PRESS RELEASE: Eleventh Circuit's Vacation of Gray Television's Forfeiture Should Raise Caution Flags at FCC

Free State Foundation President Randolph May issued the following statement regarding the Court of Appeals for the Eleventh Circuit's opinion today vacating a forfeiture penalty of $518,283 assessed against Gray Television, Inc: 

The Free State Foundation filed an amicus brief in Gray Television's appeal of its forfeiture because of certain concerns relating the FCC's rationale for imposing the forfeiture, including whether Gray's due process rights had been violated for lack of fair notice regarding whether Gray's conduct actually violated the Commission's rules as they had been interpreted. While the court did not address the specific points FCC raised, it did hold that the entire
forfeiture should be vacated because the Commission failed to provide fair notice and acted arbitrarily and capriciously in failing to explain the basis for its Notice of Apparent Liability (NAL).

 

The FCC's enforcement regime has been plagued by problematic examples of overreach and abuse in the past, which is a major reason why FSF participated as an amicus in the Gray appeal. Before the agency is allowed to impose massive penalties, it's required as a matter of due process that parties regulated by the agency have fair notice of what's expected of them to comply with Commission rules. Conservatives and rule-of-law advocates have always been rightly concerned by "regulation by enforcement" – that is using an enforcement regime to establish new heretofore unknowable regulatory requirements.

 

The FCC's recent imposition of a massive forfeiture on Telnyx, and others, may well fall into this category, raising similar due process and fair notice concerns regarding whether the conduct alleged to be violative of the agency’s rules was known or knowable.

Blog Post Provides Update on Legal Battle in Blackbeard's Pirate Ship Case

An August 10 blog post by Stephen Carlisle catches up with the continuing case of Cooper v. Allen, following the Supreme Court's 2020 decision that ruled the Eleventh Amendment barred copyright infringements against states under the Copyright Remedy Clarification Act of 1990. The blog post is titled "State Attempts to Sink Blackbeard Infringement Case by 'Deep Sixing' the Law They Passed to Claim the Copyrights." At issue in the case is the State of North Carolina's unauthorized use of copyrighted video footage created by Mr. Rick Allen of efforts to salvage the pirate Blackbeard's ship, Queen Anne's Revenge.

I first wrote about Cooper v. Allen in an October 2019 Perspectives from FSF Scholars, "States Have No Right to Infringe Copyrights: The Supreme Court Should Enforce the Copyright Remedy Clarification Act." But the Supreme Court saw things differently, concluding that the CRCA's blanket abrogation of state immunity was not proportional or congruent to any proven problem of copyright infringements by states that amounted to unconstitutional injuries. The court's decision left open the door to Congress passing a future statute that is more narrowly targeted to intentional and reckless infringements by states. Language in the court's decision suggested that intentional or at least reckless infringement could come within the reach of the Fourteenth Amendment's Due Process Clause.

Thus, in a July 2020 Perspectives from FSF Scholars, "Congress Should Stop States From Infringing Copyrights," I wrote that the "Congress should craft a statute that will abrogate the sovereign immunity of states from being sued in federal court when they intentionally or recklessly infringe copyrights." To date, no legislation has been introduced in Congress to address intentional and reckless copyright infringements by states. However, in August 2021, the U.S. Copyright Office released a policy study on "Copyright and State Sovereign Immunity." The study explored possible legal bases for addressing infringements by states that may remain for copyright owners following the decision in Cooper v. Allen, such as due process and takings claims. 

 

Despite Mr. Allen's loss on infringement claims against the State of North Carolina in Cooper v. Allen, his takings claims and other claims remain alive in U.S. District Court. Mr. Carlisle's blog post summarizes those claims and describes the "spend your opponent into the ground" litigation strategy that the North Carolina Attorney General and Department of Justice – seemingly aided by the North Carolina General Assembly – appear to be using against a copyright owner who was wrongly denied the exclusive right to use his property and financially harmed by that state. Read Mr. Carlisle's excellent blog post for more. And Godspeed to Mr. Allen in his pursuit of justice. 

Supreme Court Denies Petition in Case Involving State Takings of Copyrighted Property

On March 21, the Supreme Court denied a petition for certiorari in the case of Jim Olive Photography v. University of Houston System. The case involved important and interesting legal issues regarding judicial enforcement of the Fifth and Fourteenth Amendments' prohibitions against state government takings of copyrighted property without just compensation. Unfortunately, the court's denial of the petition means that those issues will have to wait for another time.  

In Allen v. Cooper (2020), the Supreme Court concluded that the Eleventh Amendment generally bars federal courts from hearing infringement claims against state governments. But the Eleventh Amendment does not bar federal courts from hearing claims against states for takings of private property without just compensation or for deprivations of due process. As explained in my December 2021 Perspectives from FSF Scholars, "States Should Not Take Intellectual Property Without Justice Compensation: The Constitution's Fifth and Fourteenth Amendments Protect Copyrights." 

In Jim Olive Photography, the petitioning copyright owner's taking claims were denied by the Texas Supreme Court. He sought an order by the U.S. Supreme Court to vacate that decision and have the lower court reconsider his taking claims in light of the high court's decision in Cedar Point Nursery v. Hassid (2021). In Hassid, the court determined that regulations requiring government access to private property constitute per se physical takings similar to an easement in property because they appropriate the "right to exclude." And the copyright owner in Jim Olive Photography made a well-founded argument a state's appropriation of a copyright owner's exclusive rights, either by making unauthorized reproductions of the work or by publicly displaying it, is analogous to a state's appropriation of a portion of a property owner's land or crops. 

 

The Supreme Court's denial of the petition in Jim Olive Photography is unfortunate for copyright owners whose works have been infringed by state government agencies. But I stand by the legal principles and reasoning about takings of copyrighted property that are set forth in my December 2021 Perspectives:

Copyrights are a type of property that are expressly recognized in the Constitution. This understanding of copyrights as property provides a principled basis for Takings Clause claims when states intentionally or recklessly appropriate exclusive rights in copyrighted property. Such claims also appear consonant with Supreme Court decisions that prohibit states from appropriating personal property and an owner's "right to exclude." The Court should extend its Takings Clause jurisprudence to include takings of copyrighted property.