Reed Elsevier v. Muchnick: Section 411(a) Does Not Limit Subject Matter Jurisdiction

Nine years after its decision in New York Times Co. v. Tasini, 533 U.S. 483 (2001), the U.S. Supreme Court has held that Section 411(a) of the Copyright Act does not limit a federal court’s subject matter jurisdiction to certify a class and approve a settlement that includes class members with unregistered works. In Reed Elsevier, Inc. v. Muchnick, ___ U.S. ___, 130 S.Ct. 1237, (2010), the Supreme Court reversed the Second Circuits decision that Section 411(a) was a jurisdictional requirement, thereby clearing the way for final resolution of an $18 million settlement related to the Tasini decision.

BACKGROUND

Petitioners Reed Elsevier et al (“Publishers”) are publishers of electronic content. Respondents Irvin Muchnick and others (“Writers”) are mostly freelance writers and writers’ trade groups. The Writers had contracted with the Publishers to publish their works in print. Without authorization, the Publishers reproduced the works for electronic distribution as well.

In 2000-2001, the Writers brought legal actions against the Publishers claiming copyright infringement. In 2001, in New York Times Co. v. Tasini, 533 U.S. 483 (2001), the U.S. Supreme Court held that section 201(c) of the U.S. Copyright Act prohibited publishers from electronically reproducing freelance works without specific authorization. Tasini, 533 U.S. at 493. In the wake of Tasini, the Judicial Panel on Multidistrict Litigation consolidated all of the Writer cases that involved both registered and unregistered copyrighted works, in the U.S. District Court for the Southern District of New York.

In mediation, more than 20,000 Writers and Publishers agreed to certain settlement terms, but ten authors (including Muchnick) objected to the terms of the settlement. The District Court overruled their objections, certified the class, approved the settlement, and entered final judgment.

The ten objecting Writers appealed the fairness of the settlement only. The Second Circuit, sua sponte, ordered briefing on the question of whether the federal court had jurisdiction to certify a class and approve a settlement in light of section 411(a) of the Copyright Act and the inclusion of unregistered works in the action.

Section 411(a) of the Copyright Act provides that “no civil action for infringement of the copyright in any United States work shall be instituted under preregistration or registration of the copyright claim has been made…”

The Second Circuit ultimately held that Section 411(a) was a jurisdictional requirement, concluding, therefore, that the District Court lacked jurisdiction over the action. In re Literary Works in Electronic Databases Copyright Litigation, 509 F.3d 116, 121 (2nd Cir. 2007). All parties sought a writ of certiorari – both Writers and Publishers asked the Supreme Court to reverse the Second Circuit’s decision. Accordingly, a court-appointed attorney argued in support of the Second Circuit’s decision.

Section 411(a) is not a Jurisdictional Requirement

In an unanimous decision, the U.S. Supreme Court held that while Section 411(a)‘s registration requirement is a precondition for filing a copyright infringement claim in federal court, a copyright holder’s failure to comply with the registration requirement does not restrict a federal court’s subject matter jurisdiction over infringement claims that include unregistered works. The Supreme Court distinguished between ”jurisdiction” and “claims processing” rules. (Slip op., pp 5-6). In a stated desire to minimize “drive-by jurisdictional rulings,” the Supreme Court outlined the difference between “true jurisdictional conditions and nonjurisdictional limitations on causes of action.” Id. at p 6.

Specifically, the Supreme Court compared the case to its analysis of Title VII claims in Arbaugh v. Y&H Corp., 546 U.S. 500 (2006). In which the Court found that Title VII’s numerosity requirement – stating that Title VII only applies to employers with 15 or more employees – was not a factor in subject matter jurisdiction analysis, but instead was a “substantive ingredient of a Title VII claim.” Id. at pp. 6-7.

Similarly, the Supreme Court found that Section 411(a)’s registration requirement is located in a statutory provision “separate” from those granting federal courts subject matter jurisdiction. Id. at p. 9. Neither 28 U.S.C. section 1331, which confers subject matter jurisdiction over questions of federal law, nor 28 U.S.C. section 1338(a), which specifically confers subject matter jurisdiction over copyright claims, conditions jurisdiction on whether plaintiffs have registered their copyrights before filing claims. Id.

Moreover, the Supreme Court noted several provisions in the Copyright Act allowing federal courts to adjudicate claims involving unregistered works. Id. at 10. Accordingly, the Supreme Court held that Section 411(a) “imposes a precondition to filing a claim that is not clearly labeled jurisdictional, is not located in a jurisdiction-granting provision, and admits of congressionally authorized exceptions.” Id. at p. 11.

The Supreme Court declined to address whether Section 411(a) imposes a mandatory precondition to suit that District Courts might enforce sua sponte by dismissing claims involving unregistered works.

CONCLUSION

The Reed Elsevior decision clearly holds that a plaintiff’s lack of federal copyright registration will not deprive the federal court of subject matter jurisdiction needed to settle claims related to those unregistered works. The decision will likely result in the final settlement and resolution of the post-Tasini cases involving Writers’ electronic rights.

It’s notable that in Reed Elsevior, both sides sought to reverse the Second Circuit decision on mostly equitable arguments. The Publishers argued that if the Second Circuit opinion were allowed to stand, years of “intensive, complex, and costly” settlement negotiations would have been wasted, leaving little hope for a future settlement. Moreover, the Publishers argued that the Second Circuit decision would effectively deplete the nation’s electronic databases and archives because publishers would simply purge all unauthorized works rather than spend the time and money to locate authors and get consent. The Writers agreed that excluding unregistered works from the settlement would devastate the industry because most writers did not get paid enough on the original work to make it financially worthwhile to register the copyrights on those works. As a result, either those writers would not be compensated for infringement or their work would be removed from electronic records. The extent to which these compelling arguments influenced the Supreme Court is unknown, but in making its decision, the Court may have been mindful of the impact the Second Circuit decision would have on the industry.

The impact of Reed Elsevior on smaller, single-plaintiff copyright infringement cases may be minimal, though it may leave open the door for courts to dismiss cases outright, on their own initiative, if the plaintiff holds an unregistered copyright. The most prudent authors will seek federal copyright registration protection from the outset. If writers have failed to do so and suspect infringement such that they may need urgent relief, they should still obtain copyright registration quickly through the Copyright Office’s special handling procedures. If you have any questions about your copyright rights or possible infringement, seek the advice of a qualified copyright attorney.

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Olivier Taillieu

Jeff Zuber

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