Tag Archives: court cases

ICYMI: New Advocacy and Public Policy Update

On May 19, 2017, ARL released its latest Advocacy and Public Policy Update. The topics covered in this update include various copyright issues (Register of Copyrights bill, Copyright Office study on moral rights, Copyright Office rulemaking on modernizing copyright recordation, and numerous amicus briefs filed), LSU v. Elsevier, appropriations, access to and preservation of government data, net neutrality, developments on trade agreements, and issues related to immigration and border control.  The full update is available here.

 

Louisiana State University Files Suit Against Elsevier; Elsevier Has Not Accepted Service

On February 27, 2017, Louisiana State University (LSU) filed a lawsuit against international science publisher Elsevier after the publisher breached its contract and refused to allow LSU’s veterinarian school faculty and students to access Elsevier content licensed by LSU’s Libraries. ARL’s press release is available here.

Background

LSU currently holds a license with Elsevier to cover its entire Baton Rouge campus. LSU’s veterinary school, which is located on main campus of LSU in Baton Rouge, Louisiana, previously held its own license with Elsevier. Upon the expiration of the veterinary school’s license with Elsevier, the veterinary school users continued resources licensed by LSU Libraries. The LSU Libraries’ license (attached as an exhibit to the end of the complaint) unequivocally covers its entire Baton Rouge campus, including the veterinary school.

Despite the fact that LSU Libraries license covers IP ranges specifically covering the veterinary school, Elsevier blocked access to users at the veterinary school. Upon discovery, LSU contacted Elsevier on October 11, 2016 to request reactivation of the IP ranges for the veterinary school. Elsevier unblocked those IP addresses, but then in January again blocked access for users at the veterinary school. Elsevier refused to respond to LSU’s written requests to reactivate these IP addresses.

Additionally, when LSU Libraries made a request to license 19 additional veterinary titles from Elsevier, the publisher initially responded that it would cost an additional $35,000 to add these titles. LSU Libraries accepted this price and requested an invoice only to then find Elsevier refusing to sell these titles to them.

Although LSU requested Elsevier to restore access to the veterinary school, Elsevier failed to respond until nearly six weeks later and only after LSU filed a lawsuit for breach of contract. Ultimately, Elsevier has refused to restore access for those in the veterinary school. Additionally, Elsevier has not accepted service of the lawsuit, which was filed in the Nineteenth Judicial District Court, Parish of East Baton Rouge, Louisiana, and for which service of process was attempted at Elsevier’s New York headquarters. As a result, LSU is now attempting to effect service of process at Elsevier’s headquarters in Amsterdam through the Hague Service Convention.

On April 22, 2017 Elsevier proposed that LSU “add a minimum of $170,000 of additional 2017 subscriptions to their existing contract” and “increase the price of Freedom Collection by $30,000 for the 2017 subscription period.” This amount represents an incredible increase in cost to LSU, and would not even cover the full 2017 calendar year.

Here’s my breakdown and analysis of what’s happened so far.

Elsevier’s Actions Prevent LSU from Exercising Sound Financial Stewardship of Scarce Public Resources

In essence, in an effort to exercise sound financial stewardship of public resources, LSU has been punished through Elsevier’s refusal to honor its contract. Elsevier’s actions in this case, from its blocking the IP ranges for the veterinary school to its failure to accept service at its New York office of the lawsuit to its outrageous demands that LSU Libraries pay an additional $200,000, demonstrate the publisher’s bad faith.

As a result of this dispute, Elsevier apparently wants LSU to add $170,000 of journals that the university does not need or want, a complete waste of scarce state dollars. Elsevier is holding hostage access to the veterinary school community in an effort to extort more money from a state institution. Keep in mind that LSU is already paying $1.5 million (and rising) to Elsevier.

All LSU is trying to do in the present case is ensure that it is not unnecessarily duplicating subscriptions for its campus and using state resources in a responsible manner. It is disappointing that Elsevier would respond to its own breach of contract by demanding more money from a public institution.

As summarized in LSU’s complaint:

Elsevier is well aware that LSU, like other universities, is heavily reliant upon the various types of research and educational content for which Elsevier enjoys monopolistic market powers and Elsevier is unfairly abusing its leverage to coerce LSU into paying additional and unnecessary subscription fees for research and educational content that LSU has already contracted for.

Elsevier Refuses to Honor The Plain Language of Its Existing Contract with LSU

The most obvious harm in the case comes from Elsevier’s refusal to honor its contract with LSU by blocking access to the veterinary school. Although the faculty, staff and students of the veterinary school had previously been able to access content licensed by LSU Libraries and such access was expressly covered under the IP ranges contracted for, Elsevier has denied access to these users.

Once again, Elsevier is using its monopoly power—LSU can only get the titles owned by Elsevier from Elsevier itself—to try to extract more money out of LSU. Elsevier is hoping that by refusing to honor its contract, it will be able to pressure LSU to renegotiate its current contract and pay even more money—more than the $1.5 million dollars the university pays each year to the publisher.

Elsevier Reneges on Its Contract with LSU for Additional Titles

While the major portion of the complaint involves Elsevier’s blocking of the IP ranges for the veterinary school and thus breaching its existing contract with LSU, the publisher also refused to honor the negotiations with respect to nineteen additional titles. When LSU inquired about these additional titles, Elsevier provided a quote. LSU confirmed acceptance of these terms and requested an invoice. Elsevier then replied “Thank you for these new title additions.” However, Elsevier subsequently refused to honor this agreement.

Every first-year law student takes contract law and the very first lesson is that an offer plus acceptance of that offer (plus consideration, such as money, to differentiate it from a gift) results in a valid contract. Here, Elsevier made an offer to add the requested titles in exchange for payment by LSU of $35,000. LSU expressly accepted. Elsevier even acknowledged receipt of acceptance. However, like its current contract with LSU, Elsevier has breached its own contract by now reneging and refusing to invoice the institution and provide the promised content.

Offer + acceptance (and consideration) = valid contract. Except, apparently, when you’re Elsevier. 

Elsevier’s Fails to Accept Service of the Lawsuit

Perhaps the craziest part of the entire story—though there are many deeply troubling actions by Elsevier—is the fact that Elsevier has not accepted service of the lawsuit. More than two months after the lawsuit was filed (during which time, LSU and its faculty, staff and students continue to be harmed by Elsevier’s refusal to honor its contract), Elsevier appears to be playing games with this public university. While it would be understandable for Elsevier to try to aggressively defend itself against the claims (even in a case where the facts clearly favor LSU), here Elsevier is essentially pretending that the lawsuit doesn’t even exist. This is not a standard delay tactic in litigation.

Elsevier does substantial business in the United States. The publisher charges millions of dollars each year to hundreds of universities and institutions in the United States. It has fourteen corporate headquarters and branch offices located in the United States. It is a member of the Association of American Publishers. According to OpenSecrets, last year Elsevier (under RELX) spent $1.72 million dollars lobbying in the United States (and lest you think RELX’s lobbying dollars are going to be substantially different from Elsevier, the 2014 filings show that while the company was still going by the name Reed Elsevier it paid $1.6 million dollars to its lobbyists). It has lobbied substantially on issues related to copyright and against open access. The publisher’s global litigation counsel was a witness in the House of Representatives Judiciary Committee copyright review hearing on Section 512. Elsevier has taken advantage of its rights to sue as a plaintiff in United States courts on multiple occasions in cases involving everything from breach of contract to copyright infringement to exemptions from sunshine laws. Clearly, Elsevier enjoys the benefits of its business in the United States and invests substantial resources into shaping the laws in this country.

While Elsevier enjoys all the advantages of doing business in the United States when it benefits the corporation, it conveniently decides that it’s a Dutch company when it is being sued. That LSU is being forced to chase Elsevier down in Amsterdam through the Hague Service Convention is an incredible outcome of the dispute.

Concluding Thoughts

Elsevier’s actions in the present case, including its refusal to acknowledge or respond to LSU’s requests for the publisher to abide by the terms of its own contract until after a lawsuit was filed, demonstrate its corporate culture. LSU’s complaint perfectly sums up Elsevier’s abuse of its monopoly power:

Elsevier’s total disregard for LSU’s serious concerns and amicable efforts to resolve this dispute reflects the monopolistic market power and arrogance that comes with Elsevier’s posturing as a “world-leading provider of information solutions that enhance the performance of science, health and technology professionals.”

Through its continuing breach of its contractual obligations to LSU under the Agreement, Elsevier has caused, and continues to cause, irreparable injury and significant damages to LSU and has significantly damaged, impaired and restrained the university’s ability to conduct research and educate its students, thereby improperly restricting and interfering with LSU’s primary purpose and constitutional mandate under the Louisiana Constitution.

In a time where states are facing enormous budget deficits public universities must ensure financial responsibility of scarce public resources. LSU is attempting to exercise sound judgment and stewardship of limited resources, but its only reward has been Elsevier blocking access to faculty, researchers and students at the university.

Court Cases on Trump’s Travel Ban

Over the last 24 hours, several courts have issued opinions regarding President Trump’s recent executive orders banning entry of certain nationals and refugees into the United States. While recent court opinions have imposed temporary restraining orders, how the executive orders fare on appeal (whether they are considered legitimate exercises of executive power or whether they violate the Establishment Clause) may hinge on whether Trump’s and Administration officials’ statements regarding the travel ban may be considered in determining the purpose of the executive orders.

Background

Following President Trump’s two executive orders, numerous lawsuits were filed across the nation. After Executive Order 13,769 was issued on January 27, 2017, district court Judge Robart issued a temporary restraining order against enforcement of certain portions of the Executive Order in Washington v. Trump. The Ninth Circuit denied the Government’s motion for a stay of the temporary restraining order in that case.

The Trump Administration then issued another Executive Order, No. 13,780 on March 6, 2017, designed to replace the prior Order. This Executive Order made some changes, suspending entry for nationals of six countries (Iran, Libya, Somalia, Sudan, Syria and Yemen) for 90 days, but did not apply to lawful permanent residents, holders of valid visas, dual nationals or certain other categories of people. It also included a “waiver provision” allowing foreign nationals of these countries to seek entry on a case-by-case basis. Another section of the Executive Order suspends refugee admissions for 120 days and also has a waiver provision to be determined on a case-by-case basis. Once again, numerous lawsuits were filed nationwide.

District Court Decisions

In the last day, two federal judges have blocked portions of this new Executive Order from enforcement. The first decision came yesterday evening on March 15, 2017, from district court Judge Watson in Hawaii v. Trump. Judge Watson’s order enjoins enforcement of the sections discussed above “in all places, including the United States, at all United States borders and ports of entry, and in the issuance of visas . . . pending further orders from this Court.” The Order therefore applies worldwide. In issuing this order, Judge Watson found that, based on numerous statements by Trump and Administration officials, “a reasonable, objective observer . . . would conclude that the Executive Order was issued with a purpose to disfavor a particular religion, in spite of its stated, religiously-neutral purpose” and would result in irreparable harm. Notably, Judge Watson relied on precedent set forth by the Ninth Circuit’s opinion in Washington v. Trump that courts could look beyond the plain language of the law for evidence of its purpose. Judge Watson does, however, caution that prior statements by Trump or Administration officials do not “forever taint any effort by it to address the security concerns of the nation” and “context may change during the course of litigation.” This morning, March 16, 2017, a Maryland district court Judge Chuang also issued a restraining order in International Refugee Assistance Project v. Trump. Judge Chuang also pointed to the history of public statements as evidence that the Executive Order represented a “Muslim ban.” Chuang’s order will apply only to the portion of the Executive Order suspending of nationals from six countries and does not sweep as broadly.

Ninth Circuit Dissent from Denial of En Banc Hearing in Washington v. Trump

While the judges in Hawaii and Maryland have blocked enforcement of portions of the new Executive Order, five judges from the Court of Appeals from the Ninth Circuit issued a dissent on March 15, 2017 from the Ninth Circuit’s denial of reconsideration of Washington v. Trump by an en banc panel. As noted above, the Ninth Circuit previously upheld a district court’s temporary restraining order. Following the issuance of the new Executive Order, the U.S. government filed an unopposed motion to dismiss its underlying appeal, which was granted. Despite the mootness of the appeal, one judge requested rehearing by the full court, but did not garner the votes for rehearing. These five judges, all Republican appointees, signed a dissent stating that the original Executive Order “was well within the powers of the presidency” and that the Ninth Circuit’s opinion was a “fundamental error.” These five judges argued that “Even if we have questions about the basis for the President’s ultimate findings—whether it was a ‘Muslim ban’ or something else—we do not get to peek behind the curtain. So long as there is one ‘facially legitimate and bona fide’ reason for the President’s actions, our inquiry is at an end.” The dissent also argues that the original Ninth Circuit’s panel opinion “stands contrary to well-established separation-of-powers principles.” Ultimately, the Ninth Circuit will likely have another opportunity to rehear these issues in the context of Hawaii v. Trump.

Additional Information

There are a number of ongoing suits against the travel ban. A roundup of documents for each of the cases is available here.

ARL Files Amicus Brief in Capitol Records v. ReDigi

This week is Fair Use Week, an annual celebration of the important doctrines of fair use and fair dealing. It is designed to highlight and promote the opportunities presented by fair use and fair dealing, celebrate successful stories, and explain these doctrines.

The start of Fair Use/Fair Dealing week, which runs from February 20-24, 2017, immediately follows a week in which ARL filed amicus briefs along with other library associations and organizations in two fair use cases. The first case, ARL joined the American Library Association (ALA), Association for College and Research Libraries (ACRL) and the Electronic Frontier Foundation (EFF) in filing a brief in the Georgia State e-reserves case which is again before the Eleventh Circuit. In the second case, ARL joined ALA, ACRL and the Internet Archive in filing an amicus brief in Capitol Records v. ReDigi, currently before the Court of Appeals for the Second Circuit, arguing that other existing limitations and exceptions can tilt the first fair use factor (character of the use) in favor of the user and that fair use encourages innovative services.

In the summary of the argument, the brief notes:

First, in its truncated fair use analysis, the district court ignored the similarity between the use ReDigi sought to make and uses authorized by Section 109(a). This similarity should have tilted the first fair use factor, the purpose and character of the use, in favor of ReDigi. In Authors Guild v. HathiTrust, 755 F.3d 87, 102 (2d Cir. 2014), this Court used the rationale for a specific exception—17 U.S.C. § 121, which permits the making of accessible format copies for people who have print disablilites—to support a finding of a valid purpose under the first factor. Likewise, the Copyright Office has repeatedly based fair use conclusions on specific exceptions in the context of a rulemaking under section 1201 of the Digital Millennium Copyright Act, 17 U.S.C. § 1201. As this Court did in HathiTrust and the Copyright Office did in the section 1201 rulemaking, the district court should have recognized that the purpose behind the first sale right tilted the first fair use factor in favor of ReDigi.

Second, the brief argues that a positive fair use determination in this case would encourage libraries to provide innovative services to their users. Fair use findings in technology cases have permitted libraries to provide new, digitally-based services such as HathiTrust Digital Library. In addition to enabling researchers to find relevant texts and perform critical data mining, HathiTrust provides full-text access to over fourteen million volumes to people who have print disabilities. A fair use finding in this case would provide libraries with additional legal certainty to roll out innovative services such as the Internet Archive’s Open Library. Such a result would increase users’ access to important content without diminishing authors’ incentive to create new works.

The full brief can be read here.

 

Supreme Court of the United States Upholds University of Texas’ Affirmative Action Policy

On Thursday, June 23, 2016, the Supreme Court of the United States in a 4-3 vote upheld the affirmative action admissions policy in Fisher v. University of Texas at Austin (Fisher II), finding that the race-conscious admissions program in use at the time of Fisher’s application is lawful under the Equal Protection Clause.  Justice Kennedy wrote for the majority, joined by Justices Ginsburg, Breyer and Sotomayor.  Justices Thomas, Alito and Roberts dissented with Justice Kagan recusing herself.

This case was previously heard by the Supreme Court which resulted in a 2013 opinion which in a 7-1 vote, remanded the case to the Fifth Circuit.  In Fisher I, the Supreme Court directed the Fifth Circuit to reconsider the case under the higher threshold of strict scrutiny in determining whether UT’s admission policy comports with the Equal Protection Clause of the Fourteenth Amendment.  On remand, the Fifth Circuit once again upheld UT’s admission policy in which UT accepts the top 10% of graduates from Texas high schools and uses a holistic review for the remaining open spots.  The holistic approach includes many factors, with race being one of the factors.  The admissions process did not have quotas or specific goals in terms of the number of students meeting specific characteristics.  The Association of Research Libraries joined with 37 other higher education organizations in an amicus brief supporting the University of Texas.  Oral arguments were held in December.

In the opinion, Justice Kennedy first lays out three “controlling principles” from Fisher I in determining the constitutionality of a public university’s affirmative-action program: 1) the program must be evaluated under the higher bar of strict scrutiny; 2) universities cannot impose a fixed quota, but deference is given to a university’s “reasoned, principled explanation” to pursue diversity; and 3) the university bears the burden of proving that a “nonracial approach” would not promote its interests in promoting diversity (i.e., the university is not given deference on this point).

Although Justices Kennedy and Breyer seemed interested in the possibility of remanding the case back to the trial court during oral arguments, the opinion points out that there would be limited data available and “a remand would do nothing more than prolong a suit that has already persisted for eight years and cost the parties on both sides significant resources.”  While remand was not appropriate in this case, the majority opinion cautions the University of Texas to “remain mindful that diversity takes many forms” and that “Through regular evaluation of data and consideration of student experience, the University must tailor its approach in light of changing circumstances, ensuring that race plays no greater role than is necessary to meet its compelling interest.”

The court turns to the university’s goals in trying to improve diversity, noting that the “goals cannot be elusory or amorphous–they must be sufficiently measurable to permit judicial scrutiny of the policies adopted to reach them.”  Here, the University of Texas

identifies the educational values it seeks to realize through its admissions process: the destruction of stereotypes, the “‘promot[ion of] cross-racial understanding,’” the preparation of a student body “‘for an increasingly diverse workforce and society,’” and the “‘cultivat[ion of] a set of leaders with legitimacy in the eyes of the citizenry.’”  Later in the proposal, the University explains that it strives to provide an “academic environment” that offers a “robust exchange of ideas, exposure to differing cultures, preparation for the challenges of an increasingly diverse workforce, and acquisition of competencies required of future leaders.”  All of these objectives, as a general matter, mirror the “compelling interest” this Court has approved in its prior cases.

The University has provided in addition a “reasoned, principled explanation” for its decision to pursue these goals . . . following a year-long study, which concluded that “[t]he use of race-neutral policies and programs ha[d] not been successful” in “provid[ing] an educational setting that fosters cross-racial understanding, provid[ing] enlightened discussion and learning, [or] prepar[ing] students to function in an increasingly diverse workforce and society.”  (internal citations omitted)

The Court also rejects Fisher’s argument that the top 10% plan was sufficient to promote diversity.  Indeed, the Court notes that “the record itself contains significant evidence, both statistical and anecdotal” that race-neutral admissions policies were insufficient.  Key pieces of evidence including the demographic data the University submitted showing the stagnation of minority student enrollment from 1996-2002; anecdotal evidence of minority students feeling lonely and isolated; and quantitative evidence of the lack of enrollment of at least one minority student in classes with five or more students.

The majority also rejects Fisher’s proposal to eliminate the holistic approach and increase the percentage of students admitted based on class rank alone.  The Court points out the deficiencies of using a single metric to admit students:

Even if, as a matter of raw numbers, minority enrollment would increase under such a regime, petitioner would be hard-pressed to find convincing support for the proposition that college admissions would be improved if they were a function of class rank alone. That approach would sacrifice all other aspects of diversity in pursuit of enrolling a higher number of minority students. A system that selected every student through class rank alone would exclude the star athlete or musician whose grades suffered because of daily practices and training. It would exclude a talented young biologist who struggled to maintain above-average grades in humanities classes. And it would exclude a student whose freshman-year grades were poor because of a family crisis but who got herself back on track in her last three years of school, only to find herself just outside of the top decile of her class.

These are but examples of the general problem. Class rank is a single metric, and like any single metric, it will capture certain types of people and miss others. This does not imply that students admitted through holistic review are necessarily more capable or more desirable than those admitted through the Top Ten Percent Plan. It merely reflects the fact that privileging one characteristic above all others does not lead to a diverse student body. Indeed, to compel universities to admit students based on class rank alone is in deep tension with the goal of educational diversity as this Court’s cases have defined it . . . At its center, the Top Ten Percent Plan is a blunt instrument that may well compromise the University’s own definition of the diversity it seeks.

None of Fisher’s proposed solutions or other solutions discussed during litigation were shown to be “available” and “workable” means of achieving UT’s educational goals and therefore, the Court finds, the university has met its burden of demonstrating its admissions plan was narrowly tailored.

The majority opinion concludes that while it is upholding UT’s policy, the university must continue to revisit its admissions policy and reflect on it:

A university is in large part defined by those intangible “qualities which are incapable of objective measurement but which make for greatness.” Sweatt v. Painter, 339 U. S. 629, 634 (1950). Considerable deference is owed to a university in defining those intangible characteristics, like student body diversity, that are central to its identity and educational mission. But still, it remains an enduring challenge to our Nation’s education system to reconcile the pursuit of diversity with the constitutional promise of equal treatment and dignity.

In striking this sensitive balance, public universities, like the States themselves, can serve as “laboratories for experimentation.”  The University of Texas at Austin has a special opportunity to learn and to teach. The University now has at its disposal valuable data about the manner in which different approaches to admissions may foster diversity or instead dilute it. The University must continue to use this data to scrutinize the fairness of its admissions program; to assess whether changing demographics have undermined the need for a race-conscious policy; and to identify the effects, both positive and negative, of the affirmative-action measures it deems necessary.

Ultimately, today’s decision is a win for universities (particularly given that at least one of the dissenting justices indicated that he would have overturned the Supreme Court’s 2003 decision in Grutter, which allows race to be considered as one factor but that does not amount to a quota).  However, the majority opinion takes care to caution that admissions policies using race as a factor must continue to be revisited in light of new evidence and changes in circumstance.

DC Circuit Court Upholds FCC’s Open Internet Order Governing Net Neutrality

On Tuesday, June 14, 2016, the Court of Appeals for the DC Circuit released its long-awaited opinion in U.S. Telecom Association v. FCC, upholding the FCC’s 2015 Open Internet Order by a 2-1 vote.  On petition for review, the petitioners challenged the FCC’s reclassification of broadband service as a Title II common carriers, reclassification of mobile broadband service, the ban on paid prioritization and the General Conduct Rule, and also argued that the net neutrality rules violate the First Amendment.  The DC Circuit found against each of these challenges and denied the petitions for review.

The FCC’s 2015 Open Internet Order set forth rules governing net neutrality, ensuring that Internet providers cannot create “fast lanes” and “slow lanes” by reclassifying broadband under Title II of the Communications Act while also relying on the FCC’s authority under Section 706 of the Telecommunications Act. In its accompanying report, the FCC noted the importance of net neutrality, including for specific communities:

Open Internet rules benefit investors, innovators, and end users by providing more certainty to each regarding broadband providers’ behavior, and helping to ensure the market is conducive to optimal use of the Internet. Open Internet rules are also critical for ensuring that people living and working in rural areas can take advantage of the substantial benefits that the open Internet has to offer. In minority communities where many individuals’ only Internet connection may be through a mobile device, robust open Internet rules help make sure these communities are not negatively impacted by harmful broadband provider conduct. Such rules additionally provide essential safeguards to ensure that the Internet flourishes as a platform for education and research.

The DC Circuit opinion begins with history of the FCC’s Order, including the DC Circuit’s 2014 Verizon opinion in which it vacated the FCC’s 2010 Open Internet Order anti-discrimination and anti-blocking rules as impermissible because they subjected broadband providers to common carrier treatment.  Prior to the FCC’s Open Internet Order reclassifying broadband providers, the Internet was classified as an information service, exempt from common carriage rules.  However, the court notes that in Verizon, “we upheld the Commission’s conclusion that section 706 provides it authority to promulgate open internet rules” and “the Commission’s ‘finding that Internet openness fosters . . . edge provider innovation . . . was . . . reasonable and grounded in substantial evidence’ and that the Commission had ‘more than adequately supported and explained its conclusion that edge-provider innovation leads to the expansion and improvement of broadband infrastructure.”  In its 2014 opinion, the DC cCircuit recognized that absent rules governing net neutrality “broadband providers represent a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.”

The DC Circuit also lays out its role in reviewing the FCC’s decision, noting that it “is a limited one . . . to ensure that an agency has acted ‘within the limits of [Congress’s] delegation’ of authority and that its action is not ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”  The court’s role is not to make policy judgments.

Turning to the facts of the present case, the Court first upholds the FCC’s reclassification under Title II pointing out the evidence that “consumers use broadband principally to access third-party content, not email and other add-on applications.”  The Internet is marketed to consumers as a conduit for transmission of data as a standalone service rather than for particular add-on services.  The DC Circuit then quickly rejects the petitioners’ procedural arguments that the FCC did not provide adequate notice that it was considering reclassification (among other issues), pointing directly to the FCC’s Notice of Proposed Rulemaking (NPRM) calling for comment on this issue.

With respect to the substantive arguments regarding Title II reclassification, the DC Circuit points out that consumer perception of the service is key:

when interpreting this provision in Brand X, the Supreme Court held that classification of broadband turns on consumer perception . . . Nothing in Brand X suggests that an examination of market power or competition in the market is a prerequisite to classifying broadband . . . citing the Commission’s economic findings as additional support for its approach is a far cry from requiring the Commission to find  market power.

Additionally, the DC Circuit notes that the FCC’s judgment that any impact its Open Internet Order will have on broadband investment are outweighed by the positive effects of the “virtuous circle,” is given “particularly deferential review, as long as they are reasonable” because it is a predictive judgment under the FCC’s field of discretion and expertise.

Similarly, the DC Circuit upholds the FCC’s decision to reclassify mobile broadband, pointing out the FCC’s finding of the ubiquity and widespread use of mobile broadband.  In addition,

 

Avoiding that statutory contradiction not only assures consistent regulatory treatment of mobile broadband across Titles II and III, but it also assures consistent regulatory treatment of mobile broadband and fixed broadband, in furtherance of the Commission’s objective that “[b]roadband users should be able to expect that they will be entitled to the same Internet openness protections no matter what technology they use to access the Internet.” 2015 Open Internet Order, 30 FCC Rcd. at 5638 ¶ 92. When consumers use a mobile device (such as a tablet or smartphone) to access the internet, they may establish a connection either through mobile broadband or through a Wi-Fi connection at home, in the office, or at an airport or coffee shop. Such Wi-Fi connections originate from a landline broadband connection, which is now a telecommunications service regulated as a common carrier under Title II. If a consumer loses her Wi-Fi connection for some reason while accessing the internet—including, for instance, if she walks out the front door of her house, and thus out of Wi-Fi range—her device could switch automatically from a Wi-Fi connection to a mobile broadband connection. If mobile broadband were classified as a private mobile service, her ongoing session would no longer be subject to common carrier treatment. In that sense, her mobile device could be subject to entirely different regulatory rules depending on how it happens to be connected to the internet at any particular moment—which could change from one minute to the next, potentially even without her awareness.

After upholding the FCC’s decision to reclassify broadband Internet service, the DC Circuit turned to challenges against the ban on paid-prioritization and the FCC’s General Conduct Rule.

With respect to the ban on paid-prioritization, the Court points out (and the challenger conceded) that the FCC “grounded the rules in ‘multiple complementary sources of legal authority’–not only Titles II and III, but also section 706 of the Telecommunications Act of 1996.”  The DC Circuit again points to its 2014 Verizon decision in which it upheld the FCC’s broad authority to implement rules under Section 706.  The Court states “as we held in Verizon and reaffirm today, the Commission’s section 706 authority extends to rules ‘governing broadband providers’ treatment of internet traffic’–including the anti-paid-prioritization rule–in reliance on the virtuous cycle theory.”  The Court also finds that the ban on paid-prioritization “is geared to promoting the effective deployment of new telecommunications technologies such as broadband [and] . . . is entirely consistent with the Act’s objectives.”

Turning to the General Conduct Rule, the DC Circuit notes that

The Commission adopted the General Conduct Rule based on a determination that the three bright-line rules— barring blocking, throttling, and paid prioritization—were, on their own, insufficient “to protect the open nature of the Internet.” Id. at 5659–60 ¶¶ 135–36. Because “there may exist other current or future practices that cause the type of harms [the] rules are intended to address,” the Commission thought it “necessary” to establish a more general, no-unreasonable interference/disadvantage standard. Id. The standard is designed to be flexible so as to address unforeseen practices and prevent circumvention of the bright-line rules. The Commission will evaluate conduct under the General Conduct Rule on a case-by-case basis, taking into account a “non-exhaustive” list of seven factors.

The court finds that the rule is not impermissibly vague because it did not seek to retroactively enforce a new policy and the FCC provides a mechanism for advisory opinions.  The due process concerns are satisfied provided that the regulations “are sufficiently specific that a reasonably prudent person, familiar with the conditions the regulations are meant to address and the objectives the regulations are meant to achieve, would have fair warning.”  The FCC not only set forth seven factors to guide determination of what constitutes unreasonable interference with, or disadvantaging of, end-user or edge provider access, but also a description of how each factor would be interpreted and applied.

The Court also points out that overly specific rules could be harmful:

Given that “we can never expect mathematical certainty from our language,” those sorts of descriptions suffice to provide fair warning as to the type of conduct prohibited by the General Conduct Rule. Grayned v. City of Rockford, 408 U.S. 104, 110 (1972). To be sure, as a multifactor standard applied on a case-by-case basis, a certain degree of uncertainty inheres in the structure of the General Conduct Rule. But a regulation is not impermissibly vague because it is “marked by flexibility and reasonable breadth, rather than meticulous specificity.” Id. (internal quotation marks omitted). Fair notice in these circumstances demands “no more than a reasonable degree of certainty.” Throckmorton v. National Transportation Safety Board, 963 F.2d 441, 444 (D.C. Cir. 1992) (internal quotation marks omitted). We are mindful, moreover, that “by requiring regulations to be too specific courts would be opening up large loopholes allowing conduct which should be regulated to escape regulation.” Freeman, 108 F.3d at 362 (alterations and internal quotation marks omitted). That concern is particularly acute here, because of the speed with which broadband technology continues to evolve. The dynamic market conditions and rapid pace of technological development give rise to pronounced concerns about ready circumvention of particularized regulatory restrictions. The flexible approach adopted by the General Conduct Rule aims to address that concern in a field in which “specific regulations cannot begin to cover all of the infinite variety of conditions.” Id. (alteration and internal quotation marks omitted).

Finally, the Court rejects the arguments that the Open Internet Order violates a broadband provider’s First Amendment rights because “Common carriers have long been subject to nondiscrimination and equal access obligations akin to those imposed by the rules without raising any First Amendment question.  The obligations affect a common carrier’s neutral transmission of others’ speech, not a carrier’s communication of its own message.”  Furthermore:

The absence of any First Amendment concern in the context of common carriers rests on the understanding that such entities, insofar as they are subject to equal access mandates, merely facilitate the transmission of the speech of others rather than engage in speech in their own right.

. . .

Of course, insofar as a broadband provider might offer its own content—such as a news or weather site—separate from its internet access service, the provider would receive the same protection under the First Amendment as other producers of internet content. But the challenged rules apply only to the provision of internet access as common carriage, as to which equal access and nondiscrimination mandates present no First Amendment problem.

ARL, together with three other library associations, filed an amicus brief in September 2015 supporting the FCC’s net neutrality rules, pointing out the importance for libraries and higher education:

As broadband subscribers, providers of Internet access points to patrons, and providers of digital content and services, libraries rely on the open character of the Internet to achieve their missions of providing equitable access to information, enhancing education and promoting life-long learning, supporting democracy and informed citizenry, and protecting intellectual freedom.

Today’s decision is an important win for libraries and higher education, particularly with respect to the upholding of the ban on paid prioritization and the General Conduct rule. Without bright-line rules banning paid prioritization, libraries and other institutions serving the public interest may not be able to pay extra fees for enhanced transmission of their content. Prioritization risks that network operators would give priority to entertainment or other commercial content over education, civic engagement, access to information or other services. Additionally, the General Conduct Rule is a necessary tool to ensure that the Internet remains open and neutral.  The General Conduct Rule protects against future harms, including those made possible by technological innovations and advances.

 

 

 

ICYMI: District Court Denies Oracle’s Move to Overturn Fair Use Ruling in Favor of Google

On May 26, 2016, a jury ruled in favor of Google’s use of Java’s API in its Android system, finding that the inclusion of the code was fair use.  Oracle filed a motion for judgment as a matter of law, arguing that no reasonable jury could have found against Oracle.  Last week, the district court judge denied Oracle’s motion.

Jonathan Band has a really great analysis of the district court’s twenty page order applying fair use to the case on the DisCo Project blog: “Sanity Prevails Again, Part II: The District Court Leaves the Oracle v. Google Fair Use Verdict In Place.”

Google Wins Another Fair Use Case

On May 26, 2016, a jury returned a verdict in favor of Google in its battle against Oracle.  Oracle brought suit claiming that Google infringed  by using Java application programming interface (API) in Android’s mobile operating system.  Google argued that its use of the code in the Android system, which relies partly on Java (an open source code that was acquired by Oracle in 2010), was fair use.

After three days of deliberation, the ten jurors unanimously returned a verdict in favor of Google, answering “yes” to the question of whether the use of Java API’s was fair use.

The jury’s decision is a welcome one and another win for fair use, particularly as developers continue to rely on open source languages to build new technologies.  This case demonstrates yet again why fair use has been called the “safety valve” of copyright, supporting the evolution and development of new technology.

For further reading:

Ars Technica: Google Beats Oracle–Android makes “fair use” of Java APIs

EFF: EFF Applauds Jury Verdict In Favor of Fair Use in Oracle v. Google

DisCo Project: Sanity Wins Again: The Jury Verdict on Oracle v. Google 

Supreme Court denies Authors Guild Petition for Certiorari

The Supreme Court of the United States has denied the Authors Guild for petition of certiorari in Authors Guild v. Google.  This decision leaves the Second Circuit’s opinion affirming fair use in the Google Books case intact.  In the Second Circuit’s opinion from October 2015, the court released its unanimous opinion, authored by Judge Leval, affirming that Google’s copying of books and display of snippets in a search index is transformative and a fair use.  Additionally, the Second Circuit found that Google’s provision of digital copies to its partner libraries that submitted the particular work is not an infringement.

New Decision in Georgia State University E-Reserves Case Released; 41 of 48 Claims of Infringement Found to Be Fair Uses

On March 31, 2016, the District Court for the Northern District of Georgia released its opinion on remand in the Georgia State University e-reserves case, Cambridge University Press v. Becker.  The district court originally determined in 2012 that of the 99 instances of claimed infringement, 94 of the cases were fair use and only 5 were infringing.  The case appeared before the district court again after the Court of Appeals for the Eleventh Circuit reversed and remanded the case in October 2014, directing the trial court to revisit its fair use analysis.  The Eleventh Circuit’s opinion rejected an arithmetic approach to the four fair use factors (that is, the idea that if three of the factors favor fair use, but one disfavors fair use, then fair use will always apply).

On remand, the district court considered 48 infringement claims and revisited the fair use assertions by Georgia State University.  Judge Evans found that of the 48 claims, 41 were non-infringing fair uses.  More analysis of the opinion will be available shortly.

H/T: Kevin Smith