By Thomas Long, J.D.
Justices struggle to square contention that Congress abrogated state immunity from copyright infringement suits with 1999 decision holding that it failed to do so with respect to patent infringement suits.
In oral arguments held today in a case involving state sovereign immunity from actions for damages by copyright holders asserting infringement by state actors, several Justices seemed to have difficulty squaring the petitioners’ argument that a federal statute validly abrogated state immunity with the Court’s holding in a case 20 years ago that a similar statute regarding patent cases did not validly abrogate the states’ immunity. Some of the Justices, however, expressed concern that states could get away with rampant and repeated acts of infringement, suggesting that they might have sympathy for an argument that the statute was valid under the Fourteenth Amendment.
The case argued was Allen v. Cooper, Dkt. No. 18-877, which stemmed from a copyright infringement action brought by videographer Frederick L. Allen and his company—who produced photos and videos depicting a salvaged ship of Blackbeard the pirate—against North Carolina, the North Carolina Department of Natural and Cultural Resources, and various state officials acting in their official capacities. The defendants allegedly published Allen’s copyrighted works online without permission and in violation of a settlement agreement. Under review is a decision of the U.S. Court of Appeals in Richmond, holding that the defendants were entitled to Eleventh Amendment immunity from suit in federal court. The Fourth Circuit’s decision also rested on holdings that North Carolina did not waive its immunity and that an Ex Parte Young exception to immunity did not apply, but the sole question presented by the petition for certiorari asked whether Congress validly abrogated state sovereign immunity via the Copyright Remedy Clarification Act (CRCA), which the appellate court held was an unconstitutional abrogation of state sovereign immunity.
The CRCA, enacted in 1990 and codified at 17 U.S.C. § 511(a), has been held unconstitutional by the First, Second, Fourth, Fifth, Sixth, Ninth, and Eleventh Circuits. The statute provides:
Any State, any instrumentality of a State, and any officer or employee of a State or instrumentality of a State acting in his or her official capacity, shall not be immune, under the Eleventh Amendment of the Constitution of the United States or under any other doctrine of sovereign immunity, from suit in Federal court by any person ... for a violation of any of the exclusive rights of a copyright owner provided by [federal copyright law].
Before the Fourth Circuit, the plaintiffs had argued that Congress validly enacted the CRCA because it properly invoked Article I’s Patent and Copyright Clause (Section 8, clause 8; also known as the "intellectual property clause"). However, reasoned the appellate court, under Supreme Court precedent it was clear that Congress cannot rely on the enumerated power in Article I over copyright to compel a State to litigate copyright cases in a federal court. The Fourth Circuit concluded that the legislative record behind the CRCA was "materially similar" to the record the Supreme Court considered in Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999), in which the Court held that Congress’s attempt to abrogate state sovereign immunity in the Patent Remedy Act could not be justified under the Commerce Clause or the Patent Clause because both clauses arose under Article I of the U.S. Constitution, and Congress could not abrogate state sovereign immunity under its Article I powers. However, the petitioners pointed out that in 2006, in Central Virginia Community College v. Katz, the Court held that Congress could subject states to suit under laws enacted under Article I’s bankruptcy clause, which the petitioners argued indicated that the Court rejected any implication in Florida Prepaid that sovereign immunity could never be validly abrogated under Article I.
The petitioners also argued that Congress validly enacted the CRCA under the authority granted to it in Section 5 of the Fourteenth Amendment, which affords Congress the "power to enforce, by appropriate legislation," the Amendment’s substantive guarantees. The Fourth Circuit rejected the argument, holding that Congress did not (1) make it clear that it was relying on Section 5 of the Fourteenth Amendment as the source of its authority and (2) ensure that any abrogation of immunity was congruent and proportional to the Fourteenth Amendment injury to be prevented or remedied.
Petitioners’ argument. Derek L. Shaffer of Quinn Emanuel Urquhart & Sullivan, LLP, appeared on behalf of the petitioners. According to Shaffer, the intellectual property clause "is unique within Article I in laying down an express constitutional mandate for Congress to protect specified private property rights against any and all intrusion." Shaffer continued, "For states to retain immunity to avoid paying for infringing the very same exclusive rights that Congress is meant to secure would be incompatible with the text as fixed and understood by the framers."
Justice Ginsburg pointed out that the Florida Prepaid case also involved the intellectual property clause, but Shaffer replied that in that case the Court did not address or even grant review on whether the clause was a valid basis for the Patent Remedy Act. Justice Kagan asked whether, if the argument posed by Shaffer were correct, the Court would have to overturn the rule set forth in Florida Prepaid. Shaffer responded that the argument would be available in patent cases and that ultimately "the Patent Remedy Act would be revisited and properly upheld as a valid exercise of Congress's Article I power."
Justice Alito asked Shaffer to clarify whether he was asking the Court to overturn Florida Prepaid, and Shaffer said that, in his view, Katz overruled the basis for the holding in Florida Prepaid. Shaffer reiterated that the intellectual property clause was unique in Article I, explaining that his argument would not require the Court to examine every Section 8 power in a separate sovereign immunity analysis. In response to a question from Justice Kavanaugh as to whether Florida Prepaid was subject to the usual rules on stare decisis, Shaffer said the petitioners’ position was that Florida Prepaid did not squarely address the intellectual property clause issue. According to Shaffer, any mention of the clause in Florida Prepaid was dicta because the parties had not argued the question.
Justice Sotomayor pointed out that for 200 years there was concurrent state and federal jurisdiction in copyright law. "That seems to cut against your argument that somehow the founders thought that this was an exclusive federal right," she said. Shaffer argued that the text of the Constitution supported the argument that states had waived their immunity for copyright infringement via the constitutional convention. Shaffer also argued that the argument relating to Section 5 of the Fourteenth Amendment distinguished the case at bar from Florida Prepaid, noting that the Register of Copyrights had testified to Congress that the CRCA was necessary to protect federal copyrights.
Justice Alito—citing a passage of the petitioners’ brief citing 16 examples of infringement in 13 states over the past decade—asked whether the information on record was enough to identify a serious constitutional problem. Shaffer answered in the affirmative, arguing that states were infringing private property rights without paying for them. Justice Alito stated flatly, "Sixteen examples is not enough," and expressed doubt that merely because there were acts of infringement there were constitutional violations. Justice Kagan also asked how many violations were needed to indicate a constitutional problem, reminding Shaffer that the Court in Florida Prepaid held that eight cited instances of patent infringement were not enough. Shaffer argued that patents and copyrights were fundamentally different, but Justice Kagan suggested that 16 could be considered "a really low number," adding, "That wouldn't strike me as a major national problem." Shaffer stated that the 16 instances cited in the brief involved multiple acts of infringement or bad-faith conduct and also argued that "dozens of comments" indicated that the problem was increasing in severity. Justice Breyer also expressed doubt about the Section 5 argument, suggesting that if there was no indication that patent infringement by states had increased markedly after Florida Prepaid, there might not be a major problem with copyright infringement either.
Respondents’ argument. On behalf of the respondents, North Carolina Deputy Solicitor General Ryan Park argued that "immunity from private lawsuits seeking money damages was inherent in the nature of sovereignty at the founding and remains today." According to Park, Shaffer "failed to identify any historical evidence that anyone at the founding remotely contemplated that the intellectual property clause would allow for damages lawsuits against states." Park pointed out that a federal court did not award damages in a copyright infringement action against a state until the 1970s. As for the Section 5 argument, Park said, "Copyright infringement rarely rises to a constitutional violation at all, let alone pose[s] the kind of serious constitutional threat that allows for expansive remedies like abrogation."
Responding to a question from Justice Breyer about whether states would be able to concoct a money-making scheme based on infringing the copyrights to popular movies without being liable under the Copyright Act, Ryan asserted that sovereign immunity did not absolve the states of their obligation to comply with federal law, adding that the ordinary remedy required under the Constitution when a sovereign violates federal rights is an injunction, rather than money damages. Ryan also argued that in extreme cases, copyright owners could bring direct constitutional claims.
Addressing the prongs of the Section 5 test, Justice Ginsburg opined that North Carolina’s infringing use seemed "pretty intentional." Ryan responded that it might be so if the state had not explicitly bargained for a provision in an earlier settlement agreement saying that the state could use Allen’s images for non-commercial purposes. Ryan also argued that a pending breach of contract action between the parties—in which North Carolina had not asserted sovereign immunity—showed that alternative remedies existed for the conduct giving rise to the infringement claim.
In response to a question from Justice Kagan asking what Congress could have done to enact a statute that passed Section 5 muster, Ryan said that Congress could have focused on intentional infringement and made a finding that the problem was widespread and without adequate alternative remedies. Justice Kagan suggested that most acts of infringement were intentional because they involved actual copying, meaning that they would be constitutional violations. In response, Ryan invoked the "proportionality" prong of the test, arguing that the "exorbitant" statutory damages available under the Copyright Act were not required by due process. Ryan also pointed out that "a whole range of copying doesn't violate the Copyright Act at all," such as when the fair use doctrine applies.
The case is Dkt. No. 18-877.
Attorneys: Derek L. Shaffer (Quinn Emanuel Urquhart & Sullivan, LLP) for Frederick L. Allen and Nautilus Productions, LLC. Ryan Park, Deputy Solicitor General, for Roy A. Cooper, III, Governor of North Carolina.
Companies: Nautilus Productions, LLC
MainStory: TopStory Copyright
Interested in submitting an article?
Submit your information to us today!Learn More
IP Law Daily: Breaking legal news at your fingertips
Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on intellectual property legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.