Reed Elsevier v. Muchnick

Issues 

Whether the registration requirement contained in § 411(a) of the Copyright Act is jurisdictional, denying district courts jurisdiction over claims arising from the infringement of unregistered copyrights.

Oral argument: 
October 7, 2009

Freelance writers, led by Letty Cotton Pogrebin, brought a class action lawsuit against publishers, led by Reed Elsevier, Inc., for copyright infringement, claiming that the publishers electronically reproduced their works without authorization. The majority of the claims in the class related to alleged infringements of unregistered copyrights. With the approval of the District Court, the parties settled the lawsuit. The Second Circuit held, pursuant to 17 U.S.C. § 411(a), that the District Court lacked subject matter jurisdiction to certify a class or to approve a settlement with respect to claims arising from unregistered copyrights. The Supreme Court’s interpretation of § 411(a) will determine whether claims relating to unregistered copyrights can be settled in class actions along with claims arising from registered work. An affirmation of the Second Circuit’s opinion may make settlements more difficult.

Questions as Framed for the Court by the Parties 

Does 17 U.S.C. § 411(a) restrict the subject matter jurisdiction of the federal courts over copyright infringement actions?

Facts 

Petitioners, Reed Elsevier, Inc., et al. (“Reed Elsevier”), are publishers of electronic content, such as the New York Times Co. and archival database operators, such LexisNexis. See Brief for Petitioners, Reed Elsevier Inc., et al. at 4. Respondents, Irvin Muchnick, et al. (“Muchnick”) and Letty Cotton Pogrebin, et al. (“Pogrebin”), consist mainly of freelance writers and trade groups who represent authors. See Brief for Muchnick Respondents, Irvin Muchnick, et al. at 4; see also Brief for Pogrebin Respondents, Letty Cotton Pogrebin, et al. in Support of Petitioners at 4. During the 1980s, Reed Elsevier began assembling print newspaper, magazine, and journal articles and converting them into electronic files. See Brief of Court-Appointed Amicus Curiae in Support of the Judgment Below at 2. Without authorization from the writers, Reed Elsevier then sold access to the electronic files. Id. at 2.

From 2000-2001, Respondents brought a class action suit against Reed Elsevier in the Southern District of New York claiming copyright infringement. See In re: Literary Works in Electronic Databases Litigation, 509 F.3d 116 (2d Cir. 2007). In 2001, the Supreme Court, in New York Times Co. v. Tasini, held that § 201(c) of the United States Copyright Act prohibits publishers from electronically reproducing freelance works without specific authorization. See New York Times Co. v. Tasini, 533 U.S. 483, 488 (2001). In the wake of Tasini, electronic publishers removed from their databases “hundreds of thousands” of print media that they lacked written authorization to publish. See Brief for Petitioners at 4.

The Southern District of New York suggested the parties mediate. See In re: Literary Works at 5. After more than three years of negotiations, the parties agreed to settle. See id. at 6. Essentially, the settlement agreement stated that publishers would compensate, up to eighteen-million-dollars, all authors whose works they used without authorization. See id. at 6-7. In exchange, the authors would release the publishers and database operators from liability relating to unauthorized freelance articles in the publishers’ databases. See id. The settlement agreement included both owners of registered and unregistered copyrights. See id.

As the District Court prepared for class certification and settlement approval, a group of plaintiffs, led by Muchnick, objected to the settlement. See Brief for Muchnick Respondents at 8. The objectors challenged the fairness of the settlement, but not the district court’s jurisdiction to approve a settlement compensating unregistered copyright owners. See Brief for Petitioners at 7. In September 2005 the District Court overruled the objectors and granted final class certification and settlement approval. See Brief for Muchnick Respondents. The objectors appealed the decision to the Second Circuit. See id.at 8.

Sua sponte, the Second Circuit held that the district court did not have jurisdiction over claims arising from the infringement of unregistered copyrights nor authority to approve a settlement with respect to those claims. See Brief for Muchnick Respondents at 7. In support of its decision, the Second Circuit cited § 411(a) of the United States Copyright Act, which states that “no action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” 17 U.S.C. § 411(a). The Second Circuit vacated and remanded the District Court’s judgment. Id.at 8. On March 2, 2009, the Supreme Court granted certiorari. See Question Presented.

In light of the fact that Reed Elsevier, Respondents led by Muchnick, and Respondents led by Pogrebin all contend that § 411(a) is not jurisdictional and urge reversal of the Second Circuit’s decision, there is a Court-Appointed attorney arguing in support of the judgment below. See Brief of Court-Appointed Amicus Curiae in Support of the Judgment Below at 12.

Analysis 

Section 411(a) of the United States Copyright Act states that no copyright infringement action can be “instituted” until pre-registration or registration of the copyright claim. 17 U.S.C. § 411(a). The Second Circuit Court of Appeals held that 17 U.S.C. § 411(a) denies district courts jurisdiction to approve settlements if some of the claims in the class arise from alleged infringement of unregistered copyrights. See In re: Literary Works in Electronic Databases Litigation, 509 F.3d 116, 19-20 (2d Cir. 2007). The Supreme Court will review the Second Circuit’s decision and address this jurisdictional question.

First, the Court will decide whether § 411(a) restricts the subject matter jurisdiction of the federal courts over copyright infringement actions. See Question Presented. Second, the Court will consider whether 28 U.S.C. § 1367(a) is an alternative source of jurisdiction over claims arising from unregistered work. See Id. Finally, the Court will resolve whether § 411(a) eliminates the power of lower courts to approve comprehensive settlements releasing claims that are outside their subject matter jurisdiction to adjudicate. See id.

Does 17 U.S.C. § 411(a) Restrict the Subject Matter Jurisdiction of the Federal Courts?

The biggest point of contention in this case involves the language and intent of § 411(a). Petitioners, Reed Elsevier, Inc., et al. (“Reed Elsevier”), insist that the registration requirement of § 411(a), though mandatory, is not jurisdictional. See Brief for Petitioners, Reed Elsevier Inc., et al. at 12. In support of their argument, Reed Elsevier notes that in § 411(a) Congress did not phrase the registration requirement for instituting claims in jurisdictional terms. See id. at 22-23. They explain that the omission of the word “jurisdiction” in the registration provision of § 411(a) confirms that the provision is not meant to restrict federal courts’ jurisdiction over unregistered copyrights. See id. at 19. Instead, they argue Congress merely intended § 411(a) to be a precondition to instituting a copyright claim and not a limit on federal courts’ ability to settle claims relating to unregistered copyrights. See id. at 23.

Reed Elsevier explains that 28 U.S.C. §§ 1331 and 1338(a) are the district courts’ source of jurisdiction over unregistered copyright claims. See Brief for Petitioners at 23. These statutes, according to Reed Elsevier, grant federal courts general jurisdiction over copyright cases. See Id. Section 1338(a) specifically grants original subject matter jurisdiction over “any civil action arising under any Act of Congress relating to . . . copyrights.” 28 U.S.C § 1338(a). Bolstering Reed Elsevier argument, Respondents, Letty Cotton Pogrebin, et al. (“Pogrebin”), state that § 411(a) does not restrict the original subject matter jurisdiction granted by § 1338(a). See Brief for Pogrebin Respondents, Letty Cotton Pogrebin, et al. in Support of Petitioners at 7. They assert that the intent of § 411(a) is to facilitate the registration and enforcement of U.S. copyrights and not to restrict subject matter jurisdiction. See Id. at 14.

The Second Circuit ruled that §§ 1331 and 1338(a) grant district courts original subject matter jurisdiction over copyright claims. See In re: Literary Works, 509 F.3d at 9. However, the Second Circuit held that § 411(a) limits the jurisdiction granted by §§ 1331 and 1338(a). See id. It found that district courts’ subject matter jurisdiction is limited to claims arising from registered copyrights. See id. at 10. In support of its interpretation of § 411(a), the Second Circuit cited its own binding authority as well as persuasive decisions from other circuits. See Id. at 9-10. The Second Circuit found that, in addition to imposing a jurisdictional requirement, § 411(a) also demands that each claim within the certified class satisfy the jurisdiction requirement. See id. at 10, 19.

The Court Appointed Attorney, arguing for affirmation of the Second Circuit’s judgment, maintains that the language of § 411(a) is jurisdictional. See Brief of Court Appointed Attorney Amicus Curiae in Support of Judgment at 18. She points to the last sentence of § 411(a), which states that the “Register’s failure to become a party shall not deprive the court of jurisdiction.” See Id. This use of the word “jurisdiction” in the last sentence of § 411(a) is proof, according to her, that Congress intended district courts’ subject matter jurisdiction to be contingent upon registration. See Id. The Court Appointed Attorney insists that § 508 of the Copyright Act, which requires district courts to supply the registration number of each work involved in a copyright dispute, is further proof that § 411(a) serves jurisdictional purposes. See Id. at 24-25. She believes that, together, §§ 508 and 411(a) confirm “Congress’s intent to limit infringement suits to claims based on registered works.” See Id. at 25.

Do District Courts Alternatively Have Supplemental Jurisdiction Over Claims Relating to Unregistered Work?

Pogrebin states that the district court has supplemental jurisdiction over claims related to unregistered work pursuant to 28 U.S.C. § 1367(a). See Brief for Pogrebin Respondents at 18-19. According to § 1367(a), “the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C § 1367(a). This group of respondents contends that claims relating to unregistered work involve the same “case or controversy” as the claims for registered work. See Id. at 21.

Pogrebin also argues that, though supplemental jurisdiction exists in this case, it is not necessary. They explain that because the district court had original jurisdiction over claims relating to registered work, the district court had jurisdiction over the entire civil action. See Brief for Pogrebin Respondents at 19. Contrary to the Second Circuit’s opinion, Pogrebin contends that the district court does not need original subject matter jurisdiction over every freelance author's claim. See In re: Literary Works, 509 F.3d at 16.

The Second Circuit held that the district court does not have supplemental jurisdiction over unregistered copyright claims nor does it have jurisdiction to certify a class containing claims arising from unregistered copyrights. See In re: Literary Works, 509 F.3d at 18-19. The Second Circuit found that § 1367(a) is not a way around § 411(a)’s registration requirement. See Id. at 20-21. The court explained that the District Court has supplemental jurisdiction over related claims “except as . . . expressly provided otherwise by Federal statute” and, in this case, § 411(a) expressly restricts jurisdiction over unregistered claims. See id. at 19, 21.

The Court Appointed Attorney argues that the district court did not have supplemental jurisdiction to approve the settlement. See Brief of Court Appointed Attorney at 65-68. She asserts that, though claims involving unregistered and registered work raise similar legal issues and involve common facts, they are not tied to the same single controversy as required by § 1367(a). See id. at 67-68.

Does § 411(a) Eliminate District Courts’ Power to Approve Settlements That Release Claims That Are Normally Outside Their Jurisdiction?

Reed Elsevier argues that even if § 411(a) restricts district courts’ subject matter jurisdiction, it does not limit the district court’s ability to approve settlements releasing claims involving unregistered works. See Brief for Petitioners at 45. They assert that Matsushita Elec. Indus. Co. v. Epstein gave courts the power to “approve settlements that release claims they could not have tried for want of jurisdiction.” 516 U.S. 367 (1996); seeBrief for Muchnick Respondents, Irvin Muchnick, et al. at 44. Thus, according to Reed Elsevier, § 411(a)’s mandatory requirement of copyright registration as a precondition to instituting a claim is not a precondition to certifying a class for settlement. See Brief for Petitioner at 45.

Reed Elsevier argues that the Second Circuit’s finding that § 411(a) prevents the inclusion of unregistered works in settlements like in this case is in conflict with the Supreme Court's decision in New York Times Co. v. Tasini. See Brief for Petitioner at 2-3. Petitioners also note that prior to rendering the judgment below, the Second Circuit had held that “not all members of a settlement-only class need to possess a valid cause of action.” See id. at 9. Thus, they contend, the Second Circuit is in conflict with its own previous judgments. See id.

In response, the Court Appointed Attorney argues that Petitioners, Muchnick, and Pegrobin misconstrue § 411(a) as it relates to the power to approve settlements. See Brief of Court Appointed Attorney at 66. She asserts that class action settlements require the court to issue a final judgment terminating the claims of absent class members and binding others. See id. The Court Appointed Attorney then infers that Congress did not intend to give district courts the power to terminate claims that they did not have the power to adjudicate. See id.

Discussion 

The Supreme Court’s decision will clarify whether the copyright registration requirement under § 411(a) of the Copyright Act is jurisdictional. People most affected by the Court’s decision will include freelance authors, newspaper and magazine publishers, archival database operators, and the researching public. See Brief for Petitioners, Reed Elsevier, Inc., et al. at 2.

Petitioners, Reed Elsevier, Inc., et al. (“Reed Elsevier”) assert that if the Court affirms the Second Circuit’s decision, years of “intensive, complex, and costly” settlement negotiations between them and Respondents, Irvin Muchnick, et al. (“Muchnick”) and Letty Cotton Pogrebin, et al. (“Pogrebin”), will ultimately be a waste. See Brief for Petitioners at 3-4. Furthermore, they add that if § 411(a) denies federal courts jurisdiction to approve settlements including unregistered works, “it is doubtful that any possible settlement can be achieved.” See id. at 3. This, they explain, is because of the prevalence of non-registration among freelance authors,” and “the cost and burden of registration for works of such modest economic value.” See id. at 3.

Reed Elsevier contends that if the Court affirms the Second Circuit’s decision, it will effectively deplete the nation’s electronic databases and archives. See Brief for Petitioners at 3. Reed Elsevier states that companies will most likely purge their databases of unauthorized works, rather than risk liability for publishing authors’ works without authorization or set about the task of identifying unauthorized works and trying to locate their authors. See id.at 4. They stress the difficulty that publishers would have in trying to retrospectively identify freelance articles in their databases without authorization. See id. They describe the task of locating authors of unauthorized works years after the first publication of their articles as “insuperable.” See id.at 4.

Muchnick and Pogrebin agree with Reed Elsevier that exclusion of unregistered works from settlement agreements between authors and publishers will have a devastating effect on the industry. See Brief for Muchnick Respondents, Irvin Muchnick, et al. at 35; see also Brief for Pogrebin Respondents, Letty Cotton Pogrebin, et al. in Support of Petitioners at 4. They state that “[m]ost freelance authors (i.e., the vast majority of the class) whose copyrights were infringed on a widespread basis will not spend $35 or $45 to register a year’s worth of works to bring an actual damages infringement claim for articles they sold years ago for $50 or $100.” See Brief for Pogrebin Respondents at 4. Muchnick predicts that the Court affirming the Second Circuit will either leave authors uncompensated for infringement of their copyrights or create “gaping holes” in the “electronic record of history,” since some publishers would delete freelance work from their sites altogether rather than risk lawsuits from authors. See Brief for Muchnick Respondents at 35.

The Court Appointed Attorney, arguing in support of the Second Circuit’s decision that § 411(a) is jurisdictional, maintains that a federal court cannot approve a settlement that includes unregistered works. From her point of view, such an approval would defeat public policy objectives that Congress relies on the courts to enforce. See Brief of Court-Appointed Amicus Curiae in Support of the Judgment Below at 44. These public policy objectives include (1) supporting a national registration system that publicly identifies copyrights, (2) sheltering courts from a deluge of minor infringement claims, (3) shielding defendants from unmeritorious claims, and (4) sustaining the Library of Congress. See Id. at 45.

She states that private litigants cannot waive these public purposes for their own benefit. See Brief of Court-Appointed Amicus Curiae at 46. Because the Copyright Office forwards copies of works to the Library of Congress, the Court Appointed Attorney states that § 411(a)’s registration requirement helps to maintain the nation’s historical archive. See Id. 56. She draws attention to the fact that Reed Elsevier, as companies that charge consumers for access to their databases, has “an economic interest in restricting free access” to information, such as the Library of Congress provides. See Id.

Furthermore, the Court-Appointed Attorney asserts that judicial economy is a public policy benefit of construing § 411(a) as a jurisdictional requirement. Registration “streamlines” the adjudication process by requiring a writer to define her claim before presenting it in court. See Brief of Court-Appointed Amicus Curiae at 47-48. Courts can dismiss frivolous complaints quickly, saving defendants the costs of defending unmeritorious claims. See Id. 51.

This point is of special importance to companies such as Google, Yahoo, Amazon.com, eBay, Wikipedia, and Bloomberg, which deal in works subject to federal copyright protection. See Brief of Amici Curiae Computer & Communications Industry Association and NetCoalition in Support of the Judgment Below at 1-2. These companies fear that “a ruling that § 411(a) is not jurisdictional will encourage copyright “trolls” to file more class actions for the purpose of extracting quick nuisance value settlements.” See Id. at 4. These companies regard registration as a “gatekeeper to the courthouse.” See Id. at 3. They argue that the costs of imposing a registration requirement on authors are minor, when compared to the benefits. See id. at 3.

Conclusion 

This case will address whether 17 U.S.C. § 411(a) restricts district courts’ subject matter jurisdiction over copyright infringement actions. The parties contend that § 411(a) does not restrict the lower courts’ ability to settle claims that relate to unregistered work as both the statute’s language and the intent of Congress suggest otherwise. The Court Appointed Attorney, arguing for affirmation of the Second Circuit's ruling below, maintains that § 411(a) is inherently jurisdictional and limits the courts’ jurisdiction to claims arising from registered work. The Supreme Court’s decision will not only provide clarity to this jurisdictional issue, but it will also impact the reading public’s access to written work.

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