Chaganti v. Matal

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
NAREN CHAGANTI,
Plaintiff-Appellant
v.
JOSEPH MATAL, PERFORMING THE FUNCTIONS
AND DUTIES OF THE UNDER SECRETARY OF
COMMERCE FOR INTELLECTUAL PROPERTY
AND DIRECTOR, U.S. PATENT AND TRADEMARK
OFFICE,
Defendant-Appellee
______________________
2016-2133
______________________
Appeal from the United States District Court for the
Eastern District of Virginia in No. 1:15-cv-01138-TSE-
JFA, Judge T. S. Ellis, III.
______________________
Decided: June 12, 2017
______________________
NAREN CHAGANTI, Town & Country, MO, pro se.
DENNIS C. BARGHAAN, JR., Office of the United States
Attorney for the Eastern District of Virginia, United
States Department of Justice, Alexandria, VA, for defend-
ant-appellee. Also represented by DANA J. BOENTE;
2 CHAGANTI v. MATAL
NATHAN K. KELLEY, SYDNEY O. JOHNSON, JR., Office of the
Solicitor, United States Patent and Trademark Office,
Alexandria, VA.
______________________
Before PROST, Chief Judge, LOURIE and SCHALL, Cir-
cuit Judges.
PER CURIAM.
DECISION
Naren Chaganti, an attorney, appeals the May 11,
2016 decision of the United States District Court for the
Eastern District of Virginia in Chaganti v. Lee (Cha-
ganti II), 187 F. Supp. 3d 682 (E.D. Va. 2016). In that
decision, the district court affirmed the August 4, 2015
final order of the Director of the United States Patent and
Trademark Office (“PTO”) imposing reciprocal discipline
on Mr. Chaganti following his indefinite suspension from
the practice of law by the Missouri Supreme Court. See
Final Order, In re Naren Chaganti (Chaganti I), No.
D2015-10 (U.S.P.T.O. Aug. 4, 2015), located at J.A. 2000.
We affirm.
DISCUSSION
I.
Prior to his suspension, Mr. Chaganti was licensed to
practice law in the State of Missouri and before the PTO.
On October 16, 2012, a complaint was filed against him
with the Missouri State Bar’s Office of Chief Disciplinary
Counsel. The complaint alleged that Mr. Chaganti had
engaged in conduct that violated Missouri Supreme Court
Rules 4-4.2 (prohibiting communications with a repre-
sented party) and 4-8.4 (prohibiting conduct prejudicial to
the administration of justice). See MO. SUP. CT. R. PROF.
CONDUCT R. 4-4.2, 4-8.4(d). After investigating the mat-
ter, the Chief Disciplinary Counsel filed a two-count
information in the Missouri Supreme Court, averring that
CHAGANTI v. MATAL 3
there was probable cause to believe that Mr. Chaganti
had committed the violations alleged in the October 16
complaint. As a result of the filing of the information, the
case was referred to a Disciplinary Committee for initial
adjudication. While the matter was pending before the
Disciplinary Committee, both the Missouri State Bar and
Mr. Chaganti were entitled to engage in written discov-
ery. Mr. Chaganti pursued this opportunity.
On January 24, 2014, a panel of the Disciplinary
Committee (“Panel”) held an evidentiary hearing. Mr.
Chaganti testified at the hearing, as did the attorney who
had filed the complaint against him. Also testifying was
the individual whom Mr. Chaganti was accused of im-
properly contacting because, at the time of the contact, he
was a represented party. Both of these individuals were
subjected to cross-examination. On March 13, 2014, the
Panel issued its decision. The Panel found that Mr.
Chaganti had violated Missouri Supreme Court Rules 4-
4.2 and 4-8.4. The Panel concluded that suspension from
the practice of law was the appropriate sanction. It
therefore suspended Mr. Chaganti indefinitely, with the
ability to seek reinstatement to the bar within six
months. See J.A. 903. Following Mr. Chaganti’s appeal,
on October 28, 2014, the Missouri Supreme Court issued a
decision in which it concluded that Mr. Chaganti was
“guilty of misconduct as a result of violations of Rules 4-
4.2 and 4-8.4(d).” Order, In re Naren Chaganti, No.
SC94181 (Mo. Oct. 28, 2014), located at J.A. 1029. The
court agreed with the Panel’s imposition of the sanction of
indefinite suspension, but increased from six months to a
year the time which Mr. Chaganti would have to wait
before seeking reinstatement to the bar. Id.
Following the decision of the Missouri Supreme Court,
Mr. Chaganti informed the PTO of his suspension. Under
35 U.S.C. § 2(b)(2)(D), the PTO is empowered to issue
regulations governing “the recognition and conduct of
agents, attorneys, or other persons representing appli-
4 CHAGANTI v. MATAL
cants or other parties before the Office.” Pursuant to this
statutory authority, the PTO has enacted its own Rules of
Professional Conduct governing the conduct of all practi-
tioners engaged in practice before the PTO. See 37 C.F.R.
§§ 11.101–901. If a registered PTO attorney fails to
comply with his or her professional obligations, the PTO
has the authority to suspend or exclude the practitioner
from further practice before the PTO. 35 U.S.C. § 32; 37
C.F.R. §§ 11.19–20.
Pursuant to its authority, the PTO has determined
that it will impose reciprocal discipline against a practi-
tioner who has been disciplined or disqualified by another
jurisdiction, such as a state bar. 37 C.F.R. § 11.24. In
that regard, after the PTO learns that a practitioner has
been disciplined in another jurisdiction and the PTO’s
Office of Enrollment and Discipline files a complaint
against the practitioner based on that discipline, the
Director of the PTO (“Director”) hears the matter “on the
documentary record unless the . . . Director determines
that an oral hearing is necessary.” 37 C.F.R.
§ 11.24(d)(1). In a reciprocal matter, the Director is
charged with imposing “the identical public censure,
public reprimand, probation, disbarment, suspension or
disciplinary disqualification unless the practitioner clear-
ly and convincingly demonstrates and the . . . Director
finds” that there is “a genuine issue of material fact” as to
on one of the following factors derived from the Supreme
Court’s decision in Selling v. Radford, 243 U.S. 46, 50–51
(1917):
(i) The procedure elsewhere was so lacking in no-
tice or opportunity to be heard as to constitute a
deprivation of due process;
(ii) There was such infirmity of proof establishing
the conduct as to give rise to the clear conviction
that the Office could not, consistently with its du-
ty, accept as final the conclusion on that subject;
CHAGANTI v. MATAL 5
(iii) The imposition of the same public censure,
public reprimand, probation, disbarment, suspen-
sion or disciplinary disqualification by the Office
would result in grave injustice; or
(iv) Any argument that the practitioner was not
publicly censured, publicly reprimanded, placed
on probation, disbarred, suspended or disciplinari-
ly disqualified.
37 C.F.R. § 11.24(d)(1).
On August 14, 2015, the Director issued a final order
imposing reciprocal discipline on Mr. Chaganti identical
to that which the Missouri Supreme Court had imposed.
In so doing, the Director concluded that Mr. Chaganti had
failed to carry his burden of “clearly and convincingly”
demonstrating that there was “any genuine issue of
material fact as to whether a ‘grave injustice’ under 37
C.F.R. § 11.24(d)(1)(iii) would result if reciprocal disci-
pline were imposed.” Chaganti I, J.A. 2017.
Pursuant to 35 U.S.C. § 32, Mr. Chaganti petitioned
the United States District Court for the Eastern District
of Virginia for review of the Director’s final order. East-
ern District Local Rule 83.5 provides, inter alia, that the
administrative record is the “sole basis for review” of a
PTO decision to exclude or suspend an attorney from
practice before the PTO. On May 11, 2016, the district
court issued an order affirming the Director’s final order
of reciprocal discipline. The court set forth it’s reasoning
in a memorandum opinion issued that same day. Cha-
ganti II, 187 F. Supp. 3d at 694. Citing Bender v. Dudas,
490 F.3d 1361, 1365 (Fed. Cir. 2007), the court first
explained that its review of final disciplinary orders of the
PTO is governed by the deferential standards of the
Administrative Procedure Act (“APA”), 5 U.S.C. §§ 7701,
et seq. Chaganti II, 187 F. Supp. 3d at 690. Turning to
the merits, the court ruled that the Director’s decision to
impose reciprocal discipline on Mr. Chaganti “was not
6 CHAGANTI v. MATAL
arbitrary and capricious or otherwise not in accordance
with law” because Mr. Chaganti “did not—and cannot—
establish by clear and convincing evidence that, on the
basis of the Selling factors, reciprocal discipline was not
warranted.” Chaganti II, 187 F. Supp. 3d at 694. Mr.
Chaganti now appeals. We have jurisdiction pursuant to
28 U.S.C. § 1295(a)(1).
II.
We review de novo the decision of a district court on a
petition brought pursuant to 35 U.S.C. § 32, “reapplying
the standard” applied by the district court. Sheinbein v.
Dudas, 465 F.3d 493, 495 (Fed. Cir. 2006). As seen, the
district court reviewed the PTO’s action in this case under
the standard set forth in the APA. Under that standard,
the PTO’s choice of sanction is held unlawful only if it is
“arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.” 5 U.S.C. § 706; see also
Bender, 490 F.3d at 1365–66. Having reviewed the ad-
ministrative record, we see no error in the Director’s
decision to impose reciprocal discipline on Mr. Chaganti.
III.
A.
Preliminarily, we note that Mr. Chaganti contends
that the PTO’s disciplinary procedures deprive practition-
ers of Constitutional due process. Specifically, he argues
that he was deprived of due process because (1) the PTO’s
procedures authorize the imposition of reciprocal disci-
pline even in those instances in which the original disci-
pline was imposed through a lower burden of proof than
the PTO generally requires in the disciplinary context, see
Appellant’s Br. 28–33; (2) in contrast to an original disci-
plinary proceeding before the PTO, the burden of proof in
a reciprocal disciplinary proceeding is on the practitioner,
id. at 27–28; and (3) he was not afforded an oral hearing,
id. at 33. Mr. Chaganti, however, waived these argu-
CHAGANTI v. MATAL 7
ments because he failed to raise them before the PTO.
Therefore, we do not consider them. See In re DBC, 545
F.3d 1373, 1378–79 (Fed. Cir. 2008).
B.
Mr. Chaganti’s main argument on appeal is that the
PTO erred in its analysis of the Selling factors applicable
to his case (the first three). The district court rejected
this argument, as do we.
The first Selling factor, as incorporated into the PTO’s
regulations, asks whether “the procedure” in the Missouri
Supreme Court that led to Mr. Chaganti’s suspension
“was so lacking in notice or opportunity to be heard as to
constitute a deprivation of due process.” 37 C.F.R.
§ 11.24(d)(1)(i). “Due process requirements are met where
[a practitioner] ‘attended and participated actively in the
various hearings, and was afforded an opportunity to
present evidence, to testify, to cross-examine witnesses,
and to present argument.’” In re Squire, 617 F.3d 461,
467 (6th Cir. 2010) (quoting Ginger v. Circuit Court, 372
F.2d 620, 621 (6th Cir. 1967)). These requirements plain-
ly were met in this case. During his disciplinary proceed-
ings, Mr. Chaganti engaged in discovery, testified at a
hearing before a panel of the Disciplinary Committee, and
was able to cross-examine the two individuals who testi-
fied against him. Moreover, we see no merit to Mr. Cha-
ganti’s argument that he was deprived of due process
because the Panel quashed his subpoena for the file of the
attorney who filed the complaint against him and sus-
tained objections to certain questions at the evidentiary
hearing on the grounds of attorney-client privilege. These
rulings were well within the Panel’s discretion.
The second Selling factor asks whether “[t]here was
such infirmity of proof establishing the conduct as to give
rise to the clear conviction that the [PTO] could not,
consistently with its duty, accept as final the conclusion
on that subject.” 37 C.F.R. § 11.24(d)(1)(ii). Little need be
8 CHAGANTI v. MATAL
said on this point. Suffice it to say that, having consid-
ered the record, we conclude, as did the district court, that
there was more than enough evidence demonstrating that
Mr. Chaganti violated the two Rules of Conduct at issue.
The third pertinent Selling factor inquires whether
“[t]he imposition of the same . . . suspension by the [PTO]
would result in grave injustice.” 37 C.F.R.
§ 11.24(d)(1)(iii). Relevant to this factor, as long as the
discipline that the practitioner received “was within the
appropriate range of sanctions” for the conduct in ques-
tion, there is no grave injustice in imposing reciprocal
discipline. In re Attorney Disciplinary Matter, 98 F.3d
1082, 1088 (8th Cir. 1996). As the district court recog-
nized, Missouri employs the American Bar Association’s
Standards for Imposing Lawyer Sanctions to determine
the appropriate discipline in a given set of circumstances.
Chaganti II, 187 F. Supp. 3d at 692. Where an attorney
engages in an unauthorized communication with a repre-
sented party, those standards provide for suspension—the
same penalty that Missouri imposed here. The penalty of
suspension in this case is further supported by the fact
that Mr. Chaganti violated Missouri Supreme Court Rule
4-8.4 (prohibiting conduct prejudicial to the administra-
tion of justice) in his threatening conduct towards the
represented individual. Based upon the record before us,
we have no difficulty concluding that the penalty of sus-
pension here was more than appropriate.
Finally, we have considered Mr. Chaganti’s remaining
arguments and have found them to be without merit.
CONCLUSION
For the foregoing reasons, the decision of the district
court affirming the final order of the Director imposing
reciprocal discipline on Mr. Chaganti is affirmed.
AFFIRMED
CHAGANTI v. MATAL 9
COSTS
No costs.