Jonathan Pink — Entertainment, Internet and New Media Partner at Lewis Brisbois, LLP Rotating Header Image

Copyright Quake Hits California

The United States District Court for the Southern District of California ruled on February 5, 2008 that the Copyright Remedy Clarification Act (“CRCA”) “is not a valid exercise of Congress’s power under Section 5 of the Fourteenth Amendment”, thereby holding that a State, employee of a State (acting within his or her official capacity) or instrumentality of a State cannot be held liable for copyright infringement. See Marketing Information Masters, Inc. v. The Board of Trustees of the California State University System, et. al. (06cv 1682 JAH, SDCA February 5, 2008).

In Marketing Information Masters, Marketing Information Masters, Inc. (“MIM”) sued the Trustees of the California State University and their employee, San Diego State University (SDSU) professor Robert Rauch, for copyright infringement. MIM alleged that Rauch had copied large portions of MIM’s 2003 Pacific Life Holiday Bowl report in creating SDSU’s 2004 Holiday Bowl report.

The SDSU defendants filed a motion to dismiss, claiming that the Eleventh Amendment provided them with immunity to such a claim. The plaintiff argued that the Eleventh Amendment did not apply because Congress passed the CRCA, which expressly provided that “[a]ny State, instrumentality of a state… or employee of a State or instrumentality of a State… shall not be immune, under the Eleventh Amendment” to a suit for copyright infringement. 17 U.S.C. Section 511(a). The defendants took the position that the CRCA was an invalid exercise of Congress’s power, and thus did not constitute a valid waiver of the Eleventh Amendment.

The District Court agreed, finding that the CRCA “was not passed pursuant to a valid exercise of [Congress's] Fourteenth Amendment enforcement powers,” and holding that “the CRCA does not constitute a valid abrogation of state sovereign immunity.” See Order Granting in Part and Denying in Part Defendant’s Motion to Dismiss (“Order”), page 5.

In reaching this ruling, the Court noted that the “Eleventh Amendment provides a state immunity from suit unless the state consents to be sued or Congress validly overrides the state’s immunity.” Id. at p. 3 (citing Green v. Mansour, 474 U.S. 64, 68 (1985)). To determine if Congress validly overrode a state’s immunity, the Court said that it “looks to two factors: (1) whether Congress expressed a clear intent to override the state’s immunity and (2) whether Congress acted pursuant to a congressional grant of authority.” Id. (citing Seminole Tribe of Florida v. Florida, 517 U.S. 44, 55 (1996)).

Moreover, to determine whether an act constitutes a valid exercise of Congress’s power under Section 5 of the Fourteenth Amendment, the Court said that it must find that Congress identified “‘conduct transgressing the Fourteenth Amendment’s substantive provision, and… tailor[ed] its legislative scheme to remedying or preventing such conduct.’” Id. at pages 3-4 (citing City of Boerne v. Flores, 521 U.S. 507 (1997), and quoting Florida Prepaid v. College Savings Bank, 527 U.S. 627 (1999)).

After setting forth this framework, the Court noted the relative dearth of case law addressing this issue. It observed that “[n]either the Supreme Court, nor the Ninth Circuit has addressed the issue of whether the CRCA is a valid abrogation of state sovereign immunity.” Order at page 4. Nonetheless, it added that “the Supreme Court struck down as unconstitutional two similar ‘remedy clarification’ acts involving intellectual property rights.” Id. (citing Seminole Tribe, supra (invalidating the Patent and Plant Remedy Clarification Act) and College Savings Bank v. Florida Prepaid Postsecondary Education Expense Fund, 527 U.S. 666 (1999) (invalidating the Trademark Clarification Act)).

Further, the Court observed that the only other case to directly address this issue following the holding in Seminole was Chavez v. Arte Publico Press, 204 F.3d 601, 608 (5th Cir. 2000). Applying the analytical framework of Florida Prepaid, the Chavez court said that “the relevant inquiry for determining whether the CRCA constitutes a valid exercise of Congress’s Fourteenth Amendment powers is: (1) whether there is a pattern of copyright infringement by the states; (2) whether adequate state remedies for copyright infringement exist; and (3) the coverage of the legislation.” Order at page 5 (citing Chavez, 204 F.3d at 605). Based on its analysis of the CRCA as discussed in Chavez, the Fifth Circuit found that Congress had “failed to uncover a pattern of constitutional violations by states regarding infringement of the copyright act, failed to consider alternative methods of obtaining relief, and failed to limit the reach of the CRCA in any manner.” Id. (citing Chavez, 204 F.3d at 605-608).

Following the path set forth in Chavez, the Marketing Court then embarked on an analysis similar to that of the Chavez court. It expressly embraced holding in Chavez, stating that “[t]his Court concurs with the Fifth Circuit’s application of the analytical framework presented in Florida Prepaid to the CRCA.” Order at page 6. Specifically, the Marketing Court considered whether the evidence and testimony that Congress studied prior to enacting the CRCA demonstrated a pattern of copyright infringement by the states. The Marketing Court concluded that the evidence Congress considered did not “demonstrate a pattern of unremedied copyright infringement by the states.” Id. at page 6. At most, the Court said, the evidence demonstrated “sporadic violations, not widespread violations by the states…. Additionally, [the] Register of Copyrights, reported during his testimony that states are ‘respectful of copyright law’ and he believes they will remain so.” Id.

Next, the Marketing Court considered whether Congress had adequately examined the adequacy of state remedies for copyright infringement prior to enacting the CRCA. Id. Again, it concluded that it had not, finding that Congress had only “minimally considered” the adequacy of such state remedies. Id. Finally, the Court considered whether the coverage of the CRCA was sufficiently narrow to address conduct that violates the due process clause of the Fourteenth Amendment. Order at page 5 – 6. Again, the Court responded in the negative. Id. In reaching this conclusion, the Court harkened back to the ruling in Florida Prepaid, 527 U.S. at 645, where the Supreme Court had held that provisions of the Patent Remedy Act which did not require any showing of intent to infringe were not sufficiently tailored to remedy unconstitutional behavior. “The discussion in Florida Prepaid teaches ‘that a deprivation, to fit the meaning of the due process clause, must be intentional….’” Order at page 7 (quoting Chavez, 204 F.3d at 607).

Thus, the Marketing Court held that because copyright infringement does not require a showing of intent, Congress had “failed to limit the reach of the CRCA to infringement which violates the due process clause.” Order at page 7. As such, the Court concluded that “the CRCA is not proportionate to ends legitimate under ‘ 5 of the Fourteenth Amendment.” Id. Based on this, the Court ruled that “Defendant Board of Trustees and Robert A. Rauch, in his official capacity, are entitled to immunity.” Id.

It is worth noting that the Marketing plaintiff tried to avoid the Seminole effect by relying on two cases in support of its position that the CRCA was indeed a valid a exercise of Congressional power: Unix System Laboratories, Inc. v. Berkeley Software Design, Inc., 832 F. Supp. 790 (D.N.J. 1993) and Lambert v. City of Kenner, 1993 WL 99188 (E.D. La. 1993). In both instances, the courts that heard those cases relied on the Supreme Court’s holding in Pennsylvania v. Union Gas Co., 490 U.S. 1 (1989) in arriving at their decision. See Unix, 832 F. Supp at 798; Lambert, 1993 at WL 99188 at *3. What Marketing Information neglected to mention, however, was that Union Gas was overruled by Seminole Tribe, and thus no longer good law. Indeed, in Seminole, the Supreme Court expressly overruled Union Gas by noting that that case had “deviated sharply from [the Court's] established federalism jurisprudence.” Seminole Tribe, 517 U.S. at 45.

Certainly the history and the timing of the CRCA demonstrates how — and why — the plaintiff’s reliance on Union Gas was misplaced. As Professor David Nimmer details in Nimmer on Copyright Section 12.01, the Register of Copyrights had in fact suggested to Congress that it wait until the Supreme Court ruled on Union Gas before passing the CRCA, suggesting that if the Supreme Court validated Congress’s authority to abrogate sovereign immunity in that case, Congress should amend the Copyright Act to permit states to be sued. When the Supreme Court handed down its ruling in Union Gas, Congress passed the CRCA the following year. See also H.R. Rep. No. 101-305, 101st Cong., 2d Sess. 8 (1990) (“The recent decision in … Union Gas Co., affirmatively answered the question that Congress does have the power to abrogate when it legislates under the Commerce Clause. The same reasoning applies to the Copyright Clause that also grants Congress plenary power to enact Federal Legislation.”).

Judge John A. Houston’s ruling in Marketing that the CRCA does not survive constitutional scrutiny under the enforcement clause of the Fourteenth Amendment may gain some support from the proposition (although unstated in the Marketing ruling) that the Supreme Court would invalidate the CRCA if confronted with that issue today. The reason for this is three-fold.

First, the Supreme Court has already invalidated the efforts of Congress to subject the States to suit for patent and trademark infringement based on statutes nearly identical to the CRCA. See Florida Prepaid, supra, 527 U.S. 507 (1999); and College Savings Bank v. Florida Prepaid, supra, 527 U.S. 666 (1999). Second, the Supreme Court expressly intimated a ruling that the CRCA does not pass constitutional muster in Chavez, supra, 517 U.S. 1184 (1996). Specifically, in Chavez, the Supreme Court granted a petition for writ of certiorari to consider the Fifth Circuit’s ruling in Chavez v. Arte Publico Press, 59 F.3d 539 (1995). That lower court case had held the CRCA to be valid exercise of Congressional power. The Supreme Court vacated that judgment and remanded Chavez for consideration in light of Seminole Tribe. The resulting opinion in Chavez v. Arte Publico Press found the CRCA to be unconstitutional.

Third, as discussed in the Marketing opinion, the CRCA does not comply with the analytical framework as set forth in City of Boerne v. Flores, 521 U.S. 507 (1997). In Boerne, the Supreme Court held that Congress acts validly pursuant to Section 5 of the Fourteenth Amendment only when it crafts legislation to enforce its provisions. Id. at 519. Further, the Court said that the means Congress chooses to enforce Section 5 must be congruent and proportional to the injury to be remedied. Id. at 520. As Judge Houston noted in Marketing, the CRCA does not comply with Boerne because there is scant evidence of a pervasive pattern of copyright infringement by the States, and because Congress apparently disregarded the available alternative state remedies for would-be plaintiffs. Therefore, because Congress identified no pervasive pattern of infringement by the states, and because other adequate remedies exist to address such infringement, the Supreme Court would likely find that the CRCA was not “proportionate and congruent,” and thus does not pass muster.

Based on this, the current trend (and certainly the state of the law in the Southern District of California and in the Fifth Circuit) is that a plaintiff cannot prevail in a copyright infringement claim brought against a State or State-actor when the latter is acting in his or her official capacity. See also Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 101 (1984) (“the Eleventh Amendment bars a suit against state officials when the state is the real, substantial party interest”); D’Angelo v. Crofts, 162 Fed. Appx. 728,729 (9th Cir. 2006) (the “Eleventh Amendment prevents recovery against the state or against state officers in their official capacity for retroactive money damages”).

The defendants in Marketing Information Masters were represented by Jonathan Pink, is a member of the Orange County, California office of Bryan Cave, LLP. He may be contacted at jonathan.pink@bryancave.com.

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

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