Why the music industry won’t sue certain samplers such as Girl Talk and the producers of Copyright Criminals.

I’ve discussed extensively in the past (most prominently, perhaps, here) my view regarding the music industry’s view that considers any unlicensed sample of a copyrighted recording, no matter how small and how transformed, a copyright infringement. In short, I think it likely the case law on which that view is based would be overturned if it is challenged in any case in which the sampling is used in a way sufficiently transformative that the sampling work stands on its own as a creative work. In short, that’s why I don’ t think Girl Talk has been sued.

Transformative uses of copyrighted work are permitted under the fair use doctrine, and so are critical uses. That’s why I don’t think Kembrew McLeod needs to worry about a lawsuit in connection with the documentary film he co-produced “titled Copyright Criminals, which examines the messy three-way collision between digital technology, musical collage, and intellectual property law.” So why does McLeod worry? Because he’s right in explaining the following:

The music industry believed that the law didn’t distinguish between copying one second or half a minute of a sound recording. Therefore, record companies now insist that every fragment of sound needs to be cleared, something that fundamentally altered the aural evolution of hip-hop music. The more complex you make your sound collage, the more impossible it is to share with the world. And in the course of documenting the legal and cultural history of this art form, Ben [McLeod's co-producer] and I are risking being sued.

But if McLeod is willing to fight a lawsuit — and I think he is — the recording industry won’t sue him. The existing precedents requiring licensing of every single recorded sample would be overturned, and the record industry would lost the appearance created by these precedents, an appearance that makes the vast, vast majority of samplers pay license fees for their samples. It’s better business for the industry to let the occasional brave and creative soul feel as if he’s getting away with something than to have the industry’s precious — and ill-founded — legal precedents put at genuine risk.

The internet and mixing and matching texts is not destroying authorship, and to believe so is to misunderstand authorship. Kakutani this time.

“The Principle of collage is the central principal of all art in the Twentieth Century.” – Donald Barthelme

In a rambling and incoherent diatribe in yesterday’s New York Times, Michiko Kakutani mixes and matches wildly disparate issues and controversies in what purports to be an effort to address “the contentious issues of copyright, intellectual property and plagiarism that have become prominent in a world in which the Internet makes copying and recycling as simple as pressing a couple of buttons.”

While Ms. Kakutani’s piece defies any effort to identify, much less analyze and criticize, any single thesis (or even a manageable number of theses), I cannot leave unchallenged her following contention:

As John Updike pointed out, . . .   ‘the end of authorship’ — hobbling writers’ ability to earn a living from their published works, while at the same time removing a sense of both recognition and accountability from their creations — would result from the hypothetical possibility that “books would cease to be individual works but would be scanned and digitized into one great, big continuous text that could be ‘unraveled into single pages’ or ‘reduced further, into snippets of a page,’ which readers  . . . could then appropriate and remix, like bits of music, into new works of their own.”

As Martha Woodmansee, Peter Jaszi, and others have pointed out, Ms. Kakutani and Mr. Updike’s conceptions of “authorship” are narrow-minded  historical artifacts resulting from the efforts in the 18th Century of book publishers, not authors, to protect their economic interests  and of the conceptions of copyright law that those publishers managed to enact into law and that persist to this day.

The Case Western Reserve English Department’s Authorship Collective, building largely on the work of Professor Woodmansee, summarizes this history as follows:

An “author” in the modern sense is the creator of unique literary, or artistic, “works” the originality of which warrants their protection under laws of intellectual property — Anglo American “copyright” and European “authors’ rights.” This notion is so firmly established that it persists and flourishes even in the face of contrary experience. Experience tells us that our creative practices are largely derivative, generally collective, and increasingly corporate and collaborative. Yet we nevertheless tend to think of genuine authorship as solitary and originary.

This individualistic construction of authorship is a relatively recent invention, the result of a radical reconceptualization of the creative process that culminated less than two centuries ago in the heroic self-presentation of Romantic poets. In the view of poets from Herder and Goethe to Wordsworth and Coleridge genuine authorship is originary in the sense that it results not in a variation, an imitation, or an adaptation, and certainly not in a mere reproduction, but in a new, unique — in a word, “original” — work which, accordingly, may be said to be the property of its creator and to merit the law’s protection as such. [See Martha Woodmansee, “The Genius and the Copyright: Economic and Legal Conditions of the Emergence of the ‘Author’”; rpt. in Woodmansee, The Author, Art, and the Market, 35-55.

With its emphasis on originality and self-declaring creative genius, this notion of authorship has functioned to marginalize or deny the work of many creative people: women, non-Europeans, artists working in traditional forms and genres, and individuals engaged in group or collaborative projects, to name but a few. Exposure of these exclusions — the recovery of marginalized creators and underappreciated forms of creative production — has been a central occupation of cultural studies for several decades. But the same cannot be said for the law. Our intellectual property law evolved alongside of and to a surprising degree in conversation with Romantic literary theory. At the center — indeed, the linchpin — of Anglo-American copyright as well as of European “authors’ rights” is a thoroughly Romantic conception of authorship.  Romantic ideology has also been absorbed by other branches of intellectual property law such as the law of patent and trademark; and it informs the international intellectual property regime. In patent it survives today both in figurations of the inventor and in the emphasis, which this body of law shares with copyright, on the “transformative” moment in the creative process.

We suggested above that cultural production necessarily draws upon previous creative accomplishments. For the better part of human history this derivative aspect of a new work was thought to contribute to, if not virtually to constitute, its value. Writers, like other artisans, considered their task to lie in the reworking of traditional materials according to principles and techniques preserved and handed down to them in rhetoric and poetics — the collective wisdom of their craft. In the event that they chanced to go beyond the state of the art, their innovation was ascribed to God, or later to Providence. Similarly, in the sphere of science, invention and discovery were viewed as essentially incremental — the inevitable outcome of a (collective) effort on the part of many individuals applying inherited methods and principles to the solution of shared problems.

It was not until the eighteenth century, and then chiefly in Western Europe, that an alternative vision of creative activity focusing on the endowments and accomplishments of the individual “genius” began to take shape. In a sharp departure from the self-understanding of writers of previous generations, authors in the new Romantic mode viewed their task as one of transforming the materials of personal sense experience through the operation of their unique, individual genius. This change of emphasis mystified the writing process, obscuring the reliance of these writers on the work of others. The notion that a technological or scientific breakthrough owes its existence to the “genius” — the unique creative abilities — of an individual inventor seems to be even more recent. It appears to date only to the third quarter of the nineteenth century.  Borrowed from literary discourse, this notion similarly obscures the collective or collaborative element in scientific invention and discovery. Both misrepresentations of creative activity appear to have fostered and been fostered by modern intellectual property law. Like copyright, modern patent emphasizes individual achievement — chiefly by rewarding the identification of a single genuinely transformative moment in what in most places through most of human history has been viewed as a collaborative because incremental and continuous process.

Lynn Cheney and William Kristol are anti-American.

Walter Dellinger, a partner with O’Melveney & Myers, and former head of the Office of Legal Counsel, writes today (in relation to my passionate rejection of Lynn Cheney’s attack on lawyers who represented Guantanamo Detainees):

It never occurred to me on the day that Defense Department lawyer Rebecca Snyder and Lt. Cmdr. William Kuebler of the Navy appeared in my law firm’s offices to ask for our assistance in carrying out their duties as military defense lawyers that the young lawyer who worked with me on that matter would be publicly attacked for having done so. And yet this week that lawyer and eight other Justice Department attorneys have been attacked in a video released by a group called Keep America Safe (whose board members include William Kristol and Elizabeth Cheney) for having provided legal assistance to detainees before joining the department. The video questions their loyalty to the United States, asking: “DOJ: Department of Jihad?” and “Who are these government officials? . . . Whose values do they share?”

. . .

That [the lawyers] in question would have their patriotism, loyalty and values attacked by reputable public figures such as Elizabeth Cheney and journalists such as Kristol is as depressing a public episode as I have witnessed in many years. What has become of our civic life in America? The only word that can do justice to the personal attacks on these fine lawyers — and on the integrity of our legal system — is shameful. Shameful.

Requiring licenses for artistic appropriation has nothing to with providing incentives to create.

I’ve been pretty passionate in this blog in expressing my belief that art that appropriates copyrighted work does not infringe the copyrighted work provided the new work stands sufficiently on its own as a creative work. To stand on its own in that way, the new work is one that isn’t attracting an audience merely because of its appropriation of the earlier work. The fact it uses the the copyrighted work to convey meaning through the use of symbols and allusions is no different than the way new, original art has always used the meaning culture attributes to earlier work. Art builds on art.

The counter-argument to my position is that artists need to make money to be able to create art, and if an appropriator can pay for a license, why shouldn’t he? First, merely asking for a license is not the same as obtaining one. Second, the most meaningful pieces of art in our culture are the most successful, and licenses for the use of those works are not likely to be within the financial means of most artists. Third, why should you have to ask for a license to make something new from something someone already has made money from (or as much as their work earned in the market)?

But now Malcolm Gladwell goes right to the heart of the most compelling argument copyright holders have against un-licensed appropriation — that the financial remuneration is an incentive necessary to the creation of art in the first place. Gladwell writes:

Dan Pink is best known for a number of really insightful business books, including “A Whole New Mind.” In “Drive,” he tackles the question of what motivates people to do innovative work, and his jumping-off point is the academic work done over the past few decades that consistently shows that financial rewards hinder creativity. These studies have been around for a while. But Pink follows through on their implications in a way that is provocative and fascinating. The way we structure organizations and innovation, after all, almost always assumes that the prospect of financial reward is the prime human motivator. We think that the more we pay people, the better results we’ll get. But what if that isn’t true? What the research shows, instead, is that the great wellspring of creativity is intrinsic motivation—that is, I do my best work for personal rewards (out of love or intellectual fulfillment) and not external motivation (money).

Maybe you don’t think much of this blog, but I’ve written it now for 18 months and haven’t seen a penny in return. The best writers I know scramble to make their livings through their writing, teaching, parlaying their writing into other creative projects, and whatever else can come their way. I’ve known artists my entire life. I’ve known a few who’ve had vast success, but they are a tiny, tiny minority. The artists I know won’t stop creating if they’re not paid for transformative appropriations of their works.

Article 1, Section 8 of the U.S. Constitution sets for the basis of Congressional power to create laws to protect copyright. It states:

The Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries; . . . (emphasis added).

It does not state:

The Congress shall have the Power . . . To further the capacity of authors and inventors to extract any and all value that exists in their creations, by securing for a time in excess of the lifetimes of these Authors and Inventors the exclusive right to their respective writings and discoveries; . . .

Thank god for our founding fathers — John Adams, honorable lawyer.

Whose values do the lawyers for Guantanamo detainees share? John Adams’, for one:

John Adams, in his old age, called his defense of British soldiers in 1770 “one of the most gallant, generous, manly, and disinterested actions of my whole life, and one of the best pieces of service I ever rendered my country.” That’s quite a statement, coming as it does from perhaps the most underappreciated great man in American history.

The day after British soldiers mortally wounded five Americans on a cobbled square in Boston, thirty-four-year-old Adams was visted in his office near the stairs of the Town Office by a Boston merchant , James Forest. “With tears streaming from his eyes” (according to the recollection of Adams), Forest asked Adams to defend the soldiers and their captain, Thomas Preston. Adams understood that taking the case would not only subject him to criticism, but might jeopardize his legal practice or even risk the safety of himself and his family. But Adams believed deeply that every person deserved a defense, and he took on the case without hesitation. For his efforts, he would receive the modest sum of eighteen guineas.

So when Lynn Cheney’s group, keepamericasafe.com, suggests that there’s something un-American about the fact that lawyers in the Justice Department have defended Guantanamo detainees, the real question is this: why is keepamericasafe.com spouting the un-American propaganda that those accused of wrongdoing are not entitled to a defense and to requiring proof of their wrongdoing? In fact, as Adam Serwer reports,

Lt. Col. David Frakt, who has represented detainees both in military and civilian courts, said that the lawyers who secured due process rights for detainees were ultimately vindicated. “There is an assumption there that has proven to be a fallacy, which is that everyone at Guantanamo was a terrorist,” Frakt says, pointing to the fact that the government has lost three-quarters of the habeas petitions filed by detainees at Guantanamo. “What we have seen over and over and over is that the vast majority of detainees at Guantanamo are innocent.”

This is, in short, ugly, anti-American propaganda:

When Abortion was Illegal (w/Spanish subtitles)(1992)

Happy Birthday, George, and thank you for the wisdom on torture.

After the Battle of Trenton, as his troops were preparing to run captured British soldiers through the “gauntlet,” Washington ordered them to

Treat them with humanity, and let them have no reason to complain of our copying the brutal example of the British Army in their treatment of our unfortunate brethren who have fallen into their hands.

The consequences of doing otherwise would be dire — to match the crime:

Should any American soldier be so base and infamous as to injure any [prisoner]. . . I do most earnestly enjoin you to bring him to such severe and exemplary punishment as the enormity of the crime may require. Should it extend to death itself, it will not be disproportional to its guilt at such a time and in such a cause… for by such conduct they bring shame, disgrace and ruin to themselves and their country.

Corporations = individuals? Confusions in economic theory and First Amendment jurisprudence

Metaphors are tricky things. Corporations are “persons” under the law in many respects, just as you and I are. And we treat corporations as rational individuals in the market. These figurative equations of legal fictions with human beings certainly have their utility, but they easily can be pushed too far. Individuals at AIG were making individual fortunes based on the income they were bringing into AIG for selling credit default swaps. Those individuals were making and would retain those fortunes even if, as turned out to be the case, AIG might not have sufficient funds to pay off the obligations those credit default swaps imposed on AIG. In other words, if one treated AIG as a rational person, one would suppose AIG would never expose itself to a real risk of obligating itself to pay more than it had in reserve. But AIG is merely a corporation, and the individuals actually making the decisions on behalf of AIG had every incentive to get what they could, subject AIG to irrational risk, and be able to walk away with their tens of millions of dollars.

And now the Supreme Court has overturned over 100 years of precedent permitting limits on corporate contributions to political campaigns because such limits constrained free speech and, according to the truism announced by Justice Kennedy’s majority opinion, ”Speech is an essential mechanism of democracy, for it is the means to hold officials accountable to the people.” But corporations don’t make decisions about how to spend money on campaign contributions — the individuals who control the corporations do. So what the Supreme Court has done is to remove any limits we might put on corporate CEOs to spend corporate money to advance the interests that indubitably are intended to redound to the benefit of those individual CEOs. I wouldn’t limit the ability of CEOs and shareholders to make individual contributions to political campaigns, but why are we treating purely legal entities like they are made of flesh and blood?

As Buzzflash pointed out recently, Thom Hartmann in his book Unequal Protection explains:

Prior to 1886, corporations were referred to in U.S. law as “artificial persons.” but in 1886, after a series of cases brought by lawyers representing the expanding railroad interests, the Supreme Court ruled that corporations were “persons” and entitled to the same rights granted to people under the Bill of Rights. Since this ruling, America has lost the legal structures that allowed for people to control corporate behavior.

Learn that government regulation can be very effective in under 2 minutes.

Next time someone tells you government regulation doesn’t do any good, ask them to watch the video below and whether they’d rather be driving a car built before the government started regulating automobile safety.

Legal Practice and Legal Scholarship and Law School Reputations: Ships Passing in the Night.

One of the most interesting aspects of the U.S. legal system is that, as a common law system (as opposed to the civil law system prevailing in the vast majority of the non-Anglo-American world), the practice of law and the activities of legal scholars exist in almost entirely separate realms. Having had worked for well over a decade in each of the realms of legal practice and legal academia, the following account, from Wikipedia, reflects my own experience that legal scholarship in the U.S. legal system has little impact on the actual practice of law:

In common law jurisdictions [such as the U.S.], legal treatises compile common law decisions, and state overarching principles that (in the author’s opinion) explain the results of the cases. However, in common law jurisdictions, treatises are not the law, and lawyers and judges tend to use these treatises as only “finding aids” to locate the relevant cases. In common law jurisdictions, scholarly work is seldom cited as authority for what the law is. When common law courts rely on scholarly work, it is almost always only for factual findings, policy justification, or the history and evolution of the law, but the court’s legal conclusion is reached through analysis of relevant statutes and common law, seldom scholarly commentary.

In contrast, in civil law jurisdictions, the writings of law professors are given significant weight by courts. In part, this is because civil law decisions traditionally were very brief, sometimes no more than a paragraph stating who wins and who loses. The rationale has to come from somewhere else, and the academy often filled that role. As civil law court decisions move in the direction of common law reasoning, it is possible that this balance may shift.

A footnote to this explanation adds: “At least in the U.S., practicing lawyers tend to use ‘law professor’ or ‘law review article’ as a pejorative to describe a person or work that is insufficiently grounded in reality or practicality – every young lawyer is admonished repeatedly by senior lawyers not to write “law review articles,” but instead to focus on the facts of the case and the practical effects of a given outcome.”

I do not mean to point out the stereotypical disregard for legal scholarship among practicing lawyers to disparage legal scholars. Rather, I mean to emphasize what I wrote yesterday: it is the evidence in each case that persuades the legal decision maker what the just result is in each case. The legal rules of the common law system are not abstract principles of justice pronounced from on high to produce justice in each and every situation; instead, they are the refined products produced by centuries of case-by-case efforts to achieve just results based on the specific evidence presented in each of those cases. Thus, those legal rules are subordinate to the case-by-case efforts to achieve justice, not the infallible determinants of just outcomes in all future cases. As I wrote yesterday in suggesting that my students in analyzing legal disputes first consider what the dispute is about, then consider the evidence and its persuasiveness in helping them as human beings determine a just result in that dispute, and only then employ the legal rules to articulate as legal professionals speaking in the language of their technical expertise to explain the justice of that result:

In other words, the legal rules and their proper application arise from the evidence the parties bring to bear. The rules do not predetermine disputes that are predictable before they arise. Instead, they provide the legal language (developed over the centuries’ long development of the common law) in which to couch the just conclusions compelled by the evidence.

In explaining the practice of the common law, I do not mean to denigrate U.S. legal scholarhip. But I do mean to put it into the proper context within our legal system: scholars strive to develop generalizations that govern all cases. Courts, on the other hand, decide individual cases involving individual disputes between individuals who have personal stakes in those disputes. In doing so, the courts do their best to do justice in those individual cases. Scholarly generalization, inevitably, conflicts to a considerable degree with that individual effort to find justice between individuals involved in specific disputes.

And yet the reputation of law schools is weighted enormously in favor of the evaluation by law professors of the legal scholarship of other law professors. For law students, the vast majority of whom go to law school to become lawyers, the basis of these reputations must cause some consternation if there is any truth to what I have written above about legal scholarship’s distance from and irrelevance to legal practice. But here it is, from Brian Leiter, one of the most respected authorities on the evaluation of law school quality. What measures a law faculty’s quality? Not success as a lawyer. Instead:

Faculty Quality (70% of [a law school's] final rank): the rank in this category is based on three criteria: scholarly productivity; scholarly impact of faculty work; and reputation. More precisely, 25% of the rank is based on the per capita rate of publication for the period 1998 through summer 2000 of,

1. articles in the ten most frequently cited student-edited law reviews (Yale Law Journal, Harvard Law Review, Stanford Law Review, University of Chicago Law Review, Columbia Law Review, Michigan Law Review, California Law Review, University of Pennsylvania Law Review, and Texas Law Review, plus New York University Law Review, which is less-often cited but benefits in prestige from being affiliated with a top law school;

2. articles in ten leading peer-edited law journals (Administrative Law Review, American Journal of Comparative Law, Constitutional Commentary, Environ- mental Law, Journal of Legal Studies, Law & Contemporary Problems, Law & Social Inquiry, Legal Theory, and Tax Law Review);

3. books from the three leading law publishers (Aspen, Foundation, West); and

4. books from the six leading academic presses in law (Cambridge, Chicago, Harvard, Oxford, Princeton, Yale).

Another 25% of the faculty quality rank is based on the per capita rate of scholarly impact for the top quarter of each faculty based on citations to faculty work on the Westlaw JLR database as of August 2000. Finally, 50% of the faculty quality rank is based on the subjective academic reputation of the school based on a fall 1999 survey of academics conducted by U.S. News & World Report.

Each measure of faculty quality has advantages and limitations, but together they promise to present an informative picture. The rationale for the particular weightings, and the details of the study methodology, can be found in “Measuring the Academic Distinction of Law Faculties.”

So there you have it. The law schools with the best reputations are the law schools with law professors who write law review articles read by other law professors but that have little if any impact on the actual product of the U.S. legal system.

Then again, I am on record expressing my opinion that the most reputable of law professors at the most reputable of law schools have, given the opportunity, shown themselves to the worst of lawyers.

Thanksgiving for the American Dedication to the Common Good

I’m not quite sure why it is that so many of my students really believe that the signal trait of the U.S. is a radical individualism that doesn’t even blink at suggestions that something like, say, Social Security is “socialism,” but it certainly isn’t a firm grasp of history. The Pilgrims whom we celebrate tomorrow themselves promised in their Mayflower Compact that they were each dedicated to the good of the community and that their laws were to be those intended for the general good:

We whose names are underwritten . . . covenant and combine ourselves together into a civil body politic, for our better ordering and preservation and furtherance of the ends aforesaid; and by virtue hereof to enact, constitute and frame such just and equal laws, ordinances, acts, constitutions and offices, from time to time as shall be thought most meet and convenient for the general good of the Colony: unto which we promise all due submission and obedience.

Happy Thanksgiving, to all, and to all for whom it isn’t, may we all strive to make next year’s better.

Homeland uber alles.

I’m not Hannah Arendt’s biggest fan, but the prominence she gave to “banality of evil” is an accomplishment that ought to be honored through the ages. As Wikipedia explains her thesis as well as it can be concisely described, “the great evils in history generally, and the Holocaust in particular, were not executed by fanatics or sociopaths but rather by ordinary people who accepted the premises of their state and therefore participated with the view that their actions were normal.” The role of the legal profession in Nazi Germany is, I think, a relatively neglected topic, but one can recognize when judges engage in specious reasoning to transform ugly, degrading, murderous, and unspeakable acts into the “normal” way of protecting our homeland.

I’ve compared the case of Maher Ahar to The Trial. I’m afraid that comparing it to fiction was my own effort to deflect the ugliness. As Glenn Greenwald describes Arar’s nightmare:

Maher Arar is both a Canadian and Syrian citizen of Syrian descent. A telecommunications engineer and graduate of Montreal’s McGill University, he has lived in Canada since he’s 17 years old. In 2002, he was returning home to Canada from vacation when, on a stopover at JFK Airport, he was (a) detained by U.S. officials, (b) accused of being a Terrorist, (c) held for two weeks incommunicado and without access to counsel while he was abusively interrogated, and then (d) was “rendered” — despite his pleas that he would be tortured — to Syria, to be interrogated and tortured. He remained in Syria for the next 10 months under the most brutal and inhumane conditions imaginable, where he was repeatedly tortured. Everyone acknowledges that Arar was never involved with Terrorism and was guilty of nothing.

Yesterday, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of Arar’s lawsuit (pdf) alleging, among other things, that his treatment by U.S. officials violated his constitutional rights to due process. Why? Because he couldn’t name the people who did what they did to him:

Arar alleges that “Defendants” — undifferentiated — “denied Mr. Arar effective access to consular assistance, the courts, his lawyers, and family members” in order to effectuate his removal to Syria. But he fails to specify any culpable action taken by any single defendant, and does not allege the “meeting of the minds” that a plausible conspiracy claim requires. He alleges (in passive voice) that his requests to make phone calls “were ignored,” and that “he was told” that he was not entitled to a lawyer, but he fails to link these denials to any defendant, named or unnamed. Given this omission, . . . we agree with the District Court and the panel majority that this Count of the complaint must be dismissed. Slip op. at 24-25 (emphasis added).

So next time you’re hauled in off the streets, held incommunicado, and sent to Syria to be tortured, be sure to get down the names of the “officials” doing this to you. Otherwise, you have no constitutional protections against this treatment. It’s all in the name of national security, and that trumps all, right?

This is “judging”?

The Framers embraced government provided services.

It never occurred to me that it would have to be repeated, much less come as a shock, that our country was founded on the assumption that the government would be the source of services needed by all. But Mark Brown, holder of the Newton D. Baker/Baker and Hostetler Chair at Capital University School of Law, fills us in on precisely this history, explaining that the Founding Fathers “believed that ‘essential’ services should be provided by government to the public at large for little or no remuneration. The costs of these services would be shared by the whole.” I’m not sure I agree with Brown’s characterization of this approach to governance as “socialism,” but I suppose he’s only deferring to the debased and a-historical way that term is being thrown around these days.

Why are you working harder for less? Scientific Management, management consulting, and leveraged buyouts – a century of being conned.

I described leveraged buyouts the other day — in connection with the demise of the maker of the Simmons Beauty Rest Mattress — as a symptom of why we don’t trust Wall Street. You might wonder why, if I’m right, we allow people again and again to “buy” companies by borrowing enormous sums of money — in essence, we allow the buyers to suck money out of successful companies for their own benefit in the same way we allowed home owners in a rising housing market to suck money out of their homes by means of home equity loans.

It’s perfectly clear why we allowed homeowners to do that — all involved figured the market would continue to rise at least until they could make their money and get out. But why do we let this keep happening on a much larger scale on Wall Street?

I hadn’t considered the question specifically at the moment I wrote that post about Simmons. It was enough for me that throughout the 25 years of my career both practicing (in connection with, among many things, leveraged buyouts) and teaching I’ve seen the phenomenon again and again. But this week I came across Jill Lepore‘s article “Not So Fast” in the New Yorker, an article which asks the question, “Scientific management started as a way to work. How did it become a way of life?” Lepore’s article is about the rise in the early 20th Century of “Scientific Management,” the foundation of modern “Management Consulting.” Scientific Management was created by Fredrick Winslow Taylor, who, as Lepore writes, sold himself as someone able to make businesses more efficient:

Speedy Taylor, as he was called, had invented a new way to make money. He would get himself hired by some business; spend a while watching people work, stopwatch and slide rule in hand; write a report telling them how to do their work faster; and then submit an astronomical bill for his services. He is the “Father of Scientific Management” (it says so on his tombstone), and, by any rational calculation, the grandfather of management consulting.

The problem, as Lepore notes, is that Taylor was a fraud, and Taylorism’s grandchild, management consulting, is as well.

What does all this have to do with leveraged buyouts? Plenty. The entire rationale of the leveraged buyout is that the buyers can take a company with a lot of unrealized value and realize it. How? By making the company more “efficient.” The debt taken on to buy the company (and to reward the “buyers” with profits along the way) will, the argument goes, easily be paid off given the as yet unrealized efficiencies. Thus, we’ve had decades of “downsizing” (massive layoffs), “consolidations” (elimination of competing businesses), and arguments that advances in productivity brought about by our new technologies would redound to the benefit of all (when the only benefit would redound to whoever could pull the money out quickest).

We’ve been had.

At least we have one consolation — none of us have been alone in being conned. The focus of Lepore’s work is Louis Brandeis, someone I’ve always thought was a very bright guy and who against all evidence remained convinced his entire life that Scientific Management would benefit the working person:

Neither unions nor businesses have lived up to Brandeis’s optimism. “If the fruits of Scientific Management are directed into the proper channels,” he wrote, “the workingman will get not only a fair share, but a very large share, of the industrial profits arising from improved industry.” Lately, that share has been going to shareholders and C.E.O.s. Home and work, separated since the first stirrings of the Industrial Revolution, have been growing back together again: BlackBerry on the nightstand, toaster in the photocopy room. Efficiency was meant to lead to a shorter workday, but, in the final two decades of the twentieth century, the average American added a hundred and sixty-four hours of work in the course of a year; that’s a whole extra month’s time, but not, typically, a month’s worth of either happiness minutes or civic participation. Eating dinner standing up while nursing a baby, making a phone call to the office, and supervising a third grader’s homework is not, I don’t think, the hope of democracy.

You’ll also find worthwhile on this topic the New York Times video series entitled “Flipped: How Private Equity Dealmakers Can Win While Their Companies Lose“

All the cash has been sucked from Simmons’ mattresses.

Is it any wonder we don’t trust Wall Street?

I saw it back in the 80′s up close and personal, when the debt was called “junk,” but the practice goes on and on and on. When credit markets are good, investors (called “private equity firms” or “merchant bankers” or “leveraged buy out firms” or the like among their peers and minions) will sell a company’s bonds to finance their purchase of the company, take fees for issuing those bonds, issue more bonds later on to take cash out of the company for themselves (and fees for the new issuance), and then, when the debt becomes to burdensome for the company, the purchasers of the bonds are left high and dry — that is, broke or, at best, with equity in a new, reorganized, and crippled company worth a fraction of what they paid for their bonds.

The latest victim? Simmons Bedding Company, the maker of the Simmons Beauty Rest Mattress. As the New York Times reports:

Simmons says it will soon file for bankruptcy protection, as part of an agreement by its current owners to sell the company — the seventh time it has been sold in a little more than two decades — all after being owned for short periods by a parade of different investment groups, known as private equity firms, which try to buy undervalued companies, mostly with borrowed money.

For many of the company’s investors, the sale will be a disaster. Its bondholders alone stand to lose more than $575 million. The company’s downfall has also devastated employees like Noble Rogers, who worked for 22 years at Simmons, most of that time at a factory outside Atlanta. He is one of 1,000 employees — more than one-quarter of the work force — laid off last year.

But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.

Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years.

Rules must allow for the inevitability of change: art museums and the doctrine of deviation

I’ve had my disagreements with Donn Zaretsky, the author of the Art Law Blog. But he’s dead on in his criticism last week of objections typified by Eric Gibson’s ”piece in the Wall Street Journal . . . about the Cleveland Museum of Art’s [CMA] request for court permission to use certain acquisition-restricted funds . . . to help complete its renovation/expansion. . . .”

As Zaretsky acknowledges, Gibson is sympathetic to CMA’s plight: “Clearly the museum has to do something. Nobody could have anticipated the events of a year ago, and [the museum's director] and his colleagues make a compelling case that the museum has to move forward with its expansion plan rather than mark time.” I would add that sympathy is worth the paper Gibson’s online piece is printed on. Yes, something has to be done. Maybe from New York an art museum, even a respected one, in Cleveland can be treated with condescension, but as a native Clevelander who happily moved back after 13 years of professional life in NYC, I can appreciate that the Cleveland Museum’s self-description accurately describes the importance of the institution:

The Cleveland Museum of Art means many things to many people. To the residents of Greater Cleveland, it is a beloved civic asset, a place where the community’s greatest aspirations find expression, and a backdrop for many a wedding photo. The museum is a major force in the regional cultural and intellectual community, helping to keep Northeast Ohio a vibrant center of learning and artistic endeavor. As one of the nation’s top museums, the CMA has long exhibited leadership in acquisitions, presentation, and education, and its curators have originated many groundbreaking exhibitions. The Cleveland Museum of Art is renowned the world over for the extraordinarily high quality of its holdings (which are in constant demand for loan exhibitions) and for both the intellectual rigor and the public spirit of its daily activity.

And CMA is no dusty holdover from the days when John D. Rockefeller and his contemporary Cleveland industrialists funded a cultural life of one of the richest and most dynamic cities in the country. Earlier this year, as Gibson also notes, it “completed Phase I of a $350 million, eight-year expansion and renovation plan that, when completed in 2012, will increase the museum’s size by nearly 50%, significantly expand exhibition space, and enhance the museum in other ways.” But, of course, “[l]ast fall, with the start of the second and last phase of the plan on the horizon, the museum found itself caught in what Michael J. Horvitz, the board’s chairman, calls “a perfect storm”: With $138 million remaining to be raised, philanthropy dried up, the credit markets froze, and the museum’s endowment plummeted—to $558.5 million as of June 30 this year from $736 million before the crash.”

Gibson, however, is paralyzed with fear that “the precedent this could set”if the court grant’s CMA’s request to use funds restricted for use to the acquisition of art. You have to to worry about what [art museums] might do if given an opening to finesse the rules governing restricted endowments.” As Zaretsky notes, “Lee Rosenbaum makes a similar point . . . . Cleveland’s actions,” she says, “unchecked, would set a dangerous precedent that could have a negative impact on future benefactions, just when museums need help the most.”

This is garbage. As Zaretsky points out: “The doctrine of deviation, upon which the museum relies, has been around forever. If the court grants the museum’s application, it won’t be creating an opening that other museums will then come rushing through, but allowing it to pass through an opening that was always there.” Moreover, the CMA’s has used the doctrine of deviation in the past in a responsible way, and there’s no reason to think, given the obvious need even its critics acknowledge, to think that if it convinces the court to allow it, that the decision would be a precedent for museums everywhere suddenly to act irresponsibly. Nor should we make rules that don’t permit courts to look at individual cases and grant relief from restrictions no longer serving any useful purpose just because we’re afraid someone may try to get away with fooling a court into letting them act irresponsibly. As Zaretsky points out, those who fear that allowing the CMA to be released from the restrictions imposed on its use of certain funds because circumstances demand it would create a bad precedent are blind to the fact that the rules that allow precisely that have been around and worked well for a long time:

The “opening to finesse the rules” has existed for this very museum with respect to these very funds for more than 50 years. It seems safe to say they haven’t exactly been abusing the privilege. Once again, the people who run our nation’s museums are not naughty schoolchildren who need to be penned in by simple, black-and-white rules.

And the rules set no strict standards. The legal doctrines that grant relief from restrictions on contributions made by donors require that “present circumstances have made it impossible, unlawful, or impracticable to adhere to the original terms of the donation . . . [or] the administrative terms of a gift . . . hamper the accomplishment of the gift’s purposes.” Emmeline Barton, Relief from Gift Restrictions: Cy Pres and Deviation, Harvard Law School Art Law Client Newsletter at 7 (Spring 2007).

I do wish people like Gibson and Rosenbaum would bother, before spouting off, realize that others long ago might not only have shared those opinions but also managed to work their way through to a reasonable way of accommodating the entire range of concerns raised in connection with those opinions. If the CMA can’t convince the court that circumstances merit relief from the restrictions on the funds they want to use, the court won’t let them. And we shouldn’t stop them because we’re afraid someone else might not deserve the same type of relief they’re seeking.

Do we need to protect Exxon’s right to free speech?

There’s an interesting and largely ignored set of precedents at play in the campaign finance case the Supreme Court heard arguments in yesterday. The focus is on whether Chief Justice Roberts — after having emphasized during his confirmation hearings the importance of precedent and the extraordinary circumstances that would require it to be overturned — will vote to overturn over 100 years of limits on corporate donations to political campaigns on the grounds that limiting corporate contributions to political campaigns is an unconsitutional limitation on free speech. Here’s my bet (which I strongly recommend you don’t take): Roberts will overturn the precedent and vote to overturn the campaign finance restrictions.

But there’s an even older set of precedents that ought to be subject to review: the precedents that conclude that corporations are “persons” just like you and me; accordingly, corporations are entitled to free speech rights, protection against unreasonable searches and seizures, and all the other rights guaranteeed to individuals under the Constitution.

There’s nothing self-evident about concluding that a corporation is entitled to these protections. One reason is what the right wing of the Court identified years ago in concluding that limitations could be made on a union’s power to contribute money to political causes: an individual union member’s views might difffer from the union’s. Just so, an individual stockholder or director’s views might differ from that of the corporation’s.

More importantly, though, the idea of a corporation is a convenient legal “fiction” — really a metaphor — that courts employ because it is, well convenient for purposes of certain legal analysis. But when we confuse the metaphor for the reality we can get into trouble. As Buzzflash pointed out recently, Thom Hartmann in his book Unequal Protection explains:

Prior to 1886, corporations were referred to in U.S. law as “artificial persons.” but in 1886, after a series of cases brought by lawyers representing the expanding railroad interests, the Supreme Court ruled that corporations were “persons” and entitled to the same rights granted to people under the Bill of Rights. Since this ruling, America has lost the legal structures that allowed for people to control corporate behavior.

So think twice before you conclude that the campaign finance case is all about overcoming restrictions on free speech, which is the position argued on the left by the ACLU and on the right by the Wall Street Journal:

Hillary Clinton may end up the accidental heroine in the battle to reassert First Amendment rights over restrictions on political speech. Yesterday, the Supreme Court heard a historic reargument in the case of Citizens United v. Federal Election Commission, and the Justices have a chance to revisit two of their greatest offenses against the Constitution.

The case involves a political documentary made during last year’s Presidential primaries about then-Senator Clinton called “Hillary: The Movie.” It wasn’t what you’d call a glowing portrayal. Funded by a group called Citizens United, the film was intended to be shown on cable TV during the primary season, a profile that got it caught in the net of campaign finance reform laws that control political advertising.

At stake are two major precedents in the campaign-finance canon, Austin v. Michigan Chamber of Commerce (1990) and a portion of McConnell v. FEC (2003). In Austin, the Court ruled the government may ban corporations from engaging in what’s known as “express advocacy” directly from corporate treasury funds, requiring the funds to be channeled through a separate political action committee. In McConnell, the Court built on that decision to uphold most of the Bipartisan Campaign Reform Act, a.k.a.

the 2002 McCain-Feingold law, including a section that banned “electioneering communications.”

. . . The First Amendment was designed specifically to protect speech in just the kind of scenario “Hillary: The Movie” presents—the right to engage in the political process and to challenge and comment on candidates. Citizens United is the ideal opportunity to overturn a major swath of bad law.

No, the First Amendment was not “designed to specifically protect speech” by business organizations — it was intended to protect speech by individuals. It’s an amazing argument from those who would normally argue that we need to stick to the Original Intent of the Framers, but it shows too that Original Intent is merely a means to a political end, not a reasoned position.

Do we really want anyone to have free online access to court files?

Court documents are public. You can go down to any courthouse and examine the files from any case you want. But there has been no smooth transition to making those documents publicly available on the internet. That may be changing, though I’m not entirely sure I agree with the majority of commentators on the subject that making those documents freely available to anyone with an internet connection is a good thing.

As explained by the Wall Street Journal, “Digital records of court filings, briefs and transcripts sit behind paywalls like Lexis and Westlaw.” Lawyers, non-profits, and researchers can use PACER to access all documents filed in the federal courts, but PACER has 2 significant defects: (1) it costs 8 cents per page to download any document (an amount that can add up rapidly to access a sufficient amount of material to make sense of any given document), and (2) you cannot search the system by keyword.

As the WSJ puts it: That’s right: In 2009, judicial records in the U.S. are essentially unsearchable.” But last week, a team from Princeton’s Center for Information Technology Policy unveiled a Firefox add-on that promises over time to make all those documents filed in federal courts freely available and word searchable:

They whipped up a sleek little add-on to the popular Firefox Internet browser called RECAP (PACER spelled backward). Legit users of the federal court system download it. Then each time they drop eight pennies, it deposits a copy of the page in the free Internet archive. This data joins other poached information, all of which is formatted, relabeled and made searchable—the kind of customer service government tends to skimp on. Users can even see what has already been liberated while within the government system, a stylish and subversive touch. This week, as RECAP picked up speed, various court offices got skittish and began sending out emails acknowledging the project’s legality, but “strongly discouraging” its use anyway.

I’m as great an advocate of government (and corporate) transparency as almost anyone, but I can’t help but be troubled by the possibility that someday all the files in every court in the land will be word searchable and accessible to anyone with an internet connection. It’s one thing to go to a courthouse (or even through many free online sites) to access the papers filed by the parties to a particular lawsuit. Courts are public institutions, and the fact their documents have always been and continue to be accessible to anyone (willing to visit the courthouse where those papers are filed) has been fundamental to the greatness of our judicial system.

But papers filed in court do not necessarily state facts. Think of what friends of yours have been falsely and outrageously accused of in bitter business and divorce cases. Think of all the ridiculously frivolous lawsuits “tort reformers” are always screaming about. Think about how often the report of a filing of a lawsuit, which sets forth allegations that are merely allegations, not assertions of proven fact, are reported and read as fact. Do you really want anyone with an internet connection to be able to search the files of all the courts in the land for your name, pull up the documents from that case, and set forth on their website what some witness has stated without regard to the larger context of the court case that might reveal the witnesses lack of credibility, hostility, limited knowledge, subjectivity, or sheer misapprehension?

Just one example of the sort of problems free access to court records could create was described by Charlotte Watson, Executivec Director for the New York State Office for the Prevention of Domestic Violence in a public hearing held by the New York State Commission on Public Access to Court Records. Ms. Watson testified as follows (at pages 82 and following of the transcript of the entire hearing (pdf):

Ms. Watson: What we innocently put on the “Web” a few years ago is now being used in ways we never considered, including invasive crimes such as identity theft. We’ve heard horror stories of how stalking victims were tracked and harmed through information posted and available to all for good or bad intent. We’ve all seen those annoying pop-up adds on our computers, advertising the ability to find literally, anyone. As a domestic violence advocate with more than 27 years in the field, and one concerned about privacy in general, those ads, and the open, easy access to so much personal information in what we term the “information age” are truly frightening.

Nowhere is this more of a concern than when considering the safety and security of victims of domestic violence, sexual assault and stalking. We know that domestic violence is pervasive, on-going, life-changing reality for millions of women and children in this country, and stalking is an integral part of the dynamic of domestic violence.

Domestic violence victims know all too well their abusers will use any means to control and terrify them and keep them from escaping. It is not unusual for a batterer to monitor the odometer on a victim’s car, record the victim’s phone calls, or use hidden cameras. Imagine what it would be like to have a Global Positioning Satellite unit attached to your car and monitored constantly by someone in authority over you. This is the daily reality of many victims of domestic violence with the state of technology today.

What will tomorrow hold? It’s extremely difficulty and often dangerous for battered women to escape their abusers. Many find it necessary to flee the area entirely in hope of

finding safety. Those who are able to get away live with the extreme fear of being found by their abuser. A losing battle for approximately 1,100 U.S. women each year who were murdered by their intimate partners after fleeing, as well as, countless others who are re-assaulted.

There have been many attempts to help victims find safety. . . . Unfortunately, at the same time we are recognizing the needs of domestic violence victims, the trend toward “open government” and access to information has become an easy, affordable and valuable weapon for abusers.

As advocates for victims of crime, however, we do recognize the need to find ways to increase the accountability of systems, including the courts, in their responses and decisions. It’s vital that these interests are balanced against victim safety and the privacy of users of our court process. In the effort to increase accountabilities, the court must be mindful of even the appearance of culpability, should granting easy access to information result in harm to a victim.

It should never be the case that potential consumers of the courts must weigh the need for safety through court intervention against the need for privacy and anonymity

which may also impact safety. In light of these concerns, I will outline a number of recommendations regarding open access to court information. . . . The negative implications include, as has been mentioned:

A chilling effect on victims who are considering using the court for legal relief. While we applaud the fact that family court and matrimonial records will not be subject to open access, I must emphasize that under current law, criminal court is the only court in which many victims may seek relief. Consider, for example, a victim who’s being abused or stalked by a boyfriend. To obtain an order of protection, that victim will have to disclose significant personal information and potentially embarrassing details about the abuse in criminal court. Under the Conference of Chief Justices and the Conference of State Court Administrators Guidelines, this information would readily be accessible by the public and the offender. It’s not a leap to say the victims will be reluctant to pursue an order of protection under these circumstances. Is it fair to ask a victim to sacrifice her privacy for the safety she’s entitled to under the law?

Imagine the heyday the pornography and smut industry will have with such easy access to crime scene photos of horribly violent rapes and homicides. Imagine the websurfer who accidentally opens a porn site or the errant adolescent going to sneak a peak only to discover the crime scene photo of his naked mother lying in a pool of blood. At what point would the balace tip from accountability at this point to culpability? At what price? Who and how would these decisions be made as to where to draw the line?

There are safety risks for crime victims and witnesses. As I noted earlier, abusers often track and monitor their victims as a means of maintaining control. These behaviors typically increase when a victim leaves the abuser. Whenever a victim becomes involved with the court system, whether voluntarily, as a result of mandatory arrest or pro-prosecution policies or for some other reason, precious information about her location, status, current name, phone numbers and other circumstances is disclosed. Such disclosure is a major concern for my agency and victim advocates across the state. We know that abusers will access this information and use it every way possible to stalk, threaten, assault or kill the victim and maybe her children.

This can be a problem even when the victim is using the court system for something unrelated to domestic violence. For example, if these involved in a motor vehicle accident resulting in legal action and the information, includinging simply the location of the Court is posted on the Internet, her address would be posted making it all too easy for her abuser to find her. Perhaps she relocates to escape the abuser and later becomes the beneficiary of a probated estate. As a result, identifying information could be posted creating similar safety risks. Ironically, if the victim is seeking a legal name change, even this information could be posted on the Web, making her efforts at anonymity fruitless.

It’s important to note she may not be a victim at the time of her interaction with the court on the myriad of non-domestic violence related actions that could bring her to court. After one date with a stalker, she would be vulnerable to his gaining valuable information about her that could lead to her demise. There’s an increased opportunity for identity theft. Destroying the victim’s credit and reputation is a tactic already used by batterers. Open public court records will only increase the opportunity for accessing and misusing personal information.

We’re concerned about the secondary uses of the information. Information stored by the courts will most certainly be used for purposes that move far from the original public policy intent of governmental accountability. It will be gleaned and sifted and compiled along with other information to create entirely new databases that can be misused and misinterpreted. Once the information is gathered for another database, it can never be taken back or corrected. In domestic violence cases, false or misleading information could be deliberately planted by the batterer in spurious legal filings that include slanderous material against the victim which are then posted on the Web for all to see and use.

Internet access could undermine the victim in custody proceedings. Seeking custody is one of the most powerful tactics used by abusers to access control their victims. Abusers will use every means available to discredit the victim and prolong a custody battle. The proposed guidelines actually aid abusers in this process. Open public access to court information provides abusers with cheap and easy access to all records of any criminal proceeding, regardless of whether such information was relied upon we the court. This poses serious ramifications for victims who ultimately leave their abusers and seek custody. Economic survival or the abusers threats or false promises often compel victims to minimize or deny the events or later recant earlier statements of abuse that form the basis of a criminal prosecution. The fact that such records from a criminal proceeding and many civil proceedings will be within easy grasp of an abuser in a subsequent custody proceeding essentially re-victimizes the victim, rewards the abuser’s use of coercive tactics and facilitates the abuser’s use of custody as a weapon of control.

MR. ABRAMS: It seems to me that a good part of what you’re saying would apply to public access, regardless of whether there’s an Internet or not. When you say that “open public access — on page five — to court information provides abusers with cheap and easy access to all records of any criminal proceeding, regardless of whether such information was relied upon by the court.” The fact is that now, without an Internet — before we had an Internet, there was open public access to court information, regardless of whether the information was relied upon by the court. Does your office favor limiting access to the information itself, regardless of whether it’s going on

the Internet?

MS. WATSON: Our concern is the same one expressed many times today; that’s the cheap, easy affordable part of it. You can actually be sitting in your bedroom, walk over to your computer and find the information. It’s very different from having to go down to the courthouse and go through the records and find the information, being able to sit in California, sit on your computer, pull up your victim, your target’s information on a court record in New York.

James Boyle: “A Song’s Tale: Mashups, Borrowing, and the Law”

Professor James Boyle lectures on the 199 year history of a song protesting the government’s inept response after Hurricane Katrina, tracing its sources back over 100 years through the work of, among others, Kanye West, Ray Charles, and Clara Ward. Each (I’m shocked, shocked) of these musicians borrowed from the music of others before them, yet they borrowed in different ways, under different legal rules, in a different musical culture. Their music was shaped, for better and worse, by those constraints. At the end of the 100 year journey, we can have a sense of how the music of the future may be shaped, and of what our musical culture will give up in the process.

Why is music the main battleground in the copyright wars?

Andrew Dubber is an established scholar working in Britain, an author, and an online music consultant writing a book “about the music industries and intellectual property in the digital age.” He’s also writing a blog as “a scrapbook of material for” the book. The book and the blog, Deleting Music, are “[s]pecifically . . . about the problems that arise when music is only considered in terms of its function as commerce, rather than as culture.”

Two days ago Dubber raised this question: why is his focus on music when the issues he is exploring “extend[] way beyond popular music into books, visual arts, academic works, medicine… and extend[] into the realms of international trade, global politics and genuine life and death issues”? He believes that the reason is that the music industry is uniquely threatened by the commercialization of culture:

There’s a genuine cultural crisis going on in the music industries. Master tapes are decaying in vaults. Original works – by artists you’ve heard of, not just obscure and irrelevant wannabes – are not being preserved. Archives and libraries are only reluctantly being supplied with copies of released material – and not reliably so.

In music, perhaps in more than any other field, culture is not merely being prevented from being remixed – it’s completely disappearing, preventing it from forming the basis of any future works or research. And it’s that, more than anything else, that I want to communicate through this book.

This is not a hypothetical problem, or merely an unfair distribution of power. Popular music culture is literally vanishing right now. Magnetically-charged metal oxide particles are falling from master tapes as we speak.

To me, that’s important, urgent – and worthy of its own book

Music has been the center-piece in the recent copyright wars. Dubber knows better than I the impact of the music industry’s practices on the culture, but I think there’s a very good legal explanation for the music industry’s centrality to today’s copyright disputes.

In both the plastic arts and in literature there is a long history of, well, “remixing” as a legitimate method of creation. There has been in music as well, but not in quite the concrete and specific way there can be in painting and literature. Collage is a long-established artistic genre, and in literature the wholesale copying and rearranging of existing work as a composition method goes back to the foundation of Western literature in Homer. In music, on the other hand, while composition has always been a matter of reworking existing formulas, we’ve been operating in recent times on a general assumption that lifting a single note from an earlier recording constitutes copyright infringement. For long enough this practice has been the norm in the music industry that most people I know simply assume it’s an indisputable fact that if you sample anything from a copyrighted work you must pay for the sample.

But that’s a very debatable proposition. So where did it come from?

Paying for every last sampled note from a copyrighted song only became standard industry practice beginning in 1991 practice after Judge Kevin Duffy in Grand Upright Music, Ltd v. Warner Bros. Records, Inc. , 780 F. Supp. 182 (S.D.N.Y. 1991), in a decision that did not even consider issues pertaining to fair use, enjoined the distribution of Biz Markie’s third album because one of its songs sampled three words and the accompaniment ostinato of Gilbert O’Sullivan’s cheesy hit “Alone Again, Naturally.” Duffy wasn’t satisfied with a mere injunction; he also referred the defendants to the U.S. Attorney’s office for criminal prosecution and began his opinion, like a preacher from the pulpit with these words:

“Thou shalt not steal” has been an admonition followed since the dawn of civilization Unfortunately, in the modern world of business this admonition is not always followed.

The U.S. Attorney’s office exercised its prosecutorial discretion and refused to seek an indictment against Biz Markie or his producers. One likes to think the prosecutors were more thoughtful about the copyright issues the case raised than was Judge Duffy.

But Biz Markie’s record company did not appeal the decision and, in fact, the decision marked the beginning of the music industry’s practice of requiring permission and payment for any sample. The companies that at the time constituted the industry had a strong interest in maintaining the regime Duffy’s decision put into place (a regime bolstered in 2004 by the decision in  Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792 (6th Cir. 2004), in which the court ruled that the defendant had committed copyright infringement by using in his own musical recording a two-second sample from an earlier copyrighted recording, lowering the pitch, and looping the sample to extend it to 16 beats). Deference to this legal regime meant that each company’s recordings were inviolate without payment. There was no economic reason to challenge the right of another recording company to require payment for any sample, no matter how small, no matter transformative its use was, and no matter how little impact it would have had on the market for the sampled piece. Moreover, artists who would have challenged the existing regime hardly had the financial wherewithal to take on the industry and the enormously successful artists who benefit from it. Thus, as John Pareles has written, “[a]lthough sampling was just a technological extension of the age-old process of learning through imitation, producers who use samples now pay up instead of trying to set precedents for fair use. “

Thus, the the RIAA states “generally speaking, the use of any part of a song requires a license.”

But, as I have emphasized again and on this blog, law is forced to change when the material conditions it governs change, and the ability to make and stitch together samples into compositions that can be disseminated world-wide — an ability that in 1991 was held almost exclusive by the recording industry — is now within reach of, literally, millions of people. It is inevitable that with this change the deference given to a trial court decision in 1991 would be challenged and that the arguments Judge Duffy entirely ignored in that decision would be examined anew.

But when, and in what circumstances? That is the interesting legal question right now. As I’ve previously written, Greg Gillis, who performs as Girl Talk, creates music that does nothing but violate the rule Judge Duffy declared inviolate since the dawn of civilization — Girl Talk’s work consists entirely of samples of recordings (virtually all copyrighted) stitched together into entirely new works.

Girl Talk’s work therefore has been described as a “lawsuit waiting to happen.” Gillis’s compositions include samples of recordings made by such artists as Metallica, who have demonstrated their willingness to sue people they believe have violated their copyrights, and the Guess Who, whose representative has stated ,  “We’ll chase [Girl Talk] down. What more can you do?” Yet no one, as far as I know, has yet sued Gillis. Why?

Well, I think I am a lawyer just like the lawyers representing Metallica, the Guess Who, and anyone else whose work has been sampled and repurposed by Gillis. And if were advising one of these clients (or I were representing the RIAA and could influence the lawyers for Metallica and the Guess Who), I would advise that client not to sue Girl Talk; Gillis’s argument that he has transformed the copyrighted materials sufficiently that his work constitutes non-inringing fair use is just too good. I’d go after someone I am more likely to beat. Othewise, I’d lose all the leverage I have with the existence, as yet undisputed in case law, of the decisions in Grand Upright Music and Bridgeport Music.