Valancourt Books, LLC v. Merrick Garland
Not available (2023)
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Rule of Law:
The government's mandatory deposit requirement for copyrighted works, enforced by demands for physical copies under threat of fines, constitutes an unconstitutional taking of private property under the Fifth Amendment if it is not a condition for obtaining or maintaining copyright protection and no costless, known option to abandon copyright exists.
Facts:
- Valancourt Books, LLC, an independent press based in Richmond, Virginia, publishes rare and out-of-print fiction, printing copies of its books on-demand.
- Valancourt places copyright notices in its books, but has never deposited its works under Section 407 nor registered them under Section 408.
- In June 2018, the Copyright Office sent Valancourt a letter demanding one physical copy of 341 published books for the Library of Congress, stating that failure to comply would make Valancourt liable for significant fines.
- Valancourt responded, protesting that it could not afford the estimated cost of over $2,500 for compliance, noting some books were in the public domain, and offering to sell copies to the government at cost.
- In August 2018, the Copyright Office maintained its position that Valancourt was obligated to deposit books, but narrowed the list of demanded works to 240 books after further research, reiterating the fines for non-compliance.
- The Copyright Office's demand letter explicitly stated that Valancourt’s obligation to deposit works existed regardless of whether copyright registration was sought and did not suggest any option to avoid the requirement by disavowing copyright protection.
Procedural Posture:
- Valancourt Books, LLC filed a lawsuit against the Attorney General and the Register of Copyrights in the United States District Court for the District of Columbia, challenging the application of Section 407 as an unconstitutional taking and an invalid burden on speech.
- During the district court proceedings, the Copyright Office offered Valancourt an 'offer, in full settlement' to deposit the demanded works in electronic format instead of physical copies and to grant special relief for future publications.
- Valancourt rejected the Copyright Office’s settlement offer, citing objections to receiving special treatment and difficulties producing electronic copies due to a home burglary.
- The parties cross-moved for summary judgment, and the district court ordered supplemental briefing on whether the Copyright Office’s offer to accept electronic copies had mooted the dispute, to which both parties agreed it would not if Valancourt rejected the offer.
- In July 2021, the district court granted summary judgment in favor of the government, concluding that the dispute was narrowed to electronic copies and that Section 407 did not violate the Takings Clause (viewing it as a voluntary exchange for federal copyright protection) or the First Amendment.
- Valancourt appealed the district court's grant of summary judgment to the United States Court of Appeals for the District of Columbia Circuit.
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Issue:
Does the Copyright Act's mandatory deposit requirement, enforced by demands for physical copies under threat of fines, constitute an uncompensated taking of private property in violation of the Fifth Amendment when it is not a condition of obtaining or maintaining copyright protection, and no clear, costless option to disavow copyright is made known to the copyright owner?
Opinions:
Majority - Chief Judge Srinivasan
Yes, the Copyright Act's mandatory deposit requirement, as applied by the Copyright Office through demands for physical copies under threat of fines, constitutes an uncompensated taking of private property in violation of the Fifth Amendment because it is not a condition for obtaining or maintaining copyright protection and no cognizable, costless option to abandon copyright was made known to Valancourt. The court affirmed that a physical appropriation of property, such as demanding copies of books, is a 'classic taking' that generally requires just compensation under the Fifth Amendment, citing Cedar Point Nursery v. Hassid and Horne v. Dep’t of Agric. Unlike the voluntary exchange for a governmental benefit found permissible in Ruckelshaus v. Monsanto Co., Section 407 offers no additional benefit to copyright owners because copyright protection accrues automatically upon a work’s fixation and the statute explicitly states that deposit is not a 'condition[] of copyright protection.' The court traced the history of mandatory deposit, noting that while it was once tied to gaining or maintaining copyright benefits, statutory changes in 1976 and 1988 untethered it from these benefits, eliminating the quid pro quo. The option of paying a fine instead of forfeiting property does not save the statute from constituting a taking, as established in Horne and Koontz v. St. Johns River Water Mgmt. Dist. Furthermore, the government's argument that copyright owners could avoid the requirement by disavowing copyright protection fails because no statute, regulation, or public guidance suggests a simple, costless, and transparent way to do so. Since such an option was not 'cognizable' or known to copyright owners like Valancourt, it cannot be a basis for voluntary consent to the taking. The court declined to reach Valancourt’s First Amendment claim, noting it would afford the same scope of relief.
Analysis:
This decision significantly impacts the enforcement of Section 407 of the Copyright Act by requiring the Copyright Office to either compensate copyright holders for demanded physical copies or provide a clear, costless, and easily accessible method for authors to opt out of the deposit requirement. It clarifies that a government mandate for property, even if tied to a regulatory scheme, must offer a genuine, incremental benefit or a known, voluntary escape route to avoid being deemed an unconstitutional taking. The ruling reinforces the Supreme Court's 'per se' rule for physical takings, emphasizing that the elimination of a quid pro quo in the evolution of a statute can render a long-standing requirement unconstitutional. This could lead to a reevaluation of other governmental demands for private property where the link to a clear, reciprocal benefit has eroded or is not transparent to the regulated party.
