Copyrights and state sovereignty: U.S. Supreme Court removes monetary damages for state actor infringement

On March 23, 2020, a unanimous, if slightly fractured, Supreme Court ruled in Allen v. Cooper, 140 S. Ct. 994 (2020), that Congress did not properly abrogate sovereign immunity when it enacted the Copyright Remedy Clarification Act of 1990 (CRCA). This means that states can no longer be sued for monetary damages in copyright infringement cases.

The case centers on video footage of the famous shipwreck, Queen Anne’s Revenge, which was the flagship of the pirate known as Blackbeard. The ship wrecked off the coast of North Carolina and belongs to North Carolina under both federal and state law. North Carolina contracted with a company to explore the wreck, and that company hired Frederick Allen to video record the excavation. Allen filmed the wreck for years and copyrighted his footage. North Carolina eventually posted some of the video footage online, and Allen sued for copyright infringement. North Carolina argued that it had sovereign immunity and could not be sued for monetary damages for copyright infringement, while Allen argued that Congress specifically abrogated that sovereign immunity when it passed the CRCA.

The Court ultimately agreed with North Carolina and found that neither Congress’ copyright authority nor due process authority under the Fourteenth Amendment permitted Congress to abrogate state sovereign immunity. (Allen is similar to the case of Florida Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627 (1999) in which the Court overturned portions of the Patent Remedy Act, which also abrogated state sovereign immunity for patent infringement claims.)

A primer on sovereign immunity

Generally, Eleventh Amendment sovereign immunity precludes federal courts from hearing lawsuits brought against states, unless that state has consented to the suit or Congress, using “unequivocal statutory language,” has abrogated the states’ immunity from suit. State sovereign immunity is derived from the Eleventh Amendment, which states: “The Judicial Power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” The U.S. Supreme Court has held that while the Eleventh Amendment appears to restrict only Article III diversity jurisdiction of federal courts, it extends further to recognize the states as sovereign entities that are not subject to private suit without the state’s consent. Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996).

What is the result of Allen v. Cooper?

In striking down narrow portions of the CRCA, Allen results in the reinstatement of the sovereign immunity defense for when a private party brings a copyright infringement claim against the state or actors at state agencies in the actor’s official capacity. The Supreme Court has held that sovereign immunity only extends to state agencies that the Court considers to be arms or instrumentalities of the state. The Court has never created a standardized test to determine what agencies fall into these definitions. However, the Court has directed lower courts to at least examine the “relationship between the sovereign and the entity in question” and the “essential nature and effect of the proceeding.” Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429 (1997). The major factor that the Supreme Court looks to is whether the state is “obligated to bear and pay [any potential legal] indebtedness of the [entity].” Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30, 51 (1994). State actors would constitute officials who perform official functions of these state “arms” or “instrumentalities” and may include personnel working at state agencies, public institutions of higher education and state government officials.

Sovereign immunity, however, also has limits.

First, copyright owners continue to have the ability to seek injunctive relief against states and state actors for copyright infringement, which can still result in expensive litigation. States actors do not enjoy sovereign immunity from injunctions due to the seminal case of Ex Parte Young, 209 U.S. 123 (1908). If an organization is faced with a suit for an injunction, ceasing the challenged behavior can make the claim moot and avoid continued litigation.

Also, state actors can still be sued for damages in their personal capacity (without protection of the state) if their actions are unconstitutional, outside the scope of their official authority or undertaken in bad faith. Bad faith actions could result from a state actor willfully engaging in copyright infringement. State actors should, therefore, ensure that they are acting within the authority granted to their role in order to best position themselves to benefit from sovereign immunity protections. However, the scope of these protections and what functions they apply to are assessed on a case-by-case basis.

Sovereign immunity may also apply to government contractors in instances when: (1) the government authorized the contractor’s actions in question; and (2) the government “validly conferred” such authorization. Yearsley v. W.A. Ross Construction Co., 309 U.S. 18, 20-21 (1940). 

Finally, it should be noted that the sovereign immunity protections for copyright infringement apply to the state (and those acting on behalf of the state) but do not extend to political subdivisions of the state. Lincoln County v. Luning, 10 S.Ct. 363, 530 (1890) (holding that counties, cities, towns or other municipal corporations created by a state do not enjoy the protection of sovereign immunity). A political subdivisions in Ohio could include a “municipal corporation, township, county, school district, or other body corporate and politic responsible for governmental activities in a geographic area smaller than that of the state.” R.C. § 2744.01.

Conclusion

Allen v. Cooper is an important case that impacts both private copyright owners and states. The decision affords a sovereign immunity defense from monetary damages to state and state actors that are sued for copyright infringement. However, this defense has limits and should not be wholeheartedly relied on for state and state actors to willfully violate copyright protections in bad faith. Copyright infringement may still result in expensive litigation and willful infringement may subject state actors to personal liability.