The United States Court of Appeals for the Second Circuit has rejected an attempt to certify a class action by copyright holders for the unauthorized electronic reproduction of their works. In In re Literary Works in Electronic Databases Copyright Litigation, 2007 WL 4197413 (2d Cir. 2007), thousands of authors sued a number of large publishing companies, including the New York Times, West Publishing, for copyright infringement. The court, however, held that because the class included claims made by class members who had not registered their copyrights, the district court lacked subject matter jurisdiction to certify a class and enter a judgment.
The claims all arose from the unauthorized electronic reproduction of various written works. The class members were mainly freelance writers that contracted with publishers to author the works for publication in print media. The class members retained the copyrights in those works, and the vast majority of those copyrights were unregistered. The contracts between the authors and the publishers did not grant the publishers the right to electronically reproduce those works or license them for electronic reproduction by others. The publishers, however, did so, and four class actions were consolidated in the United States District Court for the Southern District of New York, with the plaintiffs contending that the unauthorized electronic reproduction of their works infringed their copyrights. A settlement was reached after lengthy negotiations, and the district court certified a class and approved the settlement.
The Court of Appeals vacated the order and judgment, holding that the district court did not have subject matter jurisdiction to approve a settlement or certify a class consisting of claims that arose from the infringement of unregistered copyrights. The court began its analysis by recognizing that the legal theory on which the claims were based was sound. In New York Times Co. v. Tasini, 533 U.S. 483, 488 (2001), the Supreme Court held that under section 201(c) of the Copyright Act, publishers are not permitted to reproduce freelance works electronically when they have not been specifically authorized to do so. But jurisdictional issues proved to be a barrier to pursuing the claims in a class action format.
The court noted that most of the claims of the class members arose from the infringement of unregistered copyrights. 17 U.S.C. § 411(a) states that “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.” Previously, outside the class action context, the Second Circuit has held that registration is a jurisdictional requirement, and a district court lacks subject matter jurisdiction over infringement claims arising from unregistered copyrights. See Well-Made Toy Mfg. Corp. v. Goffa Int’l Corp., 354 F.3d 112, 115 (2d Cir. 2003); Morris v. Bus. Concepts, Inc., 259 F.3d 65, 72 (2d Cir. 2001). Other circuits have also reached the same conclusion, and the court held that section 411(a)’s registration requirement limits a district court’s jurisdiction over copyright claims. The court went on to conclude that the class action mechanism cannot be used to circumvent this jurisdictional requirement. Because every claim within a certified class must meet the registration requirement, the district court did not have jurisdiction to certify a class containing claims arising from thousands of unregistered copyrights. The court also rejected the plaintiffs’ contention that such claims could be included under a supplemental jurisdiction theory, finding that supplemental jurisdiction could not be exercised over jurisdictionally deficient federal claims. Judge Walker dissented from the opinion, arguing that in the wake of the Supreme Court’s decision in Eberhart v. United States, 546 U.S. 12 (2005), the requirement in section 411(a) was not a true jurisdictional bar to pursuing claims based on unregistered copyrights.
Full Opinion text: http://www.ca2.uscourts.gov:8080/isysnative/RDpcT3BpbnNcT1BOXDA1LTU5NDMtY3Zfb3BuLnBkZg==/05-5943-cv_opn.pdf#xml=http://www.ca2.uscourts.gov:8080/isysquery/irl368/12/hilite