author: Justice Stevens Justice Scalia,

text:
    CARDINAL CHEMICAL CO. et al. v. MORTON INTERNATIONAL, INC.
    No. 92-114.
    Argued March 3, 1993 —
    Decided May 17, 1993

      Charles F. Schill argued the cause for petitioners. With him on the brief was Larry L. Shatzer II.

      Gordon R. Coons argued the cause for respondent. With him on the brief were John E. Rosenquist, Jeffrey S. Ward, and Gerald K. White

        J. Michael McWilliams, Jack C. Goldstein, and William C. Rooklidge filed a brief for the American Bar Association as amicus curiae urging reversal.
      Briefs of amici curiae were filed for the American Intellectual Property Law Association by Joseph R. Re, William L. LaFuze, Nancy J. Linck, Harold C. Wegner, and H. Ross Workman; and for Atochem North America, Inc., by Brian G. Brunsvold, Herbert H. Mintz, Richard B. Racine, and Michael D. Kaminski.

   Justice Stevens

delivered the opinion of the Court.

The question presented is whether the affirmance by the Court of Appeals for the Federal Circuit of a finding that a patent has not been infringed is a sufficient reason for vacating a declaratory judgment holding the patent invalid.

Respondent, Morton International, Inc. (Morton), is the owner of two patents on chemical compounds used in polyvinyl chloride (PVC). In 1983 Morton filed this action in the United States District Court for the District of South Carolina alleging that petitioners, Cardinal Chemical Company and its affiliates (Cardinal), had infringed those patents. Cardinal filed an answer denying infringement and a counterclaim for a declaratory judgment that the patents are invalid. While this case was pending in the District Court, Morton filed two other actions against other alleged infringers of the same patents. One was filed in the Eastern District of Louisiana, the other in the District of Delaware. The defendants in both cases, like Cardinal, filed counterclaims for declaratory judgments that the patents were invalid. Of the three, the Louisiana ease was tried first and, in 1988, resulted in a judgment for the defendant finding no infringement and declaring the patents invalid. On appeal, the Federal Circuit affirmed the finding of no infringement but vacated the judgment of invalidity. The Delaware case is still pending.

In 1990 this case proceeded to a 5-day bench trial. The South Carolina District Court concluded, as had the Louisiana District Court, that the patentee had failed to prove infringement and that the defendant-counterelaimant had proved by clear and convincing evidence that both patents were invalid. Accordingly, the court mandated two separate judgments: one dismissing the action for infringement with prejudice, and another on the counterclaim, declaring the patents invalid.

Again, Morton appealed to the Federal Circuit, challenging both the dismissal of its infringement claim and the judgment of invalidity. Cardinal filed a cross-appeal contending that it was entitled to an award of fees pursuant to 35 U. S. C. §285 and that Morton should be sanctioned for prosecuting a frivolous appeal. The defendant in the third, Delaware, case filed a brief amicus curiae urging the court to affirm the judgment of invalidity. Again, however, after affirming the dismissal of the infringement claim, the Federal Circuit vacated the declaratory judgment. It explained:

“Since we have affirmed the district court’s holding that the patents at issue have not been infringed, we need not address the question of validity. Vieau v. Japax, Inc., 823 F. 2d 1510, 1517, 3 USPQ 2d 1094, 1100 (Fed. Cir. 1987). Accordingly, we vacate the holding of invalidity.” 959 F. 2d 948, 952 (1992).

The court also ruled that Morton was not liable for fees because it had advanced an argument that “apparently it was not in a position to raise earlier.” Ibid. Judge Lourie concurred in the result, but believed the parties were entitled to an affirmance of the invalidity holding “so that they can plan their future affairs accordingly.” Id., at 954.

Both parties then filed petitions for rehearing, arguing that the court should have decided the validity issue instead of vacating the District Court’s declaratory judgment; they also filed suggestions for rehearing en bane, urging the Court of Appeals to reconsider its post-1987 practice of routinely vacating a declaratory judgment of invalidity whenever noninfringement is found. Over the dissent of three of its judges, the court declined those suggestions. Chief Judge Nies filed a thorough explanation of that dissent; she found no “justification for our Vieau decision either legally or as a ‘policy’. . . . The parties can now look only to the Supreme Court for correction.” 967 F. 2d 1571, 1578 (CA Fed. 1992).

Cardinal filed a petition for certiorari asserting that the Federal Circuit errs in applying a per se rule to what should be a discretionary matter. Pet. for Cert. 13. Morton did not oppose the grant of certiorari, but instead pointed out that it also had an interest in having the validity issue adjudicated. It explained that, after the Federal Circuit had twice refused substantive review of findings that its two patents were invalid, the patents have been

“effectively stripped of any power in the marketplace.
“If Morton were to proceed against another infringer, the district court, in all likelihood would accept the twice-vacated invalidity holdings, just as the district court below adopted wholesale the [Louisiana] district court’s invalidity holdings, without any independent evaluation as to whether those holdings were correct. Further, any future accused infringer would, in all likelihood, argue for an award of attorney’s fees as Cardinal has done here, on the ground that Morton should have known better than sue on an ‘invalid patent’....
“The value of Morton’s patents is therefore essentially zero — effectively not enforceable and viewed with a jaundiced eye by competitors and district courts alike. [Morton] has lost valuable property rights . . . without due process of law.” Brief for Respondent 16-17.

Because the Federal Circuit has exclusive jurisdiction over appeals from all United States District Courts in patent litigation, the rule that it applied in this case, and has been applying regularly since its 1987 decision in Vieau v. Japax, Inc., 823 F. 2d 1510, is a matter of special importance to the entire Nation. We therefore granted certiorari. 506 U. S. 813 (1992).

I

The Federal Circuit’s current practice of routinely vacating declaratory judgments regarding patent validity following a determination of noninfringement originated in two eases decided by different panels of that court on the same day. In Vieau, the patentee had appealed adverse rulings on damages, infringement, and validity and the alleged infringer had filed a cross-appeal asserting that the District Court should have declared the patent invalid. After affirming the District Court’s finding of noninfringement, the Federal Circuit concluded:

“Our disposition on the issue of infringement renders moot the appeal of the propriety of a directed verdict on the issues of damages and willful infringement. There is no indication that Japax’s cross-appeal on invalidity extends beyond the litigated claims or the accused devices found to be noninfringing. Accordingly, we also dismiss the cross-appeal as moot. The judgment entered by the district court with respect to each of the mooted issues is therefore vacated. It is affirmed with respect to infringement.” 823 F. 2d, at 1517.

Judge Bennett filed a concurring opinion, fleshing out this perfunctory holding and explaining that there was no need to review the declaratory judgment of invalidity in the absence of any “continuing dispute (such as the presence or threat of further litigation) regarding other claims or other accused devices that remains unresolved by the finding of noninfringement.”

In the second case, Fonar Corp. v. Johnson & Johnson, 821 F. 2d 627 (CA Fed. 1987), the District Court had held that the patent was not infringed and that the defendantcounterelaimant had failed to prove invalidity. On appeal, the court affirmed the noninfringement holding, and vacated the judgment on the counterclaim as moot. In his opinion for the panel, Chief Judge Markey explained:

“There being no infringement by J & J of any asserted claim, there remains no case or controversy between the parties. We need not pass on the validity or enforceability of claims 1 and 2.... [C]f. Altvater v. Freeman, 319 U. S. 359, 363-65 ... (1943) ('To hold a patent valid if it is not infringed is to decide a hypothetical case/ but a counterclaim for invalidity is not mooted where counterclaim deals with additional patent claims and devices not involved in the complaint and with license issues.).
“The judgment that J & J has not proven claims 1 and 2 invalid or unenforceable is vacated and the appeal from that judgment is dismissed as moot." Id., at 634.

A footnote emphasized that there was no longer any dispute between the parties beyond the specific charge of infringement that had been resolved by the finding of non-infringement.

The three opinions in Vieau and Fonar indicate that the Federal Circuit’s practice of vacating declaratory judgments of patent validity (or invalidity) is limited to cases in which the court is convinced that the finding of noninfringement has.entirely resolved the controversy between the litigants by resolving the initial complaint brought by the patentee. The Federal Circuit has concluded that in such cases the declaratory judgment is “moot” in a jurisdictional sense, a conclusion that it considers dictated by two of our earlier opinions, Electrical Fittings Corp. v. Thomas & Betts Co., 307 U. S. 241 (1939), and Altvater v. Freeman, 319 U. S. 359 (1943). We therefore begin with a comment on those two cases.

II

In Electrical Fittings, the District Court held one claim of a patent valid but not infringed. The patentee was content with that judgment, but the successful defendant appealed, seeking a reversal of the finding of validity. The Court of Appeals dismissed the appeal based on the rule that a prevailing party may not appeal from a judgment in its favor. We reversed, and held that although the defendant could not compel the appellate court to revisit the finding of validity (which had become immaterial to the disposition of the case), it could demand that the finding of validity be vacated. That finding, we explained, “stands as an adjudication of one of the issues litigated. We think the petitioners were entitled to have this portion of the decree eliminated, and that the Circuit Court of Appeals had jurisdiction, as we have held this Court has, to entertain the appeal, not for the purpose of passing on the merits, but to direct the reformation of the decree.” Electrical Fittings, 307 U. S., at 242 (footnotes omitted).

Our command that the validity decision be eliminated was similar to the Federal Circuit’s mandate in the Fonar case (both eases suggest that an appellate court should vacate unnecessary decisions regarding patent validity), but the two cases are critically different. The issue of invalidity in Electrical Fittings was raised only as an affirmative defense to the charge that a presumptively valid patent had been infringed, not (as in Fonar, and as here) as a basis for a counterclaim seeking a declaratory judgment of patent invalidity. An unnecessary ruling on an affirmative defense is not the same as the necessary resolution of a counterclaim for a declaratory judgment.

In Altvater, as here, the defendant did file a counterclaim seeking a declaratory judgment that the patent was invalid. The District Court found no infringement, but also granted the declaratory judgment requested by the defendant. The Court of Appeals affirmed the noninfringement holding but, reasoning that the validity issue was therefore moot, vacated the declaratory judgment. We reversed. Distinguishing our holding in Electrical Fittings, we wrote:

“To hold a patent valid if it is not infringed is to decide a hypothetical ease. But the situation in the present case is quite different. We have here not only bill and answer but a counterclaim. Though the decision of non-infringement disposes of the bill and answer, it does not dispose of the counterclaim which raises the question of validity... . [Tjhe issue of validity may be raised by a counterclaim in an infringement suit. The requirements of case or controversy are of course no less strict under the Declaratory Judgments Act (48 Stat. 955, 28 U. S. C. §400) than in case of other suits. But we are of the view that the issues raised by the present counterclaim were justiciable and that the controversy between the parties did not come to an end on the dismissal of the bill for non-infringement, since their dispute went beyond the single claim and the particular accused devices involved in that suit.” 319 U. S., at 363-364 (footnotes omitted; citations omitted).

Presumably because we emphasized, in the last clause quoted, the ongoing nature of the Altvater parties’ dispute, the Federal Circuit has assumed that a defendant’s counterclaim under the Declaratory Judgment Act should always be vacated unless the parties’ dispute extends beyond the terms of the patentee’s charge of infringement.

While both of our earlier eases are consistent with the Federal Circuit practice established in Vieau and Fonar, neither one required it. Electrical Fittings did not involve a declaratory judgment, and Altvater does not necessarily answer the question whether, in the absence of an ongoing dispute between the parties over infringement, an adjudication of invalidity would be moot. We now turn to that question.

Ill

Under its current practice, the Federal Circuit uniformly declares that the issue of patent validity is “moot” if it affirms the District Court’s finding of noninfringement and if, as in the usual case, the dispute between the parties does not extend beyond the patentee’s particular claim of infringement. That practice, and the issue before us, therefore concern the jurisdiction of an intermediate appellate court — not the jurisdiction of either a trial court or this Court. In the trial court, of course, a party seeking a declaratory judgment has the burden of establishing the existence of an actual case or controversy. Aetna Life Ins. Co. v. Haworth, 300 U. S. 227, 240-241 (1937).

In patent litigation, a party may satisfy that burden, and seek a declaratory judgment, even if the patentee has not filed an infringement action. Judge Markey has described

“the sad and saddening scenario that led to enactment of the Declaratory Judgment Act (Act), 28 U. S. C. § 2201. In the patent version of that scenario, a patent owner engages in a danse macabre, brandishing a Damoclean threat with a sheathed sword.... Before the Act, competitors victimized by that tactic were rendered helpless and immobile so long as the patent owner refused to grasp the nettle and sue. After the Act, those competitors were no longer restricted to an in terrorem choice between the incurrence of a growing potential liability for patent infringement and abandonment of their enterprises; they could clear the air by suing for a judgment that would settle the conflict of interests. The sole requirement for jurisdiction under the Act is that the conflict be real and immediate, i. e., that there be a true, actual ‘controversy’ required by the Act.” Arrowhead Industrial Water, Inc. v. Ecolochem, Inc., 846 F. 2d 731, 734-735 (CA Fed. 1988) (citations omitted).

Merely the desire to avoid the threat of a “scarecrow” patent, in Learned Hand’s phrase, may therefore be sufficient to establish jurisdiction under the Declaratory Judgment Act. If, in addition to that desire, a party has actually been charged with infringement of the patent, there is, necessarily, a case or controversy adequate to support jurisdiction of a complaint, or a counterclaim, under the Act. In this case, therefore, it is perfectly clear that the District Court had jurisdiction to entertain Cardinal’s counterclaim for a declaratory judgment of invalidity.

It is equally clear that the Federal Circuit, even after affirming the finding of noninfringement, had jurisdiction to consider Morton’s appeal from the declaratory judgment of invalidity. A party seeking a declaratory judgment of invalidity presents a claim independent of the patentee’s charge of infringement. If the District Court has jurisdiction (established independently from its jurisdiction over the patentee’s charge of infringement) to consider that claim, so does (barring any intervening events) the Federal Circuit.

There are two independent bases for this conclusion. First, the Federal Circuit is not a court of last resort. If that court had jurisdiction while the case was pending before it, the case remains alive (barring other changes) when it comes to us. The Federal Circuit’s determination that the patents were not infringed is subject to review in this Court, and if we reverse that determination, we are not prevented from considering the question of validity merely because a lower court thought it superfluous. As a matter of practice, the possibility that we would grant certiorari simply to review that court’s resolution of an infringement issue is extremely remote, but as a matter of law we could do so, and if we did, we could also reach the declaratory judgment, as long as the parties continued to dispute the issue of validity, as they do here. As this case demonstrates, nothing prevents us, as a jurisdictional matter, from reviewing the Federal Circuit’s disposition (even its vacatur) of the District Court’s resolution of the declaratory judgment counterclaim.

Second, while the initial burden of establishing the trial court’s jurisdiction rests on the party invoking that jurisdiction, once that burden has been met courts are entitled to presume, absent further information, that jurisdiction continues. If a party to an appeal suggests that the controversy has, since the rendering of judgment below, become moot, that party bears the burden of coming forward with the subsequent events that have produced that alleged result. See United States v.W.T Grant Co., 345 U. S. 629, 633 (1953). In this case Cardinal properly invoked the original jurisdiction of the District Court, and Morton properly invoked the appellate jurisdiction of the Federal Circuit. That court unquestionably had the power to decide all the issues raised on Morton’s appeal. If, before the court had decided the case, either party had advised it of a material change in circumstances that entirely terminated the party’s controversy, it would have been proper either to dismiss the appeal or to vacate the entire judgment of the District Court. Cf. United States v. Munsingwear, Inc., 340 U. S. 36, 39 (1950). In fact, however, there was no such change in this case. The Federal Circuit’s decision to rely on one of two possible alternative grounds (noninfringement rather than invalidity) did not strip it of power to decide the second question, particularly when its decree was subject to review by this Court. Even if it may be good practice to decide no more than is necessary to determine an appeal, it is clear that the Federal Circuit had jurisdiction to review the declaratory judgment of invalidity. The case did not become moot when that court affirmed the finding of noninfringement.

IV

The Federal Circuit’s practice is therefore neither compelled by our cases nor supported by the “case or controversy” requirement of Article III. Of course, its practice might nevertheless be supported on other grounds. The courts of appeals have significant authority to fashion rules to govern their own procedures. See, e.g., Ortega-Rodriguez v. United States, 507 U. S. 234, 244, 246, 249-250 (1993); Thomas v. Arn, 474 U. S. 140, 146-148 (1985). Just as we have adhered to a practice of deciding cases on statutory rather than constitutional grounds when both alternatives are available, see, e. g., Edward J. DeBartolo Corp. v. Florida Gulf Coast Building and Construction Trades Council, 485 U. S. 568, 575 (1988), there might be a sufficient reason always to address the infringement issue before passing on the patent’s validity. If, for example, the validity issues were generally more difficult and time consuming to resolve, the interest in the efficient management of the court’s docket might support such a rule.

Although it is often more difficult to determine whether a patent is valid than whether it has been infringed, there are even more important countervailing concerns. Perhaps the most important is the interest of the successful litigant in preserving the value of a declaratory judgment that, as Chief Judge Nies noted, “it obtained on a valid counterclaim at great effort and expense.” A company once charged with infringement must remain concerned about the risk of similar charges if it develops and markets similar products in the future. Given that the burden of demonstrating that changed circumstances provide a basis for vacating the judgment of patent invalidity rests on the party that seeks such action, there is no reason why a successful litigant should have any duty to disclose its future plans to justify retention of the value of the judgment that it has obtained.

Moreover, our prior cases have identified a strong public interest in the finality of judgments in patent litigation. In Sinclair & Carroll Co. v. Interchemical Corp., 325 U. S. 327 (1945), we approved of the District Court’s decision to consider the question of validity even though it had found that a patent had not been infringed. Criticizing the contrary approach taken by other courts, we stated that “of the two questions, validity has the greater public importance, Cover v. Schwartz, 133 F. 2d 541 [(CA2 1943)], and the District Court in this case followed what will usually be the better practice by inquiring fully into the validity of this patent.” Id., at 330.

We also emphasized the importance to the public at large of resolving questions of patent validity in Blonder-Tongue Laboratories, Inc. v. University of Ill. Foundation, 402 U. S. 313 (1971). In that ease we overruled Triplett v. Lowell, 297 U. S. 638 (1936), which had held that a determination of patent invalidity does not estop the patentee from relitigating the issue in a later case brought against another alleged infringer. We also commented at length on the wasteful consequences of relitigating the validity of a patent after it has once been held invalid in a fair trial, and we noted the danger that the opportunity to relitigate might, as a practical matter, grant monopoly privileges to the holders of invalid patents. As this case demonstrates, the Federal Circuit’s practice of routinely vacating judgments of validity after finding noninfringement creates a similar potential for relitigation and imposes ongoing burdens on competitors who are convinced that a patent has been correctly found invalid.

Indeed, as Morton’s current predicament illustrates, see supra, at 89, the Federal Circuit’s practice injures not only the alleged infringer and the public; it also may unfairly deprive the patentee itself of the appellate review that is a component of the one full and fair opportunity to have the validity issue adjudicated correctly. If, following a finding of noninfringement, a declaratory judgment on validity is routinely vacated, whether it invalidated the patent (as in Vieau) or upheld it (as in Fonar), the patentee may have lost the practical value of a patent that should be enforceable against different infringing devices. The Federal Circuit’s practice denies the patentee such appellate review, prolongs the life of invalid patents, encourages endless litigation (or at least uncertainty) over the validity of outstanding patents, and thereby vitiates the rule announced in Blonder-Tongue.

In rejecting the Federal Circuit’s practice we acknowledge that factors in an unusual case might justify that court’s refusal to reach the merits of a validity determination — a determination which it might therefore be appropriate to vacate. A finding of noninfringment alone, however, does not justify such a result. Nor does anything else in the record of this case. The two patents at issue here have been the subject of three separate lawsuits, and both parties have urged the Federal Circuit to resolve their ongoing dispute over the issue of validity; it would be an abuse of discretion not to decide that question in this ease. Accordingly, the judgment of the Court of Appeals is vacated, and the case is remanded to that court for farther proceedings consistent with this opinion.

It is so ordered.

Justice Scalia,

with whom

Justice Soutee joins, concurring in part and concurring in the judgment.

I agree that the Federal Circuit erred in holding that the invalidity claim became moot once it was determined that the patent had not been infringed. Moreover, though the Federal Circuit had discretion to reach (or not to reach) respondent’s appeal of the declaratory judgment ruling, it was an abuse of discretion to decline to reach it for that erroneous “mootness” reason — constituting, in effect, a failure to exercise any discretion at all. I therefore join the judgment of the Court, and all of its opinion except Part IV.

In Part IV the Court determines that, upon remand, the Federal Circuit may not, “on other grounds,” ante, at 99 (emphasis added), continue its practice of declining review in these circumstances, set out in Vieau v. Japax, Inc., 823 F. 2d 1510 (1987). That point is much less tied to general principles of law with which I am familiar, and much more related to the peculiarities of patent litigation, with which I deal only sporadically. It need not be reached to decide this case, and I am unwilling to reach it because of the lack of adversary presentation.

The lack of adversariness was frankly acknowledged at oral argument. See, e. g., Tr. of Oral Arg. 25, 37 (“On the limited issue before this Court, where there is a declaratory judgment held, we do not have any difference whatsoever”). Petitioners and respondent disagree only as to some hypothetical applications of the Federal Circuit’s reviewing authority — applications clearly outside the facts of this case— and are in utter agreement concerning the invalidity of the Vieau practice. The briefs starkly reflect this uniformity: Respondent’s brief, in a mere 10 pages of argument, essentially incorporates by reference much of petitioners’ brief, whieh in turn largely reflects Chief Judge Nies’ dissent from the denial of en banc review below. Brief for Respondent 8-9. (Not surprisingly, petitioners did not bother to file a reply brief responding to their own echo.) Amici likewise all weighed in on the single side in this case, one of them even identifying its submission as “in support of petitioners & respondents.” Brief for Federal Circuit Bar Association as Amicus Curiae. While this harmony is heartwarming and even (since it reduces the number and length of briefs) environmentally sound, it may encourage us to make bad law.

In the past, when faced with a complete lack of adversariness, we have appointed an amicus to argue the unrepresented side. See, e. g., Toibb v. Radloff, 501 U. S. 157, 160, n. 4 (1991); Bob Jones Univ. v. United States, 461 U. S. 574, 585, n. 9, 599, n. 24 (1983); Granville-Smith v. Granville-Smith, 349 U. S. 1, 4 (1955). Cf. INS v. Chadha, 462 U. S. 919, 939-940 (1983). The wisdom of that course is shown by Cheng Fan Kwok v. INS, 392 U. S. 206, 210 (1968). That case, like this one, involved a Court of Appeals’ refusal to decide — the Third Circuit’s determination that it lacked jurisdiction to review the INS’s denial of petitioner’s application for a stay of deportation. And in that case, as in this one, both parties agreed that the Court of Appeals should have decided the case. We appointed an amicus to defend the judgment below, id., at 210, n. 9, and ended up affirming the determination rejected by the parties.

I agree with the Court that the parties’ total agreement as to disposition of this case poses no constitutional barrier to its resolution. Ante, at 88-89, n. 9. For prudential reasons, however, I would frame the resolution more narrowly. I can say with confidence that the question of the validity of the patent is not moot, so that mootness was an impermissible ground for failing to decide validity. It seems to me that is enough for us to determine for the moment. If supposed mootness was in fact the only support for the Vieau policy, the Federal Circuit will abandon it and we will never see the issue again. If, however, there is some other support, we should hear about it from counsel before we reject the policy out of hand.

The issue of discretionary refusal (as opposed to the issue of mootness) is, it seems to me, more than usually deserving of adversary presentation. It involves the practicalities of the Federal Circuit’s specialized patent jurisdiction, rather than matters of statutory or constitutional interpretation with which we are familiar. The opinions of the Federal Circuit do not discuss the practical benefits of the Vieau practice, nor can we find them discussed in the opinions of other courts, the Federal Circuit’s jurisdiction over patent appeals being exclusive, see 28 U. S. C. § 1295(a). One must suspect, however, that some practical benefits exist, since despite the fragility of the “mootness” jurisdictional justification that we reject today, Vieau has enlisted the support of the experienced judges on the Federal Circuit — who denied en banc review despite criticism of Vieau in Chief Judge Nies’ opinion dissenting from the denial, 967 F. 2d 1571 (1992), and in Judge Lourie’s panel concurrence, 959 F. 2d 948, 952 (1992).

For these reasons, I concur in the judgment of the Court, and join all of its opinion except Part IV.

       United States Patent No. 4,062,881, dated December 13, 1977, and No. 4,120,845, dated October 17,1978. The two patents are directed to organotin mereaptoalkyl carboxylic acid ester sulfides — basically, compounds of sulfur and tin that serve as heat stabilizers for PVC, protecting it from decomposition, discoloration, and loss of strength. See 959 F. 2d 948, 949, and n. 1 (CA Fed. 1992).

        Morton Thiokol, Inc. v. Witco Chemical Corp., No. 84-5685 (ED La., June 22, 1988), App. 10, 24-31, 36.

        Morton Thiokol, Inc. v. Argus Chemical Corp., 11 USPQ 2d 1152 (CA Fed. 1989), judgt. order reported at 873 F. 2d 1451 (CA Fed. 1989) (nonprecedential). The court explained its disposition of the judgment of invalidity as follows: “We hold that the finding of no literal infringement is not clearly erroneous and on that basis we affirm the portion of the judgment of the district court that determined that the patents are not infringed and dismissed the suit. We therefore find it unnecessary to reach the district court's determination that the patents are invalid, and vacate the portion of the judgment that so determined.” 11 USPQ 2d, at 1153, App. 39.

       "The evidence clearly and convincingly establishes that a person skilled in the art is unable to ascertain the claimed structures in order to avoid infringement .... Therefore, this court concludes that the language of the [claims] is too vague to satisfy the definiteness requirement of § 112.” App. to Pet. for Cert. 67a.

       “Now, therefore,
      “IT IS ORDERED that the Clerk is directed to enter judgment for the defendants in this case, dismissing the plaintiff's action for infringement with prejudice and at its costs.
      “IT IS FURTHER ORDERED that the Clerk is directed to enter judgment for the defendants on their counterclaim of invalidity of the patents, as patents 4,062,881 and 4,120,845 are found to be invalid.” Id., at 70a.

       See 959 F. 2d, at 950, n. 2 (referring to Morton International, Inc. v. Atochem North America, Inc., No. 87-60-CMW (Del., filed Feb. 9, 1987)). Atochem has also filed a brief amicus curiae in this Court, urging our reversal of the Federal Circuit practice.

       Those petitions were denied. 1992 U. S. App. LEXIS 7580 (CA Fed. 1992), App. to Pet. for Cert. 71a, 72a.

       1992 U. S. App. LEXIS 10067 (CA Fed. 1992), App. to Pet. for Cert. 73a, 74a.

       Because both parties agree that we should reject the Federal Circuit’s practice, it might be thought that they lack the adversarial posture required by Article III. Although both Morton and Cardinal do agree on the correct answer to the question presented, they do so only so that they can reach their true dispute: the validity of Morton’s two patents, a subject on which they are in absolute disagreement. Further, it is clear that no collusion between the parties has brought them here; if anything has dulled the adverseness between them, it is the Federal Circuit practice that is the subject of this case. Cf. INS v. Chadha, 462 U. S. 919, 939 (1983) (finding Art. Ill adverseness even though the two parties agreed on the unconstitutionality of the one-House veto that was the subject of that case; the parties remained in disagreement over the underlying issue of whether Chadha should be deported). The Federal Circuit’s improper finding of mootness cannot itself moot this case.

        Vieau, 823 F. 2d, at 1520. He added: “It is the burden of the party seeking the declaratory judgment to illustrate, either in its briefs or at oral argument, the continued existence of a case or controversy should a decision of noninfringement be made by this court in deciding the appeal. See International Medical Prosthetics, 787 F. 2d at 575, 229 USPQ at 281 (burden is on declaratory plaintiff to establish that jurisdiction existed at, and has continued since, the time the complaint was filed). This requirement avoids having this court unnecessarily address what might turn out to be a hypothetical situation.” Ibid.

       “The record contains no assertion that J & J infringes the ’832 patent by any methods other than those found not to infringe, or that-J & J’s machines infringe the nonasserted apparatus claims. J & J’s counterclaim merely repeated the affirmative defenses of invalidity and unenforceability and the verdict form, with no objection by J & J, dealt only with the asserted claims. J & J’s motion for JNOV dealt only with claims 1 and 2.” Fonar, 821 F. 2d, at 634, n. 2.

       That the holdings of Vieau v. Japex, Inc., 823 F. 2d 1510 (CA Fed. 1987), and Fonar Corp. v. Johnson & Johnson, 821 F. 2d 627 (CA Fed. 1987), can be said to have developed into a uniform practice or rule is made clear by the regularity with which they have been applied. See Shat-R-Shield, Inc. v. Trojan, Inc., 1992 U. S. App. LEXIS 9860, *7, judgt. order reported at 968 F. 2d 1226 (CA Fed.) (nonprecedential), cert. denied, 506 U.S. 870 (1992); Winner Int’l Corp. v. Wolo Mfg. Corp., 905 F. 2d 375, 377 (CA Fed. 1990); Wilson Sporting Goods Co. v. David Geoffrey & Associates, 904 F. 2d 677, 686 (CA Fed. 1990); Neville Chemical Co. v. Resinall Corp., 1990 U. S. App. LEXIS 16549, judgt. order reported at 915 F. 2d 1584 (CA Fed. 1990) (nonprecedential); Freeman v. Minnesota Mining and Mfg. Co., 13 USPQ 2d 1250, judgt. order reported at 884 F. 2d 1398 (CA Fed. 1989) (nonprecedential), cert. denied, 494 U. S. 1070 (1990); Senmed, Inc. v. Richard-Allan Medical Industries, Inc., 888 F. 2d 815, 817 (CA Fed. 1989); Environmental Instruments, Inc. v. Sutron Corp., 877 F. 2d 1561, 1566 (CA Fed. 1989); Julien v. Zeringue, 864 F. 2d 1569, 1571 (CA Fed. 1989); Morton Thiokol, Inc. v. Argus Chemical Corp., 11 USPQ 2d 1152, judgt. order reported at 873 F. 2d 1451 (CA Fed. 1989) (nonprecedential); Pfaff v. Wells Electronic, Inc., 12 USPQ 2d 1158, judgt. order reported at 884 F. 2d 1399 (CA Fed. 1989) (nonprecedential); Specialized Electronics Corp. v. Aviation Supplies & Academics, Inc., 12 USPQ 2d 1918, judgt. order reported at 884 F. 2d 1397 (CA Fed. 1989) (nonprecedential); Sun-Tek Industries, Inc. v. Kennedy Sky Lites, Inc., 848 F. 2d 179, 183 (CA Fed. 1988), cert. denied, 488 U. S. 1009 (1989); Advance Transformer Co. v. Levinson, 837 F. 2d 1081, 1084 (CA Fed. 1988); Pennwalt Corp. v. Durand-Wayland, Inc., 833 F. 2d 931, 939 (CA Fed. 1987) (en banc); Perini America, Inc. v. Paper Converting Machine Co., 832 F. 2d 581, 584, n. 1 (CA Fed. 1987). In only one published opinion after 1987, Dana Corp. v. IPC Ltd. Partnership, 860 F. 2d 415 (CA Fed. 1988), did the court address the District Court’s validity determination without reaching the issue of infringement, but it did so without referring to Vieau or Fonar.

       See Vieau, 823 F. 2d, at 1518-1519 (Bennett, J., concurring); Fonar, 821 F. 2d, at 634.

       “Instead of dismissing the bill without more, it entered a decree adjudicating claim 1 valid but dismissing the bill for failure to prove infringement.” 307 U. S., at 242.

       Under 35 U. S.C. §282, all patents are presumed valid. Although that presumption is obviously resurrected after the Federal Circuit vacates a finding of invalidity, Morton’s current situation makes clear that the revived presumption lacks some of its earlier strength.

       See Vieau, 823 F. 2d, at 1518-1521 (Bennett, J., concurring); Fonar, 821 F. 2d, at 634, and n. 2.

       As we have noted, the Declaratory Judgment Act affords the district court some discretion in determining whether or not to exercise that jurisdiction, even when it has been established. See Brillhart v. Excess Ins. Co. of America, 316 U. S. 491, 494-496 (1942).

         Bresnick v. United States Vitamin Corp., 139 F. 2d 239, 242 (CA2 1943).

       Commenting on Electrical Fittings, in Deposit Guaranty Nat. Bank v. Roper, 445 U. S. 326, 335 (1980), we wrote: “Although the Court limited the appellate function to reformation of the decree, the holding relevant to the instant case was that the federal courts retained jurisdiction over the controversy notwithstanding the District Court’s entry of judgment in favor of petitioners. This Court had the question of mootness before it, yet because policy considerations permitted an appeal from the District Court’s final judgment and because petitioners alleged a stake in the outcome, the case was still live and dismissal was not required by Art. III. The Court perceived the distinction between the definitive mootness of a case or controversy, which ousts the jurisdiction of the federal courts and requires dismissal of the case, and a judgment in favor of a parly at an intermediate stage of litigation, which does not in all cases terminate the right to appeal.” See also 959 F. 2d, at 953 (Lourie, J., concurring) (“[B]e-cause this court is not a court of last resort, a holding of either invalidity or noninfringement by our court does not render the case moot because it is not over. Therefore, when both infringement and validity issues are presented on appeal, we can base our affirmance on both grounds, thereby leaving a complete judgment available for review by the Supreme Court”).

       To the extent that the Federal Circuit, relying on Judge Bennett’s concurrence in Vieau, see n. 10, infra, would have imposed the burden on Cardinal to show that jurisdiction over its counterclaim, once established in the District Court, continued to attach before the Court of Appeals, it would therefore have been in error. Bearing the initial burden of establishing jurisdiction is different from establishing that it has disappeared.

       967 F. 2d 1521, 1577 (CA Fed. 1992) (Nies, C. J., dissenting from denial of rehearing en banc). As she added in a footnote: “Nor should we be unmindful of the expense and effort of the district court. Judge Avern Cohn of the Eastern District of Michigan (the Vieau trial judge) stated, in a panel discussion at our most recent Judicial Conference: ‘I took six months to write a JNOV, found the patent invalid and not infringed and was very proud of my work product. And when I read that court of appeals opinion and found that my finding of invalidity had been vacated, there was no case or controversy, I was in a state of shock for ten minutes/ Cohn, Remarks at the Patent Breakout Session of the Tenth Annual Judicial Conference of the United States Court of Appeals for the Federal Circuit 65 (April 30, 1992).” Id., at 1577, n. 9.

         Altvater cannot be read to require such a disclosure. In that case, the counterclaimant was a licensee, and there was no question but that its obligations to the patentee would continue unless the patent were found invalid. Our holding did not depend on that fact, however, and we nowhere stated that a counterclaimant could seek the affirmance of a declaratory judgment only if it ensured that its future actions would continue to violate the patentee's alleged rights.

       “In any lawsuit where a defendant, because of the mutuality principle, is forced to present a complete defense on the merits to a claim which the plaintiff has fully litigated and lost in a prior action, there is an arguable misalloeation of resources. To the extent the defendant in the second suit may not win by asserting, without contradiction, that the plaintiff had fully and fairly, but unsuccessfully, litigated the same claim in the prior suit, the defendant’s time and money are diverted from alternative uses— productive or otherwise — to relitigation of a decided issue. And, still assuming that the issue was resolved correctly in the first suit, there is reason to be concerned about the plaintiff’s allocation of resources. Permitting repeated litigation of the same issue as long as the supply of unrelated defendants holds out reflects either the aura of the gaming table or ‘a lack of discipline and of disinterestedness on the part of the lower courts, hardly a worthy or wise basis for fashioning rules of procedure.' Kerotest Mfg. Co. v. C-O-Two Co., 342 U. S. 180, 185 (1952).” 402 U. S., at 329.

       “In each successive suit the patentee enjoys the statutory presumption of validity, and so may easily put the alleged infringer to his expensive proof As a consequence, prospective defendants will often decide that paying royalties under a license or other settlement is preferable to the costly burden of challenging the patent.” Id., at 338.
      “The tendency of Triplett to multiply the opportunities for holders of invalid patents to exact licensing agreements or other settlements from alleged infringers must be considered in the context of other decisions of this Court. Although recognizing the patent system’s desirable stimulus to invention, we have also viewed the patent as a monopoly which, although sanctioned by law, has the economic consequences attending other monopolies. A patent yielding returns for a device that fails to meet the congressionally imposed criteria of patentability is anomalous.” Id., at 342-343 (footnotes omitted).

       The Federal Circuit’s practice has been the subject of a good deal of scholarly comment, all of which has consistently criticized the practice. See R. Harmon, Patents and The Federal Circuit 551-554 (2d ed. 1991); Wegner, Morton, The Dual Loser Patentee: Frustrating Blonder-Tongue, 74 J. Pat. & Tm. Off Soc. 344 (1992) (“A dual loser patentee at a trial court who fails both on infringement and validity and then loses at the Federal Circuit on infringement is given the judicial blessing of that appellate tribunal to sue and sue again against third parties, to the extent the invalidity ruling is vacated under Vieau’’); Re & Rooldidge, Vacating Patent Invalidity Judgments Upon an Appellate Determination of Noninfringement, 72 J. Pat. & Tm. Off Soc. 780 (1990). See also Donofrio, The Disposition of Unreviewable Judgments by the Federal Circuit, 73 J. Pat. & Tm. Off. Soc. 462, 464 (1991) (“[T]he Federal Circuit’s present practice of vacating such judgments [even if it correctly considers them unreviewable] should not continue because it permits litigants to destroy the conclusiveness of invalidity holdings”).


source: Caselaw Access Project

author: Justice Stevens

license: Public Domain

text:
    McNEIL v. UNITED STATES
    No. 92-6033.
    Argued April 19, 1993 —
    Decided May 17, 1993

      Allen E. Shoenberger, by appointment of the Court, 507 U. S. 906, argued the cause and filed briefs for petitioner.

      William K. Kelley argued the cause for the United States. With him on the brief were Acting Solicitor General Bryson, Acting Assistant Attorney General Schijfer, Deputy Solicitor General Mahoney, Mark B. Stern, and Henry D. Gabriel.

        Joseph A Power, Jr., and Arthur H. Bryant filed a brief for Trial Lawyers for Public Justice, P. C., as amicus curiae urging reversal.

   Justice Stevens

delivered the opinion of the Court.

The Federal Tort Claims Act (FTCA) provides that an “action shall not be instituted upon a claim against the United States for money damages” unless the claimant has first exhausted his administrative remedies. The question presented is whether such an action may be maintained when the claimant failed to exhaust his administrative remedies prior to filing suit, but did so before substantial progress was made in the litigation.

I

On March 6, 1989, petitioner, proceeding without counsel, lodged a complaint in the United States District Court for the Northern District of Illinois, alleging that the United States Public Health Service had caused him serious injuries while “conducting human research and experimentation on prisoners” in the custody of the Illinois Department of Corrections. He invoked the federal court’s jurisdiction under the FTCA and prayed for a judgment of $20 million. App. 3-7.

Four months later, on July 7,1989, petitioner submitted a claim for damages to the Department of Health and Human Services. The Department denied the claim on July 21, 1989. On August 7,1989, petitioner sent a letter to the District Court enclosing a copy of the Department’s denial of his administrative claim and an affidavit in support of an earlier motion for appointment of counsel. Petitioner asked that the court accept the letter “as a proper request, whereas plaintiff can properly commence his legal action accordingly.” Id., at 10.

For reasons that are not entirely clear, the United States was not served with a copy of petitioner’s complaint until July 30, 1990. Id., at 2. On September 19, 1990, the United States moved to dismiss the complaint on the ground that petitioner’s action was barred by the 6-month statute of limitation. The motion was based on the assumption that the complaint had been filed on April 15, 1990, when petitioner paid the court filing fees, and that that date was more than six months after the denial of petitioner’s administrative claim. In response to the motion, petitioner submitted that the complaint was timely because his action had been commenced on March 6, 1989, the date when he actually lodged his complaint and the Clerk assigned it a docket number.

The District Court accepted March 6, 1989, as the operative date of filing, but nonetheless granted the Government’s motion to dismiss. Petitioner’s suit was not out of time, the District Court reasoned, but, rather, premature. The court concluded that it lacked jurisdiction to entertain an action "commenced before satisfaction of the administrative exhaustion requirement under § 2675(a).” Id., at 21.

The Court of Appeals for the Seventh Circuit affirmed. The court explained:

“According to 28 U. S. C. § 2401(b), a tort claim against the United States must be ‘begun within six months after the date of mailing ... of notice of final denial of the claim by the ageney to which it was presented.’ The administrative denial was mailed on July 21, 1989, so McNeil had between then and January 21, 1990, to begin his action. The complaint filed in March 1989 was too early. This left two options. Perhaps the document filed in March 1989 loitered on the docket, springing into force when the agency acted. Or perhaps the request for counsel in August 1989, during the six-month period, marks the real ‘beginning’ of the action. The district court rejected both options, and McNeil, with the assistance of counsel appointed by this court, renews the arguments here.
“March 1989 was too early. The suit did not linger, awaiting administrative action. Unless McNeil began a fresh suit within six months after July 21, 1989, he loses.” 964 F. 2d 647, 648-649 (1992).

The court reviewed the materials filed in August 1989 and concluded that the District Court had not committed plain error in refusing to construe them as having commenced a new action.

Because decisions in other Circuits permit a prematurely filed FTCA action to proceed if no substantial progress has taken place in the litigation before the administrative remedies are exhausted, see Kubrick v. United States, 581 F. 2d 1092, 1098 (CA3 1978), rev’d on other grounds, 444 U. S. 111 (1979), and Celestine v. Veterans Administration Hospital, 746 F. 2d 1360, 1363 (CA8 1984), we granted certiorari to resolve the conflict. 506 U. S. 1074 (1993).

II

As the ease comes to us, we assume that the Court of Appeals correctly held that nothing done by petitioner after the denial of his administrative claim on July 21, 1989, constituted the commencement of a new action. The narrow question before us is whether his action was timely either because it was commenced when he lodged his complaint with the District Court on March 6, 1989, or because it should be viewed as having been “instituted” on the date when his administrative claim was denied.

The text of the statute requires rejection of the first possibility. The command that an “action shall not be instituted . . . unless the claimant shall have first presented the claim to the appropriate Federal agency and his claim shall have been finally denied by the agency in writing and sent by certified or registered mail” is unambiguous. We are not free to rewrite the statutory text. As of March 6,1989, petitioner had neither presented his claim to the Public Health Service, nor had his claim been “finally denied” by that agency. As the Court of Appeals held, petitioner’s complaint was filed too early.

The statutory text does' not speak with equal clarity to the argument that petitioner’s subsequent receipt of a formal denial from the agency might be treated as the event that “instituted” his action. Petitioner argues the word “instituted” that is used in § 2675(a), see n. 1, supra, is not synonymous with the word “begun” in § 2401(b), see n. 4, supra, or with the word “commence” as used in certain other statutes and rules. See, e. g., Hallstrom v. Tillamook County, 493 U. S. 20 (1989). He suggests that an action is not “instituted” until the occurrence of the events that are necessary predicates to the invocation of the court’s jurisdiction— namely, the filing of his complaint and the formal denial of the administrative claim. This construction, he argues, is consistent with the underlying purpose of § 2675(a): As long as no substantial progress has been made in the litigation by the time the claimant has exhausted his administrative remedies, the federal agency will have had a fair opportunity to investigate and possibly settle the claim before the parties must assume the burden of costly and time-consuming litigation.

We find this argument unpersuasive. In its statutory context, we think the normal interpretation of the word “institute” is synonymous with the words “begin” and “commence.” The most natural reading of the statute indicates that Congress intended to require complete exhaustion of Executive remedies before invocation of the judicial process. Every premature filing of an action under the FTCA imposes some burden on the judicial system and on the Department of Justice which must assume the defense of such actions. Although the burden may be slight in an individual ease, the statute governs the processing of a vast multitude of claims. The interest in orderly administration of this body of litigation is best served by adherence to the straightforward statutory command.

Moreover, given the clarity of the statutory text, it is certainly not a “trap for the unwary.” It is no doubt true that there are eases in which a litigant proceeding without counsel may make a fatal procedural error, but the risk that a lawyer will be unable to understand the exhaustion requirement is virtually nonexistent. Our rules of procedure are based on the assumption that litigation is normally conducted by lawyers. While we have insisted that the pleadings prepared by prisoners who do not have access to counsel be liberally construed, see Haines v. Kerner, 404 U. S. 519 (1972); Estelle v. Gamble, 429 U. S. 97, 106 (1976), and have held that some procedural rules must give way because of the unique circumstance of incarceration, see Houston v. Lack, 487 U. S. 266 (1988) (pro se prisoner’s notice of appeal deemed filed at time of delivery to prison authorities), we have never suggested that procedural rules in ordinary civil litigation should be interpreted so as to excuse mistakes by those who proceed without counsel. As we have noted before, “in the long run, experience teaches that strict adherence to the procedural requirements specified by the legislature is the best guarantee of evenhanded administration of the law.” Mohasco Corp. v. Silver, 447 U. S. 807, 826 (1980).

The FTCA bars claimants from bringing suit in federal court until they have exhausted their administrative remedies. Because petitioner failed to heed that clear statutory command, the District Court properly dismissed his suit.

The judgment of the Court of Appeals is

Affirmed.

       Title 28 U. S. C. § 2675(a) provides, in pertinent part:
      “An action shall not be instituted upon a claim against the United States for money damages for injury or loss of property or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, unless the claimant shall have first presented the claim to the appropriate Federal agency and his claim shall have been finally denied by the agency in writing and sent by certified or registered mail. The failure of an agency to make final disposition of a claim within six months after it is filed shall, at the option of the claimant any time thereafter, be deemed a final denial of the claim for purposes of this section.”

       Petitioner sought damages of $500,000 in his administrative claim, not the $20 million for which he prayed in his earlier federal court action. Pursuant to 28 U. S. C. § 2675(b), a claimant is barred from seeking in federal court “any sum in excess of the amount of the claim presented to the federal agency.” That is, had petitioner properly filed an action in district court after his administrative claim was denied, he would have been limited in his recovery to $500,000.

       Entries in the District Court docket indicate that plaintiff had previously filed a motion for leave to proceed informa pauperis, that later in August he filed a motion for appointment of counsel, and that he ultimately paid a filing fee that caused the District Court to dismiss the motion for leave to file in forma pauperis as moot. In all events, in April 1990, the District Court ordered service to be effected by a United States Marshal “because plaintiff is incarcerated and proceeding pro se.” App. 1.

       Title 28 U. S. C. § 2401(b) provides:
      “A tort claim against the United States shall be forever barred unless it is presented in writing to the appi’opriate Federal agency within two years after such claim accrues or unless action is begun within six months after the date of mailing, by certified or registered mail, of notice of final denial of the claim by the ageney to which it was presented.”

       In dissent, Judge Ripple expressed the opinion that petitioner had properly raised the issue in the District Court and on appeal, 964 F. 2d, at 649, n. 1, and that in any event it was “clear that the plaintiff, a prisoner proceeding pro se, attempted to refile the action after the denial of the administrative claim.” Id., at 649. Our grant of certiorari did not encompass the question whether a new action had been filed in August and we therefore express no opinion as to the correctness of the Court of Appeals’ ruling on that issue.

       Decisions in the Fifth and Ninth Circuits agree with the position taken in the Seventh Circuit in this case. See Gregory v. Mitchell, 684 F. 2d 199, 204 (CA5 1981); Reynolds v. United States, 748 F. 2d 291, 292 (CA5 1984); Jerves v. United States, 966 F. 2d 517, 521 (CA9 1992).

       Prior to 1966, FTCA claimants had the option of filing suit in federal court without first presenting their claims to the appropriate federal agency. Moreover, federal agencies had only limited authority to settle claims. See Federal Tort Claims Act of 1946, ch. 753, §§ 403(a), 420, 60 Stat. 843, 845. Because the vast majority of claims ultimately were settled before trial, the Department of Justice proposed that Congress amend the FTCA to "requir[e] all claims to be presented to the appropriate agency for consideration and possible settlement before a court action could be instituted. This procedure would make it possible for the claim first to be considered by the agency whose employee's activity allegedly caused the damage. That agency would have the best information concerning the activity which gave rise to the claim. Since it is the one directly concerned, it can be expected that claims which are found to be meritorious can be settled more quickly without the need for filing suit and possible expensive and time-consuming litigation.” S. Rep. No. 1327, 89th Cong., 2d Sess., 3 (1966).
      The Senate Judiciary Committee further noted that “the improvements contemplated by [the 1966 amendments] would not only benefit private litigants, but would also be beneficial to the courts, the agencies, and the Department of Justice itself” Id., at 2.

       Even petitioner concedes that at least one objective of the 1966 amendments to the FTCA was to “reduce unnecessary congestion in the courts.” Id., at 4. See Brief for Petitioner 24.

       Again, the question whether the Court of Appeals should have liberally construed petitioner’s letter of August 7,1989, as instituting a new action is not before us. See n. 5, supra.

       Indeed, we have previously recognized a systemic interest in having a parly represented by independent counsel even when the party is a lawyer. See Kay v. Ehrler, 499 U. S. 432 (1991).


author: Justice O’Connor

text:
    OKLAHOMA TAX COMMISSION v. SAC AND FOX NATION
    No. 92-259.
    Argued March 28, 1993 —
    Decided May 17, 1993

      David Allen Miley argued the cause for petitioner. With him on the briefs was David Hudson.

      Edwin S. Kneedler argued the cause for the United States as amicus curiae. With him on the brief were Solicitor General Starr, Acting Assistant Attorney General O’Meara, Ronald J. Mann, Edward J. Shawaker, and Anne S. Almy.

      G. William Bice argued the cause for respondent. With him on the brief were Gregory H. Bigler and N Brent Parmer.

      A brief of amici curiae urging reversal was filed for the State of Arizona et al. by Grant Woods, Attorney General of Arizona, and Patrick Irvine, Assistant Attorney General, and by the Attorneys General for their respective States as follows: Hubert H. Humphrey III of Minnesota, Marc Racicot of Montana, Nicholas J. Spaeth of North Dakota, Paul Van Dam of Utah, and James 2?. Doyle of Wisconsin.
      Briefs of amici curiae urging affirmance were filed for the Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation et al. by Reid Peyton Chambers and Jeannette Wolfiey; for the Gheyenne-Arapaho Tribes of Oklahoma et al. by Melody L. McCoy, Bertram E. Hirsch, and Thomas W. Fredericks; for the Choctaw Nation of Oklahoma by Bob Rabón; and for the Navajo Nation et al. by Paul E. Frye, Wayne H. Bladh, and Stanley M. Pollack.

   Justice O’Connor

delivered the opinion of the Court.

In this case, we consider whether the State of Oklahoma may impose income taxes or motor vehicle taxes on the members of the Sac and Fox Nation.

I

The Sac and Fox Nation (Tribe) is a federally recognized Indian tribe located in the State of Oklahoma. Until the mid-18th century, the Tribe lived in the Great Lakes region of the United States. M. Wright, A Guide to the Indian Tribes of Oklahoma 225 (1951). In 1789, it entered into its first treaty with the United States and ceded much of its land. See Treaty at Fort Harmar, 7 Stat. 28. That was only the first of many agreements between the Government and the Tribe in which the Tribe surrendered its land and moved elsewhere. As part of its gradual, treaty-imposed migration, the Tribe stopped briefly along the Mississippi and Missouri Rivers in what are now the States of Illinois, Missouri, Iowa, and Nebraska. Wright, Guide to Indian Tribes of Oklahoma, at 225-226. In the mid-19th century, the Sac and Fox Nation ceded land in several States for two reservations in Kansas, but the Government eventually asked it to cede these as well. Id., at 226. In 1867, the Sac and Fox Nation moved for the final time to the Sac and Fox Reservation in Indian Territory. Ibid.

By the 1880’s, however, white settlers increasingly clamored for the land the Sac and Fox and other tribes held in Indian Territory. In response, Congress passed two statutes that greatly affected the Tribe: the General Allotment Act (Dawes Act), 24 Stat. 388, which provided for allotting reservation land to individual tribal members and purchasing the surplus land for the use of white settlers; and the Oklahoma Territory Organic Act, 26 Stat. 81, which established the Oklahoma Territory in what is now the western half of the State of Oklahoma. This new Oklahoma Territory included the Sac and Fox Nation’s Reservation. In June 1890, the Government and the Tribe concluded their final treaty — a treaty designed to effectuate the provisions of the Dawes Act. Congress ratified the treaty in 1891 (hereinafter 1891 Treaty). Concerning the Tribe’s cession of land, the 1891 Treaty states:

"Article I. The said the Sac and Fox Nation hereby cedes, conveys, transfers, surrenders and forever relinquishes to the United States of America, all their title, claim or interest, of every kind or character, in and to the following described tract of land or country, in the Indian Territory, to-wit: [the Reservation land granted the Tribe in the Treaty of 1867].
“Provided however the quarter section of land on which is now located the Sac and Fox Agency shall not pass to the United States by this cession, conveyance, transfer, surrender and relinquishment, but shall remain the property of said Sac and Fox Nation, to the full extent that it is now the property of said Nation — subject only to the rights of the United States therein, by reason of said Agency being located thereon, and subject to the rights, legal and equitable, of those persons that are now legally located thereon.... And the section of land now designated and set apart near the Sac and Fox Agency, for a school and farm, shall not be subject either to allotment to an Indian or to homestead entry under the laws of the United States — but shall remain as it now is and kept for school and farming purposes, so long as said Sac and Fox Nation shall so use the same . . . .” 26 Stat. 750-751.

Under the 1891 Treaty, the Tribe retained the 800 acres discussed in the proviso. Each of the Tribe’s members, adults and minors, had the right to choose an allotment of one quarter section (160 acres) within the boundaries of the ceded land.

Today, the Sac and Fox Nation has approximately 2,500 members. Tr. of Oral Arg. 49. It has a fully functioning tribal government with its headquarters on the 800 acres reserved to it under the 1891 Treaty. The United States recognizes and encourages the Tribe’s sovereign right to self-governance within “the family of governments in the federal constitutional system.” Compact of Self-Governance Between the Sac and Fox Nation and the United States of America 2 (June 26, 1991), see 25 U. S. C. §450f, note. To this end, the Tribe has a Constitution and a Code of Laws, as well as a court system in which to enforce them. It employs approximately 140 to 150 people, most of whom are tribal members. See Tr. of Oral Arg. 50.

Among the Tribe’s employees are the members of the Sac and Fox Tax Commission, which administers the Sac & Fox tax code. The Tribe imposes a tribal earnings tax, see Sac & Fox Tribe of Indians of Okla. Code of Laws, Tit. 14, ch. 4, and a motor vehicle tax, see ch. 8. The earnings of any employee employed within tribal jurisdiction, whether or not that employee is a member of the Tribe, are subject to the earnings tax. Ch. 4, §402. The motor vehicle tax and registration provisions apply to “all motor vehicles owned by a resident of, and principally garaged within the jurisdiction of the Sac and Fox Tribe of Indians of Oklahoma.” Ch.8, §802.

The Oklahoma Tax Commission (Commission) also administers income taxes and motor vehicle taxes and fees. Oklahoma Income Tax Act, Okla. Stat., Tit. 68, § 2351 et seq. (1981 and Supp. 1990). All residents, and nonresidents of Oklahoma who receive income in the State, are subject to the Oklahoma income tax. §§2362, 2368. Oklahoma contends that the tax applies equally to members of Indian tribes and to nonmembers." Thus, ‘ it" claims "that"those-residents- -of Oklahoma who also reside within Sac and Fox jurisdiction are subject to both state and tribal income taxes.

Pursuant to the Vehicle Excise Tax Act, Okla. Stat., Tit. 68, §2101 et seq. (1981 and Supp. 1990), the State levies an excise tax, calculated as a percentage of a vehicle’s value, “upon the transfer of legal ownership of any vehicle registered in th[e] state and upon the use of any vehicle registered in th[e] state.” § 2103(A). The Commission collects the tax “at the time of the issuance of a certificate of title for any such vehicle.” Ibid. Finally, the Commission assesses a vehicle registration fee for all vehicles registered with the State of Oklahoma, see Oklahoma Vehicle License and Registration Act, Okla. Stat., Tit. 47, § 1101 et seq. (Supp. 1990), at the annual rate of $15 plus a percentage of the value of the car, § 1132(A)(1). Like the vehicle excise tax, see Tit. 68, §2102, the vehicle registration fees are to provide funds for “general governmental functions,” Tit. 47, § 1103.

The Commission contends that tribal members müst register their vehicles with the State, just as everyone else who lives within Oklahoma must do. The Tribe, however, requires Sac and Fox tribal members who live and garage ears within Sac and Fox territory to register those cars with the Tribe and to use tribal license plates. Oklahoma considers all tribal members who register their vehicles with the Sac and Fox Nation (and hence do not pay state excise and registration taxes) to be delinquent with regard to the state taxes. Nevertheless, so long as a tribal member retains ownership of a vehicle, the State makes no effort to collect the allegedly delinquent taxes. If the tribal member sells the car to a nonmember, however, and the nonmember then “applies to the State for a title and license plate, the subsequent owner must bring up the title on the vehicle by paying the current and delinquent excise taxes on the transfers of the vehicle.” App. 29. The subsequent owner also must pay registration fees for the current year and registration fees and penalties for one previous year. Ibid. In contrast, the Commission issues transfer titles to vehicles previously licensed in other States upon payment of current registration fees without more. Okla. Stat., Tit. 68, § 2105(b) (Supp. 1990).

The Sac and Fox Nation brought this action on behalf of itself and all'residents of its territorial jurisdiction, App. 1, seeking a permanent injunction barring the Commission from taxing the income of people who earn their income within Sac and Fox territory and of people who reside within thé Tribe’s jurisdiction, id., at 8. The Tribe also sought relief from imposition of the State’s vehicle excise tax and registration fees on vehicles “owned by residents of, and principally garaged within, the Sac and Fox jurisdiction” that lawfully were registered with the Sac and Fox Nation. Ibid. In large part, the Tribe based its arguments of immunity on our opinion in McClanahan v. Arizona State Tax Comm’n, 411 U. S. 164 (1973), in which we held that a State could not” subject a tribal member living on the reservation whose income derived from reservation sources to a state income tax absent express authorization from Congress. The Commission contended in response that neither McClanahan nor any other of our cases discussing Indian sovereign immunity were relevant. The analysis in those cases, the Commission argued, applied only to tribes on established reservations. It reasoned that Oklahoma had complete tax jurisdiction over the Sac and Fox, because the 1891 Treaty had disestablished the Sac and Fox Reservation.

The District Court for the Western District of Oklahoma ruled on cross-motions for summary judgment. The court declined to determine whether the reservation had been disestablished or its boundaries diminished. Instead, it held that the Commission could levy and collect state income tax on the income that nonmembers of the Tribe earned from tribal employment on trust lands, but not on the income that tribal members earned from tribal employment on trust lands. App. to Pet. for Cert. A-10. The District Court did not look to where the tribal members resided; it rested its holding instead only on where they worked. The court also held that the Commission could not require, as a prerequisite to issuing an Oklahoma motor vehicle title, payment of excise taxes and registration fees for the years a vehicle properly had been licensed by the Tribe. Id., at A-11 to A-13.

Both parties appealed, and the United States Court of Appeals for the Tenth Circuit affirmed. 967 F. 2d 1425 (1992). Like the District Court, the Court of Appeals declined to determine the boundaries of the Sac and Fox Reservation. The court read our opinion in McClanahan, supra, to stand for the proposition that, absent express congressional authorization, state jurisdiction to tax “the income of a tribal member earned solely on a reservation is presumed to be preempted,” 967 F. 2d, at 1428, and it rejected the State’s contention that the residence of the tribal member also was relevant, id., at 1428, n. 3. Thus, the Court of Appeals looked only to the status of the land on which the income was earned — in this case, trust land. In light of Oklahoma Tax Comm’n v. Citizen Band of Potawatomi Tribe of Okla., 498 U. S. 505 (1991), the court concluded that for tribal immunity purposes there was no difference between trust land validly set apart for Indian use and reservation land. 967 F. 2d, at 1428. Hence, the income of tribal members who worked for the Tribe on trust land was immune from state taxation. Id., at 1428-1429. The income of nonmembers, however, was not immune. Id., at 1429-1430.

Turning to the vehicle taxes, the Court of Appeals found that the excise tax was not enforced as a sales tax. Id., at 1430. It rejected the Commission’s contention that the registration fee was imposed for the privilege of using state roads because the State had offered no evidence to show the registration fee was tailored to the amount of use outside Indian country. Ibid. Relying on Moe v. Confederated Salish and Kootenai Tribes of Flathead Reservation, 425 U. S. 463 (1976), and Washington v. Confederated Tribes of Colville Reservation, 447 U. S. 134 (1980), the court held that the taxes were “flatly prohibited.” 967 F. 2d, at 1430. Although the taxes were imposed only indirectly on tribal members, the court would “not permit the State to tax indirectly what it cannot tax directly.” Ibid. As with the income taxes, the Court of Appeals rejected the Tribe’s argument that vehicles registered with the Tribe by nonmembers also should be immune from state taxation. Id., at 1430-1431. Both parties petitioned for certiorari.

Soon after the Court of Appeals issued its opinion, the Wisconsin Supreme Court issued an opinion in which it concluded that McClanahan’s presumption in favor of tax immunity was limited to those instances in which a tribal member both lived on and earned a living on the reservation. Anderson v. Wisconsin Dept. of Revenue, 169 Wis. 2d 255, 484 N. W. 2d 914 (1992). Thus, it declined to find state tax immunity for the wages of a tribal member who worked for the tribe on the reservation but who did not live on the reservation. Id., at 274-276, 484 N. W. 2d, at 921-922. We granted the Oklahoma Tax Commission’s petition for certiorari. 506 U. S. 971 (1992).

II

A

In McClanahan v. Arizona State Tax Comm’n, 411 U. S. 164 (1973), we held that a State was without jurisdiction to subject a tribal member living on the reservation, and whose income derived from reservation sources, to a state income tax absent an express authorization from Congress. The Commission contends that the McClanahan presumption against jurisdiction comes into effect only when the income is earned from reservation sources by a tribal member residing on the reservation. Under the Commission’s reading of McClanahan, the District Court erred in not determining whether the Sac and Fox Reservation has been disestablished or reduced because unless the members of the Sac and Fox Nation live on a reservation the State has jurisdiction to tax their earnings and their vehicles. The Commission is partially correct: The residence of a tribal member is a significant component of the McClanahan presumption against state tax jurisdiction. But our cases make clear that a tribal member need not live on a formal reservation to be outside the State’s taxing jurisdiction; it is enough that the member live in “Indian country.” Congress has defined Indian country broadly to include formal and informal reservations, dependent Indian communities, and Indian allotments, whether restricted or held in trust by the United States. See 18 U.S.C. §1151.

Our decision in McClanahan relied heavily on the doctrine of tribal sovereignty. We found a “deeply rooted” policy in our Nation’s history of “leaving Indians free from state jurisdiction and control.” 411 U. S., at 168 (internal quotation marks omitted). Indian nations, we noted, long have been “‘distinct political communities, having territorial boundaries, within which their authority is exclusive.’” Ibid. (quoting Worcester v. Georgia, 6 Pet. 515, 557 (1832) (Marshall, C. J.)). The Indian sovereignty doctrine, which historically gave state law “no rple to play” within a tribe’s territorial boundaries, 411 U. S., at 168, did not provide “a definitive resolution of the issues,” but it did “provid[e] a backdrop against which the applicable treaties and federal statutes must be read,” id., at 172. Accord, Colville, supra, at 178-179 (REHNQUIST, J., concurring in part, concurring in result in part, and dissenting in part). Although “exemptions from tax laws should, as a general rule, be clearly expressed,” McClanahan, 411 U. S., at 176, the tradition of Indian sovereignty requires that the rule be reversed when a State attempts to assert tax jurisdiction over an Indian tribe or tribal members living and working on land set aside for those members.

To determine whether a tribal member is exempt from state income taxes under McClanahan, a court first must determine the residence of that tribal member. To the extent that the Court of Appeals ruled without such a reference, it erred. The Commission, however, contends that the relevant boundary for taxing jurisdiction is the perimeter of a formal reservation, not merely land set aside for a tribe or its members. In the Commission’s view, Indian sovereignty serves as a “backdrop” only for those tribal members who live on the reservation, and all others fall outside McClanahan’s presumption against taxation. It is true that we began our discussion in McClanahan by emphasizing that we were not “dealing with Indians who have left or never inhabited reservations set aside for their exclusive use or who do not possess the usual accoutrements of tribal self-government.” Id., at 167-168. Here, in contrast, some of the Tribe’s members may not live within a reservation; indeed, if the Commission’s interpretation of the 1891 Treaty is correct and the reservation was disestablished, none do.

Nonetheless, in Oklahoma Tax Comm’n v. Citizen Band of Potawatomi Tribe of Okla., we rejected precisely the same argument — and from precisely the same litigant. There the Commission contended that even if the State did not have jurisdiction to tax cigarette sales to tribal members on the reservation, it had jurisdiction to tax sales by a tribal convenience store located outside the reservation on land held in trust for the Potawatomi. 498 U. S., at 511. We noted that we have never drawn the distinction Oklahoma urged. Instead, we ask only whether the land is Indian country. Ibid. Accord, E Cohen, Handbook of Federal Indian Law 34 (1982 ed.) (“[T]he intent of Congress, as elucidated by [Supreme Court] decisions, was to designate as Indian country all lands set aside by whatever means for the residence of tribal Indians under federal protection, together with trust and restricted Indian allotments”); Ahboah v. Housing Authority of Kiowa Tribe of Indians, 660 P. 2d 625, 629 (Okla. 1983) (same).

Additional congressional enactments support our conclusion that the McClanahan presumption against state taxing authority applies to all Indian country, and not just formal reservations. Under Pub. L. 280, 67 Stat. 588, 28 U. S. C. § 1360 (Pub. L. 280), Congress required some States to assume, and gave other States, including Oklahoma, see Ahboah, supra, at 630, the option of assuming, criminal and civil jurisdiction “in the areas of Indian country situated within such State.” 25 U. S. C. §§ 1321(a), 1322(a) (emphasis added). Congress amended Pub. L. 280 with the Indian Civil Rights Act of 1968, Pub. L. 90-284, 82 Stat. 78-80, and among other changes, added a requirement that the tribes involved consent before a State can assume jurisdiction over Indian country. Oklahoma did not assume jurisdiction pursuant to Pub. L. 280 prior to the law’s amendment in 1968, see Ahboah, supra, at 630-632, and the Commission does not contend that the members of the Sae and Fox Nation have consented to an assumption of jurisdiction since the amendment. We noted in McClanahan that the “absence of either civil or criminal jurisdiction would seem to dispose of” any contention that the State has jurisdiction to tax. 411 U. S., at 178-179.

On remand, it must be determined whether the relevant tribal members live in Indian country — whether the land is within reservation boundaries, on allotted lands, or in dependent communities. If the tribal members do live in Indian country, our cases require the court to analyze the relevant treaties and federal statutes against the backdrop of Indian sovereignty. Unless Congress expressly authorized tax jurisdiction in Indian country, the McClanahan presumption counsels against finding such jurisdiction. Because all of the tribal members earning income from the Tribe may live within Indian country, we need not determine whether the Tribe’s right to self-governance could operate independently of its territorial jurisdiction to pre-empt the State’s ability to tax income earned from work performed for the Tribe itself when the employee does not reside in Indian country. See, e. g., White Mountain Apache Tribe v. Bracket, 448 U. S. 136, 142 (1980) (citing Williams v. Lee, 358 U. S. 217, 220 (1959)).

B

The Commission also argues that the Court of Appeals erred in holding that the State could not impose state motor vehicle taxes on tribal members who live on tribal land, garage their cars principally on tribal land, and register their vehicles with the Tribe. It contends that because the vehicle excise tax is paid only when a vehicle is sold, it “resembles a sales tax” on transactions that occur outside Indian country. Brief for Petitioner 21. It also contends that the registration fee is not pre-empted because it is imposed on all vehicles that use state roads. Id., at 23. The Court of Appeals found that the vehicle excise tax “is not enforced as a sales tax against Sac and Fox purchasers,” 967 F. 2d, at 1430, and by its terms, the tax is imposed on both the transfer and the use of any vehicle in the State. Okla. Stat., Tit. 68, § 2103 (Supp. 1990). Furthermore, the taxes are not imposed on all vehicles using the roads in Oklahoma. Residents of nearby States pay neither the excise tax nor the registration fee. See Okla. Stat., Tit. 47, § 1125(C) (Supp. 1990) (exempting “visiting nonresident[s]” from registration and hence from payment of both taxes).

We agree with the Court of Appeals that the excise tax and registration fees strongly resemble the taxes that we held pre-empted in Washington v. Confederated Tribes of Colville Reservation, 447 U. S. 134 (1980). Prior to Colville, we held in Moe v. Confederated Salish and Kootenai Tribes of Flathead Reservation, 425 U. S. 463 (1976), that Montana could not apply its personal property tax to motor vehicles owned by tribal members who lived on the reservation. Id., at 480-481. To avoid the Moe holding, in Colville Washington described its motor vehicle taxes as “excise tax[es] for the ‘privilege’ of using the covered vehicle in the State.” Colville, supra, at 162. Although Washington called its taxes “excise taxes,” those taxes, like the taxes we held pre-empted in Moe, were “assessed annually at a certain percentage of fair market value” of the vehicle, and the State sought to impose them “upon vehicles owned by the Tribe or its members and used both on and off the reservation.” 447 U. S., at 162. In Colville, we rejected Washington’s distinction of Moe because the only difference between the Washington taxes and the Montana taxes was their names. 447 U. S., at 163. We did “not think Moe and McClanahan c[ould] be this easily circumvented. While Washington may well be free to levy a tax on the use outside the reservation of Indian-owned vehicles, it may not under that rubric accomplish what Moe held was prohibited.” Ibid.

Oklahoma’s taxes are no different than those in Moe and Colville. Like the taxes in both those cases, the excise tax and registration fee are imposed in addition to a sales tax; the two taxes are imposed for use both on and off Indian country; and the registration fees are assessed annually based on a percentage of the value of the vehicle. Oklahoma may not avoid our precedent by avoiding the name “personal property tax” here any more than Washington could in Colville.

The Commission, however, argues that Oklahoma’s taxes are different for yet another reason. It claims that because the Sac and Pox live on scattered allotments, and not on a reservation, neither Moe nor Colville applies. That argument fails for the same reasons it fails with regard to income taxes. See supra, at 123-126. Tribal members who live in Indian country consisting solely of scattered allotments likely use their cars more frequently on state land and less frequently within Indian country than tribal members who live on an established reservation. Nevertheless, members of the Sac and Pox Nation undeniably use their vehicles within Indian country. As we said in Colville, had the State “tailored its tax to the amount of actual off-[Indian country] use, or otherwise varied something more than mere nomenclature, this might be a different case. But it has not done so, and we decline to treat the case as if it had.” 447 U. S., at 163-164.

Ill

Absent explicit congressional direction to the contrary, we presume against a State’s having the jurisdiction to tax within Indian country, whether the particular territory consists of a formal or informal reservation, allotted lands, or dependent Indian communities. Because the Court of Appeals did not determine whether the tribal members on whom Oklahoma attempts to impose its income and motor vehicle taxes live in Indian country, its judgment is vacated. We remand this case for further proceedings consistent with this opinion.

It is so ordered.