Procedural Issues May Determine Immediate Fate of President’s Executive Order Before Diverse Panel of Ninth Circuit Judges

The near-term fate of President Trump’s Executive Order barring entry from seven Muslim-majority countries was before the Ninth Circuit Court of Appeals on February 7, 2017.  The Court must decide whether to stay a Temporary Restraining Order, or “TRO,” entered by U.S. District Judge James L. Robart, stopping enforcement of the Executive Order in response to a challenge by the States of Washington and Minnesota.  The three judges on the panel exemplify judicial diversity: Hon. William C. Canby, Jr., is an 85-year old Carter appointee based out of Phoenix; Hon. Richard Clifton is a 66-year old George W. Bush appointee from Hawaii; and Hon. Michelle Friedland is a 44-year old Obama appointee from San Francisco.

Although many controversial and politically charged issues are ultimately at play, the oral argument stands as a reminder to all that sometimes procedural issues are outcome determinative.  Washington’s Solicitor General Noah G. Purcell, representing the two plaintiff states, explained that a TRO is not normally appealable to the Circuit Court unless it is functionally a full preliminary injunction.  Thus, he urged the Court to consider the Government’s application as one seeking a writ of mandamus, under which the Court may only overturn a district court decision in the most extraordinary of circumstances.   And although the states had a heavy burden to obtain the TRO in the first place, the panel was quick to point out that it was the Government that was seeking a stay of the District Court’s TRO and the Government, therefore, bore the burden of persuading the Court that a stay was necessary.

On the merits, both sides faced tough questions. All three judges questioned Department of Justice Attorney, August E. Flentje, on whether there was any evidence supporting the Government’s assertion that there would be “irreparable harm” if the Executive Order were not allowed to go into effect. The Government, the judges observed, was hard pressed to point to a single example in the recent past of an entrant from one of the seven banned countries that had been arrested for terrorism related activities.  For his part, Mr. Purcell was peppered with questions about whether the Executive Order is different from other immigration orders, like President Reagan’s ban on entry by most Cuban immigrants.

The Ninth Circuit panel took the case under advisement, noting its understanding of the time sensitive nature of the issue and the need for a prompt decision.

For more information, please contact Kathleen Barnett Einhorn, Esq., Chair of the Firm’s Complex Commercial Litigation Group, at keinhorn@genovaburns.com or Jennifer Borek, Esq., Partner in the Complex Commercial Litigation Group, at jborek@genovaburns.com.

No Right of Public Performance for Sound Recordings Under New York Common Law

Answering a question certified to it by the Second Circuit Court of Appeals, the New York Court of Appeals held in Flo & Eddie, Inc. v. Sirius XM Radio, Inc., that New York’s common law does not protect the right to publicly perform a sound recording. The plaintiff is a company formed by two former members of the “Turtles,” a band most famous for its 1967 hit, “Happy Together.” Federal Copyright law began to recognize limited protection for sound recordings in 1971: owners of sound recordings produced after February 15, 1972, were granted the exclusive right to reproduce, distribute and prepare derivative works of those recordings. In 1995, Congress passed the Digital Performance Right in Sound Recordings Act (DPRA), now codified at 17 U.S.C. § 114, which afforded a limited right of public performance with respect to copyrighted sound recordings. The DPRA was aimed at prohibiting public performance of sound recordings by digital radio services, and excluded AM/FM radio stations, bars, restaurants, and stores, which maintain the ability to play (i.e., “perform”) copyrighted sound recordings.

Because the Turtles’ music was recorded before 1972, the band members were forced to rely on state common law protection. Analyzing the history of the common law in the state, a majority of New York’s highest court held that no such protection exists under New York’s common law. Analyzing cases going as far back as 1872, the Court found that, in contrast to federal statutory protection, New York’s common law copyright protection is “very slight at best,” and is limited to the right of first sale of a work.

The Court’s ruling does not address other causes of action like unfair competition and does not overrule cases that disapprove of “piracy,” i.e., surreptitiously recording a live performance and selling it. Nonetheless, the Court’s decision is a victory for digital radio services like Sirius, Pandora, and the like, which have fought nationwide over the right to play older un-copyrighted works without paying licensing fees.

For more information on copyright law or the New York Court’s decision in Flo & Eddie, Inc. v. Sirius XM Radio, Inc., please contact Kathleen Barnett Einhorn, Esq., Chair of the Firm’s Complex Commercial Litigation Group, at keinhorn@genovaburns.com or Jennifer Borek, Esq., Partner in the Complex Commercial Litigation Group, at jborek@genovaburns.com.

Supreme Court to Review Whether “Offensive” Names Can Be Trademarked

The U.S. Supreme Court agreed today to review the Federal Circuit’s decision to strike down the Lanham Act’s ban on “disparaging” trademarks.  The case, Lee v. Tam, No. 15-1293, involved an Asian American dance-rock band’s attempt to trademark their name THE SLANTS. The U.S Patent and Trademark Office (USPTO) refused, citing the Lanham Act’s prohibition on “disparaging” trademarks. The Federal Circuit held that this prohibition violated trademark applicants’ First Amendment Rights. (See Litigation Law Blog’s previous post about the Federal Circuit’s decision from December 23, 2015.)

The Supreme Court’s decision could impact the more famous battle over an attempt to cancel the trademark registration for the NFL’s Washington Redskins as disparaging to Native Americans.

In the Washington Redskins case, a federal district court had ruled that the football team’s trademark disparaged Native Americans.  The team had appealed the case to the Fourth Circuit Court of Appeals, which was scheduled to hold oral argument in December.  On October 18, 2016, the Fourth Circuit agreed to stay consideration of the appeal until the Supreme Court decides Lee v. Tam.

For more information on the Lanham Act or the Supreme Court’s grant of certiorari in Lee v. Tam, please contact Kathleen Barnett Einhorn, Esq., Chair of the Firm’s Complex Commercial Litigation Group, at keinhorn@genovaburns.com or Jennifer Borek, Esq., Partner in the Complex Commercial Litigation Group, at jborek@genovaburns.com.

Third Circuit Rejects Class Certification for Widener Law Grads

A panel of the Third Circuit Court of Appeals refused to allow class certification for a group of Widener University School of Law Graduates who allege that the law school inflated postgraduate employment rate statistics in Harnish v. Widener Univ. Sch. of Law, No. 15-3888 (3d Cir. Aug. 16, 2016). The law graduates claimed that, between 2005 and 2011, Widener advertised that up to 97% of students obtained employment after graduation, when, in fact, only 50-70% of graduates obtained full-time legal employment. This misrepresentation, the plaintiffs argued, violated New Jersey and Delaware consumer fraud statutes.

The circuit court rejected the plaintiffs’ theory of damages, predicated on the report of their expert economist, Dr. Donald Martin. Dr. Martin attempted to show a statistically significant relationship between employment rates and tuition prices across 64 private law schools. The analysis, though compelling, was flawed, the Court held. Because the plaintiffs did not present a theory of class-wide damages, they failed to establish that common questions of fact with respect to damages “predominate” over individual questions or that the named plaintiffs’ claims were “typical” of the class—both requirements for class certification under Federal Rule of Civil Procedure 23.

Specifically, the plaintiff’s theory was that Widener’s misrepresentations empowered the school to charge higher tuition across the market. This type of “price inflation” theory is similar (though not identical) to the “fraud on the market” concept that has been accepted in federal securities class actions. Although the Court found that Mr. Martin’s expert approach held some merit since law schools operate in a largely fixed-price market, both the New Jersey and Delaware Supreme Courts have rejected this type of theory of proof outside of the securities context. Because this theory was the only one presented to establish damages on a class-wide basis for the plaintiffs’ state-law consumer fraud claims, the Court found that class certification was inappropriate.

Harnish highlights the importance of expert evidence at the class certification phase. Although plaintiffs are not required to prove their case, they must present a coherent theory showing damages on a class-wide basis, and one that is cognizable under substantive law.

For more information on class certification or consumer fraud claims or the Court’s decision in Harnish v. Widener University School of Law, please contact Kathleen Barnett Einhorn, Esq., Chair of the firm’s Complex Commercial Litigation Group, at keinhorn@genovaburns.com or Jennifer Borek, Esq., a Partner in the Complex Commercial Litigation Group at jborek@genovaburns.com.

Public Records Produced Pursuant to OPRA May Not be Redacted for Irrelevancy

The New Jersey Appellate Division has recently confirmed the public’s unfettered right to access government records, regardless of whether certain information produced falls outside a specific request.

New Jersey’s Open Public Records Act (N.J.S.A. 47:1A-1 et seq.) (“OPRA”) permits members of the public to access public records maintained by government agencies, in order to ensure not only an informed citizenry but to minimize the evils inherent in a secluded governmental process.  Under OPRA, a member of the public may file a request with a public agency for a “government record”, defined as any record that has been made, received, or kept on file in the course of official business or that has been received in the course of official business.  There are 24 specific categories of documents that are exempt from production, including, deliberative materials, records within the attorney-client privilege, trade secrets or proprietary commercial or financial information, and criminal investigatory records.

Although public entities are exempt from producing confidential information, the New Jersey Appellative Division has recently ruled that custodians may not redact information they deem to be irrelevant in documents produced pursuant to an OPRA request.  In American Civil Liberties Union of N.J. v. N.J. Div. of Crim. Justice, the court addressed the issue of whether a government agency has the authority to redact admittedly responsive documents in order to withhold information the agency deems to be outside the scope of the OPRA request, and found that it could not.  The court held that if the redactions were not made pursuant to the statutorily recognized exemptions to disclose, or on a claim of confidentiality under the common law, information could not be redacted for irrelevancy.

The court noted that by redacting information deemed irrelevant, the custodian confers upon himself quasi-judicial powers which are based only on the custodian’s own notion of relevancy.  The court concluded that no legal support backs this policy. The decision, therefore, confirms that the general public has a right to access governmental records regardless of whether responsive documents to an OPRA request contain some seemingly irrelevant information.  Public agencies may not choose to withhold specific information when producing documents responsive to an OPRA request, because it deems that information irrelevant.  This, according to the Appellate Division, would push back on the very purpose of OPRA.

For more information on OPRA, please contact Kathleen Barnett Einhorn, Director of the Complex Commercial Litigation Practice Group, at KEinhorn@genovaburns.com.