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Preston v. Marathon

Jul 11, 2012
Harold C. Wegner

Certifying a State Law Question to the State

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In Preston v. Marathon Oil Co., __ F.3d __ (Fed. Cir. 2012)(O’Malley, J.), the Court answered a question of state law. It did so by first certifying the question to the Wyoming Supreme Court asking whether an at-will employment agreement can be modified without further consideration. The state court answered in the affirmative, Preston v. Marathon Oil Co., 2012 WY 66; 277 P.3d 81 (2012), whereupon the Federal Circuit was able to then easily reach a conclusion that a modified employment agreement made without additional consideration was binding on the employee.

Precedential Non-Precedential Opinions: Far too often in the past, the Federal Circuit has waded into uncertain waters of state law to reach “precedential” opinions which, of course, have no precedential value as to an interpretation of state law. Whatever the Federal Circuit may say about the law of a particular state is hardly of precedential importance vis a vis pronouncements from the local Supreme Court.

The Notorious Lariscey Case, a case not referred to the State Court: Perhaps the most notorious example of a nonprecedential precedential interpretation of a State law is Lariscey v. United States, 949 F.2d 1137 (Fed. Cir. 1991)( Newman, J.). Plaintiff- Federal prison inmate Earl Jason Lariscey claimed compensation from the government for an invention made as a prisoner where one element was determination of trade secret and shop right laws involving unique circumstances where there was no case on all fours. “Because Mr. Lariscey's [invention] was created, built, and used in Texas, the law of that state applies.” Lariscey, 949 F.2d at 1141. Yet, a panel of the Federal Circuit chose to interpret the state law: “We conclude that there was not a shop right [under Texas state law] in the government, that Mr. Lariscey possessed a property right in the cutting device and process, and this property was taken for governmental purposes. The case is remanded to the Claims Court for determination of just compensation.” Lariscey, 949 F.2d at 1145.

The case was obviously highly controversial. Thus, the active members of the Court voted to rehear the case en banc, 1992 U.S. App. LEXIS 9866 (1992), thereby vacating the opinion of the panel: The en banc Court was evenly split, whereupon the Court simply issued a per curiam order affirming the decision of the trial court below, 981 F.2d 1244 (1992)(per curiam order aff’g decision below by an equally divided court).

While Preston is not the first referral to a state court by the Federal Circuit, this procedure remains relatively unused in patent law. The Preston decision is a good precedent for the Federal Circuit itself to follow.

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