Allen v. Cooper

244 F.Supp.3d 525

Frederick L. ALLEN and Nautilus Productions, LLC, Plaintiffs,

v.Roy A. COOPER, et al.,¹ Defendants.

No. 5:15–CV–627–BO

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

Signed March 23, 2017

David Loar McKenzie, Sands Anderson PC, Raleigh, NC, G. Jona Poe, Jr., Poe Law Firm, PLLC, Susan Freya Olive, Olive & Olive, P.A., Durham, NC, for Plaintiffs.

Amar Majmundar, Olga E. Vysotskaya De Brito, North Carolina Department of Justice, Jeffrey A. Doyle, Hedrick, Gardner, Kincheloe and Garofalo, LLP, Raleigh, NC, J. Scott Lewis, Butler Snow LLP, Wilmington, NC, for Defendants.

ORDER

TERRENCE W. BOYLE, UNITED STATES DISTRICT JUDGE

This cause comes before the Court on a motion to dismiss filed by State defendants [DE 49] and a motion to dismiss filed by defendant Friends of the Queen Anne's Revenge. [DE 47]. The appropriate responses and replies have been filed and a hearing was held before the undersigned on November 2, 2016, in Edenton, North Carolina. For the reasons discussed below, the motions to dismiss are denied in part and granted in part.

BACKGROUND

Plaintiffs, Frederick Allen and his production company Nautilus Productions, have been the substantially exclusive underwater photographers of the shipwreck Queen Anne's Revenge ("QAR"), the ship of the pirate commonly known as Blackbeard.² The shipwreck was discovered near the Beaufort inlet off the North Carolina coast in 1996. Allen's work documenting the shipwreck through video and still images began in 1998. Allen has registered copyrights in the works created in relation to his documenting of the QAR, and such works are licensed to and commercialized by Nautilus.

Plaintiffs allege that prior to October 2013, the State of North Carolina and its Department of Natural and Cultural Resources ("DNCR") infringed, contributed to infringement, and induced infringement of Allen's registered copyrights by uploading Allen's video-footage to the internet without consent. On October 15, 2013, plaintiff, the State, and DNCR entered into a written settlement agreement which provided for payment to plaintiffs from the DNCR of $15,000 for any copyrights it had infringed prior to that date. The agreement referred to some specific instances of infringement, including the Friends of the Maritime Museum display photograph of the pile (the central portion of the shipwreck), DNCR's Flickr account showing an anchor on the pile, and the Friends of the QAR website showing mapping dividers. The State and DNCR paid plaintiffs the $15,000 provided by the settlement agreement on February 3, 2014.

Plaintiffs allege that after entry of the settlement agreement the State and DNCR resumed infringing on plaintiffs' copyrights. Plaintiffs allege that the State and DNCR have published, performed, and/or displayed plaintiffs' video footage as well as still images in print materials. Plaintiffs further allege that in an effort to convert plaintiffs' copyright assets to State property without payment to plaintiff, defendants collectively wrote and obtained passage of an amendment to an existing North Carolina statute, the effect of which is to convert copyrighted works of plaintiffs and others into public record, upon which under state law there is no limitation on use. N.C. Gen. Stat. § 121–25(b). The full text of the amended statute at the time of the filing of the complaint read as follows:

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

Effective July 1, 2016, Session law 2016–94, s. 162, amended subsection (b) to read as follows:

All photographs, video recordings, 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 a public record pursuant to Chapter 132 of the General Statutes.

N.C. Gen. Stat. § 121–25(b).

Plaintiffs seek a declaratory judgment that § 121–25(b) as amended is void and unenforceable as it is preempted by the Copyright Act, 17 U.S.C. §§ 101 et seq., and violates the Takings and Due Process Clause of the United States Constitution. U.S. Const. Amends. V and XIV. Plaintiffs further allege claims for copyright infringement, for unconstitutional taking pursuant to § 1983, as well as state law claims for unfair and deceptive trade practices and civil conspiracy.

The State defendants have moved to dismiss plaintiffs' amended complaint, arguing that it is barred by the Eleventh Amendment, that the individual defendants sued in their individual capacities are protected by qualified immunity and legislative immunity, that the complaint fails to state a plausible claim for relief, that plaintiffs lack standing to challenge § 121–25(b) as amended, and that this Court should abstain from issuing an opinion of first impression regarding North Carolina's public record statute. Fed. R. Civ. P. 12(b)(1), (2), (6). Defendant Friends of Queen Anne's Revenge move to dismiss plaintiffs' complaint for failure to state a plausible claim for relief. Fed. R. Civ. P. 12(b)(6).

DISCUSSION

Federal Rule of Civil Procedure 12(b)(1) authorizes dismissal of a claim for lack of subject matter jurisdiction. When subject matter jurisdiction is challenged, the plaintiff has the burden of proving jurisdiction to survive the motion. Evans v. B.F. Perkins Co. , 166 F.3d 642, 647–50 (4th Cir. 1999). Rule 12(b)(2) of the Federal Rules of Civil Procedure authorizes dismissal for lack of personal jurisdiction. When personal jurisdiction has been challenged on the papers alone, the plaintiff must make a prima facie case showing that personal jurisdiction exists, and a court construes all facts and inference in favor of finding jurisdiction. Combs v. Bakker , 886 F.2d 673, 676 (4th Cir. 1989).

Rule 8 of the Federal Rules of Civil Procedure"requires only a short and plain statement of the claim showing that the pleader is entitled to relief" and which provides "the defendant fair notice of what the claim is and the grounds upon which it rests." Erickson v. Pardus , 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (internal quotations, alterations, and citations omitted). A Rule 12(b)(6) motion tests the legal sufficiency of the complaint. Papasan v. Allain , 478 U.S. 265, 283, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). When acting on a motion to dismiss under Rule 12(b)(6), "the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff." Mylan Labs., Inc. v. Matkari , 7 F.3d 1130, 1134 (4th Cir. 1993). A complaint must allege enough facts to state a claim for relief that is facially plausible. Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Facial plausibility means that the facts pled "allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged," and mere recitals of the elements of a cause of action supported by conclusory statements do not suffice. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

The Court addresses first the immunity defenses raised by the State and DNCR defendants.

I. Eleventh Amendment Immunity

"The Eleventh Amendment bars suit against non-consenting states by private individuals in federal court." Bd. of Trustees of the Univ. of Ala. v. Garrett , 531 U.S. 356, 363, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001). This guarantee applies not only to suits against the state itself but also to suits where "one of [the state's] agencies or departments is named as the defendant." Pennhurst State Sch. & Hosp. v. Halderman , 465 U.S. 89, 100, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984). State officials sued in their official capacity for damages are also protected by Eleventh Amendment immunity. Ballenger v. Owens , 352 F.3d 842, 845 (4th Cir. 2003). Eleventh Amendment immunity may be waived expressly, Edelman v. Jordan , 415 U.S. 651, 673, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974) ; if the defendants removed an action from a state court with jurisdiction, Lapides v. Bd. of Regents of Univ. Sys. of Ga. , 535 U.S. 613, 122 S.Ct. 1640, 152 L.Ed.2d 806 (2002) ; or if Congress has exercised its authority to abrogate Eleventh Amendment immunity. Seminole Tribe v. Florida , 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996).

Plaintiffs argue in earnest that the State has waived its Eleventh Amendment immunity by the express language in the 2013 settlement agreement. That language reads: "In the event DCR, Intersal, or Nautilus breaches this agreement, DCR, Intersal, or Nautilus may avail themselves of all remedies provided by law or equity." [DE 1–1 ¶ 32]. "The Supreme Court repeatedly has admonished that ‘[t]he test for determining whether a State has waived its immunity from federal-court jurisdiction is a stringent one.’ " In re Sec'y of Dep't of Crime Control & Pub. Safety , 7 F.3d 1140, 1145 (4th Cir. 1993) (quoting Atascadero State Hosp. v. Scanlon , 473 U.S. 234, 241, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985) ). "[A] State will be deemed to have waived its immunity "only where stated by the most express language or by such overwhelming implication from the text as [will] leave no room for any other reasonable construction.' " Atascadero , 473 U.S. at 239–40, 105 S.Ct. 3142 (1985) (quoting Edelman , 415 U.S. at 673, 94 S.Ct. 1347 ).

General consent to suit, including such consent as found in sue-and-be-sued clauses, has been found to be insufficient to waive a state's ...