By Peter Reap, J.D., LL.M.
North Carolina, the North Carolina Department of Natural and Cultural Resources, and various state officials acting in their official capacities—who were sued in a copyright infringement action brought by a videographer and his affiliate who produced photos and videos depicting a salvaged ship of Blackbeard the pirate—were entitled to Eleventh Amendment immunity from suit in federal court, the U.S. Court of Appeals in Richmond has decided. The defendants did not waive their immunity in a settlement agreement with the plaintiffs; the federal Copyright Remedy Clarification Act did not abrogate their immunity; and Ex parte Young did not suffice to provide the plaintiffs with a valid exception to their immunity. Further, the plaintiffs’ claims against the state officials in their individual capacities were precluded by qualified immunity and by legislative immunity for their alleged involvement in enacting an allegedly unconstitutional state statute relating to shipwrecks. The federal district court in Raleigh erred in finding to the contrary on each of the above issues; its rulings were reversed, and the dispute was remanded with instructions to dismiss without prejudice the plaintiffs’ claims against North Carolina, the Department, and the public officials acting in their official capacities and to dismiss with prejudice the remaining claims against the officials in their individual capacities (Allen v. Cooper, July 10, 2018, Niemeyer, P.).
In 1717, the pirate Blackbeard captured a French merchant vessel and renamed her Queen Anne’s Revenge. Blackbeard armed the Revenge with 40 cannons and made her his flagship. But the following year, the Revenge ran aground about a mile off the coast of Beaufort, North Carolina, and was abandoned.
On November 21, 1996, Intersal, a private research and salvage firm operating under a permit issued by North Carolina, discovered the wreck of the Revenge, and on September 1, 1998, Intersal, along with Maritime Research Institute, an affiliated entity, entered into a 15-year salvage agreement with the Department. Under the agreement, Intersal and Maritime Research acknowledged North Carolina’s ownership of the shipwreck and the ship’s artifacts, and North Carolina acknowledged Intersal’s and Maritime Research’s salvage rights. The agreement provided that "Except as provided in paragraph 20 and this paragraph, Intersal shall have the exclusive right to make and market all commercial narrative (written, film, CD Rom, and/or video) accounts of project related activities undertaken by the Parties."
The agreement made an exception for the creation of a "non commercial educational video and/or film documentary" and provided that the parties would cooperate in making such an educational documentary. And Paragraph 20 provided that "The Department shall have the right to authorize access to, and publish accounts and other research documents relating to, the artifacts, site area, and project operations for non commercial educational or historical purposes."
Intersal retained plaintiff Nautilus Productions, co-plaintiff Frederick Allen’s production company, to document the salvage of the Revenge. Allen registered 13 copyrights in his video works with the U.S. Copyright Office, each copyright covering a year’s worth of footage. In 2013, Allen and Nautilus took the position that the Department’s publication of Allen’s work on the Internet without his consent infringed Allen’s copyrights, leading to a settlement agreement dated October 15, 2013. The 2013 Settlement Agreement divided Allen and Nautilus’s video and photographic documentation, treating some of the footage as "commercial documentaries" and some as "non-commercial media," for purposes of clarifying the parties’ respective rights. Finally, the 2013 Settlement Agreement addressed the video footage and still photographs as public records.
Following the settlement, Allen and Nautilus alleged that the Department "resumed infringing [Allen’s] copyrights" by "publish[ing] ... and/or display[ing]" various "works" on the Internet. Allen and Nautilus commenced this action in December 2015, naming as defendants the State of North Carolina, the Department, the Governor, and six officials in the Department, among others. Except for the Governor, who was sued only in his official capacity, each of the individual defendants was sued in both his or her official and individual capacities. The district court rejected North Carolina’s claims of immunity. North Carolina (together with the Department, hereinafter North Carolina) filed this interlocutory appeal, and Allen and Nautilus filed a cross-appeal.
North Carolina and officials in their official capacities. Invoking the Eleventh Amendment, North Carolina and its officials acting in their official capacities claimed that they are immune from suit in federal court.
The 2013 Settlement Agreement. Allen and Nautilus (the plaintiffs) argued that North Carolina waived its sovereign immunity based on the 2013 settlement which provides: "In the event [North Carolina], Intersal, or [Allen and] Nautilus breaches this Agreement, [North Carolina], Intersal, or [Allen and] Nautilus may avail themselves of all remedies provided by law or equity." However, this provision could not be read as a waiver of North Carolina’s Eleventh Amendment immunity, the Fourth Circuit held.
First, Eleventh Amendment immunity protects the States, their agencies, and officials from suit in federal court. Yet, the subject provision in the 2013 Settlement Agreement made no reference to federal court, state court or, for that matter, any court. Moreover, the provision stated only that each party may pursue available remedies as provided by law or equity. Consequently, legal or equitable limitations on those remedies must also apply. And one of those limitations is that a State, its agencies, and its officials acting in their official capacities cannot be sued in federal court without their consent. This provision fell far short of the clear statement, the court said.
Copyright Remedy Clarification Act. Next, the plaintiffs contended that Congress validly abrogated North Carolina’s Eleventh Amendment immunity with the enactment of the Copyright Remedy Clarification Act. That Act 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].
17 U.S.C. §511(a).
The question presented by that argument reduced to whether Congress validly exercised its constitutional power when enacting the Copyright Remedy Clarification Act, the court observed. The plaintiffs argued that Congress validly enacted the Copyright Remedy Clarification Act because it properly invoked Article I’s Patent and Copyright Clause, which authorizes Congress to "secur[e] for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." But, 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 court reasoned.
The plaintiffs also argued that Congress validly enacted the Copyright Remedy Clarification Act under the authority granted to it in Sectiom 5 of the Fourteenth Amendment, which affords Congress the "power to enforce, by appropriate legislation," the Amendment’s substantive guarantees. The Supreme Court has interpreted Section 5 as permitting Congress to abrogate sovereign immunity for "a somewhat broader swath of [state] conduct, including that which is not itself forbidden by the [Fourteenth] Amendment," the appellate court noted. Bd. of Trustees of Univ. of Ala. v. Garrett, 531 U.S. 356, 365 (2001). However, in light of the competing equities at stake, it has circumscribed Congress’s authority to do so in two respects. Congress must both (1) make clear that it is relying on Section 5 of the Fourteenth Amendment as the source of its authority and (2) ensure that any abrogation of immunity is congruent and proportional to the Fourteenth Amendment injury to be prevented or remedied.
In enacting the Copyright Remedy Clarification Act, Congress satisfied neither requirement, the Fourth Circuit determined. First, in enacting the Copyright Remedy Clarification Act, Congress relied on the Copyright Clause in Article I of the Constitution, rather than Section 5 of the Fourteenth Amendment. Second, Congress also did not, as required, limit the scope of the Copyright Remedy Clarification Act to enforcement of rights protected by the Fourteenth Amendment. Rather, in abrogating sovereign immunity, Congress used language that sweeps so broadly that the Act cannot be deemed a congruent and proportional response to the Fourteenth Amendment injury with which it was confronted. Thus, the Copyright Remedy Clarification Act’s wholesale abrogation of sovereign immunity for claims of copyright infringement is grossly disproportionate to the relevant injury under the Fourteenth Amendment, and therefore the abrogation cannot be sustained, the court explained, joining the numerous other courts to have considered this issue and finding the Act invalid.
Ex parte Young. Finally, Allen and Nautilus contended that their claims against the state officials for injunctive and declaratory relief may proceed under the exception to Eleventh Amendment immunity recognized in Ex parte Young, 209 U.S. 123 (1908). Under Ex parte Young, private citizens may sue state officials in their official capacities in federal court to obtain prospective relief from ongoing violations of federal law. The plaintiffs alleged two ongoing violations from which they seek prospective relief: (1) North Carolina’s continuing infringement of Allen’s copyrights and (2) its continuing enforcement of an unconstitutional statute, namely, N.C. Gen. Stat. §121-25(b), which designates images of shipwrecks in the State’s custody as public records.
As to the alleged ongoing copyright infringement, North Carolina, however, maintained that shortly before the November 2016 hearing on its motion to dismiss, it removed those allegedly infringing materials from the Internet. The plaintiffs responded that the complaint nonetheless alleged generally instances of ongoing Internet infringement beside the six specifically alleged violations, referring to a paragraph that alleged, in a conclusory fashion, that displays of copyrighted materials were continuing "at least at th[ose] locations." The court rejected this argument, finding that because the only ongoing infringement that Allen and Nautilus plausibly alleged has concededly ended, they cannot employ the Ex parte Young exception to address their fear of future infringements.
The other alleged ongoing violation North Carolina’s purported continuing "enforcement" of Section 121-25(b), also cannot support application of the Ex parte Young exception, the court held. When a plaintiff sues "to enjoin the enforcement of an act alleged to be unconstitutional," the exception applies "only where a party defendant in [such] a suit ... has ‘some connection with the enforcement of the Act.’" Hutto v. S.C. Ret. Sys., 773 F.3d 536, 550 (4th Cir. 2014). It was apparent that none of the state officials would or could have any role in enforcing the statute, as required. Thus, Ex parte Young did not provide Allen and Nautilus with an exception to the Eleventh Amendment immunity claimed by North Carolina.
Officials in their individual capacities. Qualified immunity "shields officials from civil liability so long as their conduct ‘does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.’" Mullenix v. Luna, 136 S. Ct. 305, 308 (2015). Based on the provisions of the 2013 Settlement Agreement and the then-applicable public records law, it is far from clear whether the Department was prohibited from displaying Allen’s copyrighted materials in the manner alleged in the complaint, the court opined. Here, reasonable officials in the position of the North Carolina officials would not have understood beyond debate that their publication of the material violated Allen’s rights under the Copyright Act. Thus, the court determined that Allen and Nautilus’s copyright claims against the North Carolina officials in their individual capacities are precluded by qualified immunity. It also found that legislative immunity shields the North Carolina officials in their individual capacities for their alleged involvement in the enactment of Section 121-25(b).
The case is Nos. 17-1522 and 17-1602.
Attorneys: Ryan Y. Park, North Carolina Department of Justice, for Frederick L. Allen. Susan Freya Olive (Olive & Olive, PA) for Roy A. Cooper, III.
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