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Posted on Techdirt - 6 August 2018 @ 3:40pm

SESTA, FOSTA, And How To Make Sense Of The Acronym Soup

from the You-say-potato,-I-say-we-should-have-called-the-whole-thing-off dept

Here at Techdirt we've been slow to switch: so dug in were we for so long against the legislative scourge known as SESTA that we've been reluctant to call it anything else. Even after its ghastly provisions became law – in some ways, because its ghastly provisions became law – we've been reluctant to change what we called this vehicle of censoring doom. After all, we said for months that SESTA would be awful, and now here it is, being awful. If we called it something else people might be confused about what we had been complaining about.

The problem is, it's not technically correct to continue to call this legislative outrage SESTA, and doing so threatens to create its own confusion. SESTA didn't become law; FOSTA did. When we react to those legislative changes, and cite to their source, we are citing to the bill called FOSTA, not the bill called SESTA. SESTA itself no longer exists in legislative form – FOSTA's enactment mooted it – and it's confusing to complain about a law that isn't actually one, or ever going to be one, because even if you can convince someone that it's terrible, they'll never be able to find in any law book what it is they should be upset about.

It's FOSTA that now haunts us from the U.S. Code. But what's confusing is that while FOSTA is the enacted legislation now hurting us, SESTA was the proposed bill we had warned would. All the legislative history is with SESTA (well, most of it anyway), but all the legislative power is with FOSTA.

So what happened? What's up with the two names? Why the shift? Basically this:

SESTA was a terrible bill proposing to gut Section 230 that had been rumbling around the Senate for a while. There were some hearings and proposed amendments, but by and large it remained a bill full of terrible, Internet-ruining proposals. Eventually, when it looked like it might be picking up enough steam to pass, an alternate bill got floated in the House: FOSTA. It still played SESTA's game, but it did so with different language that presumably would have resulted in something less Internet-ruining.

For what it's worth, not everyone thought this was a great strategy. Some thought that it would be better to do nothing but try to nip the whole idea behind SESTA in the bud, but others thought it might be better to go with a "devil you know" strategy if passage of something seemed inevitable, because then hopefully it could at least be something a little less awful.

FOSTA was still pretty bad, although it had some hearings and amendments to try to make it less so. But then, all of a sudden, the legislative sausage-making machine went berserk and spit out something even worse. The result was a Frankenstein monster of a bill, still called FOSTA, which combined the worst of its own proposals with the worst of the SESTA bill percolating in the Senate. This new FOSTA bill soon passed the House, and shortly thereafter it's the bill that passed the Senate. Notably it was not the original SESTA bill that the Senate voted on, because if the Senate had tried to pass anything different from what the House had passed the reconciliation process between the two bills might have delayed the ultimate passage of either. Perhaps that delay would have spared us this horror, but such a fate was not something the law's Internet-undermining champions wanted to risk.

So here we are, stuck with this garbage on the books, legislation so awful it can't even be labeled coherently. But giving name to something always makes it easier to fight. So from here on out, we'll be calling it FOSTA.

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Posted on Techdirt - 20 July 2018 @ 1:30pm

Appeals Court Tells Lower Court To Consider If Standards 'Incorporated Into Law' Are Fair Use; Could Have Done More

from the 102(b)-or-not-102(b),-that-was-the-question dept

Carl Malamud published the law on his PublicResource.org website. And for that he got sued. The problem was, in posting the Code of Federal Regulations he also included the various enforceable standards included as part of those Regulations. This displeased the organizations which had developed those standards (SDOs) and who claimed a copyright in them. So they sued Public Resource for infringement, and in a terrible decision last year Public Resource lost. Public Resource then appealed, and this week Malamud's organization won a reversal of the district court decision.

The decision by the D.C. Circuit in American Society for Testing and Materials v. PublicResource.org stands as a win for those who would choose to republish the law, even when their doing so may involve republishing standards created by non-governmental SDOs that were then incorporated by reference into controlling law. Although one can never presume to read the tea leaves at oral argument, it did seem as though the court was extremely uncomfortable with the idea that someone could be punished for having published the law. But the particular way the court addressed the copyright and trademark claims brought against Public Resource for it having done so is still worth further discussion. Disclosure: I helped file an amicus brief on behalf of members of Congress supporting Public Resource's defense, and amicus briefs on behalf of law professors at the district court.

On the copyright front, it is important to first note how the court did NOT resolve the question of whether republishing standards incorporated into law constituted copyright infringement. A threshold question in any copyright infringement case is whether there's any copyright that could have been infringed at all, because no copyright = no infringement, and with no infringement the case goes away. One way there might not be a copyright is if employees of the federal government had worked on developing the standards, like the ones at issue in this case, since under § 105 of the copyright statute, works by federal government employees are ineligible for copyright protection. But in its decision the D.C. Circuit dismissed this argument, finding that Public Resource had effectively waived it at the district court below.

As an initial matter, PRO argues that there is a triable question as to whether the standards at issue here were ever validly copyrighted given the Act’s prohibition on copyrighting “work[s] of the United States Government,” 17 U.S.C. § 105, and the fact that government employees may have participated in drafting certain standards. PRO, however, failed to adequately present this claim to the district court and has thus forfeited it. [p. 14]

Another way there might not be copyright in the standards Public Resource published is that, by being published as a factual representation of what the law is, that factual nature would preclude there being a copyright in what was republished, since, per § 102(b) of the copyright statute, purely factual works are also not eligible for copyright protection. This consideration was kicked around by the judges during oral argument because it's a complicated issue with some interesting implications. First, there's the question of whether the standards themselves are too factual to be copyrighted, but for the sake of this case the court generally assumed they could be. But even if they are copyrightable, the next question is what happens when the standards have now become a factual representation of the law governing people's behavior? Does that incorporation cause them to lose their copyright? And what would it mean for SDOs and the development of future standards by third parties if that were the case?

The court, however, chose to avoid these questions. It gave several reasons for this avoidance, including that a ruling on the copyrightability of incorporated standards could have a significant economic effect on those SDOs, [p. 16], and also that it's generally considered better practice for courts to decide cases on grounds other than constitutional ones [p. 15]. (As Public Resource and amici pointed out, not being able to post the law for people governed by it to read raises significant First Amendment and due process concerns, which would mean that the question of if the law could be copyrighted may be a constitutional one.) [p. 14-15].

Avoiding the constitutional question is all the more pressing here given that the record reveals so little about the nature of any given incorporation or what a constitutional ruling would mean for any particular standard. After all, it is one thing to declare that “the law” cannot be copyrighted but wholly another to determine whether any one of these incorporated standards—from the legally binding prerequisite to a labeling requirement, see 42 U.S.C. § 17021(b)(1), to the purely discretionary reference procedure, see 40 C.F.R. § 86.113-04(a)(1)—actually constitutes “the law.” [p. 15-16]

Instead the court chose to find for Public Resource on fair use grounds. [p.17] Or at least put Public Resource in a position to ultimately prevail on those grounds. Although the court lifted the injunctions the district court had placed on it – injunctions that had forced Public Resource to remove from its site actual, operative, mandatory law binding on the public – the case still needs to go back to the district court because the appeals court didn't think it had a sufficiently developed record before it to itself fully perform its own fair use analysis. It did, however, give the district court a head start, with enough instruction of how to perform that analysis to make it likely to yield a favorable result for Public Resource on remand.

In this section, we review each of the fair use factors, and, as we shall explain, though there is reason to believe “as a matter of law” that PRO’s reproduction of certain standards “qualif[ies] as a fair use of the copyrighted work,” id. (internal quotations and citations omitted), we ultimately think the better course is to remand the case for the district court to further develop the factual record and weigh the factors as applied to PRO’s use of each standard in the first instance. As we have emphasized, the standards here and the modes of their incorporation vary too widely to conclusively tell goose apart from gander, and the record is just too thin to tell what went into the sauce. On remand, the district court will need to develop a fuller record regarding the nature of each of the standards at issue, the way in which they are incorporated, and the manner and extent to which they were copied by PRO in order to resolve this “mixed question of law and fact.” Id. This is not to say that the district court must analyze each standard individually. Instead, it might consider directing the parties, who poorly served the court by treating the standards interchangeably, to file briefs addressing whether the standards are susceptible to groupings that are relevant to the fair use analysis. [p. 19]

Overall, this is a good result for Public Resource. And far be it for me to rain on Carl Malamud and his legal team's well-deserved parade, it's still important to point out why, although this D.C. Circuit decision is a good one, it could have been better.

For one thing, the parties have already litigated a lengthy trial. And their prize for finally winning the pie eating contest now is more pie. That litigating fair use is so arduous, even for as well-counseled a defendant as Public Resource, is a significant problem. As Lawrence Lessig has observed, "Fair use is only the right to hire a lawyer." Fair use is of little value for worthy defendants who might ultimately win infringement cases on those grounds if they can get obliterated by the litigation defending themselves along the way. Which is one reason why the D.C. Circuit's refusal to evaluate the core copyrightability grounds is a troubling one, because while Public Resource may ultimately prevail, what about anyone else who similarly decides to publish the law that also incorporates standards?

Furthermore, while the court's interest in ensuring that Public Resource could survive a subsequent fair use inquiry is great for Public Resource, and there is nothing in the decision to suggest that it is only Public Resource that should get to, it won't be helpful if the way the court framed each of the fair use factors in order to ensure it could reach Public Resource can't be of use to other defendants not exactly like Public Resource but with their own plausible fair use defenses. Certain language in particular does give some pause, such as the hostility towards some of Public Resource's transformative uses.

On this point, the district court properly rejected some of PRO’s arguments as to its transformative use—for instance, that PRO was converting the works into a format more accessible for the visually impaired or that it was producing a centralized database of all incorporated standards. [p. 21 (citing American Geophysical Union v. Texaco Inc., 60 F.3d 913, 923–24 (2d Cir. 1994)]

On the other hand, much of its reasoning is necessarily flexible enough to reach other defendants so that they, too, can have the four factors balanced in their favor. For the same reasons the court found the idea distasteful that Public Resource should be prevented from sharing the law, it would be similarly distasteful if others were similarly prevented. In addition, should another defendant have difficulty showing its use is fair, the court also left open the possibility that the underlying copyrightability of the standards incorporated into law could still be challenged.

To be sure, it may later turn out that PRO and others use incorporated standards in a manner not encompassed by the fair use doctrine, thereby again raising the question of whether the authors of such works can maintain their copyright at all. [p. 16]

The concurrence by Judge Katsas provides additional reassurance. First, he reiterated that the Section 102(b) and Constitutional questions raised by someone claiming copyright over parts of published law remain unresolved and may yet be resolved in a way that dispels these claims. [Katsas concurrence p. 3]. He also provided some additional framing for the fair use analysis, noting that "it puts a heavy thumb on the scale in favor of an unrestrained ability to say what the law is." [Katsas concurrence p. 2]

Thus, when an incorporated standard sets forth binding legal obligations, and when the defendant does no more and no less than disseminate an exact copy of it, three of the four relevant factors—purpose and character of the use, nature of the copyrighted work, and amount and substantiality of the copying—are said to weigh “heavily” or “strongly” in favor of fair use. […] The Court acknowledges the thinness of the record in this case, and it appropriately flags potentially complicating questions about how particular standards may be incorporated into law, and whether such standards, as so incorporated, actually constitute “the law.” But, where a particular standard is incorporated as a binding legal obligation, and where the defendant has done nothing more than disseminate it, the Court leaves little doubt that the dissemination amounts to fair use. [Katas concurrence p. 2]

In other words, despite the above concerns, the decision will still make it harder for future plaintiffs to try to lock people out of sharing the law on copyright grounds, as it is not something that, at least in the D.C. Circuit, will be looked upon with a friendly eye.

Meanwhile, there is also some additional good news from this case on the trademark front. Public Resource had included the trademarks of the SDOs behind the incorporated standards, and the SDOs (and district court) believed this use of the marks to be infringing. The D.C. Circuit disagreed, however, and found it possible that Public Resource's use of the trademarks could qualify as nominative fair use, which "occurs when the defendant uses the plaintiff’s trademark to identify the plaintiff’s own goods and ‘makes it clear to consumers that the plaintiff, not the defendant, is the source of the trademarked product or service.’” [p. 33-34] This issue, too, was remanded back to the trial court, although with the admonition that if the trial court should again find Public Resource's use to be infringing, it should potentially refrain from issuing another injunction barring all use of the trademark and instead consider whether merely modifying the use would be an adequate remedy. [p.36-37].

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Posted on Free Speech - 16 July 2018 @ 3:38pm

On Speech And Subpoenas, New York Giveth And Taketh (Now, The Bad News On Journalist Protection)

from the unappealing-jurisprudence dept

Having just written about a good New York ruling concerning third-party subpoenas and the ability to protect free speech, now we have to write about some less good news: the recent decision by New York's highest court undermining the protection afforded by the state's shield law.

Shield laws are critical to preserving a free and independent press because they enable journalists to resist testifying about the non-public aspects of their reporting, or having to turn over their notes and related work product. This ability to resist is what empowers them to promise anonymity to sources, which often can be the only way for news the public needs to know about to come to light. If journalists couldn't resist, or had to risk going to jail in order to try, it would inhibit their reporting and leave the public less able to learn about matters of public concern. Yet unfortunately this decision by the New York Court of Appeals invites just such a result by interfering with journalists' ability to avail themselves of the protection ostensibly afforded by the state shield law. (Note: New York confusingly labels its lowest court the Supreme Court. The highest court is instead known as the Court of Appeals. The Appellate Division is in the middle.)

As frequently happens with tough cases involving important First Amendment interests, the underlying facts of this case are awful: Conrado Juarez has been charged with the gruesome 1991 murder of his four year-old niece. The case remained unsolved until DNA evidence made him a suspect. After fourteen hours of interrogation, he purportedly confessed. He now claims that the confession was coerced, and prosecutors want to use the notes and testimony of New York Times reporter Frances Robles, who had interviewed him, to challenge his claims. The trial court originally refused her motion to quash the subpoena demanding she provide the notes and testimony, but the Appellate Division overruled that decision and quashed it. Only now the Court of Appeals has overturned the Appellate Division's ruling, thus making the subpoena once again enforceable.

In overturning the Appellate Division's decision the Court of Appeals found that the reporter had no right to appeal the original denial of her motion to quash the subpoena by the trial court. If she had no right to appeal the trial court's decision, then the Appellate Division had no ability to reverse it. [p. 2] But even if this Court of Appeals finding that she had no right of appeal were truly consistent with chapter and verse of New York appellate procedure (the dissent believes it isn't [Rivera dissent p. 8-9]), it's still a remarkably formalistic conclusion that gives short shrift to the significant substantive rights at stake.

Formalism isn't of course inherently bad; careful adherence to procedural rules can sometimes help protect substantive rights better than ad hoc short cuts can. These rules exist in order to further the administration of justice, and the Court of Appeals itself fairly makes this point: by limiting the ability to appeal in criminal matters, it keeps the administration of justice from being bogged down unfairly through appellate gamesmanship. [p. 2]

But justice isn't furthered by being a slave to interpretations of procedural rules so at odds with why we have the rules in the first place. Or, as in this case, so indifferent to the rights of those these rules were never intended to govern – namely, the third parties affected here and whose interests the Court of Appeals seems so hostile to [p. 4-5]. Or so arbitrary in their application and effect.

That arbitrariness is well on display here. First, the no-appeal rule the Court cites only applies to criminal cases, not civil ones, [p. 2], which suggests that if this case had not involved a prosecution, the reporter apparently could still have appealed a lower court's refusal to quash a subpoena without problem. Next, the rule limiting appeals does not apply to subpoenas issued as part of investigations of criminal matters. [p. 3] So, if they hadn't already begun to prosecute the defendant, the reporter also likely could have appealed a refusal to quash a subpoena.

In addition, if this case had originally broken the other way, and the trial court had originally quashed the subpoena, then per this rule, if applied consistently, it would have been the government who could not have been able to appeal that ruling. Obviously this particular result would be protective of journalists, but for the no-appeal rule to be applied this way it still makes journalists' protection entirely contingent on the judgment of trial courts. And that's a problem, because trial courts are not infallible. If they were, then there would be no need to have any appeals courts at all. We have these courts because sometimes lower courts get things wrong, as this one did here, and there needs to be some way to set things right when they do. But what the Court of Appeals is saying in this case is that when it comes to subpoenaing journalists (something that the NY legislature passed the shield law in order to prevent), if this subpoenaing happens as part of a criminal trial, then journalists will be entirely dependent on that trial court getting the decision whether to quash it perfectly correct in the first instance, because its decision on the matter will not be one that can ever be reviewed.

For shield law protection to be meaningful it needs to have adequate rights of appeal baked into it, in all situations where journalists may need to assert it. True, in the context of criminal trials journalists might be able to recover the right to appeal as part of their challenge of a contempt order seeking to punish their refusal to comply with a subpoena. But if journalists are forced to risk jail to assert their shield law protection effectively, then the protection the shield law affords is hardly effective.

The Court of Appeals seems to think that a legislative fix is the way to go to make it explicit that there is always a right of appeal. [p. 5] And there may also be the possibility of challenging a subpoena as part of an "Article 78" civil proceeding, although, as the dissent notes, forcing journalists to go this route does nothing to advance the speedy-trial interests the majority's "no appeal" rule is supposed to advance (nor is it clear that an Article 78 proceeding would necessarily be an effective option).

In any case, the alternatives available to a nonparty seeking some type of appellate review of the denial of a motion to quash will likely result in even greater delay of the criminal proceeding than would a direct appeal of a quashal motion. The two avenues left open to a nonparty to contest a denial would be a CPLR Article 78 action in the nature of prohibition or for the nonparty to simply fail to comply with the subpoena and seek appellate review of the subsequent order of contempt. In either case, if the prosecutor or defendant needed the nonparty’s evidence, they would wait until the resolution of the collateral proceedings. [Rivera dissent p. 11]

But the problem is that journalists should not be in the situation where their right and ability to resist subpoenas the shield law is supposed to protect them from are so uncertain. In order to be consistent with the First Amendment and similar principles enshrined in the New York Constitution, principles that the shield law seeks to vindicate, the right to appeal any trial court denial should be implicit, since the effect of barring these appeals so significantly impinges on the free press the public needs.

Sadly, however, this sort of decision – procedural formalism over the effective preservation of substantive speech rights – may be par for the course for the New York Court of Appeals these days. This case is not the first one where the Court of Appeals has reached a conclusion that puts substantive speech rights at risk because of the way it has limited the appellate rights of third parties. In fact, it justified this shield law decision by citing another case it decided last year where Facebook, as a third party, had tried to quash 381 Stored Communications Act "warrants" seeking information about its speakers. In that case, Facebook had been similarly denied a right to appeal the denial of its motion to quash, and for generally similar reasons as those cited in this case now.

We've written before about troubling effects that arise when shield law jurisprudence collides with attempts by platforms to protect the anonymity of their users. The questions of whether journalists can resist subpoenas and whether platforms also can are separate and distinct, and, as such, are often best resolved according to separate and distinct reasoning. After all, the right to a free press and the right to speak anonymously often affect liberty interests in different ways. Plus, as we saw in the Glassdoor case, when both the district court and the Ninth Circuit unhelpfully conflated the two sets of questions and used the reasoning for journalist subpoenas to drive its analysis of platform subpoenas, it used the weak reasoning in the former context to undermine the constitutional protection of anonymous speech in the latter. And in this case now we see further problems with conflating these issues, only this time in reverse, with the earlier Facebook case about platform subpoenas and anonymous speech now negatively shaping this case about journalist subpoenas and the right to a free press.

On the other hand, both anonymous speech and free press cases affect the interests of third parties and both vindicate important First Amendment rights upon which public discourse depends. Both therefore deserve to have had these critical rights treated with more care than the New York high court lately has afforded them.

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Posted on Techdirt - 16 July 2018 @ 1:31pm

On Speech And Subpoenas, New York Giveth And Taketh (First, The Good News On Platform Jurisdiction)

from the I-love-New-York-decisions-like-this dept

There are a few recent cases to note out of New York that address speech and subpoenas on third parties. This first post is about a good one, and soon we'll have another... less good one. In Amelius v. Grand Imperial LLC a court in New York has recently reaffirmed that a New York-issued subpoena is only enforceable on an Internet platform if the New York courts have jurisdiction over the platform. Furthermore, relying on a 2014 US Supreme Court ruling, Daimler AG v. Bauman, the court in Amelius concluded that having merely registered to do business as an out-of-state company is not enough to give New York jurisdiction over platform companies with no other connection to the state than that, nor is their having information that might be relevant to a New York case. Instead the platform would either need to be incorporated or headquartered in New York for its courts to have jurisdiction over them.

Which does not mean that out-of-state platforms like Yelp (the platform at issue in this case) cannot be subpoenaed to supply information relevant to a New York case. What it does mean, however, is that the New York subpoena would need to be "domesticated" in the platform's home jurisdiction so that its own local courts would be able to enforce it. It is not necessarily hard to do this: for instance, in California, pretty much all that needs to happen is for a California court clerk, or even just a licensed California attorney, to add a California subpoena form to the out-of-state subpoena for it to become an enforceable California subpoena.

But what's good about this arrangement is that platforms can have some control over what laws will govern the subpoenas propounded against them and anticipate which courts will be able to compel them to act. In fact, they can choose to base themselves in states that offer the best laws and procedural rules most protective to them and their users' speech, because not all states do so equivalently. For instance, the test for whether a subpoena can be allowed to unmask an anonymous speaker in California is the Krisnky test (which requires the pleading to make a prima facie case against the speaker), but in other states the test is either the Dendrite test, the Cahill test, the "good faith" test (as was the case in the Virginia Hadeed Carpet case, which raised similar jurisdictional issues as this one), or no test at all (thus rendering all the subpoenas potentially enforceable, no matter what the effect on speech). These tests obviously vary greatly in the protection they afford to anonymous speakers.

California also includes mandatory fee-shifting to help deter abusive subpoenas and to compensate those who have had to fight them off. Like the anti-SLAPP statute does for unmeritorious litigation Section 1987.2 of the Code of Civil Procedure allows for mandatory recovery of fees for unmeritorious unmasking subpoenas that courts quash. Unfortunately, like robust anti-SLAPP laws, not all states have such a provision, which is another reason why it's important that platforms not be exposed to these other jurisdictions simply because they may have completed the purely ministerial task of registering with the Secretary of State or having some users there and not any more substantive connection. Platforms are in the business of facilitating speech, and they should be able to choose which laws to expose themselves to that will give them the best ability to do it.

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Posted on Techdirt - 6 July 2018 @ 10:47am

What Soda Taxes And Lead Paint Have To Do With Internet Regulation

from the public-policy-on-sale-now! dept

They say that laws are like sausages, and you should never watch either be made if you don't want to be sick. But some manufacturing processes are more disgusting than others, and if we don't want to suffer ill-effects, we need to keep an eye on the worst of them.

As others have discussed, the new California Consumer Privacy Act (CCPA) is at best a law with troubling aspects, if not completely chilling for future Internet businesses and even non-commercial online expression. True, there may be the opportunity to amend it before it goes into effect to dull the worst of it, but how we find ourselves in this position where we are stuck with a ticking time bomb of a law that we now need to fix is a story worth telling, because if it could happen once it could happen again. And already has.

Which is why I'm going to tell the story about how California just banned soda taxes (in fact, not coincidentally, right around the same time that it passed the CCPA).

To understand what happened, one first needs to understand a bit about the California Constitution. In addition to setting up the typical branches of government (legislative, executive, judicial), it also allows for a form of direct democracy through ballot initiatives. Ballot initiatives generally only need a simple majority to pass, but once passed, they can be very difficult, if not impossible, to un-pass or modify them without another ballot measure. Even when ballot measures only amend statutory code, and not the Constitution itself, the legislature can be prevented from making any modifications to that new language, no matter how necessary those changes may be, unless the ballot initiative allows the legislature to act. And even if the initiative does permit it, it may require a much more difficult to attain super-majority of the legislature to make any changes, rather than the simple majority typically required to pass legislation.

The upshot is that an awful lot of California law and policy can depend on the initiative process -- and thus a whole lot can depend on who is able to use it to push forth the policy they prefer. In one sense, it's hard to get a new initiative on the ballot: it requires hundreds of thousands of signatures to qualify. But it turns out that for people who have a lot of money, it's not all that hard. Some estimate that it may take only $3-4 million to acquire enough signatures to get any initiative on the ballot.

Of course, whether such an initiative would pass is a separate question, but there are a few factors that make the odds pretty good. One is that it's very difficult for the electorate to make informed choices, and I don't say that as any sort of insult to the average California voter. In the most recent election this past June I timed how long it took to figure out who and what to vote for and clocked it at a whole hour. And that's with me, a lawyer practiced in reading and evaluating law and policy, living in an unincorporated area of California, meaning that I was spared having to wade through any city candidate or ballot measure choices. I just had to vote on candidates for all county, state, and federal offices, and on all county and state ballot measures. And this was in June, where there were fewer choices all around than there will be in November, yet it still took an hour to make any sort of responsible decisions before I was prepared to head to the polls. Of course, not everyone has that hour, and for many it will likely take longer, which means that the electorate tends to be dependent on campaign advertising to help them make those choices. But if someone has a few million dollars to spend to get an initiative on the ballot, they may easily have a few more, or a lot more, to spend on that advertising, and their opponents, no matter how principled in their opposition, just as easily may not.

The reality is that anyone who can spend a few million dollars to get an initiative on the ballot can use that money to put an electoral gun to the head of policymakers and force them to legislate for their desired policy in exchange for withdrawing the initiative from the upcoming election. Because at least if the policy gets implemented via the legislature's hand, rather than through the initiative process, the legislature might be able to temper some of its language. Also, by being an ordinary bill, it would theoretically be more changeable in the future, subject only to ordinary legislative majorities and not dependent on someone funding a new initiative that could successfully override it.

As this article in the Sacramento Bee describes, the soda tax ban is a case study of this dynamic. A business group wrote a proposal that would have created some significant limitations in the state's ability to raise revenue. It then shopped around the proposed initiative until it found someone willing to underwrite the signature-gathering necessary to get it on the ballot. That someone turned out to be the beverage industry, which generally hates soda taxes.

The relative merits of soda taxes are beyond the scope of this post. Suffice it to say, certain California communities like them, often as a way of raising revenue for public health programs and deterring the over-consumption of unhealthy drinks. Several of these communities have already passed a few such taxes.

But after the beverage industry underwrote the effort to get enough signatures to qualify the tax-limiting initiative for the ballot, an initiative that did more than just ban soda taxes but instead affected the state's taxation ability more broadly, the legislature found itself having to play electoral roulette: perhaps the ballot measure might fail and everything would be fine, but if it passed, it risked messing up the fiscal health of the state and all the policies and programs the legislature wanted to fund. So it capitulated and did a deal with the initiative's sponsor to bar any other California communities from passing their own soda taxes for the next 12 years in exchange for having the ballot initiative withdrawn.

In fact, June was a busy month for legislative capitulation, because right around the same time that the legislature did that deal it also did a deal with the sponsors of the "Consumer Right to Privacy Act of 2018" initiative that had also qualified for the November ballot.* Because that initiative, if it passed, would definitely cripple the Internet, the legislature instead agreed to pass the CCPA, which will only probably cripple it, but at least has the potential for improvement.

And that's what this post is really about, this extortionate ability for basically anyone with $4 million to spend to blackmail the legislature to set aside its own legislative judgment and build into California law whatever terrible policy the person with the money wants. Sure, for any policy that is so awful or unpopular there's always the chance that it might lose at the polls come Election Day, and from time to time ballot initiatives do get shot down. But it's very easy for garbage to get through, and wealthy minority voices count on that possibility when they try to ram through all sorts of policies that aren't necessarily good ones for Californians or its businesses – including on matters of tech policy.

On our best days these tech policy challenges require careful, nuanced treatment. We should look to the legislature, and legislators, to give it that careful, nuanced treatment before imposing drastic changes in the law that will affect them. But they can't give these regulatory proposals that sort of necessary attention they deserve if for a mere $4 million or so people can force them to rush through law that has been drafted without any of the care or necessary transparency sound regulation requires.

And when they are forced to pass a law like that, as they were just now with the CCPA, it is unlikely to be something we should cheer.

* Also, per the Los Angeles Times article linked above, "A third proposal, asking taxpayers to subsidize lead paint cleanup projects, was withdrawn by paint companies in exchange for lawmakers scrapping a slate of bills designed to impose new rules on the industry."

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Posted on Techdirt - 3 July 2018 @ 1:33pm

California Court Not Yet Ready To Undermine The Entire Internet; Rules Yelp Can't Be Forced To Delete A Review

from the Section-230-not-quite-dead-yet dept

In 2016, Techdirt wrote about a troubling case, Hassell v. Bird, in which a court issued an injunction telling Yelp to delete a review after a lawyer won a default judgment in a defamation case. The court ignored that Section 230 of the CDA says that platforms like Yelp cannot be held liable (and thus can't be legally mandated) to remove content of third parties, and didn't seem to care that Yelp wasn't even a party in the case.

The good news is that Yelp won its appeal of the injunction. The bad news, though, is that it barely won, and the relatively elegant, cogent opinion finding that Section 230 prevented the injunction is tempered in its effect by only being a plurality decision: victorious in its ultimate holding only because of a concurring vote on different grounds that provided a less-than-full-throated endorsement of the plurality's conclusion.

This case began when someone, who the plaintiff Hassell believes to be Bird, had posted a critical review of the Hassell law firm on Yelp that Hassell claimed to be defamatory. Hassell sued Bird and ended up with a default judgment agreeing that it was defamatory. Hassell also got the trial court in San Francisco to issue an injunction ordering Yelp to delete the offending posts. Yelp appealed the injunction on several grounds, including that it never had a chance to be heard by the court before it issued a judgment against it, and because Section 230 should have barred it. After losing at the California Court of Appeals, the California Supreme Court agreed to take up its case, and this week it issued its ruling.

The plurality opinion, which garnered three votes, found it sufficient to invalidate the injunction entirely on Section 230 grounds without having to reach any due process consideration. It cited plenty of prior cases to support its Section 230 analysis, but spent some time discussing the holdings in three in particular: Zeran v. AOL, Kathleen R. v. City of Livermore, and Barrett v. Rosenthal [p. 14-20]. Zeran was an early case construing Section 230 that set forth why it was so important for speech and ecommerce that platforms have this statutory protection for liability arising from their users' content. Barrett v. Rosenthal was a subsequent California Supreme Court case, which similarly construed it. And Kathleen R. was a case where a California Court found that Section 230 precluded injunction relief. These and other cases underpinned the plurality's opinion.

It also made several other points in support of its Section 230 finding. One was the observation that if Section 230 couldn't prevent the non-party injunction against Yelp it would just prompt litigants to game the system by not even bothering trying to name platforms as defendants, since they'd have better luck getting injunctions against them if they did NOT try to sue them than if they did.

The question here is whether a different result should obtain because plaintiffs made the tactical decision not to name Yelp as a defendant. Put another way, we must decide whether plaintiffs’ litigation strategy allows them to accomplish indirectly what Congress has clearly forbidden them to achieve directly. We believe the answer is no. [p. 22]

And part of the reason the answer is no, is that Section 230 was never intended to only limit damages liability against a platform; it also was meant to prevent injunctions as well. [p. 26-27].

An injunction like the removal order plaintiffs obtained can impose substantial burdens on an Internet intermediary. Even if it would be mechanically simple to implement such an order, compliance still could interfere with and undermine the viability of an online platform. (See Noah v. AOL Time Warner, Inc., supra, 261 F.Supp.2d at p. 540 [“in some circumstances injunctive relief will be at least as burdensome to the service provider as damages, and is typically more intrusive”].) Furthermore, as this case illustrates, a seemingly straightforward removal order can generate substantial litigation over matters such as its validity or scope, or the manner in which it is implemented. (See Barrett, supra, 40 Cal.4th at p. 57.) Section 230 allows these litigation burdens to be imposed upon the originators of online speech. But the unique position of Internet intermediaries convinced Congress to spare republishers of online content, in a situation such as the one here, from this sort of ongoing entanglement with the courts. [p. 28]

And it had to prevent injunctions, in order for platforms and the online speech they facilitate to be protected:

Perhaps the dissenters’ greatest error is that they fail to fully grasp how plaintiffs’ maneuver, if accepted, could subvert a statutory scheme intended to promote online discourse and industry self-regulation. What plaintiffs did in attempting to deprive Yelp of immunity was creative, but it was not difficult. If plaintiffs’ approach were recognized as legitimate, in the future other plaintiffs could be expected to file lawsuits pressing a broad array of demands for injunctive relief against compliant or default-prone original sources of allegedly tortious online content. Injunctions entered incident to the entry of judgments in these cases then would be interposed against providers or users of interactive computer services who could not be sued directly, due to section 230 immunity. As evinced by the injunction sought in Kathleen R., supra, 87 Cal.App.4th 684, which demanded nothing less than control over what local library patrons could view on the Internet (id., at p. 691), the extension of injunctions to these otherwise immunized nonparties would be particularly conducive to stifling, skewing, or otherwise manipulating online discourse — and in ways that go far beyond the deletion of libelous material from the Internet. Congress did not intend this result, any more than it intended that Internet intermediaries be bankrupted by damages imposed through lawsuits attacking what are, at their core, only decisions regarding the publication of third party content. [p. 30-21]

Unfortunately the rest of the Court was not as amenable to the plurality's application of Section 230 as a defense against the injunction. Even the concurrence by Justice Kruger, which provided the fourth vote in favor of overturning the injunction, did so, as Eric Goldman observed, with potentially some qualification of the Section 230 analysis ("I express no view on how section 230 might apply to a different request for injunctive relief based on different justifications."). [concurrence p.1]. But both the concurrence and the plurality recognized that there were problems with trying to hold a non-party platform like Yelp responsible for complying with the injunction to take down content that had also been directed to the defendant Bird. For the plurality it was a straightforward violation of Section 230.

[I]t is also true that as a general rule, when an injunction has been obtained, certain nonparties may be required to comply with its terms. But this principle does not supplant the inquiry that section 230(c)(1) requires. Parties and nonparties alike may have the responsibility to comply with court orders, including injunctions. But an order that treats an Internet intermediary “as the publisher or speaker of any information provided by another information content provider” nevertheless falls within the parameters of section 230(c)(1). In substance, Yelp is being held to account for nothing more than its ongoing decision to publish the challenged reviews. Despite plaintiffs’ generic description of the obligation they would impose on Yelp, in this case this duty is squarely derived from “the mere existence of the very relationship that Congress immunized from suit.” [p. 24]

For the concurrence the platform's relationship with the defendant was too attenuated and not the sort of agency relationship where it may be proper to hold a third party responsible for complying with an injunction on another.

Plaintiffs, as well as [dissenting] Justice Liu, argue that the injunction naming Yelp is valid because it merely makes explicit that Yelp, as an entity “through” whom Bird acts, is obligated to carry out the injunction on her behalf. But the trial court made no finding that Bird acts, or has ever acted, “through” Yelp in the sense relevant under Berger, nor does the record contain any such indication; we have no facts before us to suggest that Yelp is Bird’s “agent” or “servant.” It is true and undisputed, as plaintiffs and Justice Liu emphasize, that Bird’s statements were posted on Yelp’s website with Yelp’s permission. And as a practical matter, Yelp has the technological ability to remove the reviews from the site. These facts might well add up (at least absent section 230) to a good argument for filing suit against Yelp and seeking an injunctive remedy in the ordinary course of litigation. But the question presented here is whether these facts establish the sort of legal identity between Bird and Yelp that would justify binding Yelp, as a nonparty, to the outcome of litigation in which it had no meaningful opportunity to participate. Without more, I do not see how they could. [concurrence p. 7]

The plurality also rejected the theory raised by the trial court and pushed by the dissent that the platform had somehow "aided and abetted" the defamatory speech. If this argument could prevail, Section 230 would become a nullity, since every platform enables user expression, and not all that expression is necessarily entirely legal.

In his dissent, Justice Cuéllar argues that even if the injunction cannot on its face command Yelp to remove the reviews, the removal order nevertheless could run to Yelp through Bird under an aiding and abetting theory premised on conduct that remains inherently that of a publisher. (See dis. opn. of Cuéllar, J., post, at pp. 3, 20-22, 34-37.) We disagree. As applied to such behavior, Justice Cuéllar’s approach would simply substitute one end-run around section 230 immunity for another. [p. 25]

The dissenting opinions, on the other hand, were very focused on the plight of the plaintiff who had apparently been injured by these purportedly defamatory posts. (I say "purportedly," because although the Supreme Court decision does not spend much time on this issue, it's worth noting that the conclusion of the posts' defamatory nature was drawn from an ex parte default proceeding at the trial court where no defense was supplied. It is certainly easier for a court to accept a plaintiff's characterization of language as defamatory when there is no one present – even Yelp was left out – to show that it is not.) As we've seen in cases like Garcia v. Google, the operation of Section 230 can make it difficult for a legitimately aggrieved plaintiff to obtain a remedy against someone who has defamed them. But it isn't necessarily impossible, and the plurality reminded everyone that Hassell was not without any recourse:

On this last point, we observe that plaintiffs still have powerful, if uninvoked, remedies available to them. Our decision today leaves plaintiffs’ judgment intact insofar as it imposes obligations on Bird. Even though neither plaintiffs nor Bird can force Yelp to remove the challenged reviews, the judgment requires Bird to undertake, at a minimum, reasonable efforts to secure the removal of her posts. A failure to comply with a lawful court order is a form of civil contempt (Code Civ. Proc., §1209, subd. (a)(5)), the consequences of which can include imprisonment (see In re Young (1995) 9 Cal.4th 1052, 1054). Much of the dissents’ rhetoric regarding the perceived injustice of today’s decision assumes that plaintiffs’ remaining remedies will be ineffective. One might more readily conclude that the prospect of contempt sanctions would resonate with a party who, although not appearing below, has now taken the step of filing an amicus curiae brief with this court. [p. 32]

Perhaps this is the most important passage in the whole opinion. It's become really popular especially as of late to try to make platforms responsible for everything their users do. It's good to have courts remind us that it's the people who do the things who really should be held accountable instead.

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Posted on Techdirt - 28 June 2018 @ 3:50pm

The Monkey Selfie Case Continues, But The Dancing Baby One Does Not

from the never-ending-copyright-litigation dept

Thankfully this is not a post about the Monkey Selfie case, which should have ended by now but has not. Instead it's about Lenz v. Universal, the Dancing Baby case, which shouldn't have come to an end yet, but has. This week the EFF announced that the case has been settled.

The problem though isn't that it the case has been settled. It had been remanded for trial, which would have been a long, expensive slog to not accomplish what the case really needed to accomplish: put teeth back into the Section 512(f) remedy that the DMCA is supposed to afford to deter illegitimate takedown demands. The problem is that the opportunity to provide that benefit was extinguished when the US Supreme Court denied cert and refused to review the Ninth Circuit's interpretation of that provision. So we'll be stuck with this precedent until another case can prompt another look by the court and the serious issue of censorship-via-takedown notice can finally get the judicial attention it deserves.

Maybe it will even be a case where a monkey has taken a video of himself dancing along to music, because the rights of monkeys have so far been a lot more successful in attracting en banc attention from the Ninth Circuit than the speech rights of people. And maybe it won't even take 10 years of litigation (that's 32 in monkey years) to find out.

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Posted on Techdirt - 25 June 2018 @ 3:40am

The Supreme Court Makes A Federal Case Out Of South Dakota's Inability To Collect Taxes From Its Residents And Thus A Big Mess

from the aereo-for-ecommerce dept

In some ways the Supreme Court's decision last week in South Dakota v. Wayfair may seem like a small thing: it simply overturned an earlier decision, Quill Corp v. North Dakota, which had concluded that states could not impose requirements to collect sales tax on businesses with no physical presence in the state. But in dispensing with that rule, the decision invited broader effects that may not be so small, thanks to the alarming reasoning the Court used to justify it.

The Court was prompted to reverse its earlier decision – something that the Supreme Court does but rarely, thanks to the principle of stare decisis that ordinarily discourages the Court from messing with an earlier precedent – for a few reasons. In particular it was concerned that Internet businesses without a physical presence in the state had an advantage over those with one [p.12-13], and it accepted South Dakota's claims that it was losing out on millions of dollars in sales tax revenue when South Dakotans bought things from out-of-state Internet businesses who were not collecting the sales taxes that normally would have been owed [p.2].

These assumptions, if true, would raise reasonable policy concerns. But even if they were valid worries, it doesn't follow that the Supreme Court should be the organ of government to address them, especially not when its doing so threatens to create additional policy concerns of its own.

First, South Dakota may be heavily dependent on sales tax to generate revenue, but that's its choice. If consumption taxes turn out to be an inadequate way of filling its coffers, it could choose to impose other forms of taxation, like an income tax, as many other states have. It is not dependent on the United States Supreme Court to help it balance its budget.

Second, like other states, South Dakota requires its residents to independently submit to the state the sales tax that would have been collected, had they bought their goods from an Internet business with a physical presence there. ("If for some reason the sales tax is not remitted by the seller, then instate consumers are separately responsible for paying a use tax at the same rate." [p.2]). The Court may have been correct in observing that enforcing these sorts of payment requirements may be difficult [p.2], but just because it is difficult does not mean that it should fall to the United States Supreme Court to relieve the state of its enforcement burden – especially not an enforcement burden against parties over whom the state already had undisputed jurisdictional reach. This case essentially seems to boil down to South Dakota complaining, "We can't make our residents, who are clearly subject to our laws, pay their taxes, so please make sure that out-of-state residents, who are not clearly subject to our laws, do instead." And the court was amenable to this plea. [p.13]

As for whether the physical presence rule truly gave an advantage to out-of-state businesses, if the state could manage to get its residents to pay the taxes they owe the answer would be no, since any price advantage an out-of-state business could offer would have been negated by the subsequent payment obligation. But the problem with the Supreme Court having now changed the rule is that it's placed its thumb firmly on the other side of the scale and disadvantaged out-of-state businesses in favor of those with a physical presence.

In terms of sales tax collection, in and of itself it's no small task. States rarely have one tax rate applicable to the whole state, or to all types of goods. True, as the Court notes, South Dakota "is one of more than 20 States that have adopted the Streamlined Sales and Use Tax Agreement."

This system standardizes taxes to reduce administrative and compliance costs: It requires a single, state level tax administration, uniform definitions of products and services, simplified tax rate structures, and other uniform rules. It also provides sellers access to sales tax administration software paid for by the State. Sellers who choose to use such software are immune from audit liability. [p.23]

Such an agreement may certainly aid in minimizing compliance costs. So might the reasonably-priced software that the Court glibly assumes may eventually "make it easier for small businesses to cope with these problems." [p.21]. But in the here and now, compliance is still not so simple. This decision will still reach the other 30 states that have not adopted the Streamlined Sales and Use Tax Agreement, and figuring out how to comply will be more feasible for some businesses than others. Larger companies, for instance, will have more resources to manage complex compliance requirements. Companies large enough, or local enough, to have a presence in these states will also be more familiar with the state and its compliance requirements generally, since they will need to comply with the state's other laws as well.

Which leads to a more significant question raised by this decision, whose holding won't be confined to sales tax collection: what about these other state laws? Per the logic of the decision, can states impose other compliance obligations on Internet businesses, in addition to tax collection ones? As we've seen in recent discussions around Section 230, including in the cases involving Airbnb/Homeaway and Armslist, states love to apply local law to the Internet. In fact, even before the Internet states liked to impose local law whenever they could. The "long-arm" reach of states to impose their regulatory power on out-of-state parties has traditionally been limited by the requirement that the foreign party at least have some minimum contact with the state before they can be exposed to its jurisdiction. Which is why the physical presence rule made sense: being physically there suggested there was a significant enough contact between the party being regulated and the state doing the regulating. It also seemed more fair: in-state companies will also likely have in-state employees able to wield political pressure on the state government if the laws it passes to apply to their employers starts threatening their employment. Whereas out-of-state companies have no such political leverage to wield over the regulators they are nonetheless beholden to.

What the Court seems to be saying now is that lesser contact with a state than physical presence may be sufficient to establish minimum contact. In and of itself, such an assertion may not be controversial, and if the decision's rationale had been focused on those indicia it might not be so disquieting. In terms of the South Dakota taxation law itself, the law does incorporate some limitations so that it won't apply to Internet businesses with only incidental connections to South Dakota.

The Act applies only to sellers that, on an annual basis, deliver more than $100,000 of goods or services into the State or engage in 200 or more separate transactions for the delivery of goods or services into the State."[p.3]

But the Court is not specific as to what sort of lesser contact will be sufficient to subject an Internet business to state jurisdiction for taxation or otherwise, and it is going to be really expensive for out-of-state Internet businesses to find out.

Furthermore, the hostility that the Court showed to these out-of-state businesses is worrying. First, it is unjustifiably dismissive to the utility of the physical presence requirement.

The argument, moreover, that the physical presence rule is clear and easy to apply is unsound. Attempts to apply the physical presence rule to online retail sales are proving unworkable. States are already confronting the complexities of defining physical presence in the Cyber Age. For example, Massachusetts proposed a regulation that would have defined physical presence to include making apps available to be downloaded by in-state residents and placing cookies on in-state residents’ web browsers. Ohio recently adopted a similar standard. Some States have enacted so-called “click through” nexus statutes, which define nexus to include out-of-state sellers that contract with in-state residents who refer customers for compensation. Others still, like Colorado, have imposed notice and reporting requirements on out-of-state retailers that fall just short of actually collecting and remitting the tax. Statutes of this sort are likely to embroil courts in technical and arbitrary disputes about what counts as physical presence. [p. 19-20]

Of course, far from impugning the physical presence rule, these examples demonstrate the wisdom of it, because in all the examples described any dispute that might arise would arise because the states are trying to target businesses that aren't actually physically present in their states.

In fact, in general the Court seems to have an uneasy notion of what constitutes physical presence by an Internet business:

For example, a company with a website accessible in South Dakota may be said to have a physical presence in the State via the customers’ computers. A website may leave cookies saved to the customers’ hard drives, or customers may download the company’s app onto their phones. Or a company may lease data storage that is permanently, or even occasionally, located in South Dakota. Cf. United States v. Microsoft Corp., 584 U. S. ___ (2018). [p.15]

The Court also cannot imagine how limiting a company's physical presence might be of value to it:

But the administrative costs of compliance, especially in the modern economy with its Internet technology, are largely unrelated to whether a company happens to have a physical presence in a State. For example, a business with one salesperson in each State must collect sales taxes in every jurisdiction in which goods are delivered; but a business with 500 salespersons in one central location and a website accessible in every State need not collect sales taxes on otherwise identical nationwide sales. [p. 12]

Worse, to the extent that the Court can imagine why a 500-person company might choose not to have boots on the ground in every state where it might happen to have an online customer, it is inexplicably hostile:

In effect, Quill has come to serve as a judicially created tax shelter for businesses that decide to limit their physical presence and still sell their goods and services to a State’s consumers—something that has become easier and more prevalent as technology has advanced. [p. 13]

Later it in the decision the Court further describes Quill as allowing out-of-state companies to aid and abet customers in "evad[ing] a lawful tax that unfairly shifts to those consumers who buy from their competitors with a physical presence that satisfies Quill—even one warehouse or one salesperson—an increased share of the taxes." [p. 17]

What is concerning is that in using these pejorative assessments the Court is essentially declaring, "How dare you do something legal to avoid liability." Which is sadly an admonition we've heard the Court make before in trying to substantiate a questionable holding in another case: Aereo.

As the Court continues, the comparison with Aereo becomes even more apt:

"Distortions caused by the desire of businesses to avoid tax collection mean that the market may currently lack storefronts, distribution points, and employment centers that otherwise would be efficient or desirable." [p. 13]

In other words, the Court has concluded, "Our jurisdictional rule is deterring investment in the state, so therefore it's a bad rule."

This sort of contorted reasoning is exactly what happened in Aereo, where the Court looked at who was making money, unilaterally decided it was the wrong people, and then tied itself in knots to write new law, indifferent to how much settled precedent it displaced or the full extent of its likely effects, in order to justify reallocating the financial gains.

Then, as now, it was a decision predicated on a series of questionable assumptions. We can only hope that this latest result won't be as seriously catastrophic for online innovation as Aereo has been.

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Posted on Techdirt - 19 June 2018 @ 11:57am

Think The GDPR Only Regulates Big Internet Companies? The EU Says It Regulates You Too.

from the another-threat-to-democratized-speech dept

People tend to think of the GDPR as regulation companies must comply with. But thanks to a decision by the Court of Appeals for the EU earlier this month, there's particular reason to believe that ordinary Internet users will need to worry about complying with it as well.

In this decision the court found that the administrator of a fan page on Facebook is jointly responsible with Facebook for the processing of its visitors' data. And, as such, the administrator must comply with applicable data processing regulations – which necessarily include the GDPR.

The fan page at issue in this case appears to be run by some sort of enterprise, "Wirtschaftsakademie." But fan pages aren't always run by companies: as the court acknowledges, they are often run by individuals or small groups of individuals. Yet there doesn't appear to be anything in the ruling that would exempt them from its holding. Indeed, the court recognizes that its decision would inherently apply to them:

Fan pages are user accounts that can be set up on Facebook by individuals or businesses. To do so, the author of the fan page, after registering with Facebook, can use the platform designed by Facebook to introduce himself to the users of that social network and to persons visiting the fan page, and to post any kind of communication in the media and opinion market user data a processor of the data for visitors to its page, and thus jointly responsible with Facebook for its handling.

The problem is, compliance with data protection regulations like the GDPR is no simple matter. In fact, as this article suggests, the decision also potentially makes it even more complicated and expensive by expanding the jurisdiction of individual member states' data protection authorities (which was something that EU-wide regulation like the GDPR was actually supposed to minimize).

[Eduardo] Ustaran expressed concern in his 2017 post about the potential for local DPAs’ authority to issue decisions that affect companies located in other areas, in this case, Facebook, whose EU representative is in Ireland. He says that this goes against the letter of GDPR’s one-stop shop goal.

But even without this change to the GDPR's enforcement operation, the burdens of compliance were already a matter of concern. As discussed previously, compliance with the GDPR is difficult and expensive for even well-resourced companies. It's not something that individual Internet users are going to be able to easily manage, and that's a problem, because who would want to set up a Facebook fan page if doing so opened yourself up to such a crippling compliance burden?

Which leads to the essential problem here. Some cheer the GDPR because it puts user privacy front and center as a policy priority. In and of itself, there's nothing wrong with doing so – in fact, it's an idea whose time has come. But it doesn't matter how well-intentioned a law is if instead of merely regulating otherwise lawful activity it ends up suppressing it. And it's especially problematic when that activity is expressive. Even if chilling expression weren't the intent, if that's the effect, then there is something wrong with the regulation.

Furthermore, while it's bad enough if regulation chills the expressive activity of those well-resourced companies better able to navigate complex and costly compliance requirements, it's even worse if it chills the lawful and even desirable expressive activity of ordinary individuals. One of the things an Internet platform like Facebook does, and does well, is encourage the casual expression of ordinary people. If you have things to say, these platforms make it easy to say them to other people without you needing to invest in corporate structure or technical infrastructure before doing so. These are tools that help democratize expression, which ordinarily is something places claiming to value the principles of free expression should want to support. In fact, the more the antipathy against big companies, the more they should want to ensure that independent voices can thrive.

But instead we're seeing how all this regulation targeted at those big companies instead attacks regular people trying to speak online. We've seen the same problem with SESTA/FOSTA too, where individual online speakers suddenly find themselves risking legal liability for how they interact with other speakers online. And now it's happening again in the GDPR context, where the very regulation ostensibly intended to protect people online now threatens to silence them.

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Posted on Techdirt - 11 June 2018 @ 3:29pm

More Bad Facts Making More Bad Law, This Time In Wisconsin

from the thy-online-speaker's-keeper dept

A few weeks ago we, and others, filed an amicus brief in support of Airbnb and Homeaway at the Ninth Circuit. The basic point we made there is that Section 230 applies to all sorts of platforms hosting all sorts of user expression, including transactional content offering to rent or sell something, and local jurisdictions don't get to try to impose liability on them anyway just because they don't like the effects of those transactions. It's a point that is often forgotten in Section 230 litigation, and so last week the Copia Institute, joined by EFF, filed an amicus brief at the Wisconsin Supreme Court reminding them of the statute's broad application and why that breadth so important for the preservation of online free speech.

The problem is that in Daniels v. Armslist, the Wisconsin Court of Appeals had ignored twenty-plus years of prior precedent affirming this principle in deciding otherwise. We therefore filed this brief to support Armslist in urging the Wisconsin Supreme Court to review the Court of Appeals decision.

As in so many cases involving Section 230 the case in question followed an awful tragedy: someone barred from owning a gun bought one through the online marketplace run by Armslist and then shot his estranged partner. The partner's estate sued Armslist for negligence in having constructed a site where dangerous people could buy guns. As we acknowledged up front:

Tragic events like the one at the heart of this case often challenge the proper adjudication of litigation brought against Internet platforms. Justice would seem to call for a remedy, and if it appears that some twenty-year old federal statute is all that prevents a worthy plaintiff from obtaining one, it is tempting for courts to ignore it in order to find a way to give them that remedy.

Nonetheless, there was more at stake than just the plaintiff's interest. This case might look like a gun policy case, or a negligence case, but, like with Airbnb/Homeaway, this case was really a speech case, and laws like Section 230 that help protect speech are ignored at our peril because doing so imperils all the important expression they exist to protect.

The reason it was a speech case is that, as in the Airbnb/Homeaway case where someone was using the platform to say, "I have a home to rent," here someone had used the Armslist platform to say, "I have a gun to sell." Because these platforms only facilitate these narrow topics of expression it's easy to lose sight of what's getting expressed and instead focus on the consequences of the expression. But that's the problem with these cases: someone is trying to hold an Internet platform liable for the consequences of what someone said, and that's exactly what Section 230 forbids.

Tempting though it may be to try to find exceptions to that critical statutory protection, it is important to hold the line because Section 230 only works when it can always work. It wouldn't accomplish anything if platforms were only protected from certain forms of liability but still had to monitor all their users' content anyway. Congress recognized that such monitoring would be an impossible task and crippling to platforms' ability to remain available to facilitate users' speech. A major reason Section 230 exists is to protect speech from the corrosive effects these monitoring burdens would have on it. It is also why Section 230 does not let state and local jurisdictions impose their own monitoring burdens through the threat of liability, as the Wisconsin appeals court decision would do.

Thanks to local counsel Kathryn Keppel at Gimbel, Reilly, Guerin & Brown LLP for all her help getting this brief filed.

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Posted on Techdirt - 4 June 2018 @ 1:34pm

Highlights From Former Rep. Chris Cox's Amicus Brief Explaining The History And Policy Behind Section 230

from the future-reference dept

The Copia Institute was not the only party to file an amicus brief in support of Airbnb and Homeaway's Ninth Circuit appeal of a district court decision denying them Section 230 protection. For instance, a number of Internet platforms, including those like Glassdoor, which hosts specialized user expression, and those like eBay, which hosts transactional user expression, filed one pointing out how a ruling denying Airbnb and Homeaway would effectively deny it to far more platforms hosting far more kinds of user speech than just those platforms behind the instant appeal.

And then there was this brief, submitted on behalf of former Congressman Chris Cox, who, with then-Representative Ron Wyden, had been instrumental in getting Section 230 on the books in the first place. With this brief the Court does not need to guess whether Congress intended for Section 230 to apply to platforms like Airbnb and Homeaway; the statute's author confirms that it did, and why.

In giving insight into the statutory history of Section 230 the brief addresses the two main issues raised by the Airbnb appeal – issues that are continuing to come up over and over again in Section 230-related litigation in state and federal courts all over the country: does Section 230 apply to platforms intermediating transactional user expression, and does Section 230's pre-emption language preclude efforts by state and local authorities to hold these platforms liable for intermediating the consummation of the transactional speech. Cox's brief describes how Congress intended both these questions to be answered in the affirmative and thus may be relevant to these other cases. With that in mind, we are archiving – and summarizing – the brief here.

To illustrate why Section 230 should apply in these situations, first the brief explains the historical context that prompted the statute in the first place:

In 1995, on a flight from California to Washington, DC during a regular session of Congress, Representative Cox read a Wall Street Journal article about a New York Superior Court case that troubled him deeply. The case involved a bulletin board post on the Prodigy web service by an unknown user. The post said disparaging things about an investment bank. The bank filed suit for libel but couldn’t locate the individual who wrote the post. So instead, the bank sought damages from Prodigy, the site that hosted the bulletin board. [page 3]

The Stratton Oakmont v. Prodigy decision alarmed Cox for several reasons. One, it represented a worrying change in judicial attitudes towards third party liability:

Up until then, the courts had not permitted such claims for third party liability. In 1991, a federal district court in New York held that CompuServe was not liable in circumstances like the Prodigy case. The court reasoned that CompuServe “ha[d] no opportunity to review [the] contents” of the publication at issue before it was uploaded “into CompuServe’s computer banks,” and therefore was not subject to publisher liability for the third party content." [page 3-4]

It had also resulted in a damage award of $200 million dollars against Prodigy. [page 4]. Damage awards like these can wipe technologies off the map. If platforms had to fear the crippling effect that even one such award, arising from just one user, could have on their developing online services, it would dissuade them from being platforms at all. As the brief observes:

The accretion of burdens would be especially harmful to smaller websites. Future startups, facing massive exposure to potential liability if they do not monitor user content and take responsibility for third parties’ legal compliance, would encounter significant obstacles to capital formation. Not unreasonably, some might abjure any business model reliant on third-party content. [page 26]

Then there was also a third, related concern: according to the logic of Stratton Oakmont, which had distinguished itself from the earlier Cubby v. Compuserve case, unlike Compuserve, Prodigy had "sought to impose general rules of civility on its message boards and in its forums." [page 4].

The perverse incentive this case established was clear: Internet platforms should avoid even modest efforts to police their sites. [page 4]

The essential math was stark: Congress was worried about what was going on the Internet. It wanted platforms to be an ally in policing it. But without protection for platforms, they wouldn't be. They couldn't be. So Cox joined with Senator Wyden to craft a bill that would trump the Stratton Oakmont holding. The result was the Internet Freedom and Family Empowerment Act, H.R. 1978, 104 Cong. (1995), which, by a 420-4 vote reflecting significant bipartisan support, became an amendment to the Communications Decency Act – Congress's attempt to address the less desirable material on the Internet – which then came into force as part of the Telecommunications Act of 1996. [page 5-6]. The Supreme Court later gutted the indecency provisions of the CDA in Reno v. ACLU, but the parts of the CDA at Section 230 have stood the test of time. [page 6 note 2].

The statutory language provided necessary relief to platforms in two important ways. First, it included a "Good Samaritan" provision, meaning that "[i]f an Internet platform does review some of the content and restricts it because it is obscene or otherwise objectionable, then the platform does not thereby assume a duty to monitor all content." [page 6]. Because keeping platforms from having to monitor was the critical purpose of the statute:

All of the unique benefits the Internet provides are dependent upon platforms being able to facilitate communication among vast numbers of people without being required to review those communications individually. [page 12]

The concerns were practical. As other members of Congress noted at the time, "There is no way that any of that any of those entities, like Prodigy, can take the responsibility [for all of the] information that is going to be coming in to them from all manner of sources.” [page 14]

While the volume of users [back when Section 230 was passed] was only in the millions, not the billions as today, it was evident to almost every user of the Web even then that no group of human beings would ever be able to keep pace with the growth of user-generated content on the Web. For the Internet to function to its potential, Internet platforms could not be expected to monitor content created by website users. [page 2]

Thus Section 230 established a new rule expressly designed to spare platforms from having to attempt this impossible task in order to survive:

The rule established in the bill [...] was crystal clear: the law will recognize that it would be unreasonable to require Internet platforms to monitor content created by website users. Correlatively, the law will impose full responsibility on the website users to comply with all laws, both civil and criminal, in connection with their user-generated content. [But i]t will not shift that responsibility to Internet platforms, because doing so would directly interfere with the essential functioning of the Internet. [page 5]

That concern for the essential functioning of the Internet also explains why Section 230 was not drawn narrowly. If Congress had only been interested in protecting platforms from liability for potentially defamatory speech (as was at issue in the Stratton Oakmont case) it could have written a law that only accomplished that end. But Section 230's language was purposefully more expansive. If it were not more expansive, while platforms would not have to monitor all the content it intermediated for defamation, they would still have to monitor it for everything else, and thus nothing would have been accomplished with this law:

The inevitable consequence of attaching platform liability to user-generated content is to force intermediaries to monitor everything posted on their sites. Congress understood that liability-driven monitoring would slow traffic on the Internet, discourage the development of Internet platforms based on third party content, and chill third-party speech as intermediaries attempt to avoid liability. Congress enacted Section 230 because the requirement to monitor and review user-generated content would degrade the vibrant online forum for speech and for e-commerce that Congress wished to embrace. [page 15]

Which returns to why Section 230 was intended to apply to transactional platforms. Congress didn't want to be selective about which types of platforms could benefit from liability protection. It wanted them all to:

[T]he very purpose of Section 230 was to obliterate any legal distinction between the CompuServe model (which lacked the e-commerce features of Prodigy and the then-emergent AOL) and more dynamically interactive platforms. … Congress intended to “promote the continued development of the Internet and other interactive computer services” and “preserve the vibrant and competitive free market” that the Internet had unleashed. Forcing web sites to a Compuserve or Craigslist model would be the antithesis of the congressional purpose to “encourage open, robust, and creative use of the internet” and the continued “development of e-commerce.” Instead, it will slow commerce on the Internet, increase costs for websites and consumers, and restrict the development of platform marketplaces. This is just what Congress hoped to avoid through Section 230. [page 23-24]

And it wanted them all to be protected everywhere because Congress also recognized that they needed to be protected everywhere in order to be protected at all:

A website […] is immediately and uninterruptedly exposed to billions of Internet users in every U.S. jurisdiction and around the planet. This makes Internet commerce uniquely vulnerable to regulatory burdens in thousands of jurisdictions. So too does the fact that the Internet is utterly indifferent to state borders. These characteristics of the Internet, Congress recognized, would subject this quintessentially interstate commerce to a confusing and burdensome patchwork of regulations by thousands of state, county, and municipal jurisdictions, unless federal policy remedied the situation. [page 27]

Congress anticipated that states and local authorities would be tempted to impose liability on platforms, and in doing so interfere with the operation of the Internet by forcing platforms to monitor after all and thus cripple their operation:

Other state, county, and local governments would no doubt find that fining websites for their users’ infractions is more convenient than fining each individual who violates local laws. Given the unlimited geographic range of the Internet, unbounded by state or local jurisdiction, the aggregate burden on an individual web platform would be multiplied exponentially. While one monitoring requirement in one city may seem a tractable compliance burden, myriad similar-but-not-identical regulations could easily damage or shut down Internet platforms. [page 25]

So, "[t]o ensure the quintessentially interstate commerce of the Internet would be governed by a uniform national policy" of sparing platforms the need to monitor, Congress deliberately foreclosed the ability of state and local authorities to interfere with that policy with Section 230's pre-emption provision. [page 10]. Without this provision, the statute would be useless:

Were every state and municipality free to adopt its own policy concerning when an Internet platform must assume duties in connection with content created by third party users, not only would compliance become oppressive, but the federal policy itself could quickly be undone. [page 13]

This pre-emption did not make the Internet a lawless place, however. Laws governing offline analogs to the services starting to flourish on the web would continue to apply; Section 230 simply prevented platforms from being held derivatively liable for user generated content that violated them. [page 9-10].

Notably, none of what Section 230 proposed was a controversial proposition:

When the bill was debated, no member from either the Republican or Democratic side could be found to speak against it. The debate time was therefore shared between Democratic and Republican supporters of the bill, a highly unusual procedure for significant legislation. [page 11]

It was popular because it advanced Congress's overall policy to foster the most beneficial content online, and the least detrimental.

Section 230 by its terms applies to legal responsibility of any type, whether under civil or criminal state statutes and municipal ordinances. But the fact that the legislation was included in the CDA, concerned with offenses including criminal pornography, is a measure of how serious Congress was about immunizing Internet platforms from state and local laws. Internet platforms were to be spared responsibility for monitoring third-party content even in these egregious cases.

A bipartisan supermajority of Congress did not support this policy because they wished to give online commerce an advantage over offline businesses. Rather, it is the inherent nature of Internet commerce that caused Congress to choose purposefully to make third parties and not Internet platforms responsible for compliance with laws generally applicable to those third parties. Platform liability for user-generated content would rob the technology of its vast interstate and indeed global capability, which Congress decided to “embrace” and “welcome” not only because of its commercial potential but also “the opportunity for education and political discourse that it offers for all of us.” [page 11-12]

As the brief explains elsewhere, Congress's legislative instincts appear to have been born out, and the Internet today is replete with valuable services and expression. [page 7-8]. Obviously not everything the Internet offers is necessarily beneficial, but the challenges the Internet's success pose don't negate the policy balance Congress struck. Section 230 has enabled those successes, and if we want its commercial and educational benefit to continue to accrue, we need to make sure that the statute's critical protection remains available to all who depend on it to realize that potential.

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Posted on Techdirt - 30 May 2018 @ 11:57am

Wherein Facebook Messes Up Elections By Trying Not To Mess Up Elections

from the early-bird-gets-the-political-ad-buy dept

A few months ago I suggested that calling Facebook a bull in a china shop might not be fair to bulls. I fear the suggestion remains apt, as Facebook throws its considerable weight around in ways that, while potentially well-meaning, leaves all sorts of chaos in its wake. The latest evidence of this tendency relates to its recent announcement of policies designed to limit who can place political ads on Facebook.

The problem is, that's what it's done: limit who can place ads on Facebook. But according to the Verge, all it's done is limit the ability for SOME people to post political ads. As in, only SOME of the candidates in any particular race.

The Verge article notes that the Mississippi primary is set for June 5. But in one particular race for Congress, only the incumbent's authentication paperwork is in order, so only he is able to buy ads. As the day of the election draws near, his challenger finds himself locked out of being able to advertise through the medium.

E. Brian Rose is a Republican candidate for Congress in Mississippi, and is a primary challenger to the incumbent Rep. Steven Palazzo (R-MS). Up until yesterday, Rose said, Facebook had been a critical part of his campaign strategy. He amassed more than 6,000 followers on his official page, using Facebook ads to target voters in hundreds of narrowly defined demographic targets.

Yesterday, Rose’s campaign planned to buy 500 different Facebook ads. The first batch were approved shortly before the new rules took effect. But when Rose went to buy the remainder, he received a message from Facebook saying his ads had not been authorized. Rose filled out the required online forms attesting to his identity. At the end, Facebook said it would send Rose an authorization code in the mail. He was told it would arrive in 12 to 15 days — by which point the election would be over.

It's a fair read of the story that the challenger screwed up: if the incumbent was able to register, then so should have the challenger. But even so, it still looks like Facebook handled the rule change poorly, both in its timing (mid-race in the critical days leading up to an election), and with too drastic a change too dependent on its successful promotion that left too much to chance despite the serious stakes.

Facebook began allowing political advertisers to start the verification process on April 23rd. The company promoted the new process with a blog post and messages inside Facebook directed at administrators of political pages. In May, it also sent emails to page administrators advising them of the changes.

The challenger says he didn't get the notices about the change. It's a contention that seems plausible: even assuming there were no issues with the messages actually being sent out, or ending up caught in a spam filter, they would have arrived in campaign inboxes in the midst of what surely were busy days full of priorities more important than keeping up with Facebook notifications. Even assuming that authentication is the key to addressing political ad-buy abuse, an effective authentication solution should not have risked locking out live candidates in pending elections. The implementation of any solution should produce greater benefit than cost, which does not seem to be the case here. Because while it may be commendable that Facebook is trying to reduce the manipulation by outsiders on America's political campaigns, it accomplishes little if in the process of trying to reduce one candidate's unfair advantage, it ends up creating another. It appears Facebook should have done more to anticipate what might go wrong with its new system before switching over to it, but the lesson here is not just for Facebook but for those fond of pressuring Facebook to do something, anything, to change its existing policies because it turns out that sometimes doing just anything may be worse than doing nothing.

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Posted on Techdirt - 25 May 2018 @ 7:39pm

The GDPR: Ghastly, Dumb, Paralyzing Regulation It's Hard To Celebrate

from the if-you-like-privacy-and-the-Internet-demand-better dept

Happy GDPR day! At least if you can manage to be happy about a cumbersome, punitive, unprecedentedly extraterritorial legal regime that hijacks the resources of businesses everywhere without actually delivering privacy protection commensurate with the enormous toll attempts to comply with it extract. It's a regulatory response due significant criticism, including for how it poorly advances the important policy goals purportedly prompting it.

In terms of policy goals, there's no quarrel that user privacy is important. And it's not controversial to say that many providers of digital products and services to date may have been… let's just say, insufficiently attentive to how those products and services handled user privacy. Data-handling is an important design consideration that should always be given serious attention. To the extent the GDPR encourages this sort of "privacy by design," it is something to praise.

But that noble mission is overwhelmed by the rest of the regulatory structure not nearly so adeptly focused on achieving this end, which ultimately impugns the overall effort. Just because a regulatory response may be motivated by a worthwhile policy value, or even incorporate a few constructive requirements, it is not automatically a good regulatory response. Unless the goal is to ruin, rather than regulate, knotty policy problems need nuanced solutions, and when the costs of complying with a regulatory response drown out the intended benefit it can't be considered a good, or even effective, policy response. Here, even if all the GDPR requirements were constructive ones – and while some are, some are quite troubling – as a regulatory regime it's still exceptionally problematic, in particular given the enormous costs of compliance. Instead of encouraging entities to produce more privacy-protective products and services, it's instead diverted their resources, forcing them to spend significant sums of money seeking advice or make their own guesses on how to act based on assumptions that may not be correct. These guesses themselves can be costly if it results in resources being spent needlessly, or for enormous sums to be put in jeopardy if the guesses turn out to be wrong.

The rational panic we see in the flurry of emails we've all been getting, with subject lines of varying degrees of grief, and often with plaintive appeals to re-join previously vibrant subscriber communities now being split apart by regulatory pressure, reveals fundamental defects in the regulation's implementation. As does the blocking of EU users by terrified entities afraid that doing so is the only way to cope with the GDPR's troubling scope.

The GDPR's list of infirmities is long, ranging from its complexity and corresponding ambiguity, to some notably expensive requirements, to the lack of harmonization among crucial aspects of member states' local implementations, to the failure of many of these member states to produce these local regulations at any point usefully in advance of today, and to the GDPR's untested global reach. And they fairly raise the concern that the GDPR is poorly tailored to its overall policy purpose. A sound regulatory structure, especially one trying to advance something as important as user privacy, should not be this hard to comport with, and the consequences for not doing so should not be so dire for the Internet remaining the vibrant tool for community and communication that many people – in Europe and elsewhere – wish it to remain being.

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Posted on Techdirt - 23 May 2018 @ 1:45pm

Mugshots.com Operators Arrested For Letting Money Influence Editorial Decisions

from the using-poor-inferences-to-unconstitutionally-prevent-other-poor-inferences dept

Earlier this month Ars Technica reported on the arrest of the alleged operators of Mugshots.com, a website that does what it says on the tin: hosts mugshots. The issue is, the site operators didn't just host mugshots; they also charged people to have their mugshots removed from the site through a companion site, Unpublisharrest.com.

Assuming the arrest warrant is fairly stating things, the site's operators may not have had the best of intentions in running their site the way they did. According to the facts alleged they were more interested in making money by charging people to have their pictures removed from their site than in serving as any sort of public records archive.

But it shouldn't matter why they pursued the editorial policy that they did. First of all, mugshots are generally public records, and for good reason. As South Dakota's attorney general Mark Jackley noted last year, when South Dakota declared them to be public records:

"The release of criminal booking photographs to the public will result in greater transparency in the criminal process, enhance public safety, and will further assist the media and the public in the proper identification of individuals in the criminal process."

People are ordinarily allowed to share public records on their websites, just as they may share any other lawful information. People are also free to be arbitrary and capricious in how they choose what information to share. They are even free to be financially motivated in making those decisions.

But according to authorities in California, if the decision on what information to share is linked to a profit incentive (from the arrest warrant: "The motive behind posting the damaging material is financial gain."), and that information is a mugshot, you go to jail. In the case of the Mugshots.com operators, authorities have predicated their arrest on some alarming statutory language:

As of January 1, 2015, California Civil Code Section 1798.91 .1, Subdivision makes it unlawful for any person engaged in publishing or otherwise disseminating a booking photograph through a print or electronic medium to solicit, require, or accept the payment of a fee or other consideration from a subject individual to remove, correct, modify, or to refrain from publishing or otherwise disseminating that booking photograph. By posting the booking photograph online, and requiring a fee to have it removed, the owners and operators of Mugshots.com and Unpublisharrest.com are operating their websites for an unlawful purpose.

In addition, the authorities construed what the operators of Mugshots.com did as identity theft:

California Penal Code Section 530.5 defines identify theft, stating: "Every person who willfully obtains personal identifying information . . . of another person, and uses that information for any unlawful purpose. . . without the consent of that person, is guilty of a public offense. Section 530.55 identifies a 'person' as a natural person, firm, company, corporation or any other legal entity. The section defines 'personal identifying information' as any 'name, address . . . or other unique physical representation.' Because Mugshots.com and Unpublisharrest.com have used, and continue to use, the booking photographs and PII of individuals for purposes of selling the service of removing the photographs and information, the owners are in violation of California Penal Code Section 530.5, identity theft, a felony."

Taken together, the arrest warrant concludes, the site operators are guilty of extortion and conspiracy to commit extortion. But to prove extortion prosecutors must show that the accused threatened a victim either with violence, the accusation of a crime, or the exposure of a secret, if they didn't pay the accused. Yet the defendants are accused of none of these things. Not only is there no issue of threatened violence, but what the site operators are alleged to have done in no way involves revealing a secret or accusing another of a crime. Instead it is the state that has already accused the site operators' purported "victims" of a crime, and its having done so is no secret. The state's accusation against these people became public when it originally released the mugshots, meaning there is nothing that the site operators could have been threatening to reveal that wasn't already revealed.

This apparently sloppy reading of the extortion statute, compounded with the 2015 statutory language giving mugshots a sort of magical status that prevents them from being treated as an ordinary public record, represents a chilling incursion on protected First Amendment activity. It's one thing to impose liability for publishing content that isn't lawful, perhaps because it's defamatory, infringing, or somehow intrinsically wrongful unto itself. But it's another thing entirely to impose liability for publishing content that is entirely lawful – especially, as in this case, when it is not only lawful but a public record.

California authorities would likely argue that the prosecution is not about liability for speech, but liability arising from the decisions about what speech got spoken. (Or, more particular to this case, remained spoken, for the state is not prosecuting the site operators for having posted the mugshots in the first place.) But this is a distinction without a difference. Indeed, decisions about what we choose to say can be as expressive as anything we actually do say. The government ordinarily does not get to come in and force us to make those decisions in any particular way. Freedom of expression means that we are at liberty to decide what to say, and then what not to say, for whatever reason we might decide. Even when these expressive choices are guided by a profit motive.

Were that not the case, think of how chilling it would be to profit-driven news media if their editorial decisions had to be free from any financial concern in order to retain First Amendment protection. Even in terms of mugshots themselves, think about how chilling it would be if others could not freely use them to tell us about the world around us, if there was money to be made in the process. As case in point, the very same week the arrest warrant was used to extradite the site operators back to California, the New York Times ran a story about the efforts of journalist and photographer Eric Etheridge to document the lives of Freedom Riders.

Among the important artifacts of this historic campaign are more than 300 mug shots taken of the Freedom Riders in Jackson, now the subject of “Breach of Peace: Portraits of the 1961 Mississippi Freedom Riders” (Vanderbilt University Press). In it, the journalist and photographer Eric Etheridge provides visual and oral histories of these courageous men and women, juxtaposing vintage mug shots with short biographies, interviews and contemporary portraits. Originally published in 2008, this expanded edition, with updated profiles and additional portraits…

It is a book that is for sale, so it would seem there is a profit motive somewhere. But consider whether this important historical work could be released if authorities in California – or, perhaps more saliently, in Mississippi, where the mugshots are from – could scrutinize the expressive decisions that went into the book's use of the pictures because it profited from that use.

Yet that's what the California authorities have decided they are entitled to do with the Mugshots.com site. The arrest warrant is dismissive towards the free speech interests of the site's operators, accusing them of "using freedom of speech theories in justifying the activity." Of course, that's what the First Amendment is for, to protect expressive activities that authorities do not like. And authorities really don't like what happened here.

As noted above, the optics in this case are not great. People felt desperate to have their mugshots removed from the Internet, and the site operators profited from that desperation. It feels criminal, but just because they may have had nefarious intent does not mean that they committed a crime. Just reading about the arrest brought to mind the Monty Python sketch where a bunch of gangsters connived a devious plot to go to a jeweler's to obtain an expensive watch - that they paid for.

Sure, it looks like they are up to no good, but to determine whether a crime has been committed we can't just consider how it looks. We have to look closely at the underlying lawfulness of the activity, not the optics surrounding it, and for the very same reason that California authorities are now interested in policing the use of mugshots: to prevent unwarranted inferences of criminal culpability. As the New York Times wrote about the Freedom Riders book:

If these mug shots inadvertently captured the humanity and special qualities of their principled subjects, as Mr. Etheridge observed, their intention was nefarious: to publicly impugn and humiliate people whose only crime was to advocate equality through peaceful protest. No matter their purpose, mug shots inevitably imply aberrance or delinquency, whether or not the people they depict are eventually found to be guilty.

But that's what the California prosecutors have done: impute "aberrance or delinquency" to draw unwarranted inferences about criminal culpability from an act that the law cannot constitutionally criminalize. This inference has already been used to strip the site operators of their constitutional right to express themselves anonymously due to at least three search warrants that were served on their service providers. These warrants were issued upon probable cause, but the only probable cause that can be construed here is that the site operators engaged in expressive activity authorities did not like. Efforts by these authorities to now extradite, further prosecute, and potentially leave the site operators vulnerable to civil damages should not be cheered by anyone who might prefer not to experience the same as a result of their own lawful expression.

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Posted on Techdirt - 9 May 2018 @ 3:34am

Give Me Liberty, Or Give Me Data Protection? A Troubling Implication Of The American Voter UK Data Protection Case

from the frying-pan-to-fire dept

The Guardian had an article this past weekend about what looks like a potentially successful attempt by an American to use UK data protection law to force Cambridge Analytica to divulge what information it had collected about US voters like him. Whether the UK Information Commissioner’s Office (ICO) is truly entitled to compel Cambridge Analytica to do anything, much less on behalf of an American, is an open question. But for purposes here, let's assume that UK data protection law works this way, that it was intended to work this way, and that it's good policy for it to work this way.

The problem is, it's one thing for the ICO to force Cambridge Analytica to share with the American voter himself what personal data it had about him. But it's another thing entirely for the ICO to force Cambridge Analytica to share the personal data it has about American voters with it. Yet it looks from the article like that's what ICO may have threatened to force Cambridge Analytica to do.

The troubling passage:

The covering letter from the ICO says that if Cambridge Analytica has difficulties complying, it should hand over passwords for the servers seized during its raid on the company’s office – something that raises questions also about what it has managed to retrieve from the servers so far.

Insert record scratch noise here. The framing of the article, and a lot of reaction to it, is that ICO is the white knight here, seeking to vindicate the privacy rights of Americans whose data has been scooped by Cambridge Analytica. Maybe so, but to the extent it proposes to do this by itself scooping up Americans' data (and hopefully future reporting can be more explicit on whether this is what is truly proposed; the Guardian article did not link to the cover letter, nor does the ICO's press announcement) such a move is extremely concerning.

Because regardless of how problematic it is for a private entity like Cambridge Analytica to have access to lots of data about American voters, for all those same reasons it is even more problematic for a government to. And while it would be bad enough if it were the American government demanding it, it's even worse if it's a foreign government that now has access to all this data about American voters.

It's not a question of how much we trust that foreign government. We might see the problem more easily if it were, say, Russian regulators demanding Cambridge Analytica give it all the data it has, but the fact that it is our UK ally demanding it makes no difference. Irrespective of how well-intentioned or trust-worthy one considers the UK government of today, or its data protection authority, we still fought a war or two to keep it out of American democracy. In fact, so unhappy were we about things the UK government had done to help itself to information about American lives that we even came up with a couple of constitutional amendments to ensure the practice would not be continued.

Thus no matter how we feel about Cambridge Analytica having acquired our data without our permission, it would be a strange thing to encourage governments to return to those old ways and get to acquire our data without our permission too. Especially not governments so politically unaccountable to those whose data they would now collect.

Because while voters like Professor Carroll might not care, the apparently indiscriminate way the ICO has acquired data by copying entire servers would seem to capture the data of many more American voters than just him. Which, to put into the language of EU privacy regulators, would constitute a sort of data acquisition that not all of us affected had consented to.

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Posted on Techdirt - 4 May 2018 @ 3:41pm

Airbnb, Homeaway, And The Importance Of Holding The Line On Section 230

from the back-to-basics dept

SESTA has done enormous damage to the critical protection Section 230 affords platforms – and by extension all the Internet speech and online services they facilitate. But it's not the only threat: courts can also often mess things up for platforms by failing to recognize situations where Section 230 should apply and instead allowing platforms to be held liable for how their users have used their services.

Which leads to the situation Airbnb, Homeaway, and other such platforms find themselves in. Jurisdictions unhappy with some of the effects short-term rentals have had on their communities have taken to passing regulations designed to curb the practice. Whether or not it is good policy to do so is beyond the scope of this post. If some local jurisdictions want to impose liability on their residents for renting out their homes – and not all of them do – it's between them and their voters.

The problem arises when the regulations they come up with don't just target people renting their homes, but also target the online platforms that facilitate these transactions. These ordinances effectively create liability for platforms arising from content generated by others, which is a regulatory practice that Section 230 prohibits.

So Airbnb and Homeaway have started pushing back on these ordinances, first in San Francisco and now in Santa Monica. Unfortunately both efforts to enjoin them have resulted in federal district court decisions saying that Section 230 does not shield them from their reach, meaning that these local jurisdictions are fully able to hold these platforms liable if people use them to rent homes they aren't supposed to. The decision about the Santa Monica ordinance is now before the Ninth Circuit, and last week I wrote a brief for the Copia Institute explaining why it should find that Section 230 indeed prevents these ordinances from imposing liability on these platforms. It was important to say so, not just to support Airbnb and Homeaway, but because if Section 230 can't apply to them, then it won't be able to apply to a lot of other platforms that depend on it.

The crux of the problem appears to stem from courts not seeing how what is at stake in these cases is actually speech, perhaps because the kind of speech sites like Airbnb and Homeaway intermediate is so specific. But even if the only expression these platforms intermediates is, "I have a home to rent," it's still speech, speech created by someone other than the platform, and Section 230 therefore still applies. There is no language in Section 230 that would require a platform to intermediate lots of different kinds of expression in order to be entitled to the statute's protection. Many platforms are extremely specialized in the type of expression they intermediate, often because that's what makes them useful and effective as services, and all are equally entitled to the statute's protection.

The fact that the specific speech being intermediated is transactional in nature seems to be what's confusing the courts, especially given that these sites often make money by taking a cut of the transactions that are successful. The court addressing the Santa Monica ordinance recognized that a site like Craigslist, which also hosts "I have a home to rent" speech (among other types of speech), would not be affected by the ordinance because it doesn't make money when "I have a home to rent" speech results in a rental. But there is no reason that these platforms should be treated any differently. Section 230 applies regardless of how a platform makes its money. There's no requirement in the statutory language that a platform profit only in certain ways – in fact, if anything the statute encourages platforms to be innovative so that the public can continue to benefit from their services. And for good reason: think about platforms like eBay, which also profit when "I have a thing to sell" speech finds an audience who wants to buy it. If Section 230 protection could be withheld from all platforms that make money from consummated transactions it would be more than just the Airbnb and Homeaway who would be in trouble.

The only relevant question to ask in considering whether Section 230 applies is who created the content that is potentially wrongful. In the case of Airbnb and Homeaway it is their users. After all, there's nothing inherently wrongful about saying, "I have a home to rent." Whether it is wrongful depends entirely on whether the user is allowed to rent it per local law. Liability should therefore remain entirely with the user who is the one who imbued it with its wrongness. Particularly because it is often not practical, or even possible, for platforms to police all the content passing through them. Even if they had the resources to examine the volume of user-generated content that passes through their systems they may not have the ability to know which, if any of it, was wrongful. Thus if platforms could be forced by any particular jurisdiction to try to police it anyway, in order to stave off potentially expensive liability, it would invariably chill their ability to provide their services – including in other jurisdictions.

Which is also why Section 230 includes a pre-emption provision, so that no particular jurisdiction can get to decide for any other one what Internet speech and services people can benefit from in these other places. Without that provision the jurisdiction with the most restrictive laws would otherwise get to impose its policy choices on any other jurisdiction the service now shaped by these policies could reach, which, in the case of an Internet service, is every single one of the thousands and thousands of state and local jurisdictions nationwide.

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Posted on Techdirt - 30 April 2018 @ 2:12pm

Congress And The CASE Of The Proposed Bill That Helps Copyright Trolls

from the start-of-stopping-trolls dept

One of the recurrent themes on Techdirt is that law itself should not become a tool for unlawful abuse. No matter how well-intentioned, if a law provides bad actors with the ability and opportunity to easily chill others' speech or otherwise lawful activity, then it is not a good law.

The CASE Act is an example of a bad law. On the surface it may seem like a good one: one of the reasons people are able to abuse the legal system to shut down those they want to silence is because getting sucked into a lawsuit, even one you might win, can be so ruinously expensive. The CASE Act is intended to provide a more economical way to resolve certain types of copyright infringement disputes, particularly those involving lower monetary value.

But one of the reasons litigation is expensive is because there are number of checks built into it to make sure that before anyone can be forced to pay damages, or be stopped from saying or doing what they were saying or doing, that the party making this demand is actually entitled to. A big problem with the CASE Act is that in exchange for the cost-savings it may offer, it gives up many of those critical checks.

In recognition of the harm removal of these checks would invite, EFF has authored a letter to the House Judiciary Committee raising the alarm on how the CASE Act would only aggravate, rather than remediate, the significant troll problem.

Per the letter, federal courts have been increasingly "reining in [trolling behavior] by demanding specific and reliable evidence of infringement—more than boilerplate allegations—before issuing subpoenas for the identity of an alleged infringer. Some federal courts have also undertaken reviews of copyright troll plaintiffs’ communications with their targets with an eye to preventing coercion and intimidation. These reforms have reduced the financial incentive for the abusive business model of copyright trolling."

But under the CASE Act, these provisions would not apply. Instead

[L]egally unsophisticated defendants—the kind most often targeted by copyright trolls—are likely to find themselves bound by the judgments of a non-judicial body in faraway Washington, D.C., with few if any avenues for appeal. The statutory damages of up to $30,000 proposed in the CASE Act, while less than the $150,000 maximum in federal court, are still a daunting amount for many people in the U.S., more than high enough to coerce Internet users into paying settlements of $2,000–$8,000. Under the Act, a plaintiff engaged in copyright trolling would not need to show any evidence of actual harm in order to recover statutory damages. And unlike in the federal courts, statutory damages could be awarded under the CASE Act even for copyrights that are not registered with the Copyright Office before the alleged infringement began. This means that copyright trolls will be able to threaten home Internet users with life-altering damages—and profit from those threats—based on works with no commercial or artistic value.

And that's not all:

Another troubling provision of the CASE Act would permit the Copyright Office to dispense with even the minimal procedural protections established in the bill for claims of $5,000 or less. These “smaller claims”—which are still at or above the largest allowed in small claims court in 21 states—could be decided by a single “Claims Officer” in a summary procedure on the slimmest of evidence, yet still produce judgments enforceable in federal court with no meaningful right of appeal.

Also:

[T] he federal courts are extremely cautious when granting default judgments, and regularly set them aside to avoid injustice to unsophisticated defendants. Nothing in the CASE Act requires the Copyright Office to show the same concern for the rights of defendants. At minimum, a requirement that small claims procedures cannot commence unless defendants affirmatively opt in to those procedures would give the Copyright Office an incentive to ensure that defendants’ procedural and substantive rights are upheld. A truly fair process will be attractive to both copyright holders and those accused of infringement.

The CASE Act appears to reflect an idealized view that the only people who sue other people for copyright infringement are those who have valid claims. But that is not the world we live in. Trolls abound, parasites eager to use the threat of litigation as a club to extract money from innocent victims. And the CASE Act, if passed, would give them a bigger weapon.

It also gives would-be censors additional tools to chill their critics through the use of a new subpoena power administered through the Copyright Office, without sufficient due process built into the system to ensure that these subpoenas are not being used as a means of unjustly stripping speakers of their right to anonymous speech.

The CASE Act also gives the Copyright Office the authority to issue subpoenas for information about Internet subscribers. The safeguards for Internet users’ privacy established in the federal courts will not apply. In fact, the bill doesn’t even require that a copyright holder state a plausible claim of copyright infringement before requesting a subpoena—a basic requirement in federal court.

EFF was joined on this letter by many other lawyers (including me) and experts who have worked to defend innocent people from unjust threats of litigation, in the hope that it can help pressure Congress not to give the green light to more of it.

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Posted on Techdirt - 23 April 2018 @ 10:39am

We Interrupt The News Again With Hopefully The Last Update From The Monkey Selfie Case

from the with-next-friends-like-these dept

And now for the moment you've all been waiting for: a decision from the Ninth Circuit in the Monkey Selfie case.

Upshot: the case remains dismissed, and the defendants get to recover attorney fees for the appeal. There's also relatively little to say on the copyright front. This case has turned almost entirely into litigation about standing and proven to be a significant wrench in the works for any future litigation anyone, but PETA in particular, might want to bring on behalf of animals.

First, the court skewers PETA over the quality of its "friendship" with Naruto, casting significant side-eye towards PETA's apparent settlement of the lawsuit, which led to its attempt to dismiss the appeal, while at the same time leaving some question as to whether Naruto himself was down with this settlement and plan to dismiss his appeal. From footnote 3:

We feel compelled to note that PETA’s deficiencies in this regard go far beyond its failure to plead a significant relationship with Naruto. Indeed, if any such relationship exists, PETA appears to have failed to live up to the title of “friend.” After seeing the proverbial writing on the wall at oral argument, PETA and Appellees filed a motion asking this court to dismiss Naruto’s appeal and to vacate the district court’s adverse judgment, representing that PETA’s claims against Slater had been settled. It remains unclear what claims PETA purported to be “settling,” since the court was under the impression this lawsuit was about Naruto’s claims, and per PETA’s motion, Naruto was “not a party to the settlement,” nor were Naruto’s claims settled therein. Nevertheless, PETA apparently obtained something fromthe settlement with Slater, although not anything that would necessarily go to Naruto: As “part of the arrangement,” Slater agreed to pay a quarter of his earnings from the monkey selfie book “to charities that protect the habitat of Naruto and other crested macaques in Indonesia.” See Settlement Reached: ‘Monkey Selfie’ Case Broke New GroundForAnimal Rights, PETA, https://www.peta.org/blog/settlementreached-monkey- selfie-case-broke-new-ground-animal-rights/ (last visited Apr. 5, 2018). But now, in the wake of PETA’s proposed dismissal, Naruto is left without an advocate, his supposed “friend” having abandoned Naruto’s substantive claims in what appears to be an effort to prevent the publication of a decision adverse to PETA’s institutional interests. Were he capable of recognizing this abandonment, we wonder whether Naruto might initiate an action for breach of confidential relationship against his (former) next friend, PETA, for its failure to pursue his interests before its own. Puzzlingly, while representing to the world that “animals are not ours to eat, wear, experiment on, use for entertainment, or abuse in any other way,” see PETA, https://peta.org (last visited Apr. 5, 2018), PETA seems to employ Naruto as an unwitting pawn in its ideological goals. Yet this is precisely what is to be avoided by requiring next friends to have a significant relationship with, rather than an institutional interest in, the incompetent party—a point made by ChiefJustice Rehnquist in Lenhard v. Wolff, 443 U.S. 1306, 1312 (1979). See infra page 9 for exact language.

But repudiating PETA's "next friend" standing doesn't end the inquiry. There is a 2004 case from the Ninth Circuit, Cetacean Community v. Bush, which established the precedent that animals might be able to sue for themselves, even without a "next friend" to do the suing for them. The court decides it has to defer to that precedent, although so reluctantly as to undermine its persuasive effect in future cases.

Reaching that conclusion didn't end the inquiry, however. Cetacean Community means that animals might be theoretically able to sue for themselves in the Ninth Circuit, but it doesn't mean they will necessarily have a viable claim. To figure out whether they do, we have to look at the applicable statute, which in this case is the Copyright Act. And here the court concludes that Naruto, being a monkey, has no standing to sue for copyright infringement.

Several provisions of the Copyright Act also persuade us against the conclusion that animals have statutory standing to sue under the Copyright Act. See Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809 (1989) (“It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.”). For example, the “children” of an “author,” “whether legitimate or not,” can inherit certain rights under the Copyright Act. See 17 U.S.C. §§ 101, 201, 203, 304. Also, an author’s “widow or widower owns the author’s entire termination interest unless there are any surviving children or grandchildren of the author, in which case the widow or widower owns one-half of the author’s interest.” Id. § 203(a)(2)(A). The terms “children,” “grandchildren,” “legitimate,” “widow,” and “widower” all imply humanity and necessarily exclude animals that do not marry and do not have heirs entitled to property by law. Based on this court’s decision in Cetacean and the text of the Copyright Act as a whole, the district court did not err in concluding that Naruto—and, more broadly, animals other than humans—lack statutory standing to sue under the Copyright Act.

So there you go. Our long national nightmare of not knowing whether any random monkey might be able to sue for copyright infringement has been resolved. We may now go about our lives confident in the knowledge that they cannot, at least not in the Ninth Circuit.

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Posted on Techdirt - 17 April 2018 @ 10:38am

If Trump Is So Worried About Protecting Attorney-Client Privilege, He Should End The NSA's Bulk Surveillance (And CPB Device Seizures)

from the Privilege-for-me-not-for-thee dept

Over the weekend Trump tweeted:

If you can't read that it says:

Attorney Client privilege is now a thing of the past. I have many (too many!) lawyers and they are probably wondering when their offices, and even homes, are going to be raided with everything, including their phones and computers, taken. All lawyers are deflated and concerned!

Attorney-client privilege is indeed a serious thing. It is inherently woven into the Sixth Amendment's right to counsel. That right to counsel is a right to effective counsel. Effective counsel depends on candor by the client. That candor in turn depends on clients being confident that their communications seeking counsel will be confidential. If, however, a client has to fear the government obtaining those communications then their ability to speak openly with their lawyer will be chilled. But without that openness, their lawyers will not be able to effectively advocate for them. Thus the Sixth Amendment requires that attorney-client communications – those communications made in the furtherance of seeking legal counsel – be privileged from government (or other third party) view.

The problem is, it doesn't take a raid of a home or office to undermine the privilege. Bulk surveillance invades the sphere of privacy these lawyer-client communications depend on, and, worse, it does so indiscriminately. Whether it involves shunting a copy of all of AT&T's internet traffic to the NSA, or warrantlessly obtaining everyone's Verizon Wireless phone call records, while, sure, it catches records of plenty of communications made to non-lawyers (which itself is plenty troubling), it also inherently catches revealing information about communications made to and from lawyers and their clients. Meanwhile the seizures and searches of communications devices such as cell phones and laptops raises similar Constitutional problems. Doing so gives the government access to all records of all communications stored on these devices, including those privileged ones that should have been expressly kept from it.

So Trump is right: attorney-client privilege in America is under attack, and ever since we started learning about these programs lawyers have definitely been worried about how they impose an intolerable burden on the Sixth Amendment right to counsel. But unlike in Trump's situation where there is serious reason to doubt whether there's any privilege to be maintained at all (after all, privilege only applies to communications made in the course of seeking legal counsel, not communications made for other purposes, including the furtherance of crime or fraud), and care being taken to preserve what privilege there may be, bulk surveillance sweeps up all communications, including all those for which there is no doubt as to their privileged status, and without any sort of care taken to protect these sensitive communications from the prying eyes of the state. Indeed, the whole point of bulk surveillance is so that the prying eyes of the state can get to see who was saying what to whom without any prior reason to target any of these communications in particular, because with bulk surveillance there is no targeting: it swoops up everything, privileged or not.

If Trump truly finds it troubling for the government to be able obtain privileged communications he could put an end to these programs. It would certainly help make any argument he raises about how his own privilege claims should be sacrosanct rings ring less hollow if his administration weren't currently being so destructive to everyone else's.

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Posted on Techdirt - 13 April 2018 @ 7:39pm

We Interrupt Today's News With An Update From The Monkey Selfie Case

from the it-ain't-over-till-it's-over dept

In today's fast-paced news cycle it's easy to overlook the important things: the copyright status of the monkey selfie.

Today we have learned nothing new about it, except that the case is not over yet. Which is itself significant, because the parties in the case had jointly moved to dismiss the appeal, and today that motion was denied. In its order denying the motion [pdf, embedded below] the Ninth Circuit acknowledged that while it had the power to dismiss an appeal if the parties so requested it, it did not have the obligation to do so if there were countervailing interests. And in this case, the Ninth Circuit found, there were countervailing interests requiring it to fully adjudicate the matter.

It cited several other cases as analogs. As in Albers v. Eli Lily, "this case has been fully briefed and argued by both sides, and the court has expended considerable resources to come to a resolution. Denying the motion to dismiss ensures that 'the investment of public resources already devoted to this litigation will have some return.'" Furthermore, as was the case in Ford v. Strickland, "a decision in this developing area of the law would help guide the lower courts."

Also, referencing Albers and Khouzam v. Ashcroft, the court noted that denying the dismissal of appeals prevents the parties from "manipulating precedent in a way that suits their institutional preferences."

As one of our colleagues once warned in a similar context, “courts must be particularly wary of abetting ‘strategic behavior’ on the part of institutional litigants whose continuing interest in the development in the law may transcend their immediate interest in the outcome of a particular case.” Suntharalinkam v. Keisler, 506 F.3d 822, 828 (9th Cir. 2007) (en banc) (Kozinski, J., dissenting from the denial of rehearing).

In other words, enough of this procedural monkey business. The appeal remains a live matter, and at some point the court will presumably substantively rule on it.

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