Category: First Amendment

1

The Fight For Internet Censorship

Thanks to Danielle and the CoOp crew for having me! I’m excited.

Speaking of exciting developments, it appears that the Stop Online Piracy Act (SOPA) is dead, at least for now. House Majority Leader Eric Cantor has said that the bill will not move forward until there is a consensus position on it, which is to say, never. Media sources credit the Obama administration’s opposition to some of the more noxious parts of SOPA, such as its DNSSEC-killing filtering provisions, and also the tech community’s efforts to raise awareness. (Techdirt’s Mike Masnick has been working overtime in reporting on SOPA; Wikipedia and Reddit are adopting a blackout to draw attention; even the New York City techies are holding a demonstration in front of the offices of Senators Kirstin Gillibrand and Charles Schumer. Schumer has been bailing water on the SOPA front after one of his staffers told a local entrepreneur that the senator supports Internet censorship. Props for candor.) I think the Obama administration’s lack of enthusiasm for the bill is important, but I suspect that a crowded legislative calendar is also playing a significant role.

Of course, the PROTECT IP Act is still floating around the Senate. It’s less worse than SOPA, in the same way that Transformers 2 is less worse than Transformers 3. (You still might want to see what else Netflix has available.) And sponsor Senator Patrick Leahy has suggested that the DNS filtering provisions of the bill be studied – after the legislation is passed. It’s much more efficient, legislatively, to regulate first and then see if it will be effective. A more cynical view is that Senator Leahy’s move is a public relations tactic designed to undercut the opposition, but no one wants to say so to his face.

I am not opposed to Internet censorship in all situations, which means I am often lonely at tech-related events. But these bills have significant flaws. They threaten to badly weaken cybersecurity, an area that is purportedly a national priority (and has been for 15 years). They claim to address a major threat to IP rightsholders despite the complete lack of data that the threat is anything other than chimerical. They provide scant procedural protections for accused infringers, and confer extraordinary power on private rightsholders – power that will, inevitably, be abused. And they reflect a significant public choice imbalance in how IP and Internet policy is made in the United States.

Surprisingly, the Obama administration has it about right: we shouldn’t reject Internet censorship as a regulatory mechanism out of hand, but we should be wary of it. This isn’t the last stage of this debate – like Wesley in The Princess Bride, SOPA-like legislation is only mostly dead. (And, if you don’t like the Obama administration’s position today, just wait a day or two.)

Cross-posted at Info/Law.

16

The Montana Supreme Court

Western Tradition Partnership, Inc. v. Attorney General, which upheld Montana’s statute regulating corporate contributions to political campaigns, is a very amusing opinion.  It’s been a long time since a state supreme court has so brazenly tried to evade a U.S. Supreme Court decision–in this case Citizens United.  We learn, among other fascinating details, that Citizens United  was really a fact-bound case that need not be followed if a different record is presented to a court.  And we also learn that there is a Montana exception to the First Amendment, at least with respect to campaign finance regulation

Equally entertaining is Justice Nelson’s dissent, where he lambasts Citizens United while concluding that the case requires the invalidation of the Montana law. “In my view,” he says, “Citizens United has turned the First Amendment’s ‘open market-place’ of ideas into an auction house for Friedmanian corporatists.”  (I must admit that I didn’t know that Milton Friedman was a corporatist, an adjective, or interested in campaign finance.)  Justice Nelson also rejects the marketplace of ideas metaphor:

“[V]oters generally do not have the desire, much less the time, sophistication, or ability, to sift through hours upon hours of attack ads, political mumbo jumbo, and sound bites in order to winnow truth (of which there often seems to be very little) from fiction and half-truths (of which there unfortunately seems to be an endless supply).  The Supreme Court believes the solution for false or misleading speech is more speech. Yet, an endless barrage of accusations and counteraccusations providing more fodder than fact only serves to overwhelm, confuse, and disenchant voters.”

Finally, his dissent goes after the idea of corporate personhood:

“Corporations are artificial creatures of law. As such, they should enjoy only those powers—not constitutional rights, but legislatively-conferred powers—that are concomitant with their legitimate function, that being limited-liability investment vehicles for business. Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people—human beings—to share fundamental, natural rights with soulless creations of government. Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons.”

Now I agree with the last argument to this extent–it is perfectly clear that the Framers of the Fourteenth Amendment (Bingham especially) did not intend the word “person” in the Due Process Clause to include corporations. Originalists don’t seem to care about this. Nevertheless, the more important point, which I’ve made before, is that campaign finance regulation is a huge waste of time.  If half of the energy spent of that goal were spent on diminishing partisan gerrymandering of legislative districts, the improvement in the political process would be far greater.

 

The Roberts Court’s Bad Romance

Recently a coalition of Missouri payday lenders implied “that standing up for high-interest-rate lenders is somehow analagous to the acts of the ‘poor people who followed Dr. King and walked with him hundreds of miles because they believed in civil rights that much.'” Because we all know that liberty means little if you’re not free to take a loan out at 444% APR.

In The Irony of Free Speech, Owen Fiss warned that the language of the First Amendment would lose its emancipatory potential as courts used it to gut progressive legislation. In a recent essay in Democracy Journal, Jedediah Purdy confirms those fears. His thoughts on last term’s Sorrell v. IMS Health are particularly incisive on the topic of commercial speech, which the Court appears ready to radically rethink:
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Stanford Law Review Online: Don’t Break the Internet

Stanford Law Review

The Stanford Law Review Online has just published a piece by Mark Lemley, David S. Levine, and David G. Post on the PROTECT IP Act and the Stop Online Piracy Act. In Don’t Break the Internet, they argue that the two bills — intended to counter online copyright and trademark infringement — “share an underlying approach and an enforcement philosophy that pose grave constitutional problems and that could have potentially disastrous consequences for the stability and security of the Internet’s addressing system, for the principle of interconnectivity that has helped drive the Internet’s extraordinary growth, and for free expression.”

They write:

These bills, and the enforcement philosophy that underlies them, represent a dramatic retreat from this country’s tradition of leadership in supporting the free exchange of information and ideas on the Internet. At a time when many foreign governments have dramatically stepped up their efforts to censor Internet communications, these bills would incorporate into U.S. law a principle more closely associated with those repressive regimes: a right to insist on the removal of content from the global Internet, regardless of where it may have originated or be located, in service of the exigencies of domestic law.

Read the full article, Don’t Break the Internet by Mark Lemley, David S. Levine, and David G. Post, at the Stanford Law Review Online.

Note: Corrected typo in first paragraph.

Complexity, Opacity, and Permanent Crisis

Finance crises have baffled recently. Jon Corzine says he has no idea where hundreds of millions of dollars in MF Global money went. Judge Rakoff says the proposed SEC-Citi settlement would whitewash the megabank’s wrongdoing:

An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous . . . . In any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth.

And Sheila Bair suggests that we are still in the dark about critical aspects of the financial system:

Credit exposure reports are essential to make sure regulators understand crucial inter-relationships between distress at one institution and its potential to cause major losses at other institutions. This type of information was missing during the crisis. I know that many members of [Congress] heard the same arguments that I heard during the crisis — that bailouts were necessary or the “entire system” would come down.

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Nondisclosure, Non-disparagement, and Contract Law

In light of some of my previous posts on nondisclosure clauses and their enforceability, I thought readers might enjoy the following story:

“Robert Lee visited a dentist, Stacy Makhnevich, because he was suffering from a severe toothache, caused by a painful infected cavity.  She refused to treat him until he signed a so-called “privacy” contract, which included a clause preventing him from posting negative reviews of her online.  [The clause read: “Patient will not denigrate, defame, disparage, or cast aspersions upon the Physician; and (ii) will use all reasonable efforts to prevent any member of their immediate family or acquaintance from engaging in any such activity.”]

More specifically, the contract stated that Lee would not publish adverse comments about Makhnevich’s performance online, and that he would assign the copyright of any online commentary that he did make to her (presumably so that she could have such commentary quickly and directly taken down if she found it objectionable).

Lee signed the contract.  But later—after receiving a hefty bill for service that he viewed as problematic—he posted negative reviews of the dentist on Yelp.com and DoctorBase.com, despite the contract’s ban on such postings.

The Yelp.com review said:  “Avoid at all cost! Scamming their customers!”  The DoctorBase.com review was similar.

Lee claims that Makhnevich then– in an attempt to enforce the contract—tried to get Lee’s negative reviews taken down from the review sites.  He alleges that she also started billing him $100, as a fine, for every day the reviews remained on the Internet.  Moreover, Lee alleges, she refused to send copies of his billing records to him so that he could seek reimbursement from his insurer.  Makhnevich also sent Lee a notice threatening a lawsuit.  In response, Lee filed a lawsuit of his own.

Lee’s lawsuit calls the contract he signed invalid under state law as an unconscionable contract.  The lawsuit also alleges that posting one’s own commentary on a website such as Yelp.com or DoctorBase.com constitutes “fair use” under the copyright laws.

In the suit, Lee asks that the agreement that he and other patients signed with his dentist be declared void and unenforceable, and that she be barred from requiring assent to these agreements by future patients.”

So many great issues here — the penalty/liquidated clause damage term; the privacy/nondisclosure nexus; the unenforceability argument coupled with a lurking first amendment claim.  The story claims there’s even a consideration defense, though I can’t see how that’s really present on these facts.

As I’ve expressed before, I think these kinds of nondisclosure agreements are more difficult to enforce and obtain damages from than most conventional accounts would have it, and that they often function, like liquidated damages in general, to compel parties to engage in behavior that a court would not actually order.  This case seems like a good test of my theory.  I’m very glad that the Center for Democracy and Technology has taken up the battle.

 

(H/T: Reader T.G.)

Understanding Wealth Defense: Direct Action from the 0.1%

The OWS protests have provoked reflection on the morality of direct action and civil disobedience. How far should the police go to spy on, disrupt, or punish peaceful protesters? Is pepper spray a dangerous chemical agent or “a food product, essentially?” Does current American inequality merit a direct action follow-up to the Civil Rights Movement, whose mass-arrestees and water-cannoned marchers are now viewed as heroes?

It’s difficult to answer these questions without understanding the past and present tactics of the groups OWS is protesting. We can learn something about those tactics from Jeffrey A. Winters’ book Oligarchy and his recent articles. In Winters’ treatment of America’s politics of wealth defense, we can discern a transition from high-stakes defiance of government tax authority to an established position “inside the system.”

Winters recounts how Congress passed a tax on the top 0.1% in 1894, only to be slapped down by a Supreme Court “which struck it down in a 5-4 decision.” After the 16th Amendment effectively repealed that Supreme Court decision, Congress had the novel idea of actually helping pay for a war (WWI) with revenue from those best able to fund it. As Winters notes, “the highest rate [leapt] from 7 percent in 1915 to 77 percent in 1918,” and “the number of brackets went from seven to 56 over the same period.” This provoked direct action from the wealthiest “through tax avoidance and outright evasion.” At this point, Winters writes,
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J.K Rowling, Defamation and Privacy Law, and the Chilling of the Media

A common argument made to justify First Amendment restrictions on privacy torts and defamation law is that legal liability will chill the media.  I am generally sympathetic to these arguments, though only to a point.  I think these arguments are often overblown.  An interesting point of comparison is the UK, where there is a much weaker protection of free speech and much stronger defamation law.  Although the UK has not embraced all of the privacy torts recognized in the United States, it has come close, recognizing a robust tort of breach of confidence.  Despite the lack of a First Amendment equivalent, and the stronger legal liability for gossip and libel, the press in the UK seems anything but chilled or cowed.  Consider J.K. Rowling’s recent testimony:

Rowling said a “wholly untrue” Daily Express story, which claimed she had based an unpleasant character on her ex-husband, had meant she had to have a “horrible” conversation with their young daughter to explain that it was not the case.

“This episode caused real emotional hurt,” she said, because her daughter had to cope with other children believing that about her father.

Rowling added: “It portrayed me as a vindictive person who would use a book to vilify anyone against whom I had a grudge.”

Rowling also pointed to a story published in the Sunday Mirror, which claimed her husband had given up his job as a doctor “to be at the beck and call of his obscenely rich wife,” she said.

This was “damaging misinformation” about her husband, who is not a celebrity, she said, because it led colleagues to believe he had abandoned his medical career. The paper subsequently apologized.

Defamatory articles spread like fire and are difficult to contain, she told the inquiry, but she had no “magical answer” to the problem of abuses by the press.

Rowling’s testimony, and that of others, reveals a rabid and fervent media in the UK — in spite of the stronger laws.  This makes me ponder whether the claim that strong privacy and defamation law will chill the media is false — or at least is overblown as I believe.  But another conclusion may be drawn from this — perhaps the law doesn’t do much work at all.  It appears that the media’s behavior is not dramatically affected by the law, and thus the law really fails to shape norms or impact behavior.  I’m not sure I agree with this claim, but it is one that should be pondered.

The situation calls for further thought.  How can it be that the tabloid press is so robust in the UK which appears to have much weaker free speech protections than the US?   I only have guesses, not answers, and this question has always struck me as one worth investigating.

 

Ciara Torres-Spelliscy: American Corporate Political Transparency Is 44 Years Behind the UK

Ciara Torres-Spelliscy is an Assistant Professor at Stetson University College of Law and the co-author along with economist Dr. Kathy Fogel of Shareholder-Authorized Corporate Political Spending in the United Kingdom.  I am posting her views on American corporate political transparency below [FP]: 

by Ciara Torres-Spelliscy

As I told my law students in a recent class, when I was in law school, no one cared a fig about corporate political spending.  I did not hear about it in Constitutional Law, Corporate Law or Fed. Tax.  It was a non-issue because for the most part, it was banned.  It made sense that back then, the SEC would not have a corporate political spending reporting requirement.  That would have been tantamount to the agency’s asking, “have you committed any federal election crimes?”  Now that such political spending is legal, the SEC should respond to the growing calls for a new disclosure rule.

Much has changed in the years since I was on the business end of a Con Law exam.  In particular, in 2010, the Supreme Court did away with corporate source limits on election ads altogether in the infamous Citizens United case.  The upshot of this case changed not just federal law going back to 1947, but also state laws, some of which dated back to the turn of the twentieth century.

The new normal is corporations can spend an unlimited amount of their treasury funds on independent political expenditures in local, state and federal elections.  This brings us back to the SEC and its utter lack of political disclosure rules.  Because of this gap, publicly-traded corporations can spend in elections without ‘fessing up.  This seems odd given how passionate shareholders are about transparency.

In the summer of 2011, ten corporate law professors petitioned the SEC for a new disclosure rule to rectify this situation.  These professors are both conservative and progressive, yet they all agree transparency of corporate political spending is a must.

Economists have already written in support of the professors’ petition.  Economist Dr. Michael Hadani of Long Island University noted that one of the reasons why shareholders should want more reporting on corporate political spending is that it can backfire.  His regression analysis of over 1,100 companies over an 11 year period found political spending had a negative impact of firms’ market value.

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Ackerman and Benkler on the Occupied First Amendment

Slate writer Raymond Vasvari recently observed that, “for every uplifting paragraph” of precedent vindicating rights to protest, there are a “thousand cases bending an abstract right to the prosaic realities of protest.” We may never learn the extent to which Occupy Wall Street protesters were classified “enemies within,” and subject to coordinated intergovernmental suppression. But we can observe, with professors Ackerman and Benkler, that the “irony of free speech” is reaching a breaking point:

Whatever else it accomplishes, Occupy Wall Street is revealing distortions in our current understanding of the First Amendment. In recent decisions, the Supreme Court has protected Wall Street’s constitutional right to pour millions into political campaigns. But as presently construed, the First Amendment isn’t an obstacle when it comes to silencing the Occupiers. . . .

Instead of hiding behind obsolete court decisions, big city mayors must recognize that they are on the constitutional front-line. Michael Bloomberg is failing this test when he keeps Occupiers out of New York’s public parks and tolerates the arrests of dozens of protesters, providing an example for similar actions in Boston, Denver, and San Diego. In contrast, Antonio Villaraigoso is showing that leadership on behalf of the First Amendment is well within the realm of the politically possible. Los Angeles has not only avoided arrests, but seems to be expanding available public space as the protest swells. Similarly, the U.S. Parks police are on the right track in giving the demonstrators a four month extension on Freedom Plaza.

How to explain Mayor Bloomberg’s deviance from constitutional ideals? Maybe he’s one of the worried wealthy, realizing that he can only afford another 170 of his trademark $100 million dollar political campaigns with his fortune of $17 billion. Ensconced in an alternate reality of privilege, Bloomberg retails stories of struggling and put-upon banks. It is his very plutocratic disconnection from the daily life of his subjects that makes an extraordinary protest like OWS necessary.
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