February 25, 2020

Allen v. Cooper

STATE SOVEREIGN IMMUNITY

Did Congress Validly Abrogate State Sovereign Immunity Under the Copyright Remedy Clarification Act, Which Authorizes Creators of Original Works to Sue a State in Federal Court for Copyright Infringement?

CASE AT A GLANCE

Frederick Allen and his production company, Nautilus Productions LLC, contracted with a private research and salvage firm to document the exploration and salvage of the shipwreck of Queen Anne’s Revenge, near Beaufort Inlet, North Carolina. Allen and his company documented the salvage over two decades and produced a trove of video and still photographs showing the underwater shipwreck and the recovery of various items from it. Allen registered the works with the U.S. Copyright Office. Nevertheless, North Carolina, which owns the shipwreck, copied and displayed some of these works online. Allen then sued for copyright infringement under the Copyright Remedy Clarification Act.

Docket No. 18-877
Argument Date: November 5, 2019
From: The Fourth Circuit
by Steven D. Schwinn
University of Illinois Chicago John Marshall Law School, Chicago, IL

INTRODUCTION

Under the Eleventh Amendment and related federalism principles, states enjoy sovereign immunity from lawsuits for monetary damages. Congress can abrogate this immunity, however, by enacting valid legislation that creates an individual cause of action against a state. The Court has authorized abrogation for legislation validly enacted pursuant to Section 5 of the Fourteenth Amendment. It has also authorized abrogation for legislation enacted pursuant to the Bankruptcy Clause in Article I. But it has otherwise rejected congressional attempts to abrogate state sovereign immunity.

ISSUE

Did Congress validly abrogate state sovereign immunity in the Copyright Remedy Clarification Act (CRCA) by enacting the Act pursuant to its authority under the Intellectual Property Clause in Article I or its enforcement authority under the Fourteenth Amendment?

FACTS

In 1717, the pirate Edward Teach, otherwise known as Blackbeard, captured a French merchant vessel and renamed her Queen Anne’s Revenge. Teach outfitted the Revenge with 40 cannons and made her his flagship. The Revenge sailed for just one year, however, before she ran aground near Beaufort Inlet, North Carolina. Teach then abandoned the ship.

Nearly three centuries later, in November 1996, Intersal, Inc., a private research and salvage firm, discovered the shipwreck of Queen Anne’s Revenge. Intersal entered into an agreement with the North Carolina Department of Natural and Cultural Resources (DNCR). The agreement acknowledged the state’s ownership of the shipwreck, but provided that Intersal could retain a designated portion of the financial proceeds from the sale of media relating to the Revenge and its artifacts.

In 1998, Intersal retained Frederick Allen and his production company, Nautilus Productions LLC, to document the salvage of the ship. Over the last two decades, Allen and his company have produced “a substantial archive of video and still images showing the underwater shipwreck and the efforts of the teams of divers and archeologists to recover various artifacts.” Allen registered these works with the U.S. Copyright Office; Nautilus holds the licenses and commercializes them.

Sometime before October 2013, the DNCR copied and displayed Nautilus’s works online without permission. In October 2013, the state agreed to pay Nautilus $15,000 for its infringements and agreed not to infringe the works again in the future.

Nevertheless, the DNCR again copied and published Nautilus’s copyrighted videos and photographs online and in print. Nautilus issued takedown notices, but the state refused to comply. Instead, the state enacted “Blackbeard’s Law,” an act that purported to convert the works into “public record” materials. Under the law, the state could use “[a]ll photographs, video recordings, or other documentary materials of a derelict vessel or shipwreck or its contents, relics, artifacts, or historic materials in the custody of  any agency of North Carolina government or its subdivisions” without limitation or consequence. The act purported to void any agreement, permit, or license to the contrary.

Nautilus sued the state for monetary damages for copyright infringement under the federal Copyright Remedy Clarification Act. The state moved to dismiss, arguing that it enjoyed immunity from suit under state sovereign immunity in the Eleventh Amendment. The district court denied the motion and allowed this portion of the case to move forward. The United States Court of Appeals for the Fourth Circuit reversed and dismissed the case. This appeal followed.

CASE ANALYSIS

The Eleventh Amendment provides that states are immune from suits for monetary damages in federal court. (The Supreme Court has extended this immunity to suits for monetary damages in state courts and federal administrative forums.) But Congress can abrogate this immunity by enacting valid federal legislation that provides for an individual cause of action against a state for monetary damages. For example, the Court held that Congress validly abrogated state sovereign immunity by enacting the Family and Medical Leave Act, which authorizes a state employee to sue a state for monetary damages for violating the Act. Nevada Department of Human Resources v. Hibbs, 538 U.S. 721 (2003).

The Court has ruled that Congress can abrogate state sovereign immunity by enacting valid legislation under Section 5 of the Fourteenth Amendment. This power allows Congress to enforce the substantive civil rights provisions of the Fourteenth Amendment (due process and equal protection, among others) against the states, so long as the congressional act is “congruen[t] and proportional[]” to the “evil” that Congress seeks to address. City of Boerne v. Flores, 521 U.S. 507 (1997). In plain terms, this means that Congress can outlaw actual violations of the Fourteenth Amendment and “a somewhat broader swath of [state] conduct, including that which is not itself forbidden by the Amendment.” Board of Trustees of University of Alabama v. Garrett, 531 U.S. 356 (2001). When Congress validly enacts legislation pursuant to this authority, it can also abrogate state sovereign immunity by providing an individual cause of action against a state.

But at the same time, the Court ruled in a pair of cases in the 1990s that Congress cannot abrogate state sovereign immunity by enacting legislation under its Article I powers. Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996); Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999). In 2006, the Court seemed to walk back this categorical position, however, and later ruled that Congress could abrogate state sovereign immunity by enacting legislation pursuant to its Article I power to regulate bankruptcies. Central Virginia Community College v. Katz, 546 U.S. 356 (2006).

This case tests whether Congress validly abrogated state sovereign immunity in the CRCA under both theories. If Congress validly abrogated state sovereign immunity (under either theory), Allen’s case against the state can move forward. If not, Allen’s case will be dismissed.

Allen argues first that Congress validly abrogated state sovereign immunity by enacting the CRCA under its power to provide for patents and copyrights in the Intellectual Property Clause in Article I. Allen claims that the plain text of the Clause—which authorizes Congress to “secur[e]” to creators an “exclusive Right” to their works—gives Congress plenary power over patents and copyrights. He says that the history and purposes of the Clause buttress this plain reading. He contends that Congress’s plenary power to provide protections for intellectual property means that Congress can provide a remedy for copyright owners against an infringing party, including a state. If not, he asserts, states would be free to infringe copyrights without penalty.

Allen claims that the Court’s precedents do not foreclose this result. He contends that the Court in Katz rebuffed its previous categorical approach preventing Congress from abrogating state sovereign immunity under any of its Article I powers and instead adopted a clause-by-clause approach. He points out that the Court in Katz ruled that Congress validly abrogated state sovereign immunity under the Article I Bankruptcy Clause, and he argues that “the Intellectual Property Clause presents an even clearer case for abrogation.”

Allen argues next that Congress validly abrogated state sovereign immunity by enacting the CRCA under Section 5 of the Fourteenth Amendment. He claims that states violate the Due Process Clause of the Fourteenth Amendment when they infringe copyrights and that Congress therefore has authority under Section 5 to remedy those violations. Moreover, he contends that “[t]he CRCA is a congruent and proportional remedy to a demonstrated pattern of infringement by States.” Allen points to the legislative record supporting the CRCA, which includes “a lengthy report commissioned by Congress and submitted by the Register of Copyrights, multiple hearings, and a catalogue of examples…all point[ing] to the growing pattern and danger of allowing States to infringe with impunity.” He claims that Congress created the individual cause of action based upon this evidence and its finding that “nothing short of the established monetary remedies for copyright infringement would suffice to vindicate copyrights and hold States in check.” Allen asserts that this means that Congress validly enacted the CRCA pursuant to its authority under the Fourteenth Amendment, and, in so doing, it therefore validly abrogated state sovereign immunity.

North Carolina responds that Congress cannot abrogate state sovereign immunity acting under its Intellectual Property Clause authority. The state claims that the Court has recognized only two sources of authority that allow Congress to abrogate state sovereign immunity, the Bankruptcy Clause and Section 5 of the Fourteenth Amendment, and says that “[t]he Intellectual Property Clause should not be added to this exclusive list.” The state contends that the Court already foreclosed this possibility in Florida Prepaid.

The state asserts that Allen’s arguments to the contrary “clash with this Court’s precedents.” It says that Allen’s argument that Congress can abrogate immunity because of its “exclusive” power to regulate intellectual property clashes with Seminole Tribe, in which the Court rejected a similar argument, and an earlier Court ruling that held that Congress’s powers over copyrights are not  exclusive. Moreover, the state contends that Allen cannot point to historical evidence that supports his claim, in contrast to the Court’s ruling in Katz, which held that Congress could abrogate immunity under the Bankruptcy Clause, but only because of “the Bankruptcy Clause’s unique history.”

North Carolina argues next that Congress could not have enacted the CRCA pursuant to its authority under the Fourteenth Amendment. The state claims that the CRCA does not vindicate property rights under the Due Process Clause, because that Clause applies only to intentional deprivations of property where a property owner lacks access to adequate remedies. According to the state, this does not align with the CRCA’s remedy for copyright infringement, which focuses on negligent infringement. Moreover, the state contends that the relatively sparse evidence of state copyright infringements that Congress considered when enacting the CRCA falls far short of the “history of widespread and persisting deprivations of constitutional rights” by states that is required when Congress enacts legislation pursuant to its authority under the Fourteenth Amendment.

Because Congress cannot abrogate state sovereignty by enacting legislation pursuant to the Intellectual Property Clause, and because Congress did not enact the CRCA pursuant to its enforcement authority under the Fourteenth Amendment, North Carolina contends that the CRCA did not abrogate its sovereign immunity, and Allen’s case must fail.

SIGNIFICANCE

Congressional ability to authorize an individual suit against a state for monetary damages is a critical way that Congress can enforce federal law against the states. That’s because an individual suit for monetary damages holds states directly accountable for violations of federal law. Without it, states, in effect, could be free to violate federal law, ranging from federal civil rights law to federal work-place health and safety law, and beyond.

But state sovereign immunity stands as a barrier to these suits. Under the Eleventh Amendment and related federalism principles, states enjoy sovereign immunity from suits for monetary damages. Citing state sovereign immunity, states can evade lawsuits that are designed to hold them to account for their violations of federal law.

Congress can abrogate state sovereign immunity and authorize an individual lawsuit against a state for monetary damages. (There are other “exceptions” to state sovereign immunity, but they aren’t relevant here.) But the Supreme Court, over a series of rulings in the late 20th century, expanded state sovereign immunity and limited congressional authority to abrogate. (Under the guise of federalism principles, the Court expanded state sovereign immunity well beyond the plain text of the Eleventh Amendment.)

At the apex of this movement, the Court held that Congress could abrogate immunity by enacting legislation pursuant to its enforcement authority under the Fourteenth Amendment, but it could not abrogate by enacting legislation pursuant to any of its powers in Article I. These cases included Florida Prepaid where the Court wrote, without meaningful analysis, that Congress could not abrogate immunity by enacting legislation pursuant to its authority under the Intellectual Property Clause (or Patent Clause), the same one that’s at issue here.

Then in 2006 the Court walked back this categorical approach. The Court ruled in Katz that Congress could abrogate immunity by enacting legislation pursuant to its authority under the Article I Bankruptcy Clause. The Court looked carefully at the Clause and determined that its text and history confirmed that it authorized Congress to abrogate state sovereign immunity.

This case tests whether and how the Katz holding applies to the Intellectual Property Clause. In particular, it tests whether the Intellectual Property Clause shares similar textual and historical features with the Bankruptcy Clause that allowed the Court in Katz to conclude that Congress could abrogate immunity under the Bankruptcy Clause.

Alternatively, Congress can abrogate state sovereign immunity by enacting legislation pursuant to its enforcement authority under the Fourteenth Amendment. But the Court has restricted this authority, too, by restricting the substance of the Fourteenth Amendment, and thereby restricting Congress’s power to enforce it. This case also tests whether the CRCA fits within the relatively restricted authority that Congress now has under the Fourteenth Amendment.

These questions could be particularly important in the context of intellectual property. As Allen argues in his certiorari brief, states are engaging in “rampant” copyright infringement. While North Carolina denies this, without an individual cause of action under the CRCA, there is no effective way to hold states to account for any copyright violation.

Beyond intellectual property, the Court’s ruling could have broader implications with respect to Congress’s authority to abrogate state sovereign immunity in other areas, and thus to hold states accountable for other violations of federal law.

Steven D. Schwinn is a professor of law at the University of Illinois Chicago John Marshall Law School and coeditor of the Constitutional Law Prof Blog. He specializes in constitutional law and human rights. He can be reached at sschwinn@jmls.edu or 312.386.2865.

PREVIEW of United States Supreme Court Cases 47, no. 2 (November 4, 2019): 17–20. © 2019 American Bar Association

ATTORNEYS FOR THE PARTIES

  • For Petitioner Frederick L. Allen (Derek L. Shaffer, 202.538.8000)
  • For Respondent Roy A. Cooper III, Governor of North Carolina (Matthew W. Sawchak, 919.716.6400)

AMICUS BRIEFS

In Support of Petitioner Frederick L. Allen

  • Copyright Alliance; the Chamber of Commerce of the United States (Beth Susan Brinkmann, 202.662.5312)
  • Dow Jones & Company, Inc. (Robert P. LoBue, 212.336.2000)
  • Intellectual Property Law Association of Chicago (Donald William Rupert, 312.474.6300)
  • Law Professors (Owen J. McGovern, 713.951.3700)
  • Oracle America, Inc. (Kelsi Brown Corkran, 202.339.8400)
  • Public Law Scholars (Ernest A. Young, 919.360.7718)
  • Ralph Oman (Melissa Arbus Sherry, 202.637.2200)
  • Washington Legal Foundation (Cory L. Andrews, 202.588.0302)

In Support of Respondent Roy A. Cooper III, Governor of North Carolina

  • American Library Association, Association of College and Research Libraries, Association of Research Libraries, Society of American Archivists, Software Preservation Network (Jonathan Band, 202.296.5675)
  • Association of Public and Land-Grant Universities and Association of American Universities (Scott A. Keller, 202.639.7700)
  • Law Professors (Trevor Stephen Cox, 804.788.7221)
  • Simone Rose (Andrew Harry Erteschik, 919.783.2895)
  • West Virginia and 30 Other States (Lindsay Sara See, 304.558.2021)

In Support of Neither Party

  • Association of the Bar of the City of New York (James Robert Klaiber, 212.837.6000)