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Hyatt v. Office of Management

United States District Court, D. Nevada

September 7, 2017

Gilbert P. Hyatt and American Association for Equitable Treatment, Inc., Plaintiffs
v.
Office of Management and Budget and Shaun Donovan, in his official capacity as Director of the Office of Management and Budget, Defendant

          ORDER GRANTING DEFENDANTS' MOTION TO DISMISS [ECF NO. 19]

          JENNIFER A. DORSEY UNITED STATES DISTRICT JUDGE

         Anyone who has tried to register a car knows that government paperwork can be a bother. Even members of Congress have to go to the DMV, so they passed law that forces all federal agencies to go through a multi-step paperwork-reduction process any time an agency wants to ask the public for information: the little-known and seldom-litigated statute known as the Paperwork Reduction Act (“PRA”).

         The PRA's process starts with federal agencies themselves. When an agency plans to issue a rule or take an action that will include asking the public for information, it must first try to write the rule in a way that reduces the paperwork burden on the public. The agency must then send its proposed rule to the Office of Management and Budget (“OMB”), which reviews the rule for the same purposes. The OMB either approves the rule or sends it back to the agency with recommendations about how it can be less burdensome.

         Congress also gave the public a remedy for when an agency violates the PRA. If a person wants to challenge whether an agency rule complies with the PRA, the statute offers an extensive remedial framework that can be raised either before agencies or in courts. After crafting this comprehensive scheme, Congress made clear that most of the OMB's PRA decisions would otherwise not be judicially reviewable: the PRA expressly bars judicial review of any OMB decision to “approve or not act upon” an information request that is part of an agency rule.

         Plaintiffs believe that three patent regulations are too onerous because they require inventors to submit voluminous paperwork when applying for patents, so they brought this action for violations of the PRA. But I need not reach the merits of their argument because the PRA's judicial-review bar strips this court of jurisdiction over plaintiffs' claims.

         The problem for the plaintiffs is that they have forgone the PRA's remedial process and instead have done exactly what the review-bar says they cannot: seek judicial review of the OMB's decision to not act on an information request that is part of agency rules. Although this case is somewhat unusual because the OMB never reviewed the Patent and Trademark Office's (“PTO's”) rules in the first place as neither PTO never classified them as falling under the PRA. And the plaintiffs offer several statutory constructions to suggest that the judicial-review bar does not apply here. But the statute says what it says, and the plaintiffs seek what they seek. Given Congress's express language barring review for these sorts of challenges and the extensive scheme Congress created, I cannot find that I have subject-matter jurisdiction over this case. So I grant the defendant's motion dismiss.

         Background

         A. Hyatt is forced to submit paperwork to the Patent and Trademark Office and asks the OMB to step in to reduce the paperwork burden.

         Plaintiff Hyatt is an inventor who has submitted patent applications to the PTO for examination.[1] Plaintiff American Association for Equitable Treatment, Inc. is a non-profit organization founded in 2016 to promote “fair, efficient, and effective” administration of the Patent Act. Hyatt alleges that the PTO in 2013 imposed on patent applicants “requirements for information collection, ” including requiring him to respond under the PTO's Patent Rules 111, 115, and 116.[2] These rules govern the process for amending patent applications and responding to the PTO's objections during the patent-examination process.[3]

         In late 2013, Hyatt asked the OMB to review the information requests contained in Patent Rules 111, 115, and 116. The OMB responded, explaining that it would not act on these rules because the agency did not classify them as information requests under the PRA-and the rules thus did not trigger the PRA's review process at all. Plaintiffs also reference throughout their complaint OMB's July 31, 2013, Notice of Action. The OMB similarly noted in this action that Rules 111, 115, and 116 are “items not subject to the Paperwork Reduction Act.” Neither the PTO nor the OMB ever determined whether these patent rules comply with the PRA.

         Plaintiffs then brought this action under the Administrative Procedure Act (“APA”), seeking to compel the OMB to act on these patent rules under the PRA. Plaintiffs contend that OMB's response to Hyatt's request was contrary to law under § 706(2) of the APA. Plaintiffs also contend that OMB's Notice of Action was contrary to law insofar as OMB determined that the PRA does not apply to Rules 111, 115, and 116.

         B. The Paperwork Reduction Act

         The PRA was “enacted in response to one of the less auspicious aspects of the enormous growth of our federal bureaucracy: its seemingly insatiable appetite for data.”[4] “Congress designated OMB the overseer of other agencies with respect to paperwork and set forth a comprehensive scheme designed to reduce the paperwork burden.”[5] OMB is tasked with implementing policies for efficient information processing within and among agencies.[6]

         After an agency decides to include an information request in one of its rules, it must submit that rule to OMB for approval.[7] The OMB then has three options: approve the rule, reject the rule and tell the agency to go rewrite it to be less burdensome; or stay silent. If the OMB chooses the third route, after a period of time, the agency can treat the OMB's silence as tacit approval and proceed with its rulemaking.[8]

         A couple other PRA sections are relevant here. First, the PRA does not require agencies to undergo the paperwork-review process anytime they request information from the public, just when an information request meets the PRA's definition of “collections of information.” This definition forms the crux of the parties' substantive dispute: the OMB believes that the PTO's rules do not qualify as “collections of information”; the plaintiffs believe they do. I need not delve any farther into this issue because, as I explain below, I have no jurisdiction to consider the merits of plaintiffs' claims in the first place.

         Second, the PRA has a “public protection” provision that allows members of the public to challenge agency violations of the PRA.[9] Congress authorized any person to assert this protection “in the form of a complete defense, bar, or otherwise at any time during the agency administrative process or judicial action applicable thereto.”[10] Any person who believes that an agency's collection of information violates the PRA may, without penalty, refuse to comply. Congress also amended the PRA in 1995 to include a procedure for the public to petition the OMB “to review any collection of information conducted by or for an agency.”[11]

         Finally, and most important, Congress included in the PRA section 3507(d)-an express bar on judicial review for challenges to the OMB's rule-approval decisions. Section (d) contains six subsections, the sixth of which is the judicial-review bar. Because the plaintiffs' arguments rely in large part on language in other subsections of (d), I review them here.

         The other subsections of (d) contain various procedures for agencies and the OMB to follow when an information request is contained in an agency rule that is subject to the full notice-and-comment process. The section is laid out chronologically, from the start to the end of the review process. Subsection (d)(1) starts the process by instructing agencies to send the OMB proposed rules that contain information requests before they are finalized; subsection (d)(2) tells agencies what to include in their final rules; subsection (d)(3) explains that if the OMB stays silent for sixty days after it receives a proposed rule, it cannot go back and disapprove of it later; subsection (d)(4) carves out some exceptions where the OMB can go back and disapprove of some rules when if the agency did not follow the PRA's procedure for properly submitting its rule; and subsection (d)(5) explains that all of section (d) applies only to notice-and-comment rules, not other agency documents.

         Finally, subsection (d)(6) contains a single sentence: “[t]he decision by [OMB] to approve or not act upon a collection of information contained in an agency rule shall not be subject to judicial review.” There are ...


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