Supreme Court Reverses in Reed Elsevier v. Muchnick

March 2, 2010. The Supreme Court of the US issued its opinion [23 page in PDF] in Reed Elsevier v. Muchnick, reversing the judgment of the Court of Appeals (2ndCir).

This is long running class action litigation over the rights of free lance authors with respect to republication of their works in electronic databases, such as those of LexisNexis and Westlaw. There was a settlement, which was approved by the District Court. However, ten class member authors objected, and appealed.

The Court of Appeals, on its own initiative, concluded that since some of the copyrights were unregistered, there was no subject matter jurisdiction, and vacated the judgment of the District Court.

The Supreme Court reversed, 8-0, holding that the copyright registration language in the first sentence of 7 U.S.C. § 411(a), which the Court of Appeals held was jurisdictional, is not jurisdictional.

Proceedings Below. Irvin Muchnick, and other individuals, filed a complaint in the U.S. District Court (SDNY) on behalf of a class of mainly freelance writers who contracted with publishers to author the works for publication in print media, and retained the copyrights in those works.

The District Court certified the class, which included both authors who had registered their copyrighted works and authors who had not.

That action was settled. The District Court approved the settlement on September 27, 2005. However, Muchnick and nine other freelance authors objected to the settlement, and appealed to the Court of Appeals.

The Court of Appeals issued its divided opinion [43 pages in PDF] on November 29, 2007. That opinion is also reported at 509 F.3d 116.

The Court of Appeals, sua sponte, raised the issue of subject matter jurisdiction. Noting that some of the copyrights were unregistered, and applying Section 411(a), held that the District Court lacked jurisdiction over the plaintiffs' claims. It therefore vacated the class certification and settlement approval. No party urged the Court to reach this conclusion.

The Court of Appeals did not go further. It did not address the fairness of the settlement agreement.

Judge Chester Straub wrote the opinion of the Court of Appeals, in which Judge Ralph Winter joined. Judge John Walker wrote a lengthy dissent.

Further Background. The Supreme Court held in its June 25, 2001 opinion in New York Times v. Tasini, which is reported at 533 U.S. 483, that freelanced articles in newspapers, for which the author still owns the copyright, cannot be republished in electronic databases without permission from the author.

The Supreme Court held that the defendant publishers did not have a privilege under 17 U.S.C. § 201(c) to include in electronic databases the freelance articles written for and licensed to print publications.

See also, story titled "Supreme Court Rules for Authors in NYT v. Tasini" in TLJ Daily E-Mail Alert No. 216, June 26, 2001. And see, story titled "Supreme Court Grants Cert in NYT v. Tasini", Tech Law Journal, November 7, 2000.

The present class action, which had been stayed during the Tasini litigation, resumed in 2001.

Statute. 17 U.S.C. § 411(a) provides in full that "Except for an action brought for a violation of the rights of the author under section 106A (a), and subject to the provisions of subsection (b), no action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute an action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights. The Register may, at his or her option, become a party to the action with respect to the issue of registrability of the copyright claim by entering an appearance within sixty days after such service, but the Register's failure to become a party shall not deprive the court of jurisdiction to determine that issue."

Supreme Court Opinion. The Supreme Court reversed, holding 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."

The Court wrote that "This provision is part of the Act's remedial scheme. It establishes a condition -- copyright registration -- that plaintiffs ordinarily must satisfy before filing an infringement claim and invoking the Act's remedial provisions. We address whether §411(a) also deprives federal courts of subject-matter jurisdiction to adjudicate infringement claims involving unregistered works."

"While perhaps clear in theory, the distinction between jurisdictional conditions and claim-processing rules can be confusing in practice."

The Court wrote that relevant phrase of Section 411 ("no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made") does not use the words "jurisdiction" or "jurisdictional". Moreover, the language of the statute respecting jurisdiction does not contain this limitation.

In addition, the Court wrote, Section 411(a) allows a court to adjudicate claims involving "unregistered works in three circumstances: where the work is not a U. S. work, where the infringement claim concerns rights of attribution and integrity under §106A, or where the holder attempted to register the work and registration was refused." The Court then observed that "It would be at least unusual to ascribe jurisdictional significance to a condition subject to these sorts of exceptions."

"Section 411(a) thus imposes a type of precondition to suit that supports nonjurisdictional treatment under our precedents", the Court concluded.

The case now goes back to the Court of Appeals, which will address the appeal issue of fairness, reasonableness and adequateness of the settlement agreement under Rule 23(e), FRCP.

Justice Thomas wrote the opinion of the Court, in which Roberts, Kennedy, Scalia and Alito joined. Justice Ginsburg wrote a concurring opinion, in which Justices Stevens and Breyer joined. Justice Sotomayor, who previously sat on the 2nd Circuit, did not participate.

This case is Reed Elsevier, Inc., et al., v. Irvin Muchnick, et al., Supreme Court of the United States, Sup. Ct. No. 08-103, a petition for writ of certiorari to the U.S. Court of Appeals for the Second Circuit. The Court of Appeals heard an appeal from the U.S. District Court for the Southern District of New York.