The Supreme Court recently issued another in a series of rulings limiting when a statutory requirement operates as a constraint on the federal courts’ jurisdiction. In Reed Elsevier, Inc. v. Muchnick, the Court considered this question in the context of a provision in the Copyright Act requiring “registration” of a copyright before the copyright holder could bring suit. Reversing the Second Circuit, the Court held that this provision did not preclude the federal courts from exercising jurisdiction over a class action that included copyrights that were not yet registered. The Court’s decision removes a jurisdictional obstacle to class treatment of infringement claims—and to a defendant’s ability to settle such claims.
Reed Elsevier was a copyright infringement class action against publishers and online databases that electronically reproduced freelance newspaper and magazine articles, allegedly without permission. The theory of infringement had been approved by the Court earlier in New York Times Co. v. Tasini, 533 U.S. 483 (2001), and the Tasini case on remand was consolidated with similar cases in the Southern District of New York. After extensive negotiations, the parties reached a settlement. The class of plaintiffs involved in the settlement included authors who had registered their copyrights, as well as authors who had not.
In an appeal from the district court’s order approving the settlement, the U.S. Court of Appeals for the Second Circuit held, sua sponte, that the settlement must be upset under 17 U.S.C. 411(a)—a provision of the Copyright Act providing that “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.” Accordingly, over objections from all parties, the Court concluded that the district court lacked subject matter jurisdiction to approve any settlement that encompassed unregistered copyrights. An amicus curiae was appointed to defend the Second Circuit’s judgment on certiorari.
The Supreme Court (with Justice Sotomayor taking no part) expressed unanimous disagreement with the Second Circuit’s conclusion, though not all justices agreed on the test to be applied. The majority opinion for five justices, penned by Justice Thomas, construed the general rule set forth several years ago in Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), to provide that a statutory requirement is not “jurisdictional” unless Congress either “clearly states” that it is, or enacts the provision as part of a statute whose text, structure, and context otherwise indicate that the provision “ranks” as jurisdictional. The majority stopped short of requiring an explicit statement by Congress, taking into account whether the requirement appeared in the same section as jurisdiction-granting provisions, whether it admitted exceptions, and how it had been treated by courts in the past.
In a concurring opinion, Justice Ginsburg—joined by Justices Stevens and Breyer—departed from the majority’s analysis, concluding that Arbaugh stood for a bright-line rule under which only statutory provisions “clearly stating” they are jurisdictional should be treated as such. According to the concurrence, the Supreme Court’s post-Arbaugh decision in Bowles v. Russell, 551 U.S. 205 (2007)—which found that the time limit for filing an appeal was jurisdictional even without a clear statement by Congress—constituted a limited exception for unique situations in which some long-standing line of the Supreme Court’s own precedent establishes that a provision is, in fact, jurisdictional.
While Reed Elsevier does not end uncertainty as to which statutory requirements will be characterized as “jurisdictional,” the majority decision does much to harmonize the Court’s existing precedent on the issue. Moreover, it removes at least one important stumbling block for defendants who would like to resolve large copyright infringement disputes through a class action settlement. It is now clear that an infringement class action may be settled even if all of the copyright claims affected by the settlement have not necessarily been registered.