The State Strikes Back - Sovereign Immunity as a Pirate's Sword
Video: ? Nautilus Productions LLC d/b/a nautilusproductions.com (posted with permission)
In a previous article I introduced a piracy case now making its way through the Supreme Court of the United States (SCOTUS). I even led the article with an attention-grabbing sketch of the pirate involved in the case, and the catchy line that it is not the pirate that is accused of piracy, it is the State of North Carolina. While it’s fun to spark the lore of piracy on the high seas, the piracy at issue in the case is copyright infringement. And while the case involves a federal statute that protects the holders of federal copyrights from infringement, the key challenge for the SCOTUS is synthesizing complex, conflicting, constitutional principles to address Congress’ ability to abrogate state sovereign immunity under the Eleventh Amendment of the U.S. Constitution.
I don’t want to completely lose the flavor of high seas piracy or the fascination of underwater exploration in this article; so I post with this article a video of the type that North Carolina is accused of infringing. The video is a federally-protected, copyrighted work of art of the petitioners in the case, Frederick Allen, and his video production company, Nautilus Productions LLC d/b/a nautilusproductions.com, and I am posting the video with their full permission.
Introduction
Allen and Nautilus Productions (who I will collectively refer to as “Allen”) are suing the State of North Carolina, Governor Roy Cooper, the North Carolina Department of Natural and Cultural Resources, and other related parties (who I will collectively refer to as “North Carolina”), asserting claims of copyright infringement. Oral argument before the SCOTUS will occur on November 5, 2019, and the parties have laid out their arguments in their written briefs. North Carolina filed its response brief on Friday, September 20, 2019, striking back at the arguments that Allen made in his opening brief on August 6, 2019. This article lays out the issues and the arguments before SCOTUS, along with some of my own commentary.
There is no dispute that North Carolina copied, used and published Allen’s copyright-protected video and still images for its own purposes without Allen’s permission. Allen contends that he is entitled to remedy such infringement under a federal statute, the Copyright Remedy Clarification Act of 1990 (CRCA), whereby Congress expressly protected copyrights against infringements by states and gave copyright holders a remedy for state infringement. The CRCA says that such copyright holders may sue infringing states in federal court, thereby purporting to abrogate the sovereign immunity that states have under the Eleventh Amendment against being sued in federal court without their consent.
North Carolina contends that Congress, in enacting the CRCA, lacked the power under the U.S. Constitution to abrogate state sovereign immunity under the Eleventh Amendment. The trial court disagreed with North Carolina, but the court of appeals agreed with North Carolina, reversed the District Court, and dismissed Allen’s complaint. Allen appealed to the SCOTUS, which accepted review of the case to decide whether Congress had the power in enacting the CRCA to abrogate state sovereign immunity.
The Facts
This case involves piracy on more than one level. In 1718, Edward Teach, better known as “Blackbeard,” ran the flagship of his fleet of pirate vessels, the 40-gun Queen Anne’s Revenge, aground in North Carolina, where the vessel was abandoned and left undiscovered until 1996. The finder of the wreck, Intersal, Inc., a private company, obtained the exclusive rights from North Carolina to study, recover and preserve the remains of the wreck. The agreement between the state and Intersal permitted Intersal to make “commercial narrative accounts” of the project, while North Carolina retained the right to “publish accounts relating to [the project] for noncommercial, educational, or historical purposes.”
Intersal engaged Allen to document its work on the wreck and, for nearly two decades, Allen accompanied the team of professional divers and scientists in documenting their efforts through video and still images. Allen registered copyrights for his images with the United States Copyright Office under the name of his production company, Nautilus Productions LLC.
In 2013, North Carolina copied and publicly displayed Allen’s images online without Allen’s permission. Allen accused North Carolina of copyright infringement and the state entered into a settlement agreement with Allen whereby it paid him money to remedy its infringements and promised not to infringe Allen’s copyrights again in the future. North Carolina alleges that the settlement permitted it to “retain, for research purposes, archival footage, still photographs, and other media” of the wreck; to “display noncommercial digital media” of the wreck; and to make records available to the public under North Carolina’s public-records disclosure law, which at the time of the settlement defined a public record to include media that the state obtained in connection with public business.
After the settlement, North Carolina again copied and posted Allen’s copyright-protected images online and a state-run maritime museum displayed one of Allen’s images in a newsletter, all without Allen’s permission. The state claims these publications were “to further the state’s educational mission,” but North Carolina took the unusual step of enacting new legislation, referred to as “Blackbeard’s Law,” that purportedly converted Allen’s images into “public record” materials that the state could freely use and publish without permission, without regard to the prior settlement agreement, and without any adverse consequence to the state. North Carolina attempts to downplay its conduct by contending that it only posted five “short videos” and the museum only showed one image of Allen’s images. However, the state’s response brief admits that these images “were made freely available online” in an effort to further North Carolina's “educational mission.”
The Lawsuit.
Allen filed his lawsuit in the U.S. District Court for the Eastern District of North Carolina seeking monetary damages from North Carolina’s copyright infringement. North Carolina moved to dismiss the complaint under the Eleventh Amendment, arguing that the sovereign immunity granted to states under the Amendment bars Allen’s action. North Carolina argued that Congress did not have the power to abrogate its sovereign immunity with the CRCA. In making the argument, the state relied on a 1999 SCOTUS decision named Florida Prepaid, where the SCOTUS concluded that Congress exceeded its powers in enacting a sister law to the CRCA, the Patent Remedy Act, which purported to abrogate state sovereign immunity for patent infringement claims.
The District Court denied North Carolina’s motion to dismiss Allen’s copyright infringement claims and held that the CRCA validly abrogated North Carolina’s sovereign immunity. The District Court agreed with North Carolina that the Intellectual Property Clause in Article I of the U.S. Constitution did not give Congress the power to abrogate state sovereign immunity. But the District Court went on to rule that Congress had authority to enact the CRCA by virtue of Section 5 of the Fourteenth Amendment because, in the District Court’s view, Congress “acted in response to sufficient evidence of infringement of copyrights by the states” and “was clearly responding to a pattern of current and anticipated abuse by the states of copyrights held by their citizens.” This legislative history behind the CRCA led the District Court to conclude, “in this particular case Congress has clearly abrogated state immunity in cases arising under the CRCA, and such abrogation is congruent and proportional to a clear pattern of abuse by the states.”
Allen’s victory was short-lived, however. On appeal to the United States Circuit Court for the Fourth Circuit, an unanimous panel reversed the District Court, concluding that the CRCA did not validly abrogate North Carolina’s sovereign immunity under the Eleventh Amendment. The Fourth Circuit concurred with the District Court’s view that the Intellectual Property Clause did not grant power to Congress to enact the CRCA, but the Fourth Circuit disagreed that Section 5 of the Fourteenth Amendment gave Congress that power. Congress did not expressly refer to Section 5 in enacting the CRCA and, in the Fourth Circuit’s view under Florida Prepaid, the CRCA was not “congruent and proportional” to the injury that Congress sought to address.
The Supreme Court.
Allen sought review of the Fourth Circuit’s decision and the SCOTUS accepted the case for its 2019-2020 docket. Oral argument will occur on November 5 and that argument is laid out in briefs from the parties now on file.
Allen’s Argument
Allen argues that the Intellectual Property Clause and Section 5 of the Fourteenth Amendment each independently authorized Congress’ enactment of the CRCA to address, in Allen’s view, the “serious problem of unremedied copyright infringement by States.” The Intellectual Property Clause authorizes Congress to “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.” Allen argues that Florida Prepaid no longer represents the law because a 2006 SCOTUS decision named Katz “corrected course” by recognizing that Congress can properly abrogate state sovereign immunity pursuant to its Article I power, and the Intellectual Property Clause “supplies a singularly strong basis for abrogation as compared to any other authorization set forth in Article I.”
Section 5 of the Fourteenth Amendment empowers Congress “to enforce, by appropriate legislation, the provisions of [the Amendment],” and Allen argues that Congress enacted the CRCA “only after carefully compiling a record demonstrating that abrogation of state sovereign immunity is a congruent and proportional remedy for States’ pattern of continuing copyright abuses.” In Allen’s view, the record and findings that Congress made in enacting the CRCA provide the legislative predicate that was missing in the view of the SCOTUS in deciding Florida Prepaid.
A week after Allen filed his opening brief, thirteen briefs were filed by a broad array of amicus curiae (“friends of the court”) that includes the U.S. Chamber of Commerce, Recording Industry Association of America, North American Nature Photography Association, the Graphic Artists Guild, Software & Information Industry Association, American Society of Media Photographers, Dow Jones & Company, Oracle America, two bar associations, and a group of constitutional law professors. These briefs generally support Allen’s case, although a couple of the briefs say they support neither party.
North Carolina’s Response
North Carolina notes that the CRCA was one of three laws passed by Congress in the early 1990s purporting to abrogate state sovereign immunity in the context of claims for violation of intellectual property rights, and that in 1999, the SCOTUS struck down the Patent Protection Remedy Clarification Act and the Trademark Remedy Clarification Act in Florida Prepaid as exceeding Congress’ legislative authority. North Carolina thus relies on the SCOTUS’s reasoning and conclusion in Florida Prepaid throughout its argument. North Carolina further argues that under the United States’ federal-state structure of government, state sovereign immunity is, and has been since the founding of the nation, a central feature of the U.S.’s constitutional scheme which the SCOTUS has long preserved with a presumption that the Constitution does not disturb state sovereign immunity.
North Carolina argues that Congress may not use its Article I powers to expose states to lawsuits in federal court “absent compelling historical or other evidence that the Framers intended a particular clause to have that effect.” In the state’s view, nothing in the text, structure or history of the Intellectual Property Clause “gives any hint – let alone provides the required compelling evidence – that the clause was designed to intrude on state sovereign immunity.” The theme of North Carolina’s argument on Article I authority is that the SCOTUS has already ruled in the context of the Intellectual Property Clause in favor of preserving state sovereign immunity in Florida Prepaid, and there is no argument, development or other reason to deviate from the reasoning and decision of Florida Prepaid in Allen’s case.
North Carolina argues that Section 5 of the Fourteenth Amendment only authorizes Congress to enact “appropriate” legislation that provides an “appropriate remedy for identified constitutional violations, not an attempt to substantively redefine the States’ legal obligations.” Such legislation must thus pass a two-part test – first, Congress must identify the scope of the constitutional problem; and second, Congress must then choose a remedy that is “congruent and proportional to the scope of that problem.” North Carolina argues that the CRCA fails on both parts. In North Carolina’s view, Congress did not identify “widespread unconstitutional conduct by states,” and the remedy Congress choose in the CRCA was not “proportional to any constitutional problem that Congress identified.”
Confident in the Florida Prepaid decision, North Carolina ends its argument by urging the SCOTUS to honor the doctrine of stare decisis, which is the fundamental principle in the U.S. judicial system that precedent established in prior cases should be followed in subsequent cases, and that a departure from precedent requires special justification that goes beyond “the belief that precedent was wrongly decided.” North Carolina argues that Allen’s case does not present any special justification to disregard or distinguish Florida Prepaid.
Stay Tuned
The parties have framed the issues for SCOTUS decision. It is curious that the SCOTUS accepted review of this case. If a decision was just a matter for stare decisis application of Florida Prepaid, why would the SCOTUS accept review of a unanimous circuit court panel decision? There is no split among the circuit courts and it would be odd for the SCOTUS to accept the case just to confirm that the holding and reasoning of Florida Prepaid should apply to the CRCA. It could be, as Allen argues, that the SCOTUS wants to address whether the 2006 decision in Katz “corrected course” and thereby expanded the tolerance to allow Congress to abrogate state sovereign immunity pursuant to an Article I power.
I believe this case affords the SCOTUS an opportunity to add to the paucity of precedent under Section 5 of the Fourteenth Amendment. As North Carolina’s brief recognizes, the two-part test to apply under Section 5 creates a “sliding scale” – “the appropriateness of the remedy depends on the gravity of the harm it seeks to prevent.” The test commands a case-by-case, factual analysis under the test, the outcome of which will turn on the specific circumstances presented by the case. Even North Carolina must accept that the SCOTUS has had few opportunities to flesh out the concepts underlying application of the Section 5 test, and application of the test was not a prominent feature of the Florida Prepaid decision. North Carolina has framed the test well, Allen has made out a strong case for favorable application of the test, and this case calls out for the SCOTUS’s detailed consideration and application of the test.
North Carolina focuses on Florida Prepaid and stare decisis for a reason. As we lawyers frequently say, cases are won on the facts; and the facts here are not good for North Carolina. If the SCOTUS opts to delve into the test North Carolina calls for under Section 5, the SCOTUS will have to consider North Carolina’s conduct, and that is not what the state wants. After all, the invocation of sovereign immunity is all about avoiding the facts. North Carolina took liberties with Allen’s private rights and its wrongdoing is hard to hide. By entering into a settlement agreement and paying Allen money after the initial infringement of Allen’s copyrights, North Carolina – for all intents and purposes – conceded it did something wrong when it used and published Allen’s images without permission. Blackbeard’s Law and words in the settlement agreement cannot validate subsequent infringement of the exact same nature. Nor does North Carolina’s theme that it only infringed six times, and for a public benefit, help its case. An infringement of a copyright is an infringement of federally protected property right. And an alleged “little infringement” is nevertheless an infringement.
Closing Comments
There is an ancillary, but connected, constitutional – and practical – consideration that this case presents. While the consideration is raised in the briefs by both sides, it receives secondary attention. Yet, it addresses the entire theme underlying Congress’ enactment of the CRCA. The Fifth Amendment of the U.S. Constitution, which is applicable to state action through the Fourteenth Amendment, contains the Takings Clause, which states that “private property [shall not] be taken for public use, without just compensation.” The CRCA essentially codifies the Takings Clause in the context of a state infringing, or “taking,” the federally-protected copyright of a private citizen.
But the CRCA goes one step further, and that step is at the heart of this case. The CRCA opens the federal courts for a private citizen’s claim against a state for the state’s taking of that citizen’s copyright-protected work. Opening the federal courts as a venue is not just permissible in our constitutional system, it is necessary to provide the parties with the preferred dispute-resolution mechanism for copyright infringement claims. Federal courts have exclusive jurisdiction to hear infringement actions under the U.S. Copyright Act. That means that state courts are generally without jurisdiction to consider claims for copyright infringement. Thus, without the CRCA’s abrogation of state sovereign immunity, states are left unchecked in misusing and infringing the copyrights of private citizens.
One may argue, as North Carolina seems to do in its response brief, that Allen’s recourse was to bring a takings action against North Carolina in state court. Really? Federal courts have been granted exclusive jurisdiction over copyright infringement cases, and have thus developed the case law and special competence to adjudicate disputes with respect to copyrights. But when the infringer is a state, we are going to force a copyright-holder into state court to pursue a takings claim when the taking is copyright infringement? That doesn’t make any sense to me. The opposite should be true – when a state is accused of copyright infringement, it would be appropriate, if not necessary, to have the special competence of the federal courts make sure that both the state and the private claimant get the highly competent adjudication they deserve.
I will continue to follow Allen v. North Carolina with a close eye and much interest. By the way, I am not a copyright or intellectual property lawyer. I am a shipwreck lawyer who began studying shipwreck jurisprudence shortly after the Titanic was discovered in 1985 during my first quarter of law school (my law school “thesis” was a proposal for an international regime governing access to and study and recovery of the Titanic, an historic wreck on the deep seabed in international waters). Besides liking a good pirate story, my particular interest in Allen’s case mostly has to do with the Eleventh Amendment which is frequently applied in court cases involving shipwrecks. While the Eleventh Amendment is constitutionally intended to shield states from being hauled into federal court against their will, states have all too often invoked the Eleventh Amendment as a sword in the shipwreck context. Here, the sword is used to intrude on a private citizen’s clear, federally-protected copyright in shipwreck-related images. In a series of other cases, states have invoked the Eleventh Amendment to prevent finders and salvors of shipwrecks from pursuing in rem rights, to the exclusion or other detriment of a state, under the exclusive federal admiralty jurisdiction over in rem vessel-related actions.
My real hope is that the SCOTUS will use the Allen case as an opportunity to address the power of its federal courts to handle all matters, even those where states are drawn in against their will, when the matters are subject to the exclusive jurisdiction of the federal courts . . . at least in the shipwreck context.
#shipwrecks #shipwrecklaw #maritimeheritage