State Immunity From Federal Copyright and Trademark Suits: The Chavez Decision

Intellectual Property Practice Group Newsletter - Volume 2, Issue 2, Summer 1998

August 1, 1998

Robert R. Long

In April, the Fifth Circuit held in Denise Chavez v. Arte Publico Press, 139 F.3d 504 (5th Cir. 1998) that Congress's purported abrogation of states' Eleventh Amendment immunity from actions under the Copyright and Lanham Acts was not justified by the Fourteenth Amendment's enforcement provision. The court rejected an "implied waiver of immunity" theory in light of Seminole Tribe of Florida v. Florida, 116 S. Ct. 1114 (1996), holding that Congress cannot condition states' activities that are regulable by federal law upon their implied consent to being sued in federal court. Thus, the court found the express provisions of the Copyright and Lanham Acts that purport to require suit in federal court to be outside of Congress's Article I powers. It further held that neither the plaintiffs statutorily created right to protect her name from misappropriation nor her copyright infringement claim qualified as "property" which Congress can protect under the Fourteenth Amendment.

The plaintiff in this case, Denise Chavez, brought suit against the University of Houston and its publisher Arte Publico Press. She alleged that the University infringed her copyright when it continued to publish her book without her permission and violated the Lanham Act by naming her, also without her permission, as the selector of plays in another book it published. The University claimed that it had sovereign immunity under the Eleventh Amendment. Therefore, the University moved for dismissal on grounds that Chavez failed to state a claim upon which relief could be granted.

In its first opinion in this case, the Fifth Circuit had held that the 1992 Copyright and Lanham Act amendments, which purported to abrogate a state's sovereign immunity, constituted a legitimate exercise of congressional power. The Supreme Court, however, granted a petition for certiorari, vacated that judgment in light of Seminole Tribe, and remanded the case to the Fifth Circuit for further consideration (52 PTC J 77. 5/16/96).

On remand, the Fifth Circuit considered two significant questions. First, the court considered whether Parden v. Terminal Railway of Alabama State Docks Dept., 377 U.S. 184, 85 S. Ct. 1207 (1964), relied on in the first appeal, actually stood for the such a proposition that a state impliedly consented to suit in federal court when it undertook non-sovereign activities in areas regulated by the federal government. Parden held that when a state undertook to operate a railroad, it did so subject to FELA, which permits suits against railroads in federal court, and thereby waived its Eleventh Amendment immunity. The Fifth Circuit, however, noted that Seminole cited Parden only "as a case holding the unremarkable, and completely unrelated proposition that the states may waive their sovereign immunity." The state's ability to waive sovereign immunity, the court noted, "is a matter of hornbook law analytically separate from congressional overruling of state sovereign immunity. Seminole quashed [that] proposition when it unequivocally overturned Union Gas."

Moreover, the court observed, Seminole broadly held that even where the Constitution vests in Congress complete authority in a particular area, the Eleventh Amendment prevents Congress from authorizing suits against unconsenting states. The Eleventh Amendment restricts the court's powers under Article III, and Congress cannot use its Article I powers to circumvent the constitutional limitations placed upon federal jurisdiction. A fair reading of Seminole, the court concluded, required it to hold that Congress cannot condition states' activities that are regulable by federal law upon their "implied consent" to being sued in Federal Court.

The court also considered Chavez's claim that Congress's power under Section Five of the Fourteenth Amendment justified abrogation of Eleventh Amendment immunity because the state deprived Chavez of her "property" without "due process of law" when it violated the Lanham and Copyright Acts. Section 5 empowers Congress to enforce, by appropriate legislation, the provisions of the Fourteenth Amendment.

The court began its analysis with the proposition that Congress can enact legislation under Section 5 which embraces any right guaranteed by the Due Process Clause. However, Congress's power under Section 5, the court cautioned, was "remedial" and designed to enforce the provisions of the Fourteenth Amendment, not to "decree the substance of the Fourteenth Amendment's restrictions on the states."

Although the court acknowledged that Chavez's right to protect her name from misappropriation is assured by the Lanham Act, the court rejected her argument that this "intangible right" was a property right protected by the Fourteenth Amendment. In essence, it found that the Supreme Court had already decided this issue in Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155(1976) when it held that violations of reputational interests by the state are not cognizable under the Due Process Clause. In Davis, the Supreme Court stated, "[T]he interest in reputation alone which respondent seeks to vindicate in this action in federal court is quite different from the 'liberty' or 'property' recognized in those [other Supreme Court] decisions." The court also observed that the Third Circuit, in College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 131 F.3d 353 (3rd 1997), had similarly held that Congress lacked the power to subject the states to suit in federal court for violation of the misrepresentation provisions of the Lanham Act.

Likewise the court rejected Chavez's argument that her copyright claim was "property" protected against the states by the Fourteenth Amendment. The court conceded that copyrights are a "species of property," but questioned the degree to which they are protectable against the states. The court recognized that the Second Circuit in Roth v. Pritikin, 710 F.2d 934, 939 (2d. Ch. 1983), had held that the Due Process and Just Compensation Clauses protect an interest in a copyright. However, it noted that Roth "did not consider the situation before us, an infringement claim against a state." In that case, "[T]he Second Circuit was speculating on the entirely different issue of Congress's inability to retroactively invalidate by statute certain pre-existing copyright contracts between private parties."

The court also observed that Chavez's claim, although brought as an infringement claim, alternatively could likely have been brought as a breach of contract claim. Such claims, "have been held not to 'arise under' the nation's copyright laws for purposes of federal jurisdiction. 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." Thus, there was a likely state court remedy against the state for breach of contracts involving copyrights. The court concluded that the logic of City of Boerne v. Flores, 111 S.Ct. 2157 (1997), which counsels against reading statutory language to expand the substantive protections of the Bill of Rights, also weighed heavily against Chavez's claims. Moreover, reading the Copyright and Lanham Act amendments as abrogating states' Eleventh Amendment immunity would expand, rather than merely remedy, violations of procedural due process.

Finally, the court rejected what it described as Chavez's "most potent" claim: without the ability to sue in federal court, which has exclusive jurisdiction over copyright claims, she had no effective remedy to protect her name and literary work. The court found that her fear was "overblown" as only retrospective money damages would be unavailable to Chavez." It emphasized that states are subject to federal law when they undertake activities that are federally regulated; the Eleventh Amendment only shields them from suit in federal court. Additionally, the Ex Parte Young doctrine still permits suits against state officials for prospective injunctive relief, which is a particularly valuable remedy in copyright and trademark infringement cases. Finally, the court reiterated that Chavez could bring suits on copyright and trademark contracts in the state courts. The court finished by saying "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 claim against the University of Houston, a state entity, must be dismissed."

*Robert Long, a summer associate at Kilpatrick Stockton, is currently a J.D. candidate at Stanford Law School.