Business Law Journal

Plaintiff Frederick Allen (Allen) was hired to film and photograph the salvaging of Blackbeard’s pirate ship, Queen Anne’s Revenge, which had sunk a mile off the North Carolina coast in 1718.  Pursuant to federal and state law, the shipwreck belonged to the state of North Carolina.  The State contracted with a company to salvage the wreck, and the State’s contractor in turn hired Allen to document the salvaging.  Allen spent more than a decade creating videos and photographs of the salvage effort and registered copyrights in all of those works.  Thus, while North Carolina may have owned the shipwreck, Allen owned the copyright in the photographs and videos he took and created of the salvaging of the shipwreck.

After North Carolina uploaded and posted Allen’s videos and photographs to the State’s website and published his photographs in a newsletter over Allen’s objections, Allen sued the State for copyright infringement.  North Carolina moved to dismiss, invoking sovereign immunity and “the general rule that federal courts cannot hear suits brought by individuals against nonconsenting States.”  Allen contended in response that the CRCA abrogated sovereign immunity in copyright infringement cases based on the language in the CRCA, which states governments “shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity . . . from suit in Federal court . . . for a violation of any of the exclusive rights of a copyright owner.”  17 U.S.C. § 511(a).

The District Court agreed with Allen, holding that the purported abrogation in CRCA was valid and finding that Congress clearly intended to abrogate state sovereign immunity for copyright claims against a state in the CRCA.  The District Court also found a proper constitutional basis for the abrogation under Section 5 of the Fourteenth Amendment, but not under Article I of the Constitution, which contains the Intellectual Property Clause enabling Congress to grant copyrights and patents.  The District Court acknowledged that Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999), which struck down the Patent Remedy Act (a statute similar to the CRCA), precluded Congress from using its Article I powers to remove a state’s sovereign immunity, but left open the possibility of abrogation under Section 5 of the Fourteenth Amendment.  The Fourth Circuit reversed, holding that Congress could not abrogate sovereign immunity under the CRCA on either basis.

The Supreme Court affirmed the Fourth Circuit.  In its analysis, the Court explained that precedent requires two conditions before a nonconsenting state can be sued in federal court.  First, Congress must have enacted a statute with unequivocal language abrogating sovereign immunity.  Second, some constitutional provision must allow Congress to take away the sovereign immunity.  The issue before the Court was not whether Congress intended to shelve state sovereign immunity in copyright infringement actions under the CRCA, which no one disputed, but whether Congress had the authority to do so.  Allen argued that both Article I and Section 5 of the Fourteenth Amendment authorized Congress to enact the CRCA.  However, the Court found that Florida Prepaid and other precedent foreclosed each of Allen’s arguments.

Allen first argued that Article I of the Constitution enables Congress to grant copyright and patents, and therefore Congress’s authority to abrogate sovereign immunity from copyright suits naturally follows.  The Court noted that it had rejected this reasoning in Florida Prepaid when it evaluated sovereign immunity under the Patent Remedy Act, a statute “basically identical” to the CRCA.  The Court explained that in Florida Prepaid, the Supreme Court relied on a prior opinion in concluding Article I could not be used to circumvent sovereign immunity.  Accordingly, the Court held that because the Intellectual Property Clause in Article I applied to both copyrights and patents, and could not be used to avoid sovereign immunity in the patent infringement context, Florida Prepaid and stare decisis required the Court find that Article I also could not be used to avoid sovereign immunity in the copyright context.

Allen next contended that Section 5 of the Fourteenth Amendment, which authorizes Congress to enforce the Due Process Clause, also permits the CRCA’s abrogation of sovereign immunity.  The Court explained that abrogation under this section must be tailored to “remedy or prevent” conduct violating due process rights and that “[t]here must be congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end.”  The Court further explained that only intentional or reckless copyright infringement, and not merely negligent infringement, could rise to the level of property deprivation allowing Congress to act under Section 5 of the Fourteenth Amendment.  Using Florida Prepaid again as “critical precedent,” the Court looked to the legislative record for any pattern of abusive copyright infringement and found the evidence to be minimal with most incidents being unintentional.  Thus, the Court concluded that the CRCA failed the “congruence and proportionality” test because it was overbroad in extending to all infringement cases, and not just those that would amount to a constitutional violation.

Significantly, the Court’s Allen v. Cooper decision does not foreclose the possibility of future legislation that could nullify sovereign immunity while still meeting constitutional standards.  Writing for the majority, Justice Kagan remarked that the CRCA was passed before the Court had decided important cases on immunity abrogation under Article I and the “congruence and proportionality” test, but that going forward, Congress will “know” the rules and enact tailored statutes to prevent due process violations.  In his concurrence, Justice Thomas disagreed with the majority’s discussion regarding future copyright legislation and stated that the Court “should not purport to advise Congress on how it might exercise its legislative authority, nor give our blessing to hypothetical statutes or legislative records not at issue here.”  It remains to be seen whether Congress will adhere to the rules as the majority suggests.  Until further legislation is passed, however, states will be immune from copyright infringement actions.

AALRR has a dedicated group of attorneys on its Intellectual Property Team with the experience and expertise to vigorously enforce your copyrights and defend you against claims of copyright infringement.  Attorneys on the Firm’s Intellectual Property Team can also assist you with registration of your copyrights with the United States Copyright Office.  Contact the authors for assistance with your copyright and other intellectual property needs.

This AALRR post is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.

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