The Supreme Court issued two opinions today.  The first, ONEOK, Inc. v. Learjet, Inc. (13-271),   concerned the preemption of state antitrust laws in the context of natural gas regulation by the Federal Energy Regulatory Commission (FERC) under the Natural Gas Act.  The petitioners in this case, ONEOK, Inc. et al., are pipeline companies that supply gas through interstate pipelines to resellers as well as to direct customers that include the respondents, Learjet et al.  The pipeline companies were sued for reporting false information to indices that are used to set wholesale natural gas prices.  These reports ultimately affected retail price contracts.  The cases were removed to federal court and consolidated in one proceeding in Nevada.  The Ninth Circuit ultimately held that the respondent’s state antitrust claims were not preempted by the Natural Gas Act.  The Supreme Court affirmed.

It held that the Act was carefully drawn to not preempt state concerns such as the fairness of retail pricing even though FERC had authority to regulate wholesale pricing.  While the two are connected, that connection does not deprive state claims for price manipulation at the retail level, at least under the facts and arguments presented in this case.

Justice Breyer delivered the opinion of the Court and was joined by Justice Kennedy, Ginsburg, Alito, Sotomayor, and Kagan.  Justice Thomas joined the opinion as to all but Part I-A, presumably because it contained the dreaded words “legislative history.”  Justice Scalia filed a dissenting opinion that Chief Justice Roberts joined.

The second case is Rodriguez v. United States (13-9972).  Justice Ginsburg sets up the question and outcome in the very first paragraph of the opinion:

In Illinois v. Caballes, 543 U. S. 405 (2005), this Court held that a dog sniff conducted during a lawful traffic stop does not violate the Fourth Amendment’s proscription of unreasonable seizures. This case presents the question whether the Fourth Amendment tolerates a dog sniff conducted after completion of a traffic stop. We hold that a police stop exceeding the time needed to handle the matter for which the stop was made violates the Constitution’s shield against unreasonable seizures. A seizure justified only by a police-observed traffic violation, therefore, “become[s] unlawful if it is prolonged beyond the time reasonably required to complete th[e] mission” of issuing a ticket for the violation. Id., at 407. The Court so recognized in Caballes, and we adhere to the line drawn in that decision.

The facts of the case are pretty straightforward.  Officer Struble stopped Rodriguez after seeing his vehicle drive briefly on the highway shoulder and then swerve back onto the highway proper.  Rodriguez explained that he was avoiding a pothole.  Officer Struble asked Rodriguez and his passenger for identification and an explanation of their business.  Both complied.  Struble asked Rodriguez to accompany him to the squad car.  Rodriguez asked if this was required.  Struble said no and Rodriguez declined the request.  Struble then issued a warning ticket for driving on the shoulder.  Struble then asked Rodriguez if he could walk his dog around the vehicle.  Rodriguez said no.  Struble then instructed Rodriguez to turn off the ignition and exit the vehicle.  A second officer arrived seven or eight minutes later and walked a dog around the vehicle twice.  The dog indicated that drugs were present.  The officers then search the car and found a large bag of methamphetamine.

Rodriguez moved at trial to suppress the evidence at trial.  The Court denied the motion and he was convicted.  The Eight Circuit said the intrusion on his rights was de minimus and affirmed the conviction.  The Court held that keeping Rodriguez for the search well after concluding the reason for stopping him violated his Fourth Amendment rights.

Justice Ginsburg delivered the opinion of the Court and was joined by Chief Justice Roberts, and Justices Scalia, Breyer, Sotomayor, and Kagan.  Justice Kennedy filed a dissenting opinion.  Justice Thomas filed a dissenting opinion and was joined by Justice Alito and Justice Kennedy except for Part III.  Justice Alito filed a dissenting opinion as well.

Mark

There are reports from the ABA Journal online and the National Law Journal (the link is in the ABA story) of a plaintiff who sued a law blogger, Professor Shaun Martin of the University of San Diego, for defamation resulting from statements about her case on his blog.  Professor Martin opined on some of the details in the case(s) of Melanie Welch in her actions against the school where she worked and the  California State Teachers’ Retirement System.  I’m not going to go into detail here about those cases.  The information is in the stories online and in the appellate opinion that affirmed the dismissal of her defamation suit on anti-SLAPP grounds.

The gist, if I read the opinion correctly, is that Professor Martin offered opinions about the evidence presented in the case, the technical correctness of the ultimate decisions, and suggested to his readers to determine for themselves whether the results were justice:

[M]aybe all of this is complete justice. But maybe not. Depends profoundly upon your point of view.” Op. at p 7.

That was one of the statements alleged to be defamatory.  The Court found that opinion is not actionable under defamation law and the plaintiff was unable to carry her burden under the anti-SLAPP burden-shifting framework.  Readers may be wondering why I’m not putting in more detail on the facts of the case.  I’ll just say that readers should read the article links and opinion and draw their own conclusions.  I’ll just say as someone who writes regularly writes about cases and their outcomes, I believe the result to be a correct one.  The text of the document is linked in the ABA Journal article above, and for convenience, here.  We’ll see if the California Supreme Court takes up the case if presented to it.

Mark

I haven’t read the decision yet, so I can’t comment about it yet.  The opinion is here.  The Court’ summary states:

Plaintiff‐appellant authors and authors’ associations appeal a judgment  of  the  United  States  District  Court  for  the  Southern District  of  New York (Harold  Baer, Jr., Judge)  granting  summary judgment  to  defendants‐appellees  and  dismissing  claims of copyright infringement. In addition, the court dismissed the claims of  certain plaintiffs‐appellants for lack  of  standing  and dismissed other copyright claims as unripe. We hold, as a threshold matter, that certain plaintiffs‐appellants lack associational standing. We also hold that the doctrine of “fair use” allows defendants‐appellees to create a full‐text searchable database of copyrighted works and to  provide those works in formats accessible to those with disabilities, and that the claims predicated upon the Orphan Works Project are not ripe for adjudication. We vacate so much of the judgment as is based  on the district court’s holding related to the claim of infringement predicated upon defendants-appellees’ preservation of copyrighted works, and we remand for further proceedings on that issue. Affirmed, in part; vacated, in part.

The American Library Association issued a statement on the case:

Today, the U.S. Second Circuit Court of Appeals upheld the ruling in Authors Guild v.HathiTrust, deciding that providing a full text search database and providing access to works for people with print disabilities is fair use. The court also ruled that the Authors Guild lacked standing, and therefore could not assert infringement claims against the HathiTrust. The Library Copyright Alliance (LCA), of which the American Library Association (ALA) is a member, filed an amicus brief in support of the HathiTrust.

ALA President Barbara Stripling released the following statement in response to the ruling:

“The Second Circuit today affirmed more than a lower court decision—it affirmed that the fair use of copyrighted material by libraries for the public is essential to copyright law. ALA is pleased that the court recognizes the tremendous value of libraries in securing the massive record of human knowledge on behalf of the general public and in providing lawful access to works for research, educational, and learning purposes, including access for people with disabilities.

“The continued acknowledgement of the importance of fair use to enable learning and support for the development of a well-informed citizenry makes the U.S. copyright law unique and well-functioning.”

This decision affirms that libraries can engage in mass digitization to improve the discovery of works and provide full access to those works to students with print disabilities enrolled at the respective HathiTrust institutions.

The general public can search the database using keywords and locate titles held in 80 member institutions. Full text access to the underlying works is allowed only for students with print disabilities enrolled at the University of Michigan and certified as disabled by a qualified expert. Students with print disabilities are blind or have a handicap that prevents them from reading printed text. Because of the full conversion of the texts to digital format that is accessible, these students can use adaptive technologies, such as text-to-speech, to read.

ALA will continue its defense of fair use in the HathiTrust case, should additional appeals be filed.

I expect that some of the reasoning in this case may affect the Guild’s case against Google.  We’ll see.  — Mark

The Vatican has announced that it will digitize manuscripts contained in the Vatican Library that date back to the very beginning of the Church.  Some 1.5 million pages will be digitized and placed online over the next four years.  NBC News has more details on the project.  Some of the libraries holdings were microfilmed during World War II when it was thought that Rome would be bombed.  The film now resides at St. Louis University in Missouri, of all places.

The Volokh Conspiracy asks the magic question “What law school classes have you found especially useful for your practice of law?”  There are 25 responses as of this writing and most of them identify courses such as evidence, legal writing, constitutional law, criminal law and procedure, civil procedure, and other substantive classes.  No one (so far) has identified practice oriented classes such as trial advocacy or clinical experience.  Then again, no one has identified what I call the “touchy feely” classes—those that are based in legal philosophy or social sciences.

Those interested in privacy, especially in the context of filming police officers on duty in a public place might find interesting two decisions from the Illinois Supreme Court.  Illinois has criminalized such conduct with a statute deemed on of the toughest in the nation.  The Seventh Circuit Court of Appeals upheld a determination that the statutes are likely unconstitutional.  See A.C.L.U. v. Alvarez, 679 F.3d 583 (7th Cir. 2012).  The Illinois Supreme Court also found the statute to be unconstitutional and an overbroad burden on speech.  This is from the summary of People v. Melongo 2014 IL 114852:

In this decision, the supreme court said that its analysis was guided by its holding in People v. Clark, 2014 IL 115776, announced on the same day as this case, in which the court held the eavesdropping statute violative of the first amendment to the United States Constitution under the overbreadth doctrine. Here, the supreme court said again that the statute is simply too broad in deeming all conversations to be private and not subject to recording absent consent, even if the participants have no expectation of privacy, and in also criminalizing the publication of those recordings. All of this burdens substantially more speech than is necessary to serve any legitimate interest in protecting conversational privacy, making the statute invalid on its face. This defendant cannot constitutionally be prosecuted for divulging the conversations she recorded.

Both Melongo and Clark were decided without dissent.  – Mark

The Supreme Court issued two opinions this morning.  They are United States v. Apel (12-1038), and Chadbourne & Parke LLP v. Troice (12-79).  The first case involves the authority of a base commander to bar individuals from access to a military installation under federal law.  The second case involves whether class action lawsuits based on state law for “uncovered” securities can proceed in light of a federal law that bars class actions by investors in some circumstances.  I will provide commentary on these decisions by tomorrow.

In other litigation worth noting, the Ninth Circuit released an opinion ordering Google/YouTube to take down the anti-Islamic film “Innocence of Muslims.”  The Appeals Court reversed the District Court denying the takedown.  The case raises the rarely litigated issue of whether an actor/actress retains a copyrightable interest in their work.  Again, more on this later.  –Mark

There is an interesting case out of Missouri where a federal judge has issued a preliminary injunction forbidding the town of Ellisville from prosecuting individuals for flashing their lights to warn of speed traps.  The town has an ordinance which restricts flashing lights.  The judge, however, said that individuals flashing their lights as a warning was expressive conduct and likely protected by the First Amendment.  The ABA Journal has more information on the case with a link to the opinion.  I’ve made lengthy road trips in the past with a CB radio in the car.  Among the usual trucker chatter were warnings of where “bears” were operating including mile marker details.  That isn’t much different from this case in my opinion, other than how the warning was given.

Justice Scalia was out and about earlier in the week.  He spoke at the University of Hawaii law school and suggested that while the Korematsu case upholding the internment of Japanese citizens was wrong, he wouldn’t be surprised in the Court issued a similar ruling in the future.  Quote the Justice:

“Well of course Korematsu was wrong. And I think we have repudiated in a later case. But you are kidding yourself if you think the same thing will not happen again.”

I understand that Guantanamo Bay has a warm climate at the very least.  CBS News has a report on the visit.  He also commented that the Court will have the last word on the NSA data collection.  As he said in his own charming way:

“The executive knows very well what’s going on and what the threats are. Congress can have hearings for accessing threats and find out what’s going on,” Scalia said. “We can’t have hearings. We sit back and let them bring stuff to us.”

This reminds me of the old saying that if one wants to know the truth about a disputed issue at trial, just ask twelve people who weren’t involved.

In a little bit of law school news there is a report that the Charleston Law School is up for sale.  The prospective buyer is for-profit InfiLaw.  Some legislators in South Carolina want to bring the law school to the College of Charleston or the University of South Carolina as a public institution.  How this transaction goes down will depend on local politics.  The State has the full report illustrated by a nice picture of the law library.

The New York Law Journal reports on the downsizing of the Albany Law School in New York.  Layoffs and buyouts are on the table.  There was apparently a discussion between the administration and the faculty on how to reduce costs and increase revenues.  One idea floated by the faculty was to admit lesser qualified students to increase enrollment and revenues.  From the article:

One Albany Law professor said a “small but vocal minority” of faculty want the school to lower its standards to boost its tuition revenues and lessen the chances of layoffs.  “It is a very selfish, selfish endeavor,” the professor said. “They are really trying to save their jobs, but they’ve ginned this up to make it look like we are denying academic rights.”

Faculty members are self-serving?  That never would have crossed my mind after some 36 years in legal education.  No.  Never.

And while we are on the subject of declining enrollments, let’s take a look at the latest statistics from the LSAC:

As of 1/24/14, there are 187,726 fall 2014 applications submitted by 26,379 applicants. Applicants are down 12.6% and applications are down 13.7% from 2013.  Last year at this time, we had 51% of the preliminary final applicant count.  Last year at this time, we had 57% of the preliminary final application count.

As George Takei might say, “Oh my.”  — Mark

 

 

 

 

 

 

 

It’s cold in the Midwest.  The temperature is -15 outside as I write this.  I’m at home, comfortably indoors, as my institution had the good sense to close today.  I’m grateful as all commuter train service between Indiana and Chicago was cancelled making it impossible to get to the office in any event.  I spent the weekend shoveling excessive amounts of snow several times and can use the day off.  I’m being trailed by a calico kitten I rescued from my back yard on Christmas Eve.  If that’s the worst I have to deal with today I’ll take it.

The unexpected break gave me a chance to catch up on the news out there.  I’d like to recommend a couple of pieces.  One is from Brian Leiter in the Huffington Post.  He argues against mandatory experiential learning as it is being considered by the American Bar Association.  Personally, I’m a big fan of modifying the law school curriculum to include more practice oriented classes.  I can agree with Professor Leiter that the rules should allow schools to offer such classes and see where the market takes them.  Some people who want to be scholars would likely have no need for such learning.  Others, however, would benefit from changes in the curriculum.

The second article I would recommend is the commentary provided by Andrew Cohen in The Atlantic concerning the New Year’s Eve decision by a federal judge that struck down a drug test requirement before getting welfare benefits.  The state argued its “legitimate” concerns in preventing tax dollars used by recipients to buy drugs.  The Court, for the second time in this litigation struck down the requirement because the evidence didn’t support the state’s concern.  The Fourth Amendment factored in the decision as well on suspicionless drug testing.  Cohen quotes parts of the opinion and links to the full text.

I’m personally happy to see this result.  I can think of a parade of horribles in terms of policy decisions that could flow if the decision were otherwise.  I’ll give you one example.  It’s known that people drink and drive.  Or they use other stimulants that might impair them behind the wheel.  Would anyone care to take an alcohol and/or drug test to get or renew a driver’s license?  The state does expend considerable amounts of tax money to provide the licensing scheme as well as manpower and facilities for public safety.  It’s not that much of a leap to go from drug testing welfare recipients to drug testing license applicants.  There’s an actual track record based on DUI arrests and accidents.  I’ll be waiting for that kind of measure to be introduced in a state one of these days.    

Mark

I’ve had a quiet hiatus from the blog for the last several weeks or so.  Thanks, Joe.  I’ve appreciated the time off.  Now that it’s 2014, here are some of the items from the last several weeks that are worth noting.  If anyone is wondering if law school applications are stabilizing, the short answer is no.  The latest news out of the LSAC for the class of 2014 is not looking good:

As of 12/06/13, there are 90,032 Fall 2014 applications submitted by 14,171 applicants. Applicants are down 13.6% and applications are down 15.7% from 2013.  Last year at this time, we had 28% of the preliminary final applicant count.  Last year at this time, we had 16% of the preliminary final application count.

The graphs that accompany this text are here.  To quote Dr. Zachary Smith, “Oh the pain, the pain, the pain.”

Inside Higher Ed tells us about a change to university personnel policies by the Kansas Board of Regents that makes improper use of social media grounds for discipline up to an including termination.  The policy covers any facility for online publication and commentary.  The Board is reviewing the policy in light of criticisms but has not withdrawn it during the review.  Good thing I don’t work in Kansas as I might comment on matters such as evolution and climate change.  I wouldn’t want my views to conflict with those in Kansas.

The Chronicle of Higher Education (subscription) tells us that other disciplines beyond law are suffering job placement problems.  Some disciplines fare better than others.  Job listings for Ph.D.’s in History fell 7.3%.  Economics fell some 6.6% in 2013.  Foreign Languages and English, and Political Science had modest declines while Sociology seems to be on the rebound.  I remember ribbing to a friend of mine who had graduated with a philosophy degree if he knew how much cab medallions cost.  I investigated and I was shocked to discover that the median price of a cab medallion in Chicago is $357,000!  Note to law grads and others without job prospects:  driving a cab for a company may be viable; owning an independent cab in Chicago costs more than going to law school.  Who knew?

And finally, in the no-surprise at all category, the Authors Guild is appealing Judge Chin’s decision that Google’s book scanning project is fair use.  We’ll see how far they get as the case is similar to the HathiTrust case that was recently argued in the Second Circuit.  A summary of that proceeding is available from the Columbia University LibrariesPublishers Weekly has the story on the AG appeal.

Mark

Google’s fair use victory over the Authors Guild is the company’s second recent copyright victory.  Way back in 2007 the English Premier League and others sued YouTube for copyright infringement after it displayed highlight clips of EPL matches and other uploaded videos.  What started with a 39 page complaint filed on May 4, 2007 ended with a stipulation to dismiss the case filed on November 7, 2013:

Pursuant to Fed, R. Civ. P, 41(a)(1)(A)(2), all remaining plaintiffs, through counsel, hereby stipulate to the dismissal with prejudice of all their claims asserted in this action, with each party to bear its own costs, expenses and attorneys’ fees.

The dismissal came months after the plaintiffs were denied class action status.  The story is in the Guardian.   So, the case ends after 6 years or so and 461 docket entries.  Win or lose, the lawyers get paid.

Mark

Judge Denny Chin ruled today in favor Google in the book scanning case.  The ruling is consistent with the results in the Georgia State electronic reserve case and the HathiTrust case in particular.   Judge Chin assumed that the Authors Guild established a prima facie case of copyright infringement at this stage of the proceedings.  He examined each of the four factors for the defense of fair use and found:

  • Purpose and character of the use (factor one):  Google’s use is “highly” transformative in that the word index helps readers, scholars, researchers, and other to find books.  Moreover, the manipulation of electronic text can help researchers discover historical trends in how words are used.  Google’s for-profit status is of slight concern because of the important educational purpose served by Google Books.  Factor one favors Google.
  •  Nature of copyrighted work (factor two):  The majority of books scanned are non-fiction.  Though fiction deserves greater protection, all scanned books were published and available to the public.  In any event, both parties in the case agree that the second factor is not determinative.
  • Amount and substantiality of the portion used (factor three):  Google scans the entire book.  Courts have held, however, that copying the entire work can be fair use in some circumstances.  Judge Chin notes that the key to Google Books is its ability to offer full-text search.  Google tightly controls and limits the display as snippets in response to a search.  Factor three weighs slightly against a finding of fair use.
  • Effect of use upon potential market or value (factor four):  The Authors Guild argued that Google Books would act as a market replacement for books.  Alternatively, a searcher can use multiple word searches to construct a book out of snippets.  Google enhances the book market as each display links to sources where the book can be purchased.  As such, it provides a way for authors to get noticed.  As for the snippet to books argument, someone would have to have a copy of the book in order to construct a copy from the online display.  In any event, this would not be possible as Google has blacklisted some snippets as never displayable.    The fourth factor weighs strongly in favor of finding fair use.

If any of that wasn’t enough, Judge Chin had this to say:

In my view, Google Books provides significant public benefits. It advances the progress of the arts and sciences, while maintaining respectful consideration for the rights of authors and other creative individuals, and without adversely impacting the rights of copyright holders. It has become an invaluable research tool that permits students, teachers, librarians, and others to more efficiently identify and locate books. It has given scholars the ability, for the first time, to conduct full-text searches of tens of millions of books. It preserves books, in particular out-of-print and old books that have been forgotten in the bowels of libraries, and it gives them new life. It facilitates access to books for print-disabled and remote or underserved populations. It generates new audiences and creates new sources of income for authors and publishers. Indeed, all society benefits.

Take that, Authors Guild.  Speaking of whom, the Guild issued the usual “we’re going to appeal statement:”

Judge Denny Chin today ruled that Google’s mass book digitization project to be a fair use, granting the company summary judgment in the copyright infringement lawsuit brought by the Authors Guild in 2005.

“We disagree with and are disappointed by the court’s decision today,” Authors Guild executive director Paul Aiken said. “This case presents a fundamental challenge to copyright that merits review by a higher court. Google made unauthorized digital editions of nearly all of the world’s valuable copyright-protected literature and profits from displaying those works. In our view, such mass digitization and exploitation far exceeds the bounds of fair use defense.”

“We plan to appeal the decision.”

I’m sorry the Guild disagrees and is disappointed with the ruling.  I’m not.  The only question I have is why did it take this long to get to this point?  The opinion is here courtesy of Public Knowledge.

Mark

LexisNexis prevailed in a case from the Sixth Circuit that was released a few days ago.  The issue concerned whether the arbitration clause in a contract for access to LexisNexis databases allowed for class arbitration.  The ultimate answer to that question was no.  The underlying issue in the case that triggered the lawsuit and appeal had to do with the practice LexisNexis employed in its flat fee access plans to attorneys.  I’ll let the Court explain it:

        LexisNexis (a business division of Reed Elsevier) provides legal-research services, primarily on-line. In 2007, Craig Crockett and his former law firm—Dehart & Crockett, P.C.—subscribed to a LexisNexis Subscription Plan. The Plan allowed subscribers unlimited access to certain legal databases for a flat, monthly fee.  Subscribers could access other databases for an additional fee. According to Crockett, LexisNexis told subscribers that a warning sign—such as a dollar ($) sign—would display if the subscriber was about to use a database outside of the Plan.

Several years after signing up for the Plan, Crockett complained to LexisNexis that his firm was being charged additional fees without any warning that the firm was using a database outside the Plan. LexisNexis allegedly insisted on payment of the additional fees anyway.

Those of us in academics working with our subscriptions to Lexis and Westlaw are very familiar with either premium databases not appearing or alternatively messages stating the desired content is not part of the current subscription.  It makes me wonder, assuming the allegations are true, why Lexis can’t manage flat fee plans.  Of course, we’ll never know since the dispute is heading to arbitration.

Though the Court is not sympathetic to Mr. Crockett’s legal arguments concerning how the arbitration clause in the contract is read (precedent is against him), it does offer this cautionary advice to prospective commercial consumers:

Crockett’s remaining argument is that, if read not to permit classwide arbitration, the arbitration clause is unconscionable. The clause is indeed as one-sided as Crockett says: the clause favors LexisNexis at every turn, and as a practical matter makes it economically unfeasible for Crockett or any other customer to assert the individual claims that Crockett seeks to assert here. The clause provides that any arbitration of any dispute concerning LexisNexis’s charges must occur in Dayton, Ohio, where LexisNexis is headquartered. The customer must pay his own legal fees, even if the arbitrator concludes that LexisNexis’s charges were improper. And unlike many corporations that require arbitration of disputes with their customers, LexisNexis makes its customer split the tab for the arbitrator’s fee.

The idea that the arbitration agreement in this case reflects the intent of anyone but LexisNexis is the purest legal fiction. But all of these things—the one-sided nature of the arbitration clause, and its adhesive nature—were also present in American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013). And there the Supreme Court held that, all of those concerns notwithstanding, the absence of a class-action right does not render an arbitration agreement unenforceable. Id. at 2309 (The solution to Crockett’s problem is likely a market solution; as the district court observed, Westlaw’s agreement with its customers lacks any arbitration clause, much less a clause of the sort at issue here.)      Under Italian Colors, therefore, the agreement here is not unconscionable.

The case is Elsevier, Inc. v. Crockett, et al. (6th Cir. 12-3574, November 5, 2013).  Copies of the opinion are here and here.  Hat tip to Michael Ginsborg for the links.  As Paul Harvey would say, now you know the rest of the story.

Mark

Illinois is just one state in a long line that has imposed sales tax collection on out-of-state retailers when there are in-state affiliates that refer sales to that out-of-state retailer via links on the in-state affiliate’s web site.  These laws are pretty much aimed at Amazon and any other large retailer that use the same arrangements.  The Illinois General Assembly passed its own “Amazon tax” in 2011.  It was challenged by the Performance Marketing Association, Inc. Unlike the result in other challenges in other states, the PMA won at trial with the decision affirmed by the Illinois Supreme Court in a 6-1 opinion released last Friday.

The PMA argued that the tax collection requirement was discriminatory and as such was a violation of the Internet Tax Freedom Act (ITFA) (47 U.S.C. § 151 note (2000).  The provision which limits the collection of discriminatory taxes on electronic commerce as prohibited reads:

“(A) any tax imposed by a State or political subdivision thereof on electronic commerce that—

* * *

(iii) imposes an obligation to collect or pay tax on a different person or entity than in the case of transactions involving similar property, goods, services, or information accomplished through other means.” 47 U.S.C. § 151 note.

The distinction the Court draws comes from the fact that tax collecting requirements are not imposed on out-of-state retailers who enter into advertising campaigns with Illinois publishers and broadcasters.  The PMA argued that the taxing requirement comes into effect simply through a link on a web site which can be international in scope.  The Court agreed with this:

Under paragraph 3 of the definition section of the Use Tax Act, retailers who enter into contracts with Illinois publishers and broadcasters for advertising “disseminated primarily to consumers located in this State,” i.e., locally, are obligated to collect use tax. But Internet advertising is different. As the parties’ joint stipulation of facts states: “The home page and other publicly-available pages of any Internet website can be accessed from a computer, or other digital device, located anywhere in the world that is connected to the Internet via wire or radio signal. Thus, information appearing on a webpage is available and disseminated worldwide.” (Emphasis added.) Illinois law does not presently require out-of-state retailers who enter into performance marketing contracts for “offline” print or broadcast advertising which is disseminated nationally, or internationally, to collect Illinois use tax. However, under the Act, out-of-state retailers who enter into such contracts with Illinois Internet affiliates for the publication of online marketing—which is inherently national or international in scope and disseminated to a national or international audience—are required to collect Illinois use tax. In this way, by singling out retailers with Internet performance marketing arrangements for use tax collection, the Act imposes discriminatory taxes within the meaning of the ITFA.

The case is Performance Marketing Association, Inc. v. Brian Hamer, Directory of Revenue 2103 IL 114496.

Mark

In Link Rot within SCOTUS Opinions and Law Reviews [SSRN], Jonathan Zittrain and Kendra Albert found that 49% of URLs in surveyed SCOTUS opinions no long send the reader to the cited web source. Raizel Liebler and June Liebert’s recently published article, Something Rotten in the State of Legal Citation: The Life Span of a United States Supreme Court Citation Containing an Internet Link (1996-2010), 15 YALE J.L. & TECH. 273 (2013), reports a SCOTUS link rot rate of 29%. Obviously there’s a problem. But it is not with the difference in survey findings. Clearly SCOTUS must get its act together by linking to a self-hosted openly accessible archive of the web content that was cited and currently only stored in the Court’s files. How about naming the archive “Last Visited On”?

Zittrain and Albert’s article is recommended but I found Liebler and Lieber’s much more informative. Here’s the abstract for Something Rotten in the State of Legal Citation: The Life Span of a United States Supreme Court Citation Containing an Internet Link (1996-2010):

Citations are the cornerstone upon which judicial opinions and law review articles stand. Within this context, citations provide for both authorial verification of the original source material at the moment they are used and the needed information for later readers to find the cited source. The ability to check citations and verify that citations to the original sources are accurate is integral to ensuring accurate characterizations of sources and determining where a researcher received information. However, accurate citations do not always mean that a future researcher will be able to find the exact same information as the original researcher. Citations to disappearing websites cause serious problems for future legal researchers. Our present mode of citing websites in judicial cases, including within U.S. Supreme Court cases, allows such citations to disappear, becoming inaccessible to future scholars. Without significant change, the information in citations within judicial opinions will be known solely from those citations. Citations to the U.S. Supreme Court are especially important of the Court’s position at the top of federal court hierarchy, determining the law of the land, and even influencing the law in international jurisdictions. Unfortunately and disturbingly, the Supreme Court appears to have a vast problem with link rot, the condition of internet links no longer working. We found that number of websites that are no longer working cited to by Supreme Court opinions is alarmingly high, almost one-third (29%). Our research in Supreme Court cases also found that the rate of disappearance is not affected by the type of online document (pdf, html, etc) or the sources of links (government or non-government) in terms of what links are now dead. We cannot predict what links will rot, even within Supreme Court cases.

Hat tip to Adam Liptak’s In Supreme Court Opinions, Web Links to Nowhere (NYT, Sept. 23, 2013).

Joe