Arguing that the Doctrine of Laches Should Be Applicable to Bar Stale Claims Brought Against a Business Under the Copyright Act’s “Rolling” Statute of Limitations.
The question before the Supreme Court in this case was whether a laches defense can bar a claim of continuing copyright infringement that began several years before the three-year limitations period provided in the Copyright Act’s statute of limitations (in this case, 18 years), where the plaintiff knew about her claim from the outset, and her unreasonable delay caused the defendant to suffer economic and evidentiary prejudice. The issue of laches arises because many lower federal courts, including the Ninth Circuit in this case, have interpreted the statute of limitations as restarting with each new act of infringement, even though it is the same defendant repeatedly exploiting the same allegedly infringing work for many years. Thus, the Ninth Circuit, along with many other circuit courts, has recognized the availability of the laches defense to bar an ostensibly timely claim of copyright infringement that, in fact, first accrued several years before the three-year limitations period and has recurred repeatedly ever since.
The case is an unusually colorful one for us because the petitioner, Paula Petrella, alleges that MGM’s 1980 film Raging Bull has infringed her inherited copyright in her late father’s 1963 screenplay about former boxer Jake LaMotta, the subject of the film. In 1976, Ms. Petrella’s father had actually assigned all of his rights in the 1963 screenplay, including renewal rights, to a film production company that, in turn, assigned the motion picture rights to United Artists (an MGM subsidiary). Therefore, when Raging Bull was produced and released in 1980, United Artists had the undisputed right to borrow as much as it wanted from the 1963 screenplay. (MGM has argued compellingly below, on summary judgment, that the film in fact borrows no protectable elements from the 1963 screenplay. The lower courts did not reach this issue, instead dismissing Ms. Petrella’s stale claim on laches grounds.)
However, by operation of a quirk of copyright law, due to Mr. Petrella’s death in 1981, ten years before the start of the 1963 screenplay’s renewal period, his 1976 assignment of renewal rights was voided. As a result, the renewal rights reverted to his statutory heirs, including his daughter, the petitioner. Thus, in 1991, Raging Bull “became” a potentially infringing work. It is undisputed that Ms. Petrella knew about her claim in 1991. Indeed, she hired an attorney at that point to perfect her renewal rights in her father's screenplay. It is also undisputed that she delayed so long in filing suit because Raging Bull had not yielded a profit for many years. Thus, instead of suing MGM at the time when she first knew about her claim (1991), she waited until 2009, when the film generated profits, to sue for infringement.
The Ninth Circuit in this case held that that respondent MGM had proven its laches defense. The lower court reasoned that Ms. Petrella’s unreasonable, 18-year delay before filing suit in 2009 resulted in economic harm to MGM. During those 18 years, MGM invested substantial capital to exploit the movie. The long passage of time also has resulted in the death or incapacity of witnesses who are essential to MGM’s case.
Seeking reversal of the Ninth Circuits decision, Ms. Petrella argued that laches should not be available to bar a timely claim of copyright infringement under the three-year statute of limitations. She, and the amici who support her, argue that where, as here, Congress has enacted a statute of limitations, the courts do not have the equitable power to truncate that congressional time period with a laches defense.
In its amicus brief, filed in support of MGM, NELF argued that the laches defense is a crucial equitable safeguard in a case of continuous copyright infringement, such as this one, where the plaintiff has an indefinite right to sue on the same recurring claim of copyright infringement. In such a case, the plaintiff has been on notice of her claim from the outset but has delayed filing suit for many years, thereby allowing the defendant to continue exploiting the same allegedly infringing work. But the statute of limitations cannot bar the plaintiff’s stale claim, because many lower federal courts have held that a new claim accrues with each new act of infringement. Thus, the plaintiff has a “rolling,” three-year right to sue on the same recurring claim of copyright infringement.
Laches is a necessary defense in such a case to prevent the plaintiff from abusing this rolling limitations period, to the evidentiary and economic detriment of the defendant. Without the laches defense, the plaintiff can stand by and allow the same claim of copyright infringement to reaccrue repeatedly over a long period of time. And with each foreseeable recurrence of the same claim, the plaintiff’s potential share of the defendant’s profits accumulates. She is thus free to delay filing suit indefinitely and strategically on a claim that first accrued many years before the limitations period, which is generally when the defendant created and first exploited the work.
NELF also argued that the Court has, in effect, already decided the issue in this case in the respondents’ favor: laches is available to prevent a plaintiff from abusing a rolling limitations period by delaying unreasonably in filing her otherwise timely claim, and thereby causing the defendant evidentiary harm. See Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002). In Morgan, as in this case, the federal statutory claim continues to accrue under the applicable statute of limitations with each repeated and related act of the defendant. Thus, the plaintiff in each case has a virtually indefinite right of action in the same ongoing claim, allowing the plaintiff to delay filing suit. When such a plaintiff does eventually decide to sue, it is therefore likely that the claim will have arisen from facts occurring long before the applicable limitations period, and that the plaintiff will have long been aware of those ancient operative facts. As a result, the plaintiff’s unreasonable delay will have caused the loss of evidence that is essential to the defendant’s case. Therefore, laches becomes necessary to prevent irreparable evidentiary harm to the defendant in claims that are subject to a rolling limitations period.
In fact, the evidentiary prejudice identified in Morgan is even more pronounced in cases of ongoing copyright infringement, because the statutory term of the plaintiff’s copyright is often quite long. As in this case, the evidence necessary to defend the infringement claim would have arisen from facts and events that occurred long ago, when the defendant created the allegedly infringing work. And, as in this case, the defendant’s key evidence could be irretrievably lost, due to the plaintiff’s permissible delay under a rolling limitations period. Witnesses who are necessary for defending the claim may die or otherwise become unavailable, and memories may fade. The longer the plaintiff delays filing suit after her claim first accrues, the more likely the defendant will suffer irreparable evidentiary harm, as this case pointedly illustrates.
A long-delayed claim of copyright infringement is also likely to inflict economic harm on the defendant. Without the laches defense, the plaintiff is free to lie in wait for several years while the defendant invests substantial capital to exploit what it believes in good faith to be its own original work to exploit. And then, when the defendant’s money and efforts have borne fruit and have thus made a lawsuit worth the plaintiff’s while, she can choose to sue and seek recovery of her share of three years’ worth of the defendant’s highest profits.
Without the laches defense, then, the plaintiff in a case of continuous copyright infringement could abuse the rolling limitations period without any judicial oversight. Recognition of the laches defense in such cases is therefore necessary to fulfill the gatekeeping function of a statute of limitations: to protect the defendant from having to defend a stale claim.
On May 19, 2014, in a disappointing 6-3 decision, the Court reversed the Ninth Circuit and held that laches is not available to bar a timely claim for monetary relief under the Copyright Act. The Court stated that Congress had already decided how much delay a plaintiff can exercise in bringing suit and that the judiciary has no place to cut short that statutory limitations period. The majority did not deem applicable its decision in Morgan, which recognized the availability of laches to bar a timely federal statutory claim for damages (hostile work environment claims under Title VII). Unlike in this case, the majority stated that the laches recognized in Morgan applied only to a single timely claim (of workplace harassment) that continued to accumulate over time with each new offending act, where some of the constituent acts that comprise the single claim may have occurred long before the limitations period. According to the majority, this case aligns instead with the discrete, separately accruing harms discussed in Morgan in non-harassment claims of employment discrimination, where each separate act of the defendant is actionable and warrants its own limitations period. The majority also minimized the evidentiary and economic prejudice that the defendant argued here. However, the Court did recognize that laches could apply under extraordinary circumstances to bar equitable relief, such as a plaintiff’s request to destroy the allegedly infringing work (such as a building) or copies of the allegedly infringing work (such as copies of a book that have already been printed and distributed)). The Court also held that the equitable defense of estoppel could apply to bar a claim for copyright infringement altogether, if the defendant could show that the plaintiff intentionally misrepresented that it would abstain from suit, to the defendant’s detrimental reliance.
In a strongly worded dissent, Justice Breyer, joined by Chief Justice Roberts and Justice Kennedy, embraced the availability of laches in a case of continuous copyright infringement such as this one, to prevent a plaintiff from sitting on her rights strategically for 18 years and allow the defendant to reproduce and otherwise exploit the same allegedly infringing work, and then jump in to sue to collect three years’ of MGM’s highest profits. The dissent also recognized that, as NELF had argued, MGM raised several fact- and witness-dependent affirmative defenses that are now impossible to prove, due to the death or unavailability of witnesses. Finally, the dissent agreed with NELF that Morgan should apply here because that case did in fact hold that laches can bar a timely federal statutory claim for monetary relief.
The question before the Supreme Court in this case was whether a laches defense can bar a claim of continuing copyright infringement that began several years before the three-year limitations period provided in the Copyright Act’s statute of limitations (in this case, 18 years), where the plaintiff knew about her claim from the outset, and her unreasonable delay caused the defendant to suffer economic and evidentiary prejudice. The issue of laches arises because many lower federal courts, including the Ninth Circuit in this case, have interpreted the statute of limitations as restarting with each new act of infringement, even though it is the same defendant repeatedly exploiting the same allegedly infringing work for many years. Thus, the Ninth Circuit, along with many other circuit courts, has recognized the availability of the laches defense to bar an ostensibly timely claim of copyright infringement that, in fact, first accrued several years before the three-year limitations period and has recurred repeatedly ever since.
The case is an unusually colorful one for us because the petitioner, Paula Petrella, alleges that MGM’s 1980 film Raging Bull has infringed her inherited copyright in her late father’s 1963 screenplay about former boxer Jake LaMotta, the subject of the film. In 1976, Ms. Petrella’s father had actually assigned all of his rights in the 1963 screenplay, including renewal rights, to a film production company that, in turn, assigned the motion picture rights to United Artists (an MGM subsidiary). Therefore, when Raging Bull was produced and released in 1980, United Artists had the undisputed right to borrow as much as it wanted from the 1963 screenplay. (MGM has argued compellingly below, on summary judgment, that the film in fact borrows no protectable elements from the 1963 screenplay. The lower courts did not reach this issue, instead dismissing Ms. Petrella’s stale claim on laches grounds.)
However, by operation of a quirk of copyright law, due to Mr. Petrella’s death in 1981, ten years before the start of the 1963 screenplay’s renewal period, his 1976 assignment of renewal rights was voided. As a result, the renewal rights reverted to his statutory heirs, including his daughter, the petitioner. Thus, in 1991, Raging Bull “became” a potentially infringing work. It is undisputed that Ms. Petrella knew about her claim in 1991. Indeed, she hired an attorney at that point to perfect her renewal rights in her father's screenplay. It is also undisputed that she delayed so long in filing suit because Raging Bull had not yielded a profit for many years. Thus, instead of suing MGM at the time when she first knew about her claim (1991), she waited until 2009, when the film generated profits, to sue for infringement.
The Ninth Circuit in this case held that that respondent MGM had proven its laches defense. The lower court reasoned that Ms. Petrella’s unreasonable, 18-year delay before filing suit in 2009 resulted in economic harm to MGM. During those 18 years, MGM invested substantial capital to exploit the movie. The long passage of time also has resulted in the death or incapacity of witnesses who are essential to MGM’s case.
Seeking reversal of the Ninth Circuits decision, Ms. Petrella argued that laches should not be available to bar a timely claim of copyright infringement under the three-year statute of limitations. She, and the amici who support her, argue that where, as here, Congress has enacted a statute of limitations, the courts do not have the equitable power to truncate that congressional time period with a laches defense.
In its amicus brief, filed in support of MGM, NELF argued that the laches defense is a crucial equitable safeguard in a case of continuous copyright infringement, such as this one, where the plaintiff has an indefinite right to sue on the same recurring claim of copyright infringement. In such a case, the plaintiff has been on notice of her claim from the outset but has delayed filing suit for many years, thereby allowing the defendant to continue exploiting the same allegedly infringing work. But the statute of limitations cannot bar the plaintiff’s stale claim, because many lower federal courts have held that a new claim accrues with each new act of infringement. Thus, the plaintiff has a “rolling,” three-year right to sue on the same recurring claim of copyright infringement.
Laches is a necessary defense in such a case to prevent the plaintiff from abusing this rolling limitations period, to the evidentiary and economic detriment of the defendant. Without the laches defense, the plaintiff can stand by and allow the same claim of copyright infringement to reaccrue repeatedly over a long period of time. And with each foreseeable recurrence of the same claim, the plaintiff’s potential share of the defendant’s profits accumulates. She is thus free to delay filing suit indefinitely and strategically on a claim that first accrued many years before the limitations period, which is generally when the defendant created and first exploited the work.
NELF also argued that the Court has, in effect, already decided the issue in this case in the respondents’ favor: laches is available to prevent a plaintiff from abusing a rolling limitations period by delaying unreasonably in filing her otherwise timely claim, and thereby causing the defendant evidentiary harm. See Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002). In Morgan, as in this case, the federal statutory claim continues to accrue under the applicable statute of limitations with each repeated and related act of the defendant. Thus, the plaintiff in each case has a virtually indefinite right of action in the same ongoing claim, allowing the plaintiff to delay filing suit. When such a plaintiff does eventually decide to sue, it is therefore likely that the claim will have arisen from facts occurring long before the applicable limitations period, and that the plaintiff will have long been aware of those ancient operative facts. As a result, the plaintiff’s unreasonable delay will have caused the loss of evidence that is essential to the defendant’s case. Therefore, laches becomes necessary to prevent irreparable evidentiary harm to the defendant in claims that are subject to a rolling limitations period.
In fact, the evidentiary prejudice identified in Morgan is even more pronounced in cases of ongoing copyright infringement, because the statutory term of the plaintiff’s copyright is often quite long. As in this case, the evidence necessary to defend the infringement claim would have arisen from facts and events that occurred long ago, when the defendant created the allegedly infringing work. And, as in this case, the defendant’s key evidence could be irretrievably lost, due to the plaintiff’s permissible delay under a rolling limitations period. Witnesses who are necessary for defending the claim may die or otherwise become unavailable, and memories may fade. The longer the plaintiff delays filing suit after her claim first accrues, the more likely the defendant will suffer irreparable evidentiary harm, as this case pointedly illustrates.
A long-delayed claim of copyright infringement is also likely to inflict economic harm on the defendant. Without the laches defense, the plaintiff is free to lie in wait for several years while the defendant invests substantial capital to exploit what it believes in good faith to be its own original work to exploit. And then, when the defendant’s money and efforts have borne fruit and have thus made a lawsuit worth the plaintiff’s while, she can choose to sue and seek recovery of her share of three years’ worth of the defendant’s highest profits.
Without the laches defense, then, the plaintiff in a case of continuous copyright infringement could abuse the rolling limitations period without any judicial oversight. Recognition of the laches defense in such cases is therefore necessary to fulfill the gatekeeping function of a statute of limitations: to protect the defendant from having to defend a stale claim.
On May 19, 2014, in a disappointing 6-3 decision, the Court reversed the Ninth Circuit and held that laches is not available to bar a timely claim for monetary relief under the Copyright Act. The Court stated that Congress had already decided how much delay a plaintiff can exercise in bringing suit and that the judiciary has no place to cut short that statutory limitations period. The majority did not deem applicable its decision in Morgan, which recognized the availability of laches to bar a timely federal statutory claim for damages (hostile work environment claims under Title VII). Unlike in this case, the majority stated that the laches recognized in Morgan applied only to a single timely claim (of workplace harassment) that continued to accumulate over time with each new offending act, where some of the constituent acts that comprise the single claim may have occurred long before the limitations period. According to the majority, this case aligns instead with the discrete, separately accruing harms discussed in Morgan in non-harassment claims of employment discrimination, where each separate act of the defendant is actionable and warrants its own limitations period. The majority also minimized the evidentiary and economic prejudice that the defendant argued here. However, the Court did recognize that laches could apply under extraordinary circumstances to bar equitable relief, such as a plaintiff’s request to destroy the allegedly infringing work (such as a building) or copies of the allegedly infringing work (such as copies of a book that have already been printed and distributed)). The Court also held that the equitable defense of estoppel could apply to bar a claim for copyright infringement altogether, if the defendant could show that the plaintiff intentionally misrepresented that it would abstain from suit, to the defendant’s detrimental reliance.
In a strongly worded dissent, Justice Breyer, joined by Chief Justice Roberts and Justice Kennedy, embraced the availability of laches in a case of continuous copyright infringement such as this one, to prevent a plaintiff from sitting on her rights strategically for 18 years and allow the defendant to reproduce and otherwise exploit the same allegedly infringing work, and then jump in to sue to collect three years’ of MGM’s highest profits. The dissent also recognized that, as NELF had argued, MGM raised several fact- and witness-dependent affirmative defenses that are now impossible to prove, due to the death or unavailability of witnesses. Finally, the dissent agreed with NELF that Morgan should apply here because that case did in fact hold that laches can bar a timely federal statutory claim for monetary relief.
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