IP Law Daily High Court strikes down law removing States’ immunity from copyright infringement liability
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Monday, March 23, 2020

High Court strikes down law removing States’ immunity from copyright infringement liability

By Cheryl Beise, J.D.

Like the very similar Patent Remedy Act previously invalidated by the Court, the Copyright Remedy Clarification Act failed to abrogate States’ sovereign immunity.

Congress lacked the authority to abrogate the States’ immunity from copyright infringement suits through enactment of the Copyright Remedy Clarification Act of 1990 (CRCA), a unanimous Supreme Court has held. Writing on behalf of the Court, Justice Elena Kagan explained that the CRCA was "materially similar" to the Patent Remedy Act, a statute the Court struck down in Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999). In Florida Prepaid, the Court held that Congress could not use its Article I power over patents to remove the States’ immunity and that the Patent Remedy Act’s sweeping remedy was out of proportion to any due process problem created by a pattern of "unconstitutional patent infringement" committed by the States. While there was no justification for overruling Florida Prepaid, the Court observed that nothing prevented Congress from passing a valid copyright abrogation law in the future to "effectively stop States from behaving as copyright pirates" (Allen v. Cooper, March 23, 2020, Kagan, E.).

Litigation history. In 1996, a marine salvage company named Intersal, Inc., discovered the shipwreck of the Queen Anne’s Revenge, a vesselcommandeered by Edward Teach, the pirate known as Blackbeard. Under federal and state law, the wreck belonged to the state of North Carolina. The State contracted with Intersal to take charge of the recovery activities. Intersal in turn retained Frederick Allen, a local videographer, to document the operation. For a decade, Allen created videos and photos of divers’ efforts to salvage the wreckage.Allen registered copyrights in all his works. Allen brought a copyright infringement suit North Carolina, the North Carolina Department of Natural and Cultural Resources, and various state officials (collectively, the "State") for publishing some of his videos and photos without permission. Allen and the State entered into a settlement agreement, but another infringement dispute arose. The district court granted the defendants’ motion to dismiss the suit as barred by the Copyright Remedy Clarification Act of 1990 (CRCA). CRCA provides that a State "shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in Federal court" for copyright infringement. 17 U. S. C. §511(a).

On interlocutory appeal, the U.S. Court of Appeals in Richmond reversed, holding that the defendants were entitled to Eleventh Amendment immunity from suit. The Fourth Circuit ruled that the CRCA was invalid because Congress cannot rely on the enumerated power in Article I over copyright to abrogate sovereign immunity. The Fourth Circuit concluded that CRCA was "materially similar" to the Patent Remedy Act, a statute the Supreme Court struck down in Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999). In Florida Prepaid, the Court held Congress could not abrogate state sovereign immunity under its Article I powers. Allen petitioned for review of the Fourth Circuit’s decision on the question of whether Congress abrogated state sovereign immunity via the CRCA.

The High Court unanimously affirmed the Fourth Circuit’s judgment. Justice Kagan delivered the opinion of the Court, in which Chief Justice Roberts and Justices Alito, Sotomayor, Gorsuch, and Kavanaugh joined, and in which Justice Thomas joined, except for two paragraphs. Justice Thomas filed an opinion concurring in part and concurring in the judgment. Justice Breyer, joined by Justice Ginsburg, filed an opinion concurring in the judgment.

Abrogation of sovereign immunity. Generally, the doctrine of sovereign immunity prevents any federal court from hearing a suit brought by any person against a nonconsenting State. However, such suits are permitted under two conditions: (1) Congress has enacted "unequivocal statutory language" abrogating the States’ immunity from suit, and (2) some constitutional provision allows Congress to encroach on the States’ sovereignty.

In this case, it was undisputed that Congress in CRCLA "used clear enough language to abrogate the States’ immunity from copyright infringement suits," the Court noted. The only question was whether Congress had the authority to take that action. Allen argued that it did—either under the copyright clause of Article I, or alternatively, under Section 5 of the Fourteenth Amendment, which authorizes Congress to "enforce" the commands of the Due Process Clause. The Court rejected both arguments.

Article I Copyright Clause. Congress has power under Article I "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." §8, cl. 8. That provision, the Intellectual Property Clause, enables Congress to grant both copyrights and patents. "And the monopoly rights so given impose a corresponding duty (i.e., not to infringe) on States no less than private parties," the Court noted.

Allen argued that by virtue of its authority under the Intellectual Property Clause, Congress also has the authority to abrogate sovereign immunity. However, this theory was precluded by Florida Prepaid, which held that Congress could not use its Article I power over patents to remove the States’ immunity. The Florida Prepaid Court followed Seminole Tribe of Fla. v. Florida, 517 U. S. 44, 73 (1996), in which the Court held that "Article I cannot be used to circumvent" the limits sovereign immunity "place[s] upon federal jurisdiction."

Allen contended that Central Virginia Community College v. Katz, 546 U. S. 356 (2006) superseded Seminole Tribe’s general rule with a clause-by-clause approach to evaluating whether a particular constitutional provision allows the abrogation of sovereign immunity. The Court disagreed, explaining that Katz was distinguishable because itrested on the "singular nature" of bankruptcy jurisdiction. More importantly, acceptance of Allen’s argument would mean overruling Florida Prepaid. The Court was loath to trod that path. "To reverse a decision, we demand a ‘special justification,’ over and above the belief ‘that the precedent was wrongly decided,’" the Court said. Allen provided no such special justification.

Fourteenth Amendment Due Process. Allen next invoked Section 5 for the Fourteenth Amendment, which authorizes Congress to "enforce" the commands of the Due Process Clause. Referencing Fox Film Corp. v. Doyal, 286 U. S. 123, 128 (1932), the Court observed that copyrights are a form of property and that the Fourteenth Amendment bars the States from "depriv[ing]" a person of property "without due process of law." The Court also noted that Section 5 of the Fourteenth Amendment allows Congress to abrogate the States’ immunity as part of its power "to enforce" the Amendment’s substantive prohibitions. However, such an abrogation statute must be tailored to "remedy or prevent" conduct infringing the Fourteenth Amendment’s substantive prohibitions. In order to find a congressional abrogation valid under Section 5, there must be a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end. This "congruence and proportionality" test requires courts to consider the nature and extent of state conduct violating the Fourteenth Amendment and to examine the scope of Congress’s response to that injury.

The Court again looked to Florida Prepaid for guidance. Florida Prepaid defined the scope of unconstitutional patent infringement as intentional conduct for which there is no adequate state remedy. The Court in Florida Prepaid reasoned that because Congress failed to identify a pattern of "unconstitutional patent infringement" when it enacted the Patent Remedy Act—indeed there was only "thin evidence" of any patent infringement by States—the Act’s sweeping remedy was out of proportion to any due process problem. That imbalance made it impossible to view the legislation "as responsive to, or designed to prevent, unconstitutional behavior." Because there was no evidence that unconstitutional infringement by States is materially different for copyrights than patents, the Court was bound to reach the same conclusion here. "In this case, as in that one, the statute aims to ‘provide a uniform remedy’ for statutory infringement, rather than to redress or prevent unconstitutional conduct," the Court said.

The Court hastened to add that its decision did not prevent Congress from passing a valid copyright abrogation law. Congress in the future would presumably approach the issue differently than when it passed the CRCA, benefitting from the Court’s intervening guidance. If it detects violations of due process, Congress can enact a statute to "effectively stop States from behaving as copyright pirates," the Court said. "Even while respecting constitutional limits, it can bring digital Blackbeards to justice."

Justice Thomas’s concurring opinion. Justice Thomas filed an opinion concurring in part and concurring in the judgment. Justice Thomas agreed with the Court’s conclusion that the CRCA does not validly abrogate States’ sovereign immunity. However, he wrote separately to "note two disagreements and one question that remains open for resolution in a future case."

Justice Thomas agreed that Florida Prepaid is binding precedent and that the petitioners failed to demonstrate that it was incorrectly decided. However, he took issue with the majority’s view that special justification is needed to overrule precedent because error alone "cannot overcome stare decisis." That approach does not comport with the Court’s judicial duty under Article III. According to Justice Thomas, if Florida Prepaid, or any other decision is demonstrably erroneous, the Court is obligated to "correct the error, regardless of whether other factors support overruling the precedent."

Justice Thomas also disagreed with the majority’s discussion regarding future copyright legislation. In his view, the Court should opine on only the case before it, in light of the record before it and not advise Congress on how it might exercise its legislative authority.

Finally, Justice Thomas opined that the question of whether copyrights are property within the original meaning of the Fourteenth Amendment’s Due Process Clause remains open. He pointed out that Fox Film Corp. addressed "property" in the context of state tax laws, not the Due Process Clause. "And although we stated in Florida Prepaid that patents are ‘property’ for due process purposes, we did not analyze the Fourteenth Amendment’s text, and neither of the cases we cited involved due process," Justice Thomas said.

Justice Breyer concurring opinion. Justice Breyer, joined by Justice Ginsburg, filed an opinion concurring in the judgment. Justice Breyer suggested that the Intellectual Property Clause of the Constitution can "support a federal law providing that, when proven to have pirated Intellectual Property, States must pay for what they plundered." In Breyer’s view, relying not on the Intellectual Property Clause, but on §5 of the Fourteenth Amendment to protect authors and artists is ill-advised. He reiterated his opinion that both Seminole Tribe and Florida Prepaid were erroneously decided. "But recognizing that my longstanding view has not carried the day, and that the Court’s decision in Florida Prepaid controls this case, I concur in the judgment," Judge Breyer said.

The case is No. 18-877.

Attorneys: Derek L. Shaffer (Quinn Emanuel Urquhart & Sullivan, LLP) for Frederick L. Allen. Matthew W. Sawchak, North Carolina Dept. of Justice, for Roy A. Cooper, III.

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