American Shooting Center, Inc. v. Secfor International

          ORDER GRANTING MOTION TO DISMISS

          Barry Ted Moskowitz, Chief Judge United States District Court

         Defendant Linda Kurokawa (“Defendant” or “Kurokawa”), in her official capacity as Director of Community Services & Business Development for MiraCosta College, has filed a motion pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6) to dismiss the Second Amended Complaint’s claims against her for retroactive monetary relief for copyright infringement. For the reasons discussed below, Defendant’s motion is GRANTED.

         I. BACKGROUND

         This case involves claims by Plaintiffs American Shooting Center, Inc., and Reece Group that two former employees and their companies infringed Plaintiffs’ copyrights by using certain materials in connection with training courses offered at MiraCosta College.

         In an order filed on March 28, 2016 [Doc. 101], the Court dismissed with prejudice Plaintiffs’ claims against MiraCosta Community College District (“District”) on the ground that the District is immune from suit under the Eleventh Amendment. The Court also dismissed Plaintiffs’ claims for retroactive monetary relief against Kurokawa because the District’s Eleventh Amendment immunity extends to her as to those claims. However, the Court denied the motion to dismiss as to Plaintiffs’ claims for prospective declaratory or injunctive relief.

         On April 27, 2016, Plaintiffs filed a Second Amended Complaint (“SAC”). In the SAC, Plaintiffs allege that Kurokawa deprived Plaintiffs of their constitutionally protected property interests by wrongfully infringing Plaintiffs’ copyrights and failing to provide Plaintiffs with notice or an opportunity to be heard before or after such deprivation. (SAC ¶ 62.) According to Plaintiffs, the Copyright Remedies Clarification Act (“CRCA”), 17 U.S.C. § 511, strips Kurokawa of any immunity under the Eleventh Amendment. (Id.)

         Plaintiffs seek the following relief against Kurokawa: (1) a declaration that Kurokawa deprived Plaintiffs of their constitutionally protected property interests in the copyrighted works at issue; (2) imposition of a constructive trust on all gains, profits and advantages MiraCosta College derived from Kurokawa’s infringing activity; (3) an accounting of all gains, profits, and advantages MiraCosta College derived from Kurokawa’s infringement of the copyrighted works; (4) disgorgement of all gains, profits, and advantages derived from Kurokawa’s infringement of the copyrighted works; and (5) attorney’s fees and costs. (SAC ¶¶ 64, 65, Prayer for Relief.)

         II. DISCUSSION

         Plaintiffs contend that their claim for retroactive monetary relief is not barred by the Eleventh Amendment because (1) the claim is an equitable claim for disgorgement of ill-gotten gains; and (2) the CRCA abrogates any Eleventh Amendment immunity applicable to Kurokawa. The Court does not find these arguments to be persuasive.

         A. Retroactive Monetary Relief against Immune State Agency

         In the Court’s prior order, the Court dismissed with prejudice Plaintiffs’ claims against the MiraCosta Defendants, with the sole exception of Plaintiffs’ claim against Kurokawa, in her official capacity, for prospective injunctive relief. Yet in the SAC, Plaintiffs seek retroactive monetary relief against Kurokawa in the form of disgorgement of all gains and profits derived from use of the copyrighted materials.

         Plaintiffs attempt to justify their claim for retroactive monetary relief by characterizing the relief as an “equitable” remedy. Plaintiffs argue that they do not seek money damages but, rather, equitable recovery of ill-gotten profits the District derived from Kurokawa’s infringement of Plaintiffs’ copyrights.

         But Plaintiffs cannot avoid Eleventh Amendment immunity by dressing up their claim for relief as an equitable remedy. In Edelman v. Jordan, 415 U.S. 651 (1974), the Supreme Court held that the Eleventh Amendment barred the recovery of “equitable restitution” in the form of the retroactive release and payment of AABD (Aid to the Aged, Blind, and Disabled) benefits wrongfully withheld by the State of Illinois. The Supreme Court explained that the funds to satisfy such an award would inevitably be paid from the general revenues of the State of Illinois, not the pocket of the petitioner Edelman, and that such relief would run afoul of the Eleventh Amendment. Id. at 665. Responding to the argument that the award was in the form of “equitable restitution, ” the Supreme Court stated:

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’ ...