Tag: Supreme Court

Allen v. Cooper: Justly Decided If Not Exactly Just

Professional creators following the case Allen v. Cooper were no doubt disappointed by the Supreme Court’s March 23 decision—a unanimous holding that the States (and/or their agents) are generally free to infringe copyrights with impunity. But perhaps authors of works should not to be entirely discouraged on this matter, because it seems clear from the opinions written that the Justices would have preferred if the law had led them to the opposite conclusion. Moreover, a path for legislative reform remains open.   

A Quick Recap

See post here, or read more extensively on the website of plaintiff Rick Allen. The short version is that Allen’s company Nautilus Productions filmed and photographed excavation and research work performed on Blackbeard’s flagship Queen Anne’s Revenge, which was discovered off the North Carolina coast in 1996. Subsequently, the state made unlicensed uses of Allen’s copyrighted materials, primarily online, and when Allen sued for infringement, North Carolina invoked its sovereign immunity under the Eleventh Amendment, which bars citizens or entities from bringing federal suits against the states or its agents. 

In 1990, Congress passed two laws, the Patent Remedy Act and the Copyright Remedy Clarification Act, both designed to abrogate state sovereign immunity specifically for patent and copyright claims where states are alleged to be the infringing parties. In 2015, North Carolina passed “Blackbeard’s Law,” which specifically lays claim to photographic and AV works documenting shipwreck material a “public record.” So, why didn’t Congress’s CRCA protect Allen’s copyrights in this case? Well …

The IP Clause, the Eleventh and the Fourteenth Amendment walk up to the bar …

As we all know, Article I of the Constitution grants Congress the authority to establish copyright and patent laws; and one rationale for that clause, as Madison noted in Federalist 43, was the assumption that the new nation would be best served by uniform (i.e. federal) laws for intellectual property. (In copyright practice this uniformity was not fully adopted until 1978, and then there’s the whole sound recordings morass, but Madison’s seminal hopes were succinctly clear.) 

At the same time, the prospect of erecting a federal court system was a sensitive matter among anti-Federalists, who were hardly sold on the prospect of union among the States in the first place, let alone allowing their State governments to be potentially sued in the new federal courts by citizens of other States. Thus, in response to just such a case arising, the Eleventh Amendment was passed in 1795 to affirm the principle of “state sovereign immunity,” already extant at the founding period.

Without trying to cram a history of sovereign immunity into this post, suffice to say that States are not generally subject to litigation in federal court but for a handful of exceptions, and most of these exceptions derive from the Fourteenth Amendment of 1868. Relevant to Allen v. Cooper, Section 1 of the Fourteenth affirms civil liberties to all Americans, and Section 5 affirms Congress’s authority to pass such laws as may be necessary to enforce Section 1. Thus, sovereign immunity is abrogated where a State’s conduct or law runs afoul of constitutionally protected rights. 

So, it might seem reasonable to assume that the Article I power of Congress to write copyright and patent laws, which secure the intellectual property rights of all U.S. citizens, would naturally fall into the scope of protections affirmed in the Fourteenth Amendment. “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property without due process of law….” 

In fact, whether one views IP protections as grounded in natural rights or as purely utilitarian forms of property rights, the Fourteenth Amendment, combined with the Article I power, would seem to support Congress’s authority in 1990 to write the pair of laws that explicitly declared that sovereign immunity does not foreclose infringement claims brought by copyright and patent owners against the States. Alas, not so much.

A Very High Standard

Allen’s claim in this case rested on the premise that the 1990 CRCA abrogated the sovereign immunity of North Carolina; but unfortunately, the Supreme Court had already weighed this exact argument with respect to the CRCA’s sibling law, the Patent Reform Act. In the 1999 decision, in a case known as Florida Prepaid, the Court held that the Patent Reform Act did not abrogate sovereign immunity for two intertwined reasons. Article I powers alone are not sufficient grounds for Congress to circumvent sovereign immunity, and this can only be addressed by Section 5 of the Fourteenth Amendment where there is compelling evidence of a harm being intentionally caused by the State, and where no other remedies (i.e. due process) are available. 

In legal terms, the opinion states, “a Section 5 abrogation of sovereign immunity must be ‘congruent and proportional’ to the Fourteenth Amendment injury it seeks to remedy.” In practical terms that means if Congress wants to salvage the intent of the CRCA and/or the Patent Reform Act, they will need evidence, which proves that intentional infringement by State actors poses a significant threat to the interests and rights of authors and/or inventors. 

In reference to Florida Prepaid, the Kagan opinion reminds us, “Congress, we observed, ‘did not focus’ on intentional or reckless conduct; to the contrary, the legislative record suggested that ‘most state infringement was innocent or at worst negligent.’” Those data are not sufficient to circumvent the sovereign immunity. But that was then.

Especially with regard to works protected by copyright, digital technologies have changed the landscape considerably since 1990—even since 1999. Consequently, State actors (e.g. State universities) have both new means and new motives to infringe more frequently and more harmfully than the pre-digital age. Seemingly aware of these contemporary realities, the Supreme Court’s discussion of Allen v. Cooper connotes discontent with its unavoidable conclusion.

The Court Rules Justly But Hints Justice Is Not Served

The majority opinion written by Justice Kagan, and joined by Roberts, Alito, Gorsuch, Sotomayor, and Kavanaugh, with Thomas, Breyer, and Ginsburg concurring, was bound by precedent, namely Florida Prepaid. Allen’s appeal to the CRCA could not hope to overcome the principle of stare decisis, let alone in a matter that sets so high and precise a bar for setting aside states’ rights. Nevertheless, the opinions of the Justices not only present a roadmap that Congress might follow to seal the sovereign immunity loophole for copyright (and patent) owners, it practically calls upon Congress to do so. The Kagan opinion asks…

“All this raises the question:  When does the Fourteenth Amendment care about copyright infringement? Sometimes, no doubt. Copyrights are a form of property. And the Fourteenth Amendment bars the States from “depriv[ing]’ a person of property ‘without due process of law.’ … So an infringement must be intentional, or at least reckless, to come within the reach of the Due Process Clause.” (citations omitted)

Then, in a passage that all but elbows the IP Subcommittee in the ribs …

“Congress likely did not appreciate the importance of linking the scope of its abrogation to the redress or prevention of unconstitutional injuries—and of creating a legislative record to back up that connection. But going forward, Congress will know these rules. And under them, if it detects violations of due process, then it may enact a proportionate response. That kind of tailored statute can effectively stop States from behaving as copyright pirates. Even while respecting constitutional limits, it can bring digital Blackbeards to justice.”

This less than subtle overture to the legislature was one of two points of moderate dissent by Justice Thomas, whose concurring opinion admonished the Court to refrain from advising Congress on the authorship of future legislation. But writing almost the opposite view, the concurring opinion by Justice Breyer, and joined by Justice Ginsburg, laments the unavoidable conclusion necessitated by law, if not by principle. “That our sovereign-immunity precedents can be said to call for so uncertain a voyage suggests that something is amiss,” the Breyer opinion declares. 

Amiss indeed. From the moment Madison and Pinckney drafted the IP Clause, it cannot have been imagined, let alone desired, that the individual States would be left free to appropriate intellectual property from individual citizens. After all, it was a State legislature, in the Massachusetts copyright law of 1786, that declared, “As the principal encouragement such persons can have to make great and beneficial exertions of this nature, must exist in the legal security of the fruits of their study and industry to themselves, and as such security is one of the natural rights of all men, there being no property more peculiarly a man’s own than that which is produced by the labour of his mind.”  

Will SCOTUS Close Cy Pres Loophole in Class Action Litigation?

Suppose there were a company whose minions went around whacking people in the head with two-by-fours.  Then, suppose that in response, the multiple victims of said whacking joined a class-action lawsuit against the corporation and won their case.  Now, imagine that rather than any damage award going to the plaintiff class members, the money instead went to various organizations, including non-profit and academic institutions, that advocate policies favoring two-by-four head-whacking by the very industry that includes the defendant company.  If that seems absurd, welcome to the often maddening outcome known as the cy pres award in the world of class-action litigation.

From the French cy près comme possible, meaning “as near as possible,” cy pres is supposed to provide a reasonable alternative to awarding damages stemming from class-action lawsuits where the members of the injured class cannot effectively be compensated by the penalties collected in settlement.  So, in my exaggerated example above, if ten million class members are whacked by two-by-fours, and the company settles for $20 million, it may not be practical to distribute two bucks a head (literally) to the class, especially after the plaintiff attorneys take their cut (more about them below).

So, in lieu of paying the class members themselves, the court may order a cy pres award to an organization, or organizations, that, in theory, work to benefit the class members’ interests indirectly.  For example, the money in my hypothetical scenario might go to the American Society for the Prevention of Two-By-Four Whacking.  But this is often not what happens.  

In fact, just the opposite occurs according to the petition granted cert by the Supreme Court in Frank v. Gaos, for which oral arguments will be heard tomorrow.  The petition alleges that district courts too-frequently approve cy pres awards without “rigorous analysis,” and this results in (among other problems) victim classes winning settlements that only serve to fund institutions who advocate on behalf of the very parties they sued.  

Cy Pres Awards Fund Google’s Anti-Copyright Agenda

The aberrant nature of cy pres awards is the basis on which three musician/copyright activists—David Lowery, Blake Morgan, and East Bay Ray—filed an amicus brief in Frank v. Gaos, written by attorney Antigone G. Peyton. The brief describes how cy pres awards, resulting from lawsuits Google has settled, end up funding policy advocacy that favors Google, including the company’s global assault on copyright law.  “Artists such as amici watch in powerless amazement as the lower courts allow millions in cy pres awards to be funneled to Google’s academic and nonprofit influencers through dubious class action settlements, …” the brief states.

For instance, the Electronic Frontier Foundation apparently received $1 million of the $17 million Google paid in 2011 to settle a consumer privacy lawsuit (the Google Buzz case) filed by the Federal Trade Commission.  An otherwise reasonable circumstance for issuing a cy pres award, this is just one example where Google wins for losing—paying a “fine” for one transgression that directly funds organizations that generally advocate public policy in its favor.  Plus, Google gets a tax break for giving money to non-profit institutions!

Thus, Lowery et al demonstrate, in context to the larger complaint against cy pres, how copyright owners are injured through what almost amounts to shadow funding of organizations and academic institutions that consistently attack copyright through litigation and amicus briefs, academic papers, and public communications. Other parties named in the brief as receiving Google money through cy pres settlements include Public Knowledge, the Center for Democracy and Technology, the Berkman Center, and Stanford’s Center for Internet and Society.  

The Bigger Picture

Naturally, the broader complaint in Frank v. Gaos demonstrates the negative effect of cy pres awards in class actions beyond complaints against the internet industry, although the litigants here do arise from yet another Google privacy violation case settled in 2010. The petitioners’ complaint lays out the means by which an $8.5 million settlement in that case first paid class counsel a substantial fee and then funded organizations with existing relationships to Google.  From the petition …

“There are recognized conflicts of interest between class counsel and the class, because the defendant cares only about its total cost of settlement, while every dollar going to class members is a dollar that will not go to class counsel’s fees.  In the absence of legal rules explicitly forbidding such gamesmanship, class counsel and settling defendants have a variety of gimmicks available in a class-action settlement to maximize class counsel’s proceeds while minimizing the cost of settlement to the defendant.”

Essentially, the courts’ tendency to “rubber stamp” cy pres awards in these settlements creates a powerful incentive for class counsel to abrogate its responsibility to the class members because counsel’s interests and those of the defendant become deviantly aligned.  To put it in stark terms, the attorney who graduated from Harvard Law has an all too-tempting opportunity to earn a substantial fee for himself and also negotiate a donation to his alma mater and call it a “win” for his clients, who get nothing.  

Further, the petition asserts a constitutional complaint arising from the fact that a cy pres award may infringe class members’ First Amendment rights by way of forcing them to support organizations or institutions they would never choose to fund.  For instance, because the AARP was one of six recipients of the cy pres award in this particular Google settlement, the petition states, “Petitioners also objected to being compelled as a class member to subsidize the AARP’s advocacy and lobbying on controversial policy issues, which petitioner Frank often opposes.” 

Few readers of this blog need to be convinced that “digital rights” organizations such as those mentioned above present themselves as a public-serving groups while advocating policy positions that are often insidiously industry-serving.  But at least direct donations by Google to EFF et al are clearly identifiable, while cy pres awards create a layer of obfuscation between the effective “donor” and the recipient of substantial operating funds.  

From the broader petition, it seems that every citizen who doesn’t want to be whacked by a metaphorical two-by-four has an interest in the Supreme Court’s decision in this case; but copyright owners should be keenly aware of the outcome in Frank v. Gaos for the reasons described.  As the amicus brief concludes, “Allowing cy pres awards to continue along their current path means that the courts are complicit in allowing Google to fund its network of academics, think tank partners, and friendly nonprofits at the expense of class members.”  

On Cake, Creativity, & Religion in America

Today, the Supreme Court will hear oral arguments in the case Masterpiece Cakeshop v. Colorado Civil Rights Commission, a.k.a. “the wedding cake case.”  In 2012, baker and cake designer Jack Phillips of Masterpiece Cakeshop in Lakewood, CO informed David Mullins and Charlie Craig, that he would not make a new cake for their wedding due to his Christian belief that same-sex marriage is a sin.  This circumstance will look to many like a 14th Amendment, equal-protection case—one fraught with emotion for the LGBT community and those of us who defend gay rights. But, this particular conflict may be a bit trickier than it appears.

It is my own view that the most important elements of the First Amendment—a true master stroke for the late 18th century—are the balancing forces of the exercise and establishment clauses.  In recognizing the slaughter-bench that religion had made of Europe for centuries leading up to the American experiment, the relative harmony achieved by simultaneously rejecting a national religion and protecting the free exercise (or no exercise) of a plurality of beliefs is central to the function of all other civil rights in the United States.  After all, if there were a state religion, or if we failed to protect a diversity of views, the rights of free speech or a free press would be utterly meaningless.

In this regard, the current trend that seeks to upset constitutional balance by asserting the exercise of one religion (Christianity) over secular laws like the 14th Amendment is toxic beyond the immediate issue of gay rights affirmed in Obergefell.  For instance, Rep. Labrador’s proposed First Amendment Defense Act (FADA) would be a legislative end-run around equal protection that would empower a landlord to refuse housing; an employer to refuse a job; or a doctor to refuse treatment to citizens in same-sex marriages.  But in addition to being a transparently bigoted proposal, it is more broadly an assertion that the Book of Leviticus supersedes the Constitution; and I would caution even the most ardent Christian Americans to be careful what they wish for.  Such views tore nations apart for much longer than U.S. has existed.

So, while I am personally adamant, to say the least, that secular law always prevails over religious “law,” it is precisely because of this principle that I wonder if Phillips’s argument in the “wedding cake” case may be more difficult than it appears.  My right as a secularist to publish this post is codependent with protecting Phillips’s right to speak (or not speak) in accordance with his views. The speech protection cannot discriminate based on the motives of the speaker, which brings us to the question of whether Phillips’s cakes can reasonably be called creative expressions.

How creative is a wedding cake?

If I understand Phillips’s argument correctly, the issue in this case is far more subtle than a typical 14th Amendment conflict in which a proprietor outright refuses service to a customer based on some form of discrimination.  According to this account in Reuters, Phillips did not demand that Mullins and Craig leave his shop, and he offered them other products that had already been made.  What Phillips refused to do was to take up his creative brush, as it were, to make what he feels would have been a new artistic expression celebrating an event he cannot endorse. In short, what makes this case distinctive from, say, a mechanic refusing to fix the couple’s car, is that Phillips may be standing on fairly solid free speech ground if the service he refused to provide is held to be creative enough under the law.

Writing as someone who despises both bigots and “religious-freedom” laws but defends artists, copyright, and free speech, I have to admit that Phillips’s claim is not entirely dismissible simply because I reject his point of view.  Although a cake is too temporary a medium to qualify for enforceable protection under copyright law, copyright principles may still be instructive to a legal interpretation of his claim that his cakes are artistic expressions. This is because the design, painting, and arrangement of elements on the cakes could very likely meet the modicum of creativity standard required to call Phillips’s pictorial, sculptural, & graphic (PSG) work “original” in a copyright context. This may be relevant because a court, which has no business acting as cultural critic (i.e. deciding what conduct is or is not “artistic”), can look to copyright law for guidance as to what defines “creative expression” in a legal context.*

So, if it can be established that Phillips (or any baker with his level of skill) is engaged in creative expression while designing one of these cakes, then his free speech argument has merit, regardless of the discriminatory nature of the religious belief behind the speech. Under this analysis, the obvious problem with a holding against Phillips is that it would set a precedent whereby a different creative cake-maker could not refuse to make one of her expressions to celebrate a party for the Ku Klux Klan.  Or what if the medium is more permanent than a dessert?  What if the artist is a portrait painter or photographer?  Does the 14th Amendment require that the artist accept a commission to make a portrait of some figure who represents something he reviles? Certainly, most people would agree that equal protection for the customer, in this case, does not supersede the artist’s speech right to refuse to create the work. Like it or not, the rationale may be the same if the “canvas” is a cake.

Michelangelo hated painting the Sistine Chapel.  As beautiful as it is, there is an extent to which the entire undertaking is not his expression of choice, but rather an expression of his especially thorny relationship with the Medici and the Roman Church. His life exemplifies the precarious relationship many artists had with society and religion throughout most of western history. It was not until the late 19th century that art truly began to assert itself as something distinct from doctrines of morality; and one role copyright has played in that narrative is that it allowed the artist freedom to express herself without the constraints of patronage, religion, or government, which were usually intertwined.  But in order to protect this principle of artistic independence, we probably have to uphold the rights of all creators equally, whether their personal motives are secular or religious — or even unkind.

Laws designed to protect “religious freedom” like the FADA bill are extremely dangerous in my view because they upset the very delicate balance between exercise and establishment that I truly believe is the yin/yang of American civil liberties. But equally dangerous is any precedent that would coerce an individual to speak in a manner that he does not choose. Like religious-freedom laws, a victory against Phillips in this case could have some nasty, unintended consequences for creative expression.  So, as strenuously as I would use my speech right to defend the right of Mullins and Craig to enjoy equal protections, I am likewise sure that—if Phillips is held to be conducting creative expression—he cannot not be compelled to express himself for any reason.

Personally, I think people like Phillips who cherry-pick Leviticus as an excuse for discrimination are fundamentally mean-spirited and crazy (I mean have you read Leviticus?) And the kind of political figures and institutions who support this beatified baker are generally a threat to democratic principles (and some of them are pedophiles it turns out). I’d be happy to see these people lose.  But as a matter of dispassionate analysis, it may not be so easy, or even desirable, to define Phillips’s cakes as non-expressive; and it will be interesting to see what the Court makes of this argument.

ADDENDUM:  To look at this in another way, if copyright’s principles were to define Phillips’s cakes as creative expressions, then those same principles also provide boundaries that should prevent this case from serving as precedent for a broader range of “creative” services (e.g. floral arrangement).

*See this post about Star Athletica v Varisty and the subject of separability.  Based on Justice Ginsberg’s opinion, Phillips could theoretically register his designs with the USCO using another medium like paper prior to applying them to the cakes.

Photo by ivonnewierink