Snatching Settlement From the Jaws of Defeat
Supreme Court Holds Registration a Precondition to Suit, Not Jurisdictional

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 until . . . registration of the copyright claim has been made. . .” For decades, courts have ruled and commentators (including myself) have pronounced that registration is a “jurisdictional prerequisite” to the filing of an infringement action. Yesterday, however, the Supreme Court ruled that “Section 411(a)’s registration requirement is a precondition to filing a claim that does not restrict a federal court’s subject-matter jurisdiction.”  Reed Elsevier, Inc. v. Muchnick, 559 U.S. __ (2010). The case follows a recent Supreme Court trend against so-called “drive-by jurisdictional rulings,” which reflexively characterize limitations as jurisdictional in nature without conducting a thorough analysis to distinguish true jurisdictional conditions from mere claim-processing rules or preconditions to filing suit.

The opinion, authored by Justice Thomas, relies heavily on the text and structure of the Copyright Act in reaching its conclusion. Though the word “jurisdiction” appears in § 411(a), the section does not expressly state that its registration requirement is jurisdictional. The section concludes by stating:

“The Register [of Copyrights] may, at his or her option, become a party to the action with respect to the issue of registrability of the copyright claim . . . but the Register’s failure to become a party shall not deprive the court of jurisdiction to determine that issue.”

The Court found that the limiting phrase “that issue” refers only to a court’s authority to determine the registrability of a copyright claim which has been denied by the Register of Copyrights, even if the Register does not appear in the infringement action. Congress added this provision to relieve copyright claimants of the necessity of seeking mandamus against the Register of Copyrights before bringing suit, which had been a requirement under prior law. Thus, the use of the word “jurisdiction” in this context does not authorize a court, as a general matter, to adjudicate claims for infringement of unregistered works.

Moreover, § 411(a) explicitly allows courts to hear claims with respect to three particular types of unregistered works: (1) foreign works; (2) claims involving the rights of attribution and integrity under § 106A; and (3) works which the Register of Copyrights denied registration. And § 411(c) authorizes courts to adjudicate infringement actions involving certain types of broadcast works if the copyright owner declares an intention to seek registration and then registers the work within three months of its transmission. The Court reasoned that it would be “at least unusual to ascribe jurisdictional significance to a condition subject to these sorts of exceptions.” Structurally, § 411(a)’s registration requirement is located in a provision separate from those granting federal courts subject-matter jurisdiction over copyright claims (28 U.S.C. §§ 1331, granting jurisdiction over federal questions generally, and 1338(a), addressing copyright claims specifically), lending further weight to the argument that Congress did not intend the section to act as a limit on judicial power.

The Court also analyzed § 411(a) against the backdrop of two recent cases in which the Court differentiated between jurisdictional and claim-processing rules. In the first, Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), the Court held that Title VII’s definition of an employer subject to the statute as including only those having fifteen or more employees was an element of a plaintiff’s claim for relief, not a jurisdictional issue. The applicable jurisdictional section of Title VII made no reference to the 15-employee threshold, which instead appeared in a separate provision that did “not speak in jurisdictional terms or refer in any way to the jurisdiction of the district courts.”

In Bowles v. Russell, 551 U.S. 205 (2007) – an opinion also authored by Justice Thomas – the Court held that the 14-day deadline in the Federal Rules of Appellate Procedure for filing notices of appeal was “mandatory and jurisdictional,” and could not be extended by court order. Interestingly, the Bowles opinion relied much more heavily on judicial precedent than on statutory text (“We have long and repeatedly held that the time limits for filing a notice of appeal are jurisdictional in nature”), an argument that failed to win the day in Reed Elsevier despite record citations to over 200 lower court opinions characterizing § 411(a) as jurisdictional. Justice Ginsburg, concurring in Reed-Elsevier, attempted to reconcile this apparent divergence by noting that Bowles relied on a “long line of [Supreme Court] decisions left undisturbed by Congress,” whereas the cited 411(a) decisions issued from lower courts and amounted to “drive-by jurisdictional rulings that should be accorded no precedential effect.”

Why It Matters

Jurisdictional rules “speak to the power of the court rather than to the rights or obligations of the parties,” whereas claim-processing rules establish a substantive element of a particular claim. Because a court has no power to act without jurisdiction, a jurisdictional requirement may not be waived either intentionally or unintentionally by the parties or by the court. The question of the court’s jurisdiction may be raised at any time during the litigation, including after judgment and on appeal. And the court may raise the issue itself (“sua sponte”) even if the parties do not. In Arbaugh, the defendant employer did not raise the employee-numerosity issue until after it lost at trial. Had the requirement been jurisdictional in nature, the trial court would have been required to throw out the jury verdict and dismiss the case entirely (in fact, the trial court so concluded and the Fifth Circuit affirmed). Instead, the Supreme Court held that it constituted an element of the plaintiff’s claim. The objection that a plaintiff has failed to state a cause of action may not be made after judgment; thus, it is likely that on remand the defendant employer would have been found to have waived the objection.

In Reed-Elsevier, the jurisdictional issue arose only on appeal after lengthy proceedings below. The Reed-Elsevier case stemmed from the Supreme Court’s 2001 opinion in New York Times Co. v. Tasini, 533 U.S. 483 (2001), in which the Court held that the publishers of various online databases such as LEXIS/NEXIS infringed the copyrights of freelance authors by reproducing their works electronically without permission. On remand, the case was consolidated with other lawsuits brought by freelance authors based on the same theory of liability.

The consolidated Reed-Elsevier complaint asserted claims by named plaintiffs, each of whom owned at least one copyrighted work registered pursuant to § 411(a), and also purported to state claims on behalf of a class of authors, some of whom had not registered their copyrighted works. Because of the size and complexity of the consolidated action, the District Court referred the case to mediation. The parties conducted extensive negotiations over a period of three years before reaching a proposed settlement agreement in 2005. The parties then moved to certify a settlement class and to approve the settlement agreement. A handful of freelance authors objected to the settlement. The District Court overruled the objections, certified the class, and approved the settlement agreement.

The objectors appealed, raising both procedural and substantive objections to the settlement agreement. At no time, however, did any party argue that the District Court lacked subject-matter jurisdiction over the unregistered copyright claims. (Indeed, no party objected to subject-matter jurisdiction even before the Supreme Court; the Court was forced to appoint amicus counsel to play devil’s advocate and argue against jurisdiction.) Shortly before oral argument, the Court of Appeals, acting on its own initiative, ordered the parties to submit briefs on the question whether § 411(a) deprived the District Court of subject-matter jurisdiction over those claims. A divided panel of the Second Circuit held that the District Court lacked jurisdiction to certify a class and to approve a settlement involving unregistered works.

The Supreme Court’s opinion leaves unresolved the procedural and substantive objections to the settlement raised below, which will be addressed on remand. But the parties have at least survived to fight another day, rather than seeing the culmination of three years of arduous negotiations evaporate at the flick of the Second Circuit’s pen.

The Supreme Court also declined to address the question whether § 411(a)’s registration requirement is a “mandatory precondition” to suit that district courts may enforce sua sponte by dismissing claims even absent objection by the opposing party. And as a related matter, debate continues to rage at the district court level as to what, precisely, constitutes registration adequate to initiate suit. Must a plaintiff actually receive the registration certificate from the Copyright Office in order to proceed, or is the submission of the application, deposit copy and application fee sufficient? Compare, e.g., In re Napster, Inc., 191 F. Supp. 2d 1087 (N.D. Cal. 2002) with La Resolana Architects v. Clay Realtors Angel Fire, 416 F.3d 1195 (10th Cir. 2005). Resolution of these issues must await another day.