Copyright, State Sovereignty, and Pirates: Some Thoughts on Oral Argument in Allen v. Cooper (Guest Blog Post)

by guest blogger Glynn Lunney, Texas A&M Law School

When our country was founded, one of the central issues was how much of their sovereignty the states would cede to the new federal government and how much they would retain for themselves. In 1794, the addition of the 11th Amendment to the Constitution ensured that states would retain one key aspect of sovereignty vis-a-vis the new federal government: sovereign immunity.

Over two hundred years later, the discovery of a pirate ship re-raises that central issue. In Allen v. Cooper, the precise question is whether Congress can abrogate a state’s 11th Amendment immunity for acts of copyright infringement. Following its discovery in 1996, Allen had taken photos and videos to document the shipwreck and salvage of Blackbeard’s ship, Queen Anne’s Revenge. The ship had run aground and sunk at Beaufort, North Carolina in 1718. Allen had properly registered the copyrights in his original works. At some point before 2013, the state of North Carolina had published some of Allen’s photos and videos on a state website without Allen’s consent. When Allen complained, the parties reached a settlement, and the photos and videos were taken down. A short time later, however, the state reposted the photos and videos.

[For more background on the Allen v. Cooper case, see Prof. Tyler Ochoa’s summary.]

Allen filed suit for copyright infringement. He argued that Congress had abrogated state immunity for copyright infringement through the Copyright Remedy Clarification Act. While the district court agreed with Allen, the Fourth Circuit did not. In 1999, the U.S. Supreme Court had already addressed whether Congress had the authority to abrogate state immunity for acts of patent infringement and for violating section 43(a) of the Lanham Trademark Act. See Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999) (discussing power to abrogate state immunity for patent infringement); College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999) (discussing power to abrogate immunity for violations of the Trademark Act). In both cases, the Court held, by a 5-4 vote, that Congress did not have that authority. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U.S. at 636-40; College Sav. Bank, 527 U.S. at 672-75. In holding that Congress could not validly abrogate state immunity for copyright infringement, the Fourth Circuit felt itself bound to follow the Court’s earlier decisions. If Congress did not have the authority to abrogate state immunity under the Patent and Trademark Acts, as the Court had already held, presumably Congress did not have the authority to abrogate state immunity for acts of copyright infringement either.

It was a bit of a surprise, then, when the Court granted certiorari in Allen v. Cooper to address the same issue in copyright law. It would seem a straightforward case with the outcome largely dictated by the Court’s own earlier decisions on state immunity in the patent and trademark context. Yet, after the oral argument, I am left to wonder whether the Court will abandon its precedents and chart a new course.

I have four specific concerns. First, some justices seemed oddly receptive to Allen’s attorney Derek Shaffer’s truly laughable suggestion that copyright is some special form of constitutional property. Second, the work-around the Court provided in Ex parte Young largely addresses the concern of rampant state copyright infringement with which some Justices seemed concerned. Third, if Ex parte Young does not fully address the concern of rampant state copyright infringement, the ballot box, not the judiciary, is the appropriate check. Fourth, even if rampant state copyright infringement occurred or would occur, that would not justify abrogation of state immunity under section 5 of the 14th amendment. From the outset, the state’s 11th amendment immunity was an express limit on the exclusive rights that Allen had received. A refusal to award damages for any acts of copyright infringement by the state was not therefore a deprivation of property without due process of law. Rather, it was enforcement of the property rights Allen had actually received.

On the first issue, Mr. Shaffer insisted that copyright is a special form of constitutionally protected property. In his view, Congress should therefore have the authority to abrogate state immunity for acts of copyright infringement, even if it did not have the authority to do so in the patent and trademark context. To support this argument, Mr. Shaffer pointed to the word “secure” and the phrase “exclusive right” in Article I, section 8, clause 8 of the Constitution – the so-called Copyright and Patent Clause. The word “secure” in the Clause, Mr. Shaffer argued, suggests that the rights at issue already exist. The phrase “exclusive right,” he continued, must encompass a right to exclude all others, including states. Taken together, this language makes copyright, in Mr. Shaffer’s view, a special form of constitutional property.

These arguments are entirely without merit. As for the word “secure,” the Court had already carefully considered and rejected similar contentions based upon that word in Wheaton v. Peters nearly two hundred years ago. 33 U.S. (8 Peters) 591 (1834). There is no natural right to prohibit copying. Copyright is purely statutory. An author has only whatever copyright protection that Congress chooses and is able to provide. As for the second phrase, even in the unlikely event that the phrase “exclusive right” implied complete exclusivity when it was adopted in the Constitution, the subsequent adoption of the 11th Amendment in 1794 placed limits on the nature of the exclusive right Congress had the authority to grant. Moreover, the Copyright Act itself contains any number of limitations on the exclusive right of the copyright owner to reproduce the copyrighted work. The “exclusive right” the Constitution contemplates has never been absolute.

More generally, there is nothing sacred about copyright. It is not some mystical and wondrous form of constitutional property. When we move beyond copyright as myth, and attempt to measure what copyright actually does, we find that copyright is mere regulatory rent-seeking. It increases the rents, or monopoly profits, certain copyright owners can capture in the market. In theory, it is supposed to give us, in return, more and better creative works. In reality, copyright gives us nothing, or less than nothing, in return. My own empirical research on the recording industry, for example, has demonstrated that when copyright’s enforceability and revenue for the industry peaked in the 1990s, music output fell significantly. Glynn Lunney, Copyright’s Excess: Money and Music in the US Recording Industry (2018). As copyright enforceability and revenues fell following the rise of file sharing, music output increased. The notion that copyright increases creative output is, if not pure fantasy, empirically unsupported.

Thus, when Justice Breyer and others questioned whether ruling in the state of North Carolina’s favor here would leave open the possibility of rampant state infringement, North Carolina Deputy Solicitor General Ryan Park’s first and immediate response should have been: “Great. Nothing could be better for promoting the progress of science than for states to begin programs of widespread and systematic copyright infringement.” Yet, he did not.

This brings me to my second and third concerns. While I can somewhat understand Mr. Park’s reluctance to challenge the myth of copyright directly – bedtime stories are hard to fight after all, he could at least have spoken the words “Ex parte Young.” The Court’s decision in Ex parte Young, 209 U.S. 123 (1908), provides a longstanding work-around for states’ 11th Amendment immunity. While it does not enable a copyright owner to recover monetary damages from a state or state actor, Ex parte Young does allow a copyright owner to obtain an injunction against the individual state employees who are responsible for the infringement. Thus, if a state were to begin a systematic and widespread program of copyright or patent infringement, Ex parte Young would address that directly.

Alternatively and third, if Ex parte Young were not enough, not every instance where a state’s elected officials make questionable policy choices has or should have a judicial remedy. Sometimes, in a representative democracy, the only remedy available when a state’s elected officials act unwisely is the ballot box. [By its literal terms, the 11th Amendment immunizes states only against federal lawsuits by citizens of other states or citizens of any foreign state. However, the Court has not so restricted a state’s 11th Amendment immunity. See Seminole Tribe of Florida v. Florida, 517 U.S. 44, 54 (1996).] That is the structural appeal of the 11th Amendment. Let us assume for the moment that the transaction cost and collective action advantages of copyright owners has enabled them to capture Congress. As a result, Congress continues to expand and lengthen copyright protection in ways that are contrary both to the public interest and to copyright’s constitutional purpose of promoting “the Progress of Science.” In this situation, enabling the states to have a separate say on whether Congress has gone too far can provide an important check on the public choice and regulatory capture concerns copyright otherwise presents. If states believe that Congress has gone too far on copyright, they can start to push back. This is not a flaw of our federal system, but a feature. Dividing the power between states and the federal government is part of the checks and balances of our constitutional framework. It makes misuse of government power at any level less likely and mitigates its harm when it occurs. If the elected officials of a state believe that copying of certain copyrighted works of authorship without the copyright owner’s consent is in the best interests of the state’s citizens, that is a rational policy choice. The dominant judicial practice on such economic legislation has been, at least since the end of the Lochner era, to defer to the legislature’s judgment on such issues. If a citizen has a complaint about how a state is regulating its economy, the sole and proper remedy is the ballot box, not the courts.

This brings me to my fourth and final point. At several points in the argument, various Justices raised the question whether allowing a state to infringe – even willfully infringe – a copyright would constitute a taking or other constitutional violation and therefore justify Congress’s abrogation of a state’s immunity under section 5 of the 14th Amendment. Both the attorneys and the Court appeared to share an assumption that if sufficient state infringement was occurring, that would justify congressional abrogation of 11th Amendment immunity.

This assumption, however, rests on a flawed premise. Specifically, it presumes that Allen had the right to sue a state for monetary damages for unauthorized state reproduction in the first place. Yet, he never did. The right to sue a state for monetary damages for copyright infringement was never one of the sticks in the bundle of rights that Congress gave Allen. As a result, when the state of North Carolina copied and displayed Allen’s photos and videos of the Queen Anne’s Revenge, and Allen could not recover monetary damages for those actions, no deprivation of property occurred. Allen never had the right to sue for such damages. To pretend otherwise is mere bootstrap.

Mere enforcement of the property rights a person actually holds is neither a taking nor otherwise a deprivation of property. For example, if a court found a given use to be a fair use, and hence non-infringing, under section 107 of the Copyright Act, that would be neither a taking nor a constitutional deprivation of property. Fair use is an express limit on the “exclusive rights” Congress gave the copyright owner. As a result, refusing to enjoin a fair use, even if otherwise an unauthorized reproduction, would represent mere enforcement of the property rights that the copyright owner was actually given. Similarly, if a court refused to enforce a copyright in a case where enforcement would violate the First Amendment’s guarantees of free speech, that too would constitute neither a taking nor a constitutional deprivation of property. Like fair use, the free speech guarantees of the First Amendment are also an express limit on the rights Congress gave the copyright owner. As a result, refusing to enforce a copyright in a case where doing so would violate the First Amendment would represent mere enforcement of the property rights that the copyright owner was actually given.

The same analysis should apply to the state of North Carolina’s actions in Allen v. Cooper. If a court finds that the state is not liable for monetary damages for copyright infringement because of its 11th Amendment immunity, that is neither a taking nor a constitutional deprivation of property. Just like the First Amendment, the 11th Amendment is, and since 1794 has been, an express limit on whatever “exclusive rights” Congress purports to give a copyright owner. As a result, Congress never gave–and indeed, under existing law, could not have given–Allen the right to sue the state of North Carolina for monetary damages for copyright infringement. When a court refuses to award such monetary damages, that is not a deprivation of property. It is mere enforcement of the property rights that Congress actually gave Allen when he fixed his photos and videos of Queen Anne’s Revenge. It remains mere enforcement of Allen’s actual exclusive rights no matter how many times a state copies or publicly displays Allen’s copyrighted works.

We see this principle at play directly in the Court’s takings jurisprudence. In Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), for example, the Court held that a land use regulation that deprived an owner of all economically viable use of his land could constitute a taking. It would not, however, constitute a taking if the regulation merely made express a limitation already present in the owner’s title. The Court therefore remanded for a determination by the South Carolina courts whether construction of homes on the lots at issue was already prohibited by background principles of state nuisance law. Id. at 1027 (“Where the State seeks to sustain regulation that deprives land of all economically beneficial use, we think it may resist compensation only if the logically antecedent inquiry into the nature of the owner’s estate shows that the proscribed use interests were not part of his title to begin with.”). If Lucas never had a legal right to build, then prohibiting him from building could not be a taking. There would be no change in Lucas’s legal rights with respect to the parcels, and Lucas’s taking claim would fail at the threshold. Similarly, in Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984), the Court considered whether a change in the E.P.A.’s policy as to whether it would keep confidential the data submitted in conjunction with an application for approval of a new pesticide constituted a taking. While the Court held that the change did constitute a taking as applied retroactively, the Court held that the government’s refusal to keep such data confidential going forward was not a taking. 467 U.S. at 1004-08. Applied prospectively, the new data confidentiality policy defined precisely the property rights in the data an applicant would hold if it chose to submit an application under the new policy. As a result, disclosure of the data from a new application filed after the new policy went into force was not a taking of the applicant’s property rights. It was mere enforcement of the property rights the applicant was given. Id. at 1008 (“[A]s long as Monsanto is aware of the conditions under which the data are submitted, and the conditions are rationally related to a legitimate Government interest, a voluntary submission of data by an applicant in exchange for the economic advantages of a registration can hardly be called a taking.”).

The same reasoning applies to Allen. Allen began filming the Queen Anne’s Revenge shipwreck and salvage operation in 1998. Allen v. Cooper, 244 F. Supp. 3d 525, 530 (E.D.N.C. 2017), rev’d, 895 F.3d 337 (4th Cir. 2018), cert. granted, 138 S. Ct. 2664 (2019). That was two years after the Court’s decision in Seminole Tribe of Florida v. Florida. 517 U.S. 44 (1996). That decision directly stated that Congress did not have the authority, under its Article I powers, to abrogate a state’s 11th Amendment immunity. Within a year after Allen began work, the Court formalized in Florida Prepaid what everyone already knew: Congress did not have the authority to give a patent or copyright holder the right to sue a state for monetary damages for infringement. [FN] Just as Monsanto knew the new data confidentiality rules when it submitted a new pesticide application for approval, Allen either knew or should have known when he began filming that whatever “exclusive right” to bar unauthorized copying Congress had given him, it did not include the right to sue the state of North Carolina for monetary damages for infringement. Yet, Allen began filming anyway.

[FN] Indeed, that Congress did not have such authority under the Copyright and Patent Clause in Article I was so clear that no one even bothered to argue the proposition. Florida Prepaid Postsecondary Education Bd., 527 U.S. at 636 (“Seminole Tribe makes clear that Congress may not abrogate state sovereign immunity pursuant to its Article I powers; hence the Patent Remedy Act cannot be sustained under either the Commerce Clause or the Patent Clause. The Federal Circuit recognized this, and College Savings and the United States do not contend otherwise.”)

By doing so, Allen made the clearest statement possible, indeed the only statement that matters, that a right to sue the state for monetary damages for infringement was unnecessary to his work. Now more than twenty years later, Allen asks the Court to change the law and give him a legal right he never had and did not need to begin his work. Allen is not asking for justice. He is asking for retroactive windfall. It is not the state of North Carolina that is the pirate here. It is Allen.