Sidak v. U.S. Int'l Trade Comm'n

678 F.Supp.3d 1

J. Gregory SIDAK, Plaintiff, v. UNITED STATES INTERNATIONAL TRADE COMMISSION, et al., Defendants.

Case No. 1:23-cv-00325 (TNM)

United States District Court, District of Columbia

Signed May 5, 2023

Christopher Landau, Patrick F. Philbin, John V. Coghlan, Ellis George Cipollone O'Brien & Annaguey LLP, Washington, DC, for Plaintiff.

James R. Powers, U.S. Department of Justice, Federal Programs Branch, Civil Division, Washington, DC, for Defendants.

MEMORANDUM OPINION

TREVOR N. McFADDEN, UNITED STATES DISTRICT JUDGE

Plaintiff J. Gregory Sidak claims that he is trapped in an unconstitutional disciplinary proceeding before the U.S. International Trade Commission. First, he alleges the sole basis for that proceeding is an order issued by an unconstitutionally appointed administrative law judge (ALJ). Second, he claims that the Commission denied him due process by coercing him to provide an affidavit, rather than allowing him to speak through counsel. The Commission responds that his claims are unripe, untimely, and forfeited.

Sidak's Appointments Clause challenge is purely legal and thus ripe for review. And because he neither needed to nor could have raised that challenge previously, his Appointments Clause claim has not been abandoned. More, as the Commission concedes, he is right on the merits. So the Court will grant Sidak's motion for summary judgment and permanently enjoin the Commission from proceeding against him based on a constitutionally infirm order. The Court thus need not decide whether the Commission has also denied him due process.

I.

A.

The facts are undisputed. The Commission is an independent agency composed of six Commissioners appointed by the President. See 19 U.S.C. § 1330(a). The Commission has a broad mandate to ferret out "unfair methods of competition and unfair acts in the importation of articles." Id. § 1337(a)(1)(A). In other words, the Commission investigates intellectual property claims alleging patent or trademark infringement by imported goods. See generally About Unfair Import Investigations, ITC, https://perma.cc/NP34-ZCF9. The Commission employs ALJs to help resolve disputes. See Joint Statement of Material Facts (SMF) ¶ 2, ECF No. 18.

These ALJs wield significant authority. They preside over the discovery and trial phases of Commission investigations and make initial determinations. See id. ¶¶ 2, 3; 19 C.F.R. § 210.27 (establishing ALJs' powers regarding discovery). If the Commission does not review an initial determination, it adopts the ALJ's decision. See 19 C.F.R. § 210.45(c).

Before 2018, the Commission's Chairman alone appointed ALJs. See Appointment of the Commission's Administrative Law Judges for Section 337 Investigations, 83 Fed. Reg. 45,678 (Sept. 10, 2018); SMF ¶ 4. Then things changed. While a constitutional challenge to the appointment of the SEC's ALJs was pending before the Supreme Court, the Commission voted to ratify the Chairman's past ALJ appointments. See Lucia v. SEC, 585 U.S. 237, 138 S. Ct. 2044, 201 L.Ed.2d 464 (2018); 83 Fed. Reg. 45,678; SMF ¶ 6. But, against the Solicitor General's advice, the Commission did not direct its ALJs to rehear, reconsider, or ratify any decisions that they had made in pending proceedings.¹ See Mem. from the Solicitor General on Guidance on Admin. Law Judges after Lucia v. SEC, at 7-9 (July 2018), https://perma.cc/TXK2-QP2B. The Commission does not explain its disinterest in fixing its constitutional errors.

During the discovery phase of a Commission matter, parties exchange information under agency rules. See 19 C.F.R. §§ 210.27-34. Third parties may also be subpoenaed to provide information. See id. § 210.32. Because much of this information may be commercially valuable or otherwise confidential, Congress created a mechanism for ensuring the confidentiality of such information. In most cases, information designated as confidential under Commission rules may not be disclosed without the consent of the person submitting it. See 19 U.S.C. § 1337(n)(1). But information under a protective order may be disclosed within the bounds of that order. See id. Relevant here, the Commission's rules allow ALJs to issue those protective orders. See 19 C.F.R. § 210.34(a).

This case spawns from an old Commission investigation. Back in 2017, Qualcomm filed a patent-infringement complaint before the Commission against Apple. See SMF ¶ 8. The Commission then opened an investigation and assigned the matter to ALJ Thomas Pender. See id. ¶¶ 8, 10; Certain Mobile Electronic Devices and Radio Frequency and Processing Components Thereof; Institution of Investigation, 82 Fed. Reg. 37899 (Aug. 14, 2017). Soon after, ALJ Pender entered a protective order. See Protective Order, SMF Ex. D, ECF No. 18-4. The protective order was designed to shield confidential business information submitted during the investigation. It required recipients of confidential information to "utilize such [information] solely for purposes of this Investigation" and forbade parties from disclosing that information to persons not authorized under the protective order. See id. ¶¶ 3, 4, 12. It also required recipients to return or, with the producing party's consent, destroy all items containing confidential information. See id. ¶ 14.

This is where Sidak comes in. Qualcomm retained him as an expert witness for the investigation. SMF ¶ 9. And the protective order required expert witnesses to sign an acknowledgment agreeing to be bound by it. Protective Order ¶ 3. So Sidak signed an acknowledgment stating that he would "be bound by the terms of the Protective Order" and that he would not disclose confidential information to any person not designated by the order. See Acknowledgment, SMF Ex. E, ECF No. 18-5.

ALJ Pender issued his initial determination in the investigation in 2018. See SMF ¶ 14. The parties filed petitions for review, and the Commission in April 2019 reversed ALJ Pender's decision and terminated the investigation. See id. ¶¶ 16-17. Later that month, the parties to the investigation settled and agreed to dismiss all related litigation. See id. ¶ 18.

B.

Now for the substance of this case. According to Sidak, ALJ Pender made several "unjustified and injudicious comments" about him. Compl. ¶ 45, ECF No. 2. He claims this damaged his business as an economic expert. See id. Some of those comments were revealed in publicly released documents from the investigation. See id. But others were contained in sealed hearing transcripts subject to the protective order. See id. So Sidak began filing a series of Freedom of Information Act (FOIA) requests seeking access to transcripts and to "de-designate" portions of the record that allegedly had been improperly designated as confidential.² See id. ¶ 46; see also Letter from Lisa R. Barton to J. Gregory Sidak (May 25, 2022) (May 25 Letter), SMF Ex. H, ECF No. 18-8. The Commission's Secretary denied those requests. See Compl. ¶ 48.

But the Commission was not finished with Sidak. Following this denial, the Secretary sent him a letter announcing that the Commission was launching a sanctions proceeding against him to investigate "a possible breach of the administrative protective order" from the 2017 investigation. May 25 Letter at 1. In this letter, the Commission did not accuse Sidak of disclosing any confidential information to any unauthorized third party. Rather, the basis for the inquiry was that Sidak's FOIA appeal to the Commission "included multiple pinpoint citations to the confidential transcript of the [investigation's] evidentiary hearing." Id. In the Commission's view, Sidak's appeal might have violated the protective order's requirements that he use confidential information only in the investigation and return (or, with consent, destroy) documents containing confidential information. See id.

That proceeding threatened Sidak's livelihood. Under the Commission's rules, he could be "[p]ermanent[ly] disqualif[ied] from practicing in any capacity before the Commission." 19 C.F.R. § 210.34(c)(3). More, the agency could refer the facts underlying the violation "to the appropriate licensing authority." Id. And because Sidak is an attorney, that means he could be disbarred. So he lawyered up. See SMF ¶ 19.

The May 25 Letter stated that Sidak's "response should be in the form of an affidavit" describing the circumstances of the possible breach. May 25 Letter at 2; see also Letter from Lisa R. Barton to Christopher Landau (Oct. 28, 2022) (Oct. 28 Letter), SMF Ex. J, ECF No. 18-10 (stating that "the Commission instructs the parties to file their written submissions in the form of an affidavit"). Sidak, through his lawyer, lodged several legal objections to the sanctions proceeding. See generally Letter from Christopher Landau to Lisa R. Barton (June 7, 2022), SMF Ex. I, ECF No. 18-9. And his lawyer explained that, because "Sidak's response to the May 25 letter is legal, not factual, in nature," and "[b]ecause there are no material facts that require attestation, there is no basis for an affidavit." Id. at 3.

But the Commission was not interested in hearing from, nor responding to, Sidak's lawyer. In its "second and final letter," the Commission reiterated its request for an affidavit and ignored his legal arguments. See generally Oct. 28 Letter. More, the Commission warned Sidak that he could be penalized if he were to submit anything further from his attorney. See id. at 2. The letter cautioned that "any response submitted in a form other than an affidavit could lead the Commission to assume that the facts are contrary to Mr. Sidak's interest." Id. (emphasis added).

The Commission had Sidak over a barrel. So he submitted a detailed affidavit along with a cover letter from his counsel. See Letter from Christopher Landau to Katherine M. Hiner (Nov. 18, 2022) (Nov. 18 Letter), SMF Ex. K, ECF No. 18-11; Aff. of J. Gregory Sidak (Sidak Aff.), SMF Ex. L, ECF No. 18-12. In these, Sidak responded to Commission's information requests...