[00:00:00] Speaker 03:
The first case is Alfina McIntosh versus the Department of Defense, 2019, 2454.

[00:00:11] Speaker 03:
Mr. Sheng.

[00:00:15] Speaker 06:
Good morning, Your Honors.

[00:00:16] Speaker 06:
May it please the court.

[00:00:18] Speaker 06:
My name is Philip Sheng, and I represent Ms.

[00:00:20] Speaker 06:
McIntosh, the petitioner in this matter.

[00:00:23] Speaker 06:
I'd like to begin with the Appointments Clause issue, because I think that is a threshold issue that the court must decide before it can reach the merits of Ms.

[00:00:32] Speaker 06:
McIntosh's appeal.

[00:00:35] Speaker 06:
Now, Your Honors, I don't believe that there is a dispute, that there was something wrong.

[00:00:42] Speaker 06:
Something was wrong with respect to the manner in which the administrative judge below was appointed.

[00:00:47] Speaker 05:
Well, can we just break it out?

[00:00:48] Speaker 05:
You raised

[00:00:49] Speaker 05:
in your blue brief, the argument that the AJs are principal officers and therefore improperly appointed.

[00:00:57] Speaker 04:
Doesn't Arthrex resolve that question against you?

[00:01:05] Speaker 04:
By Arthrex, Judge, you have the Supreme Court's decision in Arthrex.

[00:01:09] Speaker 06:
Respectfully, I disagree.

[00:01:12] Speaker 06:
uh... the supreme court's arthrex opinion in our view.

[00:01:15] Speaker 05:
So you think after even after the supreme court's decision in arthrex the administrative judges are principal officers?

[00:01:23] Speaker 06:
Yes.

[00:01:23] Speaker 06:
Why?

[00:01:27] Speaker 06:
In our view, Arthrex requires that the board have absolute discretion to review AJ decisions.

[00:01:34] Speaker 05:
Where in Arthrex does it say that?

[00:01:36] Speaker 06:
I don't have the pin site for you, Your Honor, but I believe the very last paragraph of the Court's opinion, it says something along the lines of that there can be no statutory or statute interfering with the board's ability or the

[00:01:50] Speaker 06:
director in that case, their director's ability to review the APJ's decision.

[00:01:56] Speaker 05:
And what statute limits the full board's review?

[00:02:02] Speaker 06:
In this case, Your Honors, it would be... They have de novo review, don't they?

[00:02:08] Speaker 06:
Respectfully, I disagree.

[00:02:11] Speaker 06:
we cited in our reply brief, the agencies during the course of the rulemaking process.

[00:02:20] Speaker 05:
No, no, that's not good enough.

[00:02:22] Speaker 05:
The MSPB can do what it's want.

[00:02:24] Speaker 05:
I mean, the director of the PTO can set its own system in place.

[00:02:28] Speaker 05:
It's constitutional if there's no statutory restrictions.

[00:02:34] Speaker 05:
What the agency chooses to do through rulemaking, to me, doesn't seem to make any difference.

[00:02:39] Speaker 05:
Is there any statutory restriction on the full board's jurisdiction to review, or authority is probably a better word, to review AJ decisions?

[00:02:51] Speaker 06:
I mean, the answer is no, right?

[00:02:54] Speaker 06:
I would say that 5 USC 7701E places that limit.

[00:03:02] Speaker 06:
What does that say?

[00:03:03] Speaker 06:
Well, it says that an AJ's decision becomes final, absent an appeal to the board.

[00:03:09] Speaker 05:
How is that limited?

[00:03:11] Speaker 05:
If that doesn't limit the board, I think everybody agrees the board has sui sponte authority to take up an appeal from an AJ.

[00:03:19] Speaker 05:
Your clients have the opportunity to appeal it, so if you choose to appeal it, it's not the final decision.

[00:03:26] Speaker 06:
And again, I think that's where we disagree.

[00:03:28] Speaker 06:
I refer and respectfully, I know you, Judge Hughes, I appreciate your view that the regulation

[00:03:35] Speaker 06:
uh... that that you're looking for a statute uh... in in our view uh... the agency uh... if it's a regulation that the board has adopted the board can also waive its own regulations can it not?

[00:03:48] Speaker 06:
I believe it would have to go through a rulemaking process uh... and and i believe that uh... in in this court's Arthur X opinion uh... held that the agency is bound by its own interpretation of its rules so if the agency has interpreted uh... five U.S.C.

[00:04:04] Speaker 06:
seventy-seven

[00:04:05] Speaker 06:
if the agency has interpreted that statute such that it can only reopen a case in unusual or extraordinary circumstances.

[00:04:19] Speaker 05:
I don't see how any of this makes any difference because the employees that appeal to the board have unilateral authority to appeal an AJ decision, just like a patent owner

[00:04:31] Speaker 05:
or I guess a dissatisfied petitioner, and the PTAB can seek director review.

[00:04:41] Speaker 05:
You can always ask for full board review.

[00:04:45] Speaker 05:
Isn't that correct?

[00:04:47] Speaker 05:
So you can always get review by, and you agree that the board are properly appointed principal officers.

[00:04:53] Speaker 05:
I agree.

[00:04:53] Speaker 05:
I think you're wasting a lot of time on this argument, frankly.

[00:04:57] Speaker 05:
But if you want to continue, continue.

[00:05:00] Speaker 05:
But I do want to get to one point.

[00:05:02] Speaker 05:
To the extent there's a question about whether these AJs are inferior officers, am I correct you didn't raise that to the board or below?

[00:05:12] Speaker 06:
That's true.

[00:05:13] Speaker 06:
And you didn't put in your blue brief?

[00:05:15] Speaker 06:
Well, it's true that we did not raise it, or as McIntosh did not raise it, before the AJ.

[00:05:22] Speaker 06:
And not in your blue brief either?

[00:05:25] Speaker 06:
well uh... you know in our blue brief we took the position that the a.j.

[00:05:30] Speaker 05:
is an officer we are not come on i mean you know what i'm asking you is there anything in your blue brief that says even if they're not principal officers they're still inferior officers and therefore were improperly appointed that doesn't show up to your great brief right i think that's fair uh... we responded to the government's argument the government argued that a.j.'

[00:05:53] Speaker 06:
's are inferior officers and

[00:05:54] Speaker 05:
But why shouldn't we conclude that you've forfeited that argument, particularly because the problem has been solved?

[00:06:02] Speaker 06:
Two reasons.

[00:06:04] Speaker 06:
First, Your Honor, is that the government raised that in its opposition brief.

[00:06:08] Speaker 05:
That doesn't matter.

[00:06:10] Speaker 05:
The government will often raise protective arguments in case the court wants to hear about them.

[00:06:15] Speaker 05:
That doesn't absolve you from raising the issue for the first time in your opening brief.

[00:06:22] Speaker 05:
I mean, I can find half a dozen cases that say that.

[00:06:25] Speaker 05:
The fact that the government preemptively and perhaps as a matter of precaution raises an argument that the court might be interested in doesn't absolve you of putting it in your blueprints.

[00:06:41] Speaker 03:
Let me raise another point.

[00:06:43] Speaker 03:
You're not arguing here that there was no board at the relevant time.

[00:06:49] Speaker 06:
We are arguing.

[00:06:50] Speaker 06:
We do argue that.

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Let me address Judge Hughes at a second point I'd like to address real quick.

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Another reason, Your Honor, that I feel that we are permitted to bring the inferior officer argument is that we based our position that the AJ is a principal officer based on this court's Arthrax decision, which was subsequently vacated.

[00:07:15] Speaker 06:
And it subsequently vacated, and the parties agreed to supplemental briefing on the issue.

[00:07:21] Speaker 06:
And so we did raise it directly in our supplemental briefing.

[00:07:24] Speaker 06:
I believe we were entitled to do that.

[00:07:26] Speaker 06:
Respectfully, I think that's what the supplemental briefing was for.

[00:07:28] Speaker 06:
It was specifically to address the issue of whether or not Board AJs are principal or inferior officers.

[00:07:37] Speaker 06:
Judge Laurie, I would like to address your question.

[00:07:43] Speaker 06:
are arguing that as applied, the lengthy absence of the board as applied to Ms.

[00:07:49] Speaker 06:
McIntosh results in a Appointments Clause violation.

[00:07:56] Speaker 06:
We recognize that this court in Rodriguez held that the absence of the board was merely a temporary circumstance.

[00:08:05] Speaker 06:
Respectfully, in our view, Rodriguez

[00:08:08] Speaker 06:
dealt with the situation, dealt with the ability to appeal to the board, which was nonexistent.

[00:08:15] Speaker 06:
I think our argument is different, is slightly different.

[00:08:20] Speaker 06:
As I mentioned, Rodriguez focused on the ability to appeal, and this court held at page 1309 of its opinion that

[00:08:29] Speaker 06:
a lengthy delay caused by a severe backlog in cases pending before the board.

[00:08:39] Speaker 06:
So we're not just arguing that Ms.

[00:08:41] Speaker 06:
McIntosh didn't have the ability to appeal.

[00:08:42] Speaker 06:
I think it's fair to say, Your Honor, that there are at least three factors that are relevant to whether or not

[00:08:50] Speaker 06:
an officer is an inferior officer or a principal officer.

[00:08:55] Speaker 06:
Those are removal authority, supervisory authority, and removal authority.

[00:09:01] Speaker 06:
And I think it's fair to say that during the entire time from Ms.

[00:09:05] Speaker 06:
McIntosh's termination to when the AJ decision became final, the ability for a presidentially appointed Senate confirmed officer to intervene

[00:09:17] Speaker 06:
to sua sponte, to review, to reopen, to overturn Ms.

[00:09:20] Speaker 06:
McIntosh's termination was nonexistent.

[00:09:24] Speaker 01:
Let me probe that proposition a bit.

[00:09:29] Speaker 01:
Your position is not, I take it, that if there is a vacancy for even a very brief time, that converts the AJs from either employees or inferior officers into principal officers, right?

[00:09:43] Speaker 01:
There's a vacancy for a week.

[00:09:45] Speaker 01:
in the lack of a quorum on the board.

[00:09:51] Speaker 06:
That's correct, Judge Bryson.

[00:09:53] Speaker 01:
So what I'm struggling with, and I had the same problem in Rodriguez, of course, which presented somewhat similar situation, what is the point at which one decides, well, these vacancies have been there for so long that now,

[00:10:12] Speaker 01:
the AJs are principal officers.

[00:10:14] Speaker 01:
What's the point at which they get kind of imbued with that authority or that status constitutionally?

[00:10:21] Speaker 01:
It seems like a strange doctrinal problem that we would have difficulty in trying to assess where to draw the line.

[00:10:30] Speaker 06:
Thank you, Judge Bryson.

[00:10:31] Speaker 06:
I completely agree, and I struggle with the same question.

[00:10:35] Speaker 06:
This court's recent Arthrex opinion, the one that recently came out, we submitted a Rule 28j letter on that, did count the number of days.

[00:10:45] Speaker 06:
It counted 310 days, I believe, in Eaton.

[00:10:48] Speaker 06:
And it looked at the number of days.

[00:10:51] Speaker 06:
respectfully uh... the kind of days is is is not i think it's a you know it's it's a slippery slope uh... in our view uh... you know ms macintosh you know from the day she was terminated until our decision became final lack those three things that uh... that i mentioned earlier there was there was no uh...

[00:11:11] Speaker 06:
there was no review authority, there was no supervisory authority, there was no removal authority.

[00:11:17] Speaker 06:
The A.J.

[00:11:18] Speaker 06:
below had no threat of removal.

[00:11:22] Speaker 06:
And if we are to count days, Your Honor, the number of days for Ms.

[00:11:28] Speaker 06:
McIntosh's case was 1,666 days.

[00:11:30] Speaker 06:
That's five times longer than the spring port held permissible in Eaton, and almost 400 days longer than

[00:11:41] Speaker 06:
the Rodriguez case.

[00:11:42] Speaker 06:
And footnote 12 of the Rodriguez decision does say that there could be a case in which the lengthy absence of the board could result in an appointments clause violation.

[00:11:59] Speaker 06:
And respectfully, this is that case, 1,666 days.

[00:12:05] Speaker 05:
What makes 1,600 the right number as opposed to

[00:12:10] Speaker 05:
400 or 1,000 or 1,200.

[00:12:12] Speaker 05:
Where do we see in the Constitution any guidance for any of this?

[00:12:17] Speaker 06:
There is none.

[00:12:19] Speaker 05:
I mean, to me, it sounds like a seat of the pants argument.

[00:12:23] Speaker 05:
You're like, well, I don't know what's enough, but ours is enough.

[00:12:29] Speaker 05:
It seems an odd way of doing constitutional interpretation.

[00:12:33] Speaker 06:
Respectfully, I think I'm bound by this court's precedent.

[00:12:36] Speaker 01:
I wonder if it wouldn't be

[00:12:39] Speaker 01:
uh, reasonable to say that if there were some sort of structural change, uh, if for example, the Senate should pass a resolution, I'm just flying here with this hypothetical sort of blind, but if the, if the, um, Senate should pass a resolution saying, we believe that it's not necessary to have a merit systems protection board as such that

[00:13:05] Speaker 01:
the board members.

[00:13:06] Speaker 01:
And therefore, henceforth, until otherwise advised, there will be no consideration of a board member.

[00:13:13] Speaker 01:
We will not have board members.

[00:13:17] Speaker 01:
Then you have something where you might say, well, all right, a vacancy here, which is enforced by an unwillingness on the part of the Senate to consider nominees, might be enough to make a constitutional change.

[00:13:31] Speaker 01:
But simply the delay strikes me as

[00:13:34] Speaker 01:
as hard to find a constitutional line, as Judge Hughes was saying.

[00:13:42] Speaker 06:
It is difficult, and I appreciate that.

[00:13:45] Speaker 06:
And again, I look to Rodriguez's footnote 12.

[00:13:49] Speaker 06:
This is the court saying that there could be a case in which the delay, if 1,666 days isn't lengthy enough, that footnote, I'm not sure how far is required.

[00:14:05] Speaker 06:
go back to the fact that during, you know, when Ms.

[00:14:07] Speaker 06:
McIntosh was terminated until her decision became final, you know, there was no, you know, from the lower official to the president, there was no chain, no accountability there.

[00:14:16] Speaker 06:
And I recognize I'm well over time.

[00:14:18] Speaker 05:
But her decision becoming final was your choice, right?

[00:14:21] Speaker 05:
If she had won a review by

[00:14:25] Speaker 05:
a principal officer appointed and confirmed by the Senate, she could have gotten one, right?

[00:14:32] Speaker 05:
She would have just had to wait.

[00:14:33] Speaker 05:
I assume there are thousands of cases pending at the board right now.

[00:14:38] Speaker 06:
That is true.

[00:14:40] Speaker 06:
And we exercised our statutory right to appeal to this court, which you said, Judge Hughes, is correct.

[00:14:47] Speaker 06:
I'm out of time.

[00:14:48] Speaker 06:
I'd like to reserve whatever I have left.

[00:14:50] Speaker 03:
We'll give you two minutes for a bottle.

[00:14:53] Speaker 06:
Thank you, Judge Lurie.

[00:14:55] Speaker 03:
Ms.

[00:14:55] Speaker 03:
Fomenkova, my notes here say you're splitting your time with Mr. Fung, whom I don't see at the council table.

[00:15:04] Speaker 00:
He is over there in the seat.

[00:15:06] Speaker 03:
All right.

[00:15:07] Speaker 03:
Thank you.

[00:15:10] Speaker 00:
Good morning.

[00:15:10] Speaker 00:
May it please the court.

[00:15:12] Speaker 00:
There are two principal issues, broadly speaking, in this appeal.

[00:15:15] Speaker 00:
There's the merits questions and the appointments clause questions.

[00:15:18] Speaker 00:
And I'm happy to take them in whatever order the court would prefer.

[00:15:21] Speaker 00:
But I thought I'd start with the merits instead.

[00:15:23] Speaker 05:
Well, I think your friend spent all of his time on the appointments clause issues, so.

[00:15:28] Speaker 00:
I'm happy to talk about those.

[00:15:29] Speaker 05:
Why don't you address, I'm particularly interested in your response to his assertion that the AJs are still principal officers even after the Supreme Court's Arthurics decision.

[00:15:40] Speaker 00:
So Your Honor, in our view, the Supreme Court's Arthrex decision definitively demonstrates that they're not principal officers, that they've never been principal officers, and they have no need to be principal officers, and that the statutory structure of the MSPB is, in fact, perfectly constitutional.

[00:15:55] Speaker 00:
As the Supreme Court emphasized in Arthrex, the key question is, are the administrative judges making

[00:16:04] Speaker 00:
final decisions that are binding on the executive branch without any opportunity for review by a principal officer.

[00:16:11] Speaker 00:
And that was restricted.

[00:16:12] Speaker 00:
It used to be restricted at the PTAB because you could only petition for review by another panel of administrative judges.

[00:16:20] Speaker 00:
That's not the case at the MSPB.

[00:16:22] Speaker 00:
5 USC 7701E allows currently and has always allowed any petitioner to submit a petition for review to the board

[00:16:34] Speaker 00:
who everyone agrees is comprised entirely of principal officers that have been validly appointed.

[00:16:40] Speaker 00:
And that was true even when there was no quorum.

[00:16:44] Speaker 00:
When the board was temporarily without a quorum, petitions for final review to the board could still be filed.

[00:16:50] Speaker 00:
and that would prevent any decision by the administrative judge from becoming final.

[00:16:56] Speaker 00:
I'm not sure exactly what the exact number is, but a number of people, in fact, did file petitions for final review during that absence, and those are being considered by the board now that it's been reconstituted.

[00:17:07] Speaker 00:
And Ms.

[00:17:08] Speaker 00:
McIntosh could have done the same.

[00:17:10] Speaker 05:
So under the statutory structure of the MSPB... What about his argument that the MSPB's, the full board review authority is limited?

[00:17:20] Speaker 05:
I mean, I guess I have two questions.

[00:17:22] Speaker 05:
One, is it?

[00:17:23] Speaker 05:
And if it is, does that have any constitutional significance?

[00:17:28] Speaker 00:
So it is not.

[00:17:29] Speaker 00:
Under the statute,

[00:17:32] Speaker 00:
So the board has some regulations about the circumstances in which they will reopen a case once it has become final.

[00:17:39] Speaker 00:
But before a case becomes final, any party is free to petition for review of the board.

[00:17:46] Speaker 00:
And until the board resolves that petition, the decision does not become final.

[00:17:50] Speaker 00:
And the circumstances

[00:17:52] Speaker 00:
in which the board may take up one of those petitions for final review is not limited to unusual circumstances.

[00:18:01] Speaker 00:
We cited the regulation in our brief.

[00:18:03] Speaker 00:
It's an including but not limited to laundry list of various reasons.

[00:18:08] Speaker 00:
And so there is no meaningful statutory or even regulatory limitation

[00:18:16] Speaker 00:
on the circumstances in which the board can take up a petition for final review?

[00:18:21] Speaker 01:
Suppose there were a very draconian regulatory limitation on the board's reviewing authority that they self-imposed.

[00:18:34] Speaker 01:
I'm really asking the same question Judge Hughes asked of your opposing counsel.

[00:18:38] Speaker 01:
Would that have a constitutional consequence under the Appointments Clause?

[00:18:46] Speaker 00:
So I mean, I think in the first instance, I think that would certainly be something that the board should consider.

[00:18:53] Speaker 00:
It should be raised to the board in the first instance and for them to consider if they want to sort of revise their regulations, because the board.

[00:19:01] Speaker 01:
Let's assume that it was raised and the board said, go away.

[00:19:04] Speaker 01:
We're not concerned by this.

[00:19:06] Speaker 01:
And it comes to us.

[00:19:07] Speaker 01:
And the board has a regulation which says, I don't know, that we will only

[00:19:15] Speaker 01:
consider a maximum of five cases a year.

[00:19:23] Speaker 01:
Would that convert the AJs into principal officers?

[00:19:30] Speaker 00:
I mean, it would be a hard question, I think, constitutionally, Your Honor, because obviously we don't know which five cases are being considered.

[00:19:36] Speaker 00:
And certainly under Arthrex, they could take zero.

[00:19:40] Speaker 00:
If the board has sort of unfeathered discretion to take a case, it doesn't actually have to exercise that authority for any of them.

[00:19:48] Speaker 01:
What I'm getting at really is does an agency's self-imposed restraints on what otherwise would appear to be unrestricted supervisory authority end up

[00:20:05] Speaker 01:
having constitutional significance under the Appointments Clause?

[00:20:11] Speaker 00:
I think I would go back and say because the agency can always change their self-imposed restraints, and I think, in fact, the board has regulations that allow them to waive their existing regulations, that even if they had something sort of that fixed, if there's no limit on which cases can be submitted for petition for final review,

[00:20:32] Speaker 00:
If the board sees a sixth meritorious case that they feel should be reviewed, I see no reason why they couldn't do that if it was in the face of a regulation.

[00:20:43] Speaker 00:
Obviously, the board is bound by a statute.

[00:20:45] Speaker 00:
A court is the only one who can rescind a statute or Congress.

[00:20:50] Speaker 01:
While a regulation is in place, the agency is bound by the regulations.

[00:20:55] Speaker 01:
The Supreme Court has said that a number of times.

[00:20:56] Speaker 01:
You have to follow your own regulations until you get them changed by process that is spelled out in the APA.

[00:21:05] Speaker 00:
Sure, but I think even in that hypothetical, if we have a regulation that said you can only review five and they wanted to review a six, all they would have to do is go through the process of changing the regulation to allow them to do so.

[00:21:17] Speaker 05:
I mean, it sounds to me like the challenge would be to the regulation as inconsistent with the Appointments Clause and that we would strike down the regulation and order the board to hear more cases where exercise is discretionary or fully.

[00:21:35] Speaker 05:
I think I might agree with that.

[00:21:36] Speaker 05:
I conclude that the AJs were somehow transformed into principal officers.

[00:21:42] Speaker 05:
I mean, it would be the underlying text, but you would challenge the application of that regulation.

[00:21:48] Speaker 05:
If in denying the petition for review, the board said, we've already exceeded our five case limit, that the regulation would be found to be unconstitutional somehow.

[00:22:02] Speaker 00:
I think that's right, Your Honor.

[00:22:03] Speaker 00:
Yes, it wouldn't be that they would become a different kind of officer.

[00:22:07] Speaker 00:
It would be that something would happen to the regulation if the regulation was sort of prohibitively not allowing them to exercise that discretion.

[00:22:16] Speaker 00:
I'm sorry.

[00:22:17] Speaker 00:
You finished your pointer.

[00:22:18] Speaker 00:
No, I was just going to say that the statute here, the point is that right now there is no such prohibition.

[00:22:25] Speaker 00:
Right now there's no limit to the number of cases or the type of cases that the board can take up and consider

[00:22:31] Speaker 00:
Any petitioner can seek review, and the board also has the authority to sue Esponte to take up a case, even if a petitioner does not seek review.

[00:22:40] Speaker 00:
So it's really wide open here.

[00:22:43] Speaker 01:
Reducing the footnote in Rodriguez that Mr. Sheng pointed out, do you think that either A, that footnote is wrong, or B, that the

[00:22:56] Speaker 01:
period of time hypothesized in that footnote did not come to pass here.

[00:23:03] Speaker 00:
I think my primary response to the idea of what affects the absence of a board has here is that they never really became principal officers, even when there was no board because the Senate hadn't yet confirmed one.

[00:23:21] Speaker 00:
Because you could still file a petition for final review, and that petition would ultimately be considered, that supervision did exist.

[00:23:32] Speaker 00:
Mr. Sheng talked about it.

[00:23:33] Speaker 00:
Even though there were no supervisors in place.

[00:23:37] Speaker 00:
But they would come back.

[00:23:38] Speaker 00:
You would essentially hold the case in abeyance until they returned and exercised that supervisory authority.

[00:23:45] Speaker 00:
So the only reason that her case

[00:23:49] Speaker 00:
from her termination all the way to a final decision, there was no board, is because she didn't file for board review and allowed it to become final and terminated that way.

[00:23:58] Speaker 01:
Let me ask the question in reverse form.

[00:24:03] Speaker 01:
Can you identify for me the kind of case as to which you would say, OK, in this case now, the absence of a board

[00:24:15] Speaker 01:
virtue of non-approval or non-nomination or whatever has triggered the appointments clause problem.

[00:24:26] Speaker 00:
I struggle with that.

[00:24:28] Speaker 00:
I do like your hypothetical where the Senate actually comes out and says, we're never going to approve a board.

[00:24:32] Speaker 00:
I think that that introduces a structural element that maybe changes the picture.

[00:24:39] Speaker 00:
But I think here, we were constantly actively in the process of nominating or trying to get a board confirmed.

[00:24:47] Speaker 00:
It just took longer than, frankly, probably anybody wanted it to.

[00:24:51] Speaker 00:
But throughout that time, any petitioner could preserve their right for board review once everybody agrees constitutionally valid board what was appointed and confirmed as they have been now.

[00:25:07] Speaker 00:
I see I'm running out of time, so if there's other questions that the court, I can answer.

[00:25:12] Speaker 03:
Well, we'll hear from Mr. Fong now.

[00:25:18] Speaker 02:
May it please the court.

[00:25:20] Speaker 02:
The MSPB agrees first with the Department of Defense on the question of waiver, but to the extent that this court does not agree regarding waiver, the board's restoration of quorum on March 4th means that we're no longer seeking a remand from this court to address the issues in the first instance.

[00:25:38] Speaker 02:
Immediately upon being sworn in,

[00:25:40] Speaker 02:
the board ratified the appointment of all its existing administrative judges under the presumption that they likely are inferior officers under the Constitution.

[00:25:48] Speaker 05:
So the real question for us is if we find it waived, we get to the merits here.

[00:25:54] Speaker 05:
If we decide not to enforce the waiver, then under the regular precedent, we would send it back for a hearing by a new AJA.

[00:26:03] Speaker 02:
Yes.

[00:26:03] Speaker 02:
Under Lucia, this would just go back to a new administrative judge whose appointment has been ratified by the board for a new hearing.

[00:26:11] Speaker 02:
going back to the principal officers first.

[00:26:15] Speaker 05:
Since you're here, I know you're from the board, and this isn't in the case, and you may not know, but do you have any sense, this is just curiosity, how many petitions for review are pending at the board now?

[00:26:27] Speaker 02:
Last count was approximately a little over 4,000.

[00:26:30] Speaker 02:
We do a monthly count.

[00:26:31] Speaker 02:
Yes, it's a significant number, I know.

[00:26:33] Speaker 02:
And the board, now that they've been restored, are doing their best to work that backlog down.

[00:26:38] Speaker 02:
We just added a new member.

[00:26:39] Speaker 02:
nine days ago, and so hopefully the three members will do their best to reduce the backlog as expediently as possible, knowing it's a lot of work.

[00:26:49] Speaker 02:
But yes, it's around 4,000.

[00:26:52] Speaker 02:
So the Supreme Court in Arthrax though focused on

[00:26:56] Speaker 02:
whether there was an individual with the ability, not necessarily a mandatory review, just somebody with the ability to review decisions and alter decisions of administrative patent judges.

[00:27:06] Speaker 02:
And there was not.

[00:27:07] Speaker 02:
Not the secretary of commerce, not the director of PTO.

[00:27:10] Speaker 02:
The board, as my friend already stated, has that unfettered ability all the time by statute to review any decision it wants.

[00:27:20] Speaker 02:
Any party can file a petition for review to the board.

[00:27:22] Speaker 02:
And the board, at any point after a decision has been issued by the administrative judge, can reopen that decision and review it.

[00:27:30] Speaker 02:
There's no time limit on that.

[00:27:32] Speaker 02:
Five years later, the board, if it wanted to, could right now reopen Ms.

[00:27:36] Speaker 02:
McIntosh's decision.

[00:27:37] Speaker 02:
By regulation, we've expressed our policy preference that we're generally not going to do so.

[00:27:43] Speaker 02:
But it doesn't mean that we can't do so.

[00:27:45] Speaker 02:
It just means we generally won't do so.

[00:27:48] Speaker 01:
What do you say about the argument Mr. Sheng makes that

[00:27:52] Speaker 01:
He should not, Ms.

[00:27:54] Speaker 01:
McIntosh, should not be held to a waiver of the inferior officer argument under all the circumstances involving the second Arthur exposition, et cetera.

[00:28:08] Speaker 02:
I believe that the argument was not initially raised before the board, and it was not raised to this court originally.

[00:28:14] Speaker 02:
And so as the Department of Defense has indicated, we think the argument should be considered waived.

[00:28:21] Speaker 01:
Let's assume that we don't.

[00:28:22] Speaker 01:
agree with you that there was a requirement that it be raised before the board.

[00:28:28] Speaker 01:
And focusing just on whether it was waived by not being raised in the blue brief in this case, can you respond to Mr. Sheng's argument that the sequencing of events, including the Supreme Court's Arthrex decision and the supplemental briefing in this case, are such that there should be deemed to be no waiver?

[00:28:50] Speaker 02:
original brief put forward by Ms.

[00:28:52] Speaker 02:
McIntosh was about the idea that the board, the A.J.'

[00:28:55] Speaker 02:
's were principal officers.

[00:28:57] Speaker 02:
And then the Supreme Court's graining cert in that case was about whether or not the A.P.J.'

[00:29:02] Speaker 02:
's were principal officers.

[00:29:03] Speaker 02:
So in our position or in our mind, any supplemental briefing was about

[00:29:08] Speaker 02:
the Supreme Court addressing the question of whether or not they were principal officers and the idea of inferior officers wasn't really at issue any longer.

[00:29:16] Speaker 02:
It was just about whether or not APJs were principal officers and therefore whether AJs were principal officers.

[00:29:21] Speaker 02:
So we still believe that the issue should be considered waived as well because it wasn't something that was considered in the Supreme Court's artifacts decision.

[00:29:34] Speaker 02:
Going back to your hypothetical briefly, by the way, about the 5 versus 6, I think, well, for one thing, the board, as my friend said, does have the ability to waive any of its regulations at any time.

[00:29:47] Speaker 02:
5 CFR 1201.12 gives the board the authority or

[00:29:52] Speaker 02:
says the board will waive its regulations if it feels necessary.

[00:29:55] Speaker 02:
But in the event that does not apply, I think what you'd actually be doing is creating a situation akin to Hellman in which if that fifth case somehow bound the board so the board could never review a sixth case, it would recreate the VA statute from Hellman that was found to be unconstitutional because that did convert the AJs to principal officers.

[00:30:19] Speaker 02:
I see my time has expired.

[00:30:20] Speaker 02:
Are there any further questions?

[00:30:22] Speaker 03:
Thank you, Mr. Foley.

[00:30:26] Speaker 03:
Mr. Chang has two minutes only on the appointments clause, because there's nothing to respond to on the merits.

[00:30:34] Speaker 06:
Thank you, Your Honor.

[00:30:35] Speaker 06:
Just very briefly, I would just encourage the panel to review the Federal Register sites that we cite on page 21 of our reply brief.

[00:30:43] Speaker 06:
And that's 77 FR 62350 and 62359.

[00:30:50] Speaker 06:
It's crystal clear from the legislative history or the rulemaking history there.

[00:30:56] Speaker 06:
During the notice and comment procedure, there were specific comments that, hey, you guys are severely limiting your ability to reopen a case under 7701E.

[00:31:04] Speaker 06:
And the agency's response is that, well, that's what we're going to do.

[00:31:09] Speaker 06:
In fact, there was a comment that said, your rule is going to severely limit the MSPB's authority to reopen and reconsider cases.

[00:31:16] Speaker 06:
And the agency's response was,

[00:31:18] Speaker 06:
You know, we must confine ourselves.

[00:31:20] Speaker 06:
It says reconsidering a final decision must be confined to rare and limited circumstances.

[00:31:26] Speaker 06:
So in our view, that places a significant thumb on the scale.

[00:31:31] Speaker 06:
For example, the Supreme Court's Arthrex decision, I can't imagine the Supreme Court saying, OK, we can provide for director-level review, but the director can only review under rare, unusual, limited circumstances and must do so in a short period of time.

[00:31:44] Speaker 06:
I don't think the Supreme Court would have found that permissible.

[00:31:47] Speaker 06:
Lastly, Your Honors, I just want to emphasize the significant power that AJs have to conduct hearings, to issue subpoenas, conduct discovery, hold petitioners in contempt or whatever the word is before the board.

[00:32:05] Speaker 06:
There was no supervisory authority, no review authority, no threat of removal during that entire time that that power was exercised.

[00:32:14] Speaker 06:
And that's all I have, Your Honor.

[00:32:18] Speaker 03:
Thank you, Mr. Sheng.

[00:32:20] Speaker 03:
The case will be taken under submission.