No Three-Year Bar on Copyright Damages (For Now): SCOTUS Issues Opinion in Warner Chappell Music, Inc. et al. v. Sherman Nealy et al.

In a 6-3 majority decision in Warner Chappell Music, Inc. et al. v. Sherman Nealy et al., the Supreme Court held that the Copyright Act entitles a copyright owner to recover damages for any timely claim and that no separate three-year limit on damages exists.^[1]

As discussed in a previous article on the case, both the briefing and the oral argument underscored the importance of framing appellate questions strategically from the outset and focusing subsequent arguments on the precise question presented. Both the majority and the dissenting opinions in the recent decision reinforce these takeaways.

Moreover, the dissent signals that the Court may be receptive to deciding whether the Copyright Act authorizes the discovery rule in another case—which is currently pending on the Court’s docket. 

The majority opinion authored by Justice Kagan held that there is no separate three-year damages bar for copyright claims. Instead, the Court held, the Copyright Act entitles a copyright owner to recover damages for any timely claim. Acknowledging that the Court has never decided whether the discovery rule applies to copyright claims, the majority nevertheless concluded that the question was not properly presented in the case because Warner Chappell never challenged the Eleventh Circuit’s use of the discovery rule below. The Court also rejected the proposition that its previous decision in Petrella^[2] went beyond the case’s facts to impose a three-year limitation on damages, abrogating the Second Circuit’s opinion in Sohm, which held that a “three-year lookback period from the time a suit is filed” should be used to “determine the extent of the relief available.”^[3]

Even in the relatively short majority opinion, the Court also devoted a footnote to comment on Warner Chappell’s disregard of the limit in the Court’s reformulated question. The Court remarked that Warner Chappell’s decision to focus its briefing almost entirely on the discovery rule itself was “especially surprising” given that Warner Chappell’s own petition for certiorari raised the broader discovery-rule only in a footnote that acknowledged that the issue was not raised below and not the subject of the circuit split. Further, the Court noted that even if the petition had urged the Court to opine on the discovery rule, the Court’s reformulation of the question presented should have put an end to such arguments.

The dissenting opinion authored by Justice Gorsuch opined that the Copyright Act almost certainly does not tolerate a discovery rule, and therefore, anything the Court might say about the rule’s operational details might be soon a dead letter. Accordingly, the dissenting justices would have dismissed the case as improvidently granted in favor of waiting for another case squarely presenting the question of whether the Copyright Act authorizes the discovery rule. As noted above, a petition for certiorari in such a case is currently pending.^[4]