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Clemente Trademark Suit Hinges on Puerto Rico High Court Case

Jan. 11, 2023, 10:21 AM

Wednesday’s US Supreme Court argument in a public records fight could indicate the fate of a trademark case brought against Puerto Rico by baseball legend Roberto Clemente’s children, if the justices are inclined to tackle decades-old First Circuit precedent.

Clemente Properties Inc., run by Clemente’s three sons, filed a high court friend-of-the-court brief backing the journalists seeking records from a Congress-established oversight board. The brief asks the justices to toss out longstanding US Court of Appeals for the First Circuit precedent treating Puerto Rico as a state for the purposes of the 11th Amendment, which protects states from lawsuits brought by citizens of another state, or of another country.

If the high court agrees and limits the island’s immunity, it could open the door for the Clementes’ pending suit over Puerto Rico’s sale of commemorative Roberto Clemente license plates.

But the Puerto Rico Financial Oversight and Management Board’s argument doesn’t necessarily rely on constitutional immunity. It argued the 2016 law that restructured Puerto Rico’s debt and established the oversight board didn’t override the territory’s immunity, protecting it from a news organization’s lawsuit to enforce a records request. The justices could all but doom the Clemente suit by simply interpreting the law as not having abrogated Puerto Rico’s immunity at all—leaving First Circuit precedent intact without endorsing it.

“But there’s this important underlying question that would play into the Clemente case if the court wants to take it up,” intellectual property law attorney James L. Lovsin of McDonnell Boehnen Hulbert & Berghoff LLP said. “And we should know pretty quickly in the argument if they’re going down that road.”

The addition of libertarian-inclined justices like Neil Gorsuch and Amy Coney Barrett could raise the odds the court takes a “fresh look” at the question, constitutional law professor Jed Shugerman of Fordham University said. He said the 11th Amendment has already been stretched well beyond its text and expressed doubt that the First Circuit precedent would weigh heavily on the justices.

“Given the tie goes to the runner but that there are no ties in physics—that’s the weight they’d give it,” Shugerman said. “The question of what Puerto Rico is, that’s open enough that it’s all up for grabs.”

Justices to Watch

Shugerman said the Supreme Court’s historic sovereign immunity decisions were often more about states’ rights, before the court led by the late Chief Justice William Rehnquist crafted its 11th Amendment jurisprudence in civil rights cases. While conservatives like Rehnquist and Justice Antonin Scalia defended states’ rights there, though, Gorsuch and Barrett might be less sympathetic to shielding the government from suit on English common law grounds, he said.

Last year Gorsuch specifically addressed Puerto Rico in a concurring opinion in United States v. Jose Luis Vaello-Madero, blasting the Supreme Court of a century ago for holding “that the federal government could rule Puerto Rico and other territories largely without regard to the Constitution,” and called it “past time to acknowledge the gravity of this error” of opinions that have “no foundation in the Constitution and rest instead on racial stereotypes.”

Shugerman also said “institutionalists like Chief Justice John Roberts and Justice Brett Kavanaugh might see sovereign immunity as having gone too far, making them another “pair to watch.”

“This is a surprisingly interesting case to watch going forward,” Shugerman said.

The Eleventh’s Hour?

Clemente Properties in an August complaint accused Puerto Rico of infringing its registered trademark rights and violating the “takings” and “due process” clauses of the US Constitution. The license plates celebrated the 50th anniversary of Roberto Clemente reaching 3,000 career hits. He died in a 1972 plane crash while delivering aid to earthquake victims in Nicaragua, three months after his 3,000th hit.

The Clemente brothers acknowledged that First Circuit interpretations dating to the 1980s—one some scholars find dubious—could block their suit. The Supreme Court has held that a trio of laws subjecting states to intellectual property suits didn’t sufficiently abrogate state sovereign immunity. But if the justices find that Puerto Rico isn’t a state enjoying 11th Amendment protection, those laws could expose it to lawsuits like the Clementes’.

The Clementes vowed to take the issue to the Supreme Court if necessary. But the financial oversight board beat them there.

The board appealed a split First Circuit opinion that found the Puerto Rico Oversight, Management, and Economic Stability Act (Public Law 114-187) validly limiting 11th Amendment immunity. Puerto Rico-based news organization Centro de Periodismo Investigativo Inc. had sued to access records to which it said it was entitled under the territory’s constitution.

The US government backed the board’s petition, arguing that while the First Circuit was wrong to apply the 11th Amendment to Puerto Rico, PROMESA didn’t abrogate Puerto Rico’s immunity. Various news groups and scholars backed the journalists. The sides disagree on how to interpret PROMESA provisions granting federal court jurisdiction in certain situations in actions brought by and against the board, and whether that constituted a clear abrogation of immunity, as the Supreme Court has generally required.

Both the First Circuit majority and dissent in that case accepted that Puerto Rico enjoys state-like immunity under the 11th Amendment.

Lovsin said it “made sense” for the Clementes to attack that position in their brief because the question presented by the board didn’t really implicate it, though they could have done more to argue why the justices need to address the question.

“I think the parties’ and solicitor general’s briefs really got into that,” Lovsin said. “I don’t know that Clementes’ brief added a whole lot on that score. But I think it was helpful for the Clementes to raise their hand and say ‘we’re litigating an IP case that has an immunity question.”

Already Stretched

Shugerman noted that extending state protection to Puerto Rico isn’t the only stretch in 11th Amendment jurisprudence. Courts have held the amendment to protect states from lawsuits from anyone—which goes far beyond its text.

That text says federal courts’ jurisdiction doesn’t “extend to any suit” brought “against one of the United States by citizens of another state, or by citizens or subjects of any foreign state.” Shugerman said the expansion stems from an 1890 decision that was updated by a wave of decisions from 1998 through 2002—conservative-led 5-4 splits spearheaded by Rehnquist and Scalia.

Scalia argued the 11th Amendment was meant to be built as an extension on top of an already-existing common law tradition, Shugerman said. Scalia had argued common law already shielded governments from suit against them by their own citizens—not to limit its shield to “citizens of another state” or “a foreign state.” But the American revolution was fought in large part to eliminate “assumptions of English royalism,” Shugerman said.

“There’s very little evidence that it was in the background.,” Shugerman said. “Some things the founders borrowed from England, but a lot was jettisoned. And a lot of what they jettisoned was this monarchy stuff.”

To contact the reporter on this story: Kyle Jahner in Washington at kjahner@bloomberglaw.com

To contact the editors responsible for this story: Adam M. Taylor at ataylor@bloombergindustry.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com