FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`CDK GLOBAL LLC, a limited
`liability company; REYNOLDS AND
`REYNOLDS COMPANY, a corporation,
`Plaintiffs-Appellants,
`
`
`
` No. 20-16469
`
`D.C. No.
`2:19-cv-04849-
`GMS
`
`
`OPINION
`
`v.
`
`
`MARK BRNOVICH, Attorney General,
`Defendant-Appellee,
`
`
`ARIZONA AUTOMOBILE DEALERS
`ASSOCIATION,
`Intervenor-Defendant-Appellee.
`
`Appeal from the United States District Court
`for the District of Arizona
`G. Murray Snow, Chief District Judge, Presiding
`
`Argued and Submitted February 5, 2021
`Phoenix, Arizona
`
`Filed October 25, 2021
`
`
`
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`CDK GLOBAL LLC, a limited
`liability company; REYNOLDS AND
`REYNOLDS COMPANY, a corporation,
`Plaintiffs-Appellants,
`
`
`
` No. 20-16469
`
`D.C. No.
`2:19-cv-04849-
`GMS
`
`
`OPINION
`
`v.
`
`
`MARK BRNOVICH, Attorney General,
`Defendant-Appellee,
`
`
`ARIZONA AUTOMOBILE DEALERS
`ASSOCIATION,
`Intervenor-Defendant-Appellee.
`
`Appeal from the United States District Court
`for the District of Arizona
`G. Murray Snow, Chief District Judge, Presiding
`
`Argued and Submitted February 5, 2021
`Phoenix, Arizona
`
`Filed October 25, 2021
`
`
`
`
`
`
`2
`
`
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`Before: William A. Fletcher, Eric D. Miller, and
`Danielle J. Forrest,* Circuit Judges.
`
`Opinion by Judge Miller
`
`
`SUMMARY**
`
`Copyright Preemption / Preliminary Injunction
`
`
`The panel affirmed the district court’s order denying
`
`plaintiffs’ motion for a preliminary injunction against
`enforcement of the “Dealer Law,” an Arizona statute aimed
`at strengthening privacy protections for consumers whose
`data
`is collected by car dealers and
`restricting
`anticompetitive business practices by technology companies
`that provide database services for dealers.
`
`The Dealer Law prevents database providers such as
`
`plaintiffs from limiting access to dealer data by dealer-
`authorized third parties and requires providers to create a
`standardized framework to facilitate such access. Plaintiffs
`sought declaratory and injunctive relief on the basis that the
`Dealer Law is preempted by the Copyright Act and the
`Computer Fraud and Abuse Act, violates the Contracts
`Clause and the Takings Clause, and is void for vagueness.
`
`The panel held that it had jurisdiction under 28 U.S.C.
`
`§ 1292(a)(1) to review the district court’s order denying
`
`
`* Formerly known as Danielle J. Hunsaker.
`
`** This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`
`
`injunctive relief, but it lacked pendent appellate jurisdiction
`over the CFAA and vagueness claims, which the district
`court dismissed before ruling on the preliminary injunction.
`
`The panel affirmed the district court’s conclusion that
`
`plaintiffs were unlikely to succeed on the merits of their
`claims, and thus were not entitled to a preliminary
`injunction. As to the Copyright Act preemption claim, the
`panel held that there was no conflict preemption because the
`state and federal laws were not irreconcilable. Plaintiffs
`brought a facial challenge to the Dealer Law but could not
`establish that every possible application of the statute would
`conflict with the Copyright Act. In addition, the Dealer Law
`did not conflict with 17 U.S.C. § 106(1), which grants the
`owner of a copyrighted work the exclusive right “to
`reproduce the copyrighted work in copies.”
`
`The panel further concluded that plaintiffs were unlikely
`
`to succeed on their Contracts Clause claim. First, plaintiffs
`forfeited their claim that the Dealer Law impaired their
`contracts with third-party vendors. Second, plaintiffs did not
`show that the Dealer Law impaired their ability to discharge
`their contractual duty to keep dealer data confidential.
`Third, assuming, without deciding, that the Dealer Law
`substantially
`impaired contractual
`third-party access
`restrictions, the statute did not violate the Contracts Clause
`because it was reasonably drawn to serve important public
`purposes of promoting consumer data privacy and
`competition.
`
`Finally, the panel held that plaintiffs were unlikely to
`
`succeed on their takings claim because the Dealer Law did
`not effect a per se physical taking, and it did not constitute a
`regulatory taking.
`
`
`3
`
`
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`COUNSEL
`
`4
`
`
`
`Michael A. Scodro (argued), Britt M. Miller, and Brett E.
`Legner, Bayer Brown LLP, Chicago, Illinois; Thomas J.
`Dillickrath (argued) and Jonathan R. DeFosse, Sheppard
`Mullin Richter & Hampton LLP, Washington, D.C.; Brian
`A. Howie and Lauren E. Stine, Quarles & Brady LLP,
`Phoenix, Arizona; Molly C. Lorenzi, San Francisco,
`California; Mark W. Ryan, Washington, D.C.; Aundrea K.
`Gulley, Brice A. Wilkinson, and Denise Drake, Gibbs &
`Bruns LLP, Houston, Texas; for Plaintiffs-Appellants.
`
`Brunn (Beau) W. Roysden III (argued) and Rusty D.
`Crandell, Office of the Attorney General, Phoenix, Arizona;
`Mary O’Grady and William D. Furnish, Osborn Maledon
`P.A., Phoenix, Arizona; for Defendants-Appellees.
`
`Derek T. Ho (argued), Aaron M. Panner, Brendan J.
`Crimmins, Daniel V. Dorris, Joshua Hafenbrack, Bethan R.
`Jones, and Jayme L. Weber, Kellogg Hansen Todd Figel &
`Frederick PLLC, Washington, D.C.; John C. Norling, John
`J. Egbert, Jeffrey D. Gardner, and Jimmie W. Pursell Jr.,
`Jennings Strouss & Salmon P.L.C., Phoenix, Arizona; for
`Intervenor-Defendants-Appellees.
`
`R.J. “Jim” Sewell Jr, Smith Law Firm P.C., Helena,
`Montana, for Amicus Curiae Montana Automobile Dealers
`Association.
`
`Timothy C. Fox, Attorney General; Matthew T. Cochenour,
`Acting Solicitor General; Jon Bennion, Chief Deputy
`Attorney General; Office of the Attorney General, Helena,
`Montana; for Amicus Curiae State of Montana.
`
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`5
`
`
`
`Craig Nichols, Nichols Law Group LLP, Portland, Oregon;
`Aaron H. Jacoby, Victor P. Danhi, Karen Van Essen, and
`Franjo M. Dolenac, Arent Fox LLP, Los Angeles,
`California; for Amici Curiae California New Care Dealers
`Association and Oregon Auto Dealers Association.
`
`
`
`OPINION
`
`MILLER, Circuit Judge:
`
`In 2019, the Arizona Legislature enacted a statute aimed
`at strengthening privacy protections for consumers whose
`data
`is collected by car dealers and
`restricting
`anticompetitive business practices by technology companies
`that provide database services for dealers. The statute’s key
`provisions prevent database providers from limiting access
`to dealer data by dealer-authorized third parties and require
`providers to create a standardized framework to facilitate
`such access. Two database providers subject to the statute
`filed suit and sought a preliminary injunction against its
`enforcement on the grounds that it is unconstitutional and
`that it is preempted by numerous federal statutes. After
`concluding that the plaintiffs were unlikely to succeed on the
`merits of their claims, the district court denied a preliminary
`injunction. We affirm.
`
`I
`
`To manage their operations, car dealers use specialized
`software known as a dealer management system (DMS). The
`core of a DMS is a database containing information about a
`dealer’s customers, vehicles, accounting, parts, and services.
`Some of that data, such as customers’ social-security
`numbers and credit history, is highly sensitive. DMSs use the
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`6
`
`data to perform a variety of tasks, from sales and accounting
`to financing and inventory management.
`
`In addition, dealers often rely on separate software
`applications for aspects of their business, such as managing
`online marketing and customer relations. In order to
`function, those third-party applications must be able to
`access the data stored in a dealer’s DMS.
`
`Plaintiffs CDK Global LLC and Reynolds and Reynolds
`Co. are technology companies that license widely used
`DMSs to dealers. Between them, they control a substantial
`majority of the DMS market. They have litigated this case
`together, and their business practices do not vary in any way
`that matters to the case, so for simplicity we will refer to
`them collectively as CDK.
`
`In the past, CDK allowed dealers to share access to the
`DMS with third-party data-integration companies that would
`extract a dealer’s data from the DMS and reformat it for use
`in the dealer’s other software applications. But a few years
`ago, CDK began to prohibit that practice. It justified the
`change as necessary to protect its intellectual property rights
`and ensure robust system performance and security. CDK
`now offers its own data-integration services to dealers, albeit
`at significantly higher prices
`than
`independent data
`integrators do.
`
`Some competing DMS providers continue to permit
`dealers to grant DMS access to third parties. But switching
`to a new DMS provider can be costly, and many dealers are
`locked into long-term contracts with CDK.
`
`In 2019, the Arizona Legislature unanimously enacted a
`statute—which we will refer to as the “Dealer Law”—to
`ensure that dealers retain control over their data. See Ariz.
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`
`
`Rev. Stat. Ann. §§ 28-4651 to -4655. Two of its provisions
`are central to this appeal.
`
`7
`
`First, the Dealer Law prohibits DMS providers from
`“tak[ing] any action by contract, technical means or
`otherwise to prohibit or limit a dealer’s ability to protect,
`store, copy, share or use” data the dealer has stored in its
`DMS. Ariz. Rev. Stat. Ann. §§ 28-4651(7), 28-4653(A)(3).
`More specifically, DMS providers may not impose charges
`“beyond any direct costs incurred” for database access. See
`id. §§ 28-4651(5), 28-4653(A)(3)(a). And as long as a
`dealer-authorized
`third-party
`integrator complies with
`industry security standards, DMS providers may not prohibit
`the third party “from integrating into the dealer’s data
`system,” nor may they otherwise “plac[e] an unreasonable
`restriction on integration.” Id. §§ 28-4651(1), (9), 28-
`4653(A)(3)(b).
`
`Second, the Dealer Law requires DMS providers to
`“[a]dopt and make available a standardized framework for
`the exchange, integration and sharing of data” with
`authorized
`integrators. Ariz. Rev. Stat. Ann. § 28-
`4654(A)(1). The law specifies that this framework must
`comply with industry security standards and that it should be
`implemented using an “open application programming
`interface[],” or “API,” unless an API is “not the reasonable
`commercial or
`technical standard
`for secure data
`integration,” in which case a DMS provider may instead
`“provide a similar open access integration method.” Id. § 28-
`4654(A)(2). APIs are commonly used tools in software
`development that provide for standardized communications
`between computer systems. They allow developers to access
`information and other resources on a remote computer
`without having to understand the internal operations of the
`system with which they are interacting. See generally
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`8
`
`Google LLC v. Oracle Am., Inc., 141 S. Ct. 1183, 1191–93
`(2021).
`
`CDK sued the Attorney General of Arizona for
`declaratory and injunctive relief, asserting a wide range of
`claims. As relevant here, it argued that the Dealer Law is
`preempted by the Copyright Act, 17 U.S.C. § 101 et seq.,
`and the Computer Fraud and Abuse Act (CFAA), Pub. L.
`No. 99-474, 100 Stat. 1213 (1986) (codified at 18 U.S.C.
`§ 1030); that it violates the Contracts Clause and the Takings
`Clause; and that it is void for vagueness. CDK moved for a
`preliminary injunction.
`
`The Arizona Automobile Dealers Association intervened
`in defense of the law and, together with the Attorney
`General, moved to dismiss the complaint. The district court
`dismissed most of the claims but allowed the copyright
`preemption, Contracts Clause, and Takings Clause claims to
`proceed. Following a hearing, the district court denied a
`preliminary injunction.
`
`II
`
`CDK appeals the denial of a preliminary injunction, and
`the first issue we must resolve is the scope of its appeal.
`Specifically, the parties disagree about whether we have
`jurisdiction over CDK’s CFAA and vagueness claims,
`which the district court dismissed before ruling on the
`preliminary injunction and therefore did not address in its
`order denying an
`injunction. Although 28 U.S.C.
`§ 1292(a)(1) gives us jurisdiction to review an interlocutory
`order denying
`injunctive
`relief, we generally
`lack
`jurisdiction to review a non-final order dismissing claims
`under Federal Rule of Civil Procedure 12(b)(6). Arc of
`Cal. v. Douglas, 757 F.3d 975, 992 (9th Cir. 2014).
`
`
`
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`9
`
`the doctrine of pendent appellate
`invokes
`CDK
`jurisdiction, under which we may review an “otherwise non-
`appealable ruling” in certain limited situations when it “is
`inextricably intertwined with or necessary to ensure
`meaningful review of the order properly before us on
`interlocutory appeal.” Arc of Cal., 757 F.3d at 992–93
`(quoting Melendres v. Arpaio, 695 F.3d 990, 996 (9th Cir.
`2012)). This is not such a situation, however. The CFAA and
`vagueness claims addressed in the district court’s dismissal
`order are entirely separate from the claims addressed in the
`preliminary-injunction order. Review of one order does not
`require review of the other.
`
`The separateness of the issues in the dismissal order and
`the preliminary-injunction order is underscored by the
`sequence of the filings in this case. After the district court
`dismissed the CFAA and vagueness claims, but before it
`ruled on the preliminary-injunction motion, CDK filed an
`amended complaint omitting those claims. An amended
`complaint “supersedes the original complaint,” so the
`amended complaint was the operative pleading at the time
`the district court ruled on the preliminary-injunction motion.
`Pacific Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S.
`438, 456 n.4 (2009). The district court could not possibly
`have abused its discretion by denying an injunction on
`claims that were not included in that complaint. See LA
`Alliance for Hum. Rts. v. County of Los Angeles, No. 21-
`55395, 2021 WL 4314791, at *7 (9th Cir. Sept. 23, 2021) (A
`district court “does not have the authority to issue an
`injunction based on claims not pled in the complaint.”
`(internal quotation marks omitted)). It therefore would not
`be appropriate for us to review those claims in reviewing the
`denial of the injunction. We confine our review to the issues
`addressed in the preliminary-injunction order.
`
`
`
`10
`
`
`CDK GLOBAL V. BRNOVICH
`
`“A plaintiff seeking a preliminary injunction must
`establish that he is likely to succeed on the merits, that he is
`likely to suffer irreparable harm in the absence of
`preliminary relief, that the balance of equities tips in his
`favor, and that an injunction is in the public interest.”
`Winter v. NRDC, Inc., 555 U.S. 7, 20 (2008). Because we
`conclude that the first factor—likelihood of success on the
`merits—is decisive, we need not address the other factors.
`See Hall v. USDA, 984 F.3d 825, 835 (9th Cir. 2020). We
`review the denial of a preliminary injunction for abuse of
`discretion, but we review the district court’s underlying legal
`conclusions de novo. Id.
`
`III
`
`CDK argues that the Dealer Law is preempted by the
`Copyright Act because it “stands as an obstacle to the
`accomplishment and execution of the full purposes and
`objectives of Congress.” Puente Ariz. v. Arpaio, 821 F.3d
`1098, 1103 (9th Cir. 2016) (quoting Arizona v. United
`States, 567 U.S. 387, 399 (2012)). CDK faces a high bar:
`“The mere fact that there is tension between federal and state
`law is not enough to establish conflict preemption.”
`MetroPCS Cal., LLC v. Picker, 970 F.3d 1106, 1118 (9th
`Cir. 2020) (internal quotation marks and alteration omitted).
`“In the absence of irreconcilability” between state and
`federal law, “there is no conflict preemption.” United
`States v. California, 921 F.3d 865, 882 (9th Cir. 2019).
`
`Moreover, because CDK has brought a facial challenge
`to the Dealer Law, it “must show that ‘no set of
`circumstances exists under which [it] would be valid.’”
`Puente Ariz., 821 F.3d at 1104 (quoting United States v.
`Salerno, 481 U.S. 739, 745 (1987)); accord MetroPCS,
`970 F.3d at 1122. In other words, it must establish that every
`possible application of the Dealer Law would conflict with
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`
`
`the Copyright Act. See Puente Ariz., 821 F.3d at 1104.
`Because CDK cannot carry that burden, the district court
`correctly concluded that it is unlikely to succeed on its
`Copyright Act preemption claim.
`
`11
`
`CDK contends that the Dealer Law conflicts with the
`Copyright Act because it grants dealers and their authorized
`integrators the right to access CDK’s systems and create
`unlicensed copies of (1) its DMS, (2) its APIs, and (3) its
`data compilations. In all three respects, it says, the statute
`conflicts with 17 U.S.C. § 106(1), which grants the owner of
`a copyrighted work the exclusive right “to reproduce the
`copyrighted work in copies.”
`
`As a preliminary matter, the defendants argue that CDK
`forfeited these arguments by not raising them in the motion
`for a preliminary injunction. But although CDK did not
`advance the first two arguments until its reply in support of
`the motion for a preliminary injunction, it raised all three
`arguments at the hearing, and the district court ruled on all
`three. “[W]hen a party takes a position and the district court
`rules on it,” the argument is preserved. Yamada v. Nobel
`Biocare Holding AG, 825 F.3d 536, 543 (9th Cir. 2016).
`
`A
`
`CDK first argues that the Dealer Law interferes with its
`exclusive right to reproduce its copyrighted DMS. That is so,
`it says, because every time a third party uses the “open
`access integration method” prescribed by the Dealer Law to
`integrate with its systems, that party causes a copy of CDK’s
`DMS software to be created in the memory of CDK’s
`servers.
`
`States retain the power to regulate market practices even
`when those practices relate to copyrighted material. See, e.g.,
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`12
`
`Watson v. Buck, 313 U.S. 387, 404 (1941); Associated Film
`Distrib. Corp. v. Thornburgh, 800 F.2d 369, 375 (3d Cir.
`1986); Allied Artists Picture Corp. v. Rhodes, 679 F.2d 656,
`662–63 (6th Cir. 1982). Thus, the Copyright Act does not
`preempt market regulations that merely “touch copyrighted
`works indirectly.” Orson, Inc. v. Miramax Film Corp.,
`189 F.3d 377, 385 (3d Cir. 1999) (en banc). For at least two
`reasons, the Dealer Law touches CDK’s copyrighted works
`only indirectly, if at all.
`
`First, the district court found that third-party use of an
`“open access integration method” would not necessarily
`require a copy of the DMS to be created in memory on
`CDK’s servers. To be sure, CDK presented a witness who
`testified that “[e]ach time a party sends a request through an
`API, that party would cause a copy of [the] DMS software
`to be made in the memory of DMS servers in order to process
`the request.” But for purposes of a facial challenge, the
`current design of the system is irrelevant—CDK must show
`that no set of circumstances exists under which the Dealer
`Law could be valid. And the district court heard testimony
`that whether a DMS provider would be required to create a
`copy of its executable code in the memory of its own systems
`to respond to third-party requests “[d]epends on the
`implementation.” According to one expert witness, if a copy
`of the code were already running on a provider’s system, the
`provider would not necessarily need to create a new copy but
`could instead reuse the existing copy. It therefore may be
`possible for CDK to comply with the Dealer Law without
`being forced to create a new copy of its software to process
`third-party requests.
`
`Second, even if CDK were forced to create new copies
`of its DMS on its own server in response to third-party
`requests, it has not established that those copies would
`
`
`
`13
`
`CDK GLOBAL V. BRNOVICH
`
`
`
`infringe its reproduction right. The copies that CDK finds
`objectionable would be copies of its own software running
`on its own servers and not shared with anyone else. Like
`other property rights, the right granted by a copyright is the
`right to exclude others. See 17 U.S.C. § 106. We are unaware
`of any authority suggesting that causing a copyright holder
`to make a copy of its own copyrighted work and keep it
`within the copyright holder’s exclusive possession would
`violate the Copyright Act. In addition, it is possible that
`causing a DMS provider to copy its software on its own
`server in these circumstances would constitute fair use. See
`Assessment Techs. of WI, LLC v. WIREdata, Inc., 350 F.3d
`640, 644–45 (7th Cir. 2003); Association of Am. Med. Colls.
`v. Cuomo, 928 F.2d 519, 523 (2d Cir. 1991) (holding that
`fair use is relevant to conflict preemption under the
`Copyright Act).
`
`But we need not resolve those issues because there is
`another problem with CDK’s theory. The reproduction right
`extends only to the creation of “copies,” which are defined
`by the Copyright Act as “material objects, . . . in which a
`work is fixed . . . and from which the work can be perceived,
`reproduced, or otherwise communicated.” 17 U.S.C. § 101.
`A work is “‘fixed’ in a tangible medium of expression when
`its embodiment . . . is sufficiently permanent or stable to
`permit it to be perceived, reproduced, or otherwise
`communicated for a period of more than transitory
`duration.” Id.; see Cartoon Network LP, LLLP v. CSC
`Holdings, Inc., 536 F.3d 121, 127 (2d Cir. 2008) (explaining
`that
`the statute “imposes
`two distinct but
`related
`requirements: . . . the ‘embodiment requirement’” and “the
`‘duration requirement’”).
`
`Loading software into a computer’s memory satisfies the
`embodiment requirement because a computer’s memory is a
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`14
`
`‘perceived,
`from which software “can be
`medium
`reproduced, or otherwise communicated.’” MAI Sys.
`Corp. v. Peak Comput., Inc., 991 F.2d 511, 518–19 (9th Cir.
`1993) (quoting 17 U.S.C. § 101). But embodiment alone
`does not result in the creation of a copy; the embodiment
`must also persist for a period of more than transitory
`duration. We have not previously considered what is
`required for a copy to persist for more than a transitory
`period. In MAI, the duration requirement was not disputed,
`but it seems likely to have been met because the copy at issue
`remained fixed for a period long enough for a human
`technician “to view the system error log and diagnose the
`problem with the computer.” Id.; accord, e.g., Perfect 10,
`Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1160 (9th Cir.
`2007) (thumbnail versions of copyrighted images were
`stored long enough to repeatedly “communicate copies of
`those thumbnails to [the defendant’s] users”); Triad Sys.
`Corp. v. Southeastern Express Co., 64 F.3d 1330, 1333 (9th
`Cir. 1995) (copy of operating system remained in memory
`while computer was “in use” by a human technician). We
`agree with the Second Circuit’s characterization of our
`decisions: MAI and the cases following it establish only that
`“loading a program into a computer’s [memory] can result
`in copying that program,” not that “loading a program into a
`form of [memory] always results in copying.” Cartoon
`Network, 536 F.3d at 128; accord CoStar Grp., Inc. v.
`LoopNet, Inc., 373 F.3d 544, 551 (4th Cir. 2004).
`
`Of course, embodiments in a computer’s memory may
`perform some useful function despite being transitory.
`Cartoon Network, 536 F.3d at 130; CoStar, 373 F.3d at 551.
`Here, for example, the embodiment would allow the DMS to
`process the request of the dealer or authorized integrator
`using it. But the Copyright Act does not provide copyright
`owners the exclusive right to use their works. See 17 U.S.C.
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`15
`
`
`
` §
`
` 106. Such a right “can only be secured, if it can be secured
`at all, by letters-patent.” Baker v. Selden, 101 U.S. 99, 105
`(1879); accord Google LLC v. Oracle Am., Inc., 141 S. Ct.
`1183, 1196 (2021) (“[U]nlike patents, which protect novel
`and useful ideas, copyrights protect ‘expression’ but not the
`‘ideas’ that lie behind it.”).
`
`CDK has presented no evidence that the Dealer Law will
`require the embodiments of its DMS to persist for a period
`of more than transitory duration. Because this is a facial
`challenge, it is CDK’s burden to show that every possible
`application of the law would conflict with the Copyright Act.
`CDK has not established a likelihood of success on the
`merits of that claim.
`
`B
`
`CDK next argues that the Dealer Law conflicts with the
`Copyright Act because it requires CDK to create APIs that
`will be used by authorized
`integrators. Because an
`authorized integrator must “copy” the API’s specified
`command names in order to communicate with the DMS,
`CDK argues that the Dealer Law vitiates its exclusive rights
`in the API.
`
`As an initial matter, we note that the Dealer Law does
`not require a provider to use an API; a provider may instead
`use “a similar open access integration method” if “the [APIs]
`are not the reasonable commercial or technical standard for
`secure data integration.” Ariz. Rev. Stat. Ann. § 28-
`4654(A)(2). And if a provider chooses to use an API, it need
`not develop its own organizational scheme or set of
`commands. Instead, as the district court noted, it could
`implement an industry-standard interface. In either case, the
`provider would not have created any original expression, so
`there would be no prospect of infringing any copyright.
`
`
`
`16
`
`
`CDK GLOBAL V. BRNOVICH
`
`Even if a provider does create an API, it is not clear that
`the API would be subject to copyright protection. See
`Google, 141 S. Ct. at 1202. Nevertheless, because the
`argument fails either way, we will assume, without deciding,
`that at least some of the code defining a provider’s API
`would be subject to copyright protection.
`
`We base our analysis on the Supreme Court’s decision in
`Google. In that case, Google was accused of infringing
`Oracle’s copyright in Java SE, a computer platform that
`allowed developers to use the widely employed Java
`programming language to develop programs that could run
`on any computer, regardless of the underlying hardware.
`Google, 141 S. Ct. at 1190. The Court explained that the Java
`API comprised “a vast library of prewritten code to carry out
`complex tasks” that programmers confront in the course of
`software development. Id. at 1191. Programmers could call
`upon those prewritten building blocks to save time in writing
`programs. Id. Google sought to create its own development
`platform for smartphones, and in doing so, it copied some
`code from Java’s APIs so that programmers who were
`familiar with Java would be able to work with its new
`platform. Id.
`
`three
`into
`the relevant code
`The Court divided
`categories: implementing code, method calls, and declaring
`code. Google, 141 S. Ct. at 1191–92. Implementing code is
`the prewritten code provided in the Java API that “tells the
`computer how to execute the particular task you have asked
`it to perform.” Id. at 1191. It makes up the vast majority of
`the code in an API. See id. at 1204–05. Method calls are the
`commands that individual programmers using the Java API
`type into their own programs that “tell the computer which
`of the implementing code programs it should choose” to run,
`that is, “which task it should carry out.” Id. at 1191–92.
`
`
`
`17
`
`CDK GLOBAL V. BRNOVICH
`
`
`
`Finally, declaring code “provides both the name for each
`task and the location of each task within the API’s overall
`organizational system.” Id. at 1192. It is the part of the API
`that recognizes the method calls written by a programmer
`and links them with the corresponding implementing code to
`carry out the task the programmer has requested. Id.
`
`Because Google wrote all of its own implementing code,
`that code was not in dispute. Google, 141 S. Ct. at 1201.
`Similarly undisputed were the method calls: Oracle did not
`argue that the mere use by programmers of method calls in
`their own programs would violate any copyright. Id. Instead,
`the case turned on whether Google’s reuse of the same
`declaring code contained in the Java API constituted
`copyright infringement. Id. Assuming that that code was
`copyrightable, see id. at 1197, the Court held that because
`“Google reimplemented a user interface, taking only what
`was needed to allow users to put their accrued talents to work
`in a new and transformative program, Google’s copying of
`the . . . Java API was a fair use of that material as a matter of
`law.” Id. at 1209.
`
`CDK argues that the Dealer Law frees dealers’
`authorized integrators to copy its API’s declaring code; in
`CDK’s view, the integrators are therefore analogous to
`Google. Setting aside that the Supreme Court ultimately
`ruled in favor of Google on the basis of fair use, the analogy
`is inapt. As the district court found, authorized integrators
`need not copy any of the API’s declaring and implementing
`code. They have no need to do so—unlike Google,
`authorized integrators are not attempting to replicate DMS
`providers’ APIs
`to create
`their own complementary
`platforms. All an authorized integrator needs to write is an
`API request, which is analogous to a method call. Thus,
`authorized integrators are analogous not to Google, but to
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`18
`
`the individual programmers in Google who used the Java
`API. As the Supreme Court noted, Oracle did not even
`attempt to argue that the mere use of an API by programmers
`writing method calls would infringe its copyrights—and for
`good reason. Google, 141 S. Ct. at 1201. Programmers
`writing method calls do not engage in verbatim copying of
`API source code. CDK cannot show that the use of its API
`would necessarily infringe any copyright it might hold.
`
`C
`
`Finally, CDK argues that the Dealer Law conflicts with
`the Copyright Act because, it says, the law gives dealers and
`authorized integrators the right to copy and distribute its
`copyrighted data compilations. But although the Dealer Law
`bars DMS providers from limiting access to “protected
`dealer data,” Ariz. Rev. Stat. Ann. § 28-4653(A)(3), it
`nowhere requires or permits the copying of any copyrighted
`data compilations.
`
`Significantly, providers do not hold a copyright in the
`data itself, which consists of facts about dealers’ customers
`and business operations. Ariz. Rev. Stat. Ann. § 28-4651(7).
`Copyright protects expression, not facts. Feist Publ’ns, Inc.
`v. Rural Tel. Serv. Co., 499 U.S. 340, 344–45 (1991);
`Experian Info. Sols., Inc. v. Nationwide Mktg. Servs., Inc.,
`893 F.3d 1176, 1181–86 (9th Cir. 2018). To be sure, an
`arrangement of facts can enjoy copyright protection, but
`only if the arrangement displays some creativity; an obvious
`arrangement, such as using alphabetical order for a listing of
`names in the phone book, does not qualify. Feist, 499 U.S.
`at 362–64. And even if an arrangement is creative, so that it
`is entitled to some measure of copyright protection, that
`protection “is severely limited”—infringement requires
`“‘unauthorized use of substantially the entire item,’” not
`merely a part of it. Experian, 893 F.3d at 1186 (quoting
`
`
`
`CDK GLOBAL V. BRNOVICH
`
`
`
`Harper House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197,
`205 (9th Cir. 1989)).
`
`19
`
`For that reason, dealers and authorized integrators would
`not infringe a DMS provider’s copyright by making copies
`of the raw data in DMS databases, or even by copying
`subsets of that data arranged in particular ways by the
`provider. To infringe a copyright, they would, at a minimum,
`have to copy substantially all of a database that the provider
`had structured in some creative way. CDK has not shown
`that such an application of the Dealer Law is likely, let alone
`inevitable, and in the context of a facial challenge, that
`failure of proof is fatal to its preemption claim.
`
`IV
`
`We now turn to CDK’s constitutional claims, beginning
`with its argument that the Dealer Law violates the Contracts
`Clause. The Contracts Clause provides that “[n]o State shall
`. . . pass any . . . Law impairing the Obligation of Contracts.”
`U.S. Const. art. I, § 10, cl. 1. A state law violates the clause
`if it (1) “operate[s] as a substantial impairment of a
`contractual relationship,” and (2) is not “drawn in an
`appropriate and reasonable way to advance a significant and
`legitimate public purpose.” Sveen v. Melin, 138 S. Ct. 1815,
`1821–22 (2018) (internal quotation marks and citations
`omitted); see Apartment Ass’n of L.A. Cnty., Inc. v. City of
`Los Angeles, 10 F.4th 905, 913 (9th Cir. 2021). CDK
`advances three different theories of Contracts Clause
`violations. We conclude that none is likely to succeed.
`
`First, CDK argues that the Dealer Law impairs various
`contracts that it has with third-party vendors. The district
`court declined to address that claim because CDK did not
`raise it in its complaint or in its motion for a preliminary
`injunction but instead mentioned it for the first time at the
`
`
`
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