Of Federalism, Copyright, and Blackbeard’s Revenge: The recent Supreme Court ruling in Allen v. Cooper is the latest development in a decades-long series of Congressional enactments and Supreme Court rulings over whether and how Congress can abrogate the sovereign immunity of States from intellectual property infringement suits. This all-star panel will discuss the Court’s most recent decision in the context of the evolution of the Court’s sovereign immunity jurisprudence, the policy concerns of Congress and intellectual property owners, and where we might go from here.
Prof. Steven Tepp, Professorial Lecturer in Law, George Washington Law, and President and Founder of Sentinal Worldwide
Prof. John T. Cross, Grosscurth Professor of Intellectual Property Law and Technology Transfer, University of Louisville Brandeis School of Law
Prof. Ralph Oman, Pravel, Hewitt, Kimball and Kreiger Professorial Lecturer in Intellectual Property and Patent Law
Prof. Ernest A. Young, Alston & Bird Professor, Duke Law School
Operator: Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's Intellectual Property Practice Group, was recorded on April 7, 2020, during a live teleforum conference call held exclusively for Federalist Society members.
Micah Wallen: Welcome to The Federalist Society’s teleforum conference call. This afternoon’s topic is a Courthouse Steps teleforum on Allen v. Cooper. My name is Micah Wallen, and I’m the Assistant Director of Practice Groups at The Federalist Society.
As always, please note that all expressions of opinion are those of the experts on today’s call.
Today, we are fortunate to have with us Professor Steven Tepp, who is Professorial Lecturer in Law at George Washington Law and President and Founder of Sentinal Worldwide. Steven is our moderator today, and he will be introducing the rest of the panel. After our speakers give their opening remarks, we will then move to an audience Q&A. Thank you all for sharing with us today. And Steve, the floor is yours.
Pro. Steven Tepp: Thank you very much, Micah, and thanks to The Federalist Society for providing this medium for our conversation. For over 150 years, states and intellectual property owners alike had every reason to believe that infringements by states and state entities were fully actionable in federal court. But starting about 30 years ago, we have seen a series of developments, both in the courts and in Congress, that can be viewed as something of a tug of war with IP owners and Congress on one side and the states and the Supreme Court on the other.
Enter Frederick Allen, a professional photographer and videographer who was hired to record the wreck of the Queen Anne’s Revenge, the flagship of none other than Edward Teach, the infamous Black Beard. Those videos were posted online by the North Carolina Department of Natural and Cultural Resources, leading to this copyright infringement lawsuit. This story has something to whet the appetite of any Federalist Society member: fundamental questions of federalism, a policy tussle between branches of the federal government, the first post-Bill of Rights amendment to the Constitution doing battle with express Article I authority, and piracy, both of the high seas and copyright varieties.
We’re fortunate to have with us today a truly all-star panel to discuss these issues. Ernest Young holds the Alston & Bird Chair at Duke Law, where he teaches constitutional law and federal courts. He has written extensively on federalism and state sovereign immunity. And he was the principle author of the brief of public law scholars and the amici curia in support of petitioners in Allen v. Cooper.
Our second speaker today will be Ralph Oman, who practices and teaches copyright law at the George Washington University Law School as the Pravel Professorial Lecturer in Intellectual Property and Patent Law. He also serves as a fellow on the faculty of the law school’s creative and innovative economy center. He’s taught at the George Washington University Law School since 1993. From 1994 to 2008, he was counsel to the international law firm, Dechert.
Before entering private practice in 1994, and most relevant to this conversation, Mr. Oman was a register of copyrights over the United States from 1985 to 1993. During that time, he oversaw a report on state sovereign immunity issues that plays a starring, if not prevailing, role in the Court’s most recent decision. Prior to his appointment as register, Mr. Oman served as chief counsel for the Senate Subcommittee on Patents, Copyrights, and Trademarks of the U.S. Senate Judiciary Committee.
And our third speaker this afternoon will be John Cross. He is the Grosscurth Professor of Law at the University of Louisville School of Law in Louisville, Kentucky. Professor Cross concentrates both his teaching and research on intellectual property law, especially the intersection between competition law and intellectual property rights. He also teaches and researches in the field of conflicts of law, private international law, and court law. Cross received his undergraduate degree from Bradley University and his law degree from the University of Illinois.
Prior to joining the law faculty at Louisville in 1987, he was an attorney in private practice in Minneapolis, Minnesota. During his tenure at Louisville, Professor Cross has twice served as the visiting Fulbright scholar in Finland in 1995 and Ireland in 2000. In 2006, based on his contributions to legal scholarship, Professor Cross was awarded a Doctor of Law degree honoris causa from the University of Turku in Finland. So let’s get started without further ado with Professor Ernie Young of Duke.
Prof. Ernest A. Young: Steve, thank you for having me on this. I’m just going to try to give a little bit of an overview of the law. One thing I love about state sovereign immunity is that it combines the very practical with the absolutely nerdy, geeked out historical and political theory. So that the reason why Fred Allen can’t recover for a copyright infringement against the state of North Carolina has everything to do with what people like Blackstone and Hobbs and Bodin were saying about sovereignty in the 17th and 18th centuries.
Sovereign immunity is very old in political theory. The idea going back to the 16th century was that the sovereign who makes the law can’t be sued under the law. The common law also had an important idea of sovereign immunity, but it was a little different. Probably those principles wouldn’t have survived into our law if sovereign immunity didn’t play and important practical purpose, which is to basically maintain democratic control over the public fisc so that a court giving a jillion dollar judgement to a particular plaintiff can’t disrupt budgetary processes by raiding the kindergarten lunch fund in order to pay a damages judgement.
And so that practical reality, I think, is what has kept us with a strong doctrine of both state sovereign immunity and federal sovereign immunity. Nearly everyone at the Founding agreed that sovereign immunity existed, that it was important. And they agreed that Article III’s provision for citizen-state diversity, that is for federal court jurisdiction over cases in which a citizen and a state were the litigants, did not abrogate the sovereign immunity that the states had enjoyed prior to the Constitution.
The Supreme Court didn’t get that memo, though. And in Chism v. Georgia in 1793 they ruled for the plaintiff against Georgia and held that there was no sovereign immunity that had survived the Constitution. And so this raised a very profound practical specter that the states that were up to their eyeballs in Revolutionary War debts would be forced to pay up through litigation in federal court. And so there was a radical reaction to Chism. It’s one of only four decisions of the Supreme Court that had ever been overruled by a Constitutional Amendment. And the Eleventh Amendment followed in pretty close order, within two years of that decision.
So the text of the Eleventh Amendment, though, doesn’t cover a case like Allen v. Cooper. Every justice on the Supreme Court seems to agree that the text was simply supposed to abrogate the citizen-state diversity clause for cases in which the state did not consent to be sued. Allen v. Cooper is not a case that depends on citizen-state diversity for federal jurisdiction. It’s a federal question case.
That was held to be covered by state sovereign immunity in a case called Hans v. Louisiana a hundred years after Chism in 1890 where the Court extended state sovereign immunity to block a claim under the Contracts Clause. And then in Seminole Tribe, the Supreme Court, a hundred years after that in 1996, further held that Congress could not subject the states to sue, even if it’s specifically so provided in a federal statute, like the Copyright Act, for instance.
Seminole Tribe was expressly extended to intellectual property cases in the patent case of Florida Prepaid in 1999. And Florida Prepaid played an important role in Allen v. Cooper. I think those cases are probably wrong. I think they’re inconsistent not only with the text of the Eleventh Amendment, which doesn’t say anything about federal question cases, but they’re also inconsistent with the Framers’ notion of sovereignty.
As Justice Kennedy famously said, “The Framers split the atom of sovereignty so that, while the people were sovereign all of the time, each level of our government was only sovereign when they were acting within their respective powers.” And so a state government like Georgia, in Chism v. Georgia, was sovereign in that case because that was a contract claim under Georgia law. But in Hans v. Louisiana where the claim is under the Contracts Clause or in Seminole Tribe v. Florida where the claim is under the Federal Indian Gaming Regulatory Act or in Allen v. Cooper where the claim is under the Federal Copyright statute, the relevant sovereign is Congress.
So it just doesn’t make any sense to say that the state would have sovereign immunity in that case. If the law doesn’t provide a remedy against the source of the law, then the only relevant sovereign would be the federal government in a case like Allen v. Cooper. But the Court passed that fire brick in 1996, and it didn’t seem prepared to disturb that in Allen v. Cooper.
The Court has acknowledged two important exceptions to state sovereign immunity where Congress is allowed to abrogate the immunity of the states by subjecting the states to statutory damages liability. One is when Congress exercises its power to enforce the Reconstruction Amendments: Section 2 of the Thirteenth Amendment, Section 5 of the Fourteenth Amendment, Section 2 of the Fifteenth Amendment. And then there’s also a strange little exception for bankruptcy.
In a case called Katz, not too long ago the Supreme Court held that basically state sovereign immunity doesn’t apply in bankruptcy because bankruptcy is an area of unique uniform federal authority that was deliberately intended to minimize state by state variation. So Allen argued both of these exceptions in Allen v. Cooper. But they made a strategic decision to emphasis the bankruptcy theory. They argued that copyright was a lot like bankruptcy. At the Founding, there was a problem with state by state variation in protection of intellectual property. So the same sorts of motivations that called for insertion of a provision for a uniform federal law of bankruptcy in Article I of the Constitution also were behind the provision for uniform federal copyright laws.
Basically, the Supreme Court was having none of that. They said that bankruptcy was unique, that it was a one-clause-only holding in Katz, which I think is about as close to an admission that you’re likely to get that Katz was just inconsistent with the rest of the Court’s state sovereign immunity jurisprudence. And although the Court wasn’t prepared to overrule it, it certainly wasn’t going to extend it to any other powers. I think the Court wanted to avoid a situation where it would be asked to determine on a clause-by-clause basis whether this power or that power under Article I was also a special power like bankruptcy that could override state sovereign immunity.
The Section 5 argument was stronger. The problem was that the copyright statute looked a lot like the patent statute. And the Court had said that the effort to subject the states to patent liability under Section 5 of the Fourteenth Amendment didn’t succeed back in 1999 in Florida Prepaid. Basically, the reason for that is that not all intellectual property infringements by states are unconstitutional and, therefore, actionable under Section 5 of the Fourteenth Amendment. Only deliberate intentional infringements and only infringements where there is no adequate state remedy are deprivations of property without due process of law within the meaning of the Fourteenth Amendment. And the Court simply found that there was insufficient evidence that those requirements had been met. Basically, the Court said it was governed by Florida Prepaid in that case.
Now, one thing that’s really interesting about Allen v. Cooper is how unanimous the Court was. Previously, most of these state sovereign immunity cases under the Rehnquist court had been 5-4, with the predictable conservative liberal states rights nationalist split. In this case, it’s unanimous. And the people who had dissented in Seminole and Seminole’s progeny finally came around to accept that those cases were not going away and that there was no point in perpetually dissenting. I think that’s an important thing for the unanimity of the Court and their ability to work together and accept precedence even when particular justices don’t agree.
What they didn’t address was two things that might prove important in future litigation. One is a theory that we argued in our amicus brief and Allen argued, although a little half-heartedly. And that was a theory under a case called United States v. Georgia, which said that when you can prove that the state had violated your constitutional rights in your particular case, you could sue under a federal statute pursuant to Section 5 of the Fourteenth Amendment. And I think the Court just felt like that hadn’t been adequately argued and perhaps adequately pleaded in this particular case.
The Court also has suggested that Congress might take another crack at enacting the statute by compiling a better legislative record with more evidence than most copyright infringements are in fact intentional and that there aren’t adequate state remedies and that this might get a different result. I think you’re going to see, in the wake of Allen v. Cooper, an effort to do just that in Congress. Thanks.
Prof. Steven Tepp: Thank you very much. Very interesting. Let’s turn now to Ralph Oman, former register of copyrights, and his view of the case, in particular the factual record that the Court ultimately found unpersuasive but which I suspect Ralph may have some dissenting views.
Prof. Ralph Oman: Thank you, Steve. I appreciate your comment about my having a starring but not prevailing role in Allen v. Cooper. I would have preferred the other way around, prevailing but not starring. But that’s not the way it worked. You didn’t mention the wonderful coincidence that Queen Anne of Queen Anne’s Revenge is the same Queen Anne of the statute of Anne, the first modern copyright law. This case is, as you say, full of ironies.
But I’m here to talk about state sovereign immunity, copyright infringement building on what Professor Young has already mentioned. The problem is, as he mentioned and as all of you know, the Eleventh Amendment of the U.S. Constitution. In the most recent cases that we’ve studied in this connection, the Eleventh Amendment essentially prohibits lawsuits against states in federal court in their own name or against state entities or officials, like prisons, like universities, like hospitals.
It essentially prevents suits against states in federal court since it bars recovery of money damages. That means that if a state university makes a digital copy of your book of photographs of the university campus—and this is an actual case—and sends a 100,000 copies of that book to all of its faithful alumni without authorization, thereby destroying the author’s market—potential market—you can’t sue the university for copyright infringement and expect to get monetary damages. You might be able to get an injunction, but the damage has already been done at that point.
Fact is that Congress thought it had the problem solved back in 1990 when it passed the Copyright Remedy Clarification Act, or the CRCA. But it, as Professor Young mentioned, relied on the Constitution’s Article I powers. And Congress thought it had made clear that states could be sued for copyright infringement under that authority.
The Supreme Court, in Allen v. Cooper, held that Congress cannot use Article I to abrogate state sovereign immunity. The Eleventh Amendment was adopted after the 1788 adoption of the Constitution, so it trumps Article I. With Article I powers so circumscribed, the Court found that the CRCA was constitutionally flawed. And the Court considered the alternative, state liability under the Fourteenth Amendment, which trumps the Eleventh Amendment. The Court said that Congress could rely on due process clauses -- the Due Process Clause, the Just Compensation Clause to vindicate the property rights of authors but that Congress had not built a strong enough record in the legislative history of the CRCA to justify that extraordinary alternative.
One thing the CRCA didn’t expressly invoke Section 5 -- that was the problem. And the evidence, as Professor Young mentioned, was not deemed adequate. It was thin. There weren’t numerous examples in the record of state infringements that rose to the level of an unconstitutional taking. That shouldn’t come as a surprise since Congress wasn’t focused on satisfying the requirements of Section 5 of the Fourteenth Amendment. They thought that Article I gave them the needed authority.
Back in 1988, the Copyright Office concurred with that view. Congress had asked the Copyright Office, me in particular, personally, to study the problem and draft a report. In that report, we concluded that state infringements were not widespread but that they were on the rise and that authors were suffering as a result. Based on that and other evidence, Congress passed the CRCA.
One factor that we hadn’t counted on was judicial deference to the predictive judgement of Congress, something that Congress has often expressly expected. If Congress concluded that state infringement was about to take off exponentially, the Court should respect that conclusion. Not so. Even though new evidence suggested that Congress was right, and the new evidence today suggests that Congress was right, there have been over 165 cases of direct copyright infringement by the states or state entities in the past 20 or so years.
The states are currently engaged in willful copyright infringement without fear of monetary damages, not just books but motion pictures, music, software -- computer software. Those figures of increased infringement must be, in my opinion, just the tip of the iceberg. Most state infringements are almost certainly abandoned after the author talks to a lawyer and discovers that there’s no chance of getting monetary damages, or attorney’s fees presumably, for blatant infringements and that, in most cases, a lawsuit would be a waste of time and the client’s money.
In view of that new evidence that I mentioned a minute ago, Congress will now switch its focus from Article I to Section 5 and will build a compelling case based on state infringements that are so widespread and so flagrant in terms of being willful and knowing that the courts will accept the congressional rationale that this is a constitutional violation. North Carolina not only infringed in the Allen v. Cooper case, but it passed a law -- the North Carolina legislature passed a law cancelling Mr. Allen’s copyright. Talk about willful, my god.
As Professor Young mentioned, the Fourteenth Amendment allows Congress to intervene legislatively if evidence suggests that the states have deliberately, repeatedly, and intentionally deprived people of their rights or property without due process of law. I’m convinced that Congress could find that the new evidence is persuasive, and they could enacted a revised CRCA based on Section 5 of the Fourteenth Amendment. Of course, ultimately, the courts would have to decide whether or not the infringement is an offense that does rise to the constitutional level.
Justice Kagan, in her majority opinion, gave us a pretty clear roadmap on what Congress had to do to validly abrogate state sovereign immunity. Summarizing it, in her opinion Congress should build a record that exposes the depths of the problem, a long list of state infringements industry by industry, state by state, case by case, recognizing, as I said a few minutes ago, that most state infringement cases will fall below the radar never to be litigated because of futility. Once Congress builds that record as Justice Kagan directed, Justice Kagan would then focus -- or the Court would then focus on the scope of the abrogation.
She strongly indicates that the states are entitled to some respect and deference. They can’t be treated like any other common copyright infringer. So what’s she’s saying is that any potential abrogation under the new legislation must be, in her words, congruent, and it must be proportional. In other words, the legislation has to be respectful of the sovereign states. If they haven’t created equivalent state remedies under their own law, let’s give that alternative forum a fair hearing.
If Congress limits the abrogation to infringements that are knowing and willful, that’s a step in the right direction under Justice Kagan’s roadmap. If Congress retains sovereign immunity for the states in cases that allege a good faith reliance on the fair use doctrine, great, no monetary damages. The Digital Reserves case in Georgia -- Georgia University Library would be a case where there would be no expectation of monetary damages at the end of the litigation to establish whether or not the digital reserve was within the bounds of fair use. Same with innocent infringement or accidental infringements. All of these limitations would help create a remedy in our federal system that is congruent with the special status of our states and proportion to the harm that they’ve caused.
Of course, Justice Kagan has set a very high bar. Some copyright experts worry that copyright infringement will never rise to a constitutional violation. Mr. Tepp just last year stated the problem very elegantly at the Fordham University IP Conference. Paraphrasing him, he said, “We use the Fourteenth Amendment to vindicate states’ abuses of rights we fought the Civil War over, not copyright,” or words to that effect.
That’s the dilemma we face. We can do exactly what Justice Kagan directs us to do in the legislative arena. But there’s no guarantee that we will satisfy the requirements of the Court as expressed in Allen v. Cooper.
Don’t look for quick action in Congress. Congress, as all of us know, is otherwise preoccupied right now. And the copyright portfolio is not front and center. This is not to question the congressional ordering of priorities in the face of the coronavirus, but it is an election year and unusual election year at that. So the timetable for legislative activity on copyright is, at best, uncertain right now. State sovereign immunity is not even at the head of the copyright line. The Copyright Small Claims Court is the current leader in that regard.
Who knows what’ll happen? Too many uncertainties to predict. Legislation has been drafted. It’s being polished and reviewed by copyright experts. And it has several enthusiastic potential sponsors in the United States Senate, and we’ll see what happens. That’s my summary. Steve, back to you.
Prof. Steven Tepp: Thank you very much, Ralph. We have John Cross. John, you have, on this panel, views that are in the minority. But you have the dual advantages of batting cleanup and the fact that your views were in the majority in the Supreme Court. So please give us your perspective.
Prof. John T. Cross: Thanks so much, Steve. I first want to say what a privilege it is to be here. It’s a bit intimidating with the other panel members, but I will do my best. First, I have to say at the outset I agree 100 percent with Ernie’s point that the cases interpreting the amendment are just dead wrong. That’s not what the amendment says. It’s not what the amendment was intended to do.
But I’ve always kind of wondered, to borrow a theory from economics, if what we have here is a theory of the second best. In other words, sometimes when you take an error and them compound an error, you get closer to where you want to be had you not compounded the error. So what the Court has tried to do with the amendment is to have it serve a function I don’t think it was really ever intended to serve. Again, it’s a very narrow amendment. It relates to a very specific situation.
A couple of points I’ll make at the outset, sort of taking a broader picture on the amendment. It’s important to remember that the Court isn’t saying that states aren’t liable for copyright infringement or that they’re not liable in damages. That liability still exists. The Amendment is not a restriction on Congress’ ability to impose liability. It’s a restriction on a federal court to adjudicate that liability.
So the liability still exists. And in fact, there’s liability still in a very limited form in federal court. Ralph mentioned the ex parte Young exception where you can sue the individual officer and obtain and injunction or other forms of perspective equitable relief. So that remedy still exists.
But stepping back further, so now we have a case in patent. Now, we have a case in copyright. Where do we go from here if, in fact, we truly want to achieve what Congress meant? And that is to have states be liable for copyright infringement. One, the most logical approaches that Ralph talked about in wonderful depth, I don’t have much to add to it except a bit of skepticism that it’s really ever going to be that high a priority. After all, Florida Prepaid is now an old case. Although there were a couple of efforts—the Leahy Bill—to create a way around that decision, we haven’t seen that movement in patent. I’m not sure it’s going to happen in copyright.
But a new abrogation provision isn’t the only way out of this mess. There’s some other options. So one, remember that the amendment is only a limitation on federal court jurisdiction. That’s a peculiar problem in patent and copyright because federal jurisdiction’s exclusive. It doesn’t have to be.
One option would be to give states concurrent jurisdiction over copyright infringement cases, at least copyright infringement cases involving state defendants. You just solve the problem. You don’t need to worry about all the restrictions on Congress that would pertain to an abrogation statute. Liability is under Article I. We don’t care if it’s proportionate. We just care that the rationale exercise of the Article I power.
So if we just gave states jurisdiction, that wouldn’t entirely solve the problem. You might still have some in-state sovereign immunity in those court systems. But it would go a long way in those states that don’t have a very broad immunity.
Another option, I talked about this in a really old paper about 20 years ago, is another exception to Eleventh Amendment immunity is when the U.S. itself enforces the right, if the U.S. steps in as a parens patriae. You could, in theory at least, create that sort of system in intellectual property. But in situations where it’s a state defendant, perhaps the U.S. could step in and enforce the right. And in that situation, again, the Eleventh Amendment simply doesn’t apply.
So not to sound callus, although I probably will, the problem that we’re facing here is a problem of Congress’ own making. First, it gave federal courts exclusive jurisdiction, and yet those are the only courts bound by the amendment. Second, although it has the authority to abrogate that immunity in situations where there’s Fourteenth Amendment violation, as both of the prior speakers talked about, they didn’t do that right.
And so, again, the situation isn’t hopeless. There are ways around the amendment. I don’t really see the Court ever stepping back and restoring the amendment to what I think is its proper place. But even within this sort of Byzantine construct we’ve created, I don’t think we’ve absolutely precluded state liability in copyright. So I’m going to leave my comments at that in the hope that that will generate some good discussion. So I’ll turn the floor back to Steve.
Prof. Steven Tepp: Thank you, John. Some interesting and, I think, perhaps provocative observations there. So I have some questions at the ready, but I prefer if there are questions from any of the listeners to give them priority. So Micah, can I ask if you could come back on and let people know how they can signal they have a question?
Micah Wallen: And Steve, while we’re waiting for a few of those questions to line up, I’ll toss it back over to you.
Prof. Steven Tepp: All right. Thank you. So I’m going to start with something that’s very much a practitioner’s question in that I really have no idea what the answer might be. Why did the Court grant cert in this case? Seven of the justices were unprepared to revisit the 1999 Florida Prepaid precedent. And the factual record that was available to them from the proceedings below was not substantially stronger for copyright abrogation than it had been for the Patent Act in 1999. Who were the justices that voted to hear this case, and what did they think they were doing with their time?
Prof. Ernest A. Young: I think I know the answer to that. The Court almost always grants cert if a federal statute has been struck down on constitutional grounds by a lower court. And the cert petition in this case really rams that point home. They just said this is a case in which a federal statute has been invalidated by a lower federal court. Your practice is to always take this kind of case. You have to take this case.
And I think that’s why they took it. It’s an unusual situation in that everyone had assumed the copyright statute was unconstitutional after Florida Prepaid, insofar as it tried to impose damages liability on states and abrogate their immunity. But the Supreme Court hadn’t actually held that, and I think they felt like the Supreme Court had to weigh in on that question.
Prof. Ralph Oman: Steve, can I suggest something lighter and more frivolous as a reason? They’re human beings. It’s a fun case. They like to be in the headlines. Everybody was reading the opinion. That, I would hope, sometimes enters into the decision-making process.
Prof. Steven Tepp: All right. While we’re waiting for other questions to come in, I’ll turn it around with a much more philosophical question. There’s a widely held popular principle in America that no one is above the law. But sovereign immunity seems to fly in the face of that, at least with regard to the state institutions if not particular individuals in their individual capacity. Is sovereign immunity, a doctrine arising from the time of feudal monarchies, anti-democratic?
Prof. John T. Cross: If I can answer that, there’s sovereign immunity and there’s Eleventh Amendment immunity. And the two are not the same. I might agree with you that sovereign immunity, that is no liability at all, is anti-democratic. But Eleventh Amendment immunity is merely an immunity in the courts of a different sovereign. And I’m not sure that’s necessarily anti-democratic.
Prof. Ernest A. Young: If I could just comment on that a little bit, I think the gist of that is right in that there are still lots of ways to hold a state accountable for violating the law. You can get an injunction forcing them to conform their conduct to law in the future. You can sue their officers in their individual capacity for damages. And so I don’t think we’re saying that the state is above the law.
And in fact, there’s a democratic angle to state sovereign immunity which is that it allows the state to work out how it’s going to pay its bills without getting judgement executed on its property immediately. So that protects -- it depends on who you think of the rest of us as. If you image yourself as the plaintiff who’s getting shafted by the state and whose rights are being denied, then it seems anti-democratic. But if you are -- if you imagine yourself as a voter who’s concerned about the public fisc and wants to make sure that it’s spent in accord with legislative priorities, then large damages judgements can really throw a lynch into that, into the democratic process of prioritizing spending.
And so I think it serves that democratic purpose. Now, I don’t think it’s just about which court. I respectfully disagree with Professor Cross to the extent that that sounds like. There is Alden v. Maine, which says that even though the Eleventh Amendment’s text has no application in state court because a state court isn’t exercising the judicial power of the United States—which is the words in the amendment—nonetheless, this background principle of sovereign immunity forecloses suits under federal law brought in state court as well unless the state waves its immunity. Now, maybe a state would wave its immunity for a suit in federal court, but I’m not sure why they would. And I don’t know how many of them have.
Micah Wallen: All right. We’ll go ahead and go to our first caller.
Ed Heimlich: Yes, Ed Heimlich in Austin, Texas. My question is do we actually have the rule of law of the United States in our states anymore? Have we lost that due to this doctrine of sovereign immunity?
The medieval ruling basis that’s given as the excuse for sovereign immunity refers to a king and his government, and he did not actually make law. He was a dictator. He made dictates. So therefore, he was above the law. He owned the courts. He was the sovereign.
But our U.S. Constitution begins with “We the People,” quite clearly. Are we not the sovereign? And do we not make laws that bind the government so that our rights, our god given rights are secured by our constitution and laws made in pursuits thereof are secured from the power of the government?
Or is government now our king, as in the state’s case of a communist state where the state, the government is the god and the dictator? So that’s my question: who is the sovereign? Is it the people of the United States, “We the People”? Or is it the government?
Prof. Ernest A. Young: I’ll take a shot at that one. I think the problem is the people appear in several different guises. People are potentially plaintiffs whose rights have been violated by a state. The people are the people who drafted and ratified the Constitution, which includes a principle of sovereign immunity according to the Court. The people are the legislature that subjects the states to liability -- or the Congress that subjects their states to liability. But they are also, operating in a different capacity, the state legislature that decides whether or not to wave their sovereign immunity. So what makes federalism wonderful for nerds is that the people act in such different capacities that sometimes come into conflict.
In a case like Allen v. Cooper, which bars us to kind of sort out all the different ways in which the people act and exercise their sovereignty. Now, I’m with you at the end of the day because I think that the relevant sovereign here is, because this is a federal statutory case, is the Congress that enacted the copyright statute and tried to subject the states to liability. I think they’re the relevant sovereign. And no other entity should immunity where they act within their Article I powers. But I’d be lying to you if I didn’t say it was complicated.
Micah Wallen: All right. We’ll go ahead and move to the next caller.
Zvi Rosen: Hey guys, this is Zvi Rosen. I’m really enjoying the panel so far. One thing I’ve been wondering is—and this is mostly at Ralph but really at everyone—how have things changed over the past 30 years in terms of states and copyright? And how could a better record be constructed? And the one thing I was thinking about in particular was Controlled Digital Lending and I’m curious how evident this is.
Prof. Ralph Oman: This is Ralph. The issue -- the importance -- Steve mentioned the fact that for 150 years or longer, the states assumed they were liable for copyright infringements. And they acted accordingly. That’s how we have so few cases when we drafted the report in the Copyright Office back in 1988. But with the advent of digital technology, with the ease of copying cheap with the speed of light, it was inevitable that state infringements were going to increase. And they have. And I think we can document that if we had cooperation from industry, from the motion picture industry, from the record industry, from statistics that are being compiled by people who are in litigation right now.
The 165 cases that have occurred since 2000 are symptomatic of the larger problem and how there’s acceleration of the incidence of infringement by the states. And for better or for worse, we’re talking about the people who are effected by the invocation of sovereign immunity by the states. Many of the current generation are very suspicious of copyright. And they know you’ve been fighting this battle for a long time.
I remember teaching it at the Electronics Industry Association meeting in Las Vegas. We have a right to take. It’s become a cultural phenomenon. I think we’re ultimately going to win that battle, but it’s going to take some doing. This also explains why we weren’t able to build that record 30 years ago. We’ll have some difficulty doing so today.
Prof. John T. Cross: I’ll jump in for just a moment to respond to the part of the question regarding CDL. This is an issue -- for those of you not familiar, it’s really mostly a separate issue from issues of sovereign immunity. It’s a question of online libraries making copies of works and then -- digital copies and making those available online to, quote/unquote, “borrow them.” And it’s become a bit of a firestorm in recent weeks as an organization called the Internet Archive has, in the face of the current health crisis, announced that it was unlimiting the number of copies that could be viewed.
So a single digital copy could be viewed by an unlimited number of people simultaneously. There’re all sorts of questions about whether that complies with the Copyright Act generally. Of course, the tie to the sovereign immunity issue that we’re discussing here is that any such institution that happens to be a state entity, such as a library at a state university, might well be able to avoid many of the sticky copyright questions by virtue of its immunity.
Prof. Ralph Oman: That issue was certainly in the mind of people who were concerned about what happened in Allen v. Cooper. The fear is that other states will use that as an example and pass legislation vaulting works into the public domain that serve some state purpose. And they could get away with it under the rationale of the Court in Allen v. Cooper.
Micah Wallen: All right. We’ll now move to our next caller.
Devlin Hartline: Hi, guys. Thanks so much for doing this teleforum. This is Devlin Hartline at George Mason University. I’m really enjoying the talk and thanks to Steve Tepp and The Federalist Society and the panelists for doing this. My question is to tie in the decision in Allen v. Cooper with the current situation, namely the coronavirus epidemic and COVID-19. And so I recently read a blog post where somebody suggested that this is a good decision because we have a lot of teachers at state-run schools or professors at universities, and now that they’re teaching online, they don’t have to worry so much about copyright infringement with their teaching materials.
So I was wondering if you could speak a little bit more about the extent of the immunity for somebody at that level of -- at the state, namely teachers and professors. Does Ex parte Young present a problem for them? And then if you’re also willing, if you could talk about the normative question about whether or not this is actually a good thing for education? Thank you.
Prof. Ernest A. Young: So I can tell you a story about what happened at the University of Texas after Florida Prepaid in 1999. I was teaching at the University of Texas back then. And the Fifth Circuit, in short order, decided a copyright version, basically the same issue as in Allen v. Cooper, and also held that Congress could not abrogate the state sovereign immunity in copyright.
And so General Counsel’s office saw these decisions and recognized that it had some bearing on the operations of the university. And so it did a kind of internal review and a study of the law and also a study of the university’s practices. And the review came up with two conclusions.
The first one was that all the university faculty were still subject to the copyright laws. That they could be enjoined under Ex parte Young, as you say, to comply with them going forward. They could also be sued individually for damages that they would potentially have to pay out of their own pockets if they infringed somebody’s copyrights. So the first conclusion was we still need to comply with the copyright laws.
And the second conclusion of the university’s review was our compliance was terrible. We just weren’t doing a good job of clearing our course packets and things like that. So they changed the rules at the University of Texas and required even people in units like the law school to send their course packets to the central review to make sure that they were copyright compliant before they could be distributed to students.
So I think that shows a couple of things. One thing that it shows is that states aren’t always trying to just maximize their -- comply with federal law as little as they can get away with. But the second thing is that individual teachers need to be careful because they’re the best targets for a lawsuit if they are taking somebody’s copyrighted work. They can still be sued as individual officers. And if it’s clearly not fair use, they’re going to have a hard time.
Prof. John T. Cross: Yeah. This is John Cross. I’ll echo that sentiment because, actually, I’m also involved with the Association of University Technology Managers. And at least at state institutions, that’s a fairly typical response, what you described about Texas, namely second part first, that we’re not good at complying but that we want to be and that there’s -- certainly the horses on high at the university try to instill this notion that the copyright laws do apply and that you should not be, even in the interest of teaching or doing research, you should not be violating those.
Prof. Ralph Oman: If I may say something in that regard, that was one of the ultimate conclusions of the report that the Copyright Office did in 1988. And that language was used by Justice Kagan to justify her opinion. And that is that the states aren’t just going to rush out and start infringing as a result of this exemption from liability. But they still have a good faith concern about respecting copyrights and doing what they can to maintain copyrights.
But the question that we’ve raised and the concern we had was that it would become -- copyright enforcement would become less of a priority. They’d get sloppy in their training of their employees. They would let things happen since there was no responsibility. There was no strong incentive for them to spend resources in this regard.
And you heard of two cases Ernie and Mr. Cross mentioned were wonderful. And a lot of universities that have strong research grounds like the University of Wisconsin -- they have strong advocates in favor of protection of intellectual property. And that should continue. But there is a concern that with the ease of infringement and the availability of somebody who works online that this is going to be a problem despite the best of intentions.
Prof. John T. Cross: And Ralph, I’ll just add real quickly to that that state universities aren’t the only state entities that are infringing. And I would venture to guess that the training outside the university setting is far less comprehensive.
Micah Wallen: Steve, did you have anything else you wanted to ask the panel or closing remarks for us today?
Prof. Steven Tepp: I’ll ask one question, and I’ll ask it as a way to lead into closing remarks. And it’s a very forward-looking question in terms of how do we go forward from here. I think it’s few and far between people would agree that there shouldn’t be some sort of viable remedy for infringements by states for the right holders whose rights have been violated. The question, of course, is how do we get that in a way that is constitutionally sound?
The two most obvious answers that are before us that we’ve already discussed are, one, an improved record of state infringements that would support invocation of Section 5 of the Article -- sorry, of the Fourteenth Amendment, for Congress to abrogate the state sovereign immunity. That, of course, has practical difficulties in acquiring that information and puts copyright owners in a bit of a bizarre situation of actually hoping for a greater volume of infringements by states, which would seem to be against their short-term interest but possibly in favor of their long-term interest.
John also mentioned the Leahy Bill that was introduced in the wake of the 1999 decision. I had the privilege of working on that when I was at the Copyright Office, unfortunately after Ralph had left as register and moved on to his next thing. But that legislation would have required that states wave their own sovereign immunity or lose eligibility for protection under federal IP laws for their own works. And it was not limited to copyright. It would have covered patent and trademarks as well, which, of course, represents for many states substantial value.
Do either of those seem viable? Is there a third option? Where do we go from here? Please try and weave that into any closing remarks you might have. Perhaps we’ll go in reverse order this time. So we’ll start with John.
Prof. John T. Cross: I’m actually more -- I think a greater promise is held by a new abrogation bill. I looked into that issue at the Leahy Bill’s waiver provision 20 years ago. And I concluded at the time that it just wouldn’t work because it’s incredibly nonproportional. You’re basically denying a state a patent because -- even if it’s waived immunity for patent claims, if it hasn’t waived immunity for copyright claims, you’re going to deny it all intellectual property of any sort.
And the two really have nothing to do with each other. One, we’re granting a state a right as a benefit to creation of someone in the state. On the other, you’re holding the state liable for infringing someone else’s creation. So I’m not at all enamored with the waiver idea. I do think -- although it’s a tougher road to hoe, I do think a new abrogation provision might ultimately be the best way to proceed.
Prof. Ralph Oman: Steve, I think you mentioned at one point some time ago that the Leahy Bill, once it got the attention of the state attorneys general was dead on arrival. I’m not sure that the politics have changed.
Prof. Steven Tepp: I can’t say I disagree with you there. Do you see a way forward on abrogation then?
Prof. Ralph Oman: That seems to me to be the soundest approach in terms of what Congress would be able to do. Though I’m intrigued by the parens patriae notion, having worked on Hart-Scott-Rodino back in 1976, the Copyrights Improvements Act of 1976. We did give state attorney generals the right to enforce the antitrust laws. And that has worked.
Prof. Steven Tepp: All right. Thank you. And then Ernie.
Prof. Ernest A. Young: So I think I’m pretty optimistic on a new abrogation bill. I think it’s going to come down to really what it is that Congress is supposed to show. And there’s really two theories of that. One is do they have to show a pattern of past violations?
The Court keeps saying that it’s not clear what they mean by it. It’s not clear what the standard is, how many do you have to have? And it’s a very odd requirement because nowhere else in the law do we say Congress has to show that something is a problem already before it can legislate against it. Nowhere else do we say Congress can’t try to prevent a violation or a problem that it sees arising in the future through legislation.
So the Court didn’t really focus on that problem here, why that’s a requirement and what its nature is. And I think they’re going to need to grapple with that. If on the other hand what abrogation is simply about is simply how close is the fit between what the statute subjects the states to liability for and what state actions are actually unconstitutional—and I think that’s the correct view—then I think it’s pretty easy to write a bill that is only applicable to intentional violations and only kicks in when there’s no adequate remedy under state law.
I think there’s some things you won’t be able to get, perhaps. Some of the bells and whistles of copyright laws may have to be left out in those circumstances. It’s hard to know. But I think that basic bill ought to pass, ought to pass constitutional review.
I also think that the idea of the United States as a plaintiff that Professor Cross talked about is a really interesting idea. The United States doesn’t have the resources to sue and to espouse the claims of every person whose copyrights are violated by a state. But there are some that would probably be a high priority. For instance, people worry that we’re going to be in violation of our international treaties protecting copyrights if foreign plaintiffs can’t sue the states to recover for violations. And the United States might choose to remedy that by espousing those claims.
There’s probably not that many of those. The real $64,000 question there is whether a qui tam option would work, whether essentially the United States can deputize private plaintiffs to sue on its behalf under the False Claims Act. I’m skeptical that that’s going to work, but I think that would be an interesting issue.
Prof. John T. Cross: If I can just say one last thing, I really do think the unanimity on the Court is some good news, even though they went the wrong way. The dissenters in Seminole and Florida Prepaid and all that line of cases had said over and over again, “This is so wrong. We’re never going to sign up to this.” And even though I think they had the better of the argument on the merits, it’s corrosive of the unity of a multimember court.
It’s corrosive of the idea that the law isn’t just political. If you keep having 5-4 splits and decide that losers never accept the validity, the legitimacy of the decisions that they dissented from. So I think it’s a really positive development on the Court that they’re able to get to the unanimity on this question. I wish they’d gotten to unanimity the other way, but I think it is good for the notion of stare decisis and for the notion that the Court is more than a political body.
Prof. Steven Tepp: On that note, I’ll add one other quirk of this decision in terms of the makeup of the court. For those who follow copyright decision in particular, Justices Breyer and Ginsburg are historically, philosophically diametrically opposed on copyright issues. And yet, in the past few years, we’ve seen them join each other’s opinions. Well, I guess it was in both cases Ginsburg joining Breyer, first in the Aereo decision where Breyer wrote for the Court in favor of the copyright owner and here, again Ginsburg joining Breyer this time in favor of the defendant in the infringement suit. An interesting side note, perhaps.
Let me thank all our panelists. It’s been a great conversation, and we very much appreciate your time, I personally, as well as on behalf of the IP practice group of The Federalist Society. And I also of course want to thank Micah and The Federalist Society for making this available to us and of course thank the callers for calling in and especially people who chimed in with some questions.
Micah Wallen: On behalf of The Federalist Society, I’d like to thank all of our experts for the benefit of their valuable time and expertise today. We welcome listener feedback by email at [email protected] Thank you all for joining us. We are adjourned.