Copyright Registration: conditional, not jurisdictional

On Tuesday, the Supreme Court handed down yet another decision that may be mainly of interest to civil procedure aficionados such as myself.  But since it deals with an issue that causes some confusion in copyright cases, and also because it has some bearing on whether such global agreements in the electronic publishing field can move forward, it probably deserves some attention.  In Reed Elsevier, Inc. v. Muchnick, the District Court had approved the settlement of a class action resolving a dispute between authors and online publishers.  (not to be confused with the Google book settlement, which is a different case)  The named plaintiffs in the case had all registered their copyrights in at least one article that was reproduced electronically without their permission.  The class also included, however, a number of authors who had never registered their works.  Because of these class members' failure to comply with the requirement of Section 411(a) of the Copyright Act that no civil action for copyright infringement may be brought without registration of the copyright, the Second Circuit Court of Appeal on it s own motion refused to approve the settlement of claims of those authors of unregistered works.  (It is interesting that although these authors objected to certain terms of the settlement, none of the parties to the case objected to the courts' ability to hear and determine the case.)

Under these unusual circumstances, the Supreme Court held that although Section 411(a) creates a condition to an infringement action, that requirement is not jurisdictional.  That means the court had the power to determine the claims of authors of unregistered works, even though these authors had not satisfied what appears to be an essential condition of bringing suit.  This result can be justified as a matter of statutory construction.  It can also be justified as a practical resolution of a dispute that all of the parties wanted the federal courts to resolve.  Does it make a difference for a copyright-holder considering an infringement action whether the registration requirement is jurisdictional or is just a condition of filing suit?  Probably not, unless the copyright holder can figure out some other way to piggy-back his infringement claims into a federal court action, as the non-registering authors did in this case. 

As for what Muchnick thinks of the case named after him, go here.

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Supreme Court rejects "place of operations" test.

Today the U.S. Supreme Court decided Hertz Corp. v. Friend, 9-0, which overrules the Ninth Circuit's decision that Hertz Corporation should be deemed a citizen of the State of California because its California operations are larger than those of any other state.  (My commentary on the Ninth Circuit case is here.)  Since I saw some commentary elsewhere wondering whether this is another example of the corporatist federal courts once again making it more difficult for the little guy to sue, I feel the need to point out that this decision has limited impact, and does not seem based on any intent to prevent people from suing corporations.  (Otherwise the case would likely not have been decided by a 9-0 margin.)

All the decision does do is allow corporations like Hertz to remove cases to federal court even in states where the bulk of their operations are found.  Every corporation is deemed a citizen of at most two states, its place of incorporation and its principal place of business.  Now it is clear that principal place of business is the place where the corporation's activities are directed, and not necessarily the place where the bulk of those activities are conducted. That might seem unfair in some cases, but it does seem to accord with the common sense view of what a corporate headquarters is. This case does not change the fact that those are the only two states where corporations cannot remove state law-based cases brought by citizens of those states. Corporations could, both before and after this decision, remove diversity cases in the other 48 or 49 (depending on whether a corporation is headquartered in the same state as it is incorporated) states.  The Hertz decision only impairs the ability of plaintiffs in states where corporations maintain their largest share of operations--which might have been deemed the corporate headquarters under the Ninth Circuit's rejected test--to maintain their actions in state court.

So while Hertz gets to remove cases in California to federal court, and thus escapes the terrible fate of being forced to defend actions by California citizens in California state courts, Hertz will still have to face the citizens of New Jersey in state court, since no diversity of citizenship will be present in cases brought in New Jersey, where Hertz maintains what the federal courts now must uniformly define as its principal place of business. Since I spend a lot of time practicing in the California state courts, and have a lot of respect for California state judges, I can't say that Hertz will really be better off trading the Golden State's courts for the state courts of the Garden State. Or is it possible that Hertz took this case all the way up to the Supreme Court merely to establish its pride in its New Jersey headquarters?

(photo of Hertz headquarters in Park Ridge, New Jersey, from American Companies.com)

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Pages

It has taken me years, but I finally have this website functioning more or less the way I have been envisioning it for some time.  That is because Blogger finally allows you to set up pages that allow bloggers to post static messages such as "About Me," "Contact," etc.  These are perfect for setting up pages for biographical information, and information about various practice areas.  Of course I could have changed a while ago to a more sophisticated blogging platform, but Blogger has the advantage of being pretty easy to use.  There were also some work-arounds I could have tried, but never did.  I waited until Blogger set it up for me.  So even though I don't know much about the programming necessary to set up a website--my 14 year old kid probably knows more HTML code than I do--I have been able through trial and error and experience to figure out how to create a pretty decent-looking site, if I do say so myself.  So thank you Google and Blogger.

Comments, and especially compliments, are welcome.  The site could probably still use a little tweaking here and there.

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Office for Rent

We have a large window office available in our four lawyer suite.  It is a prime location right across the street from the downtown LA public library.  On the 17th floor of a prestigious, Class A office building.  Large shared conference room, kitchen and storage available.  Use of copier, postage meter, internet, phone service (VOIP service available), and secretarial services at cost.  Furnished (as shown in picture below) or empty. You would be sharing space with three talented and very amiable attorneys.  Rent is negotiable.  Please forward this post to anyone you know who may be interested (just click on the little envelope below the picture).

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Shortened Time Period to File Wage and Hour Claims Unenforceable

In Pellegrino v. Robert Half International, Inc., the Fourth District Court of Appeal in California affirmed summary judgment in the employees' favor, holding that a provision in the parties' employment agreements requiring that any claims be brought within six months of termination of employment, was unenforceable as to plaintiffs' statutory claims. Building on prior cases holding that Labor Code provisions governing wages and hours are unwaivable, the Court of Appeal determined that it would contravene public policy to deny these employees a remedy for unpaid wages. It could be argued that Section 17200 itself sets an arbitrary cut-off date for wage and hour claims that has nothing to do with any public policies in the Labor Code, but since the limitations period under the unfair business practices statute is longer than the periods in the Labor Code, presumably that could not violate any public policies regarding the payment of required wages.

The Court also affirmed a finding after trial that the plaintiffs in this case, who were account executives at a temporary employment agency, had been improperly mis-classified as exempt.

Finally, in another interesting discussion, the Court of Appeal found that defendant had not been denied the right to jury trial by the court's decision to try the equitable issues under Business and Professions Code Section 17200, which included the classification issues, to the court. (The parties' stipulation regarding the amount of damages applicable to each employee's claim made trial of any legal issues unnecessary.)

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Corporate Free Speech

Today the United States Supreme Court decided the long-awaited case of  Citizens United v. FEC, overruling established precedent to declare unconstitutional statutory restrictions on the ability of corporations to pay for political advertisements. Back when most free speech cases were about obscenity or civil rights or anti-war protests, the more liberal members of the Court tended to take an expansive view of the First Amendment, while the more conservative members generally supported restrictions on speech. So today, when the five most conservative members of the Court are extolling the virtues of free speech as protected by the Fist Amendment, you have to wonder whether this case is primarily about free speech.

The Court conflated the issue of free speech with the issue of the money that is spent to air political advertising.  Restrictions on corporate spending for political advertisements could have been distinguished from restrictions on speech itself, by treating them as "time, place and manner" restrictions, for example. Instead the Court justified allowing corporations virtually unlimited ability to pay for campaign commercials by invoking the values behind the First Amendment. 

The Court also conflated the rights of corporate "persons" with the rights of natural persons.  There are good reasons for treating corporations as persons under the law. The whole point of forming a corporation is to create an entity that is separate and distinct from any real person, so that the corporation's owners are not generally liable for the corporation's actions.  At the same time, it may be necessary for the law to have adopted the legal fiction of corporate personhood in order to hold corporations legally accountable for their actions.  But it seems inconsistent with that vision of treating a corporation as a distinct legal entity to at the same time treat the corporation as a collection or association of individuals expressing ideas protected by the First Amendment.  Even though a corporation may be owned by human beings, directed by human beings, and may employ human beings, the corporation is still distinct from any human being.  Therefore, such fictional persons, while they do have rights and responsibilities, need not have exactly the same rights as human beings.  Corporations are legal creations of the state.  If they are to be considered as being "endowed by their Creator with certain inalienable rights," their Creator is still a different creator than the one who created human beings.  It would not even make sense to grant certain human rights to corporations, such as the right to vote (mentioned in the dissent), or the right to marry.  As Justice Stevens stated in dissent:

[C]orporations have no consciences, no beliefs, no feelings, no thoughts, no desires. . . . [T]hey are not themselves members of "We the People" by whom and for whom our Constitution was established.

Instead of treating corporations as disfavored persons, however, as Justice Stevens and the other dissenters advocated, the Supreme Court invoked the values behind the First Amendment to support a vision in which all interests groups can freely participate, limited only by their imaginations and their wallets.  It may be worrisome to imagine a world in which the networks are flooded with corporate political advertising, and candidates appear to be sponsored by corporations, but that is the wide-open world the Supreme Court now envisions, in which the best remedy for potentially harmful or misleading speech may be the opportunity to present more speech.

Of one thing we can be certain.  This decision opens the door to a lot of new and interesting legal questions, such as whether Congress can devise new restrictions on campaign expenditures without amending the Constitution; whether Congress or the states can re-define what it means to be a corporation so as to limit corporations' ability to participate in electioneering; whether other remedies (e.g., derivative suits, defamation suits) can be pursued against corporations that spend excessively on campaign-related advertising.  If government is forced to exit the field, that may leave it up to private parties to fight these and other issues out in the legislatures, the courts and other places.

(photo by pccapitalist from photobucket)

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The Cousin Vinny Syndrome

This weekend I found myself judging two rounds of college-level mock trial competition. I was quite impressed with the level of preparation and dedication these students showed, and how well these pre-law students knew the rules of evidence, and knew how to conduct themselves in the mock courtroom. But what really surprised me was the level of theatricality these students put into their witness characterizations. Each of the trials I judged had two witnesses in the car business, and three out of four of these car experts seemed to model their performance on Marisa Tomei's Oscar-winning role in My Cousin Vinny, right down to the mannerisms and heavy Brooklyn accent. I can't blame these students for being influenced by this performance.  This is one of my favorite trial movies also, and a lot of trial lawyers will say the same.  There are a lot of things this movie can actually teach aspiring trial attorneys.  For example, any trial lawyer could benefit from studying the cross-examinations of the three eyewitnesses, especially Vinny's brilliant questioning of the guy who claimed to have cooked his grits in five minutes.  And the friendly relationship between prosecution and defense counsel, even while both were going all out to win, should be a model for many lawyers today.

Nevertheless, I felt the need to remind these students after the competition that real life trials are quite different from trials on tv and the movies, and that since in real life witnesses usually try to tone down their colorful personalities, these mock trial witnesses might come across more believably if they toned down their performances a bit.  But the students understood something that a lot of trial lawyers sometimes forget: trials are a form of theatre, and jurors, who are conditioned by television and movies, appreciate some entertainment value in the presentation of evidence.  Even if a witness's or attorney's personality and mannerisms seem distracting from the issue the party needs to prove, an entertaining witness or attorney can still make parts of the trial memorable, and juries may be favorably disposed toward the party who provides a modicum of enjoyment in the course of sitting through what feels to the jury like an overly lengthy, dry and sometimes dull process.  So while the students perhaps need to learn to tone it down, they reminded me that sometimes you also have to think about spicing it up.

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Punitive Damages in California

In Roby v. McKesson Corp., the California Supreme Court held that under the facts of that case, the ratio of punitive damages to compensatory damages should not exceed one-to-one. The Court referenced guidelines set forth in the United States Supreme Court case of State Farm v. Campbell, 538 U.S. 408, 425 (2003), suggesting that in cases where the reprehensibility of the defendant's conduct is relatively low, while compensatory damages are relatively high, the due process clause may limit punitive damages to the amount of the compensatory damages.

That may now be the "rule" in California, a rule that should lend some predictability to the enforceability of punitive damages awards. Only in cases where the defendant's conduct was unusually egregious, and the plaintiff's compensatory damages relatively low, would plaintiffs now expect the courts to enforce punitive damages awards in excess of this one-to-one ratio.

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