A quick hypothetical: A state government, say North Carolina, is running short on cash. To cure the budget shortfall, Gov. Roy Cooper announces that within hours, the state's website will begin streaming Avengers: Endgame for just $1 a view. If Cooper did so without Disney's permission, could he get away with pirating the movie without punishment?
This specific scenario may seem ridiculous and unlikely to happen anytime soon, but nevertheless, the answer may be surprising. Last week, after the U.S. Supreme Court requested North Carolina's thoughts on a petition before the high court, the state argued that it had sovereign immunity from federal copyright claims. The position is disconcerting to some in the entertainment industry. For example, tackling this same petition, the Recording Industry Association of America told the Supreme Court that thanks to recent decisions, "States are once again free to engage in copyright infringement — no matter how widespread or blatant — without fear of having to pay any money as a result. Unsurprisingly, then, despite Congress's efforts, copyright infringement by States is once again a very serious problem."
Rick Allen is the documentary filmmaker challenging the new status quo.
In 1998, Allen shot footage of researchers salvaging the remains of notorious pirate Blackbeard's flagship, Queen Anne's Revenge, which ran aground at Beaufort, North Carolina, in 1718. Having taken video and still images of the wreck and salvage efforts, Allen registered the works with the U.S. Copyright Office. Those images were subsequently commercialized by Nautilus Productions.
In 2013, Allen accused North Carolina and its Department of Natural and Cultural Resources of copyright infringement because the state had posted a few images of the shipwreck on its website. North Carolina came to a settlement agreement with Allen, paying him $15,000 for the infringements, but after taking the images down, the Department then posted five short videos and one photograph from the recovery expedition. Allen filed suit. Afterwards, North Carolina state lawmakers passed §121-25(b) — Allen dubs it "Blackbeard's Law" — which treats all photographs, video recordings and other documentary materials of a derelict vessel or shipwreck or its contents as "public record."
Can North Carolina insulate itself by putting any copyrighted work in the public domain? That raises a constitutional question.
The Eleventh Amendment to the U.S. Constitution prohibits federal courts from entertaining citizen suits against a state. In the 1980s, a series of legal decisions took up the issue of whether the Copyright Act abrogated state sovereign immunity. The answer turned out to be "no." It was held that copyright holders suing a state couldn't recover monetary damages for infringements.
This was recognized to be a problem, so after the Register of Copyrights conducted a study of the issue, Congress passed a series of laws in 1990 that attempted to explicitly abrogate state sovereign immunity in regards to copyrights, patents and trademarks.
However, in Florida Prepaid v. College Savings Bank (1999), the U.S. Supreme Court struck down the law allowing citizens to sue states for patent infringement. In a narrow 5-4 ruling, the justices in the majority rejected the argument that Congress had properly exercised its powers under the Fourteenth Amendment to enforce due process guarantees and held that such a law curtailing state immunity couldn't be justified under Article I of the Constitution.
What followed, of course, were attacks on the Copyright Remedy Clarification Act, giving citizens the right to hold states liable for copyright infringement. In July 2018, in Allen's lawsuit against North Carolina for posting his footage of Queen Anne's Revenge, the Fourth Circuit Court of Appeals pointed to Florida Prepaid and held that since Congress relied on the Copyright Clause in Article I instead of the due process clause of the Fourteenth Amendment, Congress had unconstitutionally abrogated state sovereign immunity.
Now, Allen is seeking review before the Supreme Court and is arguing that absent a review, creators of original expression will be left without a remedy when states trample on their federal copyrights. He asserts that Congress indeed has constitutional authority to abrogate state sovereign immunity for copyright infringement and that various courts have overread Florida Prepaid and similar cases. He also points to "more nuanced instruction" from follow-up Supreme Court precedent (see Central Virginia Community College v. Katz).
North Carolina at first didn't want to respond, but after the case was discussed by the justices on March 1 at a conference, a response was requested.
On April 22, the state formally opposed a review and told the Supreme Court there was consensus by federal courts that the CRCA was unconstitutional and that even if Congress attempted to abrogate immunity under the Fourteenth Amendment, it wouldn't be proper. Congress never identified an instance where a state had violated copyright intentionally, North Carolina posited. And federal lawmakers barely gave consideration to state remedies for copyright infringement and hadn't tailored a solution to the problem at hand.
Give us a chance to write our own laws, North Carolina basically argued.
"Copyright infringement is not categorically unconstitutional," states North Carolina's opposition brief. "Instead, infringement violates the Constitution only when it rises to the level of a property deprivation without due process of law."
The RIAA is somewhat aghast at reasoning by lower courts. In an amicus brief, the lobbying arm of music labels argues that state law is unlikely to provide a viable alternative remedy to infringement since for starters, federal courts generally have exclusive jurisdiction over copyright claims. Moreover, lawsuits premised on state claims (like conversion) would involve untested legal theories.
Now back to what would happen if a state decided to stream Avengers: Endgame.
Disney might not be able to collect damages, but it could at least shoot for an injunction under how appellate courts have been interpreting the current state of law.
Would it be good enough?
"An injunction against a state officer barring copyright infringement is necessarily prospective only," states the RIAA brief. "Accordingly, a State that faces nothing more burdensome than an injunction can infringe with complete impunity until such time as the infringement is detected, a lawsuit against a State official is brought, and a court issues injunctive relief. ... And because any injunction will issue only against particular state officers in their official capacities, and will of necessity cover only specifically defined infringing activity, even in the face of an injunction a State may be able to continue with infringement very similar to the activity that the injunction addresses — especially given that enforcement of an injunction against a State officer through a contempt sanction may be an onerous undertaking."