ON REMAND FROM THE SUPREME COURT OF THE UNITED STATES
EDITH H. JONES, Circuit Judge:
This Copyright/Lanham Act case was remanded from the Supreme Court for reconsideration in light of its decision in Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). The issue is whether Congress properly exercised authority to subject states to suit in federal court for violation of those statutes. See 15 U.S.C. § 1122; 17 U.S.C. §§ 501, 511. Plaintiff Chavez asserts that the University of Houston infringed her copyright by continuing to publish her book without her consent
Abrogation of a state's Eleventh Amendment immunity turns on an express statement of intent by Congress and a constitutionally valid exercise of power. See Seminole, 116 S.Ct. at 1123. Congress recently amended both the Lanham Act and Copyright Act and explicitly required states to submit to suit in federal court for violation of their provisions;
In our previous opinion, we concluded that the Supreme Court's variegated jurisprudence supported the theory that the University of Houston impliedly waived Eleventh Amendment immunity because the University chose to enter into a contract with Chavez and use her name after Congress had imposed statutory waivers in the Copyright and Lanham Acts. The state's price of doing business in those areas included the possibility of suit in federal court. This conclusion derived from our understanding of the Parden theory of implied waiver of state sovereign immunity. See Parden v. Terminal Ry. of Ala. State Docks Dept., 377 U.S. 184, 84 S.Ct. 1207, 12 L.Ed.2d 233 (1964).
Chavez and numerous amici who filed post-remand briefs contend that the Parden implied waiver theory survived Seminole, and, alternatively, that the provisions in question validly implement congressional power under section 5 of the Fourteenth Amendment. No party now asserts, in light of Seminole, that Congress could statutorily abrogate Eleventh Amendment immunity pursuant to its constitutional powers to regulate commerce or copyrights under Article I, Section 8.
I. The Status of Parden.
It would be superfluous to recount this panel's previous discussion of pre-Seminole cases. Suffice it to summarize that Parden, in historical context, seemed to imply that a state impliedly consented to suit in federal court when it undertook non-sovereign activities in areas regulated by the federal government. Seizing on our conclusion, Chavez points out that Seminole cites Parden as "a case holding the unremarkable, and completely unrelated, proposition that the States may waive their sovereign immunity." Seminole, 116 S.Ct. at 1128 (citing Parden). This language, embedded in a critique of the reasoning in the Union Gas decision,
Whether this interpretation fairly reflects Seminole, however, is another matter. Seminole cites Parden only for the statement that "states may waive their sovereign immunity," which is a matter of hornbook law analytically separate from congressional overruling of state sovereign immunity. Seminole quashed the latter proposition when it unequivocally overturned Union Gas:
Seminole, 116 S.Ct. at 1128. The Court necessarily disavowed not only the Union Gas plurality reasoning (the "plan of the convention" theory of Eleventh Amendment waiver), but also Justice White's fifth vote in favor of the Union Gas result. Justice White's Union Gas concurrence, we inferred in the previous opinion, had to be based on the Parden theory of implied waiver. We cannot understand how the Court could have overruled Union Gas only in regard to the 4-vote plurality opinion and not in toto, and we do not believe it attempted such a feat.
For other reasons, Seminole suggests that the Parden implied waiver theory has been rejected. First, Seminole expressly incorporates much of the reasoning of Justice Scalia's dissent in Union Gas, a dissent agreed upon by the same members of the Court who formed the core of the Seminole majority. Justice Scalia's dissent explicitly criticizes and describes the sleight of hand involved in the Parden implied waiver theory:
Union Gas, 491 U.S. at 44, 109 S.Ct. at 2304 (Scalia, J., concurring in part and dissenting in part). As Scalia explained,
Id. at 43, 109 S.Ct. at 2303 (emphasis in original). Scalia concludes, "If state sovereign immunity has any reality, it must mean more than this." Id. at 44, 109 S.Ct. 2304.
Second, Seminole reaches the broad conclusion that:
Seminole, 116 S.Ct. at 1131-32 (footnote omitted). In the footnote accompanying this holding, the Court comments on Justice Stevens's criticism that Seminole will prohibit federal jurisdiction over suits to enforce the bankruptcy, copyright, and antitrust laws against the states and that there would consequently be "no remedy" for state violations of those federal statutes. See id. at 1131 n. 16. The footnote does not rule out, though it would have been improper to rule on, Justice Stevens's fears. It does, however, observe the novelty of the proposition that any of those statutory schemes abrogated the states' sovereign immunity. It also lists other remedies available to redress state violations of federal law. At the very least, this footnote can give no comfort to those who contend that the Parden implied waiver theory permits all suits in federal court against unconsenting states founded on the Copyright or Lanham Acts.
This conclusion does not amount to a presumptuous, premature overruling of Supreme Court precedent, which we are forbidden to do. See Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 484, 109 S.Ct. 1917, 1921-22, 104 L.Ed.2d 526 (1989) ("If a precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions."). The Supreme Court's precedents had already expressly overruled several implications of Parden even before Seminole was decided.
II. Section 5 of the Fourteenth Amendment.
The other argument pursued by Chavez and amici is that Congress validly exercised its legislative power pursuant to section 5 of the Fourteenth Amendment, because the state court "deprived" Chavez of her "property" without "due process of law" when it violated the Lanham and Copyright Acts. Seminole reaffirmed that Congress can abrogate the states' sovereign immunity when acting pursuant to section 5 of the Fourteenth Amendment. See Seminole, 116 S.Ct. at 1128 (citing Fitzpatrick v. Bitzer, 427 U.S. 445, 96 S.Ct. 2666, 49 L.Ed.2d 614 (1976)). This is because "the Fourteenth Amendment, adopted well after the adoption of the Eleventh Amendment and the ratification of the Constitution, operated to alter the pre-existing balance between state and federal power achieved by Article III and the Eleventh Amendment." Id.
To examine this argument, we assume for present purposes that Congress expressly relied on the Fourteenth Amendment not only when it enacted the Trademark Remedy Clarification Act, but also the Copyright Remedy Clarification Act.
Viewed in light of Seminole and City of Boerne, Chavez's syllogisms are too facile. Her position is that the copyright contract and her interest in not having her name misappropriated are "property" under the Fourteenth Amendment; the state's breach of contract and misappropriation of her name "deprived her" of property; and since the deprivations were uncompensated, they occurred without due process of law. Finally, because the state "violated" the Due Process Clause, Congress was authorized to abrogate its Eleventh Amendment immunity under section 5 of the Fourteenth Amendment.
Even the first step of Chavez's argument, her claim of property interests protected by the Fourteenth Amendment, is uncertain. While Chavez's statutorily-created right to protect her name from misappropriation is assured by the Lanham Act,
In a similar vein, the Third Circuit recently held that a Lanham Act claim for a business's misrepresentation of its own goods and services does not rise to the level of a constitutional tort under the Due Process Clause. Consequently, the court held that Congress did not have power under Seminole to subject the states to suit in federal court for violation of that prong of the Lanham Act. See College Savings Bank, 131 F.3d at 358-62.
Chavez's breach of copyright action against the University of Houston raises "property" problems on several levels. Copyrights are indeed a species of property, but the extent to which they are protectable against the states raises troubling issues. In Seminole, the Supreme Court noted the absence of caselaw authority over the past 200 years dealing with enforcement of copyrights in federal courts against the states.
The problem at hand can be further refined by noting that in many cases an owner's copyright will be licensed by means of a contract with the state. Breach of the contract might give rise to remedies in contract as well as infringement, perhaps even affording a choice of remedy to the copyright owner.
Where the claim asserted is breach of a contract concerning a copyright, certain consequences follow. First, such claims have been held not to "arise under" the nation's copyright laws for purposes of federal jurisdiction. See 28 U.S.C. § 1338; 13B Wright et al., supra, § 3872; 3 Nimmer & Nimmer, supra, § 12.01[A][a]. The ground for such decisions is that a contract case concerning a copyright (or patent) license does not involve construction or adjudication of federal laws and should be left to resolution under state contract law.
Second, even if the interpretation of a contract concerning a copyright arises under federal law, courts have generally held that a state's breach of a contract does not constitute a procedural due process violation cognizable by a § 1983 action in federal court.
Thus, all signs point to the existence of a remedy against the states for breach of contracts involving copyrights in state court. The logic of City of Boerne, which counsels against reading statutory language to expand the substantive protections of the Bill of Rights, also militates against Chavez's reading of the Trademark Remedy and Copyright Remedy Clarification Acts. Those provisions would be expanding, rather than merely remedying, violations of procedural due process if they abrogate states' Eleventh Amendment immunity against copyright contract suits.
A separate problem besets the contention that a copyright infringement claim is property protected by the Due Process Clause; the claim proves too much. If it rests on the uniqueness of the property interest created by federal law, which is the source of Chavez's copyright, then it is a direct end-run around Seminole's holding that Article I powers may not be employed to avoid the Eleventh Amendment's limit on the federal judicial power. Congress could easily legislate "property" interests and then attempt to subject states to suit in federal court for the violation of such interests. This end-run is just as possible under a liberal interpretation of the Due Process Clause of the Fourteenth Amendment as it was under theories of Article I rejected by the court in Seminole. As the Third Circuit stated in a related context:
College Savings Bank, 131 F.3d at 361. Chavez and her amici have offered no distinction, and we perceive none, between her copyright infringement claim and any other tangible or intangible interests that could give rise to Eleventh Amendment abrogation provisions in this way.
Chavez also asserts that the University's actions deprived her of property without substantive due process. In modern judicial history, substantive due process has had
The conclusion that section 5 of the Fourteenth Amendment does not embrace congressional enforcement of the copyright and Lanham acts is consistent with the trend of post-Seminole decisions. Thus far, only federal statutes that enforce the Equal Protection Clause have been held to permit suits against unconsenting states. See, e.g., Crawford v. Davis, 109 F.3d 1281 (8th Cir.1997) (Title IX); Timmer v. Michigan Dept. of Commerce, 104 F.3d 833 (6th Cir.1997) (Equal Pay Act). Statutes that enforce the Commerce and Bankruptcy Clauses, on the other hand, have not been found to represent exercises of Congress's Fourteenth Amendment remedial power. See In re Creative Goldsmiths of Washington, D.C., Inc., 119 F.3d 1140 (4th Cir.1997) (holding that bankruptcy jurisdiction is not within section 5 of the Fourteenth Amendment); Mills v. Maine, 118 F.3d 37 (1st Cir.1997) (FLSA); Aaron v. Kansas, 115 F.3d 813 (10th Cir. 1997) (FLSA); Wilson-Jones v. Caviness, 99 F.3d 203 (6th Cir.1996) (holding that the FLSA is not within the purview of section 5 of the Fourteenth Amendment). But see College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 948 F.Supp. 400 (D.N.J.1996) (holding that a patent is "property" for purposes of the Fourteenth Amendment and that "remedial" legislation abrogating state sovereign immunity under Seminole is constitutional), aff'd on other grounds, 131 F.3d 353 (1997); Genentech, Inc. v. Regents of the Univ. of Cal., 939 F.Supp. 639 (S.D.Ind.1996) (stating, in dicta, that the University could be held liable for patent infringement in federal court pursuant to section 5 of the Fourteenth Amendment).
In re Creative Goldsmiths persuasively explained why section 5 of the Fourteenth Amendment cannot embrace congressionally-required waivers of state sovereign immunity in legislation authorized, as here, by Article I constitutional powers:
In re Creative Goldsmiths, 119 F.3d at 1146-47.
The most potent argument in favor of upholding these statutory waiver provisions is a practical one: Without being able to sue the state in federal court, which has exclusive jurisdiction at least over copyright claims, see 28 U.S.C. § 1338, Chavez fears she has no effective remedy to protect her name and literary work. This fear is overblown; only retrospective money damages are
Seminole condemns Congress's effort to force unconsenting states into federal court as the price of doing business regulated by the Lanham and Copyright Acts. Consequently, 15 U.S.C. § 1122; 17 U.S.C. §§ 501, 511 are invalid to that extent, and Chavez's claims against the University of Houston, a state entity, must be dismissed. Because other remedies may be available to Chavez, as outlined in this opinion, we decline comment on such remedies, but rather than require dismissal, we REVERSE and REMAND for further proceedings consistent herewith.
WISDOM, Circuit Judge, dissenting:
I respectfully dissent.
I have thought about this case a great deal — rarely with any feeling of satisfaction.
Now, nearly three and one-half years after this case was argued, I find myself where I started. I conclude that a state may be sued in federal court under the copyright and trademark laws.
I. PARDEN WAIVER
The majority concludes that "we must `drop the other shoe' and declare that Congress cannot condition states' activities that are regulable by federal law upon their `implied consent' to being sued in federal court".
The Union Gas majority position was the product of a four-justice plurality opinion (upholding the use by Congress of Article I powers to abrogate state sovereign immunity) plus Justice White's separate opinion (based upon the Parden waiver doctrine).
First, as a matter of pure mathematics, the Supreme Court needed to reject only one vote to overrule Union Gas. In the absence of a single vote (from the plurality or Justice White), Union Gas would not be a majority position. It was not mathematically necessary for the Seminole Court to reject both the plurality opinion and Justice White's separate opinion to overrule Union Gas. The Supreme Court wrote, at length, attacking the reasoning of the Union Gas plurality, but the Court made no effort to criticize Justice White's reasoning. In fact, the Court partially relied upon Justice White's opinion to conclude that the Union Gas majority was entitled to a diminished level of respect under the principle of stare decisis.
If the Seminole Court intended to reject Justice White's separate opinion in Union Gas as well as the Parden waiver theory upon which it relies, the Court would have done so expressly. The Supreme Court knows the language to use in overruling a decision. The Seminole Court expressly overruled Union Gas in clear language.
The Seminole decision does not support the view that the Court adopted Justice Scalia's Union Gas dissent in its entirety. Professor Kit Kinports has written on this lack of support:
Prof. Kinports also rejects the notion that the Court adopted Justice Scalia's position on the merits. Justice Scalia's dissent states that:
Justice Scalia concludes that the differences between Parden waiver and abrogation are "verbal distinctions"
Parden waivers would not necessarily allow an end-run around the Seminole decision because Parden waivers are very limited. A brief discussion of the refinement of the Parden waiver doctrine helps to show that decision's proper, limited role.
Although states are immune from suit in federal court under the Eleventh Amendment and Hans. v. Louisiana,
The Parden Court held that a state may waive its immunity through voluntary action. Every justice, including those who agreed with Justice White's dissent, accepted this position. The disagreement in the case was over the level of specificity needed to effect a waiver. The majority concluded that "when a State leaves the sphere that is exclusively its own and enters into activities subject to congressional regulation, it subjects itself to that regulation as fully as if it were a private person or corporation."
The differences in these views is important. The majority approach is similar to the abrogation approach rejected in Seminole in that Congress could waive Eleventh Amendment immunity whenever the State acts outside of its core governmental area. The dissent's position is different, focusing upon the traditional concept of waiver. Unless the state is clearly informed that its actions will result in the loss of immunity, the dissent would not find a knowing and voluntary waiver of state sovereign immunity.
Justice White's view was accepted by the Court in Atascadero State Hosp. v. Scanlon. The Atascadero Court found that the state had not waived its immunity when it accepted federal funds under the Rehabilitation Act because "[t]he Act likewise falls short of manifesting a clear intent to condition participation in the programs funded under the Act on a State's consent to waive its constitutional immunity."
The Court narrowed Parden further, finding that the states do not waive their immunity by engaging in core governmental functions.
Through repeated refinement of the Parden waiver doctrine, the Supreme Court has shown that this doctrine is grounded in the concept of waiver, not abrogation. These two concepts are "completely unrelated"
Prof. Chemerinsky, writing before Seminole, summarized Parden's limited role as follows:
After Seminole, the Parden waiver doctrine should have the same limited role. Only when the state is engaged in non-core functions can it "choose not to engage in activity". This severe limitation on the use of Parden provides a partial response to Justice Scalia's criticism that, through the Parden doctrine, Congress could waive state sovereign immunity in areas where it could not abrogate that immunity directly. When the Supreme Court issued Seminole, then, it did not necessarily overrule Parden. There is room for the two decisions to co-exist.
Publishing for profit is outside of the state's core governmental functions. In the circumstances of the present case, however, Texas did not consent to be sued in federal court through its actions. The language used to waive state sovereign immunity in the copyright and trademark laws is written as an absolute, not as a condition.
A general attempt at abrogation is not sufficient to condition a state's action in a non-core area on the waiver of immunity. If it were sufficient, this would allow a serious end-run around Seminole in circumstances in which Congress did not have the authority to abrogate state immunity under section 5 of the Eleventh Amendment. A clear, narrow condition does not suffer from the same defect.
The present case is not a case in which the Parden waiver doctrine applies. It is necessary, then, to consider section 5 of the Fourteenth Amendment.
II. Section 5 of the FOURTEENTH AMENDMENT
In Seminole, the Supreme Court continued to recognize Congress's ability to abrogate state sovereign immunity through legitimate exercises of its power under section 5 of the Fourteenth Amendment.
Congress created legitimate property interests in copyrights and trademarks through a valid exercise of its Article I powers. Article I grants Congress the authority to create certain property interests that are protected from intrusion by the state.
Congress has authority to protect those property rights by enacting legislation under section 5. It is not necessary that Congress thought it was enacting legislation under section 5 "as long as Congress had such authority as an objective matter".
Protecting copyright and trademark holders from infringement by an arm of the state government is a legitimate legislative objective under section 5. Section 5 gives Congress the authority to enforce the substantive provisions of the Fourteenth Amendment through appropriate legislation. Section 5's enforcement power extends to the Due Process Clause of section 1 of the Fourteenth Amendment.
In College Savings Bank v. Florida Prepaid Postsecondary Educ. Exp. Bd., the Federal Circuit concluded that Congress may exercise its authority under section 5 to abrogate state sovereign immunity in patent infringement cases.
The Fourteenth Amendment allows Congress to provide a federal forum for both equal protection and due process violations. Congress can create a federal cause of action against the state in federal court for patent, copyright, or trademark infringement.
"This proportionality inquiry has two primary facets: the extent of the threatened constitutional violations, and the scope of the steps provided in the legislation to remedy or prevent such violations."
The means chosen by Congress to achieve its objective are modest; it is not the type of "general legislation" rejected by the Court in City of Boerne.
Congress enacted a valid waiver of state sovereign immunity for copyright and trademark infringement cases. It may be that this allows an end-run around Seminole, but
I respectfully dissent.
Id. Justice White's vote was essential for the Court to conclude that a majority of the Justices rejected the Union Gas plurality opinion.
Id. at 1351.