American Shooting Center, Inc. v. Secfor International et al
Filing
113
ORDER Granting 105 Motion to Dismiss. Kurokawa's motion to dismiss is Granted. Plaintiffs' claim for retroactive monetary relief (including the claims for declaratory relief, constructive trust, accounting, and disgorgement) against Kurokawa is Dismissed with prejudice. Signed by Judge Barry Ted Moskowitz on 7/22/2016. (rlu)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
SOUTHERN DISTRICT OF CALIFORNIA
10
11
13
AMERICAN SHOOTING CENTER,
INC., a California Corporation,
RECCE GROUP, INC., a
California corporation,
14
Plaintiffs,
12
15
Case No.: 13cv1847 BTM(JMA)
ORDER GRANTING MOTION TO
DISMISS
v.
16
SECFOR INTERNATIONAL, et al.,
17
Defendants.
18
19
Defendant Linda Kurokawa (“Defendant” or “Kurokawa”), in her official
20
capacity as Director of Community Services & Business Development for
21
MiraCosta College, has filed a motion pursuant to Fed. R. Civ. P. 12(b)(1) and
22
12(b)(6) to dismiss the Second Amended Complaint’s claims against her for
23
retroactive monetary relief for copyright infringement. For the reasons discussed
24
below, Defendant’s motion is GRANTED.
25
26
I. BACKGROUND
27
This case involves claims by Plaintiffs American Shooting Center, Inc., and
28
Reece Group that two former employees and their companies infringed Plaintiffs’
1
13cv1847 BTM(JMA)
1
copyrights by using certain materials in connection with training courses offered at
2
MiraCosta College.
3
In an order filed on March 28, 2016 [Doc. 101], the Court dismissed with
4
prejudice Plaintiffs’ claims against MiraCosta Community College District
5
(“District”) on the ground that the District is immune from suit under the Eleventh
6
Amendment. The Court also dismissed Plaintiffs’ claims for retroactive monetary
7
relief against Kurokawa because the District’s Eleventh Amendment immunity
8
extends to her as to those claims. However, the Court denied the motion to dismiss
9
as to Plaintiffs’ claims for prospective declaratory or injunctive relief.
10
On April 27, 2016, Plaintiffs filed a Second Amended Complaint (“SAC”). In
11
the SAC, Plaintiffs allege that Kurokawa deprived Plaintiffs of their constitutionally
12
protected property interests by wrongfully infringing Plaintiffs’ copyrights and failing
13
to provide Plaintiffs with notice or an opportunity to be heard before or after such
14
deprivation.
15
Clarification Act (“CRCA”), 17 U.S.C. § 511, strips Kurokawa of any immunity
16
under the Eleventh Amendment. (Id.)
(SAC ¶ 62.)
According to Plaintiffs, the Copyright Remedies
17
Plaintiffs seek the following relief against Kurokawa: (1) a declaration that
18
Kurokawa deprived Plaintiffs of their constitutionally protected property interests in
19
the copyrighted works at issue; (2) imposition of a constructive trust on all gains,
20
profits and advantages MiraCosta College derived from Kurokawa’s infringing
21
activity; (3) an accounting of all gains, profits, and advantages MiraCosta College
22
derived from Kurokawa’s infringement of the copyrighted works; (4) disgorgement
23
of all gains, profits, and advantages derived from Kurokawa’s infringement of the
24
copyrighted works; and (5) attorney’s fees and costs. (SAC ¶¶ 64, 65, Prayer for
25
Relief.)
26
//
27
//
28
//
2
13cv1847 BTM(JMA)
1
II. DISCUSSION
2
Plaintiffs contend that their claim for retroactive monetary relief is not barred
3
by the Eleventh Amendment because (1) the claim is an equitable claim for
4
disgorgement of ill-gotten gains; and (2) the CRCA abrogates any Eleventh
5
Amendment immunity applicable to Kurokawa. The Court does not find these
6
arguments to be persuasive.
7
8
A. Retroactive Monetary Relief against Immune State Agency
9
In the Court’s prior order, the Court dismissed with prejudice Plaintiffs’ claims
10
against the MiraCosta Defendants, with the sole exception of Plaintiffs’ claim
11
against Kurokawa, in her official capacity, for prospective injunctive relief. Yet in
12
the SAC, Plaintiffs seek retroactive monetary relief against Kurokawa in the form
13
of disgorgement of all gains and profits derived from use of the copyrighted
14
materials.
15
Plaintiffs attempt to justify their claim for retroactive monetary relief by
16
characterizing the relief as an “equitable” remedy. Plaintiffs argue that they do not
17
seek money damages but, rather, equitable recovery of ill-gotten profits the District
18
derived from Kurokawa’s infringement of Plaintiffs’ copyrights.
19
But Plaintiffs cannot avoid Eleventh Amendment immunity by dressing up
20
their claim for relief as an equitable remedy. In Edelman v. Jordan, 415 U.S. 651
21
(1974), the Supreme Court held that the Eleventh Amendment barred the recovery
22
of “equitable restitution” in the form of the retroactive release and payment of
23
AABD (Aid to the Aged, Blind, and Disabled) benefits wrongfully withheld by the
24
State of Illinois. The Supreme Court explained that the funds to satisfy such an
25
award would inevitably be paid from the general revenues of the State of Illinois,
26
not the pocket of the petitioner Edelman, and that such relief would run afoul of the
27
Eleventh Amendment. Id. at 665. Responding to the argument that the award was
28
in the form of “equitable restitution,” the Supreme Court stated:
3
13cv1847 BTM(JMA)
1
2
3
4
We do not read Ex parte Young or subsequent holdings of this Court
to indicate that any form of relief may be awarded against a state
officer, no matter how closely it may in practice resemble a money
judgment payable out of the state treasury, so long as the relief may
be labeled ‘equitable’ in nature. The Court's opinion in Ex parte Young
hewed to no such line.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Id. at 666.
Relying on the cases of Taylor v.Westly, 402 F.3d 924, 929-930 (9th Cir.
2005) and Suever v. Connell, 439 F.3d 1142, 1146-47 (9th Cir. 2006), Plaintiffs
argue that they are not seeking monetary relief, but, rather, are just seeking the
recovery of ill-gotten gains that are being held in constructive trust for Plaintiffs.
But Taylor and Suever are distinguishable. As explained by the Ninth Circuit, those
cases concerned the return of the plaintiffs’ own property that was being held in
the California state escheat fund pursuant to a unique statutory regime that
required the state Controller to “safeguard and conserve” unclaimed property in a
trust fund. North East Med. Serv. v. California Dept. of Health Care Services, 712
F.3d 461, 469 (9th Cir. 2013).
Here, as in North East Med. Serv., Plaintiffs “do not seek the return of their
own property seized pursuant to a unique statutory scheme.” Id. at 470. This case
is more akin to Ford Motor Co. v. Dept. of Treasury, 323 U.S. 459 (1945), where a
taxpayer sought a refund of paid taxes, arguing that the taxes had been imposed
in violation of the United States Constitution. The Supreme Court determined that
the petitioner’s claim for a “refund” was, “in essence one for the recovery of money
from the state,” meaning that the state was entitled to invoke its sovereign
immunity from suit. Id. at 464.
Whether Plaintiffs’ disgorgement claim is “equitable,” or not, it seeks a
monetary award that will be paid from state funds, not Kurokawa personally.
Therefore, the state is the real party in interest, and Plaintiffs’ claim for retroactive
monetary relief is barred by the Eleventh Amendment.
4
13cv1847 BTM(JMA)
1
2
3
B. CRCA
Plaintiffs contend that the CRCA abrogates the state’s sovereign immunity
in this case. The Court disagrees.
4
Pursuant to the CRCA, the Copyright Act was modified to provide:
5
Any State, any instrumentality of a State, and any officer or employee
of a State or instrumentality of a State . . . shall not be immune, under
the Eleventh Amendment . . . from suit in Federal Court . . . for a
violation of any of the exclusive rights of a copyright owner . . . .
6
7
8
9
17 U.S.C.A. § 511(a) (1994).
Since passage of the CRCA, courts have held that Congress did not have
10
the authority to abrogate the states’ Eleventh Amendment immunity pursuant to
11
Article I of the Constitution. See Rodriguez v. Texas Comm’n on the Arts, 199 F.3d
12
13
14
15
16
279, 280-81 (5th Cir. 2000); see also Florida Prepaid Postsecondary Ed. Expense
Bd. v. College Sav. Bank, 527 U.S. 627, 636 (1999) (explaining that Patent
Remedy Act, which contained language substantially similar to that in the CRCA,
could not be sustained under either the Commerce Clause or the Patent Clause in
Article I). Courts have also uniformly held that the CRCA was not a valid exercise
17
of Congress’s power under § 5 of the Fourteenth Amendment1 because the CRCA
18
failed to meet the “congruence and proportionality” test established by City of
19
20
21
22
23
24
25
Boerne v. Flores, 521 U.S. 507, 639 (1997).
See, e.g., Chavez v. Arte Publico
Press, 204 F.3d 601, 605-07 (5th Cir. 2000) (“Since the record does not indicate
that Congress was responding to the kind of massive constitutional violations that
have prompted proper remedial legislation, that it considered the adequacy of state
remedies that might have provided the required due process of law, or that it
sought to limit the coverage to arguably constitutional violations, we conclude that
the CRCA is . . . an improper exercise of Congressional legislative power.”);
26
27
28
Section 5 provides, “The Congress shall have the power to enforce, by appropriate legislation, the
provisions of this article.”
1
5
13cv1847 BTM(JMA)
1
Marketing Info. Masters, Inc. v. Board of Trustees, 552 F. Supp. 2d 1088, 1093-95
2
(S.D. Cal. 2008); Oracle America, Inc. v. Oregon Health Ins. Exch. Corp., 80 F.
3
Supp. 3d 1168, 1172 (D. Or. 2015).
4
Plaintiffs argue that Congress has validly exercised its § 5 power to abrogate
5
state sovereign immunity because there have been actual violations of the
6
Fourteenth Amendment in this case. There are two ways that Congress may
7
validly exercise its § 5 power: (1) Congress may “creat[e] private remedies against
8
the States for actual violations of [the Fourteenth Amendment],” United States v.
9
Georgia, 546 U.S. 151, 158 (2006); or (2) “Congress may pass prophylactic
10
‘legislation which deters or remedies [Fourteenth Amendment] violations . . . even
11
if in the process it prohibits conduct which is not itself unconstitutional,’ so long as
12
‘there [is] a congruence and proportionality between the injury to be prevented or
13
remedied and the means adopted to that end.’” National Ass’n of Boards of Pharm.
14
v. Board of Regents, 633 F.3d 1297, 1316 (11th Cir. 2011) (quoting City of Boerne,
15
521 U.S. at 518-20).
16
Plaintiffs argue that there were actual violations of the Fourteenth
17
Amendment in this case because the MiraCosta Defendants failed to provide a
18
pre-deprivation hearing or post-deprivation remedies. Therefore, Plaintiffs reason,
19
under Georgia, the CRCA abrogates Kurokawa’s Eleventh Amendment immunity.
20
However, Plaintiffs’ reliance on Georgia is misplaced.
21
In a footnote in National Ass’n of Boards of Pharmacy, the Ninth Circuit
22
expressed doubt whether the appellant’s procedural due process claim actually
23
falls under Georgia’s framework:
24
25
26
27
28
In Georgia, the identical conduct that violated the Americans with
Disabilities Act also violated the Eighth Amendment. 546 U.S. at 157,
126 S.Ct. at 880–81. Here, the action necessary to infringe a copyright
is arguably distinct from the conduct constituting NABP's procedural
due process claim. In its simplest form, one infringes a copyright by
copying or distributing a work; no amount of process absent the
owner's consent avoids liability under the statute. See, e.g., 17 U.S.C.
6
13cv1847 BTM(JMA)
1
2
3
4
5
6
§ 106. NABP's due process claim argues that it should have received
a pre-deprivation hearing before its copyright was infringed. This
alleged conduct—failing to provide a hearing—is not identical to
copyright infringement. Therefore, NABP's argument that it was owed
a pre-deprivation hearing is not implicated by a strict understanding of
what it is to infringe a copyright and thus arguably not covered by
Georgia. We need not discuss this argument further, however,
because it is clear that NABP has not shown an actual denial of
procedural due process.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
National Ass’n, 633 F.3d at 1316 n. 32.
In a recent case, Campinha-Bacote v. Regents of the University of Michigan,
2016 WL 223408 (S.D. Ohio Jan. 19, 2016), the district court rejected the plaintiff’s
argument that under Georgia, the states’ sovereign immunity was validly
abrogated pursuant to § 5 because the statutorily prescribed conduct also violated
the guarantee of Due Process under the Fourteenth Amendment. The Court
explained:
Here, the Court concludes that Congress did not validly abrogate the
states' Eleventh Amendment sovereign immunity and that the
statutorily proscribed conduct, as explained in National Association of
Boards of Pharmacy, does not simultaneously and independently
violate a constitutional guarantee protected by the Fourteenth
Amendment as it did in Georgia. Instead, the existence of a
constitutional due process violation—which none has been properly
pled in the Complaint—is an inquiry distinct from whether a copyright
was infringed. As such, Campinha-Bacote's attempt to rely on Georgia
is unavailing.
Id. at * 5.
The Court agrees with the reasoning in Campinha-Bacote and the footnote
24
in National Ass’n distinguishing Georgia.
25
establish that Congress validly abrogated the state’s Eleventh Amendment
26
immunity in this case.
Georgia is inapplicable and does not
27
28
7
13cv1847 BTM(JMA)
1
III. CONCLUSION
2
For the reasons discussed above, Kurokawa’s motion to dismiss is
3
GRANTED. Plaintiffs’ claim for retroactive monetary relief (including the claims for
4
declaratory relief,2 constructive trust, accounting, and disgorgement) against
5
Kurokawa is DISMISSED WITH PREJUDICE.
6
IT IS SO ORDERED.
7
Dated: July 22, 2016
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2
Plaintiff’s declaratory relief claim is dismissed because it is narrowly tailored to support Plaintiff’s
position that Kurokawa’s sovereign immunity has been abrogated under Georgia.
8
13cv1847 BTM(JMA)
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?