By Kevin E. Noonan –

Dickens’s Bleak House has long stood as an exemplar for the perils of interminable litigation where no one benefits (except, perhaps, the lawyers; see Jarndyce v. Jarndyce).  In a case already somewhat notorious for its subject matter, Allen v. Cooper (2020), on remand back from the Supreme Court upholding North Carolina’s sovereign immunity against suit for copyright infringement, the journey recently ended at the Fourth Circuit.

To provide the reader with a recap, the case arose over Petitioner Allen’s suit against North Carolina’s unauthorized use of copyrighted materials relating to the discovery and salvage of the pirate Blackbeard’s “flagship” Revenge off the coastal waters of that state and, hence, being deemed State property [note: readers wishing to skip the recap can scroll down to the paragraph beginning with ***).  Petitioner relied on the provisions of the Copyright Remedy Clarification Act of 1990 (CRCA), codified at 17 U.S.C. § 511:

[A] State “shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in Federal court” for copyright infringement.  17 U.S.C. §511(a).  [I]n such a suit a State will be liable, and subject to remedies, “in the same manner and to the same extent as” a private party.  §511(b).

North Carolina asserted sovereign immunity under the Eleventh Amendment:

The Judicial Power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

The District Court found for plaintiff, based on the express provisions of the CRCA, and on Section 5 of the Fourteenth Amendment, in view of the “the States’ ‘pattern’ of ‘abus[ive]’ copyright infringement.”  The Fourth Circuit reversed, based on the Supreme Court’s decision in Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999), holding unconstitutional the Patent Remedy Act, enacted by Congress on the same day and having substantially the same provisions.

On certiorari, the Supreme Court affirmed the Fourth Circuit’s judgment, in a decision by Justice Kagan and joined by the Court with the exception of two portions of the opinion in which Justice Thomas did not join; in addition, Justice Breyer wrote a concurring opinion joined by Justice Ginsberg.  The opinion noted that the express language of the Eleventh Amendment is not unequivocal but that sovereign immunity stands for the “presupposition of our constitutional structure which it confirms,” citing Blatchford v. Native Village of Noatak, 501 U.S. 775, 779 (1991).  This presumption is, first, that “each State is a sovereign entity in our federal system,” citing Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 54 (1996).  Second, “[i]t is inherent in the nature of sovereignty not to be amenable to [a] suit” absent consent, cited in Seminole Tribe and relying on The Federalist No. 81, p. 487 (A. Hamilton).  Finally, that “fundamental aspect of sovereignty constrains federal ‘judicial authority’” according to the Court, citing Blatchford.

The opinion acknowledges that this immunity is not absolute and the Court has recognized exceptions, in instances where Congress enacts a statute having “unequivocal statutory language” that abrogates a State’s sovereign immunity (citing Dellmuth v. Muth, 491 U.S. 223, 228 (1989)) and there is some constitutional provision that excuses Congress’s encroachment on sovereign state prerogatives (citing Kimel v. Florida Bd. of Regents, 528 U.S. 62, 78 (2000)).  In this case, the first prong of the test was indisputably met.  As for the second prong, Petitioner relied on Congress’s Article I power to grant copyrights, and the Fourteenth Amendment’s grant to Congress of the power to enforce the Amendment’s due process provisions.

The Court rejected these arguments, the opinion stating that “[t]he slate on which we write today is anything but clean.”  The Article I power to grant copyrights (and patents) “impose[s] a corresponding duty (i.e., not to infringe) on States no less than private parties,” according to the Court, citing Goldstein v. California, 412 U.S. 546, 560 (1973).  Petitioner argued that abrogation of North Carolina’s sovereign immunity was the best, if not only, way to protect Petitioner’s copyright.  But the opinion asserts:

The problem for Allen is that this Court has already rejected his theory, in Florida Prepaid.  While that case involved Congress’s failed attempt to abrogate State sovereign immunity for patent infringement, the constitutional basis for copyright protection arises in in the same provision of Article I as patent protection (Section 8, clause 8) and thus that decision mandates the Court’s opinion here.

The Court noted that the justifications for stripping States of sovereign immunity in Florida Prepaid for patents were the same as asserted here:  “to ensure ‘uniform, surefire protection’ of intellectual property.”  While acknowledging that this was a “proper Article I concern,” the opinion reiterates the holding of Florida Prepaid that it isn’t enough to satisfy the second prong, that there is a constitutional provision supporting this exercise of federal power, based on the Court’s decision in Seminole Tribe v. Florida.  The rubric from the case is that Congress does not have the power, under Article I, to “circumvent” the limitations sovereign immunity places on federal jurisdiction.  As stated in the opinion, “the power to ‘secur[e]’ an intellectual property owner’s ‘exclusive Right’ under Article I stops when it runs into sovereign immunity.”

The Court also rejected Petitioner’s argument that Central Va. Community College v. Katz provided “an exit ramp” from the Florida Prepaid precedent.  546 U.S. 356, 359 (2006).  Katz involved the Bankruptcy Clause, which the Court decided enabled Congress to compel states to participate in bankruptcy proceedings.  But the opinion noted that the Court had expressly exempted bankruptcy proceedings from Seminole Tribe’s general rule.  The Court refused in this case to extend “bankruptcy exceptionalism” to the Copyright Clause.  Bankruptcy proceedings were “in rem” according to the Court, and accordingly “it does not implicate States’ sovereignty to nearly the same degree as other kinds of jurisdiction,” citing Katz.  In addition, the Court in Katz found that bankruptcy proceedings and the Bankruptcy Clause had a “unique history” that produced in the Court “a felt need to curb the States’ authority.”  This need stemmed from the “wildly divergent schemes” different States had at the founding of the Republic for discharging debt in bankruptcy and that the States at that time had a history of not respecting discharge orders from other states.  As is its wont, the Court reverted to the origins and purposes (the Framers’ intentions) of the Bankruptcy Clause for justification for its distinction.  And the Court in Katz had found that by ratifying the Constitution, the States had agreed to yield their sovereign immunity (in view of the language of the Bankruptcy Clause itself); because a State can always waive its immunity any apparent inconsistency was thus resolved.

Florida Prepaid, and stare decisis, were enough in the Court’s view to determine the outcome, because finding abrogation of North Carolina’s sovereign immunity would be directly contrary to affirming Florida’s sovereign immunity in the Court’s earlier precedent.  The only way to abrogate sovereign immunity in this case would have been to overrule the Court’s recognition of Florida’s sovereign immunity.  Calling stare decisis a “foundation stone of the rule of law” (and citing Michigan v. Bay Mills Indian Community, 572 U.S. 782, 798 (2014), a case on Indian tribe immunity for the principle), the opinion stated that there must be a “special justification” for doing so (as well as a belief that the earlier case had been wrongly decided), which the Court did not find.

Regarding Section 5 of the Fourteenth Amendment, the Court recognized that the Amendment “fundamentally altered the balance of state and federal power,” citing Seminole Tribe, and that the Court had held that (under the right circumstances) this Amendment gives Congress the power to abrogate State sovereign immunity, citing Fitzpatrick v. Bitzer, 427 U.S. 445, 456 (1976).  But the Court recognized that this power is limited:  for example, it must be tailored to “remedy or prevent” State conduct that violates the Amendment’s due process guaranties, citing City of Boerne v. Flores, 521 U.S. 507, 519 (1997).  The Court has fashioned a “means-ends test” in this regard, wherein “Congress can permit suits against States for actual violations of the rights guaranteed in Section 1” of the Amendment.  The Court requires a “congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end.”  But the limits on this grant of power are what the amendment actually bars, which are violations of due process.  In this case, the question the Court apprehended was “[w]hen does the Fourteenth Amendment care about copyright infringement?” – finding the answer to be “sometimes,” particularly when States deprive a citizen of property without due process of law.  But “sometimes” does not mean “always,” according to the opinion, excluding for example instances of negligence, citing Daniels v. Williams, 474 U.S. 327, 328 (1986).  Copyright infringement must be intentional, or at least reckless, for the due process protections of the Fourteenth Amendment to come to bear, and only where the State does not offer a remedy for the infringement, citing Hudson v. Palmer, 468 U.S. 517, 533 (1984).

In resolving the question before it regarding the Fourteenth Amendment, the Court once again turned to its decision in Florida Prepaid, as defining unconstitutional infringement to be “intentional conduct for which there is no adequate state remedy.”  In that case, “the statute’s abrogation of immunity [in the Patent Remedy Act], the equivalent of the CRCA’s—was out of all proportion to what it found [in the legislative history].”  This was because, inter alia, “Congress did not identify a pattern of unconstitutional patent infringement” (indeed, the Court characterized the evidence as “thin,” amounting to only two examples in the context of most States complying with the Patent Statute).  In addition, that evidence was that States’ infringement was “innocent or at worst negligent” rather than reckless or intentional.  The Court noted that the Patent Remedy Act was disproportionate to the harm that provoked it, stating “it exposed all States to the hilt” of liability for patent infringement.  It was not carefully and narrowly directed to correcting a problem but instead provided “a uniform remedy for patent infringement.”  It did not “enforce” Section 1 (due process) of the Fourteenth Amendment and thus was not “appropriate” for enforcing the Amendment under Section 5.

In view of the “identical scope” of the statute at issue before the Court, the opinion sets forth the rhetorical question “[c]ould . . . this case come out differently” (answering “no”) unless there was stronger evidence of intentional or reckless (i.e., unconstitutional) infringement.  In this case, there was a greater quantum of evidence supporting State infringement of copyrights (including a 155-page report from the Register of Copyrights) than in earlier patent cases.  But the Court held that even this wasn’t enough.  The Court found the evidence “scarcely more impressive” (“only a dozen possible examples of state infringement” and “seven court cases brought against States” as well as “five [uncorroborated] anecdotes taken from public comments”) than the evidence for States’ patent infringement in Florida Prepaid.  And only two of these examples raised any due process issues.  Under this analysis, the Court found that this statute failed the “congruence and proportionality” test and the outcome could not differ from the Court’s earlier decision in Florida Prepaid.

The opinion concluded with the Court suggesting that Congress could pass a statute abrogating State sovereign immunity regarding copyright infringement under the right circumstances, noting that Congress passed both the Patent Remedy Act and the CRCA prior to the Court’s decision in Seminole Tribe.  The opinion suggests that “Congress will know the rules” regarding “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” should Congress decide to pursue another statute to abrogate State sovereign immunity.  Such a “tailored statute” could “effectively stop States from behaving as copyright pirates” and, as a consequence, “bring digital Blackbeards to justice.”

***After the Supreme Court’s decision, the North Carolina District Court granted Allen’s motion to reopen the lawsuit on the basis of “as-applied” or “case-by-case” abrogation of state sovereign immunity under United States v. Georgia, 546 U.S. 151 (2006) (termed “the 2021 Ruling” in the Fourth Circuit’s opinion).  The State of North Carolina defendants moved to dismiss on sovereign immunity grounds, and the District Court denied this motion on one of the claims in the complaint and authorized discovery (termed “the 2024 Ruling” in the opinion).  The Fourth Circuit reversed the 2021 Ruling permitting Allen to proceed, vacated the 2024 Ruling as a consequence, and remanded with directions to dismiss.

In the opinion, the Court recognized that the North Carolina legislature had enacted a statute seeming to legitimize the State’s use of Allen’s copyrighted video and other material:

All photographs, video recordings, or other documentary materials of a derelict vessel or shipwreck or its contents, relics, artifacts, or historic materials in the custody of any agency of North Carolina government or its subdivisions shall be a public record pursuant to G.S. 132-1.  There shall be no limitation on the use of or no requirement to alter any such photograph, video recordings, or other documentary material, and any such provision in any agreement, permit, or license shall be void and unenforceable as a matter of public policy.  N.C. Gen. Stat. § 121-25(b) (2015).

The Court also noted that Allen’s 2016 complaint was brought (1) for a declaratory judgment that § 121-25(b) was preempted by the federal copyright statute; (2) for damages and injunctive relief; and (3) under 42 U.S.C. § 1983 alleging that § 121-25(b) constituted a taking under the Fifth Amendment and violated Allen’s due process rights under the Fourteenth Amendment.  In addition, the opinion recognizes Allen’s inclusion as a defendant a non-government entity, the Friends of Queen Anne’s Revenge (the “Friends of QAR”) for infringement.

Allen’s attempt to re-start the litigation was based on Rule 60(b)(6) of the Federal Rules of Civil Procedure for reconsideration of the District Court’s decision to dismiss his Fifth Amendment takings cause of action and to get the District Court’s leave to amend his complaint on these grounds (specifically based on the Supreme Court’s decision in U.S. v. Georgia).  In its 2021 Ruling, the District Court recognized that Allen’s motion was improper under Rule 60(b) but considered it under Rule 54(b); the District Court also found Allen’s motion to be timely (82 days) in view of the time spent appealing to the Fourth Circuit and the Supreme Court (more than three years).

The District Court granted Allen’s motion under its 2021 Ruling based on its determination that an intervening case, Knick v. Township of Scott, Pennsylvania, 588 U.S. 180 (2019), had implicitly overruled the Fourth Circuit precedent that the District Court had relied on in its 2017 Ruling.  The District Court further held in its 2021 Ruling that Allen’s Fifth Amendment takings claim could be properly renewed under Rule 54(b) and that neither the District Court, the Fourth Circuit, nor the Supreme Court had ever assessed Allen’s grounds for abrogation of North Carolina’s sovereign immunity under the Supreme Court’s Georgia precedent.

The case therefore proceeded with Allen filing his second amended complaint, which the North Carolina defendant challenged (and the District Court held) “[went] far beyond the [District] Court’s instructions” in its 2021 Ruling.  The District Court, in its 2024 Ruling, dismissed all grounds in the Second Amended complaint except Allen’s copyright infringement claims and “whether the North Carolina defendants’ copyright infringement activities constituted a denial of Fourteenth Amendment procedural due process” under the “case-by-case” abrogation theory from Georgia.  The North Carolina defendants then pursued this appeal.

The opinion setting forth the bases for the Court’s decision to reverse the District Court’s 2021 Ruling first assessed the Court’s jurisdiction, then North Carolina’s argument that the District Court’s 2021 Ruling was “fatally flawed,” and third whether the Court should address the North Carolina defendants’ challenge to the District Court’s 2024 Ruling (finding jurisdiction thereof under the collateral order doctrine that properly involved a consideration of the 2021 Ruling under “pendent appellate jurisdiction” citing Rux v. Republic of Sudan, 461 F.3d 461, 475 (4th Cir. 2006)).

Regarding the first issue, whether the District Court erred in permitting Allen to refile his complaint under Rule 60(b)(6) and then applying the principles of Rule 54(b), the Court asserted the standard of its review to be abuse of discretion by the District Court,  Carlson v. Bos. Sci. Corp., 856 F.3d 320, 325 (4th Cir. 2017) (regarding Rule 54(b) review), and Aikens v. Ingram, 652 F.3d 496, 501 (4th Cir. 2011) (en banc) (regarding Rule 60(b) review).  Using this standard, the Court held the District Court’s 2021 Ruling was error, because “Rule 60(b) was the only conceivable — yet nevertheless inadequate — means to reopen this litigation.”  This is because (the Court explains) Rule 54(b) applies to interlocutory, pre-judgment orders:

[A]ny order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities.  Fed. R. Civ. P. 54(b) (emphasis added).

And Rule 60(b) by its terms is directed to “Grounds for Relief from a Final Judgment, Order, or Proceeding.”  Fed. R. Civ. P. 60(b) (emphasis added).  The District Court erred in ignoring the appellate procedural history in failing to recognize that its 2017 Ruling was not an interlocutory order (which would have properly fallen within the ambit of Rule 54(b)) according to the opinion.  This is because the Supreme Court’s decision had affirmed the Circuit’s Court’s mandate ending the case against all but the QAR defendant and Allen had dismissed the action against that defendant voluntarily.  This made the judgment final and outside the scope of Rule 54(b), the opinion citing Waetzig v. Halliburton Energy Servs., Inc., 604 U.S. 305, 312 (2025), in this regard, inter alia because voluntary stipulation of dismissal does not require a court order to become effective under Fed. R. Civ. P. 41(a)(1)(A)(ii).

Under these circumstances, the Court held that the District Court had abused its discretion by applying Rule 54(b) instead of Rule 60(b)(6) (which the opinion characterizes as the “catchall provision”).  And applying that Rule requires “extraordinary circumstances” not present here according to the opinion, the Court citing Wells Fargo Bank, N.Z. v. AMH Roman Two NC, LLC, 859 F.3d 295, 299 (4th Cir. 2017) (citation modified), and Ackermann v. United States, 340 U.S. 193, 199-202 (1950).  Such motion should be, and has been, denied when the asserted reason for the motion could have been addressed in an appeal, the opinion citing Dowell v. State Farm Fire & Cas. Auto. Ins. Co., 993 F.2d 46, 48 (4th Cir. 1993).  Because Allen’s basis for reconsideration did not fall into the other reasons provided by the Rule he was compelled to satisfy the extraordinary circumstances provision.  And because “no such circumstances existed here, . . . the district court’s ruling is thus an erroneous abuse of discretion,” according to the Court.

Turning to the District Court’s reasoning for permitting Allen to submit his amended complaint for reconsideration, i.e., because the court:

[N]ever expressly closed the door to a valid claim of case-by-case abrogation under Georgia [and b]ecause this Court, the Fourth Circuit, and the Supreme Court all passed on the Georgia issue, it is appropriate to consider this claim for case-by-case abrogation following the Supreme Court’s decision rejecting the CRCA as a valid prophylactic statute,

the opinion characterizes this reasoning as being “fatally flawed for multiple reasons.”  The first of these is that the Georgia decision was handed down by the Supreme Court in 2006, “10 years before Allen had even filed his 2016 Complaint.”  Moreover (“critically”), Allen had neglected to raise Georgia before the District Court, the Fourth Circuit, or the Supreme Court in any of the earlier proceedings.  Nor did either Allen nor the District Court explain why that failure met (or “could ever meet”) the “extraordinary circumstances” test needed to properly apply Rule 60(b)(6) according to the Court.  Permitting Allen to “haul[] the North Carolina defendants back into court” would subject the North Carolina defendants to the type of “manifest” prejudice precluded for invoking Rule 60(b)(6).  The opinion cites reasons set forth in the District Court’s 2021 Ruling to have “perplexingly collapsed Allen’s Rule 60(b)(6) and Rule 15(a) burdens,” contrary to recent Supreme Court and Fourth Circuit rulings, including BLOM Bank SAL v. Honickman, 605 U.S. 204, 213 (2025), and Daulatzai v. Maryland, 97 F.4th 166, 178 (4th Cir. 2024).  The Court saw Allen’s efforts as nothing more than a “do-over” that was unfair to the North Carolina defendants and inefficient for the judicial system.

Having reversed the District Court’s 2021 Ruling, the Court then vacated the 2024 Ruling because no “live dispute” properly existed, citing Norfolk Southern Railway Co. v. City of Alexandria, 608 F.3d 150 (4th Cir. 2010), and Holloway v. City of Va. Beach, 42 F.4th 266, 275 (4th Cir. 2022), and because any resolution by the Court of the underlying issue – Eleventh Amendment sovereign immunity – would be an advisory opinion “on moot constitutional issues.”  Accordingly, the Court remanded to the District Court with instructions to dismiss the case against the North Carolina defendants with prejudice.