States Immune From Copyright Infringement Claims

Monday, March 23, 2020

In this case, the Supreme Court closed the loop on sovereign immunity arguments stemming from the CRCA. Paired with the patent decision of Florida Prepaid - States are immune for infringement claims in federal courts. IP owners would do well to police their ownership and use caution when dealing with state entities.

TAGS:Stare Decisis, Copyright, Sovereign Immunity, Due Process, Patent,

Key Ideas From Case

States Immune from Registered Copyright Claims

Allen recorded videos and took photos of the recovery for more than a decade. He registered copyrights in all of his works. When North Carolina published some of Allens videos and photos online, Allen sued for copyright infringement. North Carolina moved to dismiss the lawsuit on the ground of state sovereign immunity. Allen countered that the Copyright Remedy Clarification Act of 1990 (CRCA) removed the States sovereign immunity in copyright infringement cases. The District Court agreed with Allen, finding in the CRCAs text a clear congressional intent to abrogate state sovereign immunity and a proper constitutional basis for that abrogation. The court acknowledged that Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U. S. 627, precluded Congress from using its Article I powers including its authority over copyrights-to deprive States of sovereign immunity. But the court held that Congress could accomplish its objective under Section 5 of the Fourteenth Amendment. The Fourth Circuit reversed, reading Florida Prepaid to prevent recourse to both Article I and Section 5.

Federal Courts cannot hear Infringement Suits against States

Congress lacked authority to abrogate the States immunity from copyright infringement suits in the CRCA. In general, a federal court may not hear a suit brought by any person against a nonconsenting State. But such suits are permitted if Congress has enacted unequivocal statutory language abrogating the States immunity from suit, Seminole Tribe of Fla. v. Florida, 517 U. S. 44, 56, and some constitutional provision allows Congress to havethus encroached on the States sovereignty. Congress used clear language to abrogate the States immunity from copyright infringement suits in the CRCA. Allen contends that Congresss constitutionalpower to do so arises either from the Intellectual Property Clause, Art. I, §8, cl. 8, or from Section 5 of the Fourteenth Amendment, which authorizes Congress to enforce the commands of the Due Process Clause. Each contention is foreclosed by precedent.

Special Justification Required to Overrule Precedent

The Intellectual Property Clause enables Congress to grant bothcopyrights and patents. In Allens view, Congresss authority to abrogate sovereign immunity from copyright suits naturally follows, in order to secur[e] a copyright holders exclusive Right as against a States intrusion. But that theory was rejected in Florida Prepaid. That case considered the constitutionality of the Patent Remedy Act,which, like the CRCA, attempted to put States on the same footingas private parties in patent infringement lawsuits. 527 U. S., at 647, 648. Florida Prepaid acknowledged that Congresss goal of providing uniform remedies in infringement cases was a proper Article I concern, but held that Seminole Tribe precluded Congress from using its Article I powers to circumvent the limits sovereign immunityplace[s] upon federal jurisdiction, 517 U. S., at 73. For the same reason, Article I cannot support the CRCA. Allen reads Central Va. Community College v. Katz, 546 U. S. 356 to have replaced Seminole Tribes general rule with a clause-by-clause approach to evaluating whether aparticular constitutional provision allows the abrogation of sovereign immunity. But Katz rested on the unique history of the Bankruptcy Clause. 546 U. S., at 369, n. 9. And even if the limits of Katzs holding were not so clear, Florida Prepaid, together with stare decisis, would doom Allens argument. Overruling Florida Prepaid would require a special justification, over and above the belief that the precedent was wrongly decided, Halliburton Co. v. Erica P. John Fund, Inc., 573 U. S. 258, 266, which Allen does not offer.

Congressional Power under Const Amend 14(5) Must have congruance and proportionality

Section 5 of the Fourteenth Amendment allows Congress to abrogate the States immunity as part of its power to enforce the Amendments substantive prohibitions. City of Boerne v. Flores, 521 U. S. 507, 519. For Congresss action to fall within its Section 5 authority, [t]here must be a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end. Id., at 520. This test requires courts to consider the nature and extent of state conduct violating the Fourteenth Amendment and to examine the scope of Congresss response to that injury. Florida Prepaid again serves as the critical precedent. There, the Court defined the scope of unconstitutional patent infringement as intentional conduct for which there is no adequate state remedy. 527 U. S., at 642- 643, 645. Because Congress failed to identify a pattern of unconstitutional patent infringement when it enacted the Patent Remedy Act, the Court held that the Act swept too far. Given the identical scope ofthe CRCA and Patent Remedy Act, this case could be decided differently only if the CRCA responded to materially stronger evidence of unconstitutional infringement. But as in Florida Prepaid, the legislative record contains thin evidence of infringement. Because this record cannot support Congresss choice to strip the States of their sovereignimmunity in all copyright infringement cases, the CRCA fails the congruence and proportionality test.

States are Immune from Patent and Copyright Infringement Claims

In two basically identical statutes passed in the early1990s, Congress sought to strip the States of their sovereign immunity from patent and copyright infringement suits.Not long after, this Court held in Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U. S. 627 (1999), that the patent statute lacked a valid constitutional basis. Today, we take up the copyright statute. We find that our decision in Florida Prepaid compels the same conclusion.

States Immune even with Pattern of Abusive Copyrght Infringement

The District Court agreed. Quoting the CRCAs text, thecourt first found that Congress has stated clearly its intent to abrogate sovereign immunity for copyright claims against a state. 244 F. Supp. 3d 525, 533 (EDNC 2017).And that abrogation, the court next held, had a proper constitutional basis. Florida Prepaid and other precedent, theDistrict Court acknowledged, precluded Congress from using its Article I powers-including its authority overcopyrights-to take away a States sovereign immunity.See 244 F. Supp. 3d, at 534. But in the courts view, Florida Prepaid left open an alternative route to abrogation. Given the States pattern of abus[ive] copyright infringement,the court held, Congress could accomplish its object under Section 5 of the Fourteenth Amendment. 244 F. Supp. 3d, at 535

States Enjoy Sovereign Immunity

In our constitutional scheme, a federal court generally may not hear a suit brought by any person against a non-consenting State. That bar is nowhere explicitly set out in the Constitution. The text of the Eleventh Amendment (thesingle most relevant provision) applies only if the plaintiff is not a citizen of the defendant State.²^{But this Court has long understood that Amendment to}^{stand not so much for what it says}^{as for the broader}^{presupposition of our con}^{stitutional structure which it confirms.}^Blatchford^v.^Na^{tive Village of Noatak}^{, 501 U. S. 775, 779 (1991). That premise, the Court has explained, has several parts. First,}^{each State is a sovereign entity in our federal system.}^{Seminole Tribe of Fla.}^v.^Florida^{, 517 U. S. 44, 54 (1996). Next,}^{[i]t is inherent in the nature of sovereignty not to beamenable to [a] suit}^{absent consent.}^Id.,^{at 54, n. 13 (quot}^{ing The Federalist No. 81, p. 487 (C. Rossiter ed. 1961) (A.Hamilton)). And last, that fundamental aspect of sover}^{eignty constrains federal}^{judicial authority.}

2 Conditions Required to Meet in order to Sue States

This Court has permitted a federal court to entertain a suit against a nonconsenting State on two conditions. First, Congress must have enacted unequivocal statutory language abrogating the States immunity from the suit. Seminole Tribe, 517 U. S., at 56 (internal quotation marks omitted); see Dellmuth v. Muth, 491

U. S. 223, 228 (1989) (requiring Congress to mak[e] its intention unmistakably clear). And second, some constitutional provision must allow Congress to have thus encroached on the States sovereignty. Not even the most crystalline abrogation can take effect unless it is a validexercise of constitutional authority. Kimel v. Florida Bd. of Regents, 528 U. S. 62, 78 (2000).

Interestingly, Court thinks that Bankrupty Suits are consented too by States from Convention... but Not Copyright?

Indeed, Katzs view of the Bankruptcy Clause had a yet more striking aspect, which further separates it from anyother. The Court might have concluded from its analysis that the Clause allows Congress to abrogate the States sovereign immunity (as Allen argues the Intellectual Property Clause does). But it did not; it instead went further. Relying on the above account of the Framers intentions, theCourt found that the Bankruptcy Clause itself did the abrogating. Id., at 379 ([T]he relevant abrogation is the oneeffected in the plan of the [Constitutional] Convention). Or stated another way, we decided that no congressional abrogation was needed because the States had already agreed in the plan of the Convention not to assert any sovereign immunity defense in bankruptcy proceedings. Id., at 377.

14th Amendment Due Process Applies to Copyright Property Interests

When does the Fourteenth Amendment care about copyright infringement? Sometimes, no doubt. Copyrights are a form of property. See Fox Film Corp. v. Doyal, 286 U. S. 123, 128 (1932). And the Fourteenth Amendment bars the States from depriv[ing]a person of property without due process of law. But even if sometimes, by no means always. Under our precedent, a merely negligent act does not deprive a person of property. See Daniels v. Williams, 474 U. S. 327, 328 (1986). So an infringement must be intentional, or at least reckless, to come within the reach of the Due Process Clause. See id., at 334, n. 3 (reserving whether reckless conduct suffices). And more: A State cannot violate that Clause unless it fails to offer an adequate remedy for an infringement, because such a remedy itself satisfies the demand of due process. See Hudson v. Palmer, 468 U. S. 517, 533 (1984). That means within the broader world of state copyright infringement is a smaller one where the Due Process Clause comes into play

14th Amendment Due Process Applies to Patent Ownership Rights

Because the same is true of patent infringement, Florida Prepaid again serves as the critical precedent. That decision defined the scope of unconstitutional infringement in line with the caselaw cited above-as intentional conduct for which there is no adequate state remedy. See 527 U. S., at 642-643, 645. It then searched for evidence of that sort of infringement in the legislative record of the Patent Remedy Act. And it determined that the statutes abrogation of immunity-again, the equivalent of the CRCAs-was out of all proportion to what it found. That analysis is the starting point of our inquiry here. And indeed, it must be the ending point too unless the evidence of unconstitutional infringement is materially different for copyrights than patents. Consider once more, then, Florida Prepaid, now not on Article I but on Section 5.