Thursday, November 30, 2017
You're Invited! AALS 2018 in America's Finest City
The 2018 AALS Annual Meeting is just around the corner. And it's happening here in San Diego. So I naturally should bring my hosting skills. I plan to post about top things to do in San Diego [here's something not to do: do not bring your winter coats even though the conference is Jan 3-6]. Whether you are coming with a family or on your own there is something here for everybody. Do you love beaches or cities? upscale or hole in the wall eateries? the desert or the mountains? Here in San Diego, why choose? everything is close by. Below is a picture I snapped of one of my regular running trails (can you spot my running buddy?). Along with fellow prawfs I hope to also plan our traditional MarkelFest one of the conference evenings.
I also want to share a few of the exciting events that I am taking part in and would absolutely love to have everyone attend. First -- You gotta come celebrate with me! On Friday Jan 5, 5:30-7 USD Law is holding a reception celebration for my book (and I will talk about it a bit) You Don't Own Me and everyone is invited. My colleague Roy Brooks also has a new book out about racial justice and will speak as well. We have a beautiful campus and it's close to Old Town if you feel like having fresh made tacos and margaritas afterwards.
Second event, in which I become evil: The IP Evil Twin Debate is an annual debate, serious in substance but lighthearted in tone, we all wait for (a highlight - we get to write up (a parody of) our evil twin's bio). Last year it was Mark Lemley v. his evil twin Rebecca Tushnet debating patent law and at the 2016 event Pamela Samuelson took on her evil twin Randy Picker on copyright. This year Michael Risch is pure evil while I stand for everything that's good in a debate about trade secrecy. Christopher Cotropia is our fierce moderator. It's at Thomas Jefferson Law School Friday 430 to 530 (and then we can go together to my campus for the book event) - It will be fun!
Third event, a timely serious panel moderated by Ed Rubin (Vanderbilt) with Robert Post (Yale), Will Forbath (Univ. of Texas), Jide Nzelibe (Northwestern), and myself speaking about the role of the scholar in the larger society, both in general and in response to Trump's election. This will include questions about scholarly agendas and standards of objectivity as well as our normative obligations to our students and our ability to be neutral in highly political climates. Jan 3 at 1:30.
*** Update Will Forbath won't be making it to San Diego; Erwin Chemrinsky (Berkeley) has joined the panel instead.
Fourth event, not to neglect my employment law side -- I am part of the Employment and Labor law's section panel on The American Workplace in the Trump Era, Jan 5, 1:30. Hot-button issues - enforceability of class action waivers in arbitration agreements, discrimination on the basis of sexual orientation, joint employment doctrine, public employee speech, whistleblowing, NDAs and confidential settlements and more.
Other than that my dance card is completely empty - I look forward to seeing everyone!
Welcome to December and returning guests Andra Robertson (Case Western) and Michael Mannheimer (Northern Kentucky). And thanks to our November visitors for a great month.
Wednesday, November 29, 2017
Carpenter – Post-Oral Argument Thoughts
The following guest post is by past guest-Prawf Andrew Ferguson (UDC).
Today, the Supreme Court heard oral arguments on the much awaited Fourth Amendment case of the term – Carpenter v. United States. Fourth Amendment nerds from all over the country flocked to the Supreme Court like it was a constitutional solar eclipse.
Carpenter involves the warrantless collection of historic cell phone records for location information covering 127 days. Suspected of being involved in a series of armed robberies (ironically enough of cell phone stores), police used Timothy Carpenter’s cell phone location data to tie him to the crimes and obtain a conviction. Carpenter appealed arguing that obtaining this information without a warrant violated his Fourth Amendment rights.
The reason for the buzz of interest is because the case presents a real legal puzzle. In a world where almost all of our digital devices work through third parties, the idea that law enforcement can simply obtain the data from our smart devices without a warrant means that our modern culture of self-surveillance has also potentially created a governmental surveillance state. At the same time, the third party records in Carpenter were owned, controlled, and used by the phone companies, raising questions of who owns this data, who controls it, and does sharing it for one purpose also mean sharing it for all other purposes including government investigation?
Much (almost instant) commentary has already been posted on this case, but two things are clear: first, the stakes for the future of the Fourth Amendment are quite high and demand an answer; and second, no Justice or advocate has a completely coherent answer to how the third party doctrine should apply in the digital age.
As to the stakes – almost any digital device you can imagine connects to third party providers (and creates third party records) in order to make the magic of “smart” devices happen. In an interconnected world filled with smartphones, smart cars, smart homes, and smart medical devices, ubiquitous communication by email, text, Tweet, or chat, you share your data with private companies. In a world of data trails, you are a potential police target at all times. Your smartphone, your smart car, your fitness band provide exact geo-locational clues to your whereabouts. Your location is being tracked, and police have recognized the utility of this information to prove criminal acts and patterns. Data trails provide a wealth of clues to past and present criminal activity.
As to the debate in the high court, the Supreme Court was, perhaps not surprisingly, divided. Questions of how to distinguish decades old precedent mixed with questions about new future-oriented technology. Hypotheticals about modern subpoena power mixed with queries about the Writs of Assistance. John Adams got a shout out. So did Stephen Henderson’s idea of a Fourth Amendment time machine. So did the empiricists’ amicus brief. Again, for Fourth Amendment nerds it was a party.
At least from the questions at oral argument, it can be intuited that some Justices wish to rethink the existing third party records doctrine, and others wish to see how to make it fit a digital age. (As a disclosure, I helped author one of the amicus briefs on behalf of Mr. Carpenter). Theories abounded, with no clear resolution of how the Justices would decide.
But one question – signaling perhaps a new way of thinking about the Fourth Amendment – seemed to trouble at least a few members of the Court – namely what rights (property based or otherwise) do the consumers of smart devices have over their own data. This is a huge question in the digital age. How does the Fourth Amendment protect smart data? How do we conceptualize who owns or controls the location data coming from Carpenter’s cell phone?
Here is how Justice Gorsuch framed the question to Carpenter’s lawyer Nathan Wessler of the ACLU:
JUSTICE GORSUCH: Mr. Wessler, I'm sorry, one quick question. Focusing on the property-based approach, putting aside reasonable expectation for just a moment, what do we know about what state law would say about this information? So say -- say a thief broke into T Mobile, stole this information and sought to make economic value of it. Would you have a conversion -- would your client have a conversion claim, for example, under state law? Have you explored that at all?
Similar questions were put to the government’s advocate, Michael Dreeben:
JUSTICE GORSUCH: Mr. Dreeben, I'd like to -- I'd like to drill down on that and return to Justice Kagan's question. You know, the facts here wind up looking a lot like Jones.
One thing Jones taught us is -- and reminded us, really, is that the property-based approach to privacy also has to be considered, not just the reasonable expectation approach.
So, if we put aside the reasonable expectation approach for just a moment, Katz, Miller, Smith, and ask what is the property right here, let's say there is a property right. Let's say I have a property right in the conversion case I posited with your colleague. So that if someone were to steal my location information from T-Mobile I'd have a conversion claim, for example, against them for the economic value that was stolen.
Wouldn't that, therefore, be a search of my paper or effect under the property-based approach approved and reminded us in Jones?
The question likely arises from a law review article written by William Baude and James Stern in the Harvard Law Review called The Positive Law Model of the Fourth Amendment and in Richard Re’s response essay, The Positive law Floor. Both articles were cited in Carpenter’s brief and apparently caught the attention of the Court. But, as anyone who has read those thoughtful pieces knows, positive law when it comes to the Fourth Amendment gets confusing and contested pretty quickly in practice. It is not that the Positive Law model doesn’t offer some helpful ways to conceptualize the possible future rules, but it is hard to operationalize because positive law is messy.
So, in the spirit of the ongoing debate, I offer my own thoughts to the intuition that Justice Gorsuch was reaching for – that there is some property-like element to our smart data – but with a different conceptual hook.
My argument is not about positive law, but about the ownership/security interests we have in the data we create. Smart data (including location data) is partially ours, and because it comes from our effects, we can claim some control over it. The argument turns on the simple principle that the Fourth Amendment protects not simply the physical integrity of “persons, papers, homes, and effects” but also the information that comes from those constitutional derived sources (which would include Timothy Carpenter’s cell phone – as an effect – and its smart data). As I wrote in The “Smart” Fourth Amendment:
The Fourth Amendment--at its core--protects “informational security” …. Underlying the protection of persons, papers, homes, and effects and behind the expectation of privacy lies a desire to guard personal information from government intrusion.
In other words, it is not the corporal person, alone, that deserves protection, but also the information about the person. It is not the sheaf of papers, but the revealing personal details in those words that matter. It is not the physical home that is as important as what happens in the home. …
In this longer work on how the Fourth Amendment should adapt to new “smart” technologies, I developed the idea of “informational security” the principle of why the Fourth Amendment should protect smart data, again similar to Justice Gorsuch’s intuition that there is some property/security right to control the locational information created by individuals through the use of smartphones. [In the following excerpt from the article, I deleted the footnotes for easier reading.]
[I]nformational security is not an abstract concept, but arises from those particular constitutionally referenced sources. The Fourth Amendment secures someone, something, or somewhere. Information obtained from a constitutionally recognized source--effects, houses, persons, papers--gains derivative protection due to the source of the information. Focusing attention on a derivative constitutional source provides a useful and relatively easy guidepost to identify which types of information deserve constitutional protection.
Such derivative protection also covers information at some remove from the actual constitutionally protected interest. Charlie Katz's voice exited the closed glass door and was captured by the microphone taped on top of the phone booth. Antoine Jones's travel coordinates left the car and was captured by satellite technology. David Riley's smartphone communications data existed both on the phone and outside of it (in the cloud). Yet, the protections of the Constitution carried to these intangible, invisible, separate pieces of personal information. The constitutional protections of persons, houses, papers, and effects might, thus, be better characterized as protections of the information emanating from those constitutionally protected interests.
As laid out in more detail in the article, one can trace through the history of the Fourth Amendment and see this emphasis on protecting informational details arising from constitutionally protected sources (effects, homes, persons, papers). For questions about whether we have any property rights in our own smart data, this can be an important consideration.
For example, in terms of effects:
Central to the protection granted effects has been securing personal information about those effects. The sparse Founding Era literature suggests a focus on protecting objects which revealed something about the owner--religion, culture, status, or family associations. Searching and seizing a colonist's religious objects was not offensive simply because it interfered with property rights, but because searching revealed personal information about family and faith. Rummaging through bedroom drawers was not solely about the inviolate nature of property but, as the early history suggested, also about revealing information that might be contained in those drawers. Interpreted one way, the protection of effects has largely been the protection of what the personal effects revealed or contained.
Similarly, while Justice Scalia attempted to ground his Jones argument in property rights, the harm of affixing the GPS device was not in any real sense to physical property (the car was undamaged). The real harm was exposing the revealing personal data about the effect (car). Placing the device on the car might have been a seizure, but what made it a search was collecting the locational data intercepted by police (the “use of that device to monitor the vehicle's movements”). The “use” in that case was the capturing of data trails via satellite transmissions communicated by cell phone to a government computer. By using the car to track its owner, the government invaded the informational security of the effect. Justice Scalia's Jones analysis requires both parts--trespass plus use--and as Justice Alito argues in his concurrence, neither alone should constitute a search under Scalia's reasoning. In holding that this interception/collection was a Fourth Amendment search, Justice Scalia implicitly acknowledged the centrality of informational security. What mattered was securing the information coming from the effect, not just securing the effect itself.
The concurring Justices in Jones also focused on the personal information revealed from the GPS device. The reason a twenty-eight-day tracking of locational data became a search rested solely on the informational exposure that resulted. Such collection of personal data points (touching on associational, health, and other private travels) became of constitutional significance when the data trails could be revealing of private, personal actions. The expectation of privacy was not about expectations from the effect (the car) itself, but the information to be inferred about the travels of the car. This personal information essentially radiating off the car is what created the constitutional harm.
The article goes on to discuss the other constitutionally protected terms and the quirks and problems with the theory of informational security, but at its core the article offers a way to get to a property-oriented approach to data protection without diving into positive law. (Although, candidly, there are 84 pages of my article not excerpted that add a whole host of complexity to it).
So, if the Supreme Court is looking for a reason to protect smart data under the Fourth Amendment, it offers a starting point for debate. And, the best thing about the Carpenter argument day was that for one shining moment, everyone was focused on thinking about the Fourth Amendment and how it should apply to the digital age. Can’t wait for the decision.
A Conversation in Chicago about Trinity Lutheran
A few days ago, thanks to the good people at the Lumen Christi Institute at the University of Chicago, I was able to participate in a panel/conversation about last year's Trinity Lutheran case with my friends Andy Koppelman and (fellow Prawf) Dan Rodriguez. The video of the event is available here. (As you'll see, the video-producers substituted some bald guy for me but the words and bad jokes were mine.) Unfortunately, I suppose, for the organizers and audience, Andy and I were in substantial agreement for most of the event.
I’ve enjoyed my month guest blogging and receiving reader comments. Thank you, farewell, and happy holidays!
Tuesday, November 28, 2017
The Judicial Power Over Patents and the Future of Administrative Adjudication after Oil States
The following guest post is by my FIU colleague Hannibal Travis, Professor of Law at FIU College of Law and this semester the Irving Cypen Visiting Professor of Law at University of Florida. He wrote about Oil States prior to argument.
Although in a less spectacular way that in some other oral arguments, yesterday’s oral argument in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC put competing judicial philosophies on brief display. Emily Bazelon, Eric Posner, Cass Sunstein, and others argue that one major “judicial philosophy,” by seeking to limit the discretion of administrative agencies, “would do nothing less than undermine the structure of modern government — including the rules that keep our water clean, regulate the financial markets and protect workers and consumers.” Another judicial philosophy of “minimalism” and “majoritarianism,” according to Sunstein, would result in “reasonable” regulations being upheld from constitutional challenges. There was a subtext of this struggle between constitutional worldviews as the justices questioned attorneys in Oil States.
The Ancient Doctrine of Vested Rights
Apart from the private rights theory of Article III that has been the focus of most briefing and commentary on Oil States, Justice Breyer highlighted the “vested rights” theory, commenting that it “had great popularity in the 19th century and might have moved Justice Story but in fact has happily sunk from sight.” Justice Gorsuch had described Justice Story as concluding that once a patent is granted, it is a private right secured to its owner. This sets up a potential 5-4 or 6-3 split in which Justice Breyer writes or joins an opinion strongly defending the administrative state from constitutional counter-majoritarianism, with Justice Gorsuch on the other side.
Constructing Left and Right in Article III Jurisprudence
In the era of the Greatest Generation, the Supreme Court’s left tended to take the side of due process and an independent judiciary, while the right found administrative adjudication to be acceptable. This may play out a little bit differently in Oil States than in Northern Pipeline. In the latter, Justice Brennan, typically associated with the judicial left, wrote a plurality opinion seemingly confining Article I courts to a small area covered by three categories, adding that an independent judiciary shields litigants from judges subject to “improper influences not only by other branches but by colleagues as well.” Three conservative justices, led by Justice White, maintained that Article III’s preference for an independent judiciary should be balanced in an ad hoc fashion with “congressional values and … responsibilities.”
However, even Justice Brennan wanted to distinguish, and perhaps allow non-Article III courts to adjudicate, rights created by Congress as opposed to by the common law or state statutes. This possibility led to much dialogue at yesterday’s oral argument about whether, not being obligated to create patent rights, Congress may condition them upon post-grant agency proceedings, or whether on the other hand, as Allyson Ho argued for Oil States, “in the Article III context, where Congress is taking a category of cases that have been adjudicated in courts for centuries and removes those cases -- withdraws those cases to a non-Article III tribunal, that impacts … the individual rights guarantees that Article III [contains]….”
The Oil States oral argument is being presented as a clash between a left that supports the PTO, and a right led by Justice Gorsuch that is defending private property. In 2011, the four justice who are often portrayed as the Court’s liberals rejected Justice Brennan’s opinion in Northern Pipeline as an “analysis that did not command a Court majority …. and that was subsequently disavowed” in, among other cases, CFTC v. Schor, 478 U. S. 833 (1986). They would have revived the principle from Crowell v. Benson, 285 U. S. 22 (1932), that Article III provides a right to appeal a judgment to an independent judge, not a right to a judge who initially decides all factual issues. Therefore, in Crowell, an administrative adjudication of a private employer’s liability to an employee under a federal harbor worker’s compensation law, subject to appeal to federal district court for noncompliance with law or lack of support in the record, was consistent with Article III. Except for patents being “property,” perhaps unlike an employer’s defense to a federal statutory claim, it would be a small step from that premise to say that the PTO can revoke patents, subject to appeal to the Federal Circuit for legal error or lack of evidence.
Defusing the Northern Pipeline Bomb
Justice Kennedy possibly signaled a fifth vote in favor of inter partes reviews passing Article III muster when he distinguished Stern v. Marshall, 564 U.S. 462 (2011), as involving a right not created by Congress. In Stern, the Court held that a non-Article III court could not render a final judgment on a state law counterclaim, despite its relationship to a claim voluntarily filed in bankruptcy court by the counterclaim defendant. As Malcolm Stewart pointed out for the government, “Stern versus Marshall and Northern Pipeline … are really directed at a different sort of problem,” because the “adjudicator was being asked to determine whether one party was liable to another for a violation of [state] law.” This argument might be gaining some traction, despite the argument that Northern Pipeline merely echoed McCormick Harvesting and American Bell in insisting that private rights be enforced (or set aside) in Article III courts.
Introducing a Parade of Horribles
Justices Ginsburg and Sotomayor questioned counsel for Oil States about whether the PTO must allow its worst mistakes to be perpetuated if patents are private rights immune from revocation by the PTO, or by anyone other than a lay jury for that matter (assuming genuine issues of fact as to validity). Justice Sotomayor asked whether, “somehow at the founding in 1789, given the replete English history of the crown and the Privy Council … sidestepping any judicial adjudication of validity, … in 1789 the founders intended to change that system as radically as to say, no, we're not going to permit … the legislature to change the terms of a patent grant?”
None of the justices seemed to question whether the Privy Council was thought in 1789 to have the power to revoke issued patents. For justices who share this premise of the government in the case, it may seem to open Pandora’s Box to make flawed and foolishly granted patents administratively irrevocable, without a good constitutional reason to do so. (Incidentally, patent law historians H. Tomás Gómez-Arostegui and Sean Bottomley make a strong case in their amicus brief that between 1780 and 1800, the Court of Chancery sitting as a law court sent patent validity issues for final judgment to the King’s Bench, and that the Privy Council’s power to revoke patents had fallen into disuse and virtually out of living memory.)
The Takings Turn
Justices Breyer and Gorsuch seemed concerned that a patent owner who has invested large sums of money in manufacturing a product may be divested of the patent rights by a non-Article III court. This led to a line of questioning about whether the government could declare land held for decades to be subject to revocation by administrative panels within the Department of the Interior, before the landowners could sue other private parties for trespass.
As Justice Kennedy pointed out, the Constitution refers to a congressional power for “securing” to inventors the “exclusive right” to their discoveries, not securing to Congress or the presidency the discretion to adjust issued patents in the public interest, etc. The observation echoed a statement by the Supreme Court in 1888: “The patent, then, is not the exercise of any prerogative power or discretion by the president, or by any other officer of the government, but it is the result of a course of proceeding quasi judicial in its character, and is not subject to be repealed or revoked by the president … or the commissioner of patents, when once issued.”
The Takings Clause analogy to the Article III problem may cut both ways for Oil States, however. Justice Roberts asked:
What is … the relationship between your position and the takings clause? The government can certainly diminish the value of your property rights quite extensively when it comes up with [a] new regulation. You have a lot that you think you could have built a mansion on, and then the government passes a law and you can only build a shed on it and … yet we often … give the government a lot of leeway in saying that … that they don't have to pay compensation. So, if the government can restrict your property right in real property to that extent, why can't it do so with respect to patent rights?
Most of the way through Mr. Stewart’s argument, Justice Breyer suggested reserving the Takings Clause question for another day, perhaps after a ruling in favor of the government on Article III. Interestingly, these portions of the argument invert the supposed politics of the Court, as Chief Justice Roberts normalizes the regulatory erosion of property rights in the public interest, and Justice Breyer suggests that a massive disruption of investment-backed expectations is a taking.
Shoring up the Schor Test
One outcome of Oil States might be a decision upholding the inter partes review system of the America Invents Act, but clarifying why it is a special case and that other investments are not at risk of being caught up in administrative revocation under White House pressure. Chief Justice Roberts asked whether the multi-factor Article III test articulated in Schor provides sufficient guidance to investors contemplating the manufacture and launch of a patented product. Schor seemingly expanded Crowell into Justice White’s ad hoc balancing test from Northern Pipeline for sustaining non-Article III procedures. Schor, which had the backing of seven justices, Justices Brennan and Marshall dissenting, looks to broadly-framed “factors”: whether the courts maintain the “‘essential attributes of judicial power’” despite the administrative adjudication at issue, “whether the non-Article III forum exercises the range of jurisdiction and powers normally vested only in Article III courts, the origins and importance of the right to be adjudicated, and the concerns that drove Congress to depart from the requirements of Article III.” A firm requirement of historical understandings that a claim did not exist or was decided administratively and outside of law courts in 1789 would be more protective of judicial independence under Article III, and of the right to a civil jury. Alternatively, a consent theory based on the possibility of a reexamination of patent claims by the PTO under a 1980 statute at the time Oil States filed could decide this case, without endorsing Schor.
Copyright Lurking in the Background
Although the government was asked whether the PTO could hear infringement actions consistent with Article III, copyright small claims and initiatives such as the Stop Online Piracy Act did not come up. The government’s response to the question, however, indicated that such evasions of Article III would be difficult to sustain due to the lack of historical precedents. Presumably the answer was aimed at compulsory agency adjudication and not to voluntary small claims tribunals like the proposed Copyright Claims Board. If Oil States is based on a consent theory tied to a patent application being filed subject to a statutory scheme that warns the applicant that an issued patent may be reexamined or revoked, there will be few implications for copyright damages actions outside of Article III courts. However, if five or more justices adopt broad readings of Crowell, Schor, or the Northern Pipeline dicta concerning congressionally-created rights being subject to congressional remedies and limitations, the copyright small claims movement will have a major precedent to draw on in Congress and during constitutional challenges.
From a copyright perspective, the Oil States oral argument was noteworthy for what was not said. Given the briefing on the Seventh Amendment and the fact that Justice Thomas wrote one of the landmark opinions in Seventh Amendment jurisprudence, some might have looked forward to a discussion of the right to a jury trial and the implications of Feltner v. Columbia Pictures, 523 U.S. 340 (1998). The Seventh Amendment and the concept that jury trials shall be “preserved” did not come up, other than in the start of the government’s argument. Justice Thomas did not ask any questions, and Justice Alito asked only one: whether Congress, which had the power not to enact any patent regime, was within its rights to enact one issuing patents subject to post-grant cancellation. If the Court lumps the Seventh Amendment inquiry together with the jurisprudentially distinct Article III inquiry, and resolves the latter by expanding Crowell, Schor, or some other doctrine justifying non-Article III courts, collateral attacks on default judgments involving small copyright claims may fail.
Sponsored Post: Evidence in Practice
The following post is by Deborah Jones Merritt & Ric Simmons (both of The Ohio State University-Moritz College of Law) and is sponsored by West Academic.
Law professors try to generate active, rather than passive, knowledge in students. We want our students to do more than simply recite legal rules—or even choose the correct answer to a multiple choice question. To work effectively as lawyers, our students must be able to seize relevant facts from an unfolding situation, recognize the legal implications of those facts, and craft solutions.
Classroom hypotheticals, writing exercises, and problem sets help develop active knowledge, but we wanted to go further for our Evidence students. The fourth edition of our book, Learning Evidence: From the Federal Rules to the Courtroom (West Academic Publishing), will include seven online courtroom interactives to aid active learning.
Students will play the role of a courtroom lawyer or judge in each interactive, raising or ruling on objections to testimony that they hear in real time. Five of the interactives focus on subsets of rules (such as character evidence or hearsay); the other two are meant for semester-end review and combine rules from all parts of the course.
Students playing these interactives must know when not to object, as well as when to object. They lose points when they object to admissible evidence, mirroring the impatience that a judge might demonstrate in the courtroom. They also lose points when they fail to object to inadmissible evidence. To gain points, students must object at the proper time and cite appropriate grounds for their objection. The interactives require students to type in the rule number or common designation (“irrelevant,” “leading,” “hearsay”) to support their objection; they must recall that ground on their own, not choose it from a list of possible objections.
The interactives offer continuous feedback, sustaining proper objections and explaining the flaws in improper ones. Students may play as many times as they wish, trying different grounds for their objections. When they are done, they can view and print a full transcript of the trial scene, which explains both proper and improper objections.
We have tested the interactives with current students, who uniformly offer two reactions: “This is fun!” And, “this is hard!” We hoped for both of those reactions. Objecting to inadmissible evidence in real time, while listening to courtroom dialogue, is hard. It is much more difficult than spotting issues in a multiple-choice question or on an essay exam. But this is what actual attorneys have to do during a trial. We believe that if students can master these interactives, they will increase their ability to analyze evidence issues in other settings. The “fun” part of the simulated trial experience, meanwhile, will keep them working.
The interactives, labeled “Evidence in Practice,” will be available to all students who purchase our Learning Evidence book. We will also provide information for both professors and students about how to use these interactives most effectively. These are learning tools, not graded quizzes. Most students will struggle to gain points the first time they play an interactive. But if they replay several times, and then study the trial transcript available at the end of the exercise, they will learn evidentiary concepts more deeply.
Going forward, we hope to create more interactive exercises of different types. Some exercises might put a student in the middle of a settlement discussion; others might embody a brainstorming session among lawyers preparing for trial. Students will learn to apply evidentiary rules in diverse settings.
We intend these interactives to complement—not replace—classroom discussions, live simulations, and writing exercises. All of those experiences foster active learning. But by providing additional opportunities for practice and feedback, we hope our “Evidence in Practice” series will enhance outcomes for students.
Bamberger & Lobel, Platform Market Power
Kenneth Bamberger (Berkeley) and I just posted our new article on SSRN- Platform Market Power. Over at Legal Theory Blog, Larry Solum wrote today that it is "Highly Recommended" - thanks Larry! Download it while it's hot and let us know what you think. Here is the abstract:
The rise of the platform economy has been the subject of celebration and critique. Platform companies like Uber, Airbnb, and Postmates have been rightfully celebrated as positively disruptive, introducing much–needed competition in industries that have been otherwise over–mature and stagnant. However, some of the leading new platforms have had such meteoric success that their growing market dominance and technical capacity raise questions about new forms of anti-competitive practices, and negative impacts on consumer and employee welfare.
In this Essay, we develop a framework for considering the market power of platform companies that use digital technology to connect a multi-sided network of individual users. Specifically, we use the example of Uber as a lens to identify eight questions that are important for assessing platform power. These questions address the way a range of issues play out in the platform context, including more traditional competition concerns around innovation, regulatory arbitrage, barriers to entry, and price setting through platforms’ use of the network form to coordinate transactions, the use of digital pricing, and the use of pricing bots. These questions also focus on new concerns about power derived from data collection and use; the use of data to expand into other markets; and the implications of market power for consumer choice about personal privacy.
Together, these questions provide policymakers a framework to consider whether and how questions of market power (and competition more generally) may pose complexity or require analytic adjustments—and how the development of platforms implicates both new opportunities for, and challenges to, consumer and employee welfare in the digital context.
Monday, November 27, 2017
JOTWELL: Michalski on Dodge & Dodson on personal jurisdiction
The new Courts Law essay comes from Roger Michalski (Oklahoma--one of several new contributors to the section), reviewing William S. Dodge & Scott Dodson, Personal Jurisdiction and Aliens, Mich L. Rev. (forthcoming), which argues for a national-contacts test for personal jurisdiction over non-US persons.
The future of intellectual property and the administrative state: Oil States v. Greene’s Energy (Guest Post)
The following guest post is by my FIU colleague Hannibal Travis, Professor of Law at FIU College of Law and this semester the Irving Cypen Visiting Professor of Law at University of Florida.
The Future of Intellectual Property and the Administrative State: Oil States v. Greene’s Energy
Efficient dispute resolution is something of a Holy Grail in intellectual property (IP). Several of the major innovations in the field over the past two decades chased it: WIPO domain name dispute resolution, the statutory license process for webcasters and digital downloads of cover songs, the introduction of an theory of induced infringement into copyright jurisprudence affecting online intermediaries, the evolution of copyright filters such as ContentID and Audible Magic CopySense, and the America Invents Act of 2011. The results have been mixed in many cases.
The question being presented to the Supreme Court this week is whether the Constitution limits the trend towards dispensing with the trappings of federal civil procedure in certain IP disputes. The Patent Trial and Appeal Board of the U.S. Patent and Trademark Office (PTO) has been considering more than 1,000 petitions per year, on average, for inter partes review (IPR) of patent claims that were not novel or that were obvious considering the prior art. Patent law specialists comb through voluminous filings citing often obscure technical publications and foreign patents in a way that would be too time-consuming and expensive if done for each of the 500,000 patent applications submitted annually.
While the cancellation of an improvidently issued patent is a relatively narrow issue, the broader questions of when an Article III court should review the validity of rights underlying a claim for money damages, and when a jury trial is available as of right for such a claim, will have broader implications. Most notably, the Court’s opinion in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, will affect the default judgments that are likely to multiply in copyright cases if small claims legislation is passed to reduce the cost of enforcing copyrights.
Many years ago, the Federal Circuit resolved a constitutional challenge to the system of reexamining issued patents whose validity would traditionally have been handed to a jury for resolution. The court began with the principles that patents are property rights protected by the Fifth Amendment from deprivation without due process and from takings without just compensation and public use. It emphasized that a patent is a right to exclude granted to generate value through licensing, and to encourage risk-taking that will advance the useful arts. Prior to a 1980 statute, which became effective in 1981, Article III courts handled the cancellation of issued patents’ claims. The plaintiff in the challenge had been issued patents in the late 1970s based on an application from 1959, but on the eve of jury trial in 1982, the case had been continued pending a reexamination under the new statute. The Federal Circuit rejected the plaintiff’s Fifth Amendment, Seventh Amendment, and Article III claims against the Commissioner of Patents and Trademarks, holding that patents are “public rights” dependent on a government grant under Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982). The Court in Northern Pipeline looked for a textual commitment of a class of cases to the executive branch to limit the Article III power, or a comparable “historical understanding” that executive officials could decide certain matters.
The basic premise of Northern Pipeline and its predecessors is somewhat problematic. The fact that England had certain practices does not necessarily make them compatible with the Bill of Rights. The Seventh Amendment and Article III Judicial Power were intended to protect life, liberty, and property from the executive and legislative branches, which could “overwhelm” the British judiciary. Even Northern Pipeline distinguished territorial courts, courts-martial, and other traditionally non-“judicial” forms of dispute resolution from Congress enacting legislation to assign issues to Article I courts under an Article I power such as the Commerce Clause or the Copyright and Patent Clause. As the Civil Jury Project at NYU argues in its amicus brief, the exemption of “public rights” from the Seventh Amendment lacks “support in the amendment’s history or text, and if interpreted too broadly would empower Congress to sidestep civil juries altogether.” Justice White articulated better and more manageable distinction between public rights and private ones in 1977, in holding that the Seventh Amendment is not violated when Congress “created a new cause of action, and remedies therefor, unknown to the common law….” Causes of action known to the common law are different, this theory would suggest.
The Solicitor General of the United States and the PTO point out, as do many amici, that the Supreme Court adopted a seemingly broad standard for public rights in 2015, that bills seeking to cancel a patent were historically equitable in nature and therefore not subject to jury trial, and that the Privy Council--an entity linked to the English Crown--could void patents based on lack of novelty or filing by someone other than the true inventor. The executive branch frequently strips individuals of their property rights, and IPRs are an easier way to do so, they claim.
The Obama administration defended the AIA as alleviating “problematic” aspects of patent litigation by enabling or accelerating post-grant review of issued patents. It criticized the court system as allowing “legitimate innovators” to be “tied up” in litigation. Some innovators even had to settle cases, the administration lamented.
In the New York Times, Eduardo Porter argues that drug prices will be lower under the AIA, and that there is no evidence that a “stringent” patent system helps the economy in any event. The first point seems to be undermined by evidence that pharmaceutical prices have risen more rapidly under the AIA regime, reaching an annual percentage rate of increase in 2015 that was double the rate in 2010 (p. 29 of the link).
A better argument is that the PTAB will save potential infringers litigation costs. Perhaps this argument proves too much, however. How would many of the companies seeking to preserve a low-cost way to invalidate patents feel about low-cost methods to uncover accounting irregularities, wage and hour violations, or unpaid copyright royalties to musicians?
Another interesting question is whether the AIA will reduce prices, which are kept high by patents. Professor Porter links “stringent” patents to research claiming that there has been a “drastic increase” in pricing power – or markups (roughly sales minus cost of goods sold) – among all publicly-traded firms, and also among the larger set of all IRS tax filers. Interestingly, the trend line on markups starts to change dramatically in about 1980, just before efforts to strengthen U.S. patentholders’ positions.
Again, there are reasons to doubt this claim.
First, the research on markups attributes the enhancement of pricing power to a broad array of intangibles, which have increased in number and in strength alongside patents: copyrights, trademarks, franchises, and other intangible assets. Starting with brand value alone, it reached the impressive level of $790 billion in 2017 at 10 companies alone, including $184 billion for Apple and $48 billion for Facebook’s. Patents like those on the iPhone interface can be invented around without too much difficulty many times, even when they aren’t canceled under the AIA, but brand value is elusive. Trade secrets can also be quite valuable, as Alphabet’s Waymo alleges in its lawsuit against Uber. Perhaps trade secret theft does not cost the economy $300 billion annually, as an advocacy group asserts, but trade secrets in aggregate may be worth tens of billions of dollars. Disney’s effort to take in 65% of the revenue from screenings of next month’s The Last Jedi illustrates how copyrights can drive markups, especially after a transaction like the $4 billion deal for Lucasfilm. Intangibles other than trademarks, copyrights, and trade secrets have also proliferated, such as the millions of derivatives contracts on five U.S. banks’ balance sheets, bearing a notional value of more than $220 trillion.
Second, the most patent-intensive products see some of the most remarkable declines in price despite increases in quality. This contrasts with books, for example, which are sold today at quality levels often no better than those our forebears had access to, but at prices two to 15 times what they would have paid. The very rich in the 1970s or 1980s might have paid millions of dollars for an iPhone, but it could not be had at any price. Another interesting example is the PlayStation 2, presumably another “victim” of patents due to the many overlapping rights implicated by its games processor and graphics synthesizer chips, possibly including Nintendo’s 3D image processing patents. The PS2 fell in price from $299 at launch to $99 in 2009, before the AIA was passed. The Playstation 3, which had more than 100 times the power of the PS2, fell in price by Cyber Week 2012 to less than the PS2 at launch, or $219.
Third, the decline of startup activity that is supposed to be the mechanism for high markups – because large firms increasingly lack vigorous competition from newcomers – could just as easily be blamed on weaker patents as on “stringent” protection of patents. The research in this area points to “transformational” entrepreneurs who want to revolutionize a product category or service sector, and who account for a disproportionate share of growth within industries. Like many famous inventors who go on to become billionaires, such entrepreneurs may seek patent protection. The PTO released a working paper in 2015 finding that among thousands of startups that went public or were acquired, those that had a patent application approved were 53% more likely to obtain venture capital or similar investments. The National Venture Capital Association argues that patents “are the main way in which potential investors, namely venture capitalists, can assess whether a company has … a unique advantage.”
In any event, the AIA would not be the only or even the most efficient way to address high drug prices, even if that had been the goal of Congress or the White House. The Patent and Trademark Office could simply issue a memorandum suggesting that examiners reject the sort of patents found invalid by the PTAB for combining existing dosing methods with expiring chemical compound (or drug) patents.
Turning to the issue of whether Oil States could help reign in a “stringent” patent system that is unhelpful by academic consensus, the system may be no stronger than years or decades ago, even as we learn more about its potential economic benefits. The median patent damages award in 2016 was $6.1 million, down from 1997-2006. Moreover, nearly two-thirds of patent holders are unsuccessful in court, not counting settlements, and only 2% of cases result in a damages award. Recent research into innovation suggests that most significant inventions were not patented, and that Switzerland and the Netherlands were as innovative without patent systems as other countries with them were. Even this work, on the other hand, emphasizes that correlation studies indicate that patentability is a “primary driver of innovation.” For example, a study of inventions originating in 27 countries showed that the number of patent applications from a given country in the United States is strongly correlated with research and development investment by private industry in that country. Brazil, China, India, and Russia have seen innovation and foreign investment increase markedly after providing stronger patent and trademark protection. Global research and development spending has doubled in a 25-year period.
Critics of the PTAB suggest that it often comes out with conclusory and arguably wrong decisions. So-called “objective evidence” that an invention is not obvious, for example, is typically downplayed by the PTAB, even though the Federal Circuit calls such evidence “critical.” Vital discovery into documents probative of this issue is often denied to patentees. Moreover, the PTAB arguably misapplied the definition of a “covered business method” from the American Invents Act in at least two cases. It is possible that PTAB judges whose firm represented a party on a related matter more than one year prior to the institution of IPRs could decide IPRs in which the party is involved. Finally, the pharmaceutical industry argues that IPRs have an “extraordinarily lopsided track record” and that “the PTO has admitted to reconfiguring panels to alter outcomes,” threatening due process. While appeal to the Federal Circuit can and should cure most errors, the practice of summary affirmances undermines this safeguard.
Looking to the future, there are several ways in which a decision favorable to the PTO could affect the copyright system. Congress might be encouraged to pass small claims legislation, and even to make it mandatory rather than voluntary subject to a potential default judgment, as current drafts envisage. Although an action for damages involving copyright infringement is distinguishable from cancellation of a patent, which has more obvious equitable analogues, many of the arguments in Oil States point more broadly to considerations of deference to Congress, expert panels, cost reduction, and comprehensive statutory schemes. If accepted by the Supreme Court, these theories may apply to a Copyright Claims Board staffed by copyright experts and handing out awards of up to $30,000 per proceeding, plus up to $5,000 in attorney’s fees against defendants who maintain unreasonable defenses. The Copyright Office has even asked for comments as to whether injunctive relief should be included in such a regime. Like the PTAB, such a regime might accelerate the process of dispensing with probing examinations of applicable arguments, and their submission to civil juries, in favor of fast and cheap decisions.
Old Friends, New Research
Interdisciplinary research is all the rage, and sometimes the best way to enter this world is by building bridges on campus with other departments.
If readers have tips on building these cross-campus relationships, I'm all ears. I’ve been lucky that an old friend and former classmate in the economics department from the University of Chicago recently arrived on my campus as faculty in the business school. It wasn’t long before we started to brainstorm on the links between our fields.
And now, we’re working on a new empirical project. The hypothesis is that people are not aware of the legal consequences of marriage, and are not considering them seriously enough. But, we shall soon see how the data turns out.
Sunday, November 26, 2017
Who heads the CFPB and how to find out?
Marty Lederman deconstructs (and questions) the OLC memo concluding that the President's appointment of Mike Mulvaney was lawful and controlling. Sam Bray argues that the answer is a quo warranto action filed by the AG or the US Attorney for the District of the District of Columbia.
On Sunday, Leandra English filed suit in the District of D.C., seeking a TRO and declaratory judgment (with a passing reference to a writ of mandamus) that she is the lawful Acting Director and that the Mulvaney appointment is invalid. The suit names Trump and Mulvaney as defendants, for a declaration barring Trump from appointing any other Acting Director and barring Mulvaney from asserting the authority of the office.
An Imperfect Idea to Improve Immigration Court Practice
Immigrants often struggle to find quality representation in immigration court. There are far too many scoundrels selling immigrants false hope and filing baseless asylum claims in exchange for up-front cash payments. These lousy lawyers often escape accountability for years because the government deports their victims.
The best solution appears politically difficult. It would be better to simply pay for immigration defense like we pay for criminal defense. Sadly, the right to criminal defense does not now extend to the banishment and exile dispensed by our immigration courts.
I've thrown out an alternative, disclosing attorney track records and outcomes to prospective clients. In theory, this would mitigate information asymmetries and help improve the market for immigration services. The best could charge a premium for their services. The worst might be driven out of business--which would be good for immigrants. An immigration attorney in the bottom 10% actually reduces a client's chances below what she would face going without representation.
The proposal certainly has its warts. Some lawyers might just duck hard cases to pad their stats and draw more clients. Others might skew their advice to clients to obtain statistical wins for themselves. Immigrants without enough money will still struggle to find representation. In a best-case scenario, it's possible that securing representation by a lawyer with a strong record will make others more willing to lend to finance the representation. It gives information that could be used to underwrite the risk.
Despite the flaws, I think it would be better to have the problems caused by too much information instead of the problems immigrants now face in a world with too little information.
Kentucky Law Journal Accepting Submissions for 2018 Symposium
The Kentucky Law Journal is moving to a submission system for selecting its 2018 symposium. You can find more info here. The deadline to submit proposals is Jan. 1, 2018, and the symposium will be held in October or November. Past symposia have been a huge success.
Feel free to reach out to me or the EIC, Jordan Shewmaker ([email protected]), with any questions.
Friday, November 24, 2017
Another voice on banning laptops
This time it is Susan Dynarski (Economics at Michigan). Nothing new in the piece, since the studies she cites (UCLA/Princeton and West Point) are a few years old at this point. She does close by arguing that the same conclusion should apply to middle and high schools and to business meetings.
Wednesday, November 22, 2017
Things I think about other people's thoughts
Kevin Drum is absolutely correct that Roy Moore and Donald Trump survive sexual-misconduct allegations while Al Franken is going down. And the difference is that Franken owned it and apologized, while Moore and Trump dig-in and deny. Even Drum's counter-example, Harvey Weinstein, is explicable along the same lines--Weinstein was a prominent Democratic donor and supporter, so the left disowns (because he is an asshole predator) and the right disowns (because he is a Democrat). But Bill O'Reilly received a massive buyout and is still influential in Republican circles.
Neil Buchanan is absolutely correct about how modern eyes view old movies, including Dead Men Don't Wear Plaid and Pretty in Pink. Of course, many John Hughes' movies do not hold-up well. Sixteen Candles is obviously problematic for Long Duck Dong. But the sexual politics are abhorent. The male hero (Jake) both announces that he could sexually assault his passed-out-drunk girlfriend, is encouraged to do so by the other male lead (Geek), then sets the Geek up to do it himself. And I have long thought about The Breakfast Club, in which a one-day detention was imposed for bringing a gun to school (brain) and for bullying and assaulting another student on campus (jock)--both of which would merit suspension, if not expulsion, in these zero-tolerance times. And Bender (the burnout) threatens to rape and later sexually assaults Claire (the princess) when he is hiding under the table. All of this is presented as an elaborate courting ritual.
Family Law Universalities
Earlier this month, I presented at a conference in Lisbon, Portugal on the recent legal developments on cohabitation, such as the Illinois Supreme Court’s refusal to overrule Hewitt (the non-recognition of cohabitation contracts) and clarification of the “premarital economic partnership” concept in Hawaii case law.
Last minute at the conference, I had to switch panels somewhat randomly due to a cancellation, but that panel fit me surprisingly well as my original panel. Indeed, I was struck by the similarity of the many family law issues currently being debated in Europe and the U.S. For example, there was lots of discussion about the tax marriage penalty and increasing rates of cohabitation and out-of-wedlock births. But, I don’t think this is a case of one culture influencing the other—which suggests the surprisingly high degree of universality of these issues, one of the biggest takeaways from the conference.
Tuesday, November 21, 2017
Facial unconstitutionality does not support universal injunctions
Judge Orrick of the Northern District of California on Monday permanently enjoined (order embedded in story) enforcement of the administration's sanctuary-cities order. As with the April preliminary injunction, Judge Orrick made the injunction nationwide (really, universal). I criticized his reasoning for the universal preliminary injunction and the reasoning in this is not much better. The order again quotes Califano v. Yamasaki, ignoring that the order in that case involved a plaintiff class, not individual plaintiffs--universality made sense, as everyone in the class was a plaintiff protected by the injunction.
The court also relies on the fact that it found the regulation unconstitutional on its face, not simply in its application. But facial as opposed to as-applied goes to the scope of the judicial analysis. It should not go to the scope of the court's remedial authority. And it should not empower a district court to issue an order binding every district court in the country in actions involving different plaintiffs and subjecting the federal government to contempt sanctions for enforcement efforts having nothing to do with the two plaintiffs. Slapping the "facial" label on constitutional analysis should not so enhance the court's precedential or remedial authority.
Monday, November 20, 2017
Fed Courts by treatise--the results
I wrote at the beginning of the semester about my plan to teach Fed Courts without a casebook or cases, but relying largely on the Chemerinsky and Pfander treatises (supplemented by a few cases, statutes, rules, etc.). We have two classes remaining in the semester, but today I administered a survey on the materials and this teaching approach.
Overall, I was happy with how things went this way. Students were generally very well-prepared and ready to answer almost anything I threw at them. The occasional lapse came where the questions went to something that was not covered in the treatise discussion (often about factual or procedural backgrounds). I perhaps lectured on preliminary information a bit more in spots, where the treatises focused on different pieces of a case than the casebook I previously used (Low, Jeffries, and Bradley). One obvious place was in the discussion of Atlantic Coast Line v. Brotherhood of Engineers, where the treatises paid less attention than the casebook to the effect of on-point SCOTUS precedent on the § 2283 analysis. But this was the exception rather than the rule--between them, the two books gave the students everything they needed to participate in the discussion I was trying to lead. I also was pleased (if surprised) that some students read the highlighted cases in addition to the treatises. I taught the same basic class I have been teaching for several years, but got much further than I have in recent years--this is the first time in four years that I have reached the material on jurisdiction-stripping and congressional control over court structure.
The survey results and comments suggest the students liked the approach. Of the 12 responses (out of 13 in the class), 7 "strongly agreed" this was an effective way to learn the material and prepare for class, 8 "strongly agreed" it was more enjoyable than working from a casebook or cases, and 9 "strongly agreed" that I should teach from these materials in the future. The comments suggested a general view that this method of prep was helpful to seeing the big picture at which we engaged with the material in class. And the general level of engagement throughout the semester shows that the students were doing the reading and preparing well for class.
So, all-in-all, it worked well. The students and I were happy and it allowed me to cover all the material I wanted to in the way I wanted to. I think I have found my way going forward in this class. And I will follow the same approach for Civil Rights in the spring, working from my treatise* that is basically my class in book form, along with puzzles for class discussion.
[*] Second Edition coming to supermarket checkout lines near you in 2018.
Silencing #MeToo: How NDAs and Litigation Stifle Victims, Innovators, and Critics
Dan Solove (George Washington) who has done groundbreaking work in information privacy law and is the founder of Teach Privacy, a one of a kind privacy and security training company, did a review/interview with me about You Don't Own Me this weekend.
Silencing #MeToo: How NDAs and Litigation Stifle Victims, Innovators, and Critics -- An Interview with Orly Lobel
Countless women have been coming forward to say #MeToo and share their traumatic stories of sexual harassment and assault. But there are many stories we're not hearing. These stories are being silenced by extremely broad nondisclosure agreements (NDAs), some made at the outset of employment and others when settling litigation over sexual harassment. They stop victims from talking. They also silence other employees who witness sexual harassment of co-workers. NDAs were a powerful device used by Harvey Weinstein to hush up what he was doing.
In her new book, You Don't Own Me: How Mattel v. MGA Entertainment Exposed Barbie's Dark Side, Professor Orly Lobel tells a fascinating story about the Barbie versus Bratz litigation, which went on for about a decade. Her book is a page turner -- told as a story that could readily be a movie. The book succeeds brilliantly as a gripping tale. But it goes beyond great storytelling to explore many important issues related to business, employment, and intellectual property: the enormous power of corporate employers, the weaponized use of intellectual property to stifle innovation, the dismal failure of business ethics, the troubling use of nondisclosure agreements (NDAs) to maintain dominance and power, and the punishing litigation process.
continue after the page break for the full interview
At the center of this litigation are two dolls -- Barbie, the iconic doll created by Mattel and Bratz, a new edgier multiethnic doll created by a former employee of Mattel. The story Lobel tells is riveting -- and there's a lot to learn from it, which Lobel clearly and compellingly demonstrates.
Professor Lobel teaches at University of San Diego School of Law, and she writes in the areas of employment law, intellectual property law, behavioral economics, and consumer law and trade secrets. Lobel has published numerous books and articles, including Talent Wants to Be Free: Why We Should Learn to Love Leaks, Raids, and Free-Riding (Yale University Press, 2013).
DANIEL SOLOVE: Recently, in connection with the #MeToo movement, there has been significant attention on how nondisclosure agreements (NDA) are preventing victims from sharing their stories of harassment and assault. These types of agreements play an important role in the saga in your book. Can you describe how NDAs were involved?
ORLY LOBEL: NDAs have been mushrooming in every industry. You Don’t Own Me begins with the story of a creative designer named Carter Bryant who works for Mattel in the Barbie department. Carter dreamed all his life of being an artist and he becomes rather uninspired in the mammoth bureaucracy of the world’s largest toy company. He dreams of a different kind of doll -- sassier, empowered, edgy, and multiethnic. This is often how new ideas and innovations are formed – when certain employees start imagining a different vision and want to strike out in a new direction.
A lot of times, companies don’t take their employees’ ideas very seriously. At Mattel, because Barbie had dominated 90 percent of the doll market for a half a century, the company had this phrase that they must not “cannibalize her” – meaning, don’t invent anything that would compete with their winning product. Carter knew that the market was thirsty for a different kind of doll, except like so many of us, in every industry you look – whether you are an engineer, a scientist, a computer programmer, a sales or human resources person - Carter had signed away all his future ideas in a generic contract he signed upon being hired. Carter’s contract assigned “all inventions as defined, conceived, or reduced to practice at any time in his employment.” And Mattel claimed that that included any idea he had even if he had it during his weekends and nights.
The NDA caused years of incredibly expensive and damaging litigation. We only hear of a few examples of NDAs such as this one because it was fought over in court. In most situations, people are too afraid to try to set out on their own with their own ideas. Going against the corporate litigation machine is just too daunting.
SOLOVE: You have been quite critical of NDAs in your work. What are the problems with NDAs? How, specifically, might the law limit NDAs?
LOBEL: NDAs and other restrictive covenants such as non-competes, non-disparagement clauses, and broad innovation assignment clauses have the effect of preventing talented people from competing equally in the market.
Take, for example, non-competes. Last year I was invited to the White House to discuss evidence that a majority of employees in the workforce today have been asked to sign an agreement to not compete with their former employers after they leave the company. And there is a rise in the number of cases brought by former employers against workers who allegedly breach these contracts by taking a new job in the same industry. Similarly, employers increasingly include as a standard provision in the employment contract a provision saying that the employee agrees that “you shall not at any time, directly or indirectly disparage the Company, including making or publishing any statement, written, oral, electronic or digital, truthful or otherwise, which may adversely affect the business, public image, reputation or goodwill of the company, including its operations, employees, directors and its past, present or future products or services.”
These are Draconian clauses, and they limit the employees freedoms, not only freedom of speech, but the ability to manage their careers, leave their employers, and resist misconduct that they witness or experience at work. Trade secret laws are already in place to protect what really should be the boundaries of confidentiality – information that is secret and that the company is making efforts to keep secret.
But as I have showed extensively in my research and my previous book Talent Wants to be Free, businesses have been demanding in contracts, and then pursuing these contract in court, much broader restrictions than that. Instead of focusing on technical information to remain secret, they want to silence their employees about problems, such as sexual harassment or other misconduct that happens in the workplace – we are seeing this now with the Harvey Weinstein scandal and previously with Fox, Uber and other corporations. Their culture of silence is a product of the law – the enforcement of these very overreaching agreements.
And these NDAs are also serving, as in Carter Bryan’s story, to impede creativity and invention in markets. The NDA chilled innovation and restricted employees from using their own ideas. Mattel had no interest in developing those ideas because they would “cannibalize” their perfect Barbie, but Bratz was a product consumers, kids and parents were eager to have – more reflective of our realities, our diversity, our hopes for our children. NDAs are a way for dominant actors to crush newer, smaller and independent competitors.\
SOLOVE: You Don’t Own Me looks at a fascinating decade long court battle between Mattel and it’s competitors and through that case it unfolds the company’s history and the marketing and controversies that have surrounded Barbie, the world’s most iconic doll. Can you tell us about the ways Mattel developed and marketed Barbie?
LOBEL: Part of what was thrilling to me in researching this story was how history repeats. You Don’t Own Me begins in our contemporary times when Barbie has shaped for six decades our images of womanhood, childhood and femininity. Just this week another story broke about how the media was outraged when a Texas politician Wendy Davis was likened to a Barbie. And also this week, Mattel introduced the first Hijab wearing Barbie. And when you look back at Mattel’s marketing strategies, it’s ads, it’s various dolls, from the introduction of the first African-American Barbie to the constant back and forth about Barbie’s body proportions, we discover how much the toys and culture that surround us are directed by corporate strategy and the use of consumer psychology in marketing.
Mattel had been incredibly slow in introducing ethnic diversity into its Barbie empire, had barely introduced to the market a Barbie that had more realistic proportions until 2017, and has made all sorts of questionable choices in how Barbie relates to girls. For example, Slumber Party Barbie, in 1965, came equipped with a scale—stuck at 110 pounds—and a book called “How to Lose Weight.” The book’s first rule: “Don’t eat!”. In 1992, Mattel introduced the Teen Talk Barbie line of talking dolls, which spouted lines like : “Will we ever have enough clothes?”; “I love shopping!”; “Wanna have a pizza party?”; and, wait for it, “Math class is tough!”
More recently, Mattel introduced a Barbie laptop loaded with design software and no other educational programs. And in a 2014 Mattel-licensed book called Barbie: I Can Be a Computer Engineer, published by Random House, Barbie designs a game but needs a boy to program it. Next, Barbie inadvertently infects her computer with a virus, and has her friend fix that too. “I’m only creating the design ideas,” Barbie says, laughing. “I’ll need Steven and Brian’s help to turn it into a real game!” In the end, after the two guys program her game, Barbie victoriously declares: “I guess I can be an engineer!” Among the Amazon reviews by upset parents about the book’s message, one parent suggests it be called “I Can Manipulate Boys Into Programming While I Sit Back and Take Credit.”
The stakes in Barbie versus Bratz case have enormous implications for society. Who gets to shape the attitudes and norms of womanhood? Here one dominant powerful company has had an enormous impact in defining womanhood for generations – and along comes a popular alternative toy with a different vision of womanhood. So the stakes go beyond the specific legal issues and have effects on millions of people and how they form their identities. Should one company’s vision dominate?
These legal battles which are often little known to most people are having tremendous societal effects. Huge decisions are being made, ones that affect the ideas and views that entire generations will be exposed to. This is true with every field you work in – if you are doing marketing, advertising, product design, retail, services, online customer relations, the rules we make about how we compete in the market pattern the ways we progress in our careers, the opportunities employees, men and women from all over the world, have in the job markets, and ultimately, the culture and choices we have as a society.
SOLOVE: Intellectual property plays a key role in the story. What are some of the concerns about intellectual property law that this saga raises?
LOBEL: This story is one about how intellectual property was used as a weapon of corporate warfare. Mattel tied up Bratz in legal battles for a decade, and this bruising process severely hindered Bratz’s growth. Mattel, like many other dominant actors in tech, pharma, entertainment, and retail, is a frequent visitor to the courtroom. Corporations frequently litigate against artists, musicians, small competitors, using various aspects of intellectual property – copyright, patent law, trademark – even though many of the claims in the lawsuits are quite dubious. These suits are designed to quash competition and stifle new ideas and trends.
For example, when a photographer created some dark parody images of Barbie in a series compromised positions, which he called Food Chain Barbie, with titles of shots like, Baked Barbie, Barbie a Trois, Barbie in a Blender, and Bargaritaville, Mattel sued him. Similarly, if you take Disney’s beloved characters. Many fans like to create fan fiction or a film that parodies Star Wars (Lucas Film is now owned by Disney), or fan drawings say, political cartoons of Mickey Mouse. But Disney has been very litigious against this kind of cultural remix.
The same happens in patent litigation. IP serves a purpose and when the boundaries are in check, that works well. But if we lose sight of the goals of these laws, we risk achieving the opposite of what we set out to do.
SOLOVE: The central case that you write about in You Don’t Own Me was tried twice. What are some of the lessons of the story for the court system and trials?
The Barbie v. Bratz battle indeed was tried twice – each time with a different judge, different teams of attorneys and a different jury. What is fascinating is how much the changes in the actors made a difference in the results. One of my favorite characters in the book, 9th Circuit Court of Appeals judge Alex Kozniski. He, like many of the characters in You Don’t Own Me, is a very colorful outspoken person – he is a libertarian who loves pop culture, when he isn’t in the courtroom, he writes online reviews of films. Kozinski himself is an immigrant and he believes that markets, and life, are all about choices and freedoms. When the case comes before him, his views about law and freedom of expression, protecting speech and creativity, really make a difference.
Similarly, a new attorney named Jennifer Keller brought into the second trial manages to shift the dynamics and to expose a lot of the backstory about why and how Carter Bryant was treated the way he was and whether it is fair to sue him. Keller plays into our love-hate relationship with Barbie and she calls herself something of a Bratz! And the trial was like a legal thriller – at every turn, new facts came up raising questions about business ethics and the values of corporate America. Without giving away spoilers, You Don’t Own Me will make you think about price-fixing, safe manufacturing processes, diversity in the workplace, ethical marketing and more. The reader will have to make up their own mind about whether Carter was justly attacked by his former employer or not, and you will find out what happens when the world’s largest toy companies don’t play nicely…
SOLOVE: Thanks, Orly, for a terrific discussion. The book is You Don't Own Me: How Mattel v. MGA Entertainment Exposed Barbie's Dark Sidepublished by Norton. This an immensely engaging and insightful book -- and it tells a riveting story.
This post was authored by Professor Daniel J. Solove, who through TeachPrivacy develops computer-based privacy and data security training.
Professor Solove is the organizer, along with Paul Schwartz, of the International Privacy + Security Forum (Feb. 26-27, 2018 in Washington, DC), an annual event designed for seasoned professionals.
Originally posted on Dan Solove's LinkedIn Influencer Page
Tesla for Everyone
I was somewhat surprised to read that General Motors Co. was the only automaker publicly to say that it planned to convince lawmakers to keep the electric car credit in tax reform. I suppose electric cars are still a small percentage of the car market, but the cause created an unlikely alliance between environmental groups and utilities—and so the credit stays in the Senate tax reform bill. We’ll see what happens next, and whether there will be an electric car future. Driverless next?
In the meantime, I think a Tesla sounds like a perfect Christmas gift, if you haven’t done your shopping yet. The tax credits has always started to phase-out after each manufacturer sells 200,000 qualifying electric or plug-in hybrid vehicles, so better this holiday season than next.
Sunday, November 19, 2017
Reminder: Discovery is a two-way street
Attorneys for Alabama Media Group responded (copy of letter, free from typos and grammatical errors, in story) to the insane and incoherent letter from Roy Moore's attorney. In addition to standing by the story and denying the claims in the initial letter, AMG's lawyers say they expect litigation "would also reveal other important information about your clients" and makes a counter-demand that Moore preserve and maintain documents, materials, and information that "is or could remotely be relevant in any manner to any of the claims that you have made." This includes information relevant to Moore's "romantic relationships or physical encounters (whether consensual or not)."
This was not as brazen as the New York Times letter from October 2016, which expressly dared Trump to sue. But both are interesting examples of an emerging genre of legal writing.
154th anniversary of Gettysburg Address
This remains funny and this is newly funny. And this is the perfect day for Lincoln's successor to demonstrate his unique ideas of government and presidential leadership--leaving American citizens in foreign jail because the father of one of them is not sufficiently appreciative or supportive of him.
Friday, November 17, 2017
VAPs and Fellowships: Open Thread, 2017-2018
On this thread, comments can be shared regarding news of appointments to VAPs or similar fellowships (for example, the Climenko and Bigelow). Here is last year's thread.
You may also add information to the spreadsheet.
Originally posted November 17, 2017.
JOTWELL: Malin on Lobel on REGULATING PLATFORMS
In my excitement around the publication of my new book this week, I am late to report the excellent second review on JOTWELL of my my recent article, Orly Lobel, The Law of the Platform, 101 Minn. L. Rev. 87 (2016). The first review, by Margot Kaminski, took a Cyberlaw perspective and examined the potential, and regulatory implications, of platform to disrupt older business models by technological innovation and online services. In a previous Prawfspost I highlighted some of Kaminski's excellent points about the risks of lighter regulation for newer digital platforms, and in particular the risks exacerbating power disparities through data collection and private digital governance.
I was incredibly honored and delighted when Martin Malin wrote a Jotwell review of the The Law of the Platform in the Worklaw section, entitled A Framework for Thinking About Regulating Platforms. Malin has long been a leading scholar in the fields of employment and labor law and I have learned so much from his work. Malin writes about my article, "The article is much broader than the work law implications of the platform economy, but it is extremely useful for scholars and policymakers facing work law issues." As he suggests, "much ink has been spilled over whether platform workers — be they Uber drivers, Task Rabbit taskers, or others — are employees or independent contractors, and litigation over alleged misclassification of platform workers is ongoing. Likewise, there is robust debate over whether the rise of such platforms benefits workers by expanding their earning capacity and flexibility, or simply serves to increase income insecurity and income inequality." I think Malin and I both agree that the on-off categories of employee/independent contractor are problematic in today's work realities. I expand on the analysis of employment law, including the classification issue of drivers and other workers on the platform, in a talk I delivered when I was honored to give the 12th Annual Pemberton Lecture at the 9th Circuit Court of Appeals last year. The lecture is now published as an article named The Gig Economy and the Future of Employment and Labor Law. I am encouraged that prominent scholars like Malin and many other of my colleagues are currently doing excellent work in this field of work and the gig, including digital gig, economy and I look forward to continuing the discussions.
Thursday, November 16, 2017
The Irrepressible Myth of David Boies?
Much has been written about David Boies representation of Harvey Weinstein and the conflicts with his representation of The New York Times as representing the fall of a liberal legal icon and of one of the great lawyers of his generation.
But a question asked out of genuine ignorance: What is the basis for that reputation and is it earned? I know of Boies from three cases: US v. Microsoft, Bush v. Gore, and Hollingsworth v. Perry; I do not believe I knew his name before the first of these. He lost the first (and one of my memories of listening to that argument was that he sounded as if he was caught off-guard by an equal-protection question). He had the second reversed on appeal. In the third, he won an important trial-court victory that enabled millions of Californians to marry, carried symbolic weight,* and perhaps catalyzed the litigation movement that led to Obergefell two years later. But it did not achieve the single great judicial declaration on marriage equality that he (and Ted Olson) set out to achieve and for which he is often given credit in movies, books, and other media. It was an important case on the path to marriage equality, but far from the important case. As legal precedent, it carried less weight than, for example, the case brought in Utah, Oklahoma, Wisconsin, or Indiana, all of which produced binding circuit precedent.
[*] The symbolism arguably cut in both directions. On one hand, it was the first federal-court declaration that same-sex marriage bans violated the federal Constitution (following several state-court/state-law decisions) and it affected the biggest state in the country. On the other hand, California.
I am not suggesting that Boies has not been a successful lawyer; he clearly has been. And I am sure that he took on and won many other big (and perhaps even historic) cases. But he is being described as the Clarence Darrow of his generation, now fallen in his final act. And I wonder about the reality of that.
Taking It with a Grain of Salt
By now, I’ve read many SALT-free analogies and stories since the House Republicans decided to eliminate most of the deduction for state and local taxes. Obviously, a lot has been said about eliminating the SALT deduction for decades.
However, I don’t understand some people’s doubt of the double taxation point—they say that eliminating the SALT deduction does not result in double taxation because it’s two different levels of government taxing the money. But, why not instead focus on the fact that the money IS being taxed twice?
I’m not yet aware of any authoritative definition of double taxation requiring the taxation to be only by one level of government. Is there a non-political distinction between saying the same money has been taxed twice and the same government is taxing it twice?
Wednesday, November 15, 2017
Last year, I used some of my time as a guest blogger to draw some attention to the persons appointed as public governors at the Financial Industry Regulatory Authority (FINRA). I've kept an eye on this issue and co-authored a report on some interesting choices FINRA made for public governors. The InvestmentNews has also covered it. Many of FINRA's public governors now simultaneously serve on the boards of financial firms, including Bridgewater Associates (the world's largest hedge fund), Travelers, Blackstone, Legg Mason, Bank Leumi, Kita Capital Management, and others. These concurrent positions may reduce public confidence in FINRA's ability to zealously protect investors. Yes, those are the Public Governors. The industry-elected governors come from JP Morgan, Merrill Lynch, Piper Jaffray, and other firms.
'It's just a disgrace,' says corporate and nonprofit governance expert Nell Minow. 'These conflicts of interest are a monstrous issue. It destroys any credibility that the organization has at all.'
Minow, who is vice chairman of ValueEdge Advisors in Portland, Maine, was not involved in PIABA’s report. 'This is exactly the reason that we don't like to see industries regulate themselves," she says. 'Normally it takes a government agency at least a generation to become completely captive to industry. But in a self regulatory system, it takes five minutes.'
Still, I'm hopeful that FINRA will do more on this issue. It's recently selected a new CEO and launched an ambitious 360 degree review. Hopefully it will also do more to address conflicts of interest. It also has an open slot now. We should keep an eye on who they appoint. Importantly, the people serving on its board now are all likely doing the best that they can. Still, it would be best if FINRA (which describes its stated mission as "investor protection and market integrity") would do more to put people with investor protection backgrounds on its governing board. To help with that, we also included a list of qualified persons with investor protection backgrounds. Congress may also be paying more attention to the issue now.
Tuesday, November 14, 2017
I guess stupid acts of ignorant dog-whistle anti-Semitism grounded on stereotypes are preferable to Nazis marching with torches and pitchforks. My favorite comment came from Ariel Edwards-Levy, who reminded us that Bernie Bernstein's reporting partner for the Washington Post must be Woody Woodward. This story includes the audio of the robocall, which features a fake New York accent turned up to 11, although with a momentary "remaahks" that sounded more Boston than New York.
Lawyer & Law Student Wellness
The ABA recently released a report on lawyer and law student wellness. It (unsurprisingly) finds that both lawyers and law students have high rates of chronic stress, depression, and substance abuse. It also contains recommendations for law schools on steps to increase the chance that students will get the help they need and experience better outcomes. Some of the recommendations, such as including a note about institutional mental health and wellness resources in my syllabus, can be implemented easily. Others will require more institutional involvement.
I'm curious about what other faculty around the country do. Do you use some class time to talk to your students about wellness and mental health issues? It seems a natural fit for some courses. I'd always talk about it when we discussed lawyers assistance programs in professional responsibility. It might also make sense to talk about it when giving a review session before a final exam. I would probably frame it as a peak performance issue because the students might be more receptive to it that way. The student that sleeps eight hours a day probably has a cognitive edge over the student that sleeps only four.
Two hours of First Amendment training
Greg Thatcher, a professor of public health at Fresno State, has settled a First Amendment lawsuit claiming he erased students' chalked messages on campus sidewalks. Thatcher will pay $ 1000 to each of the students, pay $ 15,000 in attorney's fees to the Alliance Defending Freedom, and undergo two hours of "First Amendment training" with ADF. Two thoughts.
I hope "First Amendment training" does not become the new "diversity training" or "sexual harassment training."
I think there is an interesting under-color-of-law question here. Is everything a professor does on a public-university campus during school hours under color? He was not in the classroom, his office, or his building. He is dressed like he is going to the gym (although, in fairness, so do I on non-teaching days). In the encounter, he sometimes strikes a position of a competing speaker and sometimes strikes a position of an authority enforcing (erroneously understood) campus-speech regulations. And it is not clear enforcing those rules is any part of his job, although students may not understand that. He did tell/order/ask some of his students to erase the messages with him, which reflects an exercise of his obvious authority.
Fixing the Marriage Penalty
Both the House and Senate tax reform bills eliminated the marriage tax penalty for more taxpayers by doubling the brackets for them upon their marriage. In both bills, however, only the bottom and top tax brackets are doubled upon marriage. As a result, the middle and particularly the upper-middle classes are still left with the marriage penalty.
I’m not sure why the middle is left out of marriage penalty relief. Maybe budgetary issues are at play. That is why I have previously highlighted that there is an unnecessary marriage bonus when 1-income-earner married couples take advantage of double brackets, meaning foregone tax revenue. I thus have argued that double brackets should only be available for married couples with 2-income earners. But alas, the idea has not yet caught on (yet?).
Monday, November 13, 2017
First Amendment Day at SCOTUS
SCOTUS granted cert in three First Amendment cases today. The big one is National Institute of Family and Life Advocates v. Becerra, a challenge to a California law requiring that crisis pregnancy centers provide notice that publicly funded family-planning services are available elsewhere and that unlicensed clinics are unlicensed; the Court took it as a compelled-speech case and a vehicle to resolve a circuit split over the standard for "professional speech" (the Ninth Circuit applied intermediate scrutiny, while the Fourth Circuit applied strict scrutiny in invalidating similar regulations in Maryland.
The political valance of the case is interesting, as Dahlia Lithwick argues. The plaintiff here is a crisis-pregnancy center, resisting regulations that, in the name of protecting women's health, require the clinics to disclose information about the limits of their services (not providing abortion or contraception) and directing patients elsewhere for those services. But if these regulations violate the First Amendment, so should regulations in many states requiring clinics to provide pre-abortion counseling or to provide arguably false medical information about links between abortion and breast cancer, suicide, and mental-health consequences, designed to dissuade women from going through with the procedure.
Incidentally, this case meets the procedural posture I was looking for: The trial court denied a preliminary injunction, the court of appeals affirmed, and SCOTUS granted cert (to reverse, if I had to predict).
The Supreme Court's New Filing System
Today, the Supreme Court has not only initiated an e-filing system, but has also begun making e-filed documents immediately available on the Court website. For the first time, the Court’s filing system is more transparent than the PACER system long used by lower federal courts.
As someone who has previously written more than one complaint about the Court’s shortcomings on this score, I just want to congratulate the Court for taking this step. I am most excited about the prospect that the Court’s non-merits actions—like emergency stay applications in cases involving executions and elections—will become visible in time for greater public discussion.
It will be interesting to see if other components of the federal judiciary now follow the Court’s lead. For example, will PACER become more easily accessible, or accessible free of charge?
JOTWELL: Effron on Trammell on precedent and preclusion
The new Courts Law essay comes from Robin Effron (Brooklyn, visiting at Notre Dame), reviewing Alan M. Trammell, Precedent and Preclusion, ___ Notre Dame L. Rev. (forthcoming), which considers the due-process connections of precedent and preclusion.
I am anxious to read Alan's piece, as the distinction between precedent and preclusion is central to a theory of judicial departmentalism.
Saturday, November 11, 2017
Equality Law Scholars’ Forum
Equality Law Scholars’ Forum
Friday, November 17 – Saturday, November 18, 2017
The Forum is designed to provide junior scholars with commentary and critique by their more senior colleagues in the legal academy and, more broadly, to foster development and understanding of new scholarly currents across equality law.
The Forum will feature five presenters (chosen from over 50 submissions):
Age, Law, and Egalitarianism
Alexander Boni-Saenz,Assistant Professor of Law, Chicago-Kent Law
Color-Blind But Not Color-Deaf: Accent Discrimination in Jury Selection
Jasmine Rose Gonzales, Assistant Professor of Law, University of Pittsburgh Law
Colorable Claims of Discrimination
Vinay Harpalani, Associate Professor of Law, Savannah Law School
Scapegoating Abortion Rights: The Conservative Revolution and the Economic Decline of the Working Class
Yvonne Lindgren, Visiting Professor of Law, University of San Francisco
Public Labor Unions as Democracy Facilitators for the Working Class
Courtlyn Roser-Jones, Hastie Fellow, University of Wisconsin Law School
The event is co-organized by Tristin Green, USF Law, Angela Onwuachi-Willig, UC Berkeley Law, and Leticia Saucedo, UC Davis Law.
Financial support is provided by the Haas Institute for a Fair and Inclusive Society at UC Berkeley, the UC Davis School of Law, and the UC Irvine School of Law.
Comment and critique will be provided by the following scholars:
Khiara Bridges, Boston University Law
Catherine Fisk, Berkeley Law
Jonathan Glater, UC Irvine Law
Tristin Green, University of San Francisco Law
Ariela Gross, USC Law
Trina Jones, Duke Law
Osagie Obasogie, Berkeley Public Health
Angela Onwuachi-Willig, Berkeley Law
Leticia Saucedo, UC Davis Law
Michael Waterstone, Loyola-Los Angeles Law
We will also hold a panel discussion on Producing Scholarship in Equality Law with the following panelists participating:
Kathy Abrams, Berkeley Law
Catherine Albiston, Berkeley Law
Camille Gear Rich, USC Law
Vicky Plaut, Berkeley Law
Russell Robinson, Berkeley Law
Bertrall Ross, Berkeley Law
Jonathan Simon, Berkeley Law
Forget Fake News, Now There’s Fake Families
Two major newspapers have recently run two separate articles about fake families.
First, the New York Times ran this article about fake weddings as a way to have dance parties. Apparently, Argentinians love a good wedding, but no one wants to marry anymore. So, there’s now a business that exists to throw fake weddings, and it’s expanding to Chile, Mexico and the United States.
Then, the Atlantic ran this article about a business in Japan that allows single moms to hire a man to play the role of their child’s father.
To me, it’s striking how people are still often attached to family law structures and roles, even when they have given up on marriage. But, this might be in line with the family law theories saying that people idolize marriage more than ever—to the point that they are delaying marriage because reality cannot live up to their expectations. If this is true, I think coming up with the antidote will be difficult.
Friday, November 10, 2017
Procedural posture in First Amendment cases (Updated)
Update: Note the clarification below, as I was not precise enough. The questioner was asking about cases in which a preliminary injunction was sought and denied. In White (and one case I thought of, Simon & Schuster), the plaintiff did not move for a preliminary injunction. Instead, the parties went straight to cross-motions for summary judgment on permanent injunctive relief.
A question was asked of me: Can we think of significant First Amendment cases in which the lower courts denied a preliminary injunction barring enforcement of a law, then SCOTUS granted cert., reversed, and held that the challenged law is not enforceable?
The only one I could come up with off the top of my head is Steffel v. Thompson. And there the lower courts denied relief on standing and Younger grounds, never reaching the First Amendment merits.
Any cases that fit this description, where the lower courts declared the law constitutionally valid and declined to enjoin, then SCOTUS granted cert to reverse?
Thursday, November 09, 2017
The overwhelming effect of stays pending appeal
The Second Circuit denied a stay pending appeal of the denial of an injunction barring suspension of NFL running back Ezekiel Elliott. The court referred to it as an "injunction pending appeal," which is wrong and the improper terminology makes the media reporting on this more confusing than usual.
Tracing the history of this case is a Fed Courts or Remedies problem all its own: 1) Elliott was suspended for six games and an arbitrator upheld the suspension; 2) a judge in the Eastern District of Texas issued a preliminary injunction barring enforcement of the suspension (allowing Elliott to play); 3) the Fifth Circuit reversed, holding that the district court lacked jurisdiction, grounds that were arguably incorrect, although the result was probably right (barring Elliott from playing); 4) the union and player filed suit in the Southern District of New York; 5) a district judge granted a TRO (allowing Elliott to play); 6) the same judge refused to grant a preliminary injunction (barring Elliott from playing); 7) the Second Circuit granted a temporary stay of the denial of the preliminary injunction (allowing Elliott to play) pending fuller consideration of the motion to stay; 8) the Second Circuit today denied a full stay pending appeal, allowing the judgment denying the preliminary injunction to go into effect, meaning the suspension goes into effect and Elliott will not be able to play on Sunday (unless SCOTUS gets involved).
Even more than in the marriage-equality litigation, the stay question dictates the result in these cases. Although the Second Circuit granted expedited appeal, it is not clear that the case will be resolved before Elliott has missed six games. The question is the weight the likelihood-of-success prong bears in these cases--it is hard to overturn an arbitrator's decision, so Elliott was not likely to succeed in having the denial of the injunction reversed. And that may have convinced the court of appeals there was no irreparable harm in having the suspension take effect.
Alphabet Soup for the Retired Soul
Lawmakers recently decided that making tax changes to 401(k) and other retirement options was off the table, determining it to be political suicide.
I wholeheartedly agree, but I’m not sure why. Our attachment to these tax incentives for retirement accounts is puzzling when we do not take full advantage of them, whether it’s because of misguided optimism or an inability to save due to economic factors such as low wage growth. Or, it could be the preference for instant gratification, which explains why people are more intent on saving for their vacations than retirement. As a result, almost half of all working-age families have no retirement account savings, and the median for families with retirement savings was $60k.
Yet, saving has never been as important as it is today. Social security funds will run dry by 2034. Pensions are a dinosaur of the past. Life expectancy is increasing.
So, that explains why we are mentally attached to our 401(k)’s and Roth IRA’s.
But, to make saving a reality, we may need even more tax incentives than the current ones (how about a universal savings account?), and maybe some good old-fashioned Thaler/Sunstein nudges to boot.
Thus, while it's a feel-good story that tax incentives for retirement saving are here to stay, wouldn't it be an even more feel-good story if we all used them more?
Wednesday, November 08, 2017
More jurisdictionality from SCOTUS
My opinion analysis for Hamer v. NHSC is up on SCOTUSBlog. As I predicted, the Court unanimously (through Justice Ginsburg, who cares most deeply about these issues) held that FRAP 4(a)(5)(C)'s 30-day limit on extensions to file notices of appeal was not jurisdictional, then punted issues of waiver, forfeiture, and equitable exception to the Seventh Circuit for initial consideration. A few additional thoughts.
Despite mentioning it at argument, the Court did not mention or cite Scott Dodson's arguments that the rule is jurisdictional because it allocates cases between courts, but the label matters less than the consequences (waiver, forfeiture, equitable exception, etc.) that a rulemaker attaches to the rule. Jurisdictional rules are mandatory only if Congress makes them mandatory; non-jurisdictional rules can be mandatory if Congress makes them mandatory. The Court did speak of timing rules "governing the transfer of adjudicatory authority from one Article III court to another," which smacks of the allocation concept that Scott uses. But the Court could not move past the label above the effects of the rule (which are not dictated by the label).
The "clear and easy" rule of decision the Court announced is that "If a time prescription governing the transfer of adjudicatory authority from one Article III court to another appears in a statute, the limitation is jurisdictional; otherwise, the time specification fits within the claim-processing category." This does not mention the Arbaugh rule that a rule is jurisdictional only if Congress speaks in jurisdictional terms. But the synthesis is that Congress can speak in jurisdictional terms, while the Court under the REA never can speak in jurisdictional terms.
In an email, Scott identifies some problems and open questions from describing the issue as the timing for transferring adjudicatory authority from one court to another. This would make timing limits in transfer-of-venue statutes or statutes governing the time for filing cert. petitions jurisdictional. Another question is whether the same rule applies to transfers of authority from state court to federal court, which would make timing requirements for removal and cert. petitions from state courts jurisdiction. Or it would mean that the time for filing a petition from federal court would be jurisdictional, while the time for filing a petition from state court might not be. Scott argues that these open questions show that the rule is not so "clear and easy."
Tuesday, November 07, 2017
The Day Forbes Topples a Bogus Billionaire Cabinet Secretary?
In what may presage future developments, Forbes has dropped a bombshell of a story about how Wilbur Ross used "fake numbers" to "generate real assets." In essence, Ross duped a Forbes reporter years ago into reporting the assets of a fund he managed as his personal assets. According to Forbes, he kept adding to his fictitious wealth over time. Although he recently contended to be worth about 3.7 billion, Forbes now pegs the actual number as closer to $700 million.
False beliefs about his wealth led to real returns. Aided by the cachet and celebrity that came from being identified as a billionaire, Ross raised even more money for other funds. The head of an Oregon pension plan described how Ross's asserted wealth led him to outsize expectations about Ross's competence:
Five other former employees add a more tangible reason: The more money Ross appeared to be worth, the more money investors seemed willing to give him. "Really, for us, it was a bet on him, " says Sam Green, who helped put $300 million into Ross' funds on behalf of the Oregon Public Employees Retirement Fund, citing his personal wealth as one factor. "I don't know of any better indicator of future success than having been successful in the past." Ross had seemed to figure out how to make fake numbers generate real assets.
In a normal administration, press reports revealing a history of sustained falsehoods would lead to the immediate resignation or firing of a cabinet secretary.
Alimony--More Important in Family Law than Tax
The House tax reform bill denies any tax treatment to alimony payments, like property division upon divorce and child support. Currently, alimony is an above-the-line deduction to the payor per §215. However, alimony was intended to be more revenue-neutral, so the flip side is that alimony is includable as gross income to the recipient per §71.
These tax rules on alimony have made federal income tax planning an important aspect of matrimonial practice for decades. In particular, they incentivize the higher-income spouse to agree to pay alimony in a time when state legislators and courts are chipping away at the alimony obligation.
Despite its high impact in family law, the current tax treatment of alimony has only a small fiscal effect. Indeed, denying the current tax treatment to alimony payments would increase tax revenues by under $1 billion per year. However, some of this money can be recovered by simply better enforcing §71.
While alimony payors often take a deduction, payees do not always include alimony in their gross income. The Treasury Inspector General for Tax Administration (TIGTA) found that 47% of 567,887 tax returns filed in 2010 with an alimony deduction had either no corresponding alimony income reported by recipient spouse, or the amount of alimony income reported did not match the deduction taken. This meant $1.7 billion in unreported taxes over 5 years. TIGTA had recommended that the IRS send out warning letters to taxpayers alerting them to potential alimony errors.
Thus, changing the current tax treatment of alimony while forgetting the family law context results in the unintended consequence of reducing alimony transfers. If the goal is to guard the public fisc, enforcement of §71 is a better approach than denying tax treatment to alimony.
Harvard Law School Program on Corporate Governance Fellowship Announcement
From the Harvard Law School Program on Corporate Governance and Financial Regulation:
The Harvard Law School Program on Corporate Governance and Financial Regulation is pleased to announce the availability of positions of Post-Graduate Academic Fellows in the areas of corporate governance and law and finance. Qualified candidates who are interested in working with the Program as Post-Graduate Academic Fellows may apply at any time and the start date is flexible.
Candidates should be interested in spending two to three years at Harvard Law School (longer periods may be possible). Candidates should have a J.D., LL.M., or S.J.D. from a U.S. law school, or a Ph.D. in economics, finance, or related areas by the time they commence their fellowship. Candidates still pursuing an S.J.D. or Ph.D. are eligible so long as they will have completed their program’s coursework requirements by the time they start. During the term of their appointment, Post-Graduate Academic Fellows work on research and corporate governance activities of the Program, depending on their skills, interests, and Program needs. Fellows may also work on their own research and publishing in preparation for a career in academia or policy research. Former Fellows of the Program now teach in leading law schools in the U.S. and abroad.
Interested candidates should submit a CV, transcripts, writing sample, list of references, and cover letter to the coordinator of the Program, Ms. Jordan Figueroa, at [email protected]
Monday, November 06, 2017
Law School Hiring, 2017-2018, Reminder
Recall that you can post information about interviews, callbacks, etc. on the spreadsheet.
For general questions, comments, or discussion about the teaching market, see A Clearinghouse for Questions. Here is a link to a late-ish page of comments on that thread. (I can't put a link that auto-refers to the last page of comments--the trick I was using no longer works. If you know a way to do this, please email me.)
Sunday, November 05, 2017
Happy Meat Market
I hope everyone had a decently pleasant experience at the meat market this weekend--and that some great matches were made. I remember it like it was just yesterday. So, I can confirm that McSweeney's is right (and has great comic timing)--when they ran Academic Job Market or Terminal Illness? just a few days ago.
The gems include:
1. “I understand if you don’t want to talk about it.”
2. “Are you ready to think about alternatives?”
3. “You’ll land on your feet, I’m sure of it.”
4. “Have you tried praying?”
Read the rest here.
Saturday, November 04, 2017
Are The Bangles no longer welcome at Reed College, either?
Read the intro. Whatever else is happening, this demonstrates a point that came out in the comments to this post: The level of offense and the level of evil that protesters see in objectionable speech is beyond what we saw previously, which explains the more-intense reactions and confrontations between speech and counter-speech.
Friday, November 03, 2017
Am I Out of A Job?
Yesterday, lawmakers promised that after their tax reform, you could do your tax returns on a postcard.
I teach a huge 4-credit federal income tax course every year—should I reduce the course to 1-credit? Or, should I still teach it in 4-credits, but show movies to fill class time? I wouldn’t mind seeing La La Land again. Haven’t seen It yet. Maybe Victoria and Abdul.
However, I’m not going to take your movie suggestions yet. The House bill is already filled with enough compromises that I don’t foresee much simplification. And, the compromises are just starting.
The AARP is already blasting the decision to do away with the medical expense deduction. The powerful home builders and realtors are upset about the cap on the mortgage interest deduction and the $10,000 limit on the deductibility of property taxes. The most populous states are angry about the non-deductibility of state income taxes.
Invariably, the tax code picks winners and losers. But, I don’t expect to be on the losing side, put out of a job because of the simplicity of the tax code. At least, not quite yet. And later, there's tenure.
Thursday, November 02, 2017
You Don't Own Me
I am delighted to announce that my new book You Don’t Own Me (Norton) is coming out in two weeks. It tells the true story of cutthroat competition and innovation in the toy industry, with the twists and turns of a thriller, including colorful personalities, egos, and opens windows to fundamental questions about law and ethics, parenting and childhood, consumer markets and cultural icons, copyright and creativity, race and feminism...
You Don’t Own Me has been getting advanced praise from Publisher’s Weekly (“impressive”, "thoroughly researched”, “entertaining"), Kirkus Reviews ("crisp narrative", "aggressively researched", "dizzying" drama) Booklist (“outstanding”) and more ( “sparkling prose”, "thrill ride", "amazing story and great read", "Colorful and dramatic. ...Orly Lobel masterfully draws us in", “Elle Woods would eat this story up”, “gripping”; “A thrilling page-turner. Orly Lobel delivers the impossible. A fast-moving, fun book about marketing, litigation and the culture we create.”)
I’d love for you to read it !
DC v. Wesby and Fourth Amendment Perspective
Last month, the Supreme Court heard argument in DC v. Wesby, the justices’ latest case on Fourth Amendment civil suits for damages. This time, the facts involve the arrest of twenty-one people who were attending what even their attorneys call a “licentious” house party. Wesby draws into sharp relief the role of perspective in Fourth Amendment litigation. As Justice Kagan noted during oral argument, the appropriate legal rule seems to change depending on whether we adopt the perspective of the arresting officers or the party-going arrestees.
In a forthcoming paper entitled “Fourth Amendment Fairness” (draft available here), I argue for a perspectival shift in Fourth Amendment doctrine that is consistent with the line of reasoning that Kagan and other justices explored in the Wesby argument. The paper provides a "contractualist" account of Fourth Amendment fairness in general; but in this post, I’ll focus on the perspectival issues raised in Wesby, without all the philosophical trappings.
Here’s a simplified version of the facts in Wesby. After being alerted to a party in a recently vacant house, police learned that the house’s owner had not given permission for the party. Believing that the partygoers were breaking the law, the officers arrested them. But partygoers had told the police that they had been invited by someone who purported to reside in the house. Those statements tee up the key legal issue: did the police have probable cause to believe that the partygoers knew or should have known that they lacked lawful permission to enter—in which case, the police would have probable cause to arrest for trespass?
On the merits, the partygoers-turned-plaintiffs argued that the police lacked probable cause to arrest and so violated the Fourth Amendment. And to overcome qualified immunity, the plaintiffs further argued that no reasonable officer could have thought probable cause was present. The plaintiffs prevailed in the trial court, winning damages and fees of around $1 million. The DC Circuit affirmed, reasoning that the police lacked probable cause as to the mens rea required for trespass. In other words, the police lacked probable cause that the partygoers knew, or should reasonably have known, that they were unlawfully present.
The key question in Wesby is how to flesh out the concept of probable cause in the context of an unauthorized house party. But the Supreme Court’s case law affords little useful guidance about how to figure out when probable cause is present. For instance, the United States as amicus curiae collects authority that probable cause “is a ‘practical,' ‘fluid,’ ‘flexible,’ ‘common-sense’ standard that ‘requires only the kind of fair probability on which reasonable and prudent people, not legal technicians act.’” But that definition of probable cause only multiplies the relevant questions: just what is the “common-sense standard” that is “fair” from the standpoint of “reasonable and prudent people”? In other words, how much “probable cause” is probable enough?
At least one thing is clear under the case law: the probable cause inquiry must proceed from the perspective of a “reasonable officer.” From one standpoint, that approach is sensible: doctrinal rules often work best when formulated from the perspective of the police who must apply them in the first instance. But that officer-oriented approach leaves out important considerations of fairness. The Fourth Amendment is concerned with “unreasonable searches and seizures,” not unreasonable police. And whether a search or seizure is “unreasonable” should ultimately be judged from the perspective of “the people” whose rights the Fourth Amendment protects. The Fourth Amendment, after all, secures rights for the benefit of the rights-holders.
In Wesby, Justice Kagan asked a long question that got at this basic point. Here is the key passage:
JUSTICE KAGAN: -- you know, you're exactly right, that, of course, we have to view this through the eyes of the officer. And there is much that an officer could look at here and say, I think I have probable cause. And, certainly, when the qualified immunity standard is laid on top of that, makes it even easier for the officer.
I guess one of the things that – that strikes me as why there's resistance here, is that when looked at from the point of view of the reasonable partygoer, it looks a little bit different. And I -- I take the point that that's not the standard, but we are setting rules and those rules are going to affect how police officers act in the future as well.
And when looked at from the reasonable partygoer's view, there are these parties that, once long ago, I used to be invited to -
JUSTICE KAGAN: -- where you didn't - don't know the host, but you know Joe is having a party. And can I say that long, long ago, marijuana was maybe present at those parties?
And, you know, so -- and, you know, it just is not obvious that the reasonable partygoer is supposed to walk into this apartment and say: Got to get out of here. And -- and it seems a little bit hard that they're subject to arrest. So -- so how do I think about that question?
Kagan's remarks draw attention to the blurring of the qualified immunity and Fourth Amendment standards here. As Kagan suggests, an officer-oriented approach would be content to dwell on what inferences are defensible from the standpoint of a competent investigator. But, again, the ultimate Fourth Amendment inquiry shouldn’t be whether the search or seizure is within the outer bounds of what a minimally competent officers might think or do. Rather, the ultimate question is—or should be—whether the search or seizure is “unreasonable” from the perspective of Fourth Amendments rights-holders. That rights-based inquiry should then drive what Fourth Amendment doctrine expects of police.
Wesby supplies an example of how a perspectival change could prompt courts to think differently about probable cause. Because lots of people go to lawful parties without checking whether the host has legal title to the property, many rights-holders have an interest in objecting to a rule that probable cause is present whenever there are some arguable signs of trespass. Moreover, no rights-holder has a strong interest in demanding a low probable cause standard when police investigate these potential trespasses. Parties are not emergencies, after all. And the interests of property owners can be protected in other ways, such as by asking misinformed partygoers to leave. So, from the perspective of rights-holders, the probable cause standard should be sufficiently stringent to ensure that reasonable partygoers are not subject to arrest unless they have notice that the party is unauthorized. As Kagan indicates, the question isn't what a minimally competent officer might suspect, but rather what any reasonable partygoer would realize.
One might worry that this perspectival change would complicate the work of police by requiring them to imagine and then balance the competing interests of an indefinite number of rights-holders. But the appropriate analysis for a court is not necessarily the same as what police would or should do in the field. Courts often craft operational rules for officials based on deeper normative inquiries that no official would ever perform. By analogy, those who would set probable cause based on a cost-benefit analysis don’t expect police to conduct such an analysis before making an arrest. Yet changing the perspective of Fourth Amendment analysis would still have a doctrinal effect. As Kagan noted, the justices “are setting rules and those rules are going to affect how police officers act in the future.” If the relevant perspective changed, Fourth Amendment rulings would gradually send police a different and often more stringent signal about what it means to find probable cause.
A related worry is that a perspectival shift would place unrealistic imaginative demands on judges. Yet judges frequently endeavor to place themselves in the shoes of people affected by Fourth Amendment rules. In Wesby itself, Kagan was able to reach into her own personal experiences (“[T]here are these parties that, once long ago, I used to be invited to.…”) to better imagine “the reasonable partygoer's view.” True, undue reliance on personal experiences can lead a judge astray: some rights-holders might have interests that judges are not immediately able to appreciate, and judges could overvalue interests that resonate with their own experiences. But heuristics can help judges better focus their imaginative powers, including the simple expedient of imagining the legal issue from the perspective of arrestees and other suspects. Courts undertake similar efforts in many areas of law.
Without wading into Wesby’s factual details, it’s impossible to take a position on how the case should come out. But no matter how the Court rules, I hope it uses the case to make a broader point: if the officer-oriented approach to probable cause is defensible, it is so not because it embodies the Fourth Amendment’s ultimate concerns, but rather because it is a means of achieving reasonableness from the perspective of individuals with Fourth Amendment rights.