On Friday, the Supreme Court decided Warner Chappell Music, Inc. v. Nealy. This case involved the statute of limitations and remedies under the Copyright Act. The Copyright Act provides that a plaintiff must file suit "within three years after the claim accrued." 17 U. S. C. §507(b). When does a claim accrue? When the infringement occurred? Or when the plaintiff discovered the infringement? The circuits have divided on this question. Justice Kagan laid out the split:
Under the Copyright Act, a plaintiff must file suit"within three years after the claim accrued." §507(b). On one understanding of that limitations provision, a copyright claim "accrue[s]" when "an infringing act occurs." Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U. S. 663, 670 (2014). So a plaintiff can complain about infringements going back only three years from the time he filed suit. If that rule governed, many of Nealy's claims would be untimely, because they alleged infringements occurring as much as ten years earlier. But under an alternative view of the Act's limitations provision, a claim accrues when "the plaintiff discovers, or with due diligence should have discovered," the infringing act. Ibid., n. 4. That so-called discovery rule, used in the Circuit where Nealy sued, enables a diligent plaintiff to raise claims about even very old infringements if he discovered them within the prior three years.
Until fairly recently, I had never given this issue any thought. I never took an IP class in law school, and know very little about the subject. Until recently, at least.
In 2013, I published a blog post that included a copyrighted photograph. I had long ago forgotten about the post. And in the past decade, the post had about twenety views. Yet, in 2023, someone representing the copyright holder found the post, and sent me a demand letter. I promptly removed the copyrighted photograph, but the letter demanded that I pay damages.
My immediate reaction was, surely this claim was barred by the statute of limitations. But I did some research, and discovered there is a split of authorities about when a claim occurred. After giving the issue some thought, I reached a settlement, which disposed of all of the claims. Still, I was irked that courts had applied a discovery rule to the Copyright Act. My blog post was open to the public, was indexed by Google, was promoted on my social media channels, and could have been discovered shortly it was published. There was no attempt to conceal the information. It was, in the language of adverse and possesesion, open and notorious. (All of my posts are notorious.)
I wasn't the only person bothered by this rule. Warner Chappell Music's cert petition posed the following question presented:
Whether the Copyright Act's statute of limitations for civil actions, 17 U.S.C. 507(b), precludes retrospective relief for acts that occurred more than three years before the filing of a lawsuit.
But the Court would not resolve this issue. Indeed, the Court rewrote the question presented.
The question on which this Court granted certiorari is"[w]hether, under the discovery accrual rule applied by the circuit courts," a copyright plaintiff "can recover damages for acts that allegedly occurred more than three years before the filing of a lawsuit." Ibid. That question, which theCourt substituted for Warner Chappell's, incorporates anassumption: that the discovery rule governs the timeliness of copyright claims. We have never decided whether that assumption is valid—i.e., whether a copyright claim accrues when a plaintiff discovers or should have discovered an infringement, rather than when the infringement happened. See Petrella, 572 U. S., at 670, n. 4. But that issue is not properly presented here, because Warner Chappell never challenged the Eleventh Circuit's use of the discovery rule below.
Justice Kagan suggests in Footnote 1 the discovery rule issue was waived. She seemed annoyed:
Disregarding the limit in the reformulated question, Warner Chappell's briefing in this Court focuses almost entirely on the discovery rule itself… That choice is especially surprising given that Warner Chappell's own petition for certiorari raised the broader discovery-rule issue only in a footnote, which acknowledged that the issue was not raised below and is not the subject of a Circuit split. See Pet. for Cert. 14, n. But even supposing Warner Chappell's petition had urged us to opine on the discovery rule, our reformulation of the question presented should have put an end to such arguments.
We plebeians must never forget who is in charge of how a case is litigated. It's not the lawyers. It is the Oracles at One First Street.
If I had to guess, Warner usually benefits from a discovery rule, where others infringe the conglomerates copyrights, and Warner doesn't find out till much later. But this case presents the facts in reverse: a rights-holder brings a suit against a major records label. It makes sense that Warner only sought to limit the damages without touching the discovery rule issue in the lower court. But once the question was presented to the Supreme Court, Warner sought clarity on the discovery rule. But no luck.
Justice Kagan's majority opinion "assume[d] without deciding that a claim is timely under that provision if brought within three years of when the plaintiff discovered an infringement, no matter when the infringement happened."
Instead, the Court only addressed the remedial question. The Court found that damages are not limited to the three-year period before the lawsuit is filed. Rather, damages can stretch back to the initial infringement. Kagan concluded, "There is no time limit on monetary recovery. So a copyright owner possessing a timely claim for infringement is entitled to damages, no matter when the infringement occurred." To use my case as an example, if a blog posts is published in 2013 with a copyrighted photograph, a timely claim could be brought in 2023, and damages would be awarded for a full decade of infringement. (I still have no idea how to calculate damages for a blog post viewed about two dozen times over the course of a decade, but I digress.) In short, Plaintiffs can avail themselves of the discovery rule, but still seek damages dating back far longer than three-years.
Justice Gorsuch dissented, joined by Justices Thomas and Alito. (Gorsuch had a busy day, with a separate concurrence on civil forfeiture in Culley v. Marshall). Gorsuch faults the majority for sidestepping the critical question of whether there is actually a discovery rule. Any questions about the remedy become irrelevant if there is no discovery rule.
The Court discusses how a discovery rule of accrual should operate under the Copyright Act. But in doing so it sidesteps the logically antecedent question whether the Act has room for such a rule. Rather than address that question, the Court takes care to emphasize that its resolution must await a future case. The trouble is, the Act almost certainly does not tolerate a discovery rule. And that fact promises soon enough to make anything we might say today about the rule's operational details a dead letter.
Gorsuch is exactly right. To be clear, the Court rewrote a question presented to avoid deciding an issue that has divided the circuits, and then decided a subsidiary question that would become mooted if the Court answered the principal question. How's that for judicial minimalism?
Still, Justice Gorsuch offers a qualified defense of the majority:
In one sense, the Court's decision to pass over this complication may be understandable. After all, none of the parties before us questioned the application of a discovery rule in proceedings below, but joined issue only over how it should work. See ante, at 5, n. 1. And the Court may, as it does, resolve the parties' dispute while leaving for another day the antecedent question whether a discovery rule exists under the Act.
Here, Gorsuch would do what he often recommends–dismiss the case as improvidently granted (a DIG in the lingo).
But if that is a permissible course, it does not strike meas the most sensible one. Nothing requires us to play along with these particular parties and expound on the details of a rule of law that they may assume but very likely does not exist. Respectfully, rather than devote our time to this case, I would have dismissed it as improvidently granted and awaited another squarely presenting the question whether the Copyright Act authorizes the discovery rule. Better, in my view, to answer a question that does matter than one that almost certainly does not.
By my count, Gorsuch would have DIG'd Helix Energy Solutions Group, Inc. v. Hewitt, Kemp v. United States, and Shoop v. Twyford
On the merits, Gorsuch explains that discovery rules generally only apply "in case of fraud and concealment," and should not apply here. Consider a chestnut from property class. In O'Keefe v. Snyder, a discovery rule was applied for an adverse possession claim of a stolen painting that was displayed in a private residence where it could not be discovered. But in this case, the offending music was blasted on radios, television, and other media. If you had ears in 2008, you probably heard this song and its interpolation:
Then again, the plaintiff was in prison, so this is not the normal case for the discovery rule. (Some states toll the statute of limitations for adverse possession against prisoners.) Then again again, I frequently receive letters from prisoners who hear me on the radio, so it is conceivable that Nealy heard the song while incarcerated.
I hope the Court can address the discovery rule issue in the future–at least for the benefit of bloggers who have been in the game for more than three years.
The post How I Learned About The Copyright Act's Statute of Limitations appeared first on Reason.com.
