Supreme Court Paves Way for Revoking State Sovereign Immunity for Copyright Infringement

Last week, the Supreme Court handed down its unanimous judgment in Allen v. Cooper, a copyright case involving both actual and metaphorical pirates. The actual pirate was Edward Teach, better known as Blackbeard, who captured a French ship in the Indies, renamed it Queen Anne’s Revenge, used it for piracy, and then later ran it aground near the North Carolina coast in 1718. The shipwreck was discovered nearly three centuries later in 1996 by a marine salvage company named Intersal. North Carolina, the owner of the shipwreck, entered into an agreement with Intersal for its recovery, and Intersal in turn hired Rick Allen, an underwater photographer, to document those efforts through video footage and still images.

Enter the metaphorical pirates. Allen accused North Carolina of infringing his copyrights in the videos and images, which led to a settlement agreement between the parties in 2013 and the state paying Allen $15,000 for any past infringement in 2014. However, even after the settlement agreement, Allen claimed that North Carolina continued to use his video footage and still images without permission. In fact, the state legislature passed a law declaring all photographs and video recordings of its shipwrecks to be a “public record” and thus free for all to use in 2015. Upset at the turn of events, Allen filed suit in the Eastern District of North Carolina in late 2015, with the Governor of North Carolina as the lead, nominal defendant.

Allen sought to have invalidated as unconstitutional and unenforceable North Carolina’s law purporting to inject his videos and images into the “public record,” and he claimed that the state was liable for willful copyright infringement. North Carolina moved to dismiss the complaint, arguing that it had sovereign immunity under the Eleventh Amendment, which bars suits against a state by private individuals in federal courts without the state’s consent. In its unanimous judgment, the Supreme Court sided with North Carolina, holding that the state’s sovereign immunity trumped Allen’s claims. This means that, as of now, states are free from liability for copyright infringement. But, in so holding, the Supreme Court paved the way for how Congress could revoke this constitutional protection from the states.

To understand the Court’s suggestion, a little background information is needed. Under the Copyright Act of 1976, it was generally understood that states could be liable for copyright infringement, even though this was not expressly spelled out in the Act. That implicit understanding was called into question in the Supreme Court’s 1985 decision in Atascadero, which held that the waiver of sovereign immunity by a state must be “unequivocal.” Courts then applied that holding to find that the Copyright Act did not clearly abrogate state sovereign immunity. This led to Congress passing the Copyright Remedy Clarification Act (CRCA) in 1990, which expressly abrogated state sovereign immunity for copyright infringement.

The CRCA, codified in Section 511, provides in part:

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, including any governmental or nongovernmental entity, for a violation of any of the exclusive rights of a copyright owner provided by sections 106 through 122, for importing copies of phonorecords in violation of section 602, or for any other violation under this title.

When Congress enacted the CRCA in 1990, it was focused on exercising its Article I power under the Copyright Clause. And for good reason. A year earlier, in Union Gas, the Supreme Court had held that Congress could abrogate state sovereign immunity by utilizing an enumerated power under Article I—there, the Commerce Clause. However, in 1996, the Supreme Court expressly overruled Union Gas in Seminole Tribe, holding that Congress could not abrogate sovereign immunity under Article I. That decision was later walked back somewhat in Katz, where the Supreme Court carved out an exception in 2006 for the Bankruptcy Clause.

Allen argued that, as in Katz, an exception to Seminole Tribe should also be made for the Copyright Clause. The Court in Katz reasoned that the states submitted to the supremacy of the federal Bankruptcy Clause at the Constitutional Convention. So too, argued Allen, with the Copyright Clause. But Justice Kagan, who penned the opinion of the Court on behalf of herself and six other Justices, rejected this argument as foreclosed by Florida Prepaid, where the Court had held in 1999 that neither the Patent Clause nor the Commerce Clause could be used to revoke state sovereign immunity for patent infringement liability. Ruling for Allen here would mean overruling Florida Prepaid, and the Court, citing stare decisis, was unready to make that move.

But not all hope was lost for Allen. Section 5 of the Fourteenth Amendment provides another path to revoking state sovereign immunity. Under Section 5, Congress may pass “appropriate legislation” to protect persons from a state deprivation of property without due process of law. A law is “appropriate,” Justice Kagan wrote, where there is “a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end.” Infringement by the states certainly does deprive copyright owners of a property interest, the Court noted, but only if that infringement is intentional or reckless. Negligent infringement does not count. Nor does it count if the state offers an adequate remedy for the deprivation.

In assessing the “congruence and proportionality” of the CRCA, the Court examined the record behind it to understand the nature and extent of the state copyright infringement that Congress intended to address. The timing of the CRCA’s enactment becomes critical here. Recall that Congress thought it was legislating under Article I, not Section 5 of the Fourteenth Amendment, so it did not create a record geared for a Section 5 analysis. Nor did it narrowly tailor the CRCA to reach only intentional or reckless deprivations that were not adequately remedied by the states. Justice Kagan pointed out these shortcomings to hold that Allen’s Section 5 argument failed since the record was too thin and the CRCA swept too far.

The Court heavily discounted the evidence that was in the record when Congress enacted the CRCA. Indeed, Congress asked then-Register of Copyrights Ralph Oman to prepare a report documenting the problem. The lengthy report was a year in the making, and it included comments and letters from numerous copyright owners complaining about copyright infringement by the states. There were hearings in both the Senate and House that generated hundreds of pages of testimony. And both the Senate and House issued reports explaining the need for the CRCA. While the district court below found that there was “sufficient evidence” to sustain the abrogation of state sovereign immunity under Section 5, the Supreme Court was unimpressed with the evidence in the record.

However, the Court did provide a roadmap for how Congress could develop a satisfactory record and craft a statute that would pass muster under Section 5 of the Fourteenth Amendment:

Congress likely did not appreciate the importance of linking the scope of its abrogation to the redress or prevention of unconstitutional injuries—and of creating a legislative record to back up that connection. But going forward, Congress will know those rules. And under them, if it detects violations of due process, then it may enact a proportionate response. That kind of tailored statute can effectively stop States from behaving as copyright pirates. Even while respecting constitutional limits, it can bring digital Blackbeards to justice.

Thus, Congress could draft a more narrowly focused law abrogating state sovereign immunity for intentional or reckless copyright infringement, and it would be upheld if the record shows that the extent of the harm is proportionate to the response and that there are inadequate remedies available in the states. Congress has already gathered some relevant evidence. For example, there is the General Accounting Office report on state sovereign immunity for infringement actions from 2001 and there is the Senate hearing on state sovereign immunity and protection of intellectual property from 2002. Both of those records were generated when Congress realized that Article I might not support the CRCA after the Supreme Court handed down Florida Prepaid, and they contain further evidence of copyright infringement by the states.

If Congress were to hold more hearings, it could start by receiving testimony from the people and organizations that filed amicus briefs in support of Allen with the Supreme Court in this very case. The amicus briefs from Recording Industry Association of America et al., American Society of Media Photographers et al., Software & Information Industry Association, Oracle America, Dow Jones, Copyright Alliance et al., David Nimmer et al., Ralph Oman, and others highlight widespread copyright infringement by the states. Hopefully, Congress will take the hint from the Court and pass another law abrogating state sovereign immunity for copyright infringement. Sadly, it would probably not be too difficult for Congress to create a robust record that could survive judicial scrutiny under Section 5 of the Fourteenth Amendment.