SUMMARY:  A recent Supreme Court decision affirmed the Fourth Circuit’s holding that states are immune from copyright infringement lawsuits under sovereign immunity, invalidating an earlier statute that purported to abrogate state sovereign immunity from copyright infringement.  However, the Court left open the possibility that a more tailored statute could be promulgated to address copyright infringement by states under the due process clause.

In Allen v. Cooper, the United States Supreme Court (“the Court”) unanimously ruled that states are immune from copyright infringement suits in federal courts, thereby invaliding the Copyright Remedies Clarification Act (“the CRCA”) of 1990. No. 18-887, 2020 U.S. LEXIS 1909, at *5 (Mar. 23, 2020).  In its majority opinion authored by Justice Kagan, the Court relied heavily on Florida Prepaid v. College Savings Board, 527 U.S. 627 (1999), holding that Article I of the U.S. Constitution did not give Congress the power to abrogate state immunity from copyright infringement claims. Allen, 2020 U.S. LEXIS at *28.  The Court also held that the CRCA was not a valid congressional act of power under Section 5 of the Fourteenth Amendment because it lacked “congruence and proportionality between the injury to be prevented and the means adopted to that end.” Id. at *19 (citing City of Boerne v. Flores, 521 U. S. 507, 520 (1997)).

The facts giving rise to the dispute in Allen v. Cooper began when, in 1996, Intersal, Inc. discovered the shipwreck of the Queen Anne’s Revenge off the coast of North Carolina. Id. at *6.  The State of North Carolina, as the owner of the shipwreck, hired Intersal to recover the shipwreck. Id.  Intersal, in turn, hired the petitioner, Allen, and his company, Nautilus Productions, to document the recovery. Id.  Allen documented the recovery efforts through videos and photos for more than a decade, registering copyrights in such works. Id.  North Carolina published some of Allen’s videos and photos without his consent. Id. at *6–7.  Allen sued North Carolina for copyright infringement. Id. at *7.  North Carolina moved to dismiss Allen’s lawsuit alleging sovereign immunity. Id.  Allen countered that the CRCA validly abrogated state sovereign immunity from copyright infringement lawsuits. Id. at *7–8.

 The district court agreed with Allen, holding that the CRCA’s text indicated clear congressional intent to abrogate state sovereign immunity from copyright infringement lawsuits. Id. at *8.  The United States Court of Appeals for the Fourth Circuit reversed, following Florida Prepaid, and held that the CRCA did not validly abrogate state sovereign immunity from copyright infringement. Id. at *8–9.

In its analysis, the Court first considered whether Congress enacted “‘unequivocal statutory language’ abrogating the States’ immunity from the [copyright infringement] suit.” Id. at *10 (citing Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 56 (1996)).  The parties did not dispute the issue of Congress’ intent, and the Court readily concluded that Congress had used “clear enough language” in the CRCA to remove the states’ immunity from copyright infringement suits. Id.  However, the Court noted the issue was not Congress’ intent, but rather whether Congress had authority to enact the CRCA. Id. at *11.  Accordingly, the Court considered whether “some constitutional provision” allowed Congress “to have thus encroached on the States’ sovereignty.” Id. at *10-11.

Allen contended that Congress had the authority to abrogate state sovereignty under Article I, which empowers Congress to provide copyright protection, and, in the alternative, under Section 5 of the Fourteenth Amendment, which authorizes Congress to enforce the commands of the Due Process Clause. Id. at *11.

The Court rejected Allen’s Article I argument, holding that the “Intellectual Property Clause, [that] covers copyrights and patents alike . . . could not ‘abrogate state sovereign immunity [under] Article I.’” Id. at *12–13 (alteration in original) (quoting Florida Prepaid, 527 U.S. at 636).  Further, the Court held that “‘Article I cannot be used to circumvent’ the limits sovereign immunity ‘place[s] upon federal jurisdiction.’” Id. at *13 (alteration in original) (quoting Seminole Tribe, 517 U.S. at 73).  The Court emphasized that “the power to ‘secur[e]’ an intellectual property owner’s ‘exclusive Right’ under Article I stops when it runs into sovereign immunity.” Id. (quoting USCS Const. Art. I, §8, cl. 8).

Allen attempted to distinguish Florida Prepaid using Central Va. Cmty. Coll. v. Katz, 546 U.S. 356 (2006). Id.  In Katz, the Court held that Article I’s Bankruptcy clause enabled Congress to subject nonconsenting states to bankruptcy proceedings. Id.  Thus, Allen argued that the Court should adopt “‘a clause-by-clause approach to evaluating whether a particular clause of Article I’ allows the abrogation of sovereign immunity.” Id. at *13–14 (quoting Brief for Petitioners, at p. 20).  However, the Court rejected this “clause-by-clause” approach, stating that Katz “is about and limited to the Bankruptcy Clause.” Id. at *14.

Noting “there is no difference between copyrights and patents under the [Intellectual Property] Clause,” the Court stated, “we would have to overrule Florida Prepaid if we were to decide this case Allen’s way.” Id. at *17.  Yet, in light of stare decisis, the Court noted it would need a “special justification” to overrule Florida Prepaid. Id. (citing Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258, 266 (2014)).  Thus, the Court concluded that since the Intellectual Property Clause did not provide a valid basis for abrogation of state sovereign immunity from patent suits in Florida Prepaid, it also could not save abrogation in the CRCA as to copyright infringement. Id. at *13 (citing Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627).  Ultimately, the Court rejected Allen’s argument that the CRCA validly abrogated state sovereign immunity from copyright infringement suits under Congress’s authority under Article I. Id. at *17.

In addressing Allen’s argument relating to Section 5 of the Fourteenth Amendment, the Court stated that an unconstitutional deprivation of property by a state required the infringement to be “intentional, or at least reckless, to come within reach of the Due Process Clause” and not a “merely negligent act.” Id. at *20.  Accordingly, the Court again examined Florida Prepaid, where it rejected a similar argument in support of a similar law based on a lack of evidence identifying “a pattern of unconstitutional . . . infringement.” Id. at *21.  Further, the Court reviewed the legislative history of the CRCA to determine if the broad abrogation of state sovereign immunity therein was proportional to due process harm from copyright infringement by state governments. Id. at *23–26.  Finding a lack of evidence in the legislative history to establish widespread intentional infringement without adequate remedies therefor, the Court determined that the CRCA failed the congruence and proportionality test of the Boerne case. Id. at *26.  Therefore, the Court held the CRCA did not validly abrogate state sovereign immunity from copyright infringement. Id.

Even still, the Court noted that invalidating the CRCA “need not prevent Congress from passing a valid copyright abrogation law in the future.” Id. at *27.  As an example, since Congress enacted the CRCA before Seminole Tribe and before the congruence and proportionality test, the Court further noted that “Congress likely did not appreciate the importance of linking the scope of its abrogation to the redress or prevention of unconstitutional injuries” or “creating a legislative record to back up that connection.” Id.  But now, armed with such knowledge, the Court opined, Congress can enact a “tailored statute [that] can effectively stop States from behaving as copyright pirates.” Id. at *28.

Justice Thomas, concurring in part and concurring in the judgement, penned a separate opinion disagreeing with the Court on two issues. Id. at *28.  Firstly, Justice Thomas disagreed with the Court’s need for special justifications to overrule precedent, instead indicating that a demonstrably erroneous standard obligates the Court to overrule its precedent. Id. at *28–29.  However, Justice Thomas concluded that Allen did not meet this lower burden showing that Florida Prepaid is demonstrably erroneous. Id. at *29.  Secondly, Justice Thomas did not join the Court’s discussion regarding future copyright legislation, noting 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.” Id.

Justice Breyer, joined by Justice Ginsburg, concurred in the judgement. Id. at *30.  Of importance, Justice Breyer’s opinion lamented the “risk of unfairness to authors and inventors alike.”  Yet, Justice Breyer concurred in the outcome, recognizing that Florida Prepaid controls this case. Id. at *32.

In conclusion, the Court’s decision in Allen v. Cooper effectively holds that states are immune from copyright infringement lawsuits under sovereign immunity. Id. at *28.  However, the Court leaves open the possibility that Congress can validly abrogate state sovereign immunity from copyright infringement suits if Congress enacts a “tailored statute [to] stop States from behaving as copyright pirates” by “linking the scope of its abrogation to the redress or prevention of unconstitutional injuries.” Id.

TAKEAWAY:  As a result of the Allen decision, states currently enjoy sovereign immunity from copyright infringement suits.  That may change, however, should Congress enact a sufficiently tailored statute to remove that immunity.  Such a statute would likely be limited, for example, to willful copyright infringement.