Category: First Amendment

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More on Campaign Finance Reform

As Gerard noted earlier, the Court today is hearing arguments in Citizens United v. FEC, the well-publicized case featuring “Hillary: The Movie.” The case is receiving a great deal of public attention, not only because many commentators suspect the Court will overrule Austin v. Michigan Chamber of Commerce, but because the case represents a number of notable firsts—it will be the first case of the 2009 Term, the first oral argument by Elena Kagan as solicitor general, and the first case on the Court for Justice Sonia Sotomayor. Rick Hasen has collected previews of Citizens United here.

I’m not sure that the Court will outright overrule Austin, but I understand why many smart people are predicting that it will.

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Twits, As In The NFL Management Folks and Twitter

Although I despise those who twitter as a general matter (and will thus likely embrace the odd medium any day now), it has moments where it is useful. Short bursts of information updates for natural disasters, airport shut downs, and possible revolutionary mayhem come to mind. Today a less major (depending on how you look at it) issue, gmail going down, has shown that Twitter is again useful but barely. As TechCrunch notes, Twitter may have come close to crashing but held up well as thousands upon thousands of folks expressed frustration and ore about the great Google in the sky going down. And yes some Google folks used the medium to communicate bland statements about how Google was addressing the problem (probably asking some extraordinarily smart people about some obscure math issue and then finding that such knowledge may not help them figure out email service).

Now the NFL has come along and has regulated the use of Twitter as CNET describes:

[The NFL has] modified its social-media policy to limit Twitter and social-networking use by players, coaches, league officials, and even the media. The NFL said that it will let players, coaches, and other team personnel engage in social networking during the season. However, they will be prohibited from using Twitter and from updating profiles on Facebook and other social-networking sites during games. In addition, they will not be allowed to tweet or update social-networking profiles 90 minutes before a game and until post-game interviews are completed. The rules even extend to people “representing” a player or coach on their personal accounts. The NFL didn’t just stop with the league itself, though. The organization also said that media attending games will be prohibited from providing game updates through social networks.

I love the NFL’s reason and think that it is trying to assert that even fans ought not be able to share play-by-play:

“Longstanding policies prohibiting play-by-play descriptions of NFL games in progress apply fully to Twitter and other social media platforms,” the National Football League said in its statement. “Internet sites may not post detailed information that approximates play-by-play during a game. “While a game is in progress, any forms of accounts of the game must be sufficiently time-delayed and limited in amount (e.g., score updates with detail given only in quarterly game updates) so that the accredited organization’s game coverage cannot be used as a substitute for, or otherwise approximate, authorized play-by-play accounts.”

This position seems to suggest that one, players, etc. twittering has something to do with approximating play-by-play when most likely the NFL wants to regulate the way in which all those connected with a team communicate and represent themselves around a game. One might agree that being in the NFL requires following its odd ethics. How those goals havve anything to do with play-by-play recounting is beyond me. If fans start to share exuberant moments in almost real time, as I did via text in the glorious game to of the NBA finals this past season, but instead of using text, fans used Twitter, the NFL might assert that such sharing is not allowed. At least the quoted logic above seems to point to such nonsense. As CNET notes enforcement even at the team level will be quite difficult as the nFL won’t know who posted what. Of course the NFL could require some sort of disclosure of Twitter and other social networking aliases which raises a host of standard objections that readers here can easily figure out while the NFL may not. All of which makes me wonder, should the twits who came up with these positions love Twitter?

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Why so… socialist?

Sometime in the past few days, just in time for the President’s birthday, posters of Obama in Joker-style makeup appeared on a Los Angeles overpass. The images quickly spread across the internet and have sparked predictable praise from the right or criticism from the left. Whether or not the posters are unduly offensive to President Obama, they are a serious insult to Heath Ledger’s Joker and his gleeful nihilism. What strikes and fascinates me is the poster’s angry incoherence: under the image of Obama is the word “socialism.” Did this artist even see The Dark Knight? Or perhaps I should ask, what does this artist think socialism is, anyway?

Consider that socialism is associated with the concepts of “central planning” or a “planned economy,” in which a centralized authority manages everything (or at least the economy) according to plan. Now, thanks to a conversation with Brooklyn Law prof Nelson Tebbe, who offered a profound analysis of The Dark Knight, I watched that film with the close attention of a serious academic, ready to learn what it could teach me about violence. I even read the script. And the Joker’s worldview seems pretty antithetical to socialism. Here’s what the Joker has to say about planning:

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Image Protection at Universities

at_stanford_universityThe Chronicle of Higher Education (subscription required so no link) notes that Hollywood tends to ask universities and colleges for permission before they set their films or television shows at a particular campus. So Felicity attends University of New York instead of NYU, and Legally Blonde is set at Harvard instead of, wait for it … University of Chicago? Odd but apparently true (my guess is that this turn of events helped the film. No offense to Chicago but as a matter of pop culture Harvard probably takes the prize). One possible culprit according to the article is our friend US News and World Report and the ranking game. Since the report started ranking undergraduate institutions films reference real schools, rather than random State U, 29 percent of the time as opposed to 19 percent before the US News games began. The claim is that references might seem to be endorsements. So Stanford only allows “aspirational” portrayals; read here goody-goody overachievers. The article claims that Stealing Harvard was originally Stealing Stanford, but the farm rejected that idea “Since Stanford is need blind” and the story of needing to steal to go to the school would be unreal (as many fictional stories are). In contrast, Harvard seems to realize that a fictional story is just that and seems more generous about the names and so on. Note that most schools are more restrictive about shooting on campus but may embrace the idea for the fees they can charge.

All well and good, but whether there really is a trademark claim as the article suggests and the schools seem to think (note that Dawson’s Creek also wished to avoid conflict and invented Worthington University as a generic Ivy although ironically shot at Duke) is troubling. The expansive notion of association seems to fuel this perspective. But as Sandy Rierson and I argue in the Confronting the Genericisim Conundrum uses such as these are expressive and in that sense irrelevant to the market transaction trademark is supposed to be about. On a similar wavelength Mark Lemley and Mark McKenna seem to be arguing that other uses of trademarks are not relevant to trademark analysis (To be clear, I have yet to read the paper, and it may be that this sort of use would be actionable according to Mark and Mark (or dare I say it? Dare. Dare. Mark y Mark?).

In short, if one considers the feedback loop in play here, the more expressive uses that are made, the less likely people will think that Standford endorsed a portrayal. In addition, what about more critical commentary that could be set a university? Setting up a system of permissions is dangerous. Last, maybe Harvard has it correct: people are not that stupid. They can tell the difference between a fictional story and a claim to reality. Can’t they?

Image Source: Wikicommons
By: Yukihiro Matsuda from Kyoto (and Osaka), Japan

Creative Commons Attribution 2.0 License

Rating Agencies: Privilege Without Responsibility

First Amendment fundamentalist Floyd Abrams is back on the attack, now in the service of the credit rating agency S&P. He says that their ratings are essentially the same as an editorial — a position I looked at with some skepticism here. Editorials fail to receive the regulatory subsidy routinely channeled to raters, via acts like the Secondary Mortgage Market Enhancement Act of 1984 and the Investment Company Act of 1940, and agencies like the National Credit Union Administration (all of which mandate the use of raters’ products). Abrams appears to want to let the raters get all the benefits of such government subvention, without the liability or extensive regulation it should naturally lead to.

On the Media has a great interview with Abrams, who vigorously defends the agencies’ actions:

[Interviewer] BROOKE GLADSTONE: Okay, so first of all, explain to me why this is more like an editorial. To me it seems more like a clothing inspector, the people who leave the little number inside the clothing you buy. They leave their number so that if the zipper was put in backwards, for instance, they could theoretically take responsibility. Why are the ratings companies different from that?

FLOYD ABRAMS: Well, because the rating agencies use their models, use their heads, use their common sense, have ratings committees. They sit down and they come out with their best judgment as to what is likely to happen in the future about repayment of debt. And that is not subject to mathematical yes/no answers. It’s not the same as saying, my zipper is no good or a couch is no good. It’s not being an inspector. It’s not.

BROOKE GLADSTONE: Fair enough. Let’s move away from that analogy and let’s go to one that attorney David Grais, who we just spoke to, came up with, that in many cases rating agencies want their ratings to be protected as opinion, like, say, a restaurant critic’s. But more often, he notes, they’re like critics who go into the kitchen, make the food and then come out and write about it. They help create these deals. And they have a financial stake in their own ratings ‘cause they’re paid by the very companies they rate, a seemingly obvious conflict of interest.

FLOYD ABRAMS: Rating agencies have analytic standards. They apply those standards. And, yes, they discuss with the entities that they’re rating why they’re doing what they’re doing. And if the entity asks them, well, you know, how come you’re giving us a triple BBB instead of a double AA, they tell them why. And if the entity wants to do things to get a higher rating, they can do them.

And it is not inappropriate, in my view, so long as they take good steps to deal with the potential for conflict of interest. It is not inappropriate that they get paid by the entities they rate. I mean, it is not conceptually that distinguishable from, you know, a large entity which puts big ads in – what, a motorcycle magazine and then they write about the motorcycles. Do they have to be careful? Yeah.

BROOKE GLADSTONE: The fact of the matter here is that the ratings agencies, in this case, were so widely off the mark, ultimately, that it doesn’t seem to have been just a series of mistakes of judgment.

I really look forward to seeing how Abrams would deal with facts like these if similar revelations emerge about his own client:

[In the package of loans it was to rate,] Moody’s learned that [over 38 percent of the borrowers] did not provide written verification of their incomes. . . . On the plus side, Moody’s noted, 94 percent of those borrowers with adjustable-rate loans said their mortgages were for primary residences. “That was a comfort feeling,” [one analyst] said. Historically, people have been slow to abandon their primary homes. When you get into a crunch, she added, “You’ll give up your ski chalet first.”

Borrowers have no chance of repaying via income and assets? Assume a ski chalet! (Much like the classic economic approach of assuming a can opener.) As the Summary Report of Issues Identified in the Commission Staff’s Examinations of Select Credit Rating Agencies (by the Office of Compliance Inspections and Examinations of the SEC) noted in July 2008, none of the rating agencies had specific procedures for collateralized debt obligations–even though 17 CFR 240.17g-2 required them to make certain internal documents public, including procedures and methodologies they use to determine credit ratings.

Sadly, I think that, given the current state of the law, Abrams’s First Amendment arguments will do well in front of many courts. But as David Segal states in the NYT article, “The First Amendment is no defense against fraud, and that is what is alleged by many of the plaintiffs.” Segal notes that, “Against them, Mr. Abrams will argue that S.& P. was every bit as blindsided as nearly everyone else in the private sector and in the regulatory sphere.”

Here are a few quotes that appear to be from S&P:

1. Internal Email: “rating agencies continue to create [an] even bigger monster – the CDO [collateralized debt obligation] market. Let’s hope we are all wealthy and retired by the time this house of cards falters.”

2. Instant Message: “It could be structured by cows and we would rate it.”

These people don’t sound blindsided to me. Rather, they, like the three ratings agency CEOs who together earned $80 million themselves over the past 6 years, sound like people who knew exactly what they were doing: getting while the getting was good. If Abrams succeeds, he’ll be making that particular Wall Street strategy all the more foundational for America’s brave financial innovators.

But would a loss for S&P change anything? I really don’t know. What I do believe is that the US discourse on rating agencies would probably benefit from some input by scholars like John Quiggin, who argue that “Among the many challenges in reconstructing a sustainable system of global finance, the replacement of ratings issued by for-profit agencies with an alternative system, in which AAA ratings actually mean something, is among the most important.” Quiggin notes that the rating agencies are biased in many important ways:

[T]hey have a long-standing ideological bias against the public sector. This is reflected in the fact that state and local governments, which rarely default on their debt, are assessed far more stringently than corporate issuers. In the last year, thousands of private-sector securities issued with AAA ratings have been downgraded to junk, and many have subsequently gone into default.

By contrast, defaults on government debt have remained rare. One effect of the differential ratings practices of the agencies is that government borrowers have been forced to seek insurance from bond insurance companies such as AMBAC that are, in reality, less sound than the governments they are insuring.

Unfortunately, the 2006 Credit Rating Agency Reform Act specifically prohibited the SEC from regulating the “substance of the credit rating or the procedures and methodologies” used to calculate it. Reform measures proposed by the Obama administration have barely addressed the CRA’s. At the very least the government ought to be able to use FAIR v. Rumsfeld to insist on more responsible behavior (as Jennifer Chandler has argued, in another context, here). CRA’s should take the bitterness of regulation with the sweetness of regulatory subsidies.

I believe that as long as the US government provides a de facto regulatory subsidy to CRA’s, it should require them to factor into at least some of their ratings the full social value of the rated entity—not simply its likelihood to default. Ratings are often a self-fulfilling prophecy, and the state should harness their value to promote projects that improve the health, safety, security, and well-being of citizens. At the very least, the government should set up a “public option” in credit rating (akin to the proposed public option in health insurance) that is more transparent and accountable than extant credit raters. If the finance sector is going to grow as dependent on government help as the health care sector has, it should learn to accept the same web of standards and regulation that guarantee some minimal accountability for providers who accept government funds. Looking at the AHRQ and comparative effectiveness research could be a good place to start.

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Professor John Doe Is An Ugly [Insert Racial Slur]!

Law students sometimes use the internet to widely disseminate racist or gendered comments about women and minority faculty members. For example, I have heard about law students using teaching evaluation forms or Facebook or Myspace to make comments to the effect that that a female faculty member is a bitch with PMS or that an African-American faculty member is a [insert racial slur]. Indeed, the Auto-Admit debacle from a couple years back revealed that law students or potential law students seem to at least sometimes use the internet to convey vicious gendered and/or racist comments.

When I hear about these situations, I always wonder about the “character and fitness” implications. It seems to me that a law student who is publicly judging a female faculty member negatively on a gendered basis or who is characterizing minority faculty members by way of stereotyping and ugly slurs is raising questions about his/her character and fitness to practice law. In the same way that a lawyer who embezzles is not fit to practice, one might argue that a law student who dismisses individuals with ugly characterizations based only on race or gender might also be of questionable character for purposes of practicing law. Yet not everyone agrees with this assessment, and, with respect to law students using the internet for such attacks, there has not been a lot of discussion about the character and fitness issues raised.

Therefore, the AALS Section on Women in Legal Education will be presenting a panel at the AALS Annual Meeting in New Orleans examining the issues raised – including the character and fitness issues – when law students, lawyers, judges, or potential law students use the internet to make gendered or racist comments. If a student posts on her Myspace page that Professor John Doe, who teaches Gender and Race and the Law, is an “ugly [insert racial slur] who only has a job due to affirmative action,” does that pose a character and fitness concern? Should we care?

There is a call for papers for this panel presentation, and anyone interested in submitting a paper or paper proposal is welcome to e-mail me for the details.

Washington Post Fire Sale

As newspapers falter, we often hear about how terrible it would be if public funding supported them. Imagine the conflicts of interest! Well, we’re now getting an inside look at the “stealth marketing” media may need to engage in in order to survive:

Mike Allen at Politico.com [has] reported that Post publisher Katharine Weymouth has decided to solicit payoffs of between $25,000 and $250,000 from Washington lobbyists, in return for one or more private dinners in her home, where lucky diners will receive a chance for “your organization’s CEO” to interact with “Health-care reporting and editorial staff members of The Washington Post” and “key Obama administration and congressional leaders. . . .”

Though the Post’s leadership quickly backed away from the plan, we can only imagine what kinds of fire sales a few more years of economic hardship will bring:

Looks like Dan Froomkin got out just in time!

Modern Day McCarthyism

I was recently listening to a program on the rise of “red-baiting” in some Vietnamese-American communities. It’s apparently becoming a common rhetorical strategy:

On April 16, 2009, the Thurston County Court ruled in favor of a Vietnamese man who sued for defamation. This case was the first of its kind in the state of Washington. . . . The court found the five defendants . . . guilty for wrongly accusing the plaintiff . . . of having communist sympathies.

[I]n this case, both the defendants and plaintiffs fought against communism during the Second Indochina War. All those interviewed invoked a word commonly used within the Vietnamese émigré community to describe the act of wrongly accusing someone of communist sympathies: chụp mũ. As this trial brought to light, chụp mũ is a widespread practice among Vietnamese community leaders. However, it is very rare for a person who has been chụp mũ to sue his/her accusers.

This might be an interesting precedent for those accused by shock jocks of being socialist, Marxist, Bolshevik, or in favor of concentration camps.
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Contracts, Confidentiality, and Speech: Connecticut Supreme Court Upholds Agreement Not To Speak

I am sure that free speech, First Amendment gurus/junkies will have more to say about this one, but a recent case out of the Connecticut Supreme Court, Perricone v. Perricone, seems to merit a mention here. As the title of the case indicates, it is a divorce case. Apparently the husband runs a skin care company and millions of dollars are at stake. According to The Connecticut Law Tribune, the New York Post covered the divorce. Nonetheless, during the case Ms. Perricone “signed a confidentiality agreement to prevent pretrial discovery documents from being publicized. In it, she agreed that Perricone’s lucrative skin care business ‘may be severely harmed’ if she made disparaging or defamatory statements about him.” When she wanted to talk to 20/20 about the case, however, Mr. Perricone obtained an injunction by arguing that the confidentiality agreement controlled and that an integration clause in the final settlement did not supersede that agreement. In short, Ms. Perricone was still prevented from talking about the divorce. The court agreed with Mr. Perricone.

As First Amendment matter, the Connecticut Supreme Court held that the agreement was not a prior restraint on speech. I am sure that there are articles about the problem of what is state action in this context and whether one can waive First Amendment rights via contract. The court in this case relied on Cohen v Cowles Media Co. and held: “that a party’s contractual waiver of the first amendment’s prohibition on prior restraints on speech constitutionally may be enforced by the courts even if the contract is not narrowly tailored to advance a compelling state interest.”

As I am not a First Amendment guru and/or junkie, all I can say here is that it seems that there are some continuing problems here. The idea “that a judicial restraining order that enforces an agreement restricting speech between private parties [does not] constitute[] a per se violation of the first amendment’s prohibition on prior restraints on speech” appears correct if non-disclosure agreements and other confidentiality agreements are to work. Indeed, as our own Dan Solove and Neil Richards discuss in Rethinking Speech and Civil Liability:

Since New York Times v. Sullivan, the First Amendment requires heightened protection against tort liability for speech, such as defamation and invasion of privacy. But in other contexts involving civil liability for speech, the First Amendment provides virtually no protection. According to Cohen v. Cowles, there is no First Amendment scrutiny for speech restricted by promissory estoppel and contract. The First Amendment rarely requires scrutiny when property rules limit speech. Both of these rules are widely-accepted. However, there is a major problem – in a large range of situations, the rules collide.

Although I am not sure I agree with the paper’s solution, I recommend the paper as a way to think not only about the Perricone case but the problems encountered when free speech and private law intersect.

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Responsibility and Duty Meet Social Networking

In light of the events in Iran, many may laud the power of tools such as Twitter and Facebook as they allow information to reach the world. Here in the United States, however, a few stories highlight how social networking tools and blogs run into ideas of fairness, honesty, and even justice. First, the FTC is planning on investigating bloggers who are paid for their posts but who do not disclose their affiliation. The article claims “The common practice of posting a graphical ad or a link to an online retailer — and getting commissions for any sales from it — would be enough to trigger oversight.” Second, the Ninth Circuit has just ruled that a woman’s blog posts about her co-workers and job environment were not protected speech. As such, her demotion was lawful. Third, a recent Law.com article makes a strong argument that tweeting while on a jury should not be allowed and jeopardizes the fairness of a trial.

The FTC action seems too aggressive, yet it shows that the idea of blogs having some sort of purity is not always the case. But if it prompts bloggers to be more forthcoming about their affiliations and to develop some best practices (as the article suggests), that could be a good outcome. It also seems to embrace the idea of more information is better which may keep many online happy. Those who think tweeting is some sort of anointed right err. The trial context shows that rather well. As for the blog and speech case, I need to find the decision. The article claims that the court “concluded that [the plaintiff’s] speech was not a ‘public concern’ but rather was ‘racist, sexist, and bordered on vulgar,’ and it characterized her behavior, in part, as ‘salacious’ and ‘mean spirited.'” I leave it to the First Amendment folks to unravel that one, but I wonder whether this case will be appealed to the Supreme Court.

In any event, these three events show that while we can say that tools that enhance free speech are wonderful in the extreme cases such as the situation in Iran, the more subtle cases raise on-going questions about the contours of speech. As always the issues are familiar. Now, however, simply saying keep your hands off the Internet or keep it free is an insufficient guideline. Too many people are online and too much online behavior tracks offline experiences and problems. In other words, although the technologies seem to make the questions different and requiring special treatment, they may only make the old questions and responses more salient.