must be combined with additional components in order to practice the patented methods. The Court of Appeals for the Federal Circuit held that the doctrine does not apply to method patents at all and, in the alternative, that it does not apply here because the sales were not authorized by the license agreement. We disagree on both scores. Because the exhaustion doctrine applies to method patents, and because the license authorizes the sale of components that substantially embody the patents in suit, the sale exhausted the patents.

I

Respondent LG Electronics, Inc. (LGE), purchased a portfolio of computer technology patents in 1999, including the three patents at issue here: U. S. Patent Nos. 4,939,641 (’641); 5,379,379 (’379); and 5,077,733 (’733) (collectively LGE Patents). The main functions of a computer system are carried out on a microprocessor, or central processing unit, which interprets program instructions, processes data, and controls other devices in the system. A set of wires, or bus, connects the microprocessor to a chipset, which transfers data between the microprocessor and other devices, including the keyboard, mouse, monitor, hard drive, memory, and disk drives.

The data processed by the computer are stored principally in random access memory, also called main memory. Webster’s New World Dictionary of Computer Terms 334, 451 (8th ed. 2000). Frequently accessed data are generally stored in cache memory, which permits faster access than main memory and is often located on the microprocessor itself. Id., at 84. When copies of data are stored in both the cache and main memory, problems may arise when one copy is changed but the other still contains the original “stale” version of the data. J. Handy, Cache Memory Book 124 (2d ed. 1993). The ’641 patent addresses this problem. It discloses a system for ensuring that the most current data are retrieved from main memory by monitoring data requests and updating main memory from the cache when stale data are requested. LG Electronics, Inc. v. Bizcom Electronics, Inc., 453 F. 3d 1364, 1377 (CA Fed. 2006).

The ’379 patent relates to the coordination of requests to read from, and write to, main memory. Id., at 1378. Processing these requests in chronological order can slow down a system because read requests are faster to execute than write requests. Processing all read requests first ensures speedy access, but may result in the retrieval of outdated data if a read request for a certain piece of data is processed before an outstanding write request for the same data. The ’379 patent discloses an efficient method of organizing read and write requests while maintaining accuracy by allowing the computer to execute only read requests until it needs data for which there is an outstanding write request. LG Electronics, Inc. v. Asustek Computer, Inc., No. C 01-02187 CW etc., Order Construing Disputed Terms and Phrases, p. 42 (ND Cal., Aug. 20, 2002). Upon receiving such a read request, the computer executes pending write requests first and only then returns to the read requests so that the most up-to-date data are retrieved. Ibid.

The ’733 patent addresses the problem of managing the data traffic on a bus connecting two computer components, so that no one device monopolizes the bus. It allows multiple devices to share the bus, giving heavy users greater access. This patent describes methods that establish a rotating priority system under which each device alternately has priority access to the bus for a preset number of cycles and heavier users can maintain priority for more cycles without “hogging” the device indefinitely. Id., at 37-38.

LGE licensed a patent portfolio, including the LGE Patents, to Intel Corporation (Intel). The cross-licensing agreement (License Agreement) permits Intel to manufacture and sell microprocessors and chipsets that use the LGE Patents (Intel Products). The License Agreement authorizes Intel to “‘make, use, sell (directly or indirectly), offer to sell, import or otherwise dispose of’” its own products practicing the LGE Patents. Brief for Petitioners 8 (quoting App. 154). Notwithstanding this broad language, the License Agreement contains some limitations. Relevant here, it stipulates that no license

“ ‘is granted by either party hereto ... to any third party for the combination by a third party of Licensed Products of either party with items, components, or the like acquired . . . from sources other than a party hereto, or for the use, import, offer for sale or sale of such combination.’ ” Brief for Petitioners 8 (quoting App. 164).

The License Agreement purports not to alter the usual rules of patent exhaustion, however, providing that, “‘Notwithstanding anything to the contrary contained in this Agreement, the parties agree that nothing herein shall in any way limit or alter the effect of patent exhaustion that would otherwise apply when a party hereto sells any of its Licensed Products.’” Brief for Petitioners 8 (quoting App. 164).

In a separate agreement (Master Agreement), Intel agreed to give written notice to its own customers informing them that, while it had obtained a broad license “ ‘ensuring] that any Intel product that you purchase is licensed by LGE and thus does not infringe any patent held by LGE,’ ” the license “ ‘does not extend, expressly or by implication, to any product that you make by combining an Intel product with any non-Intel product.’” Brief for Respondent 9 (quoting App. 198; emphasis deleted). The Master Agreement also provides that “ ‘a breach of this Agreement shall have no effect on and shall not be grounds for termination of the Patent License.’” Brief for Petitioners 9 (quoting App. 176).

Petitioners, including Quanta Computer (collectively Quanta), are a group of computer manufacturers. Quanta purchased microprocessors and chipsets from Intel and received the notice required by the Master Agreement. Nonetheless, Quanta manufactured computers using Intel parts in combination with non-Intel memory and buses in ways that practice the LGE Patents. Quanta does not modify the Intel components and follows Intel’s specifications to incorporate the parts into its own systems.

LGE filed a complaint against Quanta, asserting that the combination of the Intel Products with non-Intel memory and buses infringed the LGE Patents. The District Court granted summary judgment to Quanta, holding that, for purposes of the patent exhaustion doctrine, the license LGE granted to Intel resulted in forfeiture of any potential infringement actions against legitimate purchasers of the Intel Products. LG Electronics, Inc. v. Asustek Computer Inc., 65 USPQ 2d 1589, 1593, 1600 (ND Cal. 2002). The court found that, although the Intel Products do not fully practice any of the patents at issue, they have no reasonable noninfringing use and therefore their authorized sale exhausted patent rights in the completed computers under United States v. Univis Lens Co., 316 U. S. 241 (1942). Asustek, supra, at 1598-1600. In a subsequent order limiting its summary judgment ruling, the court held that patent exhaustion applies only to apparatus or composition-of-matter claims that describe a physical object, and does not apply to process, or method, claims that describe operations to make or use a product. LG Electronics, Inc. v. Asustek Com puter, Inc., 248 F. Supp. 2d 912, 918 (ND Cal. 2003). Because each of the LGE Patents includes method claims, exhaustion did not apply.

The Court of Appeals for the Federal Circuit affirmed in part and reversed in part. It agreed that the doctrine of patent exhaustion does not apply to method claims. In the alternative, it concluded that exhaustion did not apply because LGE did not license Intel to sell the Intel Products to Quanta for use in combination with non-Intel products. 453 F. 3d, at 1370.

We granted certiorari, 551 U. S. 1187 (2007).

II

The longstanding doctrine of patent exhaustion provides that the initial authorized sale of a patented item terminates all patent rights to that item. This Court first applied the doctrine in 19th-century cases addressing patent extensions on the Woodworth planing machine. Purchasers of licenses to sell and use the machine for the duration of the original patent term sought to continue using the licenses through the extended term. The Court held that the extension of the patent term did not affect the rights already secured by purchasers who bought the item for use “in the ordinary pursuits of life.” Bloomer v. McQuewan, 14 How. 539, 549 (1853); see also ibid. (“[W]hen the machine passes to the hands of the purchaser, it is no longer within the limits of the monopoly”); Bloomer v. Millinger, 1 Wall. 340, 351 (1864). In Adams v. Burke, 17 Wall. 453 (1873), the Court affirmed the dismissal of a patent holder’s suit alleging that a licensee had violated postsale restrictions on where patented coffin lids could be used. “[W]here a person ha[s] purchased a patented machine of the patentee or his assignee,” the Court held, “this purchase carrie[s] with it the right to the use of that machine so long as it [is] capable of use.” Id., at 455.

Although the Court permitted postsale restrictions on the use of a patented article in Henry v. A. B. Dick Co., 224 U. S. 1 (1912), that decision was short lived. In 1913, the Court refused to apply A. B. Dick to uphold price-fixing provisions in a patent license. See Bauer & Cie v. O’Donnell, 229 U. S. 1,14-17 (1913). Shortly thereafter, in Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U. S. 502,518 (1917), the Court explicitly overruled A. B. Dick. In that case, a patent holder attempted to limit purchasers’ use of its film projectors to show only film made under a patent held by the same company. The Court noted the “increasing frequency” with which patent holders were using A. B. Dick-style licenses to limit the use of their products and thereby using the patents to secure market control of related, unpatented items. 243 U. S., at 509, 516-517. Observing that “the primary purpose of our patent laws is not the creation of private fortunes for the owners of patents but is ‘to promote the progress of science and useful arts,’” id., at 511 (quoting U. S. Const., Art. I, § 8, cl. 8), the Court held that “the scope of the grant which may be made to an inventor in a patent, pursuant to the [patent] statute, must be limited to the invention described in the claims of his patent,” 243 U. S., at 511. Accordingly, it reiterated the rule that “the right to vend is exhausted by a single, unconditional sale, the article sold being thereby carried outside the monopoly of the patent law and rendered free of every restriction which the vendor may attempt to put upon it.” Id., at 516.

This Court most recently discussed patent exhaustion in Univis, 316 U. S. 241, on which the District Court relied. Univis Lens Company, the holder of patents on eyeglass lenses, licensed a purchaser to manufacture lens blanks by fusing together different lens segments to create bi- and trifocal lenses and to sell them to other Univis licensees at agreed-upon rates. Wholesalers were licensed to grind the blanks into the patented finished lenses, which they would then sell to Univis-licensed prescription retailers for resale at a fixed rate. Finishing retailers, after grinding the blanks into patented lenses, would sell the finished lenses to consumers at the same fixed rate. The United States sued Univis under the Sherman Act, 15 U. S. C. §§ 1,3,15, alleging unlawful restraints on trade. Univis asserted its patent monopoly rights as a defense to the antitrust suit. The Court granted certiorari to determine whether Univis’ patent monopoly survived the sale of the lens blanks by the licensed manufacturer and therefore shielded Univis’ pricing scheme from the Sherman Act.

The Court assumed that the Univis patents containing claims for finished lenses were practiced in part by the wholesalers and finishing retailers who ground the blanks into lenses, and held that the sale of the lens blanks exhausted the patents on the finished lenses. Univis, 316 U. S., at 248-249. The Court explained that the lens blanks “embodied] essential features of the patented device and [were] without utility until . . . ground and polished as the finished lens of the patent.” Id., at 249. The Court noted that

“where one has sold an uncompleted article which, because it embodies essential features of his patented invention, is within the protection of his patent, and has destined the article to be finished by the purchaser in conformity to the patent, he has sold his invention so far as it is or may be embodied in that particular article.” Id., at 250-251.

In sum, the Court concluded that the traditional bar on patent restrictions following the sale of an item applies when the item sufficiently embodies the patent — even if it does not completely practice the patent — such that its only and intended use is to be finished under the terms of the patent.

With this history of the patent exhaustion doctrine in mind, we turn to the parties’ arguments.

Ill

A

LGE argues that the exhaustion doctrine is inapplicable here because it does not apply to method claims, which are contained in each of the LGE Patents. LGE reasons that, because method patents are linked not to a tangible article but to a process, they can never be exhausted through a sale. Rather, practicing the patent — which occurs upon each use of an article embodying a method patent — is permissible only to the extent rights are transferred in an assignment contract. Quanta, in turn, argues that there is no reason to preclude exhaustion of method claims, and points out that both this Court and the Federal Circuit have applied exhaustion to method claims. It argues that any other rule would allow patent holders to avoid exhaustion entirely by inserting method claims in their patent specifications.

Quanta has the better of this argument. Nothing in this Court’s approach to patent exhaustion supports LGE’s argument that method patents cannot be exhausted. It is true that a patented method may not be sold in the same way as an article or device, but methods nonetheless may be “embodied” in a product, the sale of which exhausts patent rights. Our precedents do not differentiate transactions involving embodiments of patented methods or processes from those involving patented apparatuses or materials. To the contrary, this Court has repeatedly held that method patents were exhausted by the sale of an item that embodied the method. In Ethyl Gasoline Corp. v. United States, 309 U. S. 436, 446, 457 (1940), for example, the Court held that the sale of a motor fuel produced under one patent also exhausted the patent for a method of using the fuel in combustion motors. Similarly, as previously described, Univis held that the sale of optical lens blanks that partially practiced a patent exhausted the method patents that were not completely practiced until the blanks were ground into lenses. 316 U. S., at 248-251.

These cases rest on solid footing. Eliminating exhaustion for method patents would seriously undermine the exhaustion doctrine. Patentees seeking to avoid patent exhaustion could simply draft their patent claims to describe a method rather than an apparatus. Apparatus and method claims “may approach each other so nearly that it will be difficult to distinguish the process from the function of the apparatus.” United States ex rel. Steinmetz v. Allen, 192 U. S. 543, 559 (1904). By characterizing their claims as method instead of apparatus claims, or including a method claim for the machine’s patented method of performing its task, a patent drafter could shield practically any patented item from exhaustion.

This case illustrates the danger of allowing such an end-run around exhaustion. On LGE’s theory, although Intel is authorized to sell a completed computer system that practices the LGE Patents, any downstream purchasers of the system could nonetheless be liable for patent infringement. Such a result would violate the longstanding principle that, when a patented item is “once lawfully made and sold, there is no restriction on [its] use to be implied for the benefit of the patentee.” Adams, 17 Wall., at 457. We therefore reject LGE’s argument that method claims, as a category, are never exhaustible.

B

We next consider the extent to which a product must embody a patent in order to trigger exhaustion. Quanta argues that, although sales of an incomplete article do not necessarily exhaust the patent in that article, the sale of the microprocessors and chipsets exhausted LGE’s patents in the same way the sale of the lens blanks exhausted the patents in Univis. Just as the lens blanks in Univis did not fully practice the patents at issue because they had not been ground into finished lenses, Quanta observes, the Intel Products cannot practice the LGE Patents — or indeed, function at all — until they are combined with memory and buses in a computer system. If, as in Univis, patent rights are exhausted by the sale of the incomplete item, then LGE has no postsale right to require that the patents be practiced using only Intel parts. Quanta also argues that exhaustion doctrine will be a dead letter unless it is triggered by the sale of components that essentially, even if not completely, embody an invention. Otherwise, patent holders could authorize the sale of computers that are complete with the exception of one minor step — say, inserting the microprocessor into a socket — and extend their rights through each downstream purchaser all the way to the end user.

LGE, for its part, argues that Univis is inapplicable here for three reasons. First, it maintains that Univis should be limited to products that contain all the physical aspects needed to practice the patent. On that theory, the Intel Products cannot embody the patents because additional physical components are required before the patents can be practiced. Second, LGE asserts that in Univis there was no “patentable distinction” between the lens blanks and the patented finished lenses since they were both subject to the same patent. Brief for Respondent 14 (citing Univis, supra, at 248-252). In contrast, it describes the Intel Products as “independent and distinct products” from the systems using the LGE Patents and subject to “independent patents.” Brief for Respondent 13. Finally, LGE argues that Univis does not apply because the Intel Products are analogous to individual elements of a combination patent, and allowing sale of those components to exhaust the patent would impermissibly “ascrib[e] to one element of the patented combination the status of [the] patented invention in itself.” Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U. S. 336, 344-345 (1961).

We agree with Quanta that Univis governs this case. As the Court there explained, exhaustion was triggered by the sale of the lens blanks because their only reasonable and intended use was to practice the patent and because they “embodied] essential features of [the] patented invention.” 316 U. S., at 249-251. Each of those attributes is shared by the microprocessors and chipsets Intel sold to Quanta under the License Agreement.

First, Univis held that “the authorized sale of an article which is capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect to the article sold.” Id., at 249. The lens blanks in Univis met this standard because they were “without utility until [they were] ground and polished as the finished lens of the patent.” Ibid. Accordingly, “the only object of the sale [was] to enable the [finishing retailer] to grind and polish it for use as a lens by the prospective wearer.” Ibid. Here, LGE has suggested no reasonable use for the Intel Products other than incorporating them into computer systems that practice the LGE Patents. Nor can we discern one: A microprocessor or chipset cannot function until it is connected to buses and memory. And here, as in Univis, the only apparent object of Intel’s sales to Quanta was to permit Quanta to incorporate the Intel Products into computers that would practice the patents.

Second, the lens blanks in Univis “embodiefd] essential features of [the] patented invention.” Id., at 250-251. The essential, or inventive, feature of the Univis lens patents was the fusing together of different lens segments to create bi- and trifocal lenses. The finishing process performed by the finishing and prescription retailers after the fusing was not unique. As the United States explained:

“The finishing licensees finish Univis lens blanks in precisely the same manner as they finish all other bifocal lens blanks. Indeed, appellees have never contended that their licensing system is supported by patents covering methods or processes relating to the finishing of lens blanks. Consequently, it appears that appellees perform all of the operations which contribute any claimed element of novelty to Univis lenses.” Brief for United States in United States v. Univis Lens Co., O. T. 1941, No. 855 etc., p. 10 (footnote and citations omitted).

While the Court assumed that the finishing process was covered by the patents, Univis, supra, at 248-249, and the District Court found that it was necessary to make a working lens, United States v. Univis Lens Co., 41 F. Supp. 258, 262-263 (SDNY 1941), the grinding process was not central to the patents. That standard process was not included in detail in any of the patents and was not referred to at all in two of the patents. Those that did mention the finishing process treated it as incidental to the invention, noting, for example, that “[t]he blank is then ground in the usual manner,” U. S. Patent No. 1,876,497, p. 2, or simply that the blank is “then ground and polished,” U. S. Patent No. 1,632,208, p. 1, Tr. of Record in United States v. Univis Lens Co., O. T. 1941, No. 855 etc., pp. 516, 498.

Like the Univis lens blanks, the Intel Products constitute a material part of the patented invention and all but completely practice the patent. Here, as in Univis, the incomplete article substantially embodies the patent because the only step necessary to practice the patent is the application of common processes or the addition of standard parts. Everything inventive about each patent is embodied in the Intel Products. They control access to main and cache memory, practicing the ’641 and ’379 patents by checking cache memory against main memory and comparing read and write requests. They also control priority of bus access by various other computer components under the ’733 patent. Naturally, the Intel Products cannot carry out these functions unless they are attached to memory and buses, but those additions are standard components in the system, providing the material that enables the microprocessors and chipsets to function. The Intel Products were specifically designed to function only when memory or buses are attached; Quanta was not required to make any creative or inventive decision when it added those parts. Indeed, Quanta had no alternative but to follow Intel’s specifications in incorporating the Intel Products into its computers because it did not know their internal structure, which Intel guards as a trade secret. Brief for Petitioners 3. Intel all but practiced the patent itself by designing its products to practice the patents, lacking only the addition of standard parts.

We are unpersuaded by LGE’s attempts to distinguish Univis. First, there is no reason to distinguish the two cases on the ground that the articles in Univis required the removal of material to practice the patent while the Intel Products require the addition of components to practice the patent. LGE characterizes the lens blanks and lenses as sharing a “basic nature” by virtue of their physical similarity, while the Intel Products embody only some of the “patentably distinct elements and steps” involved in the LGE Patents. Brief for Respondent 26-27. But we think that the nature of the final step, rather than whether it consists of adding or deleting material, is the relevant characteristic. In each case, the final step to practice the patent is common and noninventive: grinding a lens to the customer’s prescription, or connecting a microprocessor or chipset to buses or memory. The Intel Products embody the essential features of the LGE Patents because they carry out all the inventive processes when combined, according to their design, with standard components.

With regard to LGE’s argument that exhaustion does not apply across patents, we agree on the general principle: The sale of a device that practices patent A does not, by virtue of practicing patent A, exhaust patent B. But if the device practices patent A while substantially embodying patent B, its relationship to patent A does not prevent exhaustion of patent B. For example, if the Univis lens blanks had been composed of shatter-resistant glass under patent A, the blanks would nonetheless have substantially embodied, and therefore exhausted, patent B for the finished lenses. This case is no different. While each Intel microprocessor and chipset practices thousands of individual patents, including some LGE patents not at issue in this case, the exhaustion analysis is not altered by the fact that more than one patent is practiced by the same product. The relevant consideration is whether the Intel Products that partially practice a patent — by, for example, embodying its essential features— exhaust that patent.

Finally, LGE’s reliance on Aro is misplaced because that case dealt only with the question whether replacement of one part of a patented combination infringes the patent. First, the replacement question is not at issue here. Second, and more importantly, Aro is not squarely applicable to the exhaustion of patents like the LGE Patents that do not disclose a new combination of existing parts. Aro described combination patents as “covering] only the totality of the elements in the claim [so] that no element, separately viewed, is within the grant.” 365 U. S., at 344; see also Mercoid Corp. v. Mid-Continent Investment Co., 320 U. S. 661, 667-668 (1944) (noting that, in a combination patent, “the combination is the invention and it is distinct from any” of its elements). Aro’s warning that no element can be viewed as central to or equivalent to the invention is specific to the context in which the combination itself is the only inventive aspect of the patent. In this case, the inventive part of the patent is not the fact that memory and buses are combined with a microprocessor or chipset; rather, it is included in the design of the Intel Products themselves and the way these products access the memory or bus.

C

Having concluded that the Intel Products embodied the patents, we next consider whether their sale to Quanta exhausted LGE’s patent rights. Exhaustion is triggered only by a sale authorized by the patent holder. Univis, 316 U. S., at 249.

LGE argues that there was no authorized sale here because the License Agreement does not permit Intel to sell its products for use in combination with non-Intel products to practice the LGE Patents. It cites General Talking Pictures Corp. v. Western Elec. Co., 304 U. S. 175 (1938), and General Talking Pictures Corp. v. Western Elec. Co., 305 U. S. 124 (1938), in which the manufacturer sold patented amplifiers for commercial use, thereby breaching a license that limited the buyer to selling the amplifiers for private and home use. The Court held that exhaustion did not apply because the manufacturer had no authority to sell the amplifiers for commercial use, and the manufacturer “could not convey to petitioner what both knew it was not authorized to sell.” 304 U. S., at 181. LGE argues that the same principle applies here: Intel could not convey to Quanta what both knew it was not authorized to sell, i. e., the right to practice the patents with non-Intel parts.

LGE overlooks important aspects of the structure of the Intel-LGE transaction. Nothing in the License Agreement restricts Intel’s right to sell its microprocessors and chipsets to purchasers who intend to combine them with non-Intel parts. It broadly permits Intel to “‘make, use, [or] sell’” products free of LGE’s patent claims. Brief for Petitioners 8 (quoting App. 154). To be sure, LGE did require Intel to give notice to its customers, including Quanta, that LGE had not licensed those customers to practice its patents. But neither party contends that Intel breached the agreement in that respect. Brief for Petitioners 9; Brief for Respondent 9. In any event, the provision requiring notice to Quanta appeared only in the Master Agreement, and LGE does not suggest that a breach of that agreement would constitute a breach of the License Agreement. Hence, Intel’s authority to sell its products embodying the LGE Patents was not conditioned on the notice or on Quanta’s decision to abide by LGE’s directions in that notice.

LGE points out that the License Agreement specifically disclaimed any license to third parties to practice the patents by combining licensed products with other components. Brief for Petitioners 8. But the question whether third parties received implied licenses is irrelevant because Quanta asserts its right to practice the patents based not on implied license but on exhaustion. And exhaustion turns only on Intel’s own license to sell products practicing the LGE Patents.

Alternatively, LGE invokes the principle that patent exhaustion does not apply to postsale restrictions on “making” an article. Brief for Respondent 43. But this is simply a rephrasing of its argument that combining the Intel Products with other components adds more than standard finishing to complete a patented article. As explained above, making a product that substantially embodies a patent is, for exhaustion purposes, no different from making the patented article itself. In other words, no further “making” results from the addition of standard parts — here, the buses and memory — to a product that already substantially embodies the patent.

The License Agreement authorized Intel to sell products that practiced the LGE Patents. No conditions limited Intel’s authority to sell products substantially embodying the patents. Because Intel was authorized to sell its products to Quanta, the doctrine of patent exhaustion prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products.

IV

The authorized sale of an article that substantially embodies a patent exhausts the patent holder’s rights and prevents the patent holder from invoking patent law to control post-sale use of the article. Here, LGE licensed Intel to practice any of its patents and to sell products practicing those patents. Intel’s microprocessors and chipsets substantially embodied the LGE Patents because they had no reasonable non-infringing use and included all the inventive aspects of the patented methods. Nothing in the License Agreement limited Intel’s ability to sell its products practicing the LGE Patents. Intel’s authorized sale to Quanta thus took its products outside the scope of the patent monopoly, and as a result, LGE can no longer assert its patent rights against Quanta. Accordingly, the judgment of the Court of Appeals is reversed.

It is so ordered.

       App. 145-198 is sealed; where material contained therein also appears in the parties’ unsealed briefs, citations are to the latter.

       The A. B. Dick Company sold mimeograph machines with an attached license stipulating that the machine could be used only with ink, paper, and other supplies made by the A. B. Dick Company. The Court rejected the notion that a patent holder “can only keep the article within the control of the patent by retaining the title,” A. B. Dick, 224 U. S., at 18, and held that “any ... reasonable stipulation, not inherently violative of some substantive law,” was “valid and enforceable,” id., at 31. The only requirement, the Court held, was that “the purchaser must have notice that he buys with only a qualified right of use,” so that a sale made without conditions resulted in “an unconditional title to the machine, with no limitations upon the use.” Id., at 26.

       Lens blanks are “rough opaque pieces of glass of suitable size, design and composition for use, when ground and polished, as multifocal lenses in eyeglasses.” Univis, 316 U. S., at 244.

       The patentee held patents for (1) a fluid additive increasing gasoline efficiency, (2) motor fuel produced by mixing gasoline with the patented fluid, and (3) a method of using fuel containing the patented fluid in combustion motors. Ethyl Gasoline Corp., 309 U. S., at 446. The patentee sold only the fluid, but attempted to control sales of the treated fuel. Id., at 459. The Court held that the sale of the fluid to refiners relinquished the patentee’s exclusive rights to sell the treated fuel. Id., at 457.

       One commentator recommends this strategy as a way to draft patent claims that “will survive numerous transactions regarding the patented good, allowing the force of the patent to intrude deeply into the stream of commerce.” Thomas, Of Text, Technique, and the Tangible: Drafting Patent Claims Around Patent Rules, 17 J. Marshall J. Computer & Info. L. 219,252 (1998); see also id., at 225-226 (advocating the conversion of apparatus claims into method claims and noting that “[e]ven the most novice claims drafter would encounter scant difficulty in converting a patent claim from artifact to technique and back again”).

       LGE suggests that the Intel Products would not infringe its patents if they were sold overseas, used as replacement parts, or engineered so that use with non-Intel products would disable their patented features. Brief for Respondent 21-22, n. 10. But Univis teaches that the question is whether the product is “capable of use only in practicing the patent,” not whether those uses are infringing. 316 U. S., at 249 (emphasis added). Whether outside the country or functioning as replacement parts, the Intel Products would still be practicing the patent, even if not infringing it. And since the features partially practicing the patent are what must have an alternative use, suggesting that they be disabled is no solution. The disabled features would have no real use.

       We note that the authorized nature of the sale to Quanta does not necessarily limit LGE’s other contract rights. LGE’s complaint does not include a breaeh-of-eontract claim, and we express no opinion on whether contract damages might be available even though exhaustion operates to eliminate patent damages. See Keeler v. Standard Folding Bed Co., 157 U. S. 659, 666 (1895) (‘Whether a patentee may protect himself and his assignees by special contracts brought home to the purchasers is not a question before us, and upon which we express no opinion. It is, however, obvious that such a question would arise as a question of contract, and not as one under the inherent meaning and effect of the patent laws”).