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University of Houston System v. Jim Olive Photography

Court of Appeals of Texas, First District

June 11, 2019

UNIVERSITY OF HOUSTON SYSTEM, Appellant
v.
JIM OLIVE PHOTOGRAPHY, D/B/A PHOTOLIVE, Appellee

          On Appeal from the 295th District Court Harris County, Texas Trial Court Case No. 2017-84942

          Panel consists of Chief Justice Radack and Justices Higley and Hightower.

          OPINION

          Richard Hightower Justice.

         In this interlocutory appeal from the trial court's denial of a plea to the jurisdiction, we must determine if a viable constitutional takings claim can be asserted when the State commits copyright infringement. We conclude that a governmental unit's copyright infringement is not a taking and that the trial court therefore erred in denying the plea to the jurisdiction.

         Background

         Jim Olive Photography d/b/a Photolive, Inc. (Olive) sued the University of Houston System, alleging an unlawful taking and seeking just compensation under Article I, Section 17 of the Texas Constitution and under the Fifth Amendment of the United States Constitution. Olive, a professional photographer, alleges that he took a series of aerial photographs of the City of Houston at dusk in 2005. To take these photographs, Olive rented a helicopter, hired a pilot, and, utilizing special photography equipment, suspended himself from the helicopter with a harness. While suspended in the harness, Olive took photograph SKDT1082-"The Cityscape"- the subject of this litigation.

         Olive registered The Cityscape with the United States Copyright Office on November 18, 2005 and displayed it for purchase on his website. Olive owned all rights associated with The Cityscape, and his website had numerous references to licensing the website's photographs, including an entire page labeled "Copyrights and Usage," which described the applicable copyright protections held in the photographs and explicitly stated that "[t]he unauthorized use of these images is strictly prohibited."

         Olive alleges that sometime around June of 2012, the University of Houston downloaded The Cityscape from Olive's website, removed all identifying copyright and attribution material, and displayed it on several webpages to promote the University's C.T. Bauer College of Business. The University never contacted Olive about using his photograph and never compensated him for its use.

         Over three years later, Olive discovered that his photograph was being displayed on the University's Bauer College of Business webpages. Olive informed the University of its unauthorized use of the photograph and demanded that it cease and desist this use. The University immediately removed the photograph from the College's website. Olive further alleges that the University's display of the photograph without attribution allowed private actors such as Forbes Magazine to republish and display The Cityscape without Olive's permission and without compensation.

         Upon being sued by Olive, the University filed a plea to the jurisdiction, asserting, among other things, that because Olive failed to plead a viable takings claim, the University retains governmental immunity and the trial court lacks subject-matter jurisdiction. The trial court denied the plea, and this interlocutory appeal followed.

         The University argues in four issues that the trial court erred in denying its plea. The University first argues that a copyright is not property under the federal or state takings clauses. The University then argues that, if a copyright is property under the federal or state takings clauses, its copyright infringement of Olive's photograph is not a taking, that it lacked capacity to take Olive's copyright property, and that Olive did not sufficiently plead an intentional taking.

         Standard of Review

         The standard of review of a trial court's ruling on a plea to the jurisdiction based on governmental immunity is de novo. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004); Tex. So. Univ. v. Gilford, 277 S.W.3d 65, 68 (Tex. App.-Houston [1st Dist.] 2009, pet. denied). The plaintiff has the burden to allege facts that affirmatively demonstrate the trial court's subject-matter jurisdiction. Gilford, 277 S.W.3d at 68 (citing Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)). We construe the pleadings liberally and accept the plaintiff's factual allegations as true. See Miranda, 133 S.W.3d at 226-27; Gilford, 277 S.W.3d at 68.

         An inverse-condemnation action is a constitutional claim in which the property owner asserts that a governmental entity intentionally performed acts that resulted in a "taking" of the property for public use, without formally condemning the property. See, e.g., Tarrant Reg'l Water Dist. v. Gragg, 151 S.W.3d 546, 554 (Tex. 2004). The Texas Constitution's takings clause (Article I, Section 17) includes personal property. Renault, Inc. v. City of Houston, 415 S.W.2d 948, 952 (Tex. Civ. App.-Waco 1967), rev'd on other grounds, 431 S.W.2d 322 (Tex. 1968). It is well settled that the Texas Constitution waives governmental immunity for an inverse-condemnation (a takings) claim, but in the absence of a properly pleaded takings claim, the governmental entity retains immunity. City of Houston v. Carlson, 451 S.W.3d 828, 830 (Tex. 2014).

         Whether the pleaded facts constitute a viable takings claim is a question of law. See Tex. Parks & Wildlife Dep't v. Sawyer Trust, 354 S.W.3d 384, 390 (Tex. 2011); Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 932-33 (Tex. 1998); City of Friendswood v. Horn, 489 S.W.3d 515, 525 (Tex. App.-Houston [1st Dist] 2016, no pet.). When the plaintiff cannot establish a viable takings claim, the trial court lacks subject-matter jurisdiction and should grant a plea to the jurisdiction. Tex. Dep't of Transp. v. A.P.I. Pipe & Supply, LLC, 397 S.W.3d 162, 166 (Tex. 2013).

         Analysis Copyright generally

         Federal copyright law provides that "[c]opyright protection subsists . . . in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device." 17 U.S.C. § 102(a).

         Copyright has been defined as:

The right to copy; specifically, a property right in an original work of authorship (including literary, musical, dramatic, choreographic, pictorial, graphic, sculptural, and architectural works; motion pictures and other audiovisual works; and sound recordings) fixed in any tangible medium of expression, giving the holder the exclusive right to reproduce, adapt, distribute, perform, and display the work.

Copyright, Black's Law Dictionary (10th ed. 2014); see also 17 U.S.C. § 102(a) (1-8) (providing categories of works of authorship to include literary works; musical works, including any accompanying words; dramatic works, including any accompanying music; pantomimes and choreographic works; pictorial, graphic, and sculptural works; motion pictures and other audiovisual works; sound recordings; and architectural works).

         A copyright in a work subsists from its creation and generally endures for the life of the author and 70 years after the author's death. See 17 U.S.C. § 302(a). Civil remedies for copyright infringement include injunctive relief. 17 U.S.C. § 502(a). A copyright owner can also seek money damages from an infringer: either (1) his actual damages and any additional profits of the infringer, or (2) statutory damages, including a sum of not more than $150, 000 for willful infringement.[1] See 17 U.S.C. § 504. Federal courts have original and exclusive jurisdiction of copyright claims, 28 U.S.C. § 1338(a), and all state-law claims arising under federal law relating to copyrights are preempted by federal law. 17 U.S.C. § 301(a); see Butler v. Cont'l Airlines, Inc., 31 S.W.3d 642, 648-52 (Tex. App.-Houston [1st Dist.] 2000, pet. denied).

         In the case of copyright infringement by a state actor, states have Eleventh Amendment immunity from a suit for money damages in federal court. See Chavez v. Arte Publico Press, 204 F.3d 601, 607-08 (5th Cir. 2000) (Chavez III) (discussed below) (in copyright-infringement action against University of Houston, holding that Copyright Remedy Clarification Act (CRCA), 17 U.S.C. § 511, which purported to abrogate Eleventh Amendment immunity and to provide for state liability for copyright infringement, was unconstitutional); see also Allen v. Cooper, 895 F.3d 337, 347-54 (4th Cir. 2018) (same), pet. for cert. filed, (U.S. Jan. 4, 2019) (No. 18-877); Nat'l Ass'n of Bds. of Pharmacy v. Bd. of Regents of Univ. Sys. of Ga., 633 F.3d 1297, 1312-19 (11th Cir. 2011) (same); Richard Anderson Photography v. Brown, 852 F.2d 114, 120 (4th Cir. 1988) (holding that state university had Eleventh Amendment immunity against photographer's copyright-infringement action). See generally 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 12.01[E][2] (Rev. Ed. 2019); 6 William F. Patry, Patry on Copyright § 21.88 (Mar. 2019). But a copyright owner can obtain prospective injunctive relief for copyright infringement by a state actor under the Ex parte Young doctrine.[2] See, e.g., Nat'l Ass'n of Bds. of Pharmacy, 633 F.3d at 1307-12 (addressing claim for injunctive relief under Ex parte Young doctrine against state university for ongoing copyright infringement); Hairston v. N.C. Agric. & Tech. State Univ., No. 1:04 CV 1203, 2005 WL 2136923, at *8 (M.D. N.C. Aug. 5, 2005) ("[T]he court finds that Plaintiff sufficiently alleges an ongoing violation of federal copyright law by Defendants, and the Ex parte Young doctrine therefore applies to his copyright infringement claim seeking prospective injunctive relief from Defendants.").

         Copyright infringement, whether common law or statutory, is a tort. Porter v. United States, 473 F.2d 1329, 1337 (5th Cir. 1973); Ted Browne Music Co. v. Fowler, 290 F. 751, 754 (2d Cir. 1923) (stating courts "have long recognized that infringement of a copyright is a tort"). Texas has not waived sovereign (governmental) immunity in the Texas Tort Claims Act for copyright infringement by a governmental unit. See Tex. Civ. Prac. & Rem. Code § 101.021(1) (providing for limited waiver of governmental immunity for claims of property damage, personal injury, or death proximately caused by wrongful or negligent conduct of governmental employee arising out of (1) use of publicly owned motor-driven equipment or motor vehicle, (2) premises defects, and (3) conditions or uses of certain property); see also Schneider v. Ne. Hosp. Auth., No. 01-96-01098-CV, 1998 WL 834346, at *2 (Tex. App.-Houston [1st Dist.] 1998, pet. denied) (not designated for publication) ("It is up to the legislature to add the tort of trademark infringement to those torts for which immunity is statutorily waived."). Nor has Texas waived its Eleventh Amendment immunity by consenting to suit in federal court for copyright infringement. See generally Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 54-55, 67-72 & n.14 (1996)

         Intellectual Property and Takings

         In apparent recognition of the above legal landscape that forecloses a copyright owner's claim for copyright infringement against a state actor, Olive has asserted his constitutional takings claims against the University. The Texas Constitution's Takings Clause provides: "No person's property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made." Tex. Const. art. I, § 17(a).[3]

         The federal takings clause protects both real property and personal property. Horne v. Dep't of Agric., 135 S.Ct. 2419, 2425-26 (2015) (holding that raisins were subject of government taking: "The Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home."). A copyright, which is intellectual property, [4] is a protected property interest.[5] Nat'l Ass'n of Bds. of Pharmacy, 633 F.3d at 1317; see also 17 U.S.C. § 201(d) ("The ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will or pass as personal property by the applicable laws of intestate succession."). See generally Pascale Chapdelaine, The Property Attributes of Copyright, 10 Buff. Intell. Prop. L.J. 34 (2014). But while a copyright is "property" or a protected "property interest" for due-process purposes, that does not necessarily mean that it is property for purposes of the takings clause. See, e.g., Davida H. Isaacs, Not All Property Is Created Equal: Why Modern Courts Resist Applying the Takings Clause to Patents, and Why They Are Right to Do So, 15 Geo. Mason L. Rev. 1, 36 (2007) ("Being property is a necessary requirement for Takings Clause protection, but it is not a sufficient one.").

         In 2008, it was noted that whether copyright is property under the takings clause is "as yet unlitigated."[6] Tom W. Bell, Copyright as Intellectual Property Privilege, 58 Syracuse L. Rev. 523, 538 (2008). But see Porter, 473 F.2d at 1337 (copyright "infringement is not a 'taking' as the term is constitutionally understood") (discussed below). Relying on Zoltek Corp. v. United States, 442 F.3d 1345, 1350-53 (Fed. Cir. 2006) (holding that patent infringement by federal government does not constitute taking under Fifth Amendment), cert. denied, 551 U.S. 1113 (2007), vacated on other grounds on reh'g en banc, 672 F.3d 1309 (Fed. Cir. 2012), and the Supreme Court's denial of certiorari in Zoltek, the author asserts that Zoltek "strongly suggests that the same outcome would obtain for copyrights." Bell, 58 Syracuse L. Rev. at 538; see also Isaacs, 15 Geo. Mason. L. Rev. at 1-2, 6-17 (discussing Zoltek). But see Note, Copyright Reform and the Takings Clause, 128 Harv. L. Rev. 973 (2015) (arguing that copyright should be protected by takings clause).[7] The author further argues that the Supreme Court's "definition of 'property' appears not to shelter copyright" because of its description of the sources of property interests protected from takings[8] and "copyrights exist only by the grace of the Constitution."[9] Id.

         No Texas case appears to have addressed whether a copyright is property for purposes of the takings clause and whether copyright infringement by a state actor is a taking. The case closest on point is our unpublished 1998 decision in Schneider, 1998 WL 834346. There, after recognizing that a trademark is property, this court squarely held that a governmental entity's (a hospital authority's) "trademark infringement is not a compensable taking; thus, sovereign immunity is not waived on the basis of an unconstitutional taking."[10] Id. at *2. After noting that no authority classified trademarks as property for purposes of the takings clause, this court stated that, to the contrary, "there is authority that refutes such a classification" and cited Porter for the proposition that copyright infringement is not a taking.[11] Id. at *2 (citing Porter, 473 F.2d at 1337). We therefore turn to Porter and the other federal cases relied on by the parties for their respective positions.

         Porter v. United States

         Porter involved in part a claim by Lee Harvey Oswald's widow for the diminution in the copyright value of Oswald's writings because of their publication in the Warren Commission report. Porter, 473 F.2d at 1336.

We turn finally to the question whether Mrs. Porter can recover for the diminution in value of Oswald's writings attributable to their publication in the Warren Commission Report. It is, of course, quite plain that the recovery sought here is for infringement by the government of Mrs. Porter's common law copyright interest in Oswald's writings. Such infringement is not a "taking" as the term is constitutionally understood. Rather, it has always been held that infringement of copyright, whether common law, Twentieth Century Fox Film Corp. v. Dieckhaus, 153 F.2d 893 (CA 8, 1948), or statutory, Turton v. United States, 212 F.2d 354 (CA 6, 1954) constitutes a tort.

Id. at 1337 (emphasis added). But see Roth v. Pritikin, 710 F.2d 934, 939 (1st Cir. 1983) ("An interest in a copyright is a property right protected by the due process and just compensation clauses of the Constitution.").

         Olive characterizes Porter as anomalous[12] and as superseded by both the Supreme Court in Horne and the Fifth Circuit in Chavez. Because Horne involved the taking of raisins-which are tangible personal property, not intangible intellectual property-it is inapposite; further, it made no attempt to address intellectual property.

         As noted above, Chavez, in part a copyright-infringement action against the University of Houston, held that Congress, by enacting the CRCA, could not subject states to suit in federal court for copyright infringement because of Eleventh Amendment immunity. Chavez III, 204 F.3d at 607-08. In passing on the constitutionality of the CRCA-Chavez was not a takings case-the court addressed copyright as property for due-process purposes and considered whether Congress could abrogate state Eleventh Amendment immunity under section 5 of the Fourteenth Amendment "to prevent states from depriving copyright holders of their property without due process of law." Id. at 604; see id. at 605-07. In its analysis, the court stated that the "underlying conduct at issue here is state infringement ...


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