CALABRESI: Improper Ruling In Apple-Qualcomm Case Could Mean Higher Prices For iPhones — And More Chinese Tech


Steve Calabresi Contributor
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The U.S. International Trade Commission (ITC) has screwed up a patent-infringement case between Apple and Qualcomm worth an estimated $7 billion. The problem? The commission arguably doesn’t have jurisdiction to hear the lawsuit.

That’s because commissioners on the ITC failed to constitutionally reappoint the judge who heard the case. The judge retired around the beginning of September — only to “return” from retirement on Sept. 17. He subsequently ruled in Apple’s favor, an outcome that could cost consumers millions of dollars in years ahead.

There is no public record to prove the ITC lawfully reappointed the judge, even though it is required by federal statute, the Constitution, the Supreme Court case Lucia v. SEC, and by a presidential executive order.

Lucia v. SEC holds that  such administrative law judges (ALJs) are inferior officers of the United States. Consistent with Lucia, ALJs of the ITC must be appointed by — and, if they retire, reappointed by — the commissioners of the ITC. In this case, that doesn’t appear to have happened.

Instead, the chief judge on the ITC alleged that he reappointed the judge in the case, a flat-out violation of Lucia v. SEC.

After a judge retires, the agency from which he retired may rehire him — but only after the retired judge has satisfied various requirements, including the requirement that his fitness for the position be reevaluated.

The matter should concern the general public, because the judge in this case — who I firmly contend was appointed illegally — ignored 45 years of academic commentary on antitrust law to reach his conclusion in the case. That’s going to cost consumers millions of dollars over the next 50 years.

The unconstitutionally-appointed judge mistakenly said the market for chipsets that go into iPhones was composed exclusively of the U.S. market — excluding the global market, in which Qualcomm is only one player. Because Qualcomm has a large share of the U.S. market, the judge said it was a monopolist.

Most readers can agree that the iPhone market is global, a fact that was lost on the judge in question. If Qualcomm is taken down by the ITC, there is a good chance a Chinese firm might come in to fill Qualcomm’s shoes.

If that happens, the U.S. will lose an important battle with China over important technology products, and American consumers could end up paying more for their iPhones.

All Senate and House Oversight Committee members and their staffs should remind federal agencies under their jurisdiction of the correct law. Iowa Sen. Chuck Grassley, who chairs the Senate Finance Committee (which has oversight of the ITC) should act to prevent this colossal blunder from becoming permanent.

Moreover, President Trump should ask the ITC chairman for his written explanation accounting for the ITC’s behavior in this huge blunder. Justice demands no less.

Steven G. Calabresi is co-founder and chairman of the board of directors of the Federalist Society, co-author of “The Unitary Executive: Presidential Power from Washington to Bush,” and the Clayton J. & Henry R. Barber Professor at Northwestern Pritzker School of Law.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller, the Federalist Society or Northwestern Law School.