Author: TSA Press

This article is excerpted from the August 2014 Edition of Financier Worldwide and was reprinted with permission from the author. You can also find the full article here.

A director or officer being sued or investigated for allegations of mismanagement is facing one of his or her worst nightmares. Their reputation is at stake, and because a director’s or officer’s liability is a personal liability, such a claim can be a financial nightmare as well. The situation is made all the worse when a director receives notification that their D&O insurer might be denying coverage. But all is not lost – a director can still take control in this situation. Ty Sagalow, President of Innovation Insurance Group LLC, offers these top ten tips to follow when facing a D&O insurance denial letter.

Step 1: Don’t panic

If you have been sued or investigated as a director or officer, your company’s D&O carrier has sent a coverage analysis letter back to the company’s risk manager or general counsel. Get the letter and if the letter is denying or reserving rights on coverage, know this response is not all that uncommon. Usually  there  is  nothing  to   fear.

Step 2: Know that not every denial letter is a real denial letter

The most common response from a D&O carrier is a ‘reservations of rights’ letter. This letter will generally indicate that coverage is initially being provided under your policy but that such coverage may be removed in the future if certain things occur. While this sounds scary, in most instances it is nothing to lose sleep over. It is best to consult with an expert on the exact wording of your policy (see Step 5).

Step 3: Look at your other insurance policies

It is not uncommon for a D&O carrier to either deny coverage or reserve its rights on coverage because there might be another insurance policy that should be the policy to cover the claim. Common clauses pointing the finger at other insurance policies include: bodily injury/property damage (go to General Liability policy), pollution (go to environmental policy), ERISA (go to Fiduciary Liability policy) and, a bit more problematic, the general ‘Other Insurance’ clause. Of course, at this point, it might be a good idea to actually read the policy.

Step 4: Read the policy

While we always recommend reading the insurance policy before there is a claim, if this hasn’t occurred, it is a good idea to do so now. This also might be a good time to read the company’s by-laws on director indemnification and obtain a commitment from the general counsel that your legal fees, settlements and adverse judgments will be paid by the company, especially in the event the D&O insurer doesn’t pick up the tab.

Step 5: Talk with an independent industry expert that you hire

It is best to personally retain an insurance expert to review your situation. Preferably the individual should be someone with a D&O insurance carrier background, whether in underwriting or claims. Remember, your company’s fundamental obligation is to its own interests rather than yours, so don’t be afraid to hire your own expert.

For tips 6 – 10, be sure to check out our full article here.

Ty Sagalow is the former Chief Underwriting Officer for one of the world’s largest D&O insurance companies and is currently president of Innovation Insurance Group, LLC, an insurance consultant. He can be contacted at (212) 909-2244 or via email: tysagalow@innovationinsurance group.com.

Eversheds Sutherland is heating up its U.S. expansion. As you may recall, in 2017, the United Kingdom-based Eversheds merged with the Atlanta-based Sutherland, Asbill & Brennan, and expansion has been on the combined firm’s mind since then.

In May, Eversheds Sutherland opened up a Chicago office. The location was started by a pair of lateral real estate partners — Marc Benjamin from White & Case and Susan Kai from Kirkland & Ellis — and litigation partner Robert Owen who relocated to Chicago from New York. The firm has over 100 clients in the midwest, including Texaco and Mondolez, and as reported by Law.com, the firm intends the office to be a point of focus:

“We needed to be physically on the ground in Chicago,” [Eversheds Sutherland’s co-CEO Mark Wasserman] said. “We plan for it to become a significant focal point for us.”

But that’s not the only location the firm is building out. Yesterday, the firm announced they were opening a San Diego outpost, led by a trio of intellectual property partners —  Jose Patino, Nicola Pisano, and Christopher Bolten — they picked up from Foley & Lardner. And, as reported by Law.com, the firm believes that office is ripe to grow even bigger:

Adding the IP group in San Diego “is part of our strategy for U.S. growth,” Wasserman said, adding that he expects additional lawyers and staff from Foley & Lardner to join the trio at Eversheds.

Eversheds is also talking to lawyers with corporate, litigation or tax practices in San Diego, he said. “We think there are other opportunities.”

This bumps the number of U.S. offices up to eight, but don’t think that’s the end of the firm’s American invasion:

In the United States, Eversheds is “very interested” in growing in California, Wasserman said, adding that the firm is also talking to lawyers in Los Angeles and San Francisco.

“We would be happy to add this group wherever they were located,” he said of the Foley & Lardner partners. “And it’s a perfect opportunity to get more of a foothold in California.”

Eversheds also will continue adding lawyers to its existing offices in Texas, New York and Chicago, Wasserman said. “We’re talking to a lot of people in New York, and I expect we will be adding other people in Chicago as well over the next few months.”

It looks like the firm has picked the right time for this growth push — revenue was up 10 percent in 2018. If they keep on adding partners, their revenue is bound to see another upward tick in 2019.

Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

Thomson Reuters said today that it has acquired HighQ, a London-based enterprise collaboration and file-sharing platform for the legal industry.

HighQ has more than 400 customers, including more than half of the Global 100 largest law firms, TR said in announcing the acquisition.

It was just a year ago that HighQ announced an acquisition of its own, that of Legal Anywhere, also a mobile enterprise collaboration and file-sharing platform.

Thomson Reuters said this acquisition will expand on its strategic objective to provide more cloud-based software offerings and will meet a growing market need for legal professionals, aligning with Thomson Reuters focus on legal, tax, compliance and risk.

“Legal professionals are being disrupted by technology change and are seeking software solutions to help them improve costs and increase productivity,” said Brian Peccarelli, COO, customer markets at Thomson Reuters and head of its Legal Professionals segment. “The acquisition of HighQ will help us meet customer needs for efficient, compliant workflow collaboration solutions, and supports our ongoing approach to providing open technologies and driving customer innovation.”

Financial terms of the transaction were not disclosed.

I don’t know much about Alaska. I imagine it’s a cold place filled with bears and white people who go out to hunt for fresh oil on the weekends.

But I do moderately understand how laws are supposed to work, and I think that knowledge makes me more qualified to be Governor of Alaska than the current Governor of Alaska, Mike Dunleavy. I’m sure I could learn what to do when my dog-sled team leader pulls a hamstring on my way to work. Dunleavy seems incapable of learning what to do when his state legislature objects to his policies.

Governor Dunleavy has been sued three times THIS WEEK, over his attempts to slash-and-burn the Alaskan state budget, line-by-line. From Courthouse News:

An unprecedented call by Dunleavy for the Legislature to meet in special session outside the state capital ended with a split of 22 legislators meeting in Wasilla and 38 in Juneau, quashing any attempts at reaching 45 votes needed to override the vetoes. That action produced the Tuesday lawsuit from the Alaska Legislative Council…

The Alaska chapter of the American Civil Liberties Union filed the most recent lawsuit Wednesday in Anchorage Superior Court, claiming one of Dunleavy’s 182 line-item vetoes is an unconstitutional and retaliatory move against the state’s court system.

The ACLU seeks injunctive relief to reverse the $344,700 cut to the Alaska Court System by declaring it illegal under state law and a threat to the separation of powers…

And on Monday, Anchorage attorneys Kevin McCoy and Mary Geddes sought to invalidate Dunleavy’s choice of Wasilla as the location for the special legislative session, and the implementation of his 182 line-item vetoes.

“No previous governor has ever called the Legislature into a special session outside of the capitol,” that complaint states. McCoy and Geddes say that in doing so Dunleavy improperly intruded on the independence of the Legislature.

Here’s the complaint objecting to the Wasilla location, here’s the complaint objecting to the attempt to stop the veto vote, and here’s the complaint over Dunleavy’s retaliatory budget cuts aimed at the courts.

And that’s just the law; on policy, Dunleavy’s line item cuts include:

• a 41% cut in funding ($155 million) to the University of Alaska; University of Alaska President Jim Johnsen said that would cut 1,300 jobs;
• a 30% cut to Health and Social Services, including a $271 million cut (40%) to Medicaid;
• a 25% cut ($334 million) to K-12 schools;
• a 38% cut to the Department of Transportation ($97 million);
• a 100% cut to public radio broadcasting ($2 million).

Look, if you ask me, line-item vetos are bad and unconstitutional to begin with, and I’ve thought that since back when Bill Clinton was asking for one. Here, it appears that Dunleavy is making all these cuts to preserve a campaign promise, increasing the oil dividend provided to each Alaskan from $1,600 to $3,000 per person.

Yeah, I just learned that each Alaskan gets an oil handout from the government. See, I can do this job. Unlike Dunleavy, I’m willing to study up about things I don’t understand.

Alaska in Turmoil Over Slash-and-Burn Budget [Courthouse News Service]

Elie Mystal is the Executive Editor of Above the Law and a contributor at The Nation. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. He will resist.

The State Bar of California is poised to secure legislative approval for a substantial hike in the annual fee lawyers must pay the agency, but it will be paired with plans for greater oversight of the bar in the years ahead.

The legislation funding the bar in 2020 will bump the overall fee for active lawyers to $544, a 27 percent increase from the $430 in place now. (Attorneys will still be able to deduct $47 from the total if desired).

Though far lower than the $860 overall fee bar leaders suggested earlier in the year, the new amount will be the first fee hike in roughly two decades if approved by the Legislature.

The bar has said a fee increase is needed to allow the agency to address growing budget deficits and pursue necessary initiatives, such as technology upgrades.

However, bar officials had also wanted to transition to receiving fee approval from the Legislature for multiple years, rather than just one.

The state auditor backed this proposal in a report issued in recent months, saying that the bar’s “lack of consistent revenue makes implementing long‑term projects, such as replacing its aging technology systems, riskier because it has no guarantee that funding for these types of projects will continue.”

Lawmakers have not yet embraced the suggestion.

Instead, the bar legislation recently amended by the California Assembly states an intent to transition the bar to the state’s annual budget process by the 2021-2022 fiscal year.

An Assembly Judiciary Committee analysis of the bar bill, SB 176, said the current bar budget process limits legislative oversight. The bar submits its budget to the Legislature’s Judiciary Committees, which then set the annual fee amount, but the bar’s proposed expenditures are not examined closely as those put forward by other state agencies.

“This has allowed for some less than optimal oversight of some very significant decisions that impact the bar’s ability to protect the public and the fees its licensees must pay in order to fund those decisions, such as the decisions to purchase a $75 million building in Los Angeles, leave multiple floors of its San Francisco building vacant for decades, and approve expensive technology system,” the Assembly Judiciary Committee report said.

The Assembly report also highlights that the Legislative Analyst’s Office reviews all government spending as part of the annual budget process, but only reviewed the bar’s budget this year as a result of such a requirement being included in the bar’s funding legislation for 2019.

The Legislative Analyst’s Office said in a recent report that making the bar part of the state budget process “could increase legislative oversight by leveraging the expertise of the budgetary committees to evaluate State Bar funding requests in a manner similar to other state departments.”

“Additionally, requiring the State Bar to submit budgetary information in a manner similar to other state departments would enable easier comparison to ensure standardized or similar treatment across the various departments responsible for licensing professions,” the analyst’s office said.

The Assembly’s recent updates to the bar bill came a few days after the California Lawyers Association, which has roughly 100,000 members, added its voice to the debate.

In a letter to the chairs of the Legislature’s Judiciary Committees, CLA urged lawmakers to take a cautious approach to the issue of a bar fee increase.

The CLA also said any increased licensing fee for 2020 should be subject to further evaluation next year.

“Thus, if there is to be an increase in the licensing fee for 2020, there should also be some associated performance standards, measurements, or benchmarks included in this bill, along with a required accountability report from the State Bar addressing planned and actual spending,” CLA President Heather L. Rosing wrote in the letter. “This report could be used to assist in evaluating the impact of any fee increase authorized for 2020 and potentially provide justification for an adjustment to the amount of the licensing fee in 2021.”

Lyle Moran is a freelance writer in San Diego who handles both journalism and content writing projects. He previously reported for the Los Angeles Daily Journal, San Diego Daily Transcript, Associated Press, and Lowell Sun. He can be reached at lmoransun@gmail.com and found on Twitter @lylemoran.

Thank you for taking your turn with the coffee. I think it’s my turn now.

— Justice John Paul Stevens, during a party for new Supreme Court clerks in the early 90s, after seeing that one of the few female clerks present had been tasked with serving coffee to guests. Prior to Justice Stevens’s arrival, an “older male justice” had assigned the female clerk to coffee duty. Justice Stevens took over the job. Christopher L. Eisgruber, a former SCOTUS clerk who now serves as the president of Princeton University, described this incident in a 1993 essay.

Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

ZIMBABWE ANTI-CORRUPTION COMMISSION

Over the years the Zimbabwe Anti-Corruption Commission [ZACC] has been at the receiving end of insults and derision from the general public, which felt it was doing less than it should to contain corruption.  In an attempt to strengthen ZACC by giving its officers more powers, on 28th June, the Minister of Justice, Legal and Parliamentary Affairs gazetted Statutory Instrument 143/2019, the Criminal Procedure and Evidence (Designation of Peace Officers) (Amendment) Notice, 2019 (No. 3) [link], which designates ZACC’s officers as “peace officers” for all purposes under the Criminal Procedure and Evidence Act.  In this Commissions Watch we shall call the Amendment Notice “SI 143”.

If SI 143 is legally valid – and we shall deal with that question below – it will give officers of ZACC powers of arrest and will enhance ZACC’s capacity to fight against corruption in Zimbabwe.  As the new chairperson of ZACC, Mrs Justice Loice Matanda-Moyo, said shortly after the SI was gazetted:

“Recently, ZACC was given arresting powers.  This came as exciting news.  Without arresting powers, our job was difficult as we were depending on police officers.  When ZACC officers met the criminals, they could not arrest the suspects but had to wait for police officers, and while they waited the criminals would just run away and never be found.”

One might observe incidentally that the Minister seems not to have consulted ZACC before publishing SI 143, since it came as “exciting news” to ZACC’s chairperson.

Unpacking the Statutory Instrument

SI 143 does not explain the legal consequence of making ZACC officers “peace officers”, and to understand it one must look at the Act under which it was made, the Criminal Procedure and Evidence Act.

Peace officers and their powers

The Criminal Procedure and Evidence Act [link] gives law enforcement powers to what it calls “peace officers”, a broad class of officials including police officers, prison officers, immigration officers and traditional leaders.  The Act allows the Minister of Justice, Legal and Parliamentary Affairs to designate other persons as peace officers, and that is what he has done for ZACC’s officers in SI 143.

Under the Criminal Procedure and Evidence Act peace officers have the following powers:

• to arrest without warrant anyone they see committing or attempting to commit a crime or whom they reasonably suspect of doing so [section 25 of the Act]
• to arrest persons on the authority of a warrant of arrest issued by a judge or magistrate [section 34]
• to demand the name and address of anyone suspected of committing a crime or who may be able to give evidence regarding a crime [section 26]
• to search anyone they have arrested and to take their fingerprints [sections 41 and 41D]

Limits of peace officers’ powers

Although the powers of peace officers are broad, they are not unlimited:

• Arrest must be for a proper purpose:  Peace officers should not arrest people automatically even if they have reasonable grounds to believe they have committed a crime.  Persons may be arrested to ensure they appear in court and stand trial, or to stop them committing a crime or interfering with the evidence;  but if an arrest is done for some other purpose, e.g. to intimidate or punish them, then it is illegal.  The power of arrest, in other words, must be exercised carefully and reasonably.
• Power of search:  Under the Criminal Procedure and Evidence Act only police officers are allowed to enter premises and search for evidence.  Other peace officers cannot do so.  Even if ZACC’s officers are designated as peace officers, therefore, they will not have general powers of search ‒ though it must be pointed out that the Schedule to the Anti-Corruption Commission Act states that they can enter premises and require public officers or their agents to answer questions – but they cannot search the premises.

Is the Designation of ZACC’s Officers as Peace Officers Legal?

On the face of it SI 143 seems perfectly legal.  The Criminal Procedure and Evidence Act empowers the Minister of Justice to publish statutory instruments designating anyone as peace officers, and that is what he has done in SI 143.  The SI seems a reasonable exercise of the Minister’s power because, to judge from the chairperson’s excited remarks quoted at the beginning of this bulletin, ZACC’s officers need to be able to arrest suspects.

On the other hand, there are grounds for saying that the SI is illegal:

• Section 255 of the Constitution, which sets out ZACC’s functions, states in subsection (3):

“The Government must ensure, through legislative and other means, that the Zimbabwe Anti-Corruption Commission has power to recommend the arrest and secure the prosecution of persons reasonably suspected of corruption, abuse of power and other improper conduct which falls within the Commission’s jurisdiction.”

This provision would have been worded differently if the constitution-makers had envisaged ZACC’s officers being given powers of arrest rather than merely recommending that persons be arrested.

• ZACC is a constitutional commission and its functions are laid down in the Constitution.  It is possible to extend those functions through section 321 of the Constitution, which states that “An Act of Parliament may confer additional functions on a Commission”;  but SI 143 is not an Act of Parliament even though it is made in terms of one.
• Even if it were legal to designate ZACC’s officers as peace officers it should not be “for all purposes”, because that would empower them to arrest people for crimes unrelated to corruption.  This is too wide.  The Schedule to the Anti-Corruption Act, which gives ZACC additional powers, sets out a long list of crimes for which ZACC may recommend prosecution;  the suggestion is that those and those alone are the crimes with which ZACC must concern itself.

Conclusion

SI 143 is yet another of the statutory instruments published recently to give effect to important government programmes ‒ in this case the anti-corruption drive ‒ whose legality is open to doubt.  Ministers who need legislation to underpin their policies would be better advised to approach Parliament and persuade it to pass an appropriate Act of Parliament, rather than resorting to statutory instruments which are open to legal challenge.

Veritas makes every effort to ensure reliable information, but cannot take legal responsibility for information supplied.

Post published in: Featured

Zimbabwe faced severe droughts between last October and May that have depleted water sources in its cities.

Back in 2017 when Republicans eliminated the federal deduction for state and local taxes under the Tax Cuts and Jobs Act, they weren’t exactly subtle about efforts to stick it to high-tax blue states. Capping the property tax deduction at $10,000 for married couples hits wealthy Connecticut filers a lot harder than it does their cousins in Alabama. Trump even admitted to Sean Hannity that part of the purpose of the tax cut was “to say, hey, make sure that your politicians do a good job of running your state. Otherwise, you are not going to benefit.”

If this was intended to bring a red wave to New Jersey, it seems to have failed. Instead, it ushered in an era of creative tax policy-writing as states tried to protect their citizens from a heart-stopping increase on their federal returns. Because the Republican tax cut plan preserved the charitable deduction, many states sought to recharacterize state tax payments as charitable donations. This would allow residents to max out their $10,000 in deductible property taxes, and then pay the remainder of their bills to a “charity” administered by the state.

The suit filed yesterday by New Jersey, Connecticut, and New York — of course there’s a lawsuit, this is 2019! — sketches out the general scheme, theorizing an excess tax bill of $10,000:

In New Jersey, to use one example, the taxpayer would receive a tax credit worth 90 percent of the donation—in this case, a $9,000 property tax credit. (In a state where the tax credit is worth 85 percent of the donation, she would simply receive an $8,500 property tax credit.) The taxpayer would then pay the remaining $1,000 in property tax liability to the local unit in question.

This works out great for New Jersey, which nets the $10,000 “donation,” plus an additional $1,000 to cover the portion of the tax bill not offset by the tax credit. It works out less well for the Trump administration, which had hoped to blunt the budget-busting effect of its tax plan at the expense of blue-state taxpayers.

So Treasury Secretary Mnuchin and IRS Commissioner Charles Rettig put on their green eyeshades and came up with a plan to put the kibosh on all those state workarounds. They decided the state’s charitable tax credit was a quid pro quo, akin to getting tickets to the Vitamin C Ball in exchange for a donation to the Foundation for the Prevention of Rickets, and capped the allowable credit at 15 percent. So a state which offers a 15 percent credit on a $10,000 charitable donation, reducing the taxpayer’s liability by $1,500, is not offering a quid pro quo, meaning the entire amount is deductible. But at 16 percent, the extra $100 magically transforms it into a $1,600 bribe. In other words, Mr. and Mrs. New Jersey Taxpayer are sh*t outta luck.

But don’t count those coastal elites out yet! They’re suing Mnuchin, Rettig, the IRS, and the Treasury for violating the Administrative Procedures Act by exceeding their statutory authority and imposing arbitrary and capricious regulation. The charitable workaround may be an obvious wheeze to continue to give their residents a break on their federal returns, but there’s nothing in the GOP tax plan that forbids it. If Congress had wanted to close that loophole, they had a chance to do it last year. And they didn’t.

Moreover, coming up with that 15 percent cap looks an awful lot like legislating from the executive branch, despite Treasury’s claims that a seemingly arbitrary “cliff effect” is somehow necessary to equalize the disparate treatment of deductions and credits in the statute. But that’s a question for the U.S. District Court for the Southern District of New York where Attorneys General for Connecticut, New York, and New Jersey filed their suit yesterday. 

The country may be divided, but at least the Trump administration is Making Lawyers Great Again!

Complaint For Declaratory and Injunctive Relief [New Jersey v. Mnuchin, No. 1:19-cv-06642-1 (S.D.N.Y. July 17, 2019)]
IRS Final Rule: Contributions in Exchange for State or Local Tax Credits [84 FR 27513]

Elizabeth Dye lives in Baltimore where she writes about law and politics.

Justice John Paul Stevens will be remembered for many things. As the justice appointed by Republican President Ford, thought to be a centrist, who ultimately became a bastion of the liberal wing of the court. As the justice who said that he didn’t move left, the court moved right. As the third-longest-serving Supreme Court Justice in the history of the Court. For expressing regret over his vote supporting the reinstatement of the death penalty in the United States in 1976. For his fiery, 90-page dissent in Citizens United, after which he decided to resign from the bench. For calling for a repeal of the Second Amendment. With his long tenure on the Court, any number of opinions or dissents might spring to mind, but here are two notable ones on copyright.

Justice John Paul Stevens gave us one of the most significant copyright opinions of the last 35 years. In the 1984 case Sony Corp of America v. Universal City Studios, Justice Stevens wrote for a 5-4 court allowing the use of VCRs for “time shifting”—recording a program to view later. Sony Corp, also known as the “Betamax” case, involved a challenge to whether manufacturers of home video recording devices could be liable for copyright infringement.

As Justice Stevens noted in response to the contributory infringement claim, “…in both [patent and copyright law] the contributory infringement doctrine is grounded on the recognition that adequate protection of a monopoly may require the courts to look beyond actual duplication of a device or publication to the products or activities that make such duplication possible. The stape article of commerce doctrine must strike a balance between a copyright holder’s legitimate demand for effective—not merely symbolic—protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce. Accordingly, the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses” (emphasis added). The majority found that Betamax’s use for private, noncommercial time-shifting in the home satisfied the “substantial noninfringing use” standard, upholding time-shifting as a fair use.

Interestingly, it appears that SCOTUS originally leaned in the opposite direction; had Justice Stevens lost his battle for five votes for his position, we would not have VCRs, DVD players, or DVR. While Justice Stevens was often known for his independent streak and tendency to write his own dissenting or concurring opinions, rather than joining others, in Sony Corp, he managed to sway his colleagues and pull together a single majority opinion. A loss in Sony Corp would have dramatically altered the fair use landscape as we know it today, potentially impacting other technologies, particularly in the digital era.

While Justice Stevens’s contribution to fair use jurisprudence in Sony Corp is perhaps his most notable in the intellectual property space, he clearly had strong opinions on other areas of copyright law. Sadly, Justice Stevens was on the losing end of Eldred v. Ashcroft, the case where the majority opined that the Copyright Term Extension Act was a valid exercise of Congressional authority under the Constitution. Eldred involved a challenge to CTEA, which extended copyright term from a period of life plus 50 years to life plus 70 years (I’ve previously complained about our current copyright term here). SCOTUS considered whether Congress had the power to set copyright term and extend term retroactively, and by a 7-2 margin upheld CTEA as a “rational exercise of legislative authority” because extension of copyright term did not exceed the prescription that the statutory monopoly be confined to “limited times.”

The main part of Justice Stevens’s dissent begins, as all good copyright opinions should, with the Constitution’s IP clause: “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 Wrings and Discoveries.” Justice Stevens’s dissent then methodically goes through each of the arguments in favor of copyright term extension and emphasizes that retroactive extension — which was the real issue in the question presented to the court — does not incentivize new creations.

In conclusion, Justice Stevens’s dissent notes:

The express grant of perpetual copyright would unquestionably violate the textual requirement that the authors’ exclusive rights be only “for limited Times.” Whether the extraordinary length of the grants authorized by the 1998 Act are invalid because they are the functional equivalent of perpetual copyrights is a question that need not be answered in this case because the question presented by the certiorari petition merely challenges Congress’ power to extend retroactively the terms of existing copyrights. Accordingly, there is no need to determine whether the deference that is normally given to congressional policy judgments may save from judicial review its decision respecting the appropriate length of the term. It is important to note, however, that a categorical rule prohibiting retroactive extensions would effectively preclude perpetual copyrights. More importantly, as the House of Lords recognized when it refused to amend the Statute of Anne in 1735, unless the Clause is construed to embody such a categorical rule, Congress may extend existing monopoly privileges ad infinitum under the majority’s analysis.

By failing to protect the public interest in free access to the products of inventive and artistic genius—indeed, by virtually ignoring the central purpose of the Copyright/Patent Clause—the Court has quitclaimed to Congress its principal responsibility in this area of the law. Fairly read, the Court has stated that Congress’ actions under the Copyright/Patent Clause are, for all intents and purposes, judicially unreviewable. That result cannot be squared with the basic tenets of our constitutional structure. It is not hyperbole to recall the trenchant words of Chief Justice John Marshall: “It is emphatically the province and duty of the judicial department to say what the law is.” Marbury v. Madison, 1 Cranch 137, 177 (1803).

Rest in peace, Justice Stevens. And thank you for Sony Corp’s majority opinion, which paved the way for more fair use decisions, and for your eloquent dissent in Eldred.

Krista L. Cox is a policy attorney who has spent her career working for non-profit organizations and associations. She has expertise in copyright, patent, and intellectual property enforcement law, as well as international trade. She currently works for a non-profit member association advocating for balanced copyright. You can reach her at kristay@gmail.com.