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Supreme Court Holds States Cannot Be Sued for Monetary Damages in Copyright Infringement Cases

In a unanimous decision, the Supreme Court recently held that States cannot be held liable for monetary damages in copyright infringement lawsuits despite the Copyright Remedy Clarification Act of 1990 (CRCA). This act provides that a State “shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in Federal court” for copyright infringement. See Allen v. Cooper, 140 S. Ct. 994 (2020).

The case involves videos of Queen Anne’s Revenge, a ship captured and sailed by Blackbeard, which ran aground off the coast of North Carolina in 1718. In 1996, the shipwreck was discovered, and Frederick Allen was hired as a videographer to document the recovery efforts. For over a decade, Allen captured and documented the ship’s treasures through video footage and photographs. Allen subsequently obtained copyright registrations for all his works.

Without Allen’s permission and despite his protestation, North Carolina began publishing some of Allen’s videos and photographs in 2013. While Allen and North Carolina settled some of the claims, additional disputes over continued unpermitted use of Allen’s works arose, and Allen finally decided to file a copyright infringement action against North Carolina seeking monetary damages. North Carolina moved to dismiss the suit on sovereign immunity grounds and Allen countered that the CRCA provides an exception to immunity for copyright infringement.

The Eastern District of North Carolina agreed with Allen — Congress had the clear intent “to abrogate sovereign immunity for copyright claims against a state.” The Court of Appeals for the Fourth Circuit, however, reversed finding there was no constitutional basis for the abrogation of sovereign immunity.

The Supreme Court agreed with the Fourth Circuit. The Eleventh Amendment has always been interpreted to preclude suits brought by any person against a nonconsenting state. There are, however, two exceptions: (1) Congress may enact “unequivocal statutory language” abrogating states’ immunity, and (2) constitutional provisions may allow Congress to encroach on the states’ sovereignty. The language in the CRCA, as well as the Patent Remedy Act, was clear about Congress’s intent to abrogate the states’ immunity — the issue considered by the Supreme Court, however, was whether Congress had the authority to do so. Allen argued that Congress had the authority under the Intellectual Property Clause of Article I, or alternatively, under Section 5 of the Fourteenth Amendment. The Supreme Court disagreed.

Under Article I, Congress has the power to grant copyrights and patents. Allen argued that Congress, therefore, has the authority to abrogate sovereign immunity from copyright suits since abrogation is the best way to secure a copyright holder’s exclusive rights. The problem, however, was that the Supreme Court had already rejected this argument in Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999), where it held Congress could only abrogate sovereign immunity pursuant to its powers under Section 5 of the Fourteenth Amendment and not Article I. Since the CRCA was enacted pursuant to Article I, it could not alter the states’ sovereign immunity.

Under Section 5 of the Fourteenth Amendment, Congress is authorized to strip the states of immunity, subjecting them to suit in federal court. Abrogation statutes are only appropriate under Section 5 when they are tailored to “remedy or prevent” conduct that infringes the substantive prohibitions of the Fourteenth Amendment. The means-end test courts use in determining whether Congress’s actions fall under Section 5 authority considers whether there is “a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end.” Because copyrights are a form of property, and the Fourteenth Amendment prohibits states from depriving a person of property without due process of law, an intentional or reckless infringement may come within reach of the Due Process Clause. As with the Article I argument, the Section 5 argument had already been considered by the Supreme Court in Florida Prepaid where the Court found Congress did not identify a pattern of unconstitutional patent infringement, and the infringement that was found was mostly innocent. Because there was little evidence that states were depriving patent owners of property without due process of law, the Patent Remedy Act was too far sweeping—it abrogated sovereign immunity for any and every patent infringement suit without limitations. The Supreme Court found that because the CRCA was the copyright equivalent of the Patent Remedy Act, the result must be the same—the statute is too broad. Although there was more concrete evidence of states infringing copyrights than there was for patents, the evidence was not much more impressive than that presented in Florida Prepaid.

In the end, the Supreme Court found that the Intellectual Property Clause could not provide a basis for abrogation of sovereign immunity and such a clause in the CRCA was out of proportion to any due process problem: the statute was aimed at providing a uniform remedy for infringement, not for preventing any unconstitutional conduct. Despite this decision, Congress may still pass a valid abrogation law in the future. The CRCA was enacted prior to several important decisions regarding sovereign immunity, and so if Congress were to enact a different abrogation law, it could tailor a statute to prevent states from infringing on both copyrights and patents, thereby subjecting them to suit for damages in federal court.

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COPYRIGHT © 2020, STARK & STARKNational Law Review, Volume X, Number 241

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About this Author

Gene Markin Attorney Stark & Stark Law Firm
Shareholder

Gene Markin is a Shareholder in Stark & Stark’s Complex Commercial, Intellectual Property, and Cannabis Litigation Groups where he concentrates his practice on complex litigation matters involving copyright protection and infringement, trademark and trade dress infringement and enforcement, trade secret litigation, false advertising, domain name disputes, unfair competition, class actions, fraud and consumer fraud, shareholder and partner disputes, breach of contract, cannabis business disputes, cannabis intellectual property matters, cannabis insurance coverage...

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