Allen v. Cooper

1

FREDERICK L. ALLEN and NAUTILUS PRODUCTIONS, LLC, Plaintiffs, v. ROY A. COOPER, Governor of North Carolina, et al., Defendants.

No. 5:15-CV-00627-BO

United States District Court, E.D. North Carolina, Western Division

August 29, 2024

ORDER

TERRENCE W. BOYLE, UNITED STATES DISTRICT JUDGE

Before the Court is the second attempt of Frederick Allen and his company, Nautilus Productions, LLC, (collectively "Allen") to abrogate North Carolina's sovereign immunity. Allen's first attempt to sue the North Carolina, its Department of Natural and Cultural Resources and various state officials (collectively, "North Carolina" or "the State") foundered when the Supreme Court held the Copyright Remedy Clarification Act of 1990 ("CRCA"), 17 U.S.C. § 501, et seq., was an invalid prophylactic abrogation of state sovereign immunity under § 5 of the Fourteenth Amendment. Allen now asserts that two other theories of abrogation-as-applied abrogation under § 5 of the Fourteenth Amendment and the "self-executing" Fifth Amendment- allow this Court to hear his claims.

North Carolina disagrees. The State moves to strike much of Allen's Second Amended Complaint for exceeding this Court's order granting reconsideration and giving leave to amend. For the remaining claims, the State moves to dismiss, arguing that sovereign immunity precludes jurisdiction here because Allen cannot show a valid abrogation under either theory.

This Court agrees with the State on some issues and Allen on others. Much of the Second Amended Complaint goes far beyond the Court's instructions; and much of what remains is outside this Court's subject-matter jurisdiction, but not everything. The Court, therefore, grants in part and denies in part North Carolina's motions.

BACKGROUND

By this stage in the proceedings, the story of this case has been told and retold.^[1] Another extensive retelling is unnecessary; a primer on the key facts will suffice. Still, a thorough recounting of the procedural history-which is admittedly dense-is necessary to understand the dispute as it currently stands.

I. The Origins of Allen's Copyrights

In 1996, Intersal, a marine salvager, discovered Blackbeard's flagship the Queen Anne's Revenge ("the QAR") in North Carolina's coastal waters near the Beaufort Inlet. Under North Carolina law, the QAR and its artifacts are state property. N.C. Gen. Stat. § 122-22. Intersal and the North Carolina Department of Natural and Cultural Resources ("DNCR" or "the Department") entered into a fifteen-year salvage agreement. That agreement gave Intersal, among other things, the exclusive right to make and market all commercial media of the salvage efforts. The agreement, however, contained exceptions for public records and non-commercial and educational uses. Intersal then retained Allen and his company, Nautilus Productions LLC, to document the salvage efforts. Allen registered 13 copyrights with the U.S. Copyright Office, each copyright covering a year's worth of video and still images of the QAR's preservation.

The relationship between Allen and the Department soured around 2013. At that time, Allen learned that the Department had uploaded copyrighted still images and video-footage to the internet without his consent. Allen, Intersal, and the Department reached a written settlement agreement resolving that dispute. Without admitting to any wrongdoing, the State and the Department compensated Allen for the alleged infringement. The agreement also clarified the parties' rights to the videos and photographs.^[2]

Not long after the settlement agreement, Allen alleges the Department resumed its copyright infringement by publishing, performing, and displaying copyrighted videos and still images on the internet. To make matters worse for Allen, in 2015 the North Carolina General Assembly passed Session Law 2015-218. 2015 N.C. Sess. Laws 218, § 4(a). That law, codified as N.C. Gen. Stat. § 121-25(b)^[3], amended a provision of North Carolina public records law, by adding the following language:

(b) All photographs, video records, 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 public records pursuant to G.S. 132-1. There shall be no limitation on the use of or no requirement to alter any such photograph, video recording, 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.

2015 N.C. Sess. Laws 218, § 4. (a).

II. Allen's First Attempt to Sue the State

On 1 December 2015, Allen commenced this action. He alleged the State, the Department, and various state officials, violated federal law-namely, the Takings Clause of the Fifth Amendment, Due Process Clause of the Fourteenth Amendment, the Copyright Act, and 42 U.S.C. § 1983-through direct copyright infringement and the passage of § 12l-25(b). Allen sought declaratory relief that § 121-25(b) was void and unenforceable not only as preempted by the Copyright Act but also under the Fifth and Fourteenth Amendments. For the ongoing constitutional violations, Allen sought injunctive relief under Ex Parte Young, 209 U.S. 213 (1908). In addition to these federal claims, Allen asserted claims under North Carolina law.

The State moved to dismiss Allen's amended complaint, arguing, among other things, that the CRCA was an invalid abrogation of state sovereign immunity under § 5 of the Fourteenth Amendment. On 23 March 2017, this Court denied in part and granted in part Defendants' motion to dismiss. Allen, 244 F.Supp.3d at 546. Because this Court concluded that the CRCA abrogated North Carolina's sovereign immunity, it allowed plaintiffs' claims for copyright infringement and injunctive and declaratory relief to proceed. Id. at 535, 544.

Not all of Allen's claims survived. The Court granted the State's motion to dismiss Allen's § 1983 claims for unconstitutional takings and violations of due process as well as Allen's state-law claims because of the State's sovereign immunity. Id. at 540. The Court dismissed Allen's § 1983 claims on sovereign immunity grounds per the Fourth Circuit's decision in Hutto v. South Carolina Retirement System, 773 F.3d 526 (4th Cir. 2014), which held that state sovereign immunity bars taking claims in federal court when those claims can be brought in state court. Allen, 244 F.Supp.3d at 540.

Because this Court did not dismiss all of Allen's claims on immunity grounds, North Carolina filed an interlocutory appeal. Regarding the CRCA's abrogation of sovereign immunity under § 5 of the Fourteenth Amendment, the Fourth Circuit concluded that the CRCA satisfied neither element required for a valid abrogation. Allen, 895 F.3d at 348-54. The Circuit then took up (for the first time) Allen's claims for declaratory and injunctive relief for ongoing constitutional violations under Ex Parte Young. 895 F.3d at 354-55. It rejected that request on the grounds that Allen had failed to plausibly allege ongoing constitutional violations, citing the concession made by Allen's counsel at oral argument that ongoing infringements had stopped. Id. at 354. The Fourth Circuit also rejected prospective relief under Ex Parte Young against § 121-25(b) because of the lack of a meaningful relationship between that statute and the state officials Allen sought to enjoin. Id. at 355. Finally, the Fourth Circuit held that the state officials sued in their individual capacities were entitled to qualified and legislative immunity. Id. at 356-58.

Although the Fourth Circuit entered judgment on 10 July 2018, that judgment did not take effect until 17 August 2019 because the mandate was stayed under Federal Rule of Appellate Procedure 41(a)(1) pending a ruling on the petition for rehearing en banc, which was ultimately denied. [DE 88, 89, 91]. On remand, this Court lifted its stay and dismissed Allen's claims against the State, the Department, and the public officials in their official capacity without prejudice; the remaining claims against the public officials in their individual capacities were dismissed with prejudice. [DE 92].

Because the Fourth Circuit held provisions of the CRCA invalid, the Supreme Court granted certiorari. Allen, 598 U.S. at 254. On the contested issue-whether in enacting the CRCA Congress had validly exercised its constitutional authority to abrogate state sovereign immunity- the Court first rejected Allen's arguments that constitutional authorization could be found in Congress's power under Article I, Section 8, Clause 8. Id. at 256-260. The Court then concluded the CRCA was an invalid prophylactic abrogation under § 5 of the Fourteenth Amendment. Id. at 260-66.

III. Intervening Developments Prompt Allen's Motion for Reconsideration.

While this case worked its way through the higher courts, the Supreme Court decided Knick v. Township of Scott, 588 U.S. 180 (2019), a decision with considerable implications for the substantive requirements of Fifth Amendment takings claims in federal court. Knick's most pronounced impact is that overruled Williamson County Regional Planning Commission v Hamilton Bank of Johnson City, 473 U.S. 172 (1985). Williamson County held that "if a state provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Takings Clause until it has used the procedure and been denied just compensation." Id. at 195. "Williamson County's state-litigation rule . .. created some real anomalies," Chief Justice Rehnquist noted later, because it, combined with preclusion doctrines, effectively "ensur[ed] that litigants who [went] to state court to seek compensation [were...