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Lenity and the Meaning of Statutes

May 2023April 2024Jeesoo Nam*

Ordinary canons of statutory interpretation try to encode linguistic rules into jurisprudence. Their purpose is to figure out the meaning of a text, and their outcome is to determine the meaning of the text. Both the purpose and the outcome are linguistic.

The rule of lenity is not an ordinary canon of statutory interpretation. The rule of lenity’s outcome is to determine the meaning of a text, giving ambiguous criminal statutes a narrow interpretation, but its purpose is public policy, protecting defendants when ambiguous statutes failed to give fair notice that their actions would be punished. Unlike the ordinary canons of statutory interpretation, lenity encodes into jurisprudence not a linguistic rule, but a policy rule. Thus, a discrepancy arises: lenity’s outcome is linguistic, but its purpose is non-linguistic.

This Article makes the following three contributions. First, it analyzes the nature of the discrepancy between lenity’s purpose and outcome. Second, it demonstrates that this discrepancy leads to doctrinal issues in how the rule of lenity is applied. Sometimes the rule of lenity is over-inclusive: it is applied even when there is no violation of fair notice. Sometimes the rule of lenity is under-inclusive: the rule of lenity fails to protect certain defendants that were misled by ambiguous criminal statutes. Third, this Article argues that we can align lenity’s purpose and outcome by reforming lenity into an excuse in criminal law, and this theoretical reformation will resolve the aforementioned doctrinal issues.

INTRODUCTION

Short-barreled rifles are often used for criminal purposes because their shorter length allows them to be more easily concealed.¹ For that reason, § 5821 of the Internal Revenue Code levies an excise tax on the manufacture of short-barreled rifles, while no such tax is levied on the manufacture of long-barreled rifles.²

Thompson/Center Arms, a firearms manufacturer, packaged as one unit the following separate parts that were to be put together by the customer: a shoulder stock, a pistol, and a barrel extension.³ For convenience, I will call this unit of three parts the “Thompson/Center kit.” Putting the three pieces together—attaching the shoulder stock to the handle of the pistol and the extension to the barrel of the pistol—the customer would end up with a long-barreled rifle.⁴ If the customer only attached the shoulder stock to the pistol handle without using the barrel extension, then they would end up with a short-barreled rifle.⁵

Thus, the following legal issue arose in United States v. Thompson/Center Arms Co. Is Thompson/Center Arms liable for the § 5821 excise tax? Does the manufacture of the Thompson/Center kit count as an instance of manufacturing a short-barreled rifle?

The Supreme Court stated that § 5821 is ambiguous about what counts as the manufacture of a short-barreled rifle and that the Thompson/Center kits sat squarely in the penumbra.⁶ On one hand, Thompson/Center Arms intended for the kits to be put together into a long-barreled rifle, but on the other hand, the kit made it tremendously easy for consumers to put together a short-barreled rifle regardless of Thompson/Center Arms’s intention.⁷ Were the Court to construe § 5821’s language broadly, Thompson/Center Arms would be liable for the excise tax on short-barreled rifles, but were the Court to construe the statute’s language narrowly, Thompson/Center Arms would not be liable.

To resolve whether § 5821 should be given a broad or narrow reading, the Court applied the rule of lenity, which gives all ambiguous criminal statutes a narrow meaning, thus absolving Thompson/Center Arms of liability on the excise tax.⁸ This is a surprising application of the rule. The rule of lenity is a rule of statutory interpretation meant to apply only to criminal statutes to protect criminal defendants, yet it was applied in Thompson/Center to determine the meaning of a civil tax statute in favor of a civil plaintiff. Because the company had already paid the tax and was suing for a refund, no criminal penalties were at stake for Thompson/Center Arms.⁹

Thompson/Center’s holding presents a major problem for the administration of tax law. The standard rule in civil law grants deference to an administrative agency’s interpretation of the relevant laws.¹⁰ The rule of lenity runs in the opposite direction, interpreting statutes in favor of the taxpayer over the agency, the Internal Revenue Service (“IRS”).¹¹ This poses a special danger to the IRS’s enforcement efforts against abusive tax shelters that prey on indeterminacies in the tax law.¹²

Despite this problem, the Court’s hands were bound by a technicality. According to the rule of lenity, criminal statutes should be interpreted narrowly such that uncertainty about the meaning of the statute is resolved in a way lenient to the defendant.¹³ Section 5821 is, like tax law generally, a civil statute, but it is also a criminal statute because its meaning has implications for criminal liability. Under § 5871, criminal penalties would be imposed for non-compliance with § 5821.¹⁴ Section 5821 plays a dual role, determining how much tax one is required to pay and, thereby, defining the actus reus for criminal liability. Thus, although Thompson/Center Arms was litigating the civil matter of how much tax it owed, because the outcome of this case might have criminal implications down the road, § 5821 would need to be read narrowly, following the rule of lenity.¹⁵

Thompson/Center thus establishes that the rule of lenity applies to statutes that serve both a criminal and civil purpose, even if the issue at bar is a purely civil one,¹⁶ because the interpretation of dual-purpose statutes in the civil context necessarily carries over to define criminal liability.¹⁷ Tax laws generally play this dual role since they determine civil tax liability, and criminal penalties are imposed for non-compliance with tax law.¹⁸ Using lenity to narrowly interpret the meaning of a tax statute will both limit the reach of criminal sanctions for tax evasion and also limit the assignment of civil tax liability.¹⁹

The purpose of the rule of lenity, however, is to protect fair notice for criminal defendants.²⁰ When statutes are ambiguous, citizens can be misled into thinking that their actions were permitted rather than prohibited. The law fails to communicate the expected standard of behavior. Given the severity of criminal punishment and the moral condemnation that attaches, we ought to be especially concerned about criminal defendants who did not receive fair notice of the law.²¹ Thus, when a defendant’s act is a borderline case of an ambiguous criminal statute, the law absolves them of criminal liability as a recognition of its own failure to provide fair notice that such an act would be punished.

Since the rule of lenity was supposed to provide fair notice in punishment, its application to civil tax law, where no punishment is at stake, grossly oversteps its purpose.²² Even if a taxpayer loses a case determining their civil tax liability, so long as they continue to pay said tax liabilities, they would avoid criminal penalties.²³ I call this overstep of lenity’s purpose the “too much lenity” problem.

On my analysis, the central theoretical issue with the rule of lenity is the discrepancy between the rule’s purpose and outcome. The rule of lenity’s purpose is to ensure fair notice about which actions are punished under the law.²⁴ The rule’s outcome, as a canon of statutory interpretation, is to determine the meaning of a statute.²⁵ The rule of lenity has a linguistic outcome, but a non-linguistic purpose. Thus, lenity’s purpose and outcome are not consistent with one another.²⁶

This application of lenity as a canon of statutory interpretation, which I call the “semantic rule of lenity,” is incongruous with its normative purpose of fair notice in criminal law, resulting in its encroachment into civil matters where no punishment is at stake. Unlike other canons of statutory interpretation, which aim to figure out the meaning of a statute, substantive canons, like the rule of lenity, aim to implement normative principles, like fair notice.²⁷ Therein lies the disconnect. The purpose of the rule of lenity does not have anything to do with the ascertainment of meaning, yet the rule ends up determining the meaning of the statute.²⁸ The resulting problem of too much lenity demonstrates that this disconnect leads to real consequences.

But notice that this is a contingent feature of the rule of lenity. Lenity need not be applied as a canon of statutory interpretation. Its purpose merely requires us to let go those criminal defendants who never received fair notice of punishment. Other legal doctrines that require us to absolve certain defendants of guilt—for example, excuses such as insanity or duress—do not involve determining the meanings of statutes.²⁹ So why should the rule of lenity perform this odd, dangerous, vestigial function of determining the meaning of statutes? If the proximate aim is to absolve defendants of liability when their actions were not unambiguously criminalized by Congress, we can and ought to do so without invoking the semantics of statutes.

Challenging the standard semantic application of lenity, I will instead argue for the unorthodox position that lenity should be reworked from a canon of statutory interpretation to an excusing condition specific to criminal law.³⁰ In that way, lenity would be applied in the same manner as the doctrines of duress or insanity, as an affirmative defense to prosecution rather than a canon of statutory interpretation. Without any of the semantic baggage that currently burdens the rule of lenity, excuses can apply in criminal law without extending into civil law and thus avoid the too much lenity problem. For instance, when a taxpayer is just litigating the issue of how much taxes they will have to pay for such-and-such economic transaction because they disagree with the IRS about the meaning of a statute, the courts should use ordinary interpretative principles that would best allow the tax law to serve its function of justly and efficiently collecting revenue.³¹ But if that same taxpayer was being tried for tax evasion because the statute at issue was ambiguous—as § 5821 was with regard to Thompson/Center kits—then lenity should be applied as an excuse, an affirmative defense, in order to protect fair notice of punishment.³²

Viewed top-down, this Article can be understood to present the following argument for my conclusion that lenity should be applied as an excusing condition in criminal law rather than as a canon of statutory interpretation: First, I demonstrate that lenity’s purpose of fair notice of punishment does not match its outcome of determining the meaning of statutes. Second, I analyze three distinct doctrinal problems that stem from this mismatch between purpose and outcome. Third, I solve these problems by showing how the legal system can unite lenity’s purpose and outcome by instituting lenity as an excuse rather than a rule of statutory interpretation. Because of this conceptual harmony, the three aforementioned problems are solved if we apply lenity as an excusing condition in criminal law. Each step presents novel contributions to the literature.

Part I explicates the rule of lenity and justifies the doctrine as upholding the structural rule of law value of fair notice. Fair notice is best understood as a structural consideration about the legal system. The laws must be structured so as to provide a path safe from punishment along which ordinary citizens can walk.³³ In our society, this path is marked by published statutes delineating which acts are permissible and which are impermissible. Fair notice is thus essential to providing a genuine choice to avoid punishment.

Part II shows that lenity’s purpose and outcome are at odds with one another. Whereas ordinary rules of statutory interpretation have the purpose of trying to figure out the meaning of a statute and the outcome of determining the meaning of a statute, the rule of lenity has the purpose of protecting criminal defendants and the outcome of determining the meaning of a statute.³⁴ Thus, while ordinary rules of statutory interpretation have a semantic purpose and semantic outcome, the rule of lenity has a semantic outcome and a non-semantic purpose.

Part III demonstrates three doctrinal problems that arise from the mismatch between the rule of lenity’s purpose and outcome.

Section III.A presents the linguistic ambiguity problem. To use a stylized example, suppose a statute ambiguously imposes criminal penalties for starting a fire next to a “bank.” Defendant A started a fire next to a financial bank. Defendant B started a fire next to a river bank. Because of the ambiguity, neither Defendant A nor B had fair notice that their actions were prohibited. However, because neither interpretation of the word “bank” lets both defendants go free, the rule of lenity cannot resolve the fair notice problem here. This is the problem of linguistic ambiguity.

Section III.B presents the too much lenity problem, introduced above. In this Section, I consider the impact of a lenity-driven tax regime both in terms of the areas of tax law where lenity is most likely to be applied and its contrast to the deference regime it replaces.

Section III.C demonstrates the problem of higher-order vagueness. Applying the semantic rule of lenity to a vague statute that prohibits a certain category of actions changes the meaning of the statute to prohibit only clear cases of that category of actions.³⁵ For instance, a statute may say “do not drive dangerously,” but after the court applies the rule of lenity, the statute means “do not drive clearly dangerously.”³⁶ The problem is that the new meaning that the rule of lenity has assigned will itself be vague. Just as vague predicates have borderline cases of which items qualify as members of the category, there is also vagueness one level up about which items qualify as borderline cases.³⁷ If the vagueness of “do not drive dangerously” violates fair notice, then construing the statute to mean “do not drive clearly dangerously” will not satisfy fair notice because what counts as “clearly dangerous” is itself a vague matter as some driving is clearly clearly dangerous and some driving only borderline clearly dangerous. The semantic rule of lenity is thereby under-inclusive, creating vagueness at a higher-order but failing to take that second-order vagueness into account for purposes of fair notice.³⁸

Part IV connects the legal theory set out in Parts I and II with the doctrinal analyses of Part III to support my ultimate proposal that lenity be provided solely as an excuse in criminal law instead of its current application as a canon of statutory interpretation. In criminal law theory, excuses are most often understood in comparison to justifications, another category of affirmative defense. Whereas justifications typically serve to make an act permissible—for instance, killing another is not morally wrong if done in self-defense—excuses absolve an actor of criminal liability for their wrongful conduct when the actor lacked a genuine choice to follow the law.³⁹ For instance, a browbeater may have threatened to bust the defendant’s kneecaps unless the defendant commits a criminal act for the browbeater’s benefit. In such a situation, because the browbeater’s coercive threat left the defendant no choice in the matter, the law affords the defendant an excuse of duress.⁴⁰

The semantic rule of lenity functions more closely to justification; by assigning a narrow meaning to a statute, it shrinks what counts as impermissible. The semantic rule of lenity, when it applies, concludes that the defendant’s actions were not prohibited by law.⁴¹ However, I argue that the purpose of lenity instead aligns most closely with that of an excuse. Though lenity may seem an unlikely bedfellow to doctrines such as duress or insanity, I demonstrate that all of these doctrines aim to protect citizens who lacked a genuine choice to follow the law. In cases such as duress, one lacks the choice because of some coercive threat. In cases of lenity, one lacks the choice because one was not given fair notice about which acts would be punished. Although, in contrast to justification, the defendants may have done some prohibited act in these cases, punishing them would nevertheless go against the rule of law principle of preserving a path safe from punishment.

By shedding lenity of its semantic cloak, jurisprudence can avoid the three aforementioned doctrinal problems. Providing lenity as an excuse rather than fixing the meaning of a statute would allow the law to absolve both Defendant A and Defendant B (from the “bank” example above) of criminal liability since both defendants lacked fair notice that their actions would be punished. By restricting lenity to criminal law, taking the form of an excuse stops lenity from creeping into civil law, thereby solving the too much lenity problem. Because the excuse would not determine the meaning of the statute, issues of higher-order vagueness do not require additional iterations of lenity, thereby solving the higher-order vagueness problem.

Part V considers two counterarguments to the excuse of lenity. The first counterargument states that the excuse is unnecessary because strict construction of the civil tax code⁴² is good jurisprudence. In response, I analyze the ways that the teleology of tax law is distinct from the teleology of criminal law. Tax law helps citizens figure out how much to contribute to the public fisc as a matter of distributive justice.⁴³ Unlike criminal law, tax law is not meant to sanction prohibited behaviors—a tax on income, for instance, is not meant to morally condemn those who earn income.⁴⁴ Since tax law is not meant to serve as a system of incentives, ex-ante notice is far less important. Furthermore, choosing strict construction over the best interpretation will undo the effort to justly allocate social burdens, to the detriment of the very people who relied on the tax law to serve this function. The second counterargument against the excuse of lenity states that a legislature could satisfy the requirement of fair notice by letting citizens know by statute that the rule of lenity will not be applied to the criminal code. I argue that such a move is tantamount to notifying the public that there will be no fair notice given.

I. THE RULE OF LENITY

At its core, the rule of lenity is a rule of statutory construction that resolves any “uncertainty concerning the ambit of criminal statutes” in favor of the defendant.⁴⁵ Often, such uncertainty can arise due to linguistic indeterminacy, the most common type of which is vagueness.⁴⁶ In these cases, the meaning of the vague statute is narrowly interpreted to include only clear, prototypical cases of the criminal statute.⁴⁷ Such narrow construction is justified by the rule of law value of fair notice. Fair notice allows citizens who wish to avoid punishment to seek safety in reading the statute and choosing to avoid those actions that carry criminal penalties.

A. Lenity’s Outcome: Statutory Construction

Indeterminacy of meaning (linguistic indeterminacy) is a universal feature across natural languages.⁴⁸ Statutes, since they are written in natural language, sometimes have indeterminate meanings.⁴⁹ Such instances can give rise to what we may call hard cases or legally ambiguous cases,⁵⁰ where the statute gives no direction one way or another to those cases that straddle the indeterminacy.⁵¹

Of course, even when the statute gives no direction, a case at bar cannot go unresolved. One way to resolve a case in which there is no resolution provided by the statute itself is to have what legal theorists call a “closure rule.”⁵² A closure rule simply determines which way a judge should rule when the law is unclear one way or another, acting as a tie breaker of sorts.⁵³ The rule of lenity is often held by jurisprudents to be a paradigm closure rule.⁵⁴ When a criminal statute fails to resolve a case because its meaning is indeterminate with respect to the facts at bar, then the judge must assign the statute a narrow meaning that favors the criminal defendant.

In law, by far the most common sort of linguistic indeterminacy arises from vagueness.⁵⁵ Consider, for instance, the well-trodden “no vehicles in the park” statute:

NO VEHICLES IN THE PARK ACT: Any person who brings or drives a vehicle into a federal park shall be guilty of a misdemeanor, which may be punished by a fine.⁵⁶

From the language of the statute, no one can deny that driving an automobile into a federal park is prohibited. In contrast, we may be quite uncertain about whether someone who pushed a wheelbarrow into a federal park is criminally liable under the statute since it is uncertain whether a wheelbarrow is or is not a vehicle in this context. The term “vehicle” is vague since it admits of borderline cases where the application of the term “vehicle” is indeterminate.

An instance of a vague predicate is prototypical or core if and only if it is clearly a member of the predicate’s category.⁵⁷ A borderline or penumbral case of a vague predicate is an object that is neither clearly a member nor clearly not a member.⁵⁸ Thus, a sedan is a prototypical vehicle while wheelbarrows are borderline cases that do not clearly fall into nor outside of the vehicle category.

When it comes to vague statutes, the rule of lenity is best cashed out using this distinction between clear and borderline cases.⁵⁹ Under the rule, a vague criminal statute will be assigned a narrow meaning that includes only the clear cases of the vague categories. For instance, the narrow interpretation of “vehicle” includes automobiles but not wheelbarrows. The rule of lenity, like statutory interpretation more generally, is semantic in that it operates to determine the meaning of the statute.⁶⁰

Courts are supposed to employ the rule of lenity in the realm of criminal law.⁶¹ Under such a rule, the destruction of a fish was not found to be a violation of a statute prohibiting the destruction of “tangible objects” in a federal investigation,⁶² and transporting a stolen airplane did not count as transporting a stolen “vehicle.”⁶³ These were, in the eyes of the court, not prototypical cases of the statutes’ language.

B. Lenity’s Purpose: Fair Notice

Courts have typically appealed to fair notice, sometimes referred to as “due-process notice,”⁶⁴ as the principal justification for the rule of lenity.⁶⁵ Punishment of criminal activity is serious both in the severity of its costs on the punished and in the moral condemnation that attaches to it.⁶⁶ For the exercise of the sword of government in doling out punishments to individuals, rule of law is of principal order. A central criterion of rule of law is that those who are subject to the threat of such force be given fair warning that they are under such threat.⁶⁷ In our society, such notice is primarily given by the publication of criminal statutes. But publication is only the first step. Statutory notice is fair only when the content of the prohibitions can be readily ascertained from the published statute. Thus, when Emperor Caligula posted new statutes high on the top of Roman columns to prevent the citizenry from reading them, he failed to give fair notice to his citizens.⁶⁸

Posting laws where no one can read them is not the only way to violate fair notice. Notice can be unfair due to a statute’s linguistic indeterminacy. Similar to how linguistic indeterminacy can fail to give guidance to judges on how to rule on hard cases, linguistic indeterminacy fails to provide guidance to citizens on what sort of behavior is prohibited by law. Consider the following illustration of this aspect of fair notice employing hypothetical expectations about a vague statute.

When one reads a vague criminal statute, so one version of the fair notice story goes, one thinks not of the borderline cases, but instead the prototypical cases. For instance, it is most likely that bringing a wheelbarrow into the park never crosses an individual’s mind as they read the words, “Any person who brings or drives a vehicle into a federal park shall be guilty of a misdemeanor.” The mental representation of the concepts conveyed by a statute typically does not include borderline cases.⁶⁹ As a result, punishing someone for a borderline violation of a criminal statute would go against the natural reading of the statute. They would not have been given fair notice that their conduct would be subject to punishment but rather misled into thinking that they were following the law by the vagueness of the statute.⁷⁰ In order to preserve the important rule of law value of fair notice, the rule of lenity requires a narrow construction of such statutes.

Leading cases on the rule of lenity often explicitly endorse a similar story regarding the expectations that readers of a vague statute are likely to have. For instance, in McBoyle v. United States, the Supreme Court applied the rule of lenity to rule that airplanes were outside the scope of the phrase “motor vehicle” as it was used in a federal criminal statute.⁷¹ The opinion justifies excluding airplanes from the motor vehicle category by stating that the “motor vehicle” phrase “evoke[s] in the common mind only the picture of the vehicles moving on land.”⁷² Courts are worried about the lay citizen reading a statute and naturally having only the prototypical instances come to mind.

Importantly, the analysis just described is meant to be focused on the statute itself rather than the defendant. That is, for any given statute, the test is not to see if the defendant in the instant case actually read the statute. Many, perhaps most, defendants have not.⁷³ Instead, the analysis looks at the statute itself and how the text comes across to the ordinary reader. If the indeterminacy of a statute risks misleading readers, the rule of lenity attempts to limit punishment in such instances by requiring a narrow construction of the statute.⁷⁴ The rule of lenity aims to correct a deficiency in the law itself.⁷⁵

H.L.A. Hart’s rule of law account of excusing conditions to criminal liability can provide additional theoretical grounding to the concept and value of fair notice. On Hart’s account, people should be able to avoid law’s sanctions if they so choose.⁷⁶ There is an important security provided by knowing that we will be safe from punishment so long as we choose to follow the laws set out for us.⁷⁷ However, if we read a statute and naturally think only of the prototypical cases, then we will think that we are following the law when we commit borderline violations of that statute. Punishments for non-prototypical violations of a criminal law statute subvert the safety of choice to follow the law. The park-goer does not think that they violate the “no vehicles in the park” statute when pushing a wheelbarrow across the park gates. If it were not for the rule of lenity, their having read the law and intention to follow it would provide no assurance that they are safe from punishment; the court could arrive at an interpretation that they had never expected by considering a wheelbarrow a vehicle.

Hart’s position here can be understood as a safe path argument. It is a minimal requirement of a legal system that it provide at least one path safe from punishment along which ordinary citizens can walk. The clearest violation of a safe path is the criminalization of both an action and its absence. For instance, suppose that criminal law both required citizens to wear a face mask and forbid citizens from wearing a mask. It may even be the case that both laws, understood separately, are reasonable—perhaps the legislature passed the first law to minimize transmissions of an infectious disease and the legislature passed the second law because the purchase of face masks by laypeople caused a shortage for healthcare workers.⁷⁸ However, having both laws at once clearly violates the safe path requirement. There would be no way for a citizen to avoid punishment in a system that punishes both an action and its absence. In this situation, we would say that there is no safe path at all.

The absence of fair notice likewise violates the safe path principle. This is because the presumed safe path for ordinary citizens is the option to read the law and avoid the prohibited acts. When fair notice is violated, for instance by the punishment of non-prototypical violations of law, this safe path is upturned. These citizens’ reading of a vague statute would mislead them into thinking that they are outside the reach of punishment only to have the rug pulled out from under their feet. The state cannot be said to have provided its citizens a genuine choice to avoid punishment because the citizens were misled about which actions would lead to punishment. Vague statutes thus compromise the availability of a path safe from punishment along which ordinary citizens can walk. Lenity aims to protect for citizens a genuine choice to avoid punishment.⁷⁹

In sum, it is a rule of law principle that the government may not punish an individual without having first given fair notice that such actions would be punished. Such a principle protects the ability of citizens to find out which acts are punished and avoid committing such acts. The statutory notice that government gives to citizens is fair only insofar as citizens can naturally discern which of their acts are prohibited from reading the statute. Without lenity, citizens can be misled by a vague statute into thinking that they are safe from punishment. The significance of this rule of law value has been thought by some to endow on the rule of lenity a “quasi-constitutional status” due to its role in protecting fair notice.⁸⁰

II. A MISMATCH BETWEEN PURPOSE AND OUTCOME

Part I, in the process of explicating the rule of lenity, has presented two propositions that deserve further consideration:(1) the rule of lenity determines the meaning of criminal statutes,⁸¹ and (2) the rule of lenity is best justified by the normative principle of fair notice. The second proposition has to do with the rule of lenity’s purpose. The first proposition has to do with lenity’s mechanism; in order to carry out its purpose of fair notice, the rule of lenity stipulates a narrow meaning to a linguistically indeterminate statute. Though each proposition is well-accepted—one would not have trouble finding Supreme Court opinions⁸² or law school casebooks⁸³ that repeat these truths—it nevertheless seems to me that the two propositions are at odds with one another. Lenity’s purpose is normative, but its outcome is semantic.

By definition, to interpret a text is to ascertain its meaning.⁸⁴ The rule of lenity is not an attempt to ascertain the meaning of a statute; it instead stipulates a narrow meaning to a statute in order to protect fair notice.⁸⁵ Thus, it is odd that the rule of lenity, which does not even purport to ascertain the meaning of a statute, is nevertheless a canon of statutory “interpretation.”⁸⁶ If the purpose of the rule of lenity is something other than figuring out the meaning of a statute, then why does it end up determining the meaning of the statute?

This oddity of the rule of lenity may be best understood in contrast to more ordinary canons of statutory interpretation. For example, many canons rely on “maxims of word meaning”⁸⁷ or rules of grammar⁸⁸ to help piece together the meaning of a text. For these canons, their purpose and outcome are aligned. These rules rely on linguistic premises to ascertain the meaning of a text,⁸⁹ so it makes sense that the outcome of applying these rules is to determine the meaning of statutes.

Canons of statutory interpretation can be analytically divided into three categories. While textual canons “[find] meaning from the words of the statute” and reference canons determine “what other materials might be consulted to figure out what the statute means,” substantive canons like the rule of lenity instead implement normative principles external to the task of interpretation like fair notice.⁹⁰ Substantive canons, in contrast to the other two types of canons, are not concerned with “finding” or “figuring out” what the statute means.⁹¹ Substantive canons are grounded in normative policy principles rather than interpretative principles.

Putting these distinctions to work, one can only conclude that the rule of lenity is a canon of statutory “interpretation” in name only. The purpose of the rule of lenity is to protect criminal defendants who failed to receive fair notice that their conduct would be punished.⁹² Rather than interpreting a text, the rule assigns the words of a statute narrow meaning in order to implement normative principles concerning rule of law values. The canon is not a rule of interpretation properbecause it never seeks to interpret, that is, ascertain the meaning of, a statute.⁹³ The rule of lenity has a semantic outcome—determining the meaning of a statute—which is flatly inconsistent with its non-semantic purpose.

Notice also that the problem I have outlined here does not depend on any particular theory of statutory interpretation. The discrepancy between the rule of lenity’s purpose and outcome relies only on the distinction between figuring out a meaning and stipulating a meaning. The rule of lenity stipulates the meaning of a statute instead of trying to figure out what the statute means. On no theory of statutory interpretation is providing fair notice for criminal defendants a way of figuring out the meaning of a statute.⁹⁴ Providing fair notice is, on its face, neither a way of getting at the plain or ordinary meaning of a text nor uncovering the purpose of a statute, so it cannot be understood as either a textualist or purposive doctrine of interpretation.⁹⁵ The discrepancy between the rule of lenity’s purpose and outcome should worry legal scholars of all stripes.

III. THREE DOCTRINAL PROBLEMS

The theoretical disconnect between lenity’s purpose and outcome just outlined in Part II entails thorny doctrinal consequences. This Part explores three such doctrinal consequences: the rule of lenity cannot handle linguistic ambiguity,⁹⁶ the rule oversteps its boundaries and enters civil law,⁹⁷ and the rule fails to resolve issues of fair notice that result from higher-order vagueness.⁹⁸

A. Linguistic Ambiguity

Consider the following hypothetical. The word “bank” may refer to either the financial institution (“financial bank”) or the land next to a river (“river bank”). Suppose the Bank Safety Act criminalizes starting a fire within one hundred feet of a bank, and it is indeterminate which of the two meanings should be applied to the term “bank.” As argued in Section I.B, such indeterminacy of meaning violates the principle of fair notice. Suppose further that two defendants are on trial, Defendant A for having set fire next to a financial bank, and Defendant B for having set fire next to a river bank.

The rule of lenity states that an indeterminate text must be interpreted in favor of the defendant.⁹⁹ But which one? Giving the statute either meaning will absolve one of the defendants but still condemn the other. The rule of lenity is like the Buridan’s ass unable to choose between two identical stacks of hay. If the court rules that “bank” refers to financial banks, then Defendant A will be held criminally liable, and if the court rules that “bank” refers to river banks, then Defendant B will be held criminally liable.¹⁰⁰ This is because the statute’s indeterminacy arises from linguistic ambiguity rather than vagueness.

Linguistic ambiguity should be understood as distinct from another kind of ambiguity discussed earlier, what one might call legal ambiguity.¹⁰¹ What judges and practicing lawyers most often mean when they use the term ambiguity is a general kind of uncertainty about the application of a statute.¹⁰² Legal ambiguity can arise for a variety reasons. One such reason for legal ambiguity, discussed in the previous part of this Article, is the vagueness of language.¹⁰³ Another reason for legal ambiguity is the kind of linguistic indeterminacy we saw with the two meanings of bank, what I refer to here as linguistic ambiguity.

Vagueness in language concerns how far out to draw the boundaries of certain terms, for instance how broadly we draw the category of manufacturing a short-barreled firearm.¹⁰⁴ When linguists use the term ambiguity, they are instead referring to terms that can have disparate meanings altogether, such as the two possible meanings of the term bank.¹⁰⁵ Put succinctly, vagueness concerns interpretations that differ in degree while ambiguity concerns interpretations that differ in kind. Whereas in cases of vagueness, the court can choose between broad and narrow readings because the narrow reading is a proper subset¹⁰⁶ of the broad reading, in cases of ambiguity, there is no narrow interpretation because neither the river bank meaning nor the financial bank meaning is a proper subset of the other. Either reading of bank holds one defendant culpable while letting the other go free.

Plainly, this result of the rule of lenity is inconsistent with the demands of the rule’s fair notice purpose. Neither Defendant A nor Defendant B had fair notice that their action was punishable because the statute was ambiguous between their two readings. One could read the Bank Safety Act and come away thinking that it permits starting fires next to financial banks or come away thinking that it permits starting fires next to river banks. Given the indeterminacy of meaning, both are natural readings of the statute. The law does not clearly mark the path safe from punishment. Since neither defendant received fair notice, it would be unfair to punish either defendant.

Thus, the rule of lenity’s outcome is under-inclusive with respect to its purpose. Though the rule of lenity’s purpose of protecting fair notice would dictate absolving both defendants of criminal liability, its semantic outcome is unable to provide such a result.¹⁰⁷

At this point, the astute reader might raise the following objection. Thus far, by focusing on the fact that bank has just two possible meanings, I have obscured a third option that would work best. When it comes to linguistically ambiguous statutes, the objection states, the rule of lenity should say that the statute has no meaning at all. That is, the Bank Safety Act should be construed not to criminalize any behavior because its use of the term bank has no meaning. Following this rule, both Defendants A and B would go free, and the result would thus comport with the demands of fair notice.

In response to this objection, suppose that there is a third defendant, Defendant C. Defendant C started a fire next to a financial bank that happened to be located on a river bank. On either meaning of bank, Defendant C is guilty and, thus, had fair notice their actions were prohibited by law. Defendant C cannot possibly claim that the ambiguity in the statute would mislead someone into thinking that their actions were permissible. If the court construes the Bank Safety Act to have no meaning at all, then it would let Defendant C go, despite the fact that they had fair notice of punishment. The rule would still fail to serve its purpose.

The hypothetical Bank Safety Act demonstrates one way the disconnect between the rule of lenity’s purpose and outcome could lead to its being under- or over-inclusive, but a critic may nevertheless contend that such ambiguities appear rarely in the actual law. When will a reader actually be faced with the term “bank” in a statute and be unable to figure out whether it refers to river banks or financial institutions? Usually, the context and purpose of a statute will make one meaning the clearly right interpretation for a linguistic ambiguity, thereby eliminating any indeterminacy.¹⁰⁸

In part, I agree with the critic and, in part, I disagree. I concede I have no quantitative measurement of how often courts are faced with linguistic ambiguity, so these cases may indeed be rare. Scholars have noted real examples where the courts have had to interpret linguistically ambiguous statutes, but it is not obvious how often such ambiguities appear.¹⁰⁹ Where I disagree with the critic is that I fail to see how this is a criticism. There is, at minimum, a conceptual problem at issue—the rules and principles of our legal system fail to conceptually form a coherent whole. The hypothetical example I used here lays bare a real incoherence in our legal system. Uncovering this previously unnoticed incoherence deepens our understanding of the rule of lenity. Moreover, even if linguistically ambiguous statutes are rare, the incoherence of the rule of lenity will still have other critical real-world consequences as the next Section of this Article will show.

B. Tax Law’s Rule of Lenity

Incongruous with its purpose to provide fair notice of punishment, the rule of lenity leads to narrow constructions of texts even outside of the criminal context. For instance, in United States v. Thompson/Center Arms Co., the Supreme Court, relying on the rule of lenity, assigned a narrow meaning to the phrase “making of a firearm” with regard to an excise tax levied on the manufacture of firearms under I.R.C. § 5821.¹¹⁰ The statute’s definition for “firearm” included short-barreled rifles, but excluded pistols and long-barreled rifles. The taxpayer packaged as one unit three parts that could be connected together: a shoulder stock, a pistol, and a barrel extension. As before, let us call this unit of three parts a “Thompson/Center kit.” Putting the three parts together would create a long-barreled rifle, on which no excise tax is laid. Putting just the shoulder stock and pistol together would create a short-barreled rifle on which excise tax is laid.

The Court stated that the manufacture of a Thompson/Center kit was not clearly an instance of making a firearm, but was also not clearly not an instance of making a firearm.¹¹¹ Its next move, surprisingly, was to apply the rule of lenity. The Court assigned a narrow meaning such that only clearly making a firearm would count under § 5821. Since making the Thompson/Center kit is not clearly an instance of making a firearm, § 5821 does not here apply. Therefore, under the rule of lenity, the taxpayer need not pay any excise tax on the manufacture of a Thompson/Center kit.

The imposition of tax is a civil matter, not a criminal one. Thompson/Center Arms had paid the excise tax and was merely bringing suit to get a refund of those payments.¹¹² Recall that the rule of lenity was justified under the context of punishment and the special kind of notice that the harshness of punishment demands.¹¹³ It seems no more appropriate to apply the rule of lenity in a civil matter than it would to apply a beyond a reasonable doubt standard of evidence to civil trials.¹¹⁴ So why was the rule of lenity being used within the context of tax law? The Court’s winding reasoning proceeds as follows. To begin, § 5871 imposes criminal penalties for nonpayment of the § 5821 excise tax on firearms. I.R.C. § 5821 is, by that fact, both a criminal statute and a tax statute (or “dual-purpose statute”).¹¹⁵ Therefore, the rule of lenity should apply to § 5821 within the context of criminal law to assign a narrow meaning to the phrase “making of a firearm.” The meaning of a single statute cannot fluctuate depending on what the statute is being used for.¹¹⁶ This principle of consistency in statutory interpretation is well grounded.¹¹⁷ (Using technical language of utterances, types, and tokens, it is easier to state this proposition more precisely: though a single utterance type may have multiplicity of meaning depending on context, a single utterance token cannot.¹¹⁸) Therefore, if the rule of lenity requires assigning a narrow meaning to “making of a firearm” in the criminal law context, the narrow meaning assigned to “making of a firearm” applies to cases of civil tax law as well.

Thompson/Center stands for the principle that the rule of lenity properly applies to dual-purpose statutes. This abstract principle has left unresolved the concrete questions of exactly how lenity will change the interpretation and administration of civil law. Does lenity apply to all tax statutes? Where lenity does apply, what is its effect, counterfactually speaking? Though there is a lot of uncertainty in this area of jurisprudence, the following Sections analyze these two questions in order.

It should be noted that there are also dual-purpose statutes outside of the tax realm in areas ranging from securities law to environmental law, where violations of civil law can carry criminal penalties.¹¹⁹ Thus, I intend for my analysis of lenity in tax law to be valuable in itself as well as serving as an illuminating case study for the problem more generally across the variety of dual-purpose statutes in the law.

1. The “Willfulness” Requirement

The dual-purpose nature of tax law will serve as the starting point of the inquiry.¹²⁰ I.R.C. § 5821 is not the only statute that carries criminal penalties for non-compliance. I.R.C. §§ 7201 and 7203 assign criminal penalties to nonpayment and evasion of any tax imposed under the tax code, Title 26.¹²¹ Similar provisions assign criminal penalties for various procedural violations.¹²² So, one might reasonably conclude that the rule of lenity ought to apply to the interpretation of tax laws generally.

However, the Court in Thompson/Center implies that the rule of lenity need not be applied to all tax laws because § 7201 and related statutes can only be violated if the taxpayer acts “willfully.”¹²³ The willfulness requirement of § 7201 already builds in notice as a pre-condition of punishment since the willfulness requirement is a requirement that the taxpayer know of and understand the law that they are breaking. Though the opinion is not explicit about either the rule or the underlying principle, the Court appears to be taking the position that the willfulness requirement satisfies the requirement of fair notice,¹²⁴ so no application of the rule of lenity to the general tax law is required.¹²⁵

The Thompson/Center opinion’s use of the willfulness requirement as a dam against applying the rule of lenity is colorable, but not without cracks. The first crack in the dam is that not all tax statutes require willfulness. Thompson/Center presented just such a case, as § 5871 had no willfulness language. In those instances, it is clear that the rule of lenity should apply. The second crack in the dam is that it is not some necessity of tax law that its violations be punished only if such violations are willful. The willfulness requirement of tax law, as this Section argues, is contestable and contingent.

Generally, ignorance of the law is not an excuse.¹²⁶ One is not released from criminal liability for not having known about the existence of a law criminalizing that particular conduct. Justice Oliver Wendell Holmes gave an oft-cited defense of the doctrine, “to admit the excuse at all would be to encourage ignorance where the law-maker has determined to make men know and obey.”¹²⁷ Such a deterrence rationale satisfies the utilitarians.¹²⁸ Retributivists, in contrast, have tended to consider the mistake of law doctrine a thornier problem.¹²⁹ In particular, retributivists have found the lack of an excuse for mistake of law unfair when applied to mala prohibitaoffenses¹³⁰ and in cases where the defendant was not culpable for his ignorance of the law.¹³¹

Tax law presents an exception to the rule that mistake of law does not excuse. I.R.C. § 7201 provides that “[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony.”¹³² The “willfulness” requirement of § 7201, as interpreted in Cheek v. United States, is a legislative exception to the rule that ignorance of law does not excuse.¹³³

As the court stated in Cheek, the central idea behind this exception is that “[t]he proliferation of statutes and regulations has sometimes made it difficult for the average citizen to know and comprehend the extent of the duties and obligations imposed by the tax laws.”¹³⁴ Knowledge of a body of law as complicated as tax law requires either ability and effort devoted to understanding the requirements of tax law or the resources to hire an able person who has devoted time to studying the tax law. When the barrier to knowledge of tax law is so high, it would be unfair to punish individuals who have violated the tax law due to ignorantia legis.¹³⁵ The Court’s reasoning thus echoes the aforementioned retributivists’ fairness concerns regarding cases in which defendants are not culpable for their ignorance of the law. For this reason, knowledge of law has been understood to be required for criminal liability across cases interpreting several criminal tax statutes.¹³⁶

Whether ignorance of tax law should be an excuse is a matter of balancing costs and benefits of such a rule. As the law becomes more complex, the unfairness of punishing a mistake of law increases.¹³⁷ However, exempting mistake of law cases adds costs to the litigation process and lowers deterrence effects when people who know the law can credibly claim in court that they did not.¹³⁸ Whereas legislatures have typically found that the balance tips against allowing ignorance of law as an excuse to criminal liability generally, Congress has found the balance tips in favor of allowing ignorance as an excuse when it comes to issues of tax law.¹³⁹

Reasonable minds, of course, can disagree with Congress about the outcome of the cost-benefit analysis. The cost-benefit balancing is contingent on not only the complexity of law and our valuation of the competing normative principles, but also the positive facts. For instance, suppose that the Treasury Department could provide a pre-populated tax return for low- and middle-income individuals. State-level implementation in California has been successful in providing pre-populated returns for those with simple tax situations,¹⁴⁰ and pre-populated tax returns could plausibly be implemented at the federal level as well,¹⁴¹ the proposal even having been a part of then-Senator Barack Obama’s presidential campaign platform.¹⁴² Furthermore, most developed nations have return-free filing for low- and middle-income taxpayers, and such a system is not outside the realm of possibility in the United States.¹⁴³ If we were to resolve the compliance difficulties currently in our system for low- and middle-income taxpayers, then the case for removing willfulness becomes much stronger,¹⁴⁴ perhaps overwhelming the reasons for keeping the willfulness requirement. If the Treasury were to do all of the legwork for the taxpayer, then complying with the tax law would require no greater intellectual sophistication than following criminal law generally.

Regardless of how one would, from one’s preferred moral and political valuations, balance the costs and benefits, I take it that we all agree that if the balance of reasons weighed against the willfulness requirement, Congress should be able to revise the language of I.R.C. § 7201 (and corresponding criminal tax statutes) to delete the word “willfully.” An amendment by the legislature that ignorance of the law does not absolve one of criminal liability in tax law, which is a matter of retributive justice, should not have enormous implications for the distribution of tax liabilities, a matter of distributive justice. Yet this is precisely the consequence of the too much lenity problem.

2. From Deference to Strict Construction

Following the question of to which statutes the rule of lenity will apply, the second question is what effect such an application will have when the rule does apply to a dual-purpose statute. Recall that the rule of lenity requires finding in favor of the defendant when the law is unclear. This interpretative stance is striking as an approach to tax law. Indeterminacy is a persistent problem for statutes, and the tax code is no exception.¹⁴⁵ Moving from an approach of uncovering the best interpretation of tax statutes to a taxpayer-wins approach in hard cases is a harsh blow to the tax law’s aims. An application of the rule of lenity is particularly harmful to the IRS’s enforcement efforts, as it is in the gaps of legal ambiguity where tax shelters thrive.¹⁴⁶

This issue becomes the clearest when comparing the rule of lenity to the general doctrines granting deference to the Treasury, and by extension the IRS, in interpreting the tax law. This comparison serves to analyze the counterfactual, the interpretative approach that would govern were lenity not to apply. An examination of the counterfactual brings to light just how starkly lenity contrasts in terms of both its purpose and effect.

Generally, when statutes are ambiguous, administrative agencies are granted deference (often called “Chevron deference”) by the courts in the agencies’ interpretation of the statutes they administer.¹⁴⁷ The deference given to the IRS helps it to fill in the gaps of statutes in a way that comports with the aims of the tax code, collecting revenue in a just and efficient manner.¹⁴⁸

In contrast, the Department of Justice, which prosecutes federal criminal offenses, receives no such deference in its interpretation of criminal statutes. Instead, it is well established that to afford it deference would be to run completely opposite the rule of lenity. Whereas the rule of lenity is a pro-defendant approach to interpretation, affording deference to the Justice Department would be pro-prosecution. As Justice Scalia has put it, to afford deference to the Justice Department would “turn the normal construction of criminal statutes upside-down” into “a doctrine of severity.”¹⁴⁹

The doctrines of deference and lenity clearly juxtapose two distinct considerations about the right approach to take with regard to gaps in the law.¹⁵⁰ On the lenity account, legal indeterminacy represents a rule of law failure and, in order to protect a path safe from punishment, citizens who fall under that penumbra cannot be punished. This account makes sense given the role of criminal law in carrying out retributive justice aims of punishment and moral condemnation. On the deference account, the gaps in the law ought to be filled by the expert, policy-driven approach of administrative agencies.¹⁵¹ This account makes sense given the role of tax law in coordinating distributive justice and revenue-raising functions. By cabining lenity to criminal law and deference to civil law, these opposing doctrines would have been kept aligned to their respective purposes, but under the Thompson/Center holding, lenity would apply to dual-purpose statutes that are being interpreted in the civil context. Even in cases that solely determine civil tax liability, instead of the interpretive regime that would best carry out the purposes of the tax law, the courts must employ a rule built to protect criminal defendants. The rule of lenity is incongruous with its purpose.

Without the kind of policy-driven approach permitted by Chevron, it is hard to imagine that there can be effective policing of tax shelters.¹⁵² In order to distinguish between abusive tax shelters and permissible tax planning, the agencies must look to the general purpose of the tax laws. This is because tax shelters follow the letter of the tax law while going against the fundamental spirit of the tax code.¹⁵³ Whereas deference allows the IRS to interpret statutes in line with the spirit of the law, lenity swings much closer to the textualist “letter of the law” interpretation. Foreign jurisdictions applying ordinary meaning textualist approaches to interpretation have struggled to strike down tax shelters,¹⁵⁴ and Thompson/Center threatens the same for the US system.¹⁵⁵

As with the willfulness dam limiting the statutes to which lenity applies, the Court has partly walled off the deference due to some agency interpretations from Thompson/Center’s assault.¹⁵⁶ Though the tension is not yet fully resolved, the Supreme Court has laid out a middle way between the two competing doctrines for some dual-purpose statutes in Babbitt v. Sweet Home Chapter of Communities for a Greater Oregon, such that not all administrative interpretations will be stripped of deference.¹⁵⁷ According to the middle way, agency interpretations of dual-purpose statutes will still be granted deference if they satisfy fair notice principles. In Sweet Home, the Court noted that the agency interpretations satisfied fair notice because they came in the form of regulations that had been published for twenty years.¹⁵⁸

But the Sweet Home middle way is limited. Not all administrative interpretations come by longstanding published regulations. Thompson/Center, for instance, presented a case in which no regulations were present. In the spaces where the IRS has not passed longstanding, formal, law-like regulations or has passed regulations with language itself subject to competing interpretations, it appears that fair notice will not have been provided.¹⁵⁹ These gaps are significant.¹⁶⁰ Practitioners (or indeed anyone familiar with the tax system) would vouch for the importance of informal, nonbinding IRS guidance on tax matters.¹⁶¹ Abusive transactions exploiting legal ambiguities in the tax code are often noticed by the IRS only after a taxpayer has engaged in such transactions.¹⁶² For these cases, Thompson/Center would severely hinder the Service’s efforts in effectuating the purpose of the tax laws by shifting from a deference regime to lenity.¹⁶³

Furthermore, the Sweet Home approach to deference has also drawn academic criticism for failing to coincide with the non-delegation principle, which would confine the morally laden task of drafting criminal law statutes to elected officials in the legislature.¹⁶⁴ Chevron is essentially a delegation doctrine, recognizing the delegation of interstitial lawmaking authority from the legislature to the administrative agencies.¹⁶⁵ Since dual-purpose statutes serve criminal functions, allowing agency interpretations deference essentially puts the agencies in the role of filling in the criminal law and thereby violates the non-delegation principle. Agency deference ought to be limited to civil law just as the rule of lenity ought to be limited to the criminal law.

3. Legislative Solutions to the Too Much Lenity Problem

As I hope to demonstrate in this Article, I think that there are solutions to the too much lenity problem. Before getting to my preferred solution in Part IV, I discuss in this Section a possible legislative response and the difficulty it faces.

One possible response to the problem of too much lenity is for Congress to draft a separate criminal tax code and civil tax code. The problem of too much lenity arises when a criminal tax law refers to the language of a civil tax law. For instance, § 5871 states, “Any person who violates or fails to comply with any provision of this chapter shall, upon conviction, be fined not more than $10,000, or be imprisoned not more than ten years, or both.”¹⁶⁶ The phrase “this chapter” refers to chapter 53 of the Internal Revenue Code, which governs the taxation of machine guns, destructive devices, and certain other firearms.¹⁶⁷ It thereby requires substantive tax laws within chapter 53 to now perform double duty, assigning civil tax liability and serving as part of the criminal actus reus for § 5871.

Separating the two contexts through drafting may seem a reasonable solution at first, but thinking through how such a solution could be carried out leads to a primary difficulty. How could the legislature be able to draft language regarding the violation of tax law without referring to such laws? The content of the crime set out in § 5871 is that someone violated the tax law. And if this violation of the tax law is what we hold to be criminal, then it is hard to see how the criminal statute could be drafted without reference to the civil tax law.

The act/omission distinction partly explains the issue at hand. The distinction is ordinary and, so, should be familiar to most. To water a plant involves carrying out some willed bodily movement, an action.¹⁶⁸ Omissions can best be understood negatively as the absence of a certain act. If you have agreed to water your friend’s plants while they are on vacation, then your failing to do so is an omission—an absence of the act of watering.¹⁶⁹ The law typically criminalizes acts; a major exception is in tax law, where omissions are criminalized.

Consider the language of 18 U.S.C. § 1584, which punishes “[holding another person] to involuntary servitude.”¹⁷⁰ Holding another person to involuntary servitude is an act. The statute reflects the prohibition against involuntary servitude laid out in the Thirteenth Amendment¹⁷¹ but, importantly, does not directly reference the Thirteenth Amendment.¹⁷² Since § 1584 assigns punishment to an act, it need not refer to any other provision. It can merely replicate the language of the Thirteenth Amendment and punish holding others to “involuntary servitude.” And although this is an instance of replication between the Constitution and a statute, it is not hard to see how the same could be accomplished with replication between criminal law and civil law. The civil code can set out civil penalties for the conduct of such-and-such act and the criminal code can set out criminal penalties for the conduct of such-and-such act without either needing to directly reference the other.

In contrast, I.R.C. § 5871, and tax crimes more generally, punish non-compliance with respect to some legally required conduct, an omission. Since the omission is defined by the required conduct that one is omitting to do, one cannot spell out the omission without reference to the law that sets out the required conduct in the first place; insofar as that required conduct is a matter of civil tax law, that means that the criminal tax law must refer to the civil tax law. I.R.C. § 5871 must refer to § 5821 since § 5821 sets out the required conduct, the omission of which is punishable.

C. Higher-Order Vagueness

To make it easier to talk about the rule of lenity, let us stipulate another law and some facts about language. Suppose that there is a law prohibiting driving dangerously. The safe driving statute reads:

Whoever operates a motor vehicle or motorcycle on the public roads or highways at a dangerous speed, having regard for width, traffic, use, and the general and usual rules of such road or highway shall be fined not more than twenty-five dollars.

The half-fictive statute is based on former Oregon General Code Section 12603, which was upheld as a valid statute in State v. Schaeffer.¹⁷³

Table 1. Table of Stipulations (Stated Again Infra)
Statute’s Meaning	Analysis of Statute’s Meaning (Includes Borderline Instances)	Citizen’s Mental Representation of Statute’s Meaning (Only Prototypical Instances)
Dangerous Driving	60 mph or faster	70 mph or faster
Clearly Dangerous Driving	70 mph or faster	80 mph or faster
Clearly Clearly Dangerous Driving	80 mph or faster	90 mph or faster
Note: I encourage the reader to refer to this table while working through the following paragraphs. In order to state the problem, some unusual and technical locution must be used, so the graphical component of this table will aid in comprehension.

All reasonable people will admit that what counts as dangerous driving admits of borderline cases and is, thus, a vague predicate. Suppose by stipulation that 60 miles per hour (“mph”) is the cutoff for driving dangerously on Birch Avenue at 10 a.m. on Wednesday—one is dangerous if and only if one is driving at 60 mph or faster. Of course, driving at 60 mph is not prototypically dangerous, it is instead a borderline case. In fact, it is the border! Let us then stipulate that driving on Birch Avenue is clearly dangerous if and only if the car is going 70 mph or faster.¹⁷⁴

When a person reads the safe driving statute, their mental representation includes only these prototypical, clear instances of dangerous driving, or so the story of fair notice goes.¹⁷⁵ Driving at 60 mph, borderline dangerous driving, never crosses the mind of Average Joe as dangerous as he drives down Birch Avenue at 60 mph. Thus, when Joe goes on trial, the judges apply a rule of lenity. They construe the statute to mean that Average Joe can only be found guilty for dangerous driving if he has driven clearly dangerously, not just borderline dangerously.¹⁷⁶ To do otherwise would be unfair to his natural reading of the statute and violate fair notice as a rule of law value. So a rule of lenity, which caters to expectations, now requires judges to only find a defendant guilty of dangerous driving if the car was moving at 70 mph or faster, for it is these speeds that are clearly dangerous. Joe has not violated the safe driving statute, the court rules.

From here, the story unravels. The key observation is that someone who knows about the rule of lenity will now actually have a narrower realm of expectation. Recall that the rule of lenity, as a canon of statutory interpretation, assigns meaning to the statute.¹⁷⁷ After Joe’s trial, the meaning of the statute changed from prohibiting dangerous driving to prohibiting clearly dangerous driving.¹⁷⁸ So suppose Steve knows that courts have applied the rule of lenity with respect to the safe driving statute because he read the opinion from Joe’s verdict. Whereas Joe read the statute to mean that “dangerous” driving is prohibited, Steve rightly reads the statute to mean “clearly dangerous” driving is prohibited. The ultimate authorities on the meaning of statutes are the courts,¹⁷⁹ and the courts have stated that the safe driving statute means do not drive clearly dangerously. Steve knows from reading the opinion from Joe’s case that if he drives dangerously but only barely so such that he is still a borderline rather than prototypical case of dangerous driving, he will then be outside the ambit of the statute. The rule Joe follows is do not drive dangerously. The rule Steve follows is do not drive clearly dangerously. Since Joe and Steve have different propositional contents for the rules that they are following, they will also have different mental representations. If Steve expects that he will only be in violation of the statute for clearly dangerous driving, he will conjure the mental image of a prototypical clearly dangerous speed, not a borderline clearly dangerous speed. In other words, if mental representations of concepts are just those of prototypical instances, as discussed in Section I.B., then the mental representation that Joe has is of clearly dangerous driving while the mental representation that Steve has is of clearly clearly dangerous driving. The crux of the issue is that “clearly dangerous” is itself a vague predicate—what counts as clearly dangerous driving admits of both clear and borderline cases. This is the recursive phenomenon of higher-order vagueness, vagueness about the borderline cases.¹⁸⁰

Driving at 70 mph is a borderline case of clearly dangerous driving. Driving at 70 mph, however, is not clearly clearly dangerous driving. It is merely clearly dangerous. The mental representation of dangerous driving that Steve has upon reading the statute with the rule of lenity in mind—the propositional content of which is do not drive clearly dangerously—is driving at 80 mph or greater. Thus, Steve does not expect to be found guilty of dangerous driving when he drives at 70 mph. Applying exactly the same sort of reasoning that justified having the rule of lenity in the earlier case, a court system ought now to adopt a double rule of lenity to deal with the issues caused by second-order vagueness; otherwise, they will violate Steve’s expectations and the rule of law value of fair notice. Steve can be found guilty of dangerous driving only if he drove clearly clearly dangerously—at 80 mph or greater.

Such reasoning can continue ad-infinitum, adding the clearly adverb with each iteration of higher-order vagueness.¹⁸¹ In order to protect fair notice, there must be the triple rule of lenity, the quadruple rule, the quintuple . . . . But surely this is absurd.¹⁸² Since we plainly ought not adopt an infinite rule of lenity—lest we let many dangerous drivers go free—and fair notice does seem to be an important rule of law value in criminal law, something has gone quite wrong. Citizens who read a statute after the rule of lenity has been applied are failing to receive fair notice of punishment. Call this the “higher-order vagueness problem.”

Many readers, when presented with my argument above, have responded that the court ought to draw clear boundaries in order to avoid the higher-order vagueness problem. On their account, instead of changing the meaning from dangerous to clearly dangerous, the court should instead state something akin to “we hereby stipulate that any speeds at 70 mph or greater will count as dangerous driving for the purpose of the safe driving statute.” Whereas “clearly dangerous” is vague, “70 mph or greater” is a bright line rule. No problem of higher-order vagueness is presented for “70 mph or greater.” Steve, when reading this opinion, should have a clear mental representation that 70 mph driving is prohibited by law.

The problem with such a response is that it fails to notice that this discussion has thus far been using elliptical construction to hide the context dependence of the statute. The safe driving statute states that the notion of dangerous speed must be understood in the context of “width, traffic, use, and the general and usual rules of such road or highway.” Even if the court draws clear boundaries in one context, it leaves the other contexts open. 70 mph is a clearly dangerous speed for driving on Birch Avenue at 10 a.m. on Wednesday. But what counts as a dangerous speed on Grove Street at 8 p.m. on Saturday or MLK Boulevard at 4 p.m. on Tuesday? Surely, the court cannot delineate what counts as dangerous for every width, traffic, use, and the general and usual rules of every road and highway. And what of vague predicates that reject quantification altogether, such as the No Vehicles in the Park statute? How would a court draw up a bright line rule for the meaning of “vehicle”? The courts are severely limited in their ability to draw bright line rules. In most cases, they must simply apply the rule of lenity to restrict the meaning of a vague statute to only its prototypical instances, thus leading to the higher-order vagueness problem.

1. Technical Bookkeeping

For most legal scholars, the above Section should be convincing on its own. For these scholars, I recommend skipping this addendum on the more technical workings of the intuitive story set out above. Those more inclined to debate the theoretical foundations of law may disagree with how I have presented the issues above. Here, I respond to such disagreements.

In the above example of Steve and Joe, some theoretical premises were implicit in how I laid out the example. Premise one, legal realism is false. Premise two, judges assign meaning when applying the rule of lenity. Premise three, there is a fact of the matter about the borders of vague predicates, but such facts are unknowable (in other words, epistemicism). The higher-order vagueness problem is not dependent on these premises. Even if all three premises were false, I would need to revise only the manner in which the problem is laid out, not the substance.

The first two premises get to at what point Steve can rightly have the expectation that the law only punishes clearly dangerous driving. For instance, suppose the first premise is false and legal realism is true. According to legal realism (or, more precisely, legal realism as characterized by H.L.A. Hart), the law is whatever a judge will say it is.¹⁸³ If that is the case, then Steve need not wait for the court to actually apply any rule of lenity for he knows they will. Legal realism states that the fact the court will apply the rule of lenity makes it currently the case that the statute has a narrow meaning. And if the future fact that judges will apply the rule of lenity is current law, then Steve should think, even before Joe’s case is heard, that the law prohibits clearly dangerous driving. The only difference here is a matter of timing. Was the meaning of the statute made narrow by the rule of lenity or was it always narrow since the rule of lenity will be applied when the meaning of the statute is litigated? Either way, the problem of higher-order vagueness stands.

Regarding the second premise, recall the earlier argument in Part II that the rule of lenity stipulates rather than figures out what the statute means. Though canons of statutory interpretation typically seek to figure out the existing meaning of a statute, substantive canons like the rule of lenity instead assign meaning to a statute based on normative considerations.¹⁸⁴ The rule of lenity is not a rule of interpretation in substance since it is not concerned with figuring out what the words mean.¹⁸⁵ When the courts are applying the rule of lenity, it is often within the space of indeterminacy, where meaning has run out.¹⁸⁶ That courts change, rather than interpret, the meaning of a statute when they apply the rule of lenity (premise two above) was a key part of how I originally framed the higher-order vagueness problem.

Suppose, arguendo, the second premise is false and that the rule of lenity is a way of uncovering the existing meaning of the statute. That is, the safe driving statute already has a narrow meaning before it is ever litigated, and in litigation, judges are merely uncovering the existing meaning rather than changing the meaning to implement normative principles. This would make the rule of lenity a rule of statutory interpretation in substance. Even so, the higher-order vagueness problem remains. Again, the only thing that changes is that Steve, if he understands the already existing meaning of the statute, should think that only clearly dangerous driving is prohibited without needing to know about Joe’s case. As with the legal realism premise, the only change here is a matter of timing.

Finally, I have been speaking as if there is a definite fact of the matter about the category membership of borderline instances of a predicate and that we do not know such facts. I find the supposition of epistemicism an easy way to talk about vagueness,¹⁸⁷ but its falsity does not solve the higher-order vagueness problem. The higher-order vagueness problem arises from the general features of vagueness that all theories of vagueness must accommodate:(1) vague predicates have borderline cases that cannot be clearly categorized either as or as not members of such predicates; (2) when reading a vague statute, the reader’s mind tends to conjure up only the clear cases and not the borderline cases; and (3) the question of which items are clear or borderline cases of vague predicates is itself infected with vagueness, thus necessitating distinctions between, for example, clearly clearly dangerous driving and borderline clearly dangerous driving. Features (1) and (2) necessitate a rule of lenity to provide fair notice, and feature (3) kicks the problem one level up each time that the rule of lenity is applied such that features (1) and (2) now apply to the higher level. All three features are theory-independent phenomena.

IV. LENITY AS EXCUSE: REVISING THE DOCTRINE

I have thus far noted the discrepancy between the rule of lenity’s purpose and outcome as well as three doctrinal problems that arise from the discrepancy. The rule of lenity cannot resolve cases of linguistic ambiguity. The rule of lenity extends into civil law. The rule creates higher-order issues of fair notice. Further, I have argued that such problems are foundational to the rule of lenity as it is currently applied. If my arguments are sound, then we must revise the jurisprudential approach to indeterminate criminal law at the foundation. But what should such revisions look like? This Part examines the fundamental nature of the courts’ current lenity jurisprudence and how it ought to be rectified in a way that maintains rule of law values.

On my diagnosis, the issue is that the courts have understood the rule of lenity to be a canon of statutory construction. As a canon of statutory construction, it determines the meaning of the statute to which it applies.¹⁸⁸ Call such a doctrine the semantic rule of lenity. The meaning of statutes is not the right instrument by which to implement the demands of notice in punishment. As I have thus far argued in this Article, statutory interpretation is too blunt a tool for the fine purpose of protecting fair notice.

In some sense, it should not be surprising that the semantic rule of lenity runs into technical problems. The originators of the rule of lenity likely did not foresee the three doctrinal problems I have listed here. The rule of lenity, which traces back to sixteenth century England, predates both the advent of the Internal Revenue Code and contemporary linguistics.¹⁸⁹ Ideally, we should like to reconceptualize the rule of lenity such that we avoid the three doctrinal problems while maintaining its function carrying out rule of law values.

The semantic rule of lenity should be replaced by what I will call the lenity excuse. There ought to be an affirmative defense available to defendants in those instances in which the defendants’ actions were within the penumbra of an indeterminate criminal statute without changing the meaning of that statute.¹⁹⁰ Because the new rule would operate as an excusing condition, the mere fact that the law did not unambiguously criminalize a defendant’s conduct would be sufficient to negate any liability for criminal defendants in the same way that duress or insanity would negate liability. In this way, lenity would function like other excuses (such as duress or insanity) that absolve defendants of criminal liability when it would be unfair to punish them.¹⁹¹

In the remainder of this Part, I will argue that my proposed revision to lenity would not only be pragmatic, solving the three doctrinal problems that plagued the semantic rule of lenity, but also conceptually fruitful, helpfully tying together the purpose of lenity with that of other excuses.

A. The Categorical Unity of Lenity and Excuse

In order to understand the categorical unity between lenity and excuse, one must first understand two foundational concepts and their relation to one another: affirmative defense and excusing condition. In criminal law, the establishment of an affirmative defense will absolve the defendant of criminal liability even if the prosecution has established case that all elements of the offense are present.¹⁹² A paradigmatic example is the excuse of duress. Suppose, for instance, that a defendant has stolen cash from his friend’s wallet because a thug made a credible threat to kill the defendant unless the defendant stole from his friend and gave it to the thug.¹⁹³ Even if the prosecution can establish that all elements of the larceny offense are present, the defendant may appeal to the defense of duress, which absolves a defendant of criminal liability if the defendant was threatened with “unlawful force . . . , which a person of reasonable firmness . . . would have been unable to resist.”¹⁹⁴

For the second concept, that of excusing conditions, this Article will follow the analysis by H.L.A. Hart. Rather than defining the term, Hart provides a non-exhaustive list of its members: “Mistake, Accident, Provocation, Duress, and Insanity.”¹⁹⁵ Unlike other analyses of excuses, which tend to center their focus around the defendant’s moral responsibility,¹⁹⁶ Hart’s analysis of excusing conditions focuses on their role in protecting liberty.¹⁹⁷ Hart finds excuses to be valuable because they provide for citizens the valuable ability to predict in what instances one will be punished and to avoid such instances through one’s own will.¹⁹⁸

Return to the duress example above. If the defendant stole from the defendant’s friend because a gunman threatened to kill the defendant otherwise, the duress excuse would absolve the defendant of criminal liability.¹⁹⁹ If there was no such excuse available, then it would be very difficult for a citizen to ensure they avoid punishment. In such a system, the citizen cannot guarantee that they will avoid punishment as a result of two factors working in conjunction. Firstly, to the extent one has no control over what a violent gunman will do, one cannot guarantee that one will not be threatened by a gunman. Second, to the extent that it is near impossible to resist the orders of a gunman, one cannot guarantee that one will not commit the crime the gunman demands. Thus, without a duress excuse, whether or not one will go to jail would depend on the unpredictable whims of a gunman. In such a case, it cannot be said that the individual had a genuine choice to avoid the law’s criminal sanctions.²⁰⁰ The duress excuse eliminates this worry by ensuring that, in this unpredictable circumstance, one will be saved from punishment.

As argued in Section I.B, fair notice of the criminal laws is also an essential part of citizens’ having a genuine choice to avoid punishment. Fair notice is essential because it gives citizens an opportunity to figure out which actions are subject to punishment under the law. For instance, if the government chose not to publish the criminal laws but instead keep them private, an ordinary person would not have the ability to figure out which actions will be met with punishment. Although Hart himself did not explicitly consider the question of whether or not fair notice doctrines should be understood as excuses, his theory and its implications are clear. In order to protect the choice to avoid punishment, Hart plainly states that citizens must be given the ability to “find out, in general terms at least, the costs they have to pay if they act in certain ways.”²⁰¹

Thus, lenity’s purpose of protecting the choice to avoid punishment aligns the doctrine more closely with the domain of excuse than the domain of statutory interpretation. Given the theoretical unity between lenity and excuse, it may be instructive to look to how other excuses are applied in the criminal law and consider whether lenity should be given the same treatment.

Many excusing conditions, such as duress and insanity, are employed as affirmative defenses under the law.²⁰² In these instances, we take it as obvious that if what we want to do is free the defendant, then we should do that directly by permitting a defense, rather than indirectly through changing what a statute means. I propose here that the same treatment be given to lenity, allowing for defendants to simply avoid punishment in instances where the statute was indeterminate with respect to the defendant’s behavior without constraining the meaning of that term as the current semantic rule of lenity does.

Excuses are often understood in contrast to another category of affirmative defense: justifications. In the legal context, both serve as affirmative defenses requiring acquittal even where the prosecution has established the case that all elements of the offense are present.²⁰³ However, as a moral matter getting at the theoretical grounding of the doctrines, the two categories of defense diverge on the question of why acquittal is required. Justifications defeat what would otherwise be a prohibition against acting in a particular way. It turns what would ordinarily be prohibited into a permissible act. A standard example is self-defense. Killing another is ordinarily impermissible, but not so if done in self-defense.²⁰⁴ Someone who kills another in self-defense has done nothing wrong.²⁰⁵ This contrasts sharply with the nature of excuse, which presupposes the wrongfulness of the act done.²⁰⁶ To use the duress example, we would say that the defendant did something wrong by stealing, but only did so because the coercive threat left them no choice otherwise. Both excuse and justification absolve the actor of criminal liability, but justifications do so by negating the impermissibility of the actions whereas excuses affirm that the actions were impermissible but absolve the actor for a reason standing outside the wrongfulness of the act itself.²⁰⁷

By leveraging the distinction between a justification and an excuse, one can see why the lenity excuse better accords with our intuitions regarding notice as a rule of law value as opposed to the semantic rule of lenity. Like justification, the semantic rule of lenity redraws the lines of what is permissible and what is impermissible behavior. By giving the statute a narrow construction, the semantic rule shrinks what counts as impermissible behavior. But in many cases in which the rule of lenity is applied, we see that the defendants really did do some harmful act, such as disposing of an object that could serve as evidence²⁰⁸ and transporting a stolen airplane across state lines.²⁰⁹ Therefore, the semantic rule of lenity fails to accord with the reason why we acquit defendants who conduct non-prototypical criminal activities. The reason we acquit them is that it would be unfair, from a rule of law perspective, to punish an act without clear notification that such an act would be punished, not that the defendants have clean hands.²¹⁰

Under the lenity excuse, a criminal defendant would be absolved of liability for their actions if their actions were not clearly within the meaning of the criminal statute without needing to change the meaning of said statute. The underlying conduct rule, for example, the rule prohibiting dangerous driving, does not change. The law can stand both for the proposition that a citizen acted wrongfully and the proposition that punishing the individual, despite their wrongful acts, would violate our rule of law principles. Refashioning lenity from a canon of statutory interpretation to an excusing condition essentially allows us to have our cake and eat it too. The lenity excuse protects the safe path principle while still maintaining the best interpretation of the statute.

B. Solving the Three Doctrinal Problems

Recall the earlier discussion of the hypothetical Bank Safety Act, which criminalizes starting a fire within one hundred feet of a bank.²¹¹ We stipulated there that “bank” was ambiguous between a river bank and a financial bank and that Defendant A had set fire next to a financial bank and Defendant B had set fire next to a river bank.²¹² The semantic rule of lenity does not resolve such a situation since either reading of “bank” would absolve only one of the two defendants of guilt. However, since neither defendant received fair notice that their act would be criminalized due to the linguistic ambiguity of the Bank Safety Act, the fair notice purpose would require absolving both of guilt.

Under a lenity excuse regime, the situation is neatly resolved. The court, for all defendants, need only ask the question whether either one of their actions were unambiguously criminalized by the law. Ex hypothesi, due to the linguistic ambiguity inherent in the statute, neither defendants’ actions were unambiguously criminalized, so both defendants would be absolved of culpability. The same would go for any case of linguistic ambiguity in criminal statutes, mutatis mutandis. Thus, the outcome of the lenity excuse is consistent with what fair notice demands.

The semantic rule of lenity problematically extended past its purpose of fair notice in punishment by applying in purely civil contexts. With the lenity excuse, a statute used in both criminal and tax law contexts can be given the best interpretation rather than the narrowest construction, so tax law’s civil purposes are protected. Nevertheless, the lenity excuse can still apply in criminal contexts, which is the context in which fair notice is required due to the special status of punishment. Although the meaning of an inscription must, for linguistic reasons, stay constant across contexts,²¹³ no such principle of consistency applies to affirmative defenses at law. The law can, and does, permit defenses in criminal law that are not available in civil law.²¹⁴ Insofar as we have a principled reason, namely the special status of punishment, a company like Thompson/Center Arms Co. could leverage the excuse of lenity to avoid punishment for the manufacture of Thompson/Center kits, but it should not have such an excuse when courts are determining its civil tax liability, such as whether the firearms excise tax applies to the production of Thompson/Center kits. This solves the too much lenity problem.

The semantic rule of lenity, by assigning meaning to a statute, led to fair notice problems caused by higher-order vagueness. With the excuse of lenity, there is no need to assign any particular narrow construction to the statute itself. Without any new assignment of meaning, studious potential criminals have no reason to have different expectations of what violates the criminal law after reading an opinion employing the lenity excuse. The court instead affirms, for instance, that borderline dangerous driving of 60 mph is still dangerous, though it absolves the defendant who drove at 60 mph of criminal liability since that would not have been the defendant’s expectation from reading the statute. The sovereign command remains don’t drive dangerously rather than changing to do not drive clearly dangerously, and no double rule of lenity is required. Joe, who drove at 60 mph will be able to benefit from the lenity excuse because his actions were not clearly prohibited by the vague safe driving statute; Steve, who drove at 70 mph will not be able to benefit from the excuse. Steve’s driving was clearly dangerous and, since the conduct rule remains do not drive dangerously as opposed to do not drive clearly dangerously, Steve has received fair notice that his actions would be punished. The excuse of lenity thereby solves the higher-order vagueness problem.

The reader may here object that a problem parallel to the higher-order vagueness problem nevertheless remains. Can Steve not say that he thought himself to be following the law given that there is an excuse of lenity that absolves borderline dangerous driving of culpability? To put the force of the counterargument another way, what is the difference between saying, as the semantic rule of lenity does, that clearly dangerous driving is prohibited and saying, as the excuse of lenity does, that dangerous driving is prohibited but borderline dangerous driving is excused?

The key distinction is that although the semantic rule of lenity is directly construing the statutory conduct rule, an excuse is not meant to guide conduct. It would be quite odd to think that the presence of excuses in the criminal law is tantamount to the law’s saying, “If you are planning to commit homicide, please make sure you are insane or under duress.” Excuses are instead best understood as addressing the government on how to adjudicate questions of criminal culpability.²¹⁵ The criminal law permits excuses sotto voce.

This sotto voce feature of excuses may be analogized to the same in statutes of limitations. A five-year statute of limitations on assault, for example, is not to let citizens know that they are permitted to assault others so long as they can lay low for the next five years.²¹⁶ If the government were to amend the statute of limitations to seven years, an assaulter cannot complain of unfairness.²¹⁷ It would be on its face ridiculous for the criminal to complain, “I assaulted someone yesterday thinking I would only have to hide for five years, not seven. You are treating me unfairly!” Likewise, because excuses are not conduct rules, the rule of law principle that citizens be given fair notice of which conduct is prohibited does not apply to excuses.²¹⁸ Therefore, the excuse of lenity does not require a “second-order” excuse of lenity, thereby resolving the higher-order vagueness problem.

C. Other Justifications for the Semantic Rule of Lenity

I have argued in the previous Section that an excuse of lenity best aligns the doctrine with its rule of law purpose of fair notice while the semantic rule of lenity does not. Though the value of fair notice is the most often cited justification for the rule of lenity,²¹⁹ it is certainly not the only justification for such a long-standing and august doctrine of criminal law. Ideally, the excuse of lenity would be consistent with these other justifications as well—it would be a shame to throw out any babies with the bathwater. In this Section, I consider the other justifications for the rule of lenity and demonstrate how the excuse of lenity is consistent with such aims.

The first set of reasons significantly different from fair notice for having the rule of lenity includes those that are still closely connected to restricting the scope of criminalization. The rule of lenity “constrains the discretion of law enforcement officials”;²²⁰ it is a speed bump against over-criminalization in the United States;²²¹ and it protects the (relatively) politically powerless citizens who would have a hard time organizing to change the criminal code.²²² Since the excuse of lenity likewise works to restrict the scope of criminalization by offering a functional near-equivalent of the rule of lenity in the criminal context,²²³ all of these purposes are also carried out by the excuse of lenity.

Another category of reasons in favor of the rule of lenity involves the notion that criminal law is solely the province of the legislature, the non-delegation principle.²²⁴ Again, the functional near-equivalence between the semantic rule of lenity and the excuse of lenity within the criminal context will explain why the excuse of lenity can do much of the work that the semantic rule of lenity currently does. Whenever the excuse of lenity applies, because the excuse will be dispositive of the case, the courts need not resolve the indeterminacy of the criminal statute at hand. Courts will need to resolve penumbral issues in dual-purpose statutes, but this will not make a difference for criminal liability since the excuse of lenity will be available when defendants fall into the penumbra. Since defendants can leverage the excuse against vague statutes in court, it will, like the semantic rule of lenity, put the impetus on Congress to draft clearer statutes.²²⁵

There is one reason in favor of the semantic rule of lenity that does not apply to the excuse of lenity: the semantic rule of lenity has a long history.²²⁶ The rule of lenity originated in sixteenth-century England²²⁷ and has survived in application to the present day. This is indeed a value lost if we were to do away with the semantic rule of lenity, but its importance ought to be put in proper perspective. Though the semantic rule of lenity’s history is long, canons of statutory interpretation are not law and do not have precedential effect.²²⁸

V. COUNTERARGUMENTS AND RESPONSES

In this Part, I consider some arguments specifically against the existence of the too much lenity problem, the higher-order vagueness problem, and the excuse of lenity. The central counterarguments are (1) the tax law is best construed narrowly in civil contexts, so the “too much lenity problem” is actually a feature, not a bug, of the semantic rule of lenity, and (2) if the legislature were to announce that there is no rule of lenity, then the higher-order vagueness problem dissipates due to the fact that individuals are now on notice that statutes will be construed according to the intent of the legislature. Both arguments are important because they go to the theoretical foundations of this Article.

A. Tax Law Would Be Better Off If the Rule of Lenity Applied

The first counterargument puts forth that the problem of too much lenity is no problem at all since the tax code ought to be subject to strict construction, resolving any indeterminacy in favor of the taxpayer. On this view, it is unfair to tax a citizen without clear say-so by statute. The application of the rule of lenity to the tax law is to be celebrated, not decried. Some European nations, for instance, have strict-construction tax systems favoring taxpayers.²²⁹ Such a response, I contend, fails to comport with the differential attitude citizens should have with regard to the administration of distributive justice and retributive justice.²³⁰

First, tax law is the government’s most important lever in carrying out principles of distributive justice.²³¹ Distributive justice concerns how institutions should be designed to fairly distribute the benefits and burdens of societal cooperation.²³² Our progressive income tax system carries out a democratically determined vision of distributive justice under which tax obligations directly correspond to one’s income earned in the marketplace. The statutes provide the skeletal structure for this vision, the corpus of which is fleshed out by the judicial and administrative authority. To undo the interstitial authority is to partly undo the very aims of the tax code.²³³

On this picture of tax justice, to deviate from the best interpretation of a statute in favor of a narrow interpretation of a statute not only undoes what distributive justice would require, but thereby also partly undoes the provision of a valuable moral service by the government. The tax system provides valuable coordination between citizens to hire an expert to tally up what justice requires of them and hold each other to that tally. Since taxpayers have moral reason to pay what justice requires, following the best interpretation of the tax law helps their aims rather than impeding them.²³⁴

Second, though related to the first point, the purpose of tax law is distinct from the purpose of criminal law in that the imposition of tax does not typically aim to serve a deterrence function. After all, a tax on income is not meant to discourage the earning of income.²³⁵ There is no implicit public moral rebuke attached to civil tax liability as there is for criminal liability.²³⁶ Although there are exceptions,²³⁷ the principal purpose of the tax law is to collect (and sometimes distribute) revenue in a just and efficient manner. Notice is most critical when the statutes are intended to guide citizens’ behavior since ambiguously drafted statutes cannot properly serve this guiding function.²³⁸ After all, a citizen cannot use a statute to guide their behavior if they cannot figure out what the statute means.

To bring out this point, we can think of the perspective of a hypothetical idealized taxpayer with regard to the tax law. The taxpayer understands that they have a moral obligation to contribute a certain amount to the common pool of resources by which we fund the various functions of government. However, it is quite unlikely that the taxpayer could even estimate how much they should contribute if they were to reason purely from philosophical first principles or that they would know much about the content of such first principles. Even if the taxpayer resolves the coarse-grained question regarding their obligation to pay taxes, it is unlikely that they will even be able to approximate an answer to the fine-grained question of how much taxes they are morally obligated to contribute as a matter of justice.²³⁹

One way for the taxpayer to resolve the fine-grained question is to defer the calculations to appointed experts in the legislature and the Treasury. On this account, the taxpayer can carry out their ordinary business without worrying about what constitutes their fair share contribution and, at the end of the year, rely on the tax law and the aid of administrative officials to figure out what that fair share is given the activities they engaged in and their results. Instead of having to think through how the tenets of John Locke and Jean-Jacques Rousseau apply to him as a citizen, the taxpayer can just fill out an IRS Form 1040-EZ. This sort of division of labor is critical due to the difficulty of answering the fine-grained questions of political morality and the limited resources that citizens have to put towards such inquiry.²⁴⁰

For these taxpayers, notice is only relevant insofar as they need the information to pay what they owe. Since the taxpayer is not treating tax liability as a cost or benefit of such-and-such action, clarity in laws is actually more important for the administration of such laws rather than being governed by them.²⁴¹ This is also why the tax law can bear such enormous complexity. Whereas conduct rules primarily meant to dictate citizens’ behavior must be drafted simply so that citizens can understand the conduct rules, tax laws can be drafted with greater complexity because they are primarily addressed to administrators and judges who have expertise in tax law.²⁴² Though idealized for purposes of exposition, this sort of narrative is consistent with both the theoretical work in political philosophy²⁴³ and the empirical research that often, though notably not always, finds that tax rates have no effects or very small effects on taxpayer behavior.²⁴⁴

None of this is to deny the proposition that there would be something good provided by having a tax law system where taxpayers can more easily figure out their tax liability. For instance, if a taxpayer does not know how much taxes they will have to pay at the end of the year because the tax laws are too vague, it may lead to the taxpayer over- or under-saving for the forthcoming tax liability. Instead, my argument is merely that the civil tax law lacks many of the features that make fair notice far more important in criminal law. Given these differences—for civil tax law, there is no moral condemnation, no punishment, and no intended deterrence effect—we have good reason to think that tax law ought not follow the stringent fair notice requirements of criminal law.

B. Statutory Notice That Fair Notice Laws Have Been Repealed

The second counterargument contends that if courts were to get rid of the rule of lenity altogether in conjunction with notice of such at the legislative level, then the problem of higher-order vagueness would not arise. Here, the central idea is that the legislation stating that the rule of lenity does not apply to the criminal code would itself stop citizens from forming any expectations about the rule of lenity.

Such an approach has a fundamental problem. A notice that there would be no lenity provided would amount to notice that there is no fair notice. This becomes plain if we recall the fictive story underlying the fair notice doctrine. The reason a citizen needs fair notice is that they may think they are following the law when they are not. To put the point another way, citizens would simply be on notice that they cannot find comfort in their natural understanding of a criminal statute. That fair notice has been abrogated still stands.

The critic might then respond that the legislature ought to impose a statutory single rule of lenity. Given my argument for the higher-order vagueness problem, having just one rule of lenity would be arbitrary—what reason do we have to stop at one rather than two?—but such violations are forgivable. The law is in the business of line drawing and, since the hair-width difference between what is inside the line and outside the line can hardly be a difference-maker,²⁴⁵ line drawing is often an arbitrary matter.

The bigger issue is that having one rule of lenity does not resolve the fair notice problem so long as the rule of lenity remains semantic in nature. The same conclusion about having no rule of lenity applies to the single rule of lenity. So long as individuals understand that the meaning of a statute has changed from an application of the rule of lenity, then to announce by statute that there will be no more higher-order rules of lenity will only violate individuals’ expectations that their actions are within the bounds of legally permissible behavior. The selection of any n-tuple rule of lenity cutoff is arbitrary and will disrupt fair notice for the n+1th order reader of the statute.²⁴⁶

CONCLUSION

This Article has argued that the semantic nature of the rule of lenity leads to three problems in which the rule breaks away from its purpose of providing fair notice in criminal law. The rule of lenity cannot deal with linguistic ambiguity. Some criminal statutes also play civil functions, thereby transferring the strict construction of the rule of lenity from criminal contexts to the civil context. Once the courts construe the meaning of a statute to include just the clear cases, it then creates a fair notice burden regarding the question of what counts as the clear cases, which is itself a vague matter.

To resolve these issues, we ought to replace the semantic rule of lenity with an excuse of lenity. Excuses and fair notice share the common denominator of providing ordinary citizens the safety of choosing to avoid punishment, so having lenity provided as an excuse would more closely align the rule with its purpose. An excuse of lenity would provide the same benefits as the semantic rule of lenity, restricting the scope of criminalization and maintaining criminal law within the province of the legislature, without the drawbacks of having a semantic rule.

96 S. Cal. L. Rev. 397

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Jeesoo Nam*

* Assistant Professor of Law and Philosophy, University of Southern California. Thank you to Scott Altman, Jody David Armour, Jordan Barry, Thomas Bennett, Jonathan Choi, Robin Craig, Noël Cunningham, William Eskridge, Felipe Jiménez, Mitchell Kane, Gregory Keating, Adam Kern, Daniel Klerman, Yao Lin, Erin Miller, Michael Moore, Clare Pastore, Marcela Prieto, Robert Rasmussen, Emily Ryo, Daniel Sokol, Kevin Tobia, Gideon Yaffe, Yuan Yuan, Jack Whiteley, participants of the New York University School of Law–Lawyering Scholarship Colloquium, participants of the University of Pittsburgh–Law and Language Group, and participants of the University of Southern California Gould School of Law–Faculty Workshop for their invaluable help. Any errors are mine and mine alone.

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INTRODUCTION

Tom Murphy attended the 2015 Prescription Drug Abuse and Heroin Summit in his professional capacity as a Senior Special Agent in the Virginia State Police.¹ But the topic of the summit was of great personal interest to him: his teenage son Jason was struggling with a substance use disorder.² Jason’s substance abuse, and its attendant consequences, deepened in the months following the conference.³

In 2017, Jason died from an overdose of fentanyl and heroin.⁴

Addressing the Prescription Drug Abuse and Heroin Summit in 2019, Special Agent Murphy implored those touched by substance use disorders to share their experiences with others in order to fight stigma.⁵ He concluded his remarks by placing his family’s tragedy within the grim national context: “There are 70,000 different stories that happened in 2017. You heard my son’s.”⁶ He paused, choking back tears. “His name was Matthew Jason Murphy.”⁷

It is difficult to fathom the harms caused by substance abuse. For the past several years, the rate of fatal overdoses has exceeded the highest-ever annual death tolls from car accidents, the AIDS epidemic, and gun violence.⁸ There were 70,237 overdose deaths in the United States in 2017,⁹ 67,367 overdose deaths in 2018,¹⁰ 70,630 overdose deaths in 2019,¹¹ 91,799 overdose deaths in 2020,¹² and a stunning 107,573 overdose deaths in 2021.¹³ The substantial increase in overdose deaths between 2019 and 2021 was likely fueled in part by the COVID-19 pandemic, which caused widespread misery and inhibited access to treatment.¹⁴

For a frame of reference, Special Agent Murphy’s tribute to his son lasted four minutes;¹⁵ if a family member of every person who died from a drug overdose in 2017 shared their story for four minutes, back to back, it would last over 195 days. If family members of those who lost loved ones to overdoses in 2021 did the same thing, it would last over 298 days.

At the same conference, politicians and policymakers touted their efforts to combat the opioid epidemic, including the designation of a national public health emergency the previous year; the issuing of billions of dollars in state grants “[t]o expand access to treatment, recovery, and other crucial activities and services”; and the signing of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (“SUPPORT”) for Patients and Communities Act,¹⁶ which reduced regulatory hurdles concerning “opioid use disorder prevention, recovery, and treatment” the previous October.¹⁷ These and similar policy responses have received widespread praise.¹⁸

Unfortunately, such policy responses—while generally welcomed by experts in the field of addiction studies¹⁹—have not come close to creating the “Cascade of Care” required to serve the roughly forty million Americans with substance use disorders.²⁰ Until the political will exists for such comprehensive policy initiatives, advocates for individuals with substance use disorders must contemplate ways in which existing law and policy can be marshaled to serve that population.

This Article offers such a solution: using the federal disability-discrimination laws applicable to public schools as a new way to “see” and serve individuals who—like Jason Murphy—develop debilitating substance use disorders as adolescents. This Article proposes that students with substance use disorders who meet the eligibility criteria of federal disability laws should be recognized as individuals with disabilities (and receive appropriate accommodations) from their schools, just as adults with substance use disorders who meet such diagnostic criteria have received appropriate accommodations from their employers since the 1970s.

The argument that substance use disorders should be recognized and addressed as legal disabilities under special education law is a novel one. While several scholars have powerfully addressed the need to recognize mental health conditions under special education law,²¹ no court opinion or piece of scholarship has yet engaged with the matter of applying such laws to students with substance use disorders specifically. It is not that the matter has been studied and rejected, but rather that this particular conversation has not yet begun.

This Article offers a possible explanation for this silence: that students with substance use disorders are rarely perceived within their schools to be afflicted with “medical” conditions, which is the necessary predicate for recognition of “legal” disabilities. To that end, this Article provides a survey of current medical research regarding substance use disorders and how such disorders affect adolescents’ academic development. It also discusses the power of social perception in this space; the manner in which adolescents face unique barriers to the identification of, and appropriate responses to, substance use disorders; and how students with substance use disorders are therefore largely invisible within schools’ current drug and alcohol policies.

Jason Murphy began “self-medicating” with marijuana while he was in high school and moved out of his parents’ home the day he turned eighteen.²² If his school had recognized substance use disorders not as a propensity towards deviant behavior, but rather an addressable education-impacting disability, perhaps his story would not have been one of the 70,237—every one of whom, to some degree, representing a failure of policy—told in 2017. Radical as it may initially appear, the possibility that an avenue exists by which students like Jason can be seen and served in their schools is worth exploring.

I. SUBSTANCE USE DISORDERS AND CURRENT EDUCATION POLICY

Part I of this Article presents the case for the recognition of substance use disorders in federal special education law: Section I.A examines substance use disorders as “medical” conditions and “legal” disabilities; and Section I.B explores why schools are resistant to interpreting drug abuse by adolescents through these medical and legal constructs.

A. Substance Use Disorders in Medicine and Law

The term “substance use disorder” will be used frequently throughout this Article. This is in part because (as discussed below) the term “substance use disorder” is preferable to terms such as “addiction” and “alcoholism.”²³ But more importantly, using such “medical” terminology when discussing drug abuse by adolescents reinforces a central argument of this Article: that seeing substance-involved adolescents as having medical conditions (as opposed to merely engaging in criminal behaviors) opens the door to recognition of and support for those adolescents under federal disability laws. Accordingly, a brief framing of “substance use disorders” within medicine and law is in order.

1. Substance Use Disorders as Medical Conditions

According to the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (“DSM-5”), the “essential feature” of substance use disorders—regardless of the particular substance being abused—is a “cluster of cognitive, behavioral, and physiological symptoms indicating that the individual continues using the substance despite significant substance-related problems.”²⁴ In other words, individuals with substance use disorders continue to abuse substances despite the consequences stemming from that abuse, even when such individuals no longer desire to use drugs or obtain much pleasure from doing so.²⁵

Ten separate classes of drugs are discussed in the DSM-5: “alcohol; caffeine; cannabis; hallucinogens (with separate categories for phencyclidine [or similarly acting arylcyclohexylamines] and other hallucinogens); inhalants; opioids; sedatives, hypnotics, and anxiolytics; stimulants (amphetamine-type substances, cocaine, and other stimulants); tobacco; and other (or unknown) substances.”²⁶ Misuse of any of these drugs, with the exception of caffeine,²⁷ can result in an individual meeting the diagnostic criteria of a substance use disorder.²⁸

A problematic pattern of [substance] use leading to clinically significant impairment or distress, as manifested by at least two of the following, occurring within a 12-month period:

[Substance] is often taken in larger amounts or over a longer period than was intended.

There is a persistent desire or unsuccessful efforts to cut down or control [substance] use.

A great deal of time is spent in activities necessary to obtain [substance], use [substance], or recover from its effects.

Craving, or a strong desire or urge to use [substance].

Recurrent [substance] use resulting in a failure to fulfill major role obligations at work, school, or home.

Continued [substance] use despite having persistent or recurrent social or interpersonal problems caused or exacerbated by the effects of [substance].

Important social, occupational, or recreational activities are given up or reduced because of [substance] use.

Recurrent [substance] use in situations in which it is physically hazardous.

[Substance] use is continued despite knowledge of having a persistent or recurrent physical or psychological problem that is likely to have been caused or exacerbated by [substance].

Tolerance, as defined by either of the following:

A need for markedly increased amounts of [substance] to achieve intoxication or desired effect.

A markedly diminished effect with continued use of the same amount of [substance].

Id. at 490–91. Specific indicators of the remaining criteria, “withdrawal,” differ depending upon the substance involved. See id. at 490–578.

The absence of symptoms (with the exception of cravings) for one year or longer indicates that the substance use disorder is in “sustained remission.”²⁹ Establishing and prolonging remission from an active substance use disorder, which is achieved by preventing relapses of the previously abused substance or the transitioning to another drug, is a primary goal of substance use disorder treatment.³⁰

Although relapse is a common part of the recovery process, a variety of therapeutic approaches can be employed to promote relapse prevention and increase the likelihood of long-term remission from substance use disorders.³¹ Critically, all approaches require a degree of intentionality and effort on the part of the individual with the substance use disorder and, ideally, their family or other support network.³² Establishing sustained remission from a substance use disorder is a long-term process that, for some, involves a personal commitment to lifelong abstinence from all mind-altering substances.³³

In 2020, the most recent year for which data is available, approximately 40.3 million people aged twelve and older met the diagnostic criteria for a substance use disorder.³⁴ A significant gap exists between the number of individuals who need treatment for substance use disorders and the number of individuals who receive such treatment.³⁵ Many individuals with substance use disorders have co-occurring mental health issues.³⁶

2. Substance Use Disorders as Legal Disabilities

As reflected by policymakers’ remarks to the 2019 Prescription Drug Abuse and Heroin Summit, there has been a notable, if incomplete, movement toward recognizing substance use disorders as “medical” conditions most efficaciously addressed through treatment and community support.³⁷ Even now, however, the idea that substance use disorders can be recognized within, and addressed by, federal disability laws may strike some as odd—if not wrongheaded.

Indeed, when presented with the argument that adolescents with substance use disorders should be seen and served by federal disability laws, many will likely find it more difficult to accept the premise that such laws should recognize substance use disorders in the first place than to accept the premise that such recognition should be extended to adolescents. But the first premise above has been in effect since the mid-1970s.³⁸

The first major piece of federal disability-rights legislation was the Rehabilitation Act of 1973. The following language, contained in Section 504 of the Rehabilitation Act (“Section 504”) represents “the first explicit Congressional statement recognizing ‘discrimination’ against people with disabilities.”³⁹

No otherwise qualified individual with a disability in the United States, as defined in section 705(20) of this title, shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.⁴⁰

The Americans with Disabilities Act (“ADA”), which was passed in 1990, extends the Rehabilitation Act’s discrimination prohibitions to private companies,⁴¹ local and state governments,⁴² and public accommodations.⁴³

During the initial drafting and subsequent revisions of the Rehabilitation Act and the ADA, lawmakers directly confronted the possibility of adults with substance use disorders seeking workplace accommodations.⁴⁴ Regulations under both statutes acknowledge addiction and alcoholism as disabilities deserving of certain protections⁴⁵ and clarify the obligations of employers of individuals with substance use disorders.⁴⁶ A body of case law and legal scholarship further articulates those boundaries.⁴⁷

The Rehabilitation Act and ADA’s statutory language, regulatory guidance, and case law uniformly discharge any obligation on the part of employers to accommodate active drug use (or alcohol abuse that interferes with work obligations) by individuals with substance use disorders.⁴⁸ Employees who are “currently engaging in the illegal use of drugs” are not considered “qualified individual[s] with a disability” under the ADA and are therefore not entitled to workplace accommodations, reasonable or otherwise.⁴⁹ However, employees with substance use disorders who have maintained sobriety beyond a minimum period of abstinence—the necessary length of which is determined on a case-by-case basis⁵⁰—are entitled to reasonable accommodations for their continued recovery-support needs.⁵¹

The fact that these regulations cannot be neatly transferred to the school environment—which, obviously, has significant implications for the project of extending coverage under the Rehabilitation Act and ADA to students with substance use disorders—will be discussed in Section II.B.

B. Substance Use Disorders Among Adolescents

Substance use disorders are diagnosable, treatable, “medical” conditions that can, under certain conditions, be recognized as “legal” disabilities. But if an individual’s drug abuse is interpreted not as evidence of such a “medical” condition, and is instead interpreted only as maladaptive, dangerous, and unlawful behavior, then there is no possibility of such drug abuse being recognized and addressed as a “legal” disability. As discussed below, adolescents are especially vulnerable to such incomplete interpretations of their substance abuse, which perhaps is why a discussion regarding the inclusion of substance use disorders within special education laws has not yet occurred. Section B.1 discusses the prevalence of substance use disorders among adolescents and the education-related consequences of such disorders; Section B.2 discusses certain perceptual errors that prevent widespread recognition of substance use disorders among adolescents; and Section B.3 discusses the harms caused by schools’ resistance to recognizing substance use disorders among adolescents.

1. The Educational Impact of Substance Use Disorders

Substance use disorders among adolescents are considered to be a major public health challenge that presents certain difficulties distinct from the challenges presented by substance use disorders among adults.⁵² According to the most recent Substance Abuse and Mental Health Services Administration (“SAMHSA”) National Survey on Drug Use and Health, an estimated 6.3% of adolescents—1.6 million individuals—met the diagnostic criteria for substance use disorder.⁵³ Given that the average class size in secondary schools is approximately twenty-seven students, one could visualize this prevalence by imagining that every middle and high school class in the country has one or two students with a substance use disorder.⁵⁴

The same “treatment gap” that exists for individuals with substance use disorders generally also exists for adolescents with substance use disorders. Only 0.7% of adolescents—169,000 individuals—received any substance abuse treatment in 2020, which is slightly over 10% of the total number of adolescents who needed such treatment.⁵⁵

While more research is needed to further understand the nature and mechanisms of substance use disorders among adolescents,⁵⁶ and debates over certain aspects of the condition are ongoing within the medical community,⁵⁷ the notion that adolescents can and do have substance use disorders is uncontroversial among medical professionals.⁵⁸

And naturally, because adolescents spend a significant percentage of their waking hours in school,⁵⁹ many of the harms posed by substance use disorders among adolescents manifest within the school environment. While the concept that substance use disorders are likely to negatively impact school performance is intuitive, the specific manners in which they can do so—and how the effects of substance use disorders may resemble other, recognized disabilities—are deserving of review, if only to clarify the manners in which schools can serve affected students.

The purpose and objectives of schooling extend beyond the academic learning process; schools play a critical role in students’ social development and the fostering of time- and task-management skills critical to future achievement.⁶⁰ This holds for students receiving special education services as well: the concept of “education” as encompassing more than academic instruction is reinforced by the stated purpose of the Individuals with Disabilities Education Act (“IDEA”),⁶¹ guidance from the U.S. Department of Education’s Office of Special Education Programs,⁶² and judicial interpretation of special education law.⁶³ For the purposes of this analysis, the objectives of school can be roughly bifurcated into those that are academic—both classroom learning itself and the process of learning how to learn and retain information—and those connected with the socialization process. The emergence of a substance use disorder in adolescence can significantly impede progress in both spheres.

Substance abuse by adolescents has been shown to impair verbal memory, memory retrieval, executive function, and learning performance.⁶⁴ Frequent substance use can cause “measurable and long-lasting cognitive impairments.”⁶⁵ While the most acute cognitive effects of substance abuse are present during periods of frequent use, the scaffolded nature of secondary education can extend the consequences of failing to learn critical foundational information well into the future.⁶⁶ The academic impact of substance abuse is also reflected in the lower grades consistently found among students with substance use disorders.⁶⁷

Substance use disorders also hinder adolescents’ social development. The illegality of substance use can result in criminal charges and involvement with the juvenile justice system; a significant percentage of adolescents in juvenile detention meet the criteria for substance use disorders.⁶⁸ Adolescents who abuse substances are also at a higher risk of dropping out of school, which in turn can produce a myriad of social and economic harms.⁶⁹

Given the prevalence of substance use disorders among adolescents, and the fact that substance use disorders are highly likely to negatively impact the education of adolescents, it is striking that the argument that substance use disorders should be recognized under special education law remains a novel one. A reason for this, as argued below, is that substance abuse by adolescents is too infrequently assessed through a clinical, “medicalized” lens and is instead too frequently assessed through a punitive, “disciplinary” lens.

2. Perceptual Barriers for Adolescents with Substance Use Disorders

Sociologists have long examined the role played by social constructs and labeling in assigning meaning to human behavior.⁷⁰ These methods of categorization are not “constant, but [instead] change according to the dominant modes of thinking.”⁷¹ These processes have had a significant impact upon drug policy insofar as they heavily influence the manners in which individuals with substance use disorders are perceived by society.⁷²

Indeed, over a century of policy responses to drug and alcohol abuse have been significantly influenced by the dominant social constructions of substance-abusing individuals.⁷³ For example, an “alcoholic-as-sinner” construct undergirded the temperance movement;⁷⁴ an “addict-as-criminal” construct inspired the “War on Drugs.”⁷⁵

The heavy influence of social constructs in this space is apparent when considering one’s own responses to various labels associated with substance-involved individuals. Terms such as “addict” and “alcoholic” are not used in the DSM-V to describe individuals with substance use disorders, nor is the term “addiction.”⁷⁶ While some individuals, such as those participating in Twelve Step recovery fellowships, choose to use such language—or more-graphic terms such as “junkie” and “dope fiend”—to describe themselves, the use of such terms to describe individuals with substance use disorders is discouraged due to their negative connotations.⁷⁷

Such terminology has the secondary effect of erasing substance-involved adolescents altogether. To give an example, while a twelve-year-old child can meet the diagnostic criteria for an alcohol use disorder—the adolescents with alcohol use disorders in the aforementioned SAMHSA study included twelve-year-old respondents⁷⁸—describing a twelve-year-old child as an “alcoholic” reflexively appears to be misguided, if not outright impossible. Such dissonance surely stems from the notion that “alcoholism” requires years of problematic drinking to develop. But, as discussed in Section I.A. above, the diagnostic criteria for substance use disorders does not require a minimum age of onset or duration of symptoms. The notion that it requires years of drinking “alcoholically” before an individual can meet the criteria of an alcohol use disorder is simply wrong.

The logical extension of that incorrect belief is that problematic, harm-causing substance abuse by an adolescent is attributable not to a substance use disorder but rather to less-sympathetic causes such as youthful experimentation or simple defiance. Such a belief can prevent adolescents with substance use disorders from obtaining needed medical intervention and likely provides a tacit justification for punitive disciplinary policies.

Describing adolescents as “addicts” is perhaps easier to accept, insofar as a certain percentage of adolescents abuse drugs such as opiates that create an obvious physical dependence and precipitate rapid physical withdrawal symptoms.⁷⁹ In other words, the abuse of certain drugs can cause symptoms that do align with our conceptions of “addiction” regardless of the age of the drug abuser.

But other drugs, such as marijuana, can cause physical withdrawal symptoms that last for weeks and are often mistaken for general irritability or depression.⁸⁰ So despite the fact that marijuana use disorder is the most prevalent of all substance use disorders among adolescents,⁸¹ marijuana abuse does not align as neatly within the social construct of “addiction,” which requires physical tolerance to and withdrawal from a drug. When drug and alcohol abuse by adolescents often does not align with our constructs of “addiction” or “alcoholism,” such behavior is vastly more likely to be addressed within a punitive, “disciplinary” framework. Nowhere is this more evident than in schools.

3. Schools’ Outdated and Ineffective Responses to Substance-Involved Students

While a particular construct can achieve a measure of dominance on a societal level, various entities within society operate under their own dominant modes of thinking.⁸² Imagine, for example, a father who finds illicitly obtained opiate painkillers in his teenage daughter’s room and decides to take bold action in response. The nature of the response will depend significantly, if not entirely, upon the entity he contacts; the local police would likely address the situation differently from a substance abuse treatment center or a priest. If the painkillers were discovered in the girl’s school locker, however, the available responses would be limited by district-level or statewide disciplinary policies.⁸³

In a 2012 study of the drug- and alcohol-related policies of the one hundred largest school districts in the country, disciplinary responses to incidents of drug possession, use, sales, and distribution (including referral to law enforcement) were far more prevalent than interventions intended to detect and address possible substance use disorders.⁸⁴ Though only 15% of districts’ policies referenced obtaining written assessments for potential substance dependence and 55% allowed for referrals to substance abuse counseling, intervention, and treatment programs following possession or use offenses, 98% referenced the imposition of principal-determined suspensions, 90% recommended expulsion hearings, 86% allowed for reporting to law enforcement, and 80% referenced placement in alternative schools or programs.⁸⁵ Only 26% of districts referenced prevention education in their drug or alcohol policies, and only 44% referenced school-based interventions or remediations.⁸⁶

So-called “zero tolerance” policies towards drug- and alcohol-related infractions have been criticized for being ineffective,⁸⁷ punitive,⁸⁸ and overbroad.⁸⁹ There is also a degree to which such policies are too narrow, insofar as their focus—and therefore utility—extends only to the boundaries of active drug possession and use. Put another way, current methods of addressing adolescent drug abuse in schools focus more on the drugs being used than on the adolescents using them. When drugs are removed from a situation, through successful policy initiatives or carceral force, the particular “drug problem” ceases to exist: no laws are broken, and the threat to school safety disappears.

This framing of the problem of student drug use fails to recognize the fundamental nature of substance use disorders insofar as it presumes that the unwanted behavior of student drug use can be deterred through consequences, when continued use in spite of consequences is one of the indicators of substance use disorders.⁹⁰ Furthermore, achievement of such policies’ primary objective—the cessation of drug possession and use—would not fully address students’ substance use disorders, as achieving long-term recovery is an active endeavor that persists far beyond the cessation of substance use.⁹¹

Recognizing substance use disorders as diagnosable and treatable medical conditions, as well as education-impacting disabilities, provides a clearer lens through which to view adolescent substance abuse, albeit one with profoundly complicated implications. What were once considered merely to be willful acts of defiance could instead be interpreted to be ineffective and destructive attempts of self-medication.⁹² The value of deterrence mechanisms, absent attempts to address the underlying motivations for substance abuse, diminishes if not vanishes.⁹³ In short, when substance use disorders are cognizable conditions in schools, the problematic activity of adolescent drug abuse necessitates a far greater degree of interpretative complexity.

The challenge this presents, its implications on the allocation of limited resources such as time and funding, and a reasonable desire to avoid controversial decision-making all serve as likely resistance points to the recognition of substance use disorders under special education law. That is why this Article seeks to instigate a new conversation among educators, policymakers, and scholars regarding how to best see and serve substance-involved students. To that end, Part II below will place substance use disorders within the two spheres of special education laws under which public schools operate, which will highlight current impediments to the recognition of substance-involved students and the areas of the law where recognition and accommodations could plausibly be obtained.

II. SITUATING SUBSTANCE USE DISORDERS WITHIN SPECIAL EDUCATION LAW

Two of the three major disability-rights statutes under which public schools operate—Section 504⁹⁴ and Title II of the ADA⁹⁵—currently offer sufficient tools to procure recognition of, and a degree of support for, certain students with substance use disorders. As discussed below, however, such students can neither be seen nor served under the other statute—the IDEA.⁹⁶

A. The Individuals with Disabilities Education Act

The first federal law to mandate that states receiving federal education funding provide “all handicapped children [with] a free appropriate public education” was the Education for All Handicapped Children Act of 1975 (“EAHCA”).⁹⁷ The EAHCA was the product of many years of congressional lobbying from parents and advocates for children with disabilities.⁹⁸ It was also influenced by two federal cases that upheld procedural due process and equal protection claims in favor of students with disabilities who had been excluded or otherwise denied services from their public schools.⁹⁹ The EAHCA was reauthorized in 1990, at which time its name was changed to the Individuals with Disabilities Education Act.¹⁰⁰

The IDEA seeks to ensure that all students with qualifying disabilities and corresponding educational needs receive a “free appropriate public education.”¹⁰¹ The manners in which schools provide a free appropriate public education to IDEA-qualified students are articulated in students’ Individualized Education Programs (“IEPs”).¹⁰² Each student’s IEP must articulate which “special education and related services” the child is entitled to receive in order to meet their specific educational goals.¹⁰³ Furthermore, the free appropriate public education offered to each child, codified by their IEP, must be provided in the least restrictive environment in which they can attain their individualized educational objectives.¹⁰⁴ These entitlements are provided to children who meet the IDEA’s disability criteria¹⁰⁵ and whose disability also “adversely affects [the] child’s educational performance”¹⁰⁶ in a manner that creates the need for “special education and related services.”¹⁰⁷ Each of these eligibility prongs will be analyzed in more detail below.¹⁰⁸

In addition to the substantive right to a free appropriate public education, the IDEA provides certain procedural rights in disputes between parents or otherwise interested third parties and schools.¹⁰⁹ Parents or public agencies may file a “due process complaint” on any matter relating to the “identification, evaluation or educational placement” of a child with a disability.¹¹⁰ Parties to disputes are afforded access to a timely mediation process conducted by a “qualified and impartial mediator.”¹¹¹ The mediator’s decision in due process disputes can subsequently be challenged in a civil court action; in certain cases, such an action can be filed prior to full exhaustion of the administrative process.¹¹²

The IDEA, and the EAHCA before it, have made a positive impact on public education and the lives of millions of children with disabilities.¹¹³ That said, many scholars have noted that the IDEA’s overly restrictive eligibility criteria appear to conflict with its stated objective of “ensur[ing] that all children with disabilities have available to them a free appropriate public education.”¹¹⁴ Indeed, students with substance use disorders are functionally invisible under the IDEA.

1. Eligibility Barriers for Students with Substance Use Disorders

a. “Child with a Disability”

In order to receive services under the IDEA, a student must first qualify as a “child with a disability.”¹¹⁵ The following disabilities—and only the following disabilities—are recognized under the IDEA: “intellectual disabilities, hearing impairments (including deafness), speech or language impairments, visual impairments (including blindness), serious emotional disturbance, . . . orthopedic impairments, autism, traumatic brain injury, other health impairments, or specific learning disabilities.”¹¹⁶ The IDEA’s regulatory guidance provides further clarification regarding the requisite components of each disability.¹¹⁷ Failure to meet the criteria for a “child with a disability” precludes a student from receiving services under the IDEA.¹¹⁸ While two of the IDEA’s qualifying disabilities—emotional disturbance¹¹⁹ and other health impairments¹²⁰—may initially appear to encompass students with substance use disorders, the conditions for the disabilities that are articulated in the IDEA’s regulations would make such recognition difficult to obtain.

i. Emotional Disturbance

In order to obtain recognition under the IDEA as a child with an emotional disturbance, a student must, “over a long period of time and to a marked degree that adversely affects [the student’s] educational performance,”¹²¹ exhibit one or more of the following characteristics:

(A) An inability to learn that cannot be explained by intellectual, sensory, or health factors.

(B) An inability to build or maintain satisfactory interpersonal relationships with peers and teachers.

(D) A general pervasive mood of unhappiness or depression.

(E) A tendency to develop physical symptoms or fears associated with personal or school problems.¹²²

The regulations further state that emotional disturbance “includes schizophrenia” but does not apply to children who are “socially maladjusted” unless they exhibit one of the criteria provided above.¹²³

The general deficiencies in this regulatory language have been catalogued at length.¹²⁴ Insofar as students with substance use disorders are concerned, it should be noted that the criteria for emotional disturbances do not align with the DSM-V’s criteria for substance use disorders;¹²⁵ some students would exhibit sufficient criteria under both conditions to obtain classification as a student with a substance use disorder and an emotional disturbance, but other students with substance use disorders would fail to meet the emotional disturbance criteria entirely. Nor does the requirement that qualifying behavior be exhibited “over a long period of time”¹²⁶ reflect the DSM-V’s relative lack of emphasis upon the amount of time symptoms of substance use disorders must be present prior to a diagnosis.¹²⁷ Furthermore, the clause referencing “socially maladjusted”¹²⁸ students—a term used to describe juvenile delinquency at the time the IDEA’s precursor was drafted¹²⁹—appears to serve little purpose other than to bias decisionmakers against classifying certain types of maladaptive behavior as evidence of emotional disturbance.¹³⁰

Evidence of student drug use in the records of IDEA-based civil actions appears to dissuade reviewing judges from attributing student behavior to an underlying emotional disturbance in IDEA-based appeals.¹³¹ In denying a student eligibility under the emotionally disturbed category, Judge Richard Posner attributed the child’s drug use and criminal record to “a lack of proper socialization” and noted that while the child’s substance abuse “interferes with his schooling . . . it interferes with much else besides, such as [his] ability to conform to the law and avoid jail.”¹³² A district court opinion, also denying eligibility, noted that “[t]eenagers . . . can be a wild and unruly bunch. Adolescence is, almost by definition, a time of social maladjustment for many people.”¹³³ Some courts consider substance abuse to be a de facto indicator of social maladjustment.¹³⁴ Given the barriers to receiving an emotional disturbance disability classification faced by all students with maladaptive school behaviors, and the particular barrier of the social maladjustment clause for students with a history of substance abuse, widespread acknowledgement of student substance use disorders via the emotionally disturbed category of IDEA-eligible disabilities is unlikely.

ii. Other Health Impairment

To qualify for IDEA services under the “other health impairment” category, a student must have “limited strength, vitality, or alertness, including a heightened alertness to environmental stimuli, that results in limited alertness with respect to the educational environment” due to a “chronic or acute health problem[] such as asthma, attention deficit disorder or attention deficit hyperactivity disorder, diabetes, epilepsy, a heart condition, hemophilia, lead poisoning, leukemia, nephritis, rheumatic fever, sickle cell anemia, and Tourette syndrome [that] adversely affects a child’s educational performance.”¹³⁵ The requirement that the health condition create a “limited alertness with respect to the educational environment” is far easier to demonstrate than the emotional disturbance criteria;¹³⁶ it also more closely aligns with the typical manifestations of substance use disorders.¹³⁷ Other obstacles exist, however, for individuals seeking recognition of substance use disorders as an “other health impairment.”

While the category’s list of “chronic or acute health problems” that are considered “other health impairments” is non-exhaustive,¹³⁸ the absence of substance use disorders leaves the decision of whether to acknowledge a particular student’s disorder to the special education team at the student’s school, subject to review of a mediator and, if appealed, a state or federal judge.¹³⁹ Though such a finding would not be outside the realm of possibility, two factors diminish its likelihood. One, the lack of precedent for a substance use disorder being classified as an “other health impairment” compromises advocates’ ability to effectively argue for such a classification and would likely give reviewing authorities pause before making such a determination. Furthermore, the fact that other conditions (such as attention-deficit/hyperactivity disorder and Tourette syndrome) have been added to the original list of “other health impairments” in formal amendments to the IDEA’s regulations¹⁴⁰ might dissuade school personnel or reviewing authorities from recognizing a condition absent from the regulations that has not been subjected to a similar degree of review and approval.

Another significant barrier impeding the classification of substance use disorders as an “other health impairment” is the secondary requirement—which also applies to findings of emotional disturbance and all other qualifying disabilities under the IDEA—that the impairment “adversely affects a child’s educational performance.”¹⁴¹ Indeed, most disputes over whether a student should receive IDEA services under the “other health impairment” classification focus not upon the existence of a disability but rather the degree to which that disability adversely affects the child’s educational performance.¹⁴²

b. “Adversely Affects Educational Performance”

Neither the IDEA statutory text nor its regulations clearly articulate the type and extent of adverse effect a disability must have upon a student’s educational performance in order for the child to qualify for IDEA services.¹⁴³ This element of the IDEA’s eligibility criteria has been a longstanding focus of scholarly critique.¹⁴⁴ While students with substance use disorders who receive recognition of their disability as an “other health impairment” would face much of the same difficulty as other students with disabilities in demonstrating the adverse effect of their disability (and corresponding need for special education and related services), the unique nature of substance use disorders poses particular challenges in this space.

These challenges can be distinguished between those that would likely be faced by students who are actively using substances at the time of an eligibility determination or IEP meeting and those likely to be faced by students in remission¹⁴⁵ from a substance use disorder. While students in remission would likely face fewer barriers in this space than substance-involved students, demonstrating sufficient adverse effects upon their educational performance that can be attributable to their substance use disorder might nevertheless be difficult. For one, the educators and reviewing entities making the eligibility determination may not fully understand the unique profile of substance use disorders and the manner in which they can continue to symptomatically manifest—and, possibly, adversely affect the student’s educational performance—even when a student is in remission from active drug use.¹⁴⁶ Additionally, the existence of alternative vehicles of support for students with disabilities that do not feature as-stringent eligibility criteria—Section 504 and the ADA—might diminish the perceived significance of recognizing a substance use disorder in remission under the IDEA.¹⁴⁷ Finally, the delicate balance of being in remission from a substance use disorder, and that disorder concurrently being recognized as adversely affecting the student’s educational performance to a degree that warrants special education and related services, is ever-vulnerable to disruption by the common occurrence of relapses.¹⁴⁸

Students who do not use or possess drugs at school but instead manifest the adverse effects of substance use disorders primarily at home can also “fall[] without” the “outer boundaries of IDEA eligibility.”¹⁴⁹ According to the Department of Education’s Office of Special Education Programs, because the IDEA’s provisions “relate to the educational environment . . . for eligibility purposes, the student must meet the [adverse effect requirement] within the educational environment.”¹⁵⁰ Unfortunately, such policies fail to acknowledge the degrees to which the consequences of substance use disorders extend beyond periods of active drug use.¹⁵¹

The remaining category of students, those with substance use disorders who commit drug-related offenses at school, would likely have the most-obvious claim that their disability is adversely affecting their educational performance. The significance of this finding, however, would be diminished by the disciplinary (and possibly legal) consequences the students would face following the infraction. Furthermore, the discovery of active substance abuse either at home or at school can result in parents seeking a degree of support for their students that schools are typically unwilling to fund.¹⁵² While these particular elements are distinct from the inquiry concerning IDEA eligibility for students with substance use disorders, they would factor significantly into the manner in which such students would be served under the IDEA were they to meet the initial eligibility criteria.

c. “Needs Special Education”

One eligibility prong remains: students who meet the aforementioned criteria must also “need[] special education and related services.”¹⁵³ The IDEA defines special education as “specially designed instruction, at no cost to parents, to meet the unique needs of a child with a disability.”¹⁵⁴ The term “specially designed instruction” is defined as “adapting, as appropriate to the needs of an eligible child . . . the content, methodology, or delivery of instruction.”¹⁵⁵ The IDEA provides a list of “related services” that “may be required to assist a child with a disability to benefit from special education,” including “psychological services, . . . social work services, . . . counseling services, including rehabilitation counseling . . . and medical services . . . for diagnostic or evaluation purposes.”¹⁵⁶ Whether a student needs “special education,” as opposed to accommodations such as preferential seating or mobility assistance, is often a determining factor in whether a student meets IDEA eligibility or the more-expansive Section 504 eligibility criteria.¹⁵⁷

While the eligibility requirement that a student must “need[] special education” is logically “intertwined” with the requirement that a student’s IDEA-recognized disability “adversely affects” their educational performance, they are distinct inquires.¹⁵⁸ Complicating this analysis is the fact that the statutory and regulatory language of the IDEA does not clarify (beyond the aforementioned definitions) which modifications constitute “special education” and which are simply best practices that address individual student needs.¹⁵⁹

The eligibility barriers discussed above are likely sufficient to preclude recognition of students with substance use disorders under the IDEA, rendering the discussion of whether such students need “special education” primarily theoretical at present. Nevertheless, advocates seeking IDEA reform must clearly establish that—if the statute were amended to recognize substance use disorders as education-impacting disabilities—there are available special education practices that could serve such students. Two foundations for this argument exist. One can first analogize the manner in which the students with substance use disorders could be served under the IDEA to the manner in which students with attention-deficit hyperactivity disorder (“ADHD”) are currently being served under the IDEA.¹⁶⁰ One can then glean examples of “specially designed instruction” from school-based programs that currently serve students with substance use disorders, such as recovery schools.¹⁶¹

ADHD and substance use disorders are “inextricably intertwined.”¹⁶² Children with ADHD are at a significantly higher risk of developing substance dependence than children without ADHD,¹⁶³ and rates of ADHD among adolescents receiving treatment for substance use disorders are significantly higher than among the general population of their peers.¹⁶⁴ Like substance use disorders, ADHD is correlated with poor academic performance, higher risk of dropout, and an increased risk of involvement with the juvenile justice system.¹⁶⁵

ADHD was not included in the examples of “other health impairments” in the IDEA’s original regulations; the condition was added following the IDEA Amendments of 1997.¹⁶⁶ In seeking similar recognition of substance use disorders, advocates need not entirely conflate such disorders with ADHD to nevertheless draw valid analogies between the two conditions. Both concern a medically grounded reassessment of maladaptive school behavior that, if left unaddressed, leaves students vulnerable to a higher risk of failure. Furthermore, to whatever degree the common symptoms of ADHD mirror the school performance of students with substance use disorders, similar special education and related services can be provided to the latter population.

Advocates can also look to programs that currently serve students with substance use disorders for examples of academic modifications and supportive services that allow such students to fully access their educational opportunities. Recovery schools, which provide integrated therapeutic support for students in remission from substance use disorders, are a valuable source of such knowledge and experience.¹⁶⁷ Recovery schools’ academic programming is typically more flexible than traditional schools, both to provide students the opportunity to learn foundational material that was not obtained prior to entering treatment and to allow time for supportive services throughout the day.¹⁶⁸ Recovery schools also have small class sizes, which allow for a greater amount of individual student attention.¹⁶⁹ Incorporating the principles and practices of recovery schools into public school systems would substantially alleviate the most pressing challenges of recovery schools—maintaining sustainability and offering a diverse suite of academic and elective courses¹⁷⁰—by leveraging economies of scale.

Despite the valuable insight recovery schools can provide, the manners in which “the content, methodology, or delivery of instruction”¹⁷¹ can most-efficaciously be adapted for students with substance use disorders remains a significant opportunity for further study and innovation. Much more is known regarding the “related services”¹⁷² schools can provide—and in some cases are already providing—to support this population. Approaches such as resilience theory,¹⁷³ peer network counseling,¹⁷⁴ motivational interviewing,¹⁷⁵ and cognitive-behavioral therapy¹⁷⁶ have all been demonstrated to improve outcomes for adolescents with substance use disorders.¹⁷⁷ School-based interventions can strengthen “social resistance skills,”¹⁷⁸ provide “normative education” regarding the dangers of substance abuse,¹⁷⁹ and focus on “competence-enhancement” that addresses other social needs.¹⁸⁰

It should also be noted that the provision of “special education and related services” to students with substance use disorders aligns with the value of inclusion underlying the policy that students are to be educated in the “least restrictive environment” in which their needs can be met.¹⁸¹ This is especially the case if such interventions can be performed at the outset of the disorder’s manifestation. Providing early, effective, and evidence-based interventions can allow students to remain integrated in their schools and home environments and forestall, or ideally preempt altogether, a need for residential placement or the threat of juvenile justice involvement.

In summary, the IDEA’s eligibility criteria currently present barriers to the recognition of students with substance use disorders that would likely require statutory or regulatory amendments to overcome. In addition to amending the IDEA’s eligibility criteria, there are two important policy considerations that are deserving of attention, debate, and a similarly tailored response: (1) the balance between schools’ non-negotiable need to maintain safe and drug-free campuses and students’ protections against disciplinary actions that are “manifestations” of their disabilities;¹⁸² and (2) schools’ obligations to provide tuition reimbursement for residential treatment programs.

2. Further Policy Considerations: Manifestation Determinations and Residential Placements

a. Manifestation Determinations

If a student’s IEP team determines that a particular incident of school misbehavior is a manifestation of the child’s disability, the school, rather than levying punitive discipline, will conduct a “functional behavioral assessment, . . . implement a behavioral intervention plan[, and] . . . return the child to the placement from which the child was removed.”¹⁸³ However, drug-related offenses trigger an exception to the IDEA’s standard protocol of determining whether a student’s misbehavior can be considered a “manifestation” of the student’s disability.¹⁸⁴ Students who are caught using or possessing drugs at school are thus subject to disciplinary action, referral to law enforcement, and removal to an alternative educational setting for up to forty-five days “without regard to whether the behavior is determined to be a manifestation of the child’s disability.”¹⁸⁵ Under the IDEA, schools still have the discretion to hold manifestation determination hearings following drug-related infractions by students with disabilities, but they are not required to do so as they are with other infractions.¹⁸⁶

The fact that substance use disorders are functionally invisible within special education law has resulted in inconsistent outcomes of manifestation determinations involving drug-related offenses for students with IDEA-recognized disabilities.¹⁸⁷ If a student with a substance disorder who is deemed to have met the aforementioned IDEA eligibility criteria—by, again, meeting the criteria for emotional disturbance or being recognized as having an “other health impairment,” either of which must adversely affect the student’s educational performance to a degree that requires special education—committed a drug-related offense at school, it would almost certainly be considered a manifestation of their disability. Nevertheless, absent an amendment to the current guidelines, the aforementioned exception would apply, and the student’s school district would still have the ability to discipline the student, refer the student to law enforcement, and remove the student to an alternative placement for up to forty-five days.¹⁸⁸

Any legislative response that adheres to the value of school safety would ensure that schools maintain the flexibility to adequately respond to all drug-related offenses, including, if necessary, the temporary removal of students from campus. Such responses, however, should initiate, rather than foreclose, a dialogue regarding the “special education and related services” students are to be provided in their new placement. Without such support, the value of safety—both for the individual student and the school community—would be compromised upon the student’s return.

b. Residential Placements

The school’s response could be rendered moot, however, if the student is first withdrawn from the district by their parents and placed in a residential drug-treatment program. Under the IDEA’s regulations, parents of children who have previously received special education services and are dissatisfied by a school’s current provision of services can enroll their child in a private school program and file a due process action seeking reimbursement.¹⁸⁹ Such reimbursement is justified only if “the public placement violated IDEA and the private [here, residential] school placement was proper under the Act.”¹⁹⁰

Federal circuits employ different tests for determining whether a particular student’s residential placement is proper (and therefore reimbursable).¹⁹¹ Under the oldest, most lenient, and most widely employed standard, courts assess “whether full-time placement may be considered necessary for educational purposes, or whether the residential placement is a response to medical, social or emotional problems that are segregable from the learning process.”¹⁹² The Seventh Circuit modified the above test to focus more directly upon the primary purpose of the chosen residential facility; reimbursement is not provided for placements that are “oriented more toward enabling the child to engage in noneducational activities.”¹⁹³ The Fifth Circuit adopted elements of the aforementioned tests to create a two-part standard for proper residential placements: such placements “must be 1) essential in order for the disabled child to receive a meaningful educational benefit, and 2) primarily oriented toward enabling the child to obtain an education.”¹⁹⁴ The second prong of this test is a “fact-intensive inquiry” that involves “weed[ing] out inappropriate treatments from the appropriate (and therefore reimbursable) ones.”¹⁹⁵

In practice, courts are reluctant to order reimbursement for programs designed to address substance use disorders for students with disabilities currently recognized under the IDEA.¹⁹⁶ A valid concern exists, however, that broadening the IDEA’s eligibility standards to encompass more students with mental health disorders would place a significant burden upon school districts to underwrite treatment costs.¹⁹⁷

In conclusion, students with substance use disorders will likely remain invisible under the IDEA. Fortunately, another mechanism exists by which this population can be seen and served in their schools: the prohibitions against disability-based discrimination by public entities contained in Section 504 and further contextualized by the ADA.

B. Section 504 and the Americans with Disabilities Act

Compared to the IDEA, Section 504 and the ADA appear to impose altogether different obligations upon schools: the IDEA imposes an affirmative duty to provide students that meet its exclusive eligibility criteria with a free appropriate public education¹⁹⁸ while Section 504 and the ADA contain strong prohibitions against disability-based discrimination.¹⁹⁹ Functionally, however, Section 504 and the ADA stand alongside the IDEA as powerful mechanisms by which students with disabilities can be seen and served in their schools.²⁰⁰

1. Section 504 and the ADA’s Eligibility Requirements and Protections

Unlike the IDEA, Section 504 and the ADA’s current eligibility standards provide sufficient opportunity to recognize and serve certain students with substance use disorders. While the IDEA only recognizes particular enumerated disabilities,²⁰¹ Section 504 and the ADA prohibit discrimination against—and provide needed protections for—all students for whom “a physical or mental impairment . . . substantially limits one or more major life activities.”²⁰²

According to Section 504’s school-specific regulations, schools must provide each “qualified handicapped person” with a “free appropriate public education.”²⁰³ To be considered “handicapped” under Section 504 and the ADA, students must have “any physiological disorder or condition . . . affecting one or more” of a broad list of bodily systems,²⁰⁴ or “any mental or psychological impairment,”²⁰⁵ that substantially limits one or more “major life activities,” including learning, reading, and concentrating.²⁰⁶ Subsequent ADA regulatory language—particularly its requirement that “the definition of disability . . . shall be construed in favor of broad coverage of individuals”²⁰⁷—informs the manner in which Section 504 eligibility is to be determined by educators.

Because Section 504 and the ADA’s disability-based eligibility criteria are far less restrictive than the IDEA’s,²⁰⁸ virtually all students with IDEA-recognized disabilities receive concurrent recognition and protections under Section 504 and the ADA, while some students who are eligible for “Section 504 Plans”²⁰⁹ are ineligible for accommodations under the IDEA.²¹⁰ Nevertheless, the IDEA and Section 504 both require the provision of a “free appropriate public education” to students who meet their separate eligibility criteria.²¹¹

In sum, the IDEA contains a statutory FAPE provision and allows private causes of action only for prospective relief. Section 504 contains a broadly-worded prohibition on discrimination against, exclusion of and denial of benefits for disabled individuals, under which the U.S. DOE has promulgated regulations containing a FAPE requirement worded somewhat differently from the IDEA FAPE requirement.

Mark H. v. Lemahieu, 513 F.3d 922, 925, 930 (9th Cir. 2008). Scholars have argued that Section 504’s FAPE standard, while technically different, is equally robust to the IDEA’s FAPE standard. See Walker, supra note 200, at 1598–1603.

Providing a “free appropriate public education” under Section 504 requires the “provision of regular or special education and related aids and services that . . . are designed to meet individual educational needs of handicapped persons as adequately as the needs of nonhandicapped persons are met.”²¹² While it is “noncontroversial” that Section 504 and the ADA prohibit certain actions such as “unnecessary segregation, unjustified disparate-impact discrimination, refusal to furnish comparable academic and nonacademic facilities and settings, and failure to provide reasonable accommodation,”²¹³ the nature of services schools must provide in order to meet the needs of students with disabilities “as adequately” as their nonhandicapped peers (and thus provide an “appropriate” education) is a matter of debate.²¹⁴ If a disagreement occurs as to whether students with disabilities are receiving a free appropriate public education, Section 504 regulations provide for “a system of procedural safeguards that includes notice, an opportunity . . . to examine relevant records, an impartial hearing with opportunity for participation by the person’s parents or guardian and representation by counsel, and a review procedure.”²¹⁵

With the growing recognition of substance use disorders as complex, “biopsychosocial” conditions that often begin in adolescence, advocates for substance-involved students are better positioned than ever to seek Section 504 accommodations for students with substance use disorders. While this project would break new ground in the education context, a separate area of disability-nondiscrimination doctrine under Section 504 and the ADA can provide an initial (though incomplete) framework for such advocacy—the manners in which qualifying adults with substance use disorders have, for decades, been accommodated in their workplaces.²¹⁶

2. The Challenge of Substance-Involved Students

As discussed in Section 1.A.2, substance use disorders have long been considered “impairment[s] [that] substantially limit[] one or more major life activities” under Section 504 and the ADA.²¹⁷ Advocates for students with substance use disorders can thus stand upon decades of scholarship and case law addressing the recognition and protection of employees with substance use disorders in their workplaces. But the school context presents a challenging issue that is not present in the workplace context: what, if any, obligations are owed to substance-involved students.

The standards for qualifying for Section 504 and ADA protections differ in key ways within the employment and education contexts. In the employment context, “qualified” individuals are only those who, “with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.”²¹⁸ Those who are “currently engaging in the illegal use of drugs” are not considered “qualified individual[s] with a disability.”²¹⁹ In the school context, however, students can only lose their status as a “qualified individual” for Section 504 accommodations in schools by no longer being “of an age during which nonhandicapped persons are provided” public education.²²⁰

Furthermore, while Section 504’s procedural protections do not preclude schools from issuing “legitimate, non-discriminatory”²²¹ consequences for school misbehavior,²²² and some students can therefore face expulsion following drug-related offenses, the student’s relationship with the public school system—through an alternative school within their local school district, or perhaps a school program within a treatment or carceral setting—typically continues after such disciplinary measures have been taken.²²³ Put another way, while adults with substance use disorders are not entitled to any particular job (or to employment generally), students with substance use disorders are entitled, and indeed obligated, to attend school in some capacity.²²⁴

These distinctions expose a critical gap in special education law. Students with substance use disorders can meet the eligibility criteria of Section 504 and the ADA,²²⁵ and, unlike adult employees, students (1) cannot lose their status as a “qualified individual” deserving of Section 504 accommodations on the basis of active substance abuse,²²⁶ and (2) typically remain in an ongoing relationship with the public school system following the discovery of active substance abuse. What, then, are schools’ “free appropriate public education” duties under Section 504 to these students? Specifically, what manner and extent of academic and behavioral supports are legally necessary to provide an appropriate education for students in all stages of substance use disorders?²²⁷

For now, these queries must be addressed on an individual basis and subjected to review by individuals who may be unaware of, or actively resistant to, the needs of adolescents with substance use disorders.²²⁸ Until the public school system’s obligations to students with substance use disorders are determined and articulated to schools, obtaining services or accommodations for substance-involved students will be challenging.²²⁹ But even if formal Section 504 accommodations are not obtained, there may nevertheless be value in recognizing a substance-involved student as a child with a disability. The simple act of incorporating the vocabulary of a medicalized construct of substance use disorders into schools could have a significant effect on parents, educators, and the students themselves. A meeting convened to discuss a student’s “relapse,” for example, would likely have a different tone, and possibly outcome, than one discussing a student’s continued rule- and law-violations. And ideally all parties would recognize that any mandatory punitive responses on the part of the school will, absent concurrent therapeutic support, almost certainly fail to incentivize the student to cease drug use.²³⁰

Furthermore, if such district-level drug policies prove to be consistently illogical and counterproductive over time, perhaps district-level policymakers would then be motivated to reform their policies in a manner that acknowledges the complexity of substance use disorders. Section 504’s affirmative obligation for schools to identify disabled students might also impact district-level behavior through increased screening for substance use disorders and timely communication with parents regarding warning signs and symptoms.²³¹ In fulfilling their evaluative obligations under Section 504, schools can play an invaluable role in the education of families and implementation of proactive responses to budding substance use disorders. Meeting this requirement might also entail increasing training opportunities for teachers and counselors to identify and initially address evidence of substance abuse.

3. Existing Space to Serve Students with Substance Use Disorders

There is, however, a class of individuals who could immediately obtain formal recognition and accommodations under Section 504: non-using students in recovery from substance use disorders. This population stands to benefit from decades of precedent on the matter without triggering the complex questions raised by substance-involved students.

Though the effort-intensive nature of maintaining remission from substance use disorders arguably justifies a robust provision of “regular or special education and related aids and services”²³² for students in recovery, there are also several practical—and relatively easy to provide—accommodations that advocates can and should seek for that population. Examples of such accommodations include the coordination of communication between school personnel, parents, and, upon consent, outside treatment providers to ensure that aberrations in students’ academic performance or behavior are addressed quickly and strategically; giving students the opportunity to call their sponsors or therapists during school hours without judgment or consequence; and excusing absences to attend outpatient treatment programs. Schools can also be more sensitive to the scheduling needs of students in recovery and, where possible, provide opportunities to transfer out of classes containing students from whom they should maintain distance.

Such interventions, if proven effective for a particular student, should remain available as long as the student attends school. This argument finds support in the ADA Amendments Act of 2008, which proscribes factoring the “ameliorative effects of mitigating measures” when assessing an individual’s impairment.²³³ In other words, the impact of a student’s disability must be assessed insofar as how it would manifest absent any mitigating measures (such as school-based recovery supports).²³⁴ Students in recovery are entitled to support under Section 504 and the ADA regardless of the length of their sobriety.

In any event, advocates for students with substance use disorders can and should initiate this conversation by seeking support and protections for this population under Section 504 and the ADA. Reasonable applications of the statutes as they currently stand can make a significant impact upon the lives of students in various stages of substance use disorders, as well as upon the school systems that serve them.

Nevertheless, the primary impact of broadly acknowledging and addressing substance use disorders in schools may lay outside the strict bounds of statutory obligations. Important as specific accommodations are, the greatest value in extending Section 504 protections to students in recovery may be simple recognition: for them to be seen, celebrated, and supported in their schools.

CONCLUSION

Substance use disorders are incredibly challenging to address. Initial instincts, on a personal and policy level, are often to mistake substance use disorders for problems that are seemingly easier to solve, if not to ignore them altogether. It is no surprise, then, that the primary policy framework for serving students with disabilities—the IDEA—fails to acknowledge and address students with substance use disorders. That said, certain students (particularly students in recovery) are entitled to recognition and accommodations under Section 504 and the ADA. Seeing and serving students with substance use disorders would be a complex and controversial project, but such students—like all other students with disabilities—are deserving of support.

96 S. Cal. L. Rev. 355

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Parker Cragg*

* Judicial Law Clerk, Southern District of Texas. All views expressed are my own. I could not have written this Article without the education, encouragement, and feedback I received from Tara Ford, Bill Koski, Ticien Sassoubre, Rabia Belt, Jasmine Miller, Thomas Butterfoss, and Max Etchemendy. I am also grateful beyond words to my family, my friends, and the recovery school community for their support over the years. Finally, I am indebted to the kind and thoughtful editors of the Southern California Law Review who worked on this article: Daniel Willey, Celine Ang, Jessica Block, and Christopher LoCascio.

Analyzing the Circuit Split Over CDA Section 230(E)(2): Whether State Protections for the Right of Publicity Should be Barred

May 2023May 2023Courtney Kim*

INTRODUCTION

In 2018, coworkers notified Karen Hepp, a newscaster and co-anchor for the local Fox affiliate’s morning news program Good Day Philadelphia, that a screenshot of her smiling at a hidden security camera taken about fifteen years ago was being used in various online advertisements for erectile dysfunction and dating apps.¹ Hepp was not previously aware that her photo had been taken or that her photo was posted and shared online on platforms such as Facebook, Reddit and Imgur.² Hepp’s photo was used to solicit Facebook users to “meet and chat with single women.”³ The photo was also featured on Imgur under the heading “milf,” a derogatory and degrading term that refers to a sexually attractive woman with young children, and a Reddit user under the handle “pepsi_next” posted Hepp’s photo to a Reddit subgroup “r/obsf,” which is a repository for risqué photos of older women.⁴ Though Hepp did not allege that Facebook, Imgur, or Reddit had any role in creating or directly publishing this content, she argued that the platforms’ actions have caused “serious, permanent and irreparable harm” to her reputation brand, and image.⁵ Hepp filed claims against Facebook, Imgur, and Reddit for violations of a Pennsylvania state statute that codifies a right of publicity through causes of action for an unauthorized use of one’s name or likeness and the Pennsylvania common law right of publicity.⁶

Because there is no federal law protecting a right of publicity, states that have adopted the right of publicity have done so by statute, judicial decision, or both.⁷ The right of publicity is the right to control the commercial use and value of one’s persona, but the right significantly varies from state to state. Generally, a claim “requires three elements to be actionable: (1) the use of an individual’s persona; (2) for commercial purposes; and (3) without plaintiff’s consent.”⁸ The Pennsylvania statute creates a cause of action for “any natural person whose name or likeness has commercial value and is used for any commercial or advertising purpose without the written consent of such natural person.”⁹ In Hepp v. Facebook, Facebook, Reddit, and Imgur filed a motion to dismiss the suit under Federal Rule of Civil Procedure 12(b)(6), and the District Court for the Eastern District of Pennsylvania granted the motion, holding that Hepp’s statutory and common law right of publicity claims were barred by the section 230(c) of the Communications Decency Act (“CDA”).¹⁰

Section 230 of the CDA states, “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider,” and it expressly preempts any state law to the contrary.¹¹ Essentially, this means interactive service providers are generally immune from liability related to content posted or shared by third parties. Therefore, section 230 “creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.”¹² However, there are some exceptions to this immunity, including causes of action under “any law pertaining to intellectual property.”¹³

In granting the motion to dismiss, the district court in Hepp followed the Ninth Circuit’s interpretation of section 230(e)(2) in holding that only federal intellectual property claims are excluded from the scope of CDA section 230 immunity, so state rights of publicity claims are barred by section 230(c).¹⁴ Hepp argued that the District Court for the Eastern District of Pennsylvania should instead follow other district courts in New Hampshire and New York in holding that section 230(e)(2) includes state intellectual property claims, such as a state right of publicity claim.¹⁵ Hepp subsequently appealed her case to the Third Circuit, which held that it would “adhere to the most natural reading of section 230(e)(2)’s text” so that “a state law can be a ‘law pertaining to intellectual property,’ too.”¹⁶ This created a circuit split between the Ninth and Third Circuits with regard to subsection (e)(2).

The argument to limit interpretation of the intellectual property exemption in section 230(e)(2) to federal law is most strongly supported by the broader congressional intent to create a broad liability shield for interactive computer service users and providers in enacting section 230. Federal laws are well-established with clear scopes of application, but state laws protecting intellectual property are far from uniform, so state laws are much less predictable and could lead to significantly different outcomes between jurisdictions. State laws may cover different causes of action rooted in different legal theories, have varying purposes and policy goals, and provide for different remedies, all assuming that a state legislature has decided to enact a law at all. Consequently, if varying state laws are exempt from section 230 immunity, the integrity of section 230 would be severely compromised. Policy-wise, the Ninth Circuit’s interpretation to exclude state intellectual property laws could very likely prevent individuals harmed by infringing content from having any redress as third-party users who typically post such content are generally very difficult to identify. On the other hand, we must also defer to Congress’s express statutory language and assume that the literal language of the statute accurately reflects Congress’s intent. Therefore, because subsection (e)(2) states that “any law pertaining to intellectual property” is not included within section 230 immunity, and Congress explicitly named federal and state law multiple times within subsection (e), we must conclude that Congress did not actually intend to limit the intellectual property exemption, which should apply its most literal meaning.

There is also a potential argument that the right of publicity is not even an intellectual property right at all, in which case the exception to immunity for claims related to intellectual property laws would not even apply. Furthermore, there has been intense controversy over section 230 coming from both sides of the political aisle, so the statute may be amended or even repealed entirely in the relatively near future. Also, the entire landscape of the internet and the public’s relationship with the internet have been shaped by section 230, so changes to the law or differing applications of the law could compromise our understanding of the right and the internet.¹⁷ However, the current proposed changes to section 230 do not directly address the issue over how subsection (e)(2) should be interpreted with regard to state intellectual property laws, so the circuit split described in this Note will likely still be relevant.¹⁸

In the absence of federal protection, whether claims regarding the right of publicity are actionable is increasingly important with the growth and expansion of the internet, particularly social media. The rise of “influencers,” individuals who essentially monetize and make a career out of their personas and relationships with branded or commercial content, and the rise of “deep fakes,” which utilize technology to synthesize fake pictures or videos that convincingly appear to depict specific individuals or celebrities, are deeply linked to the interest in one’s self, which is protected by the right of publicity. Though lawsuits over right of publicity have historically been brought almost exclusively by celebrities, the age of social media has created many more opportunities for members of the general public to have a commercial interest in their name, image, likeness, or persona. Social media has proven to be extremely lucrative, and content can generate significant value from a business standpoint. Companies and internet platforms will presumably adapt their own policies regarding allegedly infringing content depending on the prevailing interpretation of section 230(e)(2) in order to avoid as much liability as possible, which would create consequences for the millions of users that access those sites and platforms every day.

Part I of this Note will provide background and context to the right of publicity and how it developed in common law to provide a remedy
for individuals, typically celebrities, whose likenesses have been misappropriated without their consent. I will analyze the right of publicity as codified in individual state statutes with an emphasis on how these often significantly different statutes create unpredictability in enforcement and litigation. I will also distinguish the right of publicity from causes of action regarding copyright and compare the Digital Millennium Copyright Act (“DMCA”) to section 230 of the CDA. Part II will provide an overview of section 230 and discuss legislative history and intent. Within Part II, I will also examine both sides of the circuit split from the Ninth and Third Circuits’ contrary interpretations of CDA section 230(e)(2) and each side’s underlying tradeoffs involving the lack of uniformity in state intellectual property laws and the potential effects of precluding claims from such laws as compared to potentially refraining from expanding beyond the congressional purpose of CDA section 230. Finally, I will address the arguments over whether section 230 should still exist in its current form and proposed reforms.

I. THE RIGHT OF PUBLICITY

Hepp sued Facebook, Reddit, and Imgur for allegedly violating her right of publicity as granted by Pennsylvania state statute and common law. The right of publicity is defined as “the inherent right of every human being to control the commercial use of his or her identity.”¹⁹ The right of publicity is generally regarded as an intellectual property right, though interactive service providers such as the defendants in Hepp have argued to the contrary. The right of publicity allows all individuals, celebrity or not, to recover for unpermitted uses of their likeness or persona for commercial gain.²⁰ The right is valuable in that it provides individuals the opportunity to protect the commercial use of their identities as many people, especially celebrities, generate significant income by authorizing others to use their identities in exchange for payment.²¹

A. Origins and Development

The right of publicity originally developed as the other side of the coin of the laws and theories surrounding the right of privacy.²² Samuel D. Warren and Louis Brandeis first recognized the right of privacy as a right potentially rooted in common law in a law review article in 1890.²³ The right of privacy was designed to protect people from uninvited public attention and create a cause of action for people who suffered emotional harm from unwanted publicity.²⁴ However, because the right to privacy is generally a right “to be let alone,”²⁵ there was difficulty in enforcing and applying this right to cases involving individuals who were already in the public spotlight. Some courts held that individuals who sought out publicity through their career choices must waive any right of privacy, while others concluded that while celebrities may be the subject of news stories, they maintain a right of privacy that allows them a shield from unwanted, non-newsworthy publicity.²⁶ Therefore, the term “right of publicity” was first coined by Judge Jerome Frank in Haelan Laboratories, Inc. v. Topps Chewing Gum, Inc. in order to address “the economic potential of a celebrity’s identity.”²⁷

In Haelan, a chewing-gum manufacturer made a contract with a baseball player for the exclusive right to use the player’s photograph in connection with sales of its gum.²⁸ However, a rival chewing gum manufacturer knew of the contract and deliberately induced the player to authorize the rival manufacturer to use the player’s photograph in connection with the sales of the rival’s gum.²⁹ The Second Circuit held that an individual has a right in the publicity value of their photograph—that is, the right to grant the exclusive privilege of publishing their picture—and that this right, which is particularly relevant for prominent figures in the public eye, “might be called a ‘right of publicity.’ ”³⁰ Haelan distinguished itself from prior case law due to the opinion’s emphasis on the economic interest at stake as the plaintiffs, rather than not wanting their photographs to be withheld from public viewing entirely, simply did not want their photographs to be sold for profit by third parties.³¹ The right of publicity is significantly distinct from the right of privacy because the right of privacy is not assignable, and as such, the two rights are independent from each other.³²

Though the right of publicity has clear roots in privacy rights, Professor Melville Nimmer associated the right of publicity with unfair competition and property law.³³ Nimmer stated an individual is entitled to “the fruit of his labors unless there are important countervailing public policy considerations . . . [and] persons who have long and laboriously nurtured the fruit of publicity values may be deprived of them, unless judicial recognition is given to what is here referred to as the right of publicity.”³⁴ Thus, Nimmer linked the right of publicity to the commercial aspects of a public figure’s “personality.”³⁵ In contrast, in 1960, William Prosser advocated for the recognition of the tort of privacy appropriation and suggested that an individual could have the right to control the use of their identity from the appropriation of others.³⁶ Unlike Nimmer’s analysis of the right of publicity, the tort of misappropriation is not a property right. This analysis lends support to the minority view that the right of publicity should not be considered an intellectual property right.

B. Federal Influences

In 1977, the U.S. Supreme Court recognized the right of publicity in Zacchini v. Scripps-Howard Broadcasting Co.,³⁷ the first and only Supreme Court case to address the right of publicity. In Zacchini, an entertainer performed a fifteen-second human cannonball act and sued a local television station after the station taped and broadcast the entire act on the news without the entertainer’s permission.³⁸ The Court considered whether the station was immunized from damages by the First and Fourteenth Amendments of the Constitution and ultimately held that Ohio could grant a state law remedy against the station or give immunity to the press but was not required to do so either by the First and Fourteenth Amendments.³⁹ The rationale behind protecting the right of publicity, according to the Court, was simple: to prevent unjust enrichment by the theft of good will as broadcasting an entertainer’s entire act “poses a substantial threat to the economic value of that performance.”⁴⁰ The Court clearly emphasized the proprietary interest of the individual and compared the purpose of the right of publicity to the economic philosophy behind granting patent and copyright ownership, which is to encourage individuals to produce inventions and creative works in order to foster innovation and benefit the public.⁴¹

Zacchini, as the only Supreme Court case on the subject, provided some federal influence on the right of publicity, and another source of federal influence is section 43(a)(1) of the Lanham Act, the federal unfair competition act.⁴² Rights of publicity cases also regularly implicate the Lanham Act because unauthorized appropriations of celebrities’ identities often involve issues of confusion over sponsorship. Congress amended the Lanham Act in 1988 to codify judicial decisions that had interpreted the Act to allow for false endorsement claims, and the amendment provides celebrities with a clearer statutory foundation for alleging the applicability of the Lanham Act in right of publicity actions.⁴³

Any person who, on or in connection with any goods or services . . . uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person . . . shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act.

15 U.S.C. § 1125(a) (1988 & Supp. IV 1992). The Lanham Act is also important as a federal law because the CDA has a preemption clause that preserves federal claims of false endorsement, so hypothetical plaintiffs could potentially still have an avenue for redress under this federal law even if causes of action under the state right of publicity are barred. Thus, in order to attempt to avoid being barred, some types of cases are now more likely to also be rooted in the Lanham Act for the nationwide coverage, clear remedy, and wide scope of damages.⁴⁴

C. Incongruence Among States

Currently, twenty-five states have passed statutory protections for the right of publicity, and many other states have held that their respective common law would protect the right.⁴⁵ Of the courts that have directly addressed the issue, some states have recognized a distinct right of publicity and distinguished it from a right from misappropriation while others treat the right of publicity as synonymous with the tort of appropriation as expressed in the Restatement (Second) of Torts.⁴⁶ As previously stated, Prosser wrote about the right to privacy in 1960 and argued it is composed of four subparts, one of which being the right to protection against misappropriation of one’s likeness.⁴⁷ Later, the American Law Institute adopted these four subcategories in the Restatement (Second) of Torts.⁴⁸ The tort of misappropriation protects the “interest of the individual in the exclusive use of his own identity, in so far as it is represented by his name or likeness, and in so far as the use may be of benefit to him or to others.”⁴⁹ Though this right is in the nature of a property right, misappropriation is rooted in the common form of invasion of privacy.⁵⁰

The scope of the right of publicity varies from state to state, so the extent that a right of publicity might be protected greatly depends on the state in which a person is attempting to assert that right, as well as the state in which that person is domiciled. For example, individuals in most states, such as California,⁵¹ can assert their right of publicity during their lifetimes, while individuals in Texas cannot, as their statutory right is protected only post-mortem.⁵² Further, there is a wide range of duration periods within state statutes that provide for the right of publicity to survive after an individual’s death.⁵³ Moreover, some state statutes only protect the right of publicity for certain types of people, such as soldiers⁵⁴ or “public figures.”⁵⁵ Perhaps most notably, what exactly is protected under the right of publicity varies greatly among states. For example, in Virginia, the statutory right of publicity is limited to a person’s name, portrait, or picture,⁵⁶ whereas in New York, the right protects a person’s “name, portrait, picture or voice”⁵⁷ but does not extend to that person’s likeness. In contrast, the California statute is much broader and protects against unauthorized use of an individual’s “name, voice, signature, photograph, or likeness, in any manner.”⁵⁸ Even further, Indiana’s statute grants a property interest in an individual’s name, voice, signature, photograph, image, likeness, distinctive appearance, gestures, or mannerisms.⁵⁹

Significantly, there is currently no federal statute to protect the right of publicity or otherwise provide a uniform approach to the right. Due to the reach of social media and other technological advancements, and the fact that those most likely to assert their right of publicity are celebrities and public figures whose identities could be recognized across the entire country, litigation is unpredictable.⁶⁰ Generally speaking, a right of publicity claim involves (1) the use of an individual’s “persona,” (2) for commercial purposes, and (3) without the individual’s consent.⁶¹ For the purposes of this Note and to determine whether a state’s right of publicity statute might fit into the carve-out of CDA section 230 immunity, I will largely limit the discussion to statutory protections and judicial applications of such protections.

D. Application

Each state’s statutory differences in turn lead to very different judicial outcomes in application that do not necessarily strictly adhere to the statutory language. In Midler v. Ford Motor Co., for example, actress and singer Bette Midler sued for an alleged violation of her right of publicity when Ford and its advertising agency used a sound-alike of Midler, but neither her name nor her picture, in a television commercial.⁶² Though the advertising agency had properly licensed Midler’s song from the copyright holder, the sound-alike was directed to “sound as much as possible like the Bette Midler record” after Midler herself refused the gig.⁶³ Thus, the only issue in the case was whether Midler’s voice was protected.⁶⁴ The lower court granted summary judgment in favor of the agency due to the fact that although California’s statute would have protected Midler’s voice if it were used without her consent, the audio in the commercial was not actually Midler’s voice.⁶⁵ Ultimately, the Ninth Circuit reversed and held that “to impersonate her voice is to pirate her identity,” so the defendants committed a tort of misappropriation by intentionally seeking an attribute of Midler’s identity, valued at what the market would have paid for Midler to have actually sung the commercial.⁶⁶ However, there was no statutory violation of Midler’s right of publicity as the term “likeness” refers to a visual image rather than a vocal imitation.⁶⁷

Similarly, in White v. Samsung Electronics, plaintiff Vanna White, the co-host of Wheel of Fortune—“one of the most popular game shows in television history” to which an estimated forty million people tune in daily— sued after Samsung ran an advertisement without consent from or payment to White.⁶⁸ Samsung referred to the advertisement as the “Vanna White” advertisement, which depicted a robot outfitted to specifically resemble White in her famed stance next to the “instantly recognizable” Wheel of Fortune game show set.⁶⁹ White argued that the advertisement used her “likeness” in violation of section 3344 of the California Civil Code, but because the advertisement featured a robot with mechanical features and not White’s “precise features,” the Ninth Circuit held that the robot did not constitute White’s “likeness” within the statutory meaning and affirmed the dismissal of White’s claim.⁷⁰ However, the common law right of publicity has a broader umbrella of protection as it “does not require that appropriations of identity be accomplished through particular means to be actionable,” and in this case, the aspects of the advertisement leave “little doubt about the celebrity the ad is meant to depict,” so the district court erred in rejecting White’s common law right of publicity claim on summary judgment.⁷¹

Furthermore, White also brought a claim under the Lanham Act, for which she was required to show that the defendants created a likelihood of confusion as to whether White was endorsing the products in the advertisement.⁷² The Ninth Circuit applied an eight-factor test from the trademark case AMF Inc. v. Sleekcraft Boats.⁷³ The eight factors are as follows: “(1) strength of the plaintiff’s mark; (2) relatedness of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) likely degree of purchaser care; (7) defendant’s intent in selecting the mark; [and] (8) likelihood of expansion of the product lines.”⁷⁴ Based on the evidence White provided, the first, second, fifth, sixth, and seventh factors supported finding that there was a likelihood of confusion.⁷⁵ The Ninth Circuit found that a jury could reasonably conclude that there was an underlying intent to persuade consumers that White was endorsing the products, so White properly raised a genuine issue of material fact and the lower court erred in rejecting her claim at the summary judgment stage.⁷⁶ Thus, even if state right of publicity claims are barred by section 230, a potential plaintiff may be able to assert a similar but distinct claim.

E. Distinguishing the Right of Publicity from Causes of Action for Copyright Infringement

Copyright law and the right of publicity, though seemingly similar, are very different rights that are rooted in different textual and theoretical foundations, especially regarding copyright law’s constitutional basis.⁷⁷ The federal Copyright Act grants authors of original works the exclusive rights to reproduce, distribute, display, and perform their work.⁷⁸ Copyright law also gives rights to the public, such as the right to use ideas and the right to resell lawfully purchased works.⁷⁹ In contrast, as previously stated in this section, the right of publicity is protected by state statutes and common law and allows an individual to recover for unauthorized use of a person’s name or likeness for a commercial purpose. The right of publicity is most often asserted by celebrities, but most state statutes grant all individuals this right. There is also “a critical distinction between a commercial transaction for a photograph, itself, and a commercial transaction where a photograph is used to promote or sell another product or service.”⁸⁰

Jennifer Rothman, a leading scholar on the right of publicity, has argued that though copyright and the right of publicity both strive to protect creative artists and to incentivize them to create works, the two rights seriously conflict.⁸¹ Rothman argued that the right of publicity “conflicts not only with explicit provisions of the Copyright Act, but also with the implicit grant of affirmative rights to copyright holders and the public,” particularly because the right of publicity has grown to cover “persona,” so the scope of the right has expanded beyond just an individual’s name or likeness.⁸² One’s “persona” could be implicated in a use where a viewing audience is simply reminded of the person even when neither the person’s name nor likeness is used.⁸³

Section 301 of the Copyright Act sets out a test to determine whether copyright law preempts a state law claim, such as a right of publicity claim: the content of the protected right must fall within the subject matter of copyright as specified by sections 102 and 103 of the Copyright Act, and the right asserted under state law must be “equivalent to any of the exclusive rights within the general scope of copyright” as specified by section 106 of the Copyright Act.⁸⁴ Therefore, while causes of action under a state’s right of publicity can be brought concurrently with a cause of action for copyright infringement, copyright law does not necessarily preempt right of publicity claims. Though an argument that the state-based right of publicity is preempted by federal copyright law exists, most judicial decisions have rejected it.⁸⁵ The Sixth and Ninth Circuits, as well as some district courts, have concluded that section 301, the Copyright Act’s explicit preemption clause, never preempts the right of publicity because the right of publicity is generally not equivalent to the rights protected by the Copyright Act.⁸⁶ While there is no categorical preemption of right of publicity claims, there have been individual cases in which the right was preempted; for example, in Fleet v. CBS, Inc., an actor in a movie attempted to use his right of publicity to thwart a copyright owner from exploiting its property.⁸⁷ In Fleet, because the individuals only sought to block CBS from reproducing and distributing their performances in a film, their claims were preempted by federal copyright law since the film came within the subject matter of copyright protection and their claim was equivalent to an exclusive right within the general scope of copyright.⁸⁸

Many rights of publicity cases also involve causes of action for copyright infringement under the DMCA,⁸⁹ which is analogous to the CDA in that the DMCA immunizes providers from some lawsuits involving third-party content. In passing the DMCA, Congress “sought to provide a safe harbor against copyright liability for the normal operations of online service providers.”⁹⁰ The DMCA established certain safe harbors to “provide protection from liability for: (1) transitory digital network communications; (2) system caching; (3) information residing on systems or networks at the direction of users; and (4) information location tools.”⁹¹ The DMCA provides “safe harbors” to covered providers who remove content after being notified that the content may violate federal copyright law.⁹² To be protected from lawsuits premised on hosting potentially infringing content, the DMCA requires the person notifying a service provider of copyright infringement to submit a statement “under penalty of perjury identifying the allegedly infringing material and providing a good-faith assertion that the use of the material is unlawful.”⁹³ Then, the provider hosting the allegedly infringing content must decide whether to accept the notice and remove the material or ignore the notice and risk liability.⁹⁴ The DMCA both incentivizes the provider to take down the material by granting immunity to providers that do so, which creates a risk that providers will take down lawful material in order to avoid liability, as well as provides a process for the user who posted the allegedly infringing content to challenge the initial notice, in which case the provider may be able to replace the initial post and retain immunity if there is sufficient “counter notification.”⁹⁵

The most significant difference between the CDA and the DMCA is the DMCA’s requirement that the provider lack knowledge of the infringing material to be protected. Section 230 of the CDA immunizes providers for hosting both lawful and unlawful third-party content regardless of whether the provider has notice of allegedly unlawful user-generated content.⁹⁶ For example, Perfect 10, Inc. v. CCBill LLC, in which the owner of a subscription website for adult entertainment alleged interactive service providers violated copyright and right of publicity laws among others by providing services to websites that posted stolen images, involved both the safe harbors from DMCA and the question of whether a claim under the right of publicity was barred by section 230 of the CDA.⁹⁷ Because the DMCA sets a significantly higher threshold for providers to qualify for immunity, the Ninth Circuit first analyzed whether the providers met the threshold conditions set out in section 512(i) and then determined whether the providers could qualify for any of the safe harbors established in subsections (a) through (d).⁹⁸ Ultimately, the provider was not eligible for immunity because it was not enforcing its DMCA policy.⁹⁹ The district court stated that “the DMCA’s protection of an innocent service provider disappears at the moment the service provider loses its innocence, i.e., at the moment it becomes aware that a third party is using its system to infringe.”¹⁰⁰

In contrast to the complex and thorough examination of the requirements set forth by the DMCA to be shielded from liability, the question of whether the right of publicity claim was barred by section 230 of the CDA was quickly and succinctly handled on its face as the Ninth Circuit held the claim did not fit within the intellectual property carve-out.¹⁰¹ Perfect 10 clearly illustrates some of the significant differences in the liability shields granted through the DMCA and the CDA. Though the statutes are entirely distinct from one another, scholars have advocated for CDA reform, in part because as it is, section 230 allows interactive service providers to avoid liability even if they are aware of and profit from illegal content, so long as the provider itself is not the author of the material.¹⁰²

II. SECTION 230 OF THE COMMUNICATIONS DECENCY ACT

A. Legislative History and Intent

Before Congress enacted section 230 of the Communications Decency Act,¹⁰³ it enacted a subsection of the Telecommunications Act of 1996¹⁰⁴ in order to protect internet platforms from liability for third-party content. Common law had created a much different legal standard. In Stratton Oakmont v. Prodigy Services, a defamation case involving the “Wolf of Wall Street,” Jordan Belfort, in which an anonymous user wrote on Prodigy’s online message board that Belfort’s brokerage had engaged in criminal and fraudulent acts, the New York Supreme Court held that the message board was a “publisher” and moderating some posts and establishing guidelines for impermissible content meant that the message board was liable.¹⁰⁵ Thus, an internet platform would bear no liability for illegal context created by its users, but this protection did not extend to a platform that moderated user-created content.¹⁰⁶ This created a policy-poor incentive in that platforms could adopt an “anything goes” model for user-created content to avoid open-ended liability.¹⁰⁷ In response, then-Representatives Ron Wyden, a Democrat from Oregon, and Christopher Cox, a Republican from California, were concerned that this precedent would disincentivize websites to block obscene content.¹⁰⁸

Representatives Wyden and Cox were also concerned about another extreme: then-Senator James Exon (Democrat from Nebraska) proposed a bill in the summer of 1996 to ban “anything unsuitable for minors from the internet.”¹⁰⁹ Senator Exon’s bill, which passed in the Senate with eighty-four votes in favor and sixteen votes opposed, cast an extremely wide net as “anyone who posted any ‘indecent’ communication, including any ‘comment, request, suggestion, proposal [or] image’ that was viewable by ‘any person under 18 years of age,’ would become criminally liable, facing both jail and fines.”¹¹⁰ Moreover, the bill went so far as to criminalize the mere transmission of such content.¹¹¹ Representatives Wyden and Cox responded and proposed their own bill that was intended to protect speech and privacy on the internet from government regulation and “incentivize blocking and filtering technologies that individuals could use to become their own censors in their own households.”¹¹² Representative Wyden emphasized that “parents and families are better suited to guard the portals of cyberspace and protect our children than our Government bureaucrats,” and argued against federal censorship of the internet.¹¹³ This way, content creators would be liable for compliance with all civil and criminal laws relating to their content, but this responsibility would not shift to internet platforms, “for whom the burden of screening billions of digital messages, documents, images, and sounds would be unreasonable—not to mention a potential invasion of privacy.” Instead, platforms are permitted to review and moderate some content in the course of enforcing rules against obscene content while still maintaining a broad liability shield.¹¹⁴ This measure received 420 yeas and four nays in the House of Representatives, and Congress ultimately passed its version of the Telecommunications Act—with both the contradicting Cox-Wyden amendment and Exon amendment.¹¹⁵ However, within a year of the statute’s enactment, the Exon amendment was struck down by the Supreme Court, which unanimously held that the Exon amendment created an unacceptable burden on adult speech because “[i]n order to deny minors access to potentially harmful speech, the CDA effectively suppresses a large amount of speech that adults have a constitutional right to receive and to address to one another.”¹¹⁶ Ironically, because Exon’s legislation and Cox-Wyden’s legislation were merged into the same legislative title, after Exon was declared unconstitutional, the Cox-Wyden amendment became section 230 of the Communications Decency Act, the exact name of the legislation that it was designed to rebuke.¹¹⁷ When section 230 was enacted in 1996, less than half of Senators and only a quarter of House Representatives even had email addresses.¹¹⁸ Though people likely generally understood the burgeoning significance of the internet, it was probably hard to foresee exactly how important user-generated content would become to everyday lives and activities or even the sheer volume of internet traffic.¹¹⁹

Overall, section 230 serves three core purposes. First, it “maintain[s] the robust nature of internet communication and, accordingly . . . keep[s] government interference in the medium to a minimum.”¹²⁰ Second, the immunity provided by section 230 “protects against the ‘heckler’s veto’ that would chill free speech,” as without section 230, individuals could threaten litigation against interactive computer service providers, which would be forced to choose to either remove the content or face litigation costs and potential liability.¹²¹ Third, section 230 encourages interactive computer service providers to self-regulate “offensive” material as a response to the holding in Stratton Oakmont, in which the provider of an electronic message-board service was “potentially liable for its user’s defamatory message because it had engaged in voluntary self-policing of the third-party content.”¹²² However, the broad immunity shield granted to providers has arguably led to disincentivize providers from self-regulating.¹²³

Judicial interpretation of section 230 is crucial to determine whether platforms such as Facebook, Reddit, Imgur, and others could be liable for the infringing actions of third-party users. Section 230 unambiguously provides immunity to providers and users of interactive computer services from liability for subject matter generated by third parties as (c)(1) states, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”¹²⁴ Though “immunity” or a synonym is not explicitly included in section 230(c)(1), reviewing courts have recognized the provision to protect interactive service providers for the display of content created by someone else.¹²⁵ The main purpose of section 230 is to bar “lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions—such as deciding whether to publish, withdraw, postpone, or alter content.”¹²⁶ In Zeran v. AOL, which was decided shortly after the CDA was enacted, the Fourth Circuit heard a defamation claim against America Online (“AOL”) alleging “that AOL unreasonably delayed in removing defamatory messages posted by an unidentified third party, refused to post retractions of those messages, and failed to screen for similar postings thereafter,” but held that the CDA squarely barred the claim.¹²⁷

Section 230 defines an “interactive computer service” as “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet.”¹²⁸ This broad definition covers many entities operating online, including broadband internet access providers (such as Verizon FIOS and Comcast Xfinity), internet hosting companies (such as DreamHost and GoDaddy), search engines (such as Google and Yahoo!), online messaging boards, and many varieties of online platforms.¹²⁹ An “information content provider” is “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.”¹³⁰ Thus, section 230 distinguishes those who create content from those who provide access to that content, providing a broad liability shield to the latter group.¹³¹

It is undisputed that section 230(c)(1) of the CDA is limited by section 230(e)(2), which requires courts to “construe Section 230(c)(1) in a manner that would neither ‘limit or expand any law pertaining to intellectual property.’ ”¹³² However, there are conflicting interpretations of section 230(e)(2) of the CDA. This discrepancy is the focus in many rights of publicity cases and other cases rooted in state causes of action, such as Hepp v. Facebook. In determining whether section 230(e)(2) applies, courts have sometimes looked not only to whether the plaintiff is suing under a law that generally involves intellectual property issues, but more specifically, whether the plaintiff’s claim actually involves an intellectual property right.¹³³ It is significant to note that protection of intellectual property rights on internet platforms is limited by federal protections, such as the safe harbor provisions of section 512 of the DMCA.¹³⁴ These safe harbors give providers a broad liability shield from indirect liability for copyright infringement by third-party users, which is relevant here as these safe harbors could potentially be interpreted to indicate congressional intent to protect platforms against liability for intellectual property infringement by third-parties. Because both statutes were enacted in the late 1990s, there has been debate over whether they should still exist in their current form, as the internet is nearly unrecognizable as compared to the late 1990s.

B. Arguments that Subsection (E)(2) Should Be Interpreted to Be Limited to Federal Intellectual Property Laws

In three relatively short paragraphs, the Ninth Circuit directly addressed in 2009 whether the intellectual property carve-out in section 230(e)(2) should open up interactive computer service providers to liability for claims under state right of publicity statutes in Perfect 10, Inc. v. CCBill LLC and ultimately held that it should not.¹³⁵ The Ninth Circuit revisited the issue in 2019 in Enigma Software Group USA, LLC v. Malwarebytes, Inc., and affirmed its prior conclusion.¹³⁶

Section 230 states that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider,” and expressly preempts any state law to the contrary,¹³⁷ so the majority of federal circuits have interpreted section 230 to establish “broad ‘federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.’ ”¹³⁸ There is no express definition of “intellectual property” in the CDA, and there are many types of laws that could arguably be characterized as intellectual property claims.¹³⁹ The Ninth Circuit reasoned that while the scope of federal intellectual property laws is “relatively well-established,” state laws governing intellectual property claims significantly differ and do not provide analogous uniformity. Therefore, construing “any law pertaining to intellectual property” in subsection (e)(2) to literally mean any intellectual property law, including state laws, would open up interactive computer service providers to a massive amount of liability with extremely unpredictable litigation.¹⁴⁰ To avoid this, the Ninth Circuit held that the term “intellectual property” should instead mean “federal intellectual property” in order to protect Congress’s “expressed goal of insulating the development of the Internet from the various state-law regimes.”¹⁴¹ Furthermore, regarding the right of publicity specifically, there is an argument that the publicity rights do not constitute intellectual property rights for the purposes of the liability carve-out, in which case subsection (e)(2) would be irrelevant and right of publicity suits would be barred by section 230(c)(1).

This concern is certainly valid with respect to right of publicity claims; as noted above, of the twenty-five states that have actually granted statutory protection to an individual’s right of publicity, there are vast discrepancies between state statutes, including the scope of the right, who may assert a claim, and the duration of the right.¹⁴² However, websites and their respective contents are accessible in all fifty states at any given time. Thus, if section 230 does not immunize interactive computer service providers from causes of action stemming from right of publicity statutes, each state with relevant legislation could potentially have a different outcome. For example, if potentially infringing content used only an individual’s voice for a commercial purpose without the individual’s consent, it would be actionable only in Alabama, California, Hawaii, Indiana, Illinois, Nevada, New York, Ohio, Oklahoma, South Dakota, Texas, and Washington, but likely not in Florida, Kentucky, Massachusetts, Nebraska, Pennsylvania, Rhode Island, Tennessee, Utah, Virginia, or Wisconsin.¹⁴³ Even states that would allow this claim to proceed have different required elements regarding who may bring the claim and the duration of the right, among others, and even if an individual were able to successfully assert their right and win their case, these statutes grant different remedies.¹⁴⁴ Overall, allowing section 230(e)(2) to include the state right of publicity laws within the intellectual property exception could open up interactive computer service providers to a massive amount of unpredictable liability. Again, because the internet is accessible throughout the country, these providers would be required to comply with the most restrictive state’s standards to avoid liability.

Additionally, states also have different choices of law and jurisdictional reaches that could lead to forum-shopping. For instance, the broad choice of law and jurisdictional reach of the Indiana statute, collectively with the statute’s “expansive scope of protection and purported applicability to non-domiciliaries and deceased individuals, opens up Indiana courts for suits brought by many individuals who might not have a cause of action in their home states.”¹⁴⁵ Though forum-shopping would likely not pose a significant risk if the relevant statute requires that an individual seeking to assert a claim be domiciled in that state as an individual can only be domiciled in one state, it is still a possibility, particularly if the statute does not limit who may assert a claim in the state or if the allegedly infringing content in question involves multiple individuals. For example, because the Indiana right of publicity statute specifies that it “applies to an act or event that occurs within Indiana, regardless of a personality’s domicile, residence, or citizenship,” an individual who may not meet the required elements of another state’s statute could be incentivized to assert their right in Indiana instead.¹⁴⁶ This possibility could force entities that utilize others’ personality rights to comply with Indiana’s statute over others.

Alternatively, individuals who split their time between different states may raise a question of domicile. For example, in a series of cases involving who could control the commercial use of the iconic photograph of Marilyn Monroe standing over a subway grate with her white skirt blowing up around her from the film The Seven Year Itch, because Monroe split her time, work, and property ownership between New York and California, the significant differences in the state law made the question of domicile critical.¹⁴⁷ Eventually, the Monroe estate lost its rights in Monroe’s identity because the court determined that Monroe’s domicile resulted in the application of New York law.¹⁴⁸

In Perfect 10, the Ninth Circuit most likely implicitly categorized the right of publicity as intellectual property because it considered whether the California statute protecting the right of publicity should be included in the Section(e)(2) exception and concluded it should not.¹⁴⁹ The Ninth Circuit stated that “[s]tates have any number of laws that could be characterized as intellectual property laws: trademark, unfair competition, dilution, right of publicity and trade defamation.”¹⁵⁰ Due to the nature of the inconsistency of state laws, “no litigant will know if he is entitled to immunity for a state claim until a court decides the legal issue.”¹⁵¹

The California right of publicity statute is distinct from the right of privacy and stresses the economic value of an individual’s persona as property,¹⁵² which aligns with the general consensus that the right of publicity is a property right rather than a personal one. However, this is not true for all states. Because the right of publicity originally stemmed from a privacy theory, some states have retained this classification. In New York, for instance, the current statute is titled the “Right of Privacy,” and as such, is concerned with protecting an individual’s identity rather than unfair competition.¹⁵³ Despite the fact that Haelan was the first to recognize that a right of publicity existed separately from the right of privacy under New York law in 1953, the current New York statute is relatively limited compared to other states.¹⁵⁴ If the right of publicity is not rooted in a theory of property, “then the right clearly may be made the subject of license or waiver, but cannot have independent, exclusive, alienable, or divisible characteristics.”¹⁵⁵ However, if the right of publicity is defined as a property right, then the right may be “assignable, survivable, descendible, and even taxable.” This difference was another significant issue in the series of Marilyn Monroe cases described above; because New York law applied, issues of assignability resulted in the Monroe estate losing its rights in Monroe’s identity.¹⁵⁶ Somewhat similarly, a New Hampshire trial court held that three right-of-privacy torts, including “intrusion upon seclusion, publication of private facts, and casting in a false light,” involved rights that could not be considered property rights.¹⁵⁷ Thus, the claims did not fit within the intellectual property carve-out and section 230 barred the claims.¹⁵⁸

Theoretically, if the right of publicity is not actually classified as intellectual property, section 230(e)(2) would not apply and right of publicity claims brought in those states would unquestionably be barred. Despite considering the intellectual property carve-out of section 230, the Ninth Circuit declined to explicitly define what constitutes “intellectual property” or reference a definition of the term in Perfect 10 and instead construed the term narrowly to advance the CDA’s express policy of providing broad immunity.¹⁵⁹ Conversely, the Third Circuit applied multiple definitions of intellectual property, including one from Black’s Law Dictionary that defines the term as a “category of intangible rights protecting commercially valuable products of the human intellect. The category comprises primarily trademark, copyright, and patent rights, but also includes . . . publicity rights.”¹⁶⁰ The intellectual property system aims to strike a good balance between the interests of innovators and the wider public in order to “foster an environment in which creativity and innovation can flourish.”¹⁶¹

Interestingly, this is very similar to Congress’s stated purpose behind section 230 of the CDA. Even in 1996, the internet was already a valuable tool for society that offered significant opportunities for people to both create and express content, as well as learn from the massive amount of information available, so Representatives Cox and Wyden wanted to strike an analogous balance to the intellectual property system. By shielding interactive computer service users and providers from liability and allowing them to moderate user-generated content so long as they do not participate in the generation of allegedly infringing content in any way, section 230 was designed to balance innovation and public interest of free speech online.¹⁶² The precarious balance of these significant competing interests could be greatly threatened if section 230(e)(2) were interpreted to include state right of publicity laws because internet platforms would be subject to liability in an ever-evolving and incredibly inconsistent doctrine of law.

Right of publicity actions involve both confusion-based and association-based relationships. Confusion-based relationships include situations “where a person’s name or likeness is used in commercial advertising, creating a likelihood that consumers will believe the person endorses or approves of the advertised product.”¹⁶³ Association-based relationships, on the other hand, are “mere references that conjure associations with a person [but] do not automatically create a likelihood that consumers will be confused as to whether the person endorses or approves of the product.”¹⁶⁴ Because confusion-based relationships are already protected by the broad scope of trademark and unfair competition law, these types of claims do not necessarily need to be brought under state right of publicity law in order to fit within the subsection (e)(2) intellectual property exemption.¹⁶⁵ For example, celebrities and public figures can register their names as a trademark or service mark under federal trademark law.¹⁶⁶ As described above in White, Vanna White brought a likelihood of confusion claim under the Lanham Act and the Ninth Circuit found that the provided evidence was sufficient to present a genuine issue of material fact.¹⁶⁷ Similarly, unfair competition acts can be brought under federal trademark law even without a registered trademark.¹⁶⁸ Thus, analogous cases involving confusion-based relationships can be brought under the Lanham Act as it provides nationwide coverage, a clear remedy, and a wide scope of damages. Such claims would not be barred by section 230 because under either interpretation of subsection (e)(2), the Lanham Act would clearly fit within the statutory exemption for intellectual property. Therefore, plaintiffs such as White may have some recourse available to them even if the circuit split on the interpretation of subsection (e)(2) is resolved to bar state right of publicity laws. However, this case was decided in 1992, so the CDA had not yet been enacted. The next relevant question would be to determine whether interactive service providers might still be entitled to immunity for violations of specific provisions of the Lanham Act. In a more recent case, the Ninth Circuit held that despite the fact that the Lanham Act generally deals with intellectual property—for example, trademarks—the intellectual property carve-out in section 230(e)(2) “does not apply to false advertising claims brought under [section] 1125(a) of the Lanham Act, unless the claim itself involves intellectual property.”¹⁶⁹

Overall, the Ninth Circuit declined to include rights of publicity protected by state law within the “intellectual property” exemption because doing so would “fatally undermine the broad grant of immunity provided by the CDA.”¹⁷⁰ Despite the isolated language in section 230(e)(2), reading section 230 holistically leads to the conclusion that courts should defer to the legislative intent and purpose of creating a “vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by . . . State regulation.”¹⁷¹ Thus, to interpret section 230(e)(2) to include diverse state intellectual property laws, particularly those regarding the right of publicity, would mean that entities otherwise entitled to CDA immunity would be forced to endure litigation costs for extremely unpredictable state laws, defeating the purpose and policy goals of section 230.

C. Arguments that Subsection (E)(2) Should Be Interpreted to Include State Intellectual Property Laws

In contrast, the Third Circuit recently addressed whether state right of publicity laws should be included in the intellectual property exemption in Karen Hepp’s appeal and concluded that “a state law can be a law pertaining to intellectual property, too.”¹⁷² Despite the Ninth Circuit’s holding in Perfect 10, the Third Circuit reasoned that the plain language of section 230(e)(2) is clear. If Congress had actually intended for the intellectual property exemption to be limited to federal law, “it knew how to make that clear, but chose not to.”¹⁷³

The Third Circuit’s holding builds off Universal Communication Systems, Inc. v. Lycos, Inc., the first case to address whether section 230 precludes intellectual property laws. First Circuit case was decided shortly before Perfect 10 in which there were alleged violations of federal law as well as trade name dilution in violation of Florida law.¹⁷⁴ In Universal Communication, the First Circuit held “[c]laims based on intellectual property laws are not subject to section 230 immunity,” so it addressed the dilution claim separately.¹⁷⁵

The Third Circuit also considered district court cases that interpreted section 230(e)(2), including Atlantic Recording Corp. v. Project Playlist, Inc.¹⁷⁶ In Atlantic Recording, record companies asserted copyright claims under both state and federal law, and the court reasoned that because Congress specified whether local, state, or federal law applied four times in subsection (e), Congress did not intend to limit the intellectual property exemption to only federal law.¹⁷⁷ Therefore, in Hepp, the Third Circuit found that because Congress knew how to cabin the interpretation about state law and did so explicitly, “the structure does not change the natural meaning.”¹⁷⁸ Atlantic Recording did not involve any DMCA safe harbors, but other such cases that involve allegedly infringing third-party user content could consider the interaction between the CDA intellectual property exception and the DMCA safe harbors to determine whether interactive service providers might still be immune from liability.¹⁷⁹

While it is true that section 230 generally created a pro-free-market policy, the statute’s policy goals do not necessarily swallow state intellectual property rights because state property rights can also facilitate market exchange. The Third Circuit noted that because the natural reading of section 230(e)(2) would include state law, “policy considerations cannot displace the text.”¹⁸⁰ Even so, the Third Circuit stated that policy could cut the other way even outside section 230’s text: “if likeness interests are disregarded on the internet, the incentives to build an excellent commercial reputation for endorsements may diminish.”¹⁸¹

The Third Circuit also considered whether Hepp’s claims actually arose from a law pertaining to intellectual property, and concluded that they do.¹⁸² Black’s Law Dictionary defines “intellectual property” to include publicity rights, and both legal and lay dictionaries treat “intellectual property” as a compound term.¹⁸³ The court also applied a test from another legal dictionary, Bouvier’s, which the Pennsylvania right of publicity statute satisfies.¹⁸⁴ Overall, there is substantial evidence to support the conclusion that at least Pennsylvania’s statutory right of publicity falls within the definition of intellectual property.¹⁸⁵ Moreover, the Third Circuit considered the only Supreme Court case to address the right of publicity, Zacchini v. Scripps-Howard Broadcasting Co., which analogized the right of publicity to patent and copyright law because the right of publicity focuses “on the right of the individual to reap the reward of his endeavors and [has] little to do with protecting feelings or reputation.”¹⁸⁶ As analyzed above, the right of publicity and trademarks are relatively analogous for confusion-based relationships. The Florida Supreme Court articulated the harm caused by a right of publicity violation by “associat[ing] the individual’s name or . . . personality with something else.”¹⁸⁷ Thus, the legal definition including trademark also supports the conclusion that the right of publicity is intellectual property.

However, Judge Cowen dissented in Hepp and stated that he “believe[s] that the ‘intellectual property’ exception or exclusion to immunity under § 230(e)(2) . . . is limited to federal intellectual property laws (i.e., federal patent, copyright, and trademark laws) and—at most—state laws only where they are co-extensive with such federal laws.”¹⁸⁸ Judge Cowen argued that despite the fact that the majority implied there was an existing circuit split between the First and Ninth Circuits due to Universal Communication and Perfect 10, Hepp actually created the circuit split because in Universal Communication neither party actually raised the issue of whether state law counts as intellectual property under section 230 and the First Circuit seemingly assumed it did.¹⁸⁹ Ultimately, Judge Cowen supported the Ninth Circuit’s approach for the reasons analyzed in Section II.B and stated that “the more expansive interpretation would gut the immunity system established by Congress and undermine the policies and findings that Congress chose to codify in the statute itself.”¹⁹⁰ Furthermore, on October 21, 2021, Facebook requested that the Third Circuit re-hear the Hepp appeal en banc, arguing that the “ ‘majority’s decision misread the intellectual property exception to the immunity established by section 230 of the Communications Decency Act (CDA) creating a conflict with’ the Ninth Circuit, and ‘ignores a key textual feature and downplays the contextual and structural features of the statute.’ ”¹⁹¹

D. Arguments for Section 230 Reform and Proposed Changes

The above arguments and analyses of section 230 of the CDA are applicable in its current state, but section 230 as a whole has recently come under fire from both sides of the political aisle. There have been calls to amend or even repeal the statute.¹⁹² Many on the left have criticized section 230 because they believe it has “enabled tech platforms to host harmful content with impunity,” while many on the right argue that it has allowed tech platforms to disproportionately suppress conservative speech and perspectives.¹⁹³ The law arguably allows bad actors to hide behind the law’s liability shield and prevents harmed users, such as Karen Hepp, from holding internet platforms accountable. In the 116th congressional session, twenty-six bills were introduced that would have amended the scope of section 230 immunity, and the bills had an extremely wide range of proposed changes, such as reducing the scope of immunity in certain types of cases, placing conditions on immunity, or repealing the statute entirely.¹⁹⁴ Currently, there are fourteen bills that have been introduced for the 117th congressional session related to section 230, but none of the proposals are related to the judicial interpretation or scope of the intellectual property exception to immunity within subsection (e)(2).¹⁹⁵

There is also a question of executive authority in whether the Federal Communications Commission (“FCC”) has regulatory authority to implement section 230. Congress passed the CDA as part of the Telecommunications Act of 1996, which in turn amended the Communications Act of 1934, a statute administered by the FCC.¹⁹⁶ The National Telecommunications and Information Administration (“NTIA”) filed a petition in 2020 that provides the FCC with an opportunity to consider its rulemaking authority.¹⁹⁷ To clarify the FCC’s role in administering section 230, Congress could grant an express delegation or disavowal of authority.¹⁹⁸ A delegation would give the FCC a statutory basis for promulgating regulations while a disavowal would prohibit the FCC from attempting to regulate under section 230.¹⁹⁹

Legislative action on section 230 in any shape or form could have significant and unintended consequences. Since section 230 was passed in 1996, it has been considered to be the “cornerstone of online expression” and has been referred to as the “[twenty-six] words that created the internet” and the internet’s “Magna Carta.”²⁰⁰ The internet has grown exponentially and has influenced daily public life considerably since the statute was enacted in 1996, so a fundamental change to section 230 could change the internet as we know it, and even a small change to section 230 could have a substantial ripple effect. For example, social media operators could potentially adjust their content moderation practices to comply with reforms, ranging from aggressively screening content to not moderating any content, including content that may be considered objectionable or obscene to most users. On the other hand, if section 230 were to remove immunity for certain types of content, it does not necessarily mean that providers or users will actually be liable for such content; it simply means that section 230 would not bar liability. Thus, providers could continue to host potentially obscene or objectionable content if they believe the benefits of hosting such content would outweigh potential litigation costs, particularly if lawsuits are unlikely or providers believe they have a strong likelihood of prevailing in a suit.²⁰¹ This could be a move to bring the reality of section 230 closer to its original congressional intention of creating a free-market system.

Overall, despite the heated debate over section 230, there have not been any proposed changes that have been close to being implemented. The extremely wide range of proposed changes also means that their implications on section 230 generally, as well as the right of publicity specifically, are ironically very unpredictable. Therefore, the circuit split on the interpretation of subsection (e)(2) and whether state right of publicity claims should be barred will continue to be a noteworthy issue until Congress acts, whether through amendments, repealing the statute entirely, or more directly providing guidance on the relatively narrow subject of the right of publicity.²⁰²

CONCLUSION

The explicit statutory language of section 230 of the CDA supports the Third Circuit’s interpretation of subsection (e)(2), the intellectual property exception to immunity. Within subsection (e), Congress specified whether federal, state, or local law applied in four instances, so we must defer to the express language and assume that Congress chose not to limit subsection (e)(2) to only federal intellectual property laws. The general consensus among the legal community is that the right of publicity falls under the umbrella of intellectual property, so the literal interpretation of section 230 should not bar right of publicity claims brought under state statutes. Unless or until Congress clarifies what should be included within this exception to the broad liability shield protecting interactive service providers or takes some other action, the Third Circuit’s interpretation will likely be upheld.

Overall, however, it would make the most sense to interpret section 230(e)(2) in the way that aligns most closely with the legislative intent and history of the statute as a whole to avoid fundamentally crippling the statute by exposing interactive service providers to liability from extremely varied state statutes relating to the right of publicity. The Third Circuit’s interpretation could very likely create an exception that swallows the whole statute. Assuming the right of publicity constitutes intellectual property, under the Ninth Circuit’s interpretation to protect the integrity of section 230, right of publicity claims should be barred so long as providers do not participate in the creation of the allegedly infringing content. This would maintain uniformity and predictability throughout the court system. The Ninth Circuit’s interpretation is thus most beneficial to interactive service providers such as Facebook and most frustrating to individuals who feel they have been harmed by allegedly infringing content on internet platforms, such as Karen Hepp. Such individuals could potentially attempt to redress this harm through other types of claims, such as copyright or trademark. These two examples would undoubtedly constitute intellectual property laws, and claims under federal law would be doubly effective against section 230’s broad shield, but alleged infringements of the right of publicity do not always meet the required elements for such claims. Furthermore, providers could be immune from liability through other statutes, such as the safe harbors from the DMCA, so individuals may be left without a remedy. There is no clear balance or solution to these concerns in the current form of section 230 of the CDA.

The severe implications of the Third Circuit’s seemingly “correct” interpretation could strongly incentivize Congress to clarify either the scope of subsection (e)(2) or separately protect the right of publicity in order to avoid the purpose and intent behind section 230 of the CDA. Many scholars have advocated for a federal statute or a uniform act to protect the right of publicity. Federal codification of the right of publicity would create uniform and equal protections to individuals across the entire country, as opposed to the current state statutes that have created extremely varied interests in the right. A federal statute or uniform act would also drastically reduce the economic costs created by uncertainty in litigation. Finally, unauthorized uses of individuals’ “personas,” including name and likeness, are becoming increasingly more common due to improvements in technology and the expansion of social media. This type of action would balance the interests of wanting to protect both the public’s right of publicity and interactive service providers from liability for user-generated content. Ultimately, due to the complex and time-intensive nature of Congressional processes, any proposed change, if any, to section 230 may not be established for some time, so there is likely going to be substantial consequences and potentially a wave of lawsuits for alleged violations of the right of publicity in the wake of the Third Circuit’s holding in Hepp.

96 S. Cal. L. Rev. 449

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Courtney Kim*

* J.D., University of Southern California Gould School of Law, 2023. B.A., University of California, Los Angeles, 2020.

Affirmative Acting: The Role of Law in Casting More Actors With Disabilities (A Note in Five Acts)

May 2023May 2023Kira Patterson*

SETTING THE STAGE: INTRODUCTION

“Always find your light.” This is a common piece of advice given to theater artists, encouraging them to make sure they can be seen on stage.¹ But who gets the chance to grace the stage in the first place? Our society has recently begun to actively ask new questions about equity and visibility. In the context of theater, we have largely focused not on who is on the stage, but on how theater productions can be enjoyed equitably. To answer these questions, we have turned to effectuating and enforcing the standards set forth in the Americans with Disabilities Act (“ADA”).²

Over the thirty years since the ADA was passed, and even more concertedly following the Act’s 2008 amendments,³ theaters have begun to reserve sections of the house⁴ for patrons with wheelchairs and to renovate facilities to create ADA-compliant restrooms for audience members.⁵ However, while the ADA has prompted great strides in improving theatergoers’ ability to access productions, figuring out how to apply the ADA to the people on the stage is another question altogether.⁶

While audience accessibility is a tremendous step forward in ensuring that enjoyment of theater productions does not exclude people who cannot easily access and navigate unwelcoming spaces, the time has come to turn the spotlight back towards the stage. We need to turn our attention to creating and nurturing structures allowing for equal access for theater performers—specifically, for the purposes of this Note, those with disabilities. Pushes in the theater world to pinpoint and remedy gender and racial inequities have become much more prevalent in recent years,⁷ and rightfully so, but we must not leave those with disabilities out of the discussion. As it is, “disability is too often an afterthought, if it is thought of at all.”⁸

Indeed, Actors’ Equity Association (“AEA”), the union for actors and other theater makers,⁹ even reported that barely 1% of contracts they issued from 2016 to 2019 went to artists who self-reported living with a disability.¹⁰ AEA also estimated that about a quarter of Americans live with at least one disability.¹¹ If you compare these statistics (about 25% of Americans have disabilities, but only about 1% of theater jobs offered over the course of three years went to artists who reported living with disabilities), the problem should begin to crystallize: Why are we not seeing representation of people with disabilities on stage at the same rates as in society?

While data on disability representation on stage is scarce, we can look to data collected in theater’s more closely studied sister entertainment industries of television and film to get a sense of what levels of representation in the theater might look like. For instance, in the sphere of network television in 2018, only 22% of characters with disabilities were actually portrayed by an actor with the same disability; for streaming services, this number decreased to 20%.¹² The unfortunate result gleaned from this study and studies like it is that the overwhelming majority of characters with disabilities—at least in the context of film and television—continue to be portrayed by actors without disabilities.¹³ The first time an Emmy was awarded to a show starring people with disabilities was not until 2016,¹⁴ and the number of actors with disabilities who have ever won an Oscar can be counted on one hand.¹⁵ These statistics truly pull back the curtain on an entertainment industry that does not tend to value actors with disabilities.

There is reason to believe the statistics are just as grim in the theater. For instance, it was not until 2019 that an actor in a wheelchair (Ali Stroker) first won a Tony award (for her tremendous performance in a revival of the classic Broadway hit Oklahoma!).¹⁶ This lack of representation begs the question of why, as society finally begins to converse more openly about equity, “disability” is still so often excluded from the discussion.¹⁷

This Note will attempt to answer that question—and explore what role law could play in arriving at a solution—through a variety of lenses, including the ADA and employment discrimination law. It will set the proverbial stage by laying out the history of disability discrimination in theater and entertainment, after which it will discuss relevant federal and state sources of disability and employment law. The Note will then make the case—by looking at potential legal remedies¹⁸—that in the subjective world of theater, the way to increase representation of actors with disabilities on stage is not a simple legal fix; instead, it will likely take a combination of changes—attitudinal, legal, and otherwise—working in tandem in the theater industry to get more actors with disabilities on stage. And while making these moves in the direction of inclusion and equity on stages across the country would certainly advantage actors with disabilities, it would also benefit society at large: theater that reflects our tapestried reality “is simply better, richer, [and] more rewarding when it is by, for, and about all of us.”¹⁹

ACT I. HISTORY OF DISABILITY IN PERFORMANCE

All too often, actors with disabilities are excluded from the audition room; much—if not most—of the time, actors with disabilities do not get invited to audition at all, regardless of the disability status of the role in question.²⁰ And if the actor has made it into the audition room? That is only the first part of the journey. Next comes the actual casting of the role, where no matter how many talented actors have made it into the room to audition for a single part, only one person leaves with the job. Even once actors with disabilities make it through the door to get seen by the director, the odds are against them in terms of actually landing a role.

Recent Broadway shows that have main characters who have disabilities provide a good look into the regularity with which actors with disabilities get passed over for roles, while actors without disabilities gain more access to those roles. Broadway productions of relatively well-known shows that fit this description are not hard to find. The Curious Incident of the Dog in the Night-Time tells the story of a young man on the autism spectrum, and yet the 2015 Broadway production nonetheless cast an actor “without autism or any other disabilities” for the role.²¹ Wicked, over its yearslong and wildly popular Broadway run, never once filled the role of Nessarose, who uses a wheelchair, with an actress with physical disabilities.²² Likewise, all of the lead roles in recent productions of The Miracle Worker and Richard III, both of which focus on main characters with physical disabilities, were portrayed by actors without physical disabilities.²³

This practice of casting actors without disabilities in the roles of characters with disabilities has come to be known, in some circles, as “disability drag.”²⁴ In fact, a whole microcosm of scholarship has developed around this idea of disability drag, which also takes to task the various tropes that seem to be intertwined in the writing of most, if not all, characters with disabilities currently on stage and screen.²⁵ This area of academic investigation and rumination asks us to reframe the way we think about characters and people with disabilities: “What if their disability weren’t the thing to overcome but merely one element of one’s identity?”²⁶ Nonetheless, on the whole, society appears to turn away from asking itself such introspective questions, especially when the alternative involves making money by casting big-name actors.

None of this means that the world of creating theater is not making some strides on its own. For instance, Deaf West Theatre’s 2015 Broadway production of the musical Spring Awakening was produced and performed in both English and American Sign Language,²⁷ with a cast comprised of “25 deaf, hard of hearing and hearing actors and musicians.”²⁸ The show was met with great success and earned multiple Tony Award nominations, including one for the highly regarded Best Revival of a Musical,²⁹ even though it was a production of a type that Broadway had never seen before.

There are also smaller theater companies popping up that have been created with the explicit goal of promoting the work of artists with disabilities. For instance, the mission of the Phamaly Theatre Company in Denver, Colorado, is “to be a creative home for theatre artists with disabilities” as well as to “model a disability-affirmative theatrical process.”³⁰ Alie B. Gorrie, an actress with low vision, describes her reaction to attending a production “filled with disabled artists, singing, dancing, and actively defying disability tropes” at the Phamaly Theatre Company as the first instance where she felt like she truly belonged in the theater.³¹ The experience, however, left Gorrie with a lingering question: Why had it taken two decades of working in the theater industry for her to feel this sense of belonging?³² Which begs the broader question: How many people who dream of working in the theater industry have already been discouraged and turned away by the lack of access and opportunities?

Despite these steps forwards, it is apparent that sidelining actors who have disabilities deprives society of a wealth of talent. We have seen how powerful performances by actors with disabilities can be and how rewarding it can be to see them in the spotlight, as evidenced in a number of recent television shows. Consider RJ Mitte, an actor with cerebral palsy playing a character with the same disability on the hit AMC show Breaking Bad.³³ More recently, think of Lily D. Moore, an actress born with Down syndrome playing a fan-favorite character with the same diagnosis in Mindy Kaling’s Netflix series Never Have I Ever.³⁴ Therefore, the question we must now be asking is what legal solutions can be utilized to ensure that Mitte and Moore are not the “token” actors with disabilities, but instead just actors. And are those legal solutions alone enough?

ACT II. LEGAL BACKGROUND

Scene 1: The Americans with Disabilities Act

One lens through which to approach the problem returns our attention to the ADA. Signed into law in 1990,³⁵ and amended in 2008 to provide broader protections for people with disabilities,³⁶ the ADA provides for protection of individuals with “a physical or mental impairment that substantially limits one or more major life activities.”³⁷ The ADA has seen much success over the years: it has empowered people with disabilities to become their own best advocates³⁸ and has modernized our built environment to promote physical accessibility.³⁹ Specifically relevant here, though, is Title I of the ADA, which concerns employment discrimination.⁴⁰

Title I of the ADA prohibits employers (including theaters)⁴¹ from “discriminat[ing] against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.”⁴² Thus, discrimination against people with disabilities in the workplace is already prohibited by law in many circumstances, according to the ADA. There are, however, two distinct points that illustrate how far we have left to go and how far short the ADA has fallen in getting us there.

First, although the ADA requires an employer to make “reasonable accommodations” for employees with disabilities,⁴³ Congress did not give a clear-cut definition of what exactly counts as a “reasonable accommodation.”⁴⁴ Instead, Congress provided examples of accommodations that could be implemented to enable “qualified individual[s]” with disabilities to perform the “essential functions” of their jobs.⁴⁵ There are no statutory limitations—financial, quantitative, or otherwise—on what constitutes a “reasonable accommodation,” other than that an accommodation that would cause an employer’s business “undue hardship” is not “reasonable.”⁴⁶ Similarly, Congress did not provide further instruction on how to determine what constitutes “undue hardship.”

This lack of guidance from Congress means that implementing the ADA can easily “become a checklist of what is or isn’t provided.”⁴⁷ In other words, it can become the “absolute minimum you can do to avoid looking like a jerk”⁴⁸ or exposing yourself to liability. Sure, you may have a wheelchair ramp in place, but does that really work to make the actors in need of the accommodation feel welcome and unburdened in their artistic journey?

This Note argues that a wheelchair ramp here and there is not enough. Instead, for actors to truly feel welcomed into the space and able to practice their craft uninhibited, the theater must ask itself questions such as, “Are we putting an extra burden on our artists with disabilities by requiring them to perform while simultaneously navigating a world that is not built for them?” and “How are we ensuring that we are hiring actors with disabilities in the first place?”

Second, while enforcing the ADA may help to ease the strain disproportionately placed on the small group of actors with disabilities who have already made their way into the rehearsal hall, what about those who have yet to be cast? Able-bodied actors are routinely cast in roles portraying people with disabilities,⁴⁹ which diminishes the number of roles available for actors with those disabilities. Further, it often “simply never occur[s]” to casting directors “to cast, or even consider, actors with disabilities in roles that don’t specify whether a character is disabled or not.”⁵⁰

Even though we are taking steps towards creating a more inclusive culture, it does appear as though we are nonetheless collectively excluding people with disabilities from that equity-driven vision of our society—even with the assistance of the ADA. So, if the ADA as it currently operates does not seem fit to truly improve diversity onstage, are there other potential legal routes?

Scene 2: Title VII of the Civil Rights Act of 1964

When it comes to the world of preventing discrimination in employment, Title VII of the Civil Rights Act of 1964⁵¹ is undoubtedly the star of the show. Since the ADA may not, on its own, provide a way to ensure that more actors with disabilities get onstage, it is worth exploring another relevant legal avenue: employment discrimination law governed by Title VII. Congress formulated this broad new civil rights bill in 1963 and took final steps towards securing the bill’s passage in 1964.⁵² Title VII notably included language banning employment discrimination because of a person’s “race, color, religion, sex, or national origin.”⁵³ While Title VII does not apply to disability discrimination, it provides some guidance as to how the ADA might be amended to address the issues discussed here.

The basic structure of a case alleging individual disparate treatment (also known as intentional discrimination) in one of the above categories has been crafted over time through case law by the Supreme Court. The so-called “burden-shifting” structure that has been created is set forth in the pivotal case of McDonnell Douglas Corp. v. Green.⁵⁴ First, a plaintiff who alleges disparate treatment under section 703(a)(1) of Title VII “because of such individual’s race, color, religion, sex, or national origin”⁵⁵ must prove their prima facie case that (1) they do indeed fall into one of those categories, (2) they applied for a job and were qualified, and (3) they were rejected by the employer.⁵⁶ Next, the employer has the chance to bring to light any “legitimate, nondiscriminatory reason” for having rejected the employee.⁵⁷ If the employer can do so, the burden shifts back to the plaintiff, who has an opportunity to prove that the “legitimate, nondiscriminatory reason” given by the employer was “pretext” for what in truth amounts to discriminatory animus.⁵⁸

Integral to this Note, however, is the language highlighted in section 703(e) of Title VII that an employer may protect itself from liability by presenting a particular affirmative defense.⁵⁹ The essence of this defense is that the employer asserts that it rightfully, and therefore legally, discriminated against this job applicant. The employer can do this by showing that it discriminated because of “religion, sex, or national origin”⁶⁰ if it can also show that “religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business.”⁶¹

This exception to the general rule, which is known as a “bona fide occupational qualification” (typically referred to as a “BFOQ”),⁶² can sometimes be used by employers to legally justify certain discrimination in hiring practices if that discrimination is based on religion, sex, or national origin. For example, in Dothard v. Rawlinson, an all-male prison asserted that it would be unsafe for women to become guards in their prisons.⁶³ Female job applicants hoping to become guards then sued the prison, claiming that they were not hired because of their sex.⁶⁴ The Supreme Court took the side of the prison, holding that while the applicants’ sex was the reason they were not hired, this discrimination was legal due to the BFOQ exception.⁶⁵ In other words, the prison was allowed to reject female applicants because of their sex due to the fact that having male guards was “reasonably necessary to the normal operation of that particular business.”⁶⁶

Conversely, in UAW v. Johnson Controls, Inc., the Supreme Court refused to grant an employer the use of a BFOQ.⁶⁷ Johnson Controls stated that it would not allow women to work in certain jobs at its manufacturing plant that involved lead exposure, citing an interest in preserving the women’s fertility.⁶⁸ In essence, Johnson Controls was asserting that being a man was a BFOQ that was required in order to get the job.⁶⁹ Here, the Supreme Court interpreted the BFOQ exception narrowly by ruling that the amorphous danger of harm to female employees’ fertility is not an appropriate use of the exception and that female employees who were qualified for the job could not be turned away simply on the basis of their sex.⁷⁰

As seen in Johnson Controls above, the BFOQ is not a free pass to discriminate against job applicants however an employer sees fit; Congress created the BFOQ exception to be used narrowly and “the courts have construed it as such.”⁷¹ It is not unreasonable, however, to imagine a scenario in which this affirmative defense could actually be used to benefit a particular group of job applicants. Consider a scenario in which an employer wants to have only Senegalese chefs work at a Senegalese restaurant, with the stated goal of “authenticity.” Here, the employer could use a national origin BFOQ to justify this hiring practice, with the end result being that a minority group (Senegalese chefs) gains greater access to job opportunities they otherwise may not have had. While perhaps counterintuitive, this Note will propose the use of a BFOQ not simply as a way to shield an employer from liability, but also as a way to encourage diversity in the hiring process.

Scene 3: Threshold Question—Employee or Independent Contractor?

It must be noted going forward that applying the ADA and Title VII to workers hinges on the workers’ classification as “employees,” as opposed to “independent contractors,” because the ADA and Title VII do not cover independent contractors.⁷² So what is the difference? The ADA and Title VII both provide the following definition of “employee”: “[A]n individual employed by an employer.”⁷³ Since that definition is not particularly elucidating, courts have often looked to the common law of agency for a less circular definition.⁷⁴ Among other factors, the Restatement (Second) of Agency defines an employee as the “servant” of an employer (the “master”).⁷⁵ This relationship is said to be formed when the master gains control over the servant’s performance of a service, and, in particular, when the master gains the right to control the “physical conduct” of the servant.⁷⁶ Conversely, then, an independent contractor is a worker whose physical conduct and general performance are not under the complete control of the master.⁷⁷

Many theaters officially classify the actors they hire as independent contractors, often primarily in order to take advantage of related tax benefits and to circumvent paying minimum wages, overtime, and workers’ compensation.⁷⁸ The argument theaters provide for this practice is that actors are temporary workers, typically only hired to perform in one show at a time, and that therefore being an actor is more akin to being a part of the “gig economy”⁷⁹ than being a part of a typical workplace. Theaters in this camp tend to paint a picture of their actors not as their so-called “servants” whose physical conduct they control, but instead as transient workers whose job is simply to put on a performance.

In reality, however, there is so much more to an actor’s responsibilities and interactions with a director. While actors may have moments of free decision-making throughout the process of preparing (“blocking”) a play, almost everything comes down to what the artistic director envisions. This is really an employee-employer relationship where the employer has full control over not only when and where rehearsals are held, but ultimately full control concerning when, where, and how an actor portrays their part.

Though employee classification is crucial for actors—as well as employees writ large—to achieve better legal protections, a deeper exploration of the distinction between employees and independent contractors and the implications of this divide for employment equity, particularly in the context of theater, is beyond the scope of this Note.⁸⁰ Thus, the remainder of this Note will assume for the sake of argument that actors are classified as employees, not as independent contractors. This classification allows for their protection by the ADA and Title VII.

ACT III. LEGAL REMEDY NO. 1: CREATING A NEW BFOQ

Scene 1: Creating a Race or Color BFOQ

Notably missing from the list of categories that can be used to assert a BFOQ defense⁸¹ are race, color, and disability. Over the past few decades, the bulk of relevant scholarship has focused on reasons Congress specifically did not include race or color as possible BFOQs.⁸² Relatedly, scholars have started to ask whether Congress erred in this omission, and some even go so far as to champion adding a race or color BFOQ.⁸³

More specifically, this question about a race or color BFOQ has recently been explored in the context of entertainment.⁸⁴ Do historically marginalized actors lack opportunities as a “result of illegal discrimination by the theater industry,”⁸⁵ or is it instead a product of artistic freedom and sound business decisions? Should the issue be relegated to the realm of First Amendment jurisprudence?⁸⁶

Legal scholars have often approached this question by looking at language used by the Equal Employment Opportunity Commission (“EEOC”).⁸⁷ The EEOC’s regulations⁸⁸ mention that a gender BFOQ could theoretically exist for hiring actors if deemed necessary for a play’s authenticity: “Where it is necessary for the purpose of authenticity or genuineness, the Commission will consider sex to be a bona fide occupational qualification, e.g., an actor or actress.”⁸⁹ The EEOC has thus explicitly “recognized that the entertainment industry is one place where discrimination might be necessary.”⁹⁰

The fact that use of a BFOQ has been considered by the EEOC as potentially useful (and lawful) in an entertainment context gives credence to the idea that it is permissible to legally discriminate, through the use of a BFOQ, in order to preserve a play’s primary functions of storytelling and authenticity.⁹¹ Therefore, “it seems reasonable to assume that where the characters are race-specific, race is a job requirement, and hence, should be a BFOQ exception.”⁹²

Scene 2: Creating a Disability BFOQ

So, could a disability BFOQ similarly be added to the ADA? The idea is not without precedent, at least in the realm of some states’ local laws. For instance, the Administrative Rules of Montana state that an employer may use a BFOQ “where the reasonable demands of a position require a distinction based on . . . physical or mental disability.”⁹³

But the question remains: Is the addition of a disability BFOQ really enough to make a difference? Or would it just perpetuate the status quo of allowing employers/artistic directors to keep employees/actors with disabilities off the stage? According to the University of Southern California Annenberg Inclusion Initiative, only 2.7% of characters with speaking roles in a survey of 900 popular movies from 2007 to 2016 were characters portrayed with a disability.⁹⁴ Assuming the trend holds true across the sister industries of stage and screen, these statistics show that a disability BFOQ probably could not effectuate all that much change. If only around 2–3% of characters are written to have disabilities, even if a majority of directors cast those roles with actors who have disabilities, we would have at most a 3% increase in the number of actors with disabilities getting cast. And there is no guarantee that any directors would even opt to utilize the disability BFOQ. Thus, the most progress a disability BFOQ could make would likely be marginal at best.

Furthermore, creating a disability BFOQ opens the door to possible misuse and abuse by employers. Indeed, use of a BFOQ, though it can be
co-opted for the benefit of a group of employees, is usually seen as an employer-friendly tactic. For example, an employer who does not want to hire actors with disabilities could use the BFOQ as a shield, asserting that such an actor with a disability could not serve “essential functions”⁹⁵ (such as deft movement across the stage) required of the job.

Scholarship at the forefront of this conversation seems to overwhelmingly come to the same conclusion: “[T]he fear that employers could misuse a generally applicable . . . BFOQ to shield invidious . . . discrimination is too great to warrant the enactment of such a provision.”⁹⁶ Given these potential setbacks, it becomes necessary to look at what other remedial legal options remain.

ACT IV. LEGAL REMEDY NO. 2: AFFIRMATIVE ACTION

Scene 1: Background

The concept of affirmative action, created during the civil rights movement in the United States, derives from a “paradox,” namely that “[o]nce we amended the Constitution and passed laws to protect people of color from being treated differently in ways that were harmful to them, the government had trouble enacting programs that treat people of color differently in ways that might be beneficial.”⁹⁷ We face a similar problem with regard to disabilities, in that in employment discrimination law’s noble effort to level the playing field, we must fight to create ways to treat people with disabilities that “might be beneficial”⁹⁸ as well.

From a statistical standpoint, affirmative action for race actually resulted in some of its intended effect; the years between 1974 and 1980 saw a 20% increase in the rate of minority employment in businesses relying on affirmative action (as compared to an increase of only 12% in companies without affirmative action plans in place).⁹⁹ Furthermore, there is still room for the affirmative action model to change over time, as “[t]here is no Brown v. Board of Education . . . for affirmative action, no well-established precedent.”¹⁰⁰ Thus, the door is left ajar for a new movement in which we use affirmative action tactics to make sure that more actors with disabilities are not only getting into the audition room, but also getting cast.

While decades of proof show that affirmative action has led to success, specifically in the context of school desegregation,¹⁰¹ the concept also comes with quite a bit of baggage.¹⁰² Scholars and laypeople alike have been arguing for years over whether “affirmative action for racial minorities disadvantages white people by virtue of their race.”¹⁰³ It is likely that this same argument would surface regarding whether affirmative action in the context of casting actors with disabilities disadvantages able-bodied actors. To this point, however, although there may be winners and losers in affirmative action, it has been determined that the practice is occasionally justified nevertheless.¹⁰⁴

In United Steelworkers v. Weber, the Supreme Court created precedent that some affirmative action regimes are, in fact, justified, and it laid out a test dictating when these regimes are constitutional.¹⁰⁵ While the Court’s opinion is perhaps not particularly clear in terms of where to draw that line,¹⁰⁶ it does provide us with a set of loose guidelines. In order for a plan to fall on the permissible side of that line, it must (1) be “designed to break down old patterns of . . . segregation and hierarchy,” (2) “not unnecessarily trammel the interests of” other employees or applicants, and (3) be a “temporary measure.”¹⁰⁷

These guidelines, specifically designed to apply to affirmative action in regard to racial segregation and discrimination, could easily be adapted to apply to disability as well. One could imagine guidelines for theater companies that (1) break down existing patterns of hierarchy in terms of casting actors without disabilities; (2) do not “unnecessarily trammel” the interests of actors without disabilities, who would retain plenty of chances to be cast; and (3) only last until such time that theaters understand and realize not only that diverse casting is a noble goal, but also that it makes sound economic sense. While this raises a different question as to how these guidelines would be implemented, as discussed below, there may actually be no need to adapt these guidelines because of the differences in statutory language between Title VII and the ADA.

Scene 2: Statutory Interpretation

Challenges to affirmative action in the context of ending racial segregation sometimes stem from a disgruntled white student who feels that a school’s admission policies are a zero-sum game (and thus, feels that their rights are being “unnecessarily trammel[ed]”).¹⁰⁸ For instance, in Fisher v. University of Texas, a white woman who was denied admission to the University of Texas sued on the grounds that the school’s admissions system was unconstitutional because it took race into account.¹⁰⁹ Ultimately, Justice Anthony Kennedy authored the close opinion in favor of the University of Texas, deciding that the university’s policy of considering race as one of a number of factors in admissions “met the standard of strict scrutiny”¹¹⁰ and was thus appropriate. While the final outcome of this case comes down on the side of the affirmative action plan being implemented by the university, it also demonstrates the very live and contentious idea that there are people who tend to feel they are being injured by affirmative action schemes at large.

The Court has maintained its belief that at least some affirmative action regimes could be unconstitutional because they “unnecessarily trammel”¹¹¹ other employees’ rights, and their authority on this matter comes from citing the text of Title VII itself: it is unlawful to “discriminate . . . because of . . . race” when hiring employees.¹¹² White students have long used this argument to say that they themselves were discriminated against because of their race (as a white person) when a Black student is admitted and there is an affirmative action regime in place at that university;¹¹³ the claim is one of “reverse racism.”¹¹⁴ Similar arguments have long been made by many white plaintiffs in the employment context: there have “recently [been] a number of headlines regarding ‘anti-white racism’ and there have been a variety of civil rights lawsuits filed by white employees . . . claiming race discrimination.”¹¹⁵

The language of the ADA, on the other hand, dictates only that a covered entity may not “discriminate against a qualified individual on the basis of disability.”¹¹⁶ The ADA itself provides limited guidance on whether an employer may or may not, for instance, discriminate in favor of a qualified individual on the basis of disability.¹¹⁷ In light of this difference in statutory language, it is possible that an affirmative action plan in the context of disability under the ADA may not even need to pass muster under the three-part Weber¹¹⁸ test described above. Further analysis of this distinction in language, although beyond the scope of this Note, is required to determine if theater companies would be within their rights to implement affirmative action regimes regarding hiring actors with disabilities.

Scene 3: Application

Given the analysis above, this Note proposes that theaters could help remedy the imbalance in casting practices by beginning to use an affirmative action model to bring more inclusivity into the casting room and onto the stage. If future analysis supports the above interpretation of the statutory text, this model does not have to live up to the Weber¹¹⁹ standards. Each theater company is unique, with its own set of structures and hierarchies already in place, so the most effective way for each individual theater company to utilize an affirmative action model would likely be best judged by the company itself. The 2020s appear to have ushered in a hunger for an increase in overall diversity,¹²⁰ and it is possible that some theaters would jump at the chance to create a scheme through which they could improve the diversity on their stages—if only because it would reflect well on the theater.

Perhaps one answer is a required training for theater companies throughout the country (likely in an online format) through which they could gain a better understanding of the necessities and risks associated with creating and implementing an affirmative action plan.¹²¹ Then, each theater company could come up with a plan that best fits its specific needs and goals. Implementation of these plans would likely require the creation of an organization to oversee these plans and establish accountability, as well as conduct periodic check-ins with each theater company to assess follow-through and commitment going forward. While this suggestion would involve significant resources (time, money, and otherwise), this Note has demonstrated how crucial it is to take affirmative steps in this arena to enact true change. Investing these resources would be a necessary first step.

However, clearly the nebulous idea of “using affirmative action in casting actors with disabilities” leaves a lot of details to be desired. Who would ensure that theaters truly implemented affirmative action measures? How would relevant statistics be tracked, given that each theater and, more granularly, each show has a completely different set of needs? What kind of penalties would be imposed if theaters chose not to follow their affirmative action plans? All of this is not to say that legal remedies would not move theater in the right direction, but given these difficult questions with no immediate answers, it seems clear that this proposed legal remedy is not enough on its own either. So, what options remain?

ACT V. A LOOK AT POTENTIAL QUASI-LEGAL AND NONLEGAL REMEDIES

Scene 1: Societal Shifts—Effects of the COVID-19 Pandemic

One force that has the potential to shift the way we as a society see entertainment and theater, and therefore theater creators, is the COVID-19 pandemic.¹²² Our society’s transition to the use of Zoom and other online platforms has greatly increased theater’s accessibility in a number of ways,¹²³ perhaps most notably in terms of the internet’s ability to transcend physical barriers and allow people from all around the world to watch a performance.¹²⁴

Additionally, many virtual productions are simply more affordable¹²⁵—both for audiences who no longer need to worry about issues such as transportation to and from the theater, costly parking, and the allure of overpriced theater snacks and drinks, and for theater companies that suddenly find themselves without the need for large, elaborate sets, accessible theaters, or a whole team of spotlight operators.

This shift has the possibility to push access for actors with disabilities in the right direction and could provide the movement with enough momentum to continue to embrace inclusivity and accessibility once we (presumably) reenter a less digital world. However, Deaf¹²⁶ theater artist Elbert Joseph has his doubts: “[O]nce we go back to being in person, are people going to be willing to continue [making theater accessible]? Because there is no more excuse.”¹²⁷ And he is right: we have now seen a digital landscape in which disability has proven to be much less of a barrier in the bid for access.¹²⁸

Writer and performer Katie Hae Leo, while acknowledging the importance of the ADA as it stands, believes that the COVID-19 pandemic has reminded society of the vulnerabilities associated with being a person with disabilities.¹²⁹ She adds that, although the pandemic may have established a precedent of creating more access for artists with disabilities, it will all be for naught unless we “codify some of those changes, and make sure that they become part of, at the very least[,] best practices and at the best, law.”¹³⁰

Now that we have seen, by way of the pandemic, that many accessibility measures are in reality quite easy to implement,¹³¹ the above legal proposals of adding a disability BFOQ to the ADA and implementing an affirmative action regime for casting actors with disabilities could come into play. When utilized in tandem with the lessons we have learned from being thrust into the virtual world during the pandemic, these legal solutions could help to create a theater landscape that is both welcoming and encouraging to theater artists with disabilities.

Additionally, while creating diversity onstage is a noble goal in and of itself, theater companies do have pure economic reasons to invest in increased representation. Looking back at theater’s sister industries, film and television, that exact understanding seems to be unfolding as the early 2020s progress. While statistics, as discussed above, show dismal rates of casting actors with disabilities over the years, both film and television have begun to make great strides in their bid for inclusivity on screen. Take, for instance, the critically acclaimed 2021 film CODA, which centers on a family with deaf adults and their hearing child.¹³² The deaf characters are all played by deaf actors,¹³³ and the story puts deafness at the heart of the viewer’s experience. The film even led to the first acting Oscar nomination (and win) ever for a deaf man, Troy Kotsur.¹³⁴ Kotsur told the New York Times via a sign language interpreter that the success of this film marks a wider understanding that we should no longer “think of deaf actors from a perspective of limitations.”¹³⁵ As film and television make these moves forward, and as theaters begin to grapple with the fact that more diverse casts could lead to more money and acclaim, hopefully theaters will begin to follow in the footsteps of their sister industries.

Scene 2: Building Upon Ongoing Diversity, Equity, and Inclusion Work

Since it appears that no one solution, legal or otherwise, is sufficient to meaningfully increase opportunities for actors with disabilities on stage, it is worth looking to other work that is already being done in the arena for inspiration. The initiatives currently taking shape, in theater and beyond, are known as Diversity, Equity, and Inclusion (“DEI”) initiatives.¹³⁶ DEI work, according to the International Labour Organization, can be responsible for an increase in innovation of up to 59% and an increase in understanding and assessment of consumer demand of up to 37%.¹³⁷

This wave of DEI work in workplaces around the country and beyond focuses on the tenets of “diversity” (the ways in which people differ from one another), “equity” (fair treatment and opportunity regardless of identity), and “inclusion” (providing a variety of people with power and decision-making authority).¹³⁸ However progressive a DEI mindset in a workplace might be, though, underrepresentation “remains a very real problem.”¹³⁹ A 2020 review of workplace diversity, for example, found that around 85% of top executives in the United States are white,¹⁴⁰ with similar statistics showing that the majority of top executives do not report having a disability.¹⁴¹

Even so, companies, including theaters, are now actively considering DEI initiatives; these initiatives tend to center on anti-racism and racial equity.¹⁴² Many theater websites boast initiatives to combat racism within their internal structures.¹⁴³ In addition to actively increasing representation of people of color in the workplace, these initiatives are shining a spotlight on the destructive effects of racism on the workplace. Imagine if this push for equity in terms of race could be harnessed and used through the lens of disability as well. This would bring awareness to the trials and tribulations of actors with disabilities, as this Note has detailed, and could help to create a society in which anti-ableism becomes central to the workplace.

Scene 3: Exploring Nontraditional Casting

Another potential route to getting more actors with disabilities on stage would be to follow the dictates of “nontraditional casting.”¹⁴⁴ Under the regime of nontraditional casting, in order to expand opportunities for
oft-overlooked actors, artists are cast in roles in which certain categories (such as gender, ethnicity, disability, and race) are not “germane to the character’s or the play’s development.”¹⁴⁵ The attempts at kickstarting nontraditional casting have been widespread; multiple major theater organizations banded together in the late 1980s to create a not-for-profit organization called the Non-Traditional Casting Project (“NTCP”).¹⁴⁶

The NTCP, as a part of its advocacy work, identified a few distinct types of nontraditional casting meant to act as “jumping-off points for the imagination,”¹⁴⁷ such as “societal casting,”¹⁴⁸ “cross-cultural casting,”¹⁴⁹ and “conceptual casting.”¹⁵⁰ These various categories are meant to serve as tools for creating opportunities for actors who may otherwise be passed over.

One further category to be addressed is “blind casting,” in which “actors are cast on the basis of their talent without regard to their physical attributes [and abilities or disabilities].”¹⁵¹ While the idea of blind casting may appear innocuous on the surface, and perhaps even look like a good solution, academic scholarship points us to the conclusion that even casting that is nondiscriminatory on its face leads to the same disparities on stage after all is said and done.¹⁵²

2020/aug/11/its-dangerous-not-to-see-race-is-colour-blind-casting-all-its-cracked-up-to-be [https://
perma.cc/ZB3H-GEWR] (quoting Diep Tran, an arts journalist specializing in diversity) (“Colour-blind casting is dangerous . . . [because] [i]t negates the very real structural hindrances that block actors of colour from the same opportunities as white actors—like low pay in the theatre industry, a lack of roles that are ethnically specific that actors of colour can play, and unconscious bias on the part of white theatres and casting directors.”). Furthermore, in the past, directors have gone so far as to use the idea of blind casting to do things such as cast white actors as characters of color, using the explanation that the white actors just happened to be best for the role.¹⁵³

Because of the potential harms of blind casting, scholars urge directors to consider “conscious casting” instead, where attributes and abilities/disabilities are taken into account to the extent that they interact with the plot lines and characters and affect the meaning of a play or movie.¹⁵⁴ Utilizing conscious casting from the nontraditional casting canon may prove another useful tool in the casting toolbox. However, the distinction between casting “blindly” and “consciously” is not always straightforward and still allows for a well-meaning director to make a blunder by casting actors in a way that sets forth an unintentional message.¹⁵⁵

Even so, conscious casting can and should be used in the context of casting actors with disabilities. Conscious casting could even be combined with the affirmative action plan discussed above; this could open the door to actors with disabilities not only playing characters with disabilities, but
able-bodied characters as well. Not only would this provide more job opportunities to actors with disabilities, but it would also allow directors to make purposeful statements through their casting about how our society views, and should or should not view, people with disabilities.

Making conscious casting an industry standard would signal to artistic and casting directors alike that diversity on stage could be a meaningful enhancement to their repertoire and the messages conveyed, and, as such, should be taken into account. It is true that some baggage might come along with this approach: it could require extra auditions to be held, extra outreach into various underrepresented communities, and extra thought put into how casting each actor affects how the play comes across to the audience.¹⁵⁶ Given the dramatic loss of talent caused by excluding actors with disabilities, however, this Note argues that the potential for positive outcomes far outweighs the baggage.

CURTAIN CALL: CONCLUSION

At the end of the day, representation on stage can (and should) inspire new generations of both activists and actors, but it appears as though there is no single legal solution that will be able to ensure or enforce that representation. Instead, if we hope that “[o]ne day, every American theatre will be a safe, equitable, and inclusive workplace filled with arts practitioners who represent and reflect the wonderful diversity of the human tapestry,”¹⁵⁷ we will need to source solutions from within the legal field as well as beyond.

This Note does not, by any means, cover the breadth of issues and possibilities left to be discovered and discussed in terms of getting better representation on theater stages. For instance, studies that have thus far been done about disability in film and television should be replicated for the stage in order to give us a more accurate picture of the issue as it applies to stage actors.¹⁵⁸ Also, further research beyond the scope of this Note may yield other creative and effective legal and nonlegal tactics that can be used to not only increase diversity onstage, but also to maintain it.

It is hopefully clear by now that there is a problem in the theater world that needs to be addressed. Not enough actors with disabilities are getting employed—or even getting the chance to prove that they should be employed. This issue has negative effects all around. Of course, it impacts actors with disabilities by lessening their opportunities to practice their craft. But it also affects society at large in a number of ways; representation of disabilities on stage can lead to a feeling of “belonging” for many people who have so often felt sidelined, and the art that gets created becomes more inclusive and authentic overall.

It should also be clear by now that there is not yet a simple solution to the above problem, in the law or in society. This cannot dissuade us, however, from fighting to ensure that actors with disabilities have the opportunity to perform on stage. It appears as though it will take a conglomeration of methods: the creation of a disability BFOQ; affirmative action based on disability; monetary and business incentives; ongoing DEI work; and conscious casting could all be pieces of the as yet unsolved puzzle. And while we are still missing puzzle pieces, we should begin by working with the methods we already have.

This Note has presented potential legal avenues for addressing the lack of opportunities for actors with disabilities in the theater industry and has concluded that using the law as a vehicle for improving the odds for these actors is probably not enough. Either way, casting more actors with disabilities is an issue that clearly requires immediate attention. After all, when it comes to the heart of the reason that all of this research and discussion is necessary in the first place, actress Ali Stroker put it best in her Tony Award acceptance speech: “This award is for every kid watching tonight who has a disability, who has a limitation or a challenge, who has been waiting to see themselves represented in this arena,” she said.¹⁵⁹ “You are.”¹⁶⁰

96 S. Cal. L. Rev. 483

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Kira Patterson*

* Senior Editor, Southern California Law Review, Volume 96; J.D. Candidate 2023, University of Southern California Gould School of Law; B.A. Drama and Psychology 2015, Tufts University. Thank you to my supportive, loving, wonderful friends and family for having my back throughout law school. Special thanks to my advisor, Dr. Orly Rachmilovitz, for her guidance during the note-writing process, and a final thank you to my mentors (also known as my parents), Barbara and Patrick Patterson, for inspiring me every day. This Note is dedicated to the memory of colleague and friend Jenny Lin.

Race and Politics: The Problem of Entanglement in Gerrymandering Cases

April 2023April 2025Stephen Menendian*

Gerrymandering—the manipulation of political districting processes and boundaries for partisan political advantage—has proven a troubling and difficult area of constitutional concern. This is partly due to the exceptionally divergent standards of judicial review applicable depending upon the basis for the gerrymander claim. The Supreme Court has consistently held that racial gerrymanders are subject to strict scrutiny review and presumptively violate the Equal Protection Clause of the Fourteenth Amendment. The Court has recently declared that partisan gerrymanders, on the other hand, are a political question and non-justiciable.

This Article argues that current guidance from the Supreme Court on standards for evaluating gerrymandering claims is inadequate to guard against constitutional violations because of the problem of entanglement: the race and partisan preferences of voters are so deeply intertwined in many contexts that it is practically impossible to discern whether race or partisanship was the basis for political districting decisions. The entanglement of race and politics in political districting processes means that there is a dangerous risk that unconstitutional racial gerrymanders will escape judicial review under the cover of partisanship.

This Article explicates the problem of entanglement in gerrymandering cases and evaluates several possible solutions. Presenting original research drawn from the 2020 decennial census and voter data from the 2020 presidential election, this Article establishes an empirical basis for the problem of entanglement. Although prior legal scholarship has emphasized the problem of “conjoined polarization”—the overlap in partisan and racial preferences—as an enabling factor in partisan redistricting processes, this Article claims that racial residential segregation plays a more central and dynamic role than has generally been acknowledged in undergirding the entanglement of race and politics in political redistricting processes.

INTRODUCTION

The manipulation of political districting processes for political advantage—popularly known as gerrymandering—has long bedeviled the United States,¹ but concerns about the abuse of this practice have intensified in recent decades due to a confluence of factors: intensifying partisan political polarization, widening racial political polarization, the use of detailed voter files to predict voting behavior, the emergence of sophisticated computer technology to generate ever-more precise political maps, and a sharp divergence in the Supreme Court’s jurisprudence governing different forms of this practice.

In reviewing suits brought to challenge gerrymandering practices, the Supreme Court has held that state legislative efforts to draw political districts based on race violate the Equal Protection Clause, a natural extension of the Court’s general prohibition on the use of racial classifications in policymaking.² On the other hand, the Supreme Court has held that legislative efforts to draw political districts based upon partisanship or for partisan political advantage are “political questions” and non-justiciable.³

In this regard, these two forms of gerrymandering are treated in the utmost extreme: racial gerrymandering is subject to the highest level of judicial scrutiny while partisan political gerrymandering is treated as non-justiciable, meaning not that it is subject to the lowest level of judicial review, rational basis review, but that the practice is deemed unsuitable for judicial review at all. Racial gerrymanders are subject to strict scrutiny judicial review whereas partisan political gerrymanders are not subject to judicial review whatsoever.⁴

The Supreme Court’s broader equal protection clause jurisprudence supplies a basis for treating these two types of claims differently. Prevailing equal protection jurisprudence treats race as a “suspect” class in government policymaking subject to strict scrutiny review, while most other classifications are reviewed under a rational basis test.⁵ But strict adherence to this approach would compel a very different result than the determination that partisan gerrymanders are non-justiciable. Lower courts would still be able to entertain such cases, just under a much lower level of review, rational basis.

If there were no relationship between race and partisanship in voting patterns, then political gerrymanders and racial gerrymanders could be regarded as separate and distinct categories and there would be no logical inconsistency in a jurisprudence that regulated one but not the other. Partisan gerrymanders would have no observable racial effect, or vice versa. In practice, however, race has long been highly correlated with partisan political affiliation.⁶ Although racial political polarization waxes and wanes over time, it is strong enough that a jurisprudence of gerrymandering cannot neatly divide the two types.

The Court’s racial gerrymandering jurisprudence makes clear that sorting voters into separate political districts on the basis of race is unconstitutional, just as it is presumptively unconstitutional to sort pupils into different schools on the basis of race.⁷ In racially diverse states with racially polarized voting patterns and merely modest levels of racial residential segregation, however, it is likely that partisan gerrymandering will effectively sort people into different districts on a racial basis. In much of the country, race and partisanship are entangled, such that redistricting efforts on one basis are largely indistinguishable from the other. As a consequence, unregulated partisan gerrymanders have a dangerous potential to subvert the constitutional rule against racial gerrymandering.

Although political scientists have long recognized the correlation of race and partisan affiliation (what political scientists term “conjoined polarization”),⁸ prior analysis of gerrymandering jurisprudence has underexamined the specific role of racial residential segregation in facilitating the entanglement of race and politics in redistricting processes. In recent legal scholarship analyzing this problem, segregation is either completely absent from the discussion, mentioned in passing, or is treated as an assumed operative background condition.⁹

This Article argues that it is the interaction of racial residential segregation and racial political polarization that creates the entanglement problem in redistricting processes, not merely “conjoined polarization” by itself.¹⁰ Where the level of racial residential segregation is higher, the entanglement of race and politics in districting processes is likely to be greater, not only because of the geographic concentrations of people that facilitate political district line-drawing, but also because regions with higher levels of racial residential segregation have both greater racial political polarization and partisan political polarization.

This Article presents original analysis of the 2020 presidential election results and 2020 census data to demonstrate that racial segregation and partisan segregation are strongly correlated. Moreover, regions with higher levels of racial residential segregation appear to have higher levels of partisan polarization. As a result, partisan gerrymanders in those regions are likely to result in the segregation of voters into different political districts on the basis of race and vice versa.

Part I provides a brief history of gerrymandering, including the types and forms of political districts that were historically practiced. Political districts were far more varied in the early years of the republic than is generally appreciated or understood today. More importantly, Part II notes that although gerrymandering practice can be traced to the early decades of the republic, efforts to curb it also extend back into the nineteenth century. Standards and norms for democratic practice have improved and evolved since the framing of the Constitution, laying the groundwork for particularized claims brought to challenge this practice.

Part II compares racial gerrymandering and partisan political gerrymandering cases, rulings, and reasoning. It analyzes points of divergence and convergence between the two lines of cases. The partisan and racial gerrymandering cases germinate from the same seed and the same soil but have produced extremely divergent results in the body of the Supreme Court’s precedent governing these cases. This creates a problem in cases brought that challenge redistricting where race and partisan affiliation are largely co-extensive. In such cases, racial gerrymandering could escape judicial scrutiny under the cover of partisanship.

Part III explicates the entanglement problem, that purely partisan redistricting maps are in many cases objectively indistinguishable from redistricting maps that explicitly use race. The key components of this problem are racial political polarization and racial residential segregation. When these factors coincide, partisan gerrymandering is likely to sort people into different districts on a racial basis. Part III also shows that racial residential segregation plays a larger role than is generally appreciated in both racial and partisan gerrymandering processes. It presents original and other recent empirical research suggesting that regions with higher levels of racial residential segregation have both more racial political polarization and political segregation.

Part IV reviews three possible ways to address the entanglement problem in terms of current constitutional law and text, weighing the merits of each. First, any hybrid gerrymandering case in which race appears to play a significant role but is co-extensive with partisanship could be categorically exempted from judicial review if the state raises such a defense. This approach is not a functional solution because it would formalize a loophole for subverting the Constitution as long as racial gerrymanders are clothed in the guise of partisanship.

Second, any case where race and partisanship are co-extensive could instead be drawn within the racial gerrymandering line and held to strict scrutiny review, even though race cannot be said to “predominate.” This approach would better align with the Court’s broader anti-classification jurisprudence but would require adjustments to the standards applicable to racial gerrymandering cases.

Finally, the Court could reverse its judgment that partisan gerrymanders are non-justiciable. The Court only recently gathered a majority of Justices in support of that view. It could reverse course and direct lower courts to review such claims under a lower standard of review within the equal protection jurisprudence or some other constitutional provision or basis altogether. In this regard, Part IV makes the case for revisiting the Court’s Guarantee Clause jurisprudence based upon principles and concerns articulated by the framers of the Constitution.

I. A BRIEF HISTORY OF GERRYMANDERING

Although the United States was still a young nation at the time of the ratification of the Constitution in 1787, the framers already enjoyed decades of cumulative experience with democratic political processes, including political districting, based upon the collective experiments already underway in the various states since the Revolution.¹¹ The Federalist Papers, for example, note political districts of varying size and composition both within and between states as a matter of fact.

In Federalist No. 57, James Madison observes that different sized political districts contribute to both the federal and state legislatures: “The city of Philadelphia is supposed to contain between fifty and sixty thousand souls. It will therefore form nearly two districts for the choice of federal representatives. It forms, however, but one county, in which every elector votes for each of its representatives in the State legislature.”¹² Thus, Pennsylvania’s county-districting system for electing state legislators necessarily resulted in large population disparities between political districts in that state at the time of the adoption of the Constitution. But in Federalist No. 61, Alexander Hamilton notes that although the New York State Assembly is drawn from counties, the New York State Senate is drawn from districts composed of two to six counties apiece.¹³

While acknowledging the existence of population disparities between political districts (and implicitly, the existence of inequities in political representation), both Madison and Hamilton unequivocally maintain throughout The Federalist Papers that the principle of majoritarianism—that the majority should prevail—is the fundamental basis of free government and republican government.¹⁴ In Federalist No. 58, for instance, Madison asserts that “the fundamental principle of free government” is that the “majority would rule.”¹⁵ In that context, he was writing against the suggestion made by critics of the proposed Constitution that supermajorities should be required for either a quorum or a decision (such as passing a law) in the House of Representatives. As he explains: “In all cases where justice or the general good might require new laws to be passed, or active measures to be pursued, the fundamental principle of free government would be reversed. It would be no longer the majority that would rule: the power would be transferred to the minority.”¹⁶

Indeed, this is one of the chief objections the framers had with the Articles of Confederation, which gave equal suffrage to each state in the federal legislature (unlike the Constitution, which does so only in one legislative chamber, the Senate).¹⁷ Prior to the constitutional convention in Philadelphia in the summer of 1787 where the Constitution was hammered out, Madison privately wrote to Thomas Jefferson expressing his hopes for systemic changes to the federal government. Chief among these concerns was converting from a system in which each state receives equal voting power in Congress to a system of representation based upon population.¹⁸

Hamilton firmly agreed. In Federalist No. 22, Hamilton maintains that “the fundamental maxim of republican government . . . requires that the sense of the majority should prevail.”¹⁹ Therefore, in his view, Every idea of proportion and every rule of fair representation conspire to condemn a principle, which gives to Rhode Island an equal weight in the scale of power with Massachusetts, or Connecticut, or New York; and to Deleware [sic] an equal voice in the national deliberations with Pennsylvania or Virginia, or North Carolina.²⁰

In a powerful and eloquent denunciation of the principle of equal suffrage between states, Hamilton goes on to develop the argument on the “impropriety of an equal vote between States of the most unequal dimensions and populousness” in various ways.²¹

This argument, however, and all of the reasoning developed in support of it, would appear to have equal force against political districts within states of “most unequal dimensions and populousness.” Indeed, in Federalist No. 46, Madison asserts that “[e]very one knows that a great proportion of the errors committed by the State legislatures proceeds from the disposition of the members to sacrifice the comprehensive and permanent interest of the state, to the particular and separate views of the counties or districts in which they reside.”²²

How can the principles, reasoning, and keen insights developed by Hamilton in pushing for more proportional representation between states in the federal government be reconciled with the apparent lack of concern with unevenly populated political districts within states or the absence of an explicit mechanism regulating it? The answer is not clear. It may have been an oversight. There were many weighty matters that preoccupied the Constitutional Convention, and the issue of unequal political districts within states may not have been a topline concern. Or, if it were a serious concern, perhaps any concerned framers were either outnumbered by those who were not or sensed efforts to regulate it were either impracticable or not a winnable issue. Despite their reputation, especially Madison’s, as “author” of the Constitution, historians have noted that most of the proposals Madison or Hamilton introduced or supported at the convention were defeated.²³

Or perhaps they assumed that unequal populations across political districts within states, to the extent that they were found, would exist within tolerable limits, or would not result in the vast and strikingly unequal representation of political interests to the same extent found when small states enjoyed the same voting power as the larger states. After all, the proponents of the Constitution were largely concentrating their reform efforts on addressing defects in the experience of government under the Articles of Confederation and the paralysis that resulted from allowing small states to block legislation necessary to advancing the interests of the nation.

Yet another possibility is that they believed that a separate and sufficient mechanism existed for addressing the districting problem. As an example of the latter, perhaps they believed that Article I, Section 4, allowing Congress to alter state electoral rules in federal elections, would suffice to remedy any particularly egregious or extreme case that might arise within a state.²⁴ This possibility is purely speculative given that none of the three lengthy Federalist Papers (59–61) dedicated to defending the inclusion of this provision mention the composition, size, or population of political districts. In any case, this provision quickly fell into disuse, because it would be decades before Congress passed a law under this authority.²⁵

Regardless of the framers’ concern—or lack thereof—for the issue of inequities between political districts within states, state legislatures took full advantage of the maneuvering room granted them by the Constitution’s silence on this matter. In one of the most notorious instances of abuse of this power, the Massachusetts legislature passed a redistricting law in 1812 designed to minimize the political power of the Federalist Party in the next election by concentrating Federalist voters into a small number of districts while spreading Republican voters into a wider range of districts.²⁶ The plan worked because the Republican party won twenty-nine seats compared to eleven for the Federalist Party, despite winning only 49% of the vote.²⁷ The map, however, so conspicuously divided up the Boston region in an unnatural manner that critics likened the shape to a salamander. Governor Elbridge Gerry, a leading proponent of the plan, lent his name to political history when a political cartoonist dubbed the plan a “Gerry-mander: A new species of Monster.”²⁸

The type and form of political district found in the early republic was more diverse and less uniform than those that exist today. Not only were political districts of unequal population and dimension regularly employed, and the manipulation of those districts common to the extent of political tolerance, but the form and type of district were not nearly as uniform as is the case today.²⁹ All districts organized for electing members to the House of Representatives today are what political scientists call “single-member plurality” districts.³⁰ This means that each district elects a single member, and that member is elected by a plurality of the vote (winning more votes than any other candidate—also called “first past the post”). This was not, however, the case in the early years of the republic. A variety of district types co-existed, from multi-member to at-large districts. Many of these district types were designed to maximize or entrench partisan political power.

The Constitution neither prescribes nor prohibits particular types of districts or methods of electing representatives, aside from the requirement that voting qualifications be the same as those employed for the most “numerous branch of the state legislature.”³¹ It only requires a certain number of representatives for each state based upon relative population. Consequently, most of the original thirteen states used multi-member districts in the first congressional elections.³²

Between 20% and 44% of House members were elected from multi-member districts until the Twenty-Eighth Congress.³³ This means that each district elected more than one representative. They did not use proportional representation systems, as is common to most modern parliamentary democracies, as such systems had not yet been developed. Instead, they gave some districts greater political representation relative to others. Later, some states used “at-large” voting, meaning that House members were elected in some states by a vote of the entire state, as United States senators are elected today.³⁴

As is true of many aspects of our political system and institutions, there was a gradual trend toward greater uniformity. In 1842, Congress passed the first of a series of laws, generally known as “Apportionment Acts,” which outlawed at-large, statewide House districts under its Article I, Section 4 authority.³⁵ Although ostensibly aimed at giving political minorities within states more opportunity to elect members to Congress, it also had the effect of outlawing multi-member districts, not just at-large systems. There were serious doubts about the constitutionality of such laws,³⁶ and at least a few states continued to use at-large systems in violation of the law.

It was not until an apportionment act in 1872 that Congress added that districts should not only be geographically contiguous and single-member, but also that they should contain “as nearly as practicable an equal number of inhabitants.”³⁷ This requirement was reiterated in similar subsequent enactments, although it was not yet a constitutional principle.³⁸

In 1967, Congress passed another law prohibiting multi-member and at-large districts (in states with more than one representative) based on concerns that southern states might resort to at-large, statewide systems in response to the Voting Rights Act of 1965.³⁹ Both multi-member and at-large districts could be used to dilute Black voting strength in southern states.⁴⁰

The key developments, however, were in the courts of the 1960s. In 1962, the Supreme Court ruled that political districting processes were “justiciable” and could be reviewed by courts in the case of Baker v. Carr.⁴¹ Two years later, the Supreme Court ruled that political districts should approximate equal population and announced the principle of “one person, one vote.”⁴² Unequal political districts undermined this principle. If districts could be devised of unequal size, then some people enjoy greater electoral influence, and their votes might count more than others. This legal principle has been serially re-affirmed and strengthened such that the Court has struck down districting laws drawing districts with deviations of less than 1% in population between them.⁴³ Permitting suits challenging inequities and disparities in the design of political districts opened the door for the challenges to partisan political and racial gerrymandering processes.

II. THE GERRYMANDERING CASES

This Part of the Article will briefly review the major challenges to racial gerrymandering and partisan political gerrymandering reviewed by the Supreme Court and conclude with some comparative observations and analysis.

A. RACIAL GERRYMANDERING

The first notable racial gerrymandering case actually precedes Baker v. Carr. In Gomillion v. Lightfoot, the Supreme Court considered a challenge to a redistricting plan in Alabama that would have rendered the city of Tuskegee a twenty-eight-sided political district for no perceptible reason other than to disenfranchise the town’s Black population, which lived virtually exclusively in the districts outside the newly drawn city boundaries.⁴⁴ The Court held that complaints alleging racial gerrymandering of municipal boundaries were cognizable under the Equal Protection Clause of the Fourteenth Amendment.⁴⁵

A decade later, in White v. Regester, the Supreme Court affirmed a lower court ruling that a redistricting plan adopted in Texas had elements designed to exclude Mexican-Americans from electing representatives in the state legislature through the employment of multi-member districts.⁴⁶ The Court, however, rejected a similar claim involving multi-member districts in Indiana that had a disparate effect on Black voters in racially segregated urban neighborhoods.⁴⁷ These cases, however, did not involve the drawing of districts so much as the type of district.

Racial gerrymandering claims received a significant boost in a series of cases considered by the Supreme Court after the 1990 census, beginning with the landmark case of Shaw v. Reno, in which the Court first recognized this claim as such in the drawing of district lines.⁴⁸ After the 1990 census, North Carolina was awarded an additional congressional seat. The state legislature’s initial apportionment plan was rejected by the Department of Justice under the preclearance provision of the Voting Rights Act (“VRA”).⁴⁹ A revised VRA-compliant plan created a second majority-Black district. Five white North Carolina residents sued, arguing that the redistricting plan violated the Equal Protection Clause of the Fourteenth Amendment. Specifically, the residents claimed that the state engaged in an “unconstitutional racial gerrymander.”⁵⁰

In an opinion authored by Justice Sandra Day O’Connor, the Court articulated several principles that helped lay the foundation for a clear rule against racial gerrymanders. First, the Court situated the case firmly within its racial classification jurisprudence, affirming that “laws that explicitly distinguish between individuals on racial grounds fall within the core of [the Equal Protection Clause’s] prohibition,” and that “[e]xpress racial classifications are immediately suspect.”⁵¹ Furthermore, the Court asserted that the harms of racial classification are as present in the electoral context as they are in other contexts that the Court had reviewed:

Racial classifications of any sort pose the risk of lasting harm to our society. They reinforce the belief, held by too many for too much of our history, that individuals should be judged by the color of their skin. Racial classifications with respect to voting carry particular dangers. Racial gerrymandering, even for remedial purposes, may balkanize us into competing racial factions; it threatens to carry us further from the goal of a political system in which race no longer matters—a goal that the Fourteenth and Fifteenth Amendments embody, and to which the Nation continues to aspire.⁵²

The Court acknowledged, however, that all redistricting is necessarily race-conscious, drawn with an awareness of racial demographics, just as the legislature is aware of many other demographics features when drawing legislative districts.⁵³ Therefore, the Court held that not all race-conscious redistricting is unconstitutional.⁵⁴ The Court did not, however, identify the line between permissible race-conscious political redistricting and impermissible racial gerrymandering. It concluded that the plan in question was so “bizarre on its face that it was ‘unexplainable on grounds other than race.’ ”⁵⁵ Therefore, the Court held that the appellants stated a claim strong enough to survive a motion to dismiss and remanded the case for further determinations.⁵⁶

A similar set of facts led to another suit that the Supreme Court considered involving Georgia in the case of Miller v. Johnson.⁵⁷ In announcing its decision in an opinion authored by Justice Anthony Kennedy, however, the Court both affirmed critical parts of Shaw and helped indicate where to draw the line between race-conscious political districting and impermissible racial gerrymandering.

The Court first specifically rejected the state of Georgia’s claim that “evidence of a legislature’s deliberate classification of voters on the basis of race cannot alone suffice to state a claim under Shaw.”⁵⁸ Kennedy also observed that “the essence of the equal protection claim recognized in Shaw is that the state has used race as a basis for separating voters into districts.”⁵⁹ Critically, however, the Court promulgated a “predominant factor” test to guide it’s application of the facts to the law in this context.⁶⁰

To establish a racial gerrymandering claim, a plaintiff must prove that “race was the predominant factor motivating the legislature’s decision to place a significant number of voters within or without a particular district.”⁶¹ To make this showing, a plaintiff must establish that the legislature subordinated traditional race-neutral districting principles, including but not limited to compactness, contiguity, respect for political subdivisions or communities defined by actual shared interests, to racial considerations.⁶² Where these or other race-neutral considerations are the basis for redistricting legislation, and are not subordinated to race, a state can “defeat a claim that a district has been gerrymandered on racial lines.”⁶³

In several subsequent cases involving similar fact patterns and southern states, the Court further clarified that to bring racial gerrymandering claims, individuals must reside in the district that they claim is gerrymandered⁶⁴ and that such claims should be brought on a district-by-district basis, not against an entire plan.⁶⁵ This is consistent with the view that these cases are concerned with the dangers of racial classification. An individual residing outside of a district that it claims has been gerrymandered has not, in some sense, been “classified” on the basis of race by government as the Court has construed this concept.⁶⁶ It should be noted that most of the contemporaneous cases heard by the Court at this time involved drawing districts to increase or preserve minority representation in Congress under the VRA.⁶⁷

There remain a number of ambiguities in how to apply the predominance test, some of which the Supreme Court has grappled with, but has not necessarily fully resolved.⁶⁸ In particular, the Court has tried to clarify how the consideration of race is to be viewed in relation to other considerations before triggering strict scrutiny. In a case heard in the 2015 term, the Court rejected a lower court’s ruling that race did not “predominate” as a consideration in the redistricting plan because of “non-racial factors,” including the goal of creating districts of equal population.⁶⁹ The Court clarified that the equal population factor is not a factor to be considered in the ordinary course of redistricting, but a constitutional mandate.⁷⁰ While that may seem like an easy case, the Court considered a harder question in the 2016 term.

The state of Virginia defended a Republican-led redistricting plan against a racial gerrymandering claim on the grounds that the “predominance test” should only be applied if the use of race is in conflict with “traditional districting principles,” as it had presumed in cases such as Shaw.⁷¹ The Court rejected this position in a seven-to-one decision presented in an opinion by Justice Kennedy. He concluded that racial gerrymanders can exist or arise even under plans that otherwise conform to traditional factors such as compactness and contiguity. As he explained, “The Equal Protection Clause does not prohibit misshapen districts. It prohibits unjustified racial classifications.”⁷²

Critically, the Court emphasized that an unconstitutional racial gerrymander can arise or exist even if an identical plan could have been adopted without consideration or use of race. Justice Kennedy explained that “[t]he racial predominance inquiry concerns the actual considerations that provided the essential basis for the lines drawn, not post hoc justifications the legislature in theory could have used but in reality did not.”⁷³ Thus the predominance test is a factual inquiry into considerations used as part of the actual districting process. Holding otherwise would provide a state with constitutional cover for unconstitutional behavior. As the Court observed, “By deploying [non-racial] factors in various combinations and permutations, a State could construct a plethora of potential maps that look consistent with traditional, race-neutral principles. But if race for its own sake is the overriding reason for choosing one map over others, race still may predominate.”⁷⁴

B. PARTISAN GERRYMANDERING

Since the early 1960s, the Supreme Court has become more solicitous of racial gerrymandering claims even has it has become more hostile to partisan political gerrymandering claims. This Section will now review the latter line of cases.

The Supreme Court squarely confronted a partisan gerrymandering claim in the 1986 term in the case of Davis v. Bandemer.⁷⁵ In that case, the Court reviewed a redistricting plan proposed by the Republican-controlled Indiana state legislature. This plan yielded an immediate partisan advantage in which 43 out of the 100 seats in the state House of Representatives were filled by Democratic candidates even though 51.9% of the statewide votes went to Democratic candidates.⁷⁶ Upon review, a deeply divided Court produced a fragmented set of opinions in which most justices agreed on the result—a holding that the plan was not unconstitutional—but disagreed on the rationale and basis for that judgment.⁷⁷

Six of the Justices, and therefore the Court, endorsed the legal principle that partisan or political gerrymanders are justiciable, while three Justices, Justice O’Connor, Justice Burger, and Chief Justice Rehnquist, preferred to rule that such claims are not. Even among the Justices in the majority and plurality, however, there was a lack of consensus on the grounds for doing so and on the standards that should be adopted to evaluate such claims. The debate between the Justices prefigures most of the issues that have been subsequently debated in this context.

The plurality of Justices White, Marshall, Brennan and Blackmun begin with the principle that in order to establish a partisan gerrymandering claim, plaintiffs must “prove both intentional discrimination against an identifiable political group and an actual discriminatory effect on that group.”⁷⁸ They caution, however, that the mere fact that “a particular apportionment scheme makes it more difficult for a particular group in a particular district to elect the representatives of its choice does not render that scheme constitutionally infirm.”⁷⁹ In addition, they reject the notion that mere disproportionality in representation is a sufficiently adverse effect to establish a constitutional violation. The plurality advises that reviewing courts examine both the district individually as well as the state’s overall districting plan holistically. The plurality also asserts that a constitutionally infirm redistricting plan can occur either when a minority manipulates boundaries to consistently thwart the will of the majority, or when a majority uses its power to shut a minority out of the political process or a meaningful chance to influence it.

Ultimately, the plurality held that “unconstitutional discrimination occurs only when the electoral system is arranged in a manner that will consistently degrade a voter’s or a group of voters’ influence on the political process as a whole.”⁸⁰ In applying this standard, the plurality emphasized that claimants would need to examine more than a single election to conclude that an impermissible partisan gerrymander exists, and that they should be able to distinguish between a meaningful structural disadvantage established by districting compared to mere lack of success in persuading voters. The plurality felt that the district court’s conclusions were less persuasive than the state’s defense on this point and voted to reverse the lower court.

Justice Powell and Justice Stevens found the plurality’s approach too restrictive and would have affirmed the lower court. In particular, Justice Powell wrote in favor of a multi-factor analysis:

The most important [factor to consider is] the shapes of voting districts and adherence to established political subdivision boundaries. Other relevant considerations include the nature of the legislative procedures by which the apportionment law was adopted and legislative history reflecting contemporaneous legislative goals. To make out a case of unconstitutional partisan gerrymandering, the plaintiff should be required to offer proof concerning these factors, which bear directly on the fairness of a redistricting plan, as well as evidence concerning population disparities and statistics tending to show vote dilution. No one factor should be dispositive.⁸¹

Justice O’Connor and Justice Burger argued strenuously that the majority’s holding would prove unworkable in practice, as illustrated by the inability of the six Justices in favor of holding partisan gerrymanders as justiciable to get behind a single standard and therefore was a “political question” as set out in the framework for evaluating such questions in Baker v. Carr.⁸² In addition to the lack of a clearly defined and easily applicable standard for adjudicating such claims, they had prudential concerns. Justice O’Connor argued that without a clear standard, opening federal courts to claims of partisan gerrymandering would lead to “pervasive and unwarranted judicial superintendence of the legislative task of apportionment.”⁸³ She wondered if there was any logical stopping point short of “roughly proportional representation for every cohesive political group.”⁸⁴

Despite its inviting holding, Bandemer established a heavier burden for plaintiffs to overcome so as to make out a discriminatory political gerrymandering claim than its authors probably imagined. Over the next eighteen years, no federal courts, at any level, ruled that a redistricting plan was an unconstitutional political gerrymander. This was the situation when the Court heard the case of Vieth v. Jubelirer in 2004.⁸⁵

In Vieth, the Court considered a suit brought by members of the Democratic Party, claiming that the state of Pennsylvania’s partisan redistricting plan violated the Constitution.⁸⁶ Five Justices agreed that the plan did not violate the Constitution, but four of those Justices took the position of Justice O’Connor, Justice Burger, and Chief Justice Rehnquist in Bandemer, arguing that political gerrymanders should be non-justiciable and voting to overturn Bandemer.⁸⁷ The fifth Justice, Justice Kennedy, however, agreed that current standards were unworkable, but he preferred to leave the door open to discovering one.⁸⁸ The four dissenting Justices agreed with Bandemer’s holding but disagreed on the specifics of how to operationalize that principle.⁸⁹

The Court subsequently heard a case that had been held over until Vieth was decided, League of United Latin American Citizens v. Perry.⁹⁰ In Perry, the petitioners challenged the 2003 redistricting plan enacted by the Republican-controlled Texas legislature. Drawn merely a year after the 2002 midterm elections, the 2003 plan led to an election result where twenty-one Republicans and eleven Democrats were elected in congressional elections the following year,⁹¹ a far more lopsided result than the aggregate vote count would suggest. The petitioners argued that the mid-decennial nature of the redistricting plan revealed the legislature’s sole motivation to gain partisan advantage,⁹² which should be sufficient to trigger heightened scrutiny. In the majority opinion, Justice Kennedy entertained the petitioners’ proposed “sole-intent” test, but ultimately found it “not convincing” because some contested district lines were drawn based on more local interests and a number of line-drawing requests by Democratic legislators were honored.⁹³

Interestingly, Justice Stevens and Justice Breyer, in their dissent, proposed a different test wherein a plaintiff must prove partisan aims by showing that: (1) the legislature “subordinated neutral districting principles to political considerations” and (2) their predominant motive was to “maximize one party’s power,” along with a showing of discriminatory intent by establishing that (1) the plaintiff’s candidate of choice won election under the old plan; (2) the plaintiff’s residence is now in a district that is a safe seat for the opposite party; and (3) the plaintiff’s new district is less compact than the old district.⁹⁴ However, this complex alternative test was clearly not entertained by the majority.

The next major partisan gerrymandering case was heralded when the Court agreed to review a redistricting plan arising from Wisconsin in Gill v. Whitford, based on the fact that a new technical standard had been developed and proposed: the efficiency gap.⁹⁵ This was a formula devised by social scientists to provide metrics that could gauge the specific disadvantage created by certain redistricting schemes. The authors of this formula claimed it provided clear and workable standards for operationalizing them.⁹⁶ The result was a letdown when the Court dismissed the case for lack of standing. The Court also breezily dismissed another case the same year in a per curiam opinion regarding Maryland’s Democratic-favored political gerrymandering.⁹⁷ This case was reconsidered, and then dismissed, in the 2019 term.

Justice Kennedy’s departure from the Court led to a more decisive result in this line of cases. In Rucho v. Common Cause, a majority of the Court held for the first time that partisan gerrymanders are a political question and non-justiciable largely for the reasons developed in the dissent in Bandemer and the concurrences in Vieth.⁹⁸ This would seem to be, thus far, the end of the line for claims of partisan gerrymandering.

C. POINTS OF CONVERGENCE AND DIVERGENCE

The juxtaposition of the racial gerrymandering and partisan political gerrymandering cases is itself revealing. The partisan and racial gerrymandering cases germinate from the same seed and the same soil. They both arise out of a political context in which democratic representation is being distorted or manipulated for specific advantage, and in a legal context in which the Constitution provides scant direct guidance (despite the provision of a political mechanism by which Congress, via Article 1, Section 4, can alter state electoral rules in federal elections). The germ for both claims is the Court’s greater solicitude toward challenges to various electoral schemes in the early 1960s. And yet the Court has evolved vastly different frameworks and conclusions for regulating these forms of political districting activity for reasons that are not entirely convincing or coherent.

In theory, the different levels of scrutiny and accord given to race versus other classifications under the Equal Protection Clause could explain the differences in treatment, but the proponents of treating political gerrymanders as non-justiciable decline to ground their reasoning on this basis.⁹⁹ After all, if this were the critical explanatory factor, then partisan gerrymandering claims would be justiciable, just at a much lower level of judicial review.

Instead, the main contention of the non-justiciable position emphasizes the lack of workable standards and the constitutional structure and history of gerrymandering as a political practice. Recall, for example, that Justice White and the plurality in Bandemer emphasized whether a districting scheme created a severe structural disadvantage in access to the political process, whereas Justice Powell (joined by Justice Stevens) would have applied a multi-factor, holistic approach. Justice O’Connor and the Justices who joined her opinion argued that the Baker factors for evaluating whether an issue is a political question squarely fit, and that there was no logical stopping point short of proportional representation once such claims were entertained.

The most obvious rejoinder to the claim that political gerrymandering suits cannot be grounded onto a workable standard is the fact that workable standards have already been developed and adopted in the racial gerrymandering context. Logically, if the standard is workable in one context, it should be workable in another, absent some factor that would render it otherwise. Indeed, this is a prominent theme of the Justices who support judicial review of extreme partisan gerrymanders.

In Bandemer, all six Justices in the majority signed onto a sharp critique of Justice O’Connor’s opinion (joined by Burger and Rehnquist) arguing that she failed to “point out how the standards that we set forth here for adjudicating this political gerrymandering claim are less manageable than the standards that have been developed for racial gerrymandering claims.”¹⁰⁰ This was also a central point of contention in Vieth. The plaintiffs in that case modeled their claim on the standard adopted in Miller, that the partisan objective was a “predominant factor” in the redistricting process.¹⁰¹ As the plurality in Vieth forthrightly noted, “Appellants contend that their intent test must be discernible and manageable because it has been borrowed from our racial gerrymandering cases.”¹⁰² Yet, it disagreed, for reasons that Justice Stevens upbraided in his dissent:

Especially perplexing is the plurality’s ipse dixit distinction of our racial gerrymandering cases. Notably, the plurality does not argue that the judicially manageable standards that have been used to adjudicate racial gerrymandering claims would not be equally manageable in political gerrymandering cases. Instead, its distinction of those cases rests on its view that race as a districting criterion is “much more rarely encountered” than partisanship, and that determining whether race—“a rare and constitutionally suspect motive”—dominated a districting decision “is quite different from determining whether [such a decision] is so substantially affected by the excess of an ordinary and lawful motive as to [be] invali[d].” But those considerations are wholly irrelevant to the issue of justiciability.¹⁰³

Moreover, the stronger the argument advanced by the plurality in Vieth and the majority in Rucho against porting the standards used in the racial gerrymandering cases to the political gerrymandering context, the more they reveal the weaknesses of the doctrine they have developed in the racial gerrymandering context. In Vieth, for instance, Justice Scalia writes on behalf of the plurality that the “predominant motivation” test is “vague . . . when used to evaluate single districts, [but] it all but evaporates when applied statewide.”¹⁰⁴ Any vagueness, however, is built into the notion that courts can discern the predominance of any particular factor in a complex legislative process. Qualitative considerations in legislative processes are not like mechanical inputs into the production of widgets. They inherently resist the quantification necessary to determine “predominance.”

The argument Justice Scalia develops in the guise of a rhetorical question is especially revealing:

And how is the statewide “outweighing” to be determined? If three-fifths of the map’s districts forgo the pursuit of partisan ends in favor of strictly observing political-subdivision lines, and only two-fifths ignore those lines to disadvantage the plaintiffs, is the observance of political subdivisions the “predominant” goal between those two? We are sure appellants do not think so.¹⁰⁵

The exact same argument could be developed at the scale of a single political district in the racial gerrymandering context, using neighborhoods, census tracts, or other census designated geographies as the smaller scale analogue subdivision. The “predominant factor” test seeks to quantify the inherently qualitative. Any deficiency in the predominant factor test in the partisan gerrymandering context is likely equally applicable to the racial gerrymandering context.

Finally, Justice Scalia tries to draw another distinction to justify this difference in treatment:

Determining whether the shape of a particular district is so substantially affected by the presence of a rare and constitutionally suspect motive as to invalidate it is quite different from determining whether it is so substantially affected by the excess of an ordinary and lawful motive as to invalidate it.¹⁰⁶

But this argument utterly ignores the fact that Shaw and its progeny never characterized the pursuit of partisan political advantage as an ordinary (“traditional”) districting principle and also readily acknowledged that virtually all political districting is race-conscious, drawn with the awareness of racial demographics. To that extent, it is impossible to declare that consideration of race is any less “ordinary” than consideration of partisan advantage in the redistricting process. Moreover, in both cases, the argument is that it is only the predominance of this consideration that renders it illegal, not its mere presence. To that extent, Justice Scalia’s comment assumes what it concludes when it declares one legal and the other unlawful.

Chief Justice Roberts makes a similar leap in logic in Rucho: “A permissible intent—securing partisan advantage—does not become constitutionally impermissible, like racial discrimination, when that permissible intent predominates.”¹⁰⁷ If true, it is only because he and his colleagues make it so. If they decided that securing partisan advantage was unconstitutional when it predominates the redistricting process, then it would be so. Both Justice Scalia and Chief Justice Roberts assume that pursuit of partisan advantage is permissible to justify their conclusion that the case lines are different. Further, if the main reason that partisan gerrymandering is non-justiciable is the lack of workable standards, then the constitutionality of such processes is based upon their judgment in that regard rather than an evaluation of valiant, but ineffective, efforts.

As unconvincing as these arguments are for why the predominance test cannot be reasonably applied to the partisan context, there is an even stronger argument for why partisan and racial gerrymanders cannot be treated in such categorically distinct ways, and it is a point that the dissenters have not developed: the entanglement of partisanship and race in redistricting processes.

Against a backdrop of even moderate racial residential segregation, racial political polarization in voting patterns combined with the race-conscious districting processes mean that partisan gerrymandering cannot be clearly distinguished from racial gerrymandering. Even if mapmakers completely ignore racial demographics in generating districting options, a redistricting process motivated by the pursuit of partisan advantage is likely to produce maps strikingly similar to those that might occur if the state had “used race as a basis for separating voters into districts.”¹⁰⁸ The next Part of this Article confronts and unpacks this problem.

III. THE ENTANGLEMENT PROBLEM

The entanglement of race and partisanship in political districting processes is rooted in a few critical phenomena. To understand the entanglement problem, we must first examine the concept of polarization, especially as it is applied to politics.

Polarization is itself an elusive notion, and it is not always clear what it means. Sometimes polarization is invoked to describe the salience of political conflict.¹⁰⁹ This simple characterization is misleading. Although there may be an underlying relationship,¹¹⁰ partisanship and political polarization are not coterminous.¹¹¹

The existence of closely contested elections versus landslide elections cannot tell you whether the electorate is polarized or not. Landslides might occur in deeply polarized contexts but in which one group dominates another, as in the Jim Crow South, or low-polarization contexts in which a broadly popular, mainstream candidate triumphs. Similarly, closely contested elections can occur when both candidates are popular or both are deeply unpopular. Aggregate returns are not indicative.

More often, polarization is used to refer to intensity of disagreement or political conflict. This conceptualization, however, also fails to capture the essence of polarization. Extreme (corrosive or toxic) partisanship can exist in a state of either high or low political polarization. It is the distance or scope of disagreement, not necessarily the intensity of feeling or contestation, that is key to understanding polarization. This is perhaps easier to understand in an economic context.

Suppose that most people in a certain society are middle-income, with far fewer extremely rich and extremely poor individuals. Such an income distribution would be depicted graphically in the form of what statisticians call a “normal distribution” (or a “Gaussian” distribution) with a bulge in the middle and smaller downward sloping tails toward the edges of the income distribution.¹¹² In contrast, suppose that most people in another society are either extremely poor or very wealthy, with fewer people as middle-income. This is what statisticians call a bimodal distribution, with bulges towards the ends of the distribution. The mean or median results could be identical in both situations. See Figure 1.

FIGURE 1. A Normal vs. a Bimodal Distribution

Polarization refers to a process by which a distribution resembling a normal distribution evolves into something more closely resembling a bimodal distribution. Thus, if the income distribution hollows out this way, economists may describe this as “economic polarization.”¹¹³ The same is true of politics.

As political scientists and surveyors have demonstrated, American political attitudes have indeed become more polarized in recent decades.¹¹⁴ The Pew Research Center, which conducts regular surveys on political attitudes, found that in both 1994 and 2004, more Americans expressed mixed or centrist political opinions than either conservative or liberal views.¹¹⁵ By 2014, however, this had reversed, a trend that has continued to the present.

One particularly important dynamic contributing to political polarization is that Republicans have become more conservative and Democrats have become more liberal. In 1994, only 64% of Republicans were more conservative than the median Democrat, and only 70% of Democrats were more liberal than the median Republican. By 2014, those figures had risen to 92 and 94%, respectively.¹¹⁶

Another form of polarization is racial political polarization. This tends to refer to distinctive partisan preferences between racial groups. Table 1 below indicates the significant racial gaps in support for partisan candidates in presidential elections since 2000.

TABLE 1. Republican Support by race in Presidential Elections, 2000–2020.¹¹⁷.

Although there is non-trivial variation between electoral cycles, this table shows consistently high political polarization between racial groups in the popular vote for President (and by implication for political party) over two decades. In presidential elections since 2000, Black support for the Republican candidate narrowly ranges from 4% to 12%. White support ranges from 55% to 59%. Latino support ranges from 26% to 44% (in 2004).¹¹⁸ And Asian support ranges from 27% to 43%. The white-Black voting gap ranges from 46 to 53 points. Although political polarization by race seems to reach a peak in 2012, the figures as of 2020 are just as large, if not larger, as they were in 2000. In short, racial political polarization has worsened over time, but it has been consistently high throughout the twenty-first century.

Similar tables could be generated for congressional races, midterm elections, governor’s races, and the like. Political scientists have observed that racial political polarization in the United States has been pronounced at least since 1965.¹¹⁹ This connection between race and partisan affiliation is described as the “conjoined polarization.”¹²⁰ Although this phenomenon might be troubling in its own right, it is not automatically a problem in the context of political redistricting processes.

If racial groups were evenly distributed across space, then political polarization by race would not factor into political redistricting processes. Gender political polarization offers a contrasting illustration. Gender political polarization has increased significantly in recent years too, and a table similar to Table 1 could be presented illustrating it.¹²¹ But the absence of gender political segregation means that gender is not a meaningful basis upon which to conduct political redistricting processes.

Residential segregation is the critical element that enables gerrymandering. This is true generally, but in the context of racial gerrymandering, racial residential segregation is the critical factor.

When racial groups are highly concentrated into certain neighborhoods or communities, and there is a moderate to high degree of racial political polarization, then racial gerrymandering is relatively easy. On the other hand, even if the political community is racially polarized, if racial groups are highly integrated across space, then racial gerrymandering would prove extremely difficult to impossible. If either condition is absent, it is not possible to either use race to draw political districts for partisan advantage nor to draw districts for partisan advantage that segregate people into different political districts on the basis of race. Only when both conditions hold does the entanglement problem arise. Table 2, below, indicates the relationship.

TABLE 2. Conditions for Entanglement

The entanglement of race and politics in political redistricting processes, then, is not simply a function of the conjoined polarization of racial political polarization and partisan political polarization. It depends on the existence of racial residential segregation as well.

Unfortunately, racial residential segregation is persistently moderate to high across much of the United States. Using traditional measures of segregation such as the dissimilarity index, national Black-white dissimilarity in 2020 was 55.2, meaning that 55% of Black Americans would have to move into a predominantly white neighborhood to have no racial residential segregation between Black and white Americans.¹²² This is in a range social scientists regard as “moderately high.” Asian-white dissimilarity scores are 40.0, and Hispanic-white dissimilarity scores are 45.3, in the moderate range.¹²³ Even though most of these numbers have improved in recent decades, they demonstrate the persistence of racial residential segregation. In many cities, these figures are much higher.

Other popular measures of segregation are the Isolation/Exposure Indices, which describe neighborhood composition of the typical (median) or average person by race. The “typical” Black and white Americans reside in vastly different neighborhood milieus. As of 2020, the average white resident of a metropolitan area resides in a neighborhood that is 69% white, 9% Black, 12% Hispanic, and 6% Asian.¹²⁴ In contrast, a typical Black resident lives in a neighborhood that is 41% Black, 34% white, 17% Hispanic, and 6% Asian. Not only are these demographically different worlds, these figures mean that Black “exposure” to white people is 34, roughly the same level it was in 1940.

Using a different measure of segregation, the Divergence Index, which can account for multiple racial groups simultaneously and provide a single holistic score for every city or metropolitan region, racial residential segregation appears stubbornly persistent.¹²⁵ The Divergence Index compares demographic proportions of smaller geographies to larger geographies and then sums those population-weighted differences to yield a holistic score.¹²⁶ Over 50% of cities and metro areas have a higher (more segregated) Divergence score as of 2020 than in 1990.¹²⁷

Given the central role of residential segregation in facilitating or impeding the manipulation of district boundaries for political advantage, it is strange that prior legal scholarship has under-emphasized or ignored this factor in analyzing gerrymandering cases. Perhaps that is because it is assumed that segregation is a neutral or binary background factor that either exists or does not, and does not actually affect the level of partisan political polarization in a region. If so, there are several findings that challenge this assumption.

A study conducted by the political scientist Jessica Trounstine identified a direct relationship between racial residential segregation and partisan political polarization.¹²⁸ She finds that the relationship between segregation and racial political polarization is statistically powerful: a city in the 10th percentile of segregation has a 35% point divide in racial support for a political candidate, compared to a 63% point divide at the 90th percentile.¹²⁹ In other words, the more racial residential segregation, the more racial political polarization.

Could this difference be explained by the fact that white people vote more conservatively in certain states or regions than others? She tests for this and finds that the relationship between segregation and polarization is unaffected by the conservatism of the local white population. In fact, she found that “cities with more conservative white populations have smaller racial divides.”¹³⁰

In short, racial residential segregation is not a background condition that exists in a binary state, either existing or not, to undergird the entanglement problem. Rather, it is a condition that interacts dynamically with racial political polarization. A higher level of racial residential segregation seems to coincide with higher racial political polarization. Similarly, racial residential segregation interacts dynamically with partisan political segregation and (by inference) partisan political polarization, as will be shown below.

To appreciate the full relationship between race and politics, it is important first to emphasize that the critical role of residential segregation in relationship to gerrymandering is general, not specific to racial segregation and racial gerrymandering. Partisan political polarization, by itself, is neither a necessary nor a sufficient condition to enable partisan gerrymandering. Political segregation, however, is necessary. If people of different political preferences or partisan affiliation are evenly distributed across space, regardless of how polarized they may be, it is extremely difficult to draw political districts for partisan advantage. On the other hand, high levels of partisan residential segregation (say, Republicans living in one community and Democrats in another) make it much easier to draw districts for partisan political advantage. For simplicity of illustration, compare hypothetical voting precincts of equal size with voting totals depicted in Tables 3 and 4 below.

TABLE 3. Hypothetical #1 Voting Precinct Electoral Results

Although the vote total in Table 3 is relatively close (only a two-point margin between the winner and loser), the precincts are extremely divergent from the aggregate vote total, suggesting a high degree of political segregation between precincts. In contrast, consider this a different election with the same aggregate result in Table 4 below.

TABLE 4. Hypothetical #2 Voting Precinct Electoral Results

In this case, the winner’s vote margin is the same as in the first case, but the precincts only marginally diverge from the aggregate result. The largest gap for support for Candidate A and the aggregate result is just 4 points, in Precinct 1, compared to a 37–40-point gap between each precinct and the ultimate results in the first case. The first case suggests a high level of political segregation across precincts. If these results were stable over time, and not specific to a particular candidate but consistent across candidates and issues, then we could reasonably describe that region as having a high degree of political segregation. It should be much easier for mapmakers to draw political districts for partisan advantage in cases like the first rather than the second (although a larger number of precincts or sub-precinct level voting data would be needed).

Unfortunately, the United States has widespread political segregation as well, which maps vividly illustrate.¹³¹ Democrats and Republicans are not just more divergent in their views, they are increasingly residing in different communities.¹³² Using this type of data or other geographically disaggregated vote tabulations, it is possible to calculate the degree of political segregation that exists in different regions. Using the formula for the Divergence Index (described above),¹³³ I have calculated the relative degree of political segregation for different major metropolitan regions of the United States.

Using 2020 presidential election precinct tabulation results, out of the 314 largest metropolitan areas in the United States (those with a population of 200,000 or more), Table 5 below lists the top 20 most politically segregated regions of the United States along with their divergence score.¹³⁴

TABLE 5. The 20 Most Politically Segregated Metropolitan Areas in the United States (2020 Presidential Election)

The dynamic of political segregation can also be depicted visually, providing a more intuitive and easily comprehensible approach. Compare maps of Jackson, Mississippi (the most politically segregated metro), with Carson City, Nevada (ranked 273 out of 314), which has one of the lower political divergence scores), in Figure 2, below. The contrast is vivid.

FIGURE 2. Political Segregation in Jackson, Mississippi, and Carson City, Nevada

As the maps displayed in Figure 2 illustrate, the metropolitan area of Jackson ranks first in political divergence, indicating the presence of ideological extremes where precincts overwhelmingly voted in favor of one party while neighboring precincts voted in favor of the other party. In contrast, all of the precincts in Carson City approximate the regional average, suggesting a much lower level of political segregation. The high level of political segregation in Jackson makes it especially vulnerable to partisan gerrymandering. This is partly what makes districting such a dilemma in the United States: the high degree of political geographic or residential segregation.

One of the striking features of the list presented in Table 5, above, is that the vast majority of the most politically segregated regions are in the South (17 of the top 20).¹³⁵ Given that region’s racial history, it raises the question of whether there is a relationship between political residential segregation and racial residential segregation in the United States. Figure 3, below, confirms the relationship between the two, as shown in a scatterplot.

FIGURE 3. Racial Segregation and Political Segregation in the United States, 2020 (314 Metros)

Figure 3 depicts the 314 largest metropolitan areas in the United States. The horizontal axis indicates the divergence index score (calculated as described above) for political segregation and the vertical axis indicates the relative percentile rank for racial residential segregation using the same formula but with data from the 2020 decennial census.¹³⁶ The scatterplot indicates a clear positive relationship, with a 0.50 correlation between the two variables.¹³⁷

Not only does this analysis suggest a relationship between the two phenomena, but it also means that where racial segregation is higher, partisan gerrymandering should be easier. Conversely, where partisan segregation is higher, racial gerrymandering should be easier. In short, they go hand in hand, but in a dynamic relation.¹³⁸ The problem lies in their coincidence.¹³⁹ This is the crux of the entanglement problem, not the simple fact of conjoined polarization between race and politics.

Whether the context is partisan gerrymandering or racial gerrymandering, the active ingredient is segregation, not polarization. Partisan gerrymandering only requires some degree of political segregation. Racial gerrymandering, however, requires both racial political polarization and racial residential segregation.¹⁴⁰ Prior legal scholarship treats segregation as the backdrop condition and conjoined polarization as the central or proximate problem when the truth is the opposite.

In practical terms, the persistence of racial political polarization means that the strong correlation between political segregation and racial residential segregation easily facilitates both racial and partisan gerrymandering in ways that are essentially indistinguishable. State officials can draw maps at a hyper-granular level that may relocate a small number of people from one district to another, with full awareness of their race and the fact of conjoined racial identity with partisan preference, and nonetheless claim that the decision was based on partisan motivations. In other words, racial residential segregation enables partisan gerrymandering that will result in the political segregation of people between districts on the basis of race. Even if the map-makers were to scrub all data regarding race from their software, a map drawn on partisan or other non-racial characteristics could appear objectively indistinguishable from maps drawn in cases like Shaw.

This problem is not speculative or theoretical. The Supreme Court has already heard cases touching on this problem. In oral argument in Wittman v. Personhuballah,¹⁴¹ Chief Justice Roberts asked “if race and partisanship are co-extensive, which one predominates?”¹⁴² In that case, several Republican members of Congress appealed a lower court’s decision to strike down a redistricting plan it found to be based on race. This question led to a brief dialogue among the Justices and the lawyer for the original plaintiffs regarding this issue, but the case was ultimately dismissed for lack of standing among the members of Congress to bring their appeal.

In another case decided that same term, Cooper v. Harris, the Court acknowledged that many of the Shaw considerations (compactness, for example) used to assess whether race predominated become less probative when the state raises the defense of partisanship.¹⁴³ As it explained, “political and racial reasons are capable of yielding similar oddities in a district’s boundaries. That is because, of course, ‘racial identification is highly correlated with political affiliation.’ ”¹⁴⁴ In that case, the Court rejected the claim that partisan goals are a complete defense to racial gerrymandering claims. As it explained, the predominance “inquiry is satisfied when legislators have ‘place[d] a significant number of voters within or without’ a district predominantly because of their race, regardless of their ultimate objective in taking that step.”¹⁴⁵

So, for example, if legislators use race as their predominant districting criterion with the end goal of advancing their partisan interests—perhaps thinking that a proposed district is more “sellable” as a race-based VRA compliance measure than as a political gerrymander and will accomplish much the same thing—their action still triggers strict scrutiny.

Id.

But this guidance merely sidesteps the more difficult question of how to determine whether a legislature’s districting decisions were “because of race” in such cases, and assumes that racial motives can be disentangled from partisan ones (either as a means or an end).¹⁴⁶ Indeed, the entire concept of “predominance” assumes that the factors considered by entities charged with redistricting, and which are being reviewed by courts, are separate and independent elements.¹⁴⁷ Because of the difficulties introduced by entanglement, lower courts may be hesitant to rule that race “predominates” when race and partisanship are highly entangled or when the state supplies reasons to believe that any apparent use of race was merely partisanship.¹⁴⁸

Again, this is not a speculative concern. The NAACP Legal Defense Fund and the Lawyers Committee for Civil Rights brought a suit against Georgia in 2017 alleging that a mid-decade redrawing of political districts was both a racial and political gerrymander.¹⁴⁹ The district court acknowledged that ascertaining the existence of a racial gerrymander was “particularly hard to do when the State offers a defense rooted in partisan gerrymandering, as it did here. We did not move these voters because they are black, the State tells us. We moved them because they were Democrats.”¹⁵⁰ The court ultimately sided with the state for that reason.

Experience demonstrates that this epistemological problem created by the entanglement of racial and partisan gerrymanders already exists and may be intensifying. The provision of block level census data following the 1990 census meant that state legislatures could draw more fine grain political districts based on race than was ever possible before using computer programs. Indeed, the Court confronted this fact in Bush v. Vera, in which the Court noted that the computer program “REDAPPL enabled districters to make more intricate refinements on the basis of race than on the basis of other demographic information.”¹⁵¹

This technology has only improved in the intervening decades. It is now possible to generate thousands of potential maps at a keystroke with computer processing and programs that draw from large voter or census files.¹⁵² Large data files can be cross-referenced not only to generate demographic profiles, but also psychographic information, such as predicting propensity to vote, donate money, or even respond to certain campaign communications.¹⁵³

Upon the death of a North Carolina Republican strategist involved in redistricting efforts, his daughter made public his personal computer files against the wishes of the party and company he worked for.¹⁵⁴ The trove contained thousands of documents detailing the various ways that he sought to generate political advantages for his clients, describing gerrymandering as legal vote stealing.¹⁵⁵

In Vera, however, Justice O’Connor stated that “[i]f district lines merely correlate with race because they are drawn on the basis of political affiliation, which correlates with race, there is no racial classification to justify.”¹⁵⁶ Although likely dicta, this approach nonetheless does not resolve the issue because, if there is a perfect identity or correspondence of race and partisanship, how is a court supposed to judge whether the lines were drawn “because of political affiliation” or “because of race”? If a state legislature is trying to conceal its racial intentions, it would simply develop a record of partisan purposes and other traditional districting considerations. The entanglement of race and partisanship would then allow state legislatures to subvert the Constitution.¹⁵⁷ The vastly divergent standards for both forms of gerrymandering makes it even more difficult to regulate this problem. There are, however, solutions.

IV. SOLUTIONS

This Article argues that the wildly divergent standards established by the Supreme Court governing partisan political gerrymandering and racial gerrymandering claims are untenable. Justices across the ideological spectrum agree that the use of race in drawing political districts may run afoul of the Constitution, but the Court’s extremely divergent rules regulating gerrymandering cases make it extremely difficult, if not impossible, to know whether race has been used or not. In too many contexts, partisan political gerrymanders will entail conduct that violates the principles and standards established by the foundational racial gerrymandering cases, or run so closely up to them that any attempt to fully disentangle partisan ends from racial ones is likely to be hopelessly futile or end up subverting the Court’s racial gerrymandering jurisprudence by allowing racial gerrymanders to escape under the cover of partisanship.

Beyond the categorical differences grounded in the Court’s precedent regulating the use of race at a higher level of judicial review than most other classifications, the Court has tried to manage the entanglement problem in two steps: first, by recognizing that all political districting processes are inherently race-conscious, as they are conscious of other demographic and community characteristics.¹⁵⁸ Thus, the Court has distinguished between awareness of race and actions or policy decisions that use race in the sorting of people into different districts. The Court has held that it is the latter that violates the Constitution, not the former.

Second, by requiring that racial considerations actually “predominate” other factors, the Court has drawn a line between impermissible consideration of race and other ordinary or “traditional” considerations such as compactness, contiguity, community boundaries, and so forth.¹⁵⁹ It is notable that in the listing of such ordinary considerations that partisan political advantage is never mentioned or listed. And this is presumably not simply because a bare-faced partisan consideration is unseemly, but because it was not considered by the Court (at least in those decisions) as a regular or ordinary consideration in the districting processes. Nonetheless, the Court’s jurisprudence prompts an objective, factual inquiry into whether race was in fact used or not.

Unfortunately, several demographic factors are converging in a way that makes it much more difficult—if not impossible—to delineate between race and partisanship as a consideration. First, political polarization appears to have increased in recent years.¹⁶⁰ Second, political segregation is highly visible and becoming more pronounced as well.¹⁶¹ Third, racial political polarization has increased markedly in recent decades.¹⁶² The interaction of these three factors, on top of a fourth—the persistence of racial residential segregation¹⁶³—means that partisanship and race are highly correlated in a way that makes partisan districting largely and increasingly coterminous with racial districting. In simplified terms, “conjoined polarization” and racial residential segregation interact to create the conditions that entangle race and partisanship in political redistricting processes.

That this is a practical problem is evidenced by the fact that many cases heard by the Supreme Court in recent years feature both claims, whereas that would have been anomalous even a few decades ago.¹⁶⁴ With the Court shutting the door on partisan gerrymandering claims, it seems increasingly likely that suits designed to curb the excesses of partisan gerrymandering will be brought under the color of racial gerrymandering.¹⁶⁵ Thus, the Court will eventually need to squarely confront and address this problem.

One possible solution is to carve out an exemption for racial gerrymanders that appear to be largely or entirely based on partisan motives, as Justice O’Connor intimated in Vera, but to extend the exemption to cases in which the objective use of race clearly “predominates.”¹⁶⁶ Under this approach, mapmakers would be permitted to use race in districting processes as long as their purpose was purely partisan. Under this approach, partisanship would be a complete defense to racial gerrymandering claims.

This approach would solve the smaller problem of the difficulties lower courts confront disentangling race and partisan motivates, but it would leave intact the larger problem of allowing racial gerrymanders to persist under the cover of partisanship. To that extent, this is only a partial solution or non-solution, because it would potentially obliterate the racial gerrymandering claim and undermine the constitutional prohibition against the use of race in policymaking in many ordinary cases.¹⁶⁷ Under a rule such as this, any egregiously racially segregated political district could be justified on the basis of mere partisanship. The obvious exception would be cases in which state legislatures are seeking to create “majority-minority” districts under the VRA, because those could not plausibly be defended on partisan-only grounds. This approach would clearly violate the Court’s prevailing anti-classification jurisprudence and the principles and spirit of Shaw and its progeny’s rules against permitting state legislatures to sort people into one district or another on the basis of race.

A second possible solution would be to create an exemption in the opposite direction: a supplement could be drawn to the rule that partisan gerrymanders are non-justiciable if partisan purposes overlay or are essentially indistinguishable from racial considerations. In such a case, partisan gerrymanders could be swept into the racial gerrymandering line, even though it would be difficult or implausible to assert that race “predominates.” This is essentially the tack the Court appeared to take in Cooper v. Harris in its 2016 term, prior to the Court’s more recent decision that partisan gerrymanders are non-justiciable in Rucho.

The NAACP Legal Defense Fund’s president and director-counsel, Janai Nelson, has suggested an approach along these lines.¹⁶⁸ The approach would shield against rearguard incursions into racial gerrymandering from the partisan direction. This option is most consistent with the Court’s anti-classification jurisprudence: any sorting or segregation of people into different political districts based on race violates the Constitution, even if it cannot be said that race “predominates.” This approach drives the presumptive rule against the use of racial classifications to its logical endpoint.

Although requiring a tweak to the Court’s racially gerrymandering jurisprudence, the Court can easily justify the use of a threshold test less than “predominance” when two factors are so tightly entangled that “predominance” becomes nonsensical.¹⁶⁹ In such cases it is either impossible for race to “predominate” because partisan considerations are co-extensive with race or, even if they are greater, it is because their correspondence renders the possibility of calculating predominance by disaggregating and weighing the relative influence of each factor or consideration impossible.¹⁷⁰

A third possible solution to the entanglement problem is to reverse course on partisan gerrymanders and declare that they are justiciable. Aside from the unlikely chance that the Court will revisit, let alone reverse, it’s recent decision in Rucho, even if it were to do so, there remains the challenge of defining the standard upon which they can or should be reviewed.

The most obvious and straightforward option is the predominance test—to inquire whether partisan considerations “predominate” over other ordinary districting considerations. In cases where race and partisanship are entangled, this could help solve the larger problem of allowing racial gerrymanders to escape under the cover of partisanship, but it does not actually solve the epistemological problem of how courts may distinguish between entangled factors or inputs.¹⁷¹ Thus, it would have the inverse effect of the first possibility, which is to help address the larger problem, but leave the smaller one intact.

Moreover, this possibility remains only a partial solution to the larger problem. Even if the Supreme Court were to allow courts to review partisan gerrymandering claims, it is unlikely that such partisan gerrymanders would be reviewed at the exactingly high level of scrutiny as racial classifications are. Thus, there is still some risk present that racial gerrymanders will escape regulation in the guise of partisanship due to the gap in the standards of review.¹⁷²

This third option, however, although requiring a reversal of recent precedent, is at least more logically consistent with the idea that these are categorically distinct claims arising from different case law and constitutional concerns. It renders the entanglement problem less urgently in need of resolution since the more extreme partisan gerrymandering cases would be regulated through a parallel structure under (presumably) rational basis review.

This approach has several other meritorious considerations in its favor, especially its potential grounding in various aspects of constitutional jurisprudence. Some versions of this approach, for example, naturally conform to the paradigm famously known as “Carolene Products footnote four.”¹⁷³ This famous footnote in Constitutional Law maps neatly to the entanglement problem at issue in this Article. That is because at the heart of this footnote are issues of political process and racial equality and their interrelation, the same issues here. As the Court said in that famous footnote:

It is unnecessary to consider now whether legislation which restricts those political processes which can ordinarily be expected to bring about repeal of undesirable legislation, is to be subjected to more exacting judicial scrutiny under the general prohibitions of the Fourteenth Amendment than are most other types of legislation. . . . Nor need we enquire whether similar considerations enter into the review of statutes directed at particular religious, or national, or racial minorities; whether prejudice against discrete and insular minorities may be a special condition, which tends seriously to curtail the operation of those political processes ordinarily to be relied upon to protect minorities, and which may call for a correspondingly more searching judicial inquiry.¹⁷⁴

Carolene Products footnote four has been called a “paradigm” within equal protection jurisprudence on account of the fact that it provides a coherent and comprehensive roadmap for judicial review.¹⁷⁵ It is not just that the footnote addresses one possible way of dealing with laws that affect access to the political process, like political redistricting does, but it also specifically deals with the intersection of race and political access: suggesting that laws which impede racial minorities access to the political process should be reviewed more closely.

The Equal Protection Clause arguably provides a sufficient basis by itself for establishing a rule against partisan gerrymanders: they violate fundamental democratic principles such as those that motivated the Court to rule, in the early 1960s, that political districts should be of equal size. They violate majority rule—what Madison called the “fundamental principle of free government” in Federalist No. 58 and Hamilton called the “the fundamental maxim of republican government” in Federalist No. 22.¹⁷⁶ Whether permitting a minority to entrench itself through the manipulation of district boundaries or by manipulating the number of voters in each district, the result can be the same and does violence to the principle of “one person, one vote” either way.

A claim rooted in equal protection could narrowly assert that permitting extreme partisan gerrymanders would violate a person’s right to be treated equally by law or more broadly assert that it would also hinder access to both the political process and the ability to use that process to remedy unfair or unjust legislation. But even if the Equal Protection Clause itself, or some broader more synthetic reading of it, Carolene Products, or even related associational claims grounded in the First Amendment are part of the foundation for rendering partisan gerrymandering claims justiciable,¹⁷⁷ there is another constitutional provision which has lain dormant but could be potentially enlisted to this cause: the Guarantee Clause.

The Guarantee Clause requires the United States guarantee to the states a republican form of government.¹⁷⁸ Although rarely invoked, the prevailing consensus is that this Clause requires majority rule and that representatives serving in state governments be selected by elections.¹⁷⁹ In other words, it is a guarantee to the citizens of those states (and of the nation) that each state government must be republican in form. This clause might be the basis for challenges to features of various state governments that are anti- or un-democratic. In addition to a formal recognition of the problem of entanglement in the gerrymandering cases, a revival of the Guarantee Clause could provide an easily understandable basis for reversing or excepting Rucho.

The problem here is that Supreme Court precedent does not allowed federal courts to entertain claims brought under the Guarantee Clause, thus far. In 1849, and again in 1946, the Supreme Court ruled that claims under this clause are non-justiciable.¹⁸⁰ Prominent and notable jurists, however, would have held otherwise. In his courageous and lonely dissent in Plessy v. Ferguson, the first Justice Harlan would not only have held that the segregative railway statute adopted by the state of Louisiana and reviewed in that case violated the Thirteenth and Fourteenth Amendments to the Constitution, but also the Guarantee Clause. As he explained:

Such a system is inconsistent with the guaranty given by the constitution to each state of a republican form of government, and may be stricken down by congressional action, or by the courts in the discharge of their solemn duty to maintain the supreme law of the land, anything in the constitution or laws of any state to the contrary notwithstanding.¹⁸¹

The aforementioned Supreme Court decisions, moreover, occurred prior to the Court’s ruling that districting cases are justiciable in Baker v. Carr. And in any event, these decisions cannot be based on the meaning of that clause as understood by its framers.¹⁸²

Federalist No. 9 explains that the “principles” of republican governance are “now well understood,” and in addition to the fundamental majoritarian principle, they include: (1) “[t]he regular distribution of power into distinct departments”; (2) “the introduction of legislative balances and checks”; (3) “the institution of courts composed of judges holding their offices during good behavior”; and (4) “the representation of the people in the legislature by deputies of their own election.”¹⁸³

Moreover, Federalist No. 39 dealt specifically with the meaning of republican government. As Madison explained there, “we may define a republic to be . . . a government which derives all of its powers directly or indirectly from the great body of the people; and is administered by persons holding their offices during pleasure for a limited period, or during good behaviour.”¹⁸⁴ In other words, it is a government, in the words of Lincoln, “of, by, and for the people.”¹⁸⁵ Madison goes onto explain that

[i]t is essential to such a government, that it be derived from the great body of the society, not from an inconsiderable proportion, or a favored class of it; otherwise a handful of tyrannical nobles, exercising their oppressions by a delegation of their powers, might aspire to the rank of republicans, and claim for their government the honorable title of republic.¹⁸⁶

Critics might note that, despite Madison and Hamilton’s declarations on the centrality of the principle of “majority rules,” they and their colleagues seemed unconcerned with the use of districting for partisan advantage in terms of either unequal size of districts or manipulation of lines, or else they would have argued against it (as they did against equal suffrage for states) or proposed or included provisions in the Constitution or in their respective roles in the federal government against it. In Part II, a number of possibilities were presented as to why Madison and Hamilton may not have introduced measures relating to this potential problem. A few more may now be considered.

First, any interpretative methodology assessing the Guarantee Clause would have to account for the fact that many categorical exclusions for voting existed at the time of the framing of the Constitution that are now prohibited, including those on the basis of sex, race, and class (through the Fifteenth, Nineteenth and Twenty-Fourth Amendments, respectively).¹⁸⁷ Thus, there are textual reasons to “update” any originalist understanding of the Guarantee Clause based upon the text of the Constitution itself, as amended. After all, it has already been observed that the modern Supreme Court has repeatedly struck down districting plans with population disparities in percentage terms far less than those observed by Madison and Hamilton in The Federalist Papers.

Second, the framers failed to anticipate the extent to which partisanship would manifest in the federal councils and the harmful effects thereof. There is no reason to believe that they should devise measures to address problems they lacked the foresight to see. And, by their own accounts, the precautions and safeguards that the framers believed would curtail the harmful effects of partisanship were based on assumptions and premises that proved fallacious or were quickly refuted by experience as political parties organized themselves in the federal councils.

To be clear, the framers were well-aware of the problem of partisanship. Having observed it within the states and other republics, Alexander Hamilton referred to this problem as “the diseases of faction” and the “demon of faction,” and James Madison called it “mischiefs of faction” and the “rage of party.”¹⁸⁸ What they underestimated was the degree to which political parties would become the primary organizing forces to frame political discourse and focus policy debate in the federal government.

As Madison and Hamilton explained throughout The Federalist Papers, the framers believed that the size and diversity of peoples and interests represented in the national government would ameliorate the effects of faction as observed in the state governments.¹⁸⁹ As Madison concluded in Federalist No. 10, the “variety of sects dispersed over the entire face of [the confederacy of states] must secure the national councils against any danger from that source.”¹⁹⁰ Hamilton arrived at similar conclusions in Federalist Nos. 60 and 61, where he wrote that “a diversity of local circumstances, prejudices, and interests” would make it unlikely that a “predominant faction” would prefer a particular class of electors over another.¹⁹¹ Not only that, Hamilton felt that the diverse manner in which the various federal branches would be populated would safeguard against this problem, such that he concluded there is “little probability of a common interest to cement these different branches in a predilection for any particular class of electors.”¹⁹²

If at any moment the quantity of highly competitive national political parties had been greater and more numerous or if political parties had not acquired so much significance in organizing political interests at a national level, then this conclusion might have proven correct. But by the end of the first decade of the government’s operation under the Constitution, the problems of partisanship were already manifest to such an extent that it was one of the principal subjects of concern in George Washington’s 1796 Farewell Address. Far from leaving office assured with his good works and sanguine on the young nation’s prospects, he sounded an alarm.

In this regard, any originalist argument would be incomplete without considering George Washington’s remarks in his Farewell Address, which were drafted with input from Hamilton and Madison, his top advisors. The degree to which they underestimated the corrosive effects of toxic partisanship—what they called the “baneful effects of the spirit of party”—is clear from the substance of the address.¹⁹³

Having observed the emergent dynamics of partisanship firsthand as the nation’s first chief executive,¹⁹⁴ Washington expressed a deep-seated fear that political parties presented a danger to the stability of the young republic, and potentially an existential threat. The Senate Historical Office characterizes his remarks concerning the “dangers of parties in state” as reflecting the view that political parties “carried the seeds of the nation’s destruction through petty factionalism.”¹⁹⁵ The remarks specify, in serial form, the harmful effects that flow from extreme partisanship. Among them:

• “It serves always to distract the public councils and enfeeble the public administration.”

• “It agitates the community with ill founded jealousies and false alarms,”

• “kindles the animosity of one part against another,”

• “foments occasionally riot and insurrection.”

• “It opens the door to foreign influence and corruption, which find a facilitated access to the government itself through the channels of party passions. Thus the policy and the will of one country are subjected to the policy and will of another.”¹⁹⁶

If anything, the experience of the last few years amply illustrates these dangers, especially in the administration of President Donald Trump, which experienced arguably each of these effects, most obviously in the Ukraine scandal that led to the first impeachment,¹⁹⁷ the interactions with Russian officials that led to the Mueller investigation,¹⁹⁸ and the riot and insurrection at the Capitol on January 6, 2021.¹⁹⁹

Extreme partisanship has fostered a visceral antipathy against the other party (what political scientists call “negative partisanship”) often for no other reason than the “animosity of one part against another,” such that even bipartisanship on broadly popular legislation (such as when Republicans in Congress voted for the 2021 infrastructure bill) is viewed within the faction as a violation of partisan solidarity.²⁰⁰

And, in the most extreme case, above all the previously listed concerns, Washington asserted that partisanship could lead to the “destruction of public liberty” in this way:

The alternate domination of one faction over another, sharpened by the spirit of revenge natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries which result gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation on the ruins of public liberty.²⁰¹

Some political prognosticators and military leaders have warned that some version of this frightful vision might be realized in the aftermath of the 2024 election.²⁰²

Critically, however, Washington also characterized the dangers of extreme partisanship in geographic terms, which he called “the danger of parties in the state, with particular reference to the founding of them on geographical discriminations.”²⁰³ Although he may well have been referring to the sectional divide between the North and the South, the specific formulation is a perfect fit for the excesses of gerrymandering. It accurately characterizes the manifestation of partisanship through gerrymandering, which is a process of making geographic discriminations.

Whether a consequence of the framers’ underestimation of the ultimate role of political parties, the extent to which partisanship would infect the federal government, or some other reason, the Constitution itself is silent in regards to the problems posed by extreme forms of political districting. But that does not mean that the framers left the political community helpless, even in the absence of an explicit constitutional provision adopted to solve this problem. Provisions like the Guarantee Clause are open-textured specifically to empower that political community to address problems such as this, empowering both Congress and the courts to regulate such practices as partisan districting as circumstances may necessitate.

CONCLUSION

Unlike the canonical and venerated document that it is regarded as today,²⁰⁴ the United States Constitution was recognized by its framers as a political experiment of uncertain prospects.²⁰⁵ To give the political community governed by it the flexibility to make it work in practice and tailor it to exigencies without violating its text or spirit, the framers provided an amendment process to correct for unforeseen flaws or circumstances and used terse, open-textured language amenable to varying shades of interpretations in enumerating certain powers, rights, or prohibitions.²⁰⁶

Nonetheless, the Constitution was chiefly designed to overcome the deficiencies of the Articles of Confederation and other problems that had plagued the young republic.²⁰⁷ Consequently, it is silent on many issues that subsequently bedeviled the nation governed by it in intervening centuries. Two notable examples that frustrated subsequent generations in the first half of the nineteenth century were the definition of national citizenship and its relationship to state citizenship, and in the latter half of the twentieth century and early twenty-first century, the issue of abortion.

Because the original Constitution did not explicitly indicate how federal citizenship was defined or acquired, the Supreme Court ultimately decided the question of whether persons of African descent were or could become United States citizens, which it did in the most notorious case of Dred Scott v. Sandford.²⁰⁸ The Court’s decision was reversed by opening line of the Fourteenth Amendment.²⁰⁹ Similarly, the issue of abortion has proven to be highly divisive and one of the most deeply contested legal matters of the last fifty years. Advocates and jurists often look beyond the explicit text to the structure of the Constitution and the history and traditions of the republic at certain points in time to try to resolve these matters.²¹⁰

Unfortunately, extreme manipulation of political districting processes is another issue upon which the Constitution remains explicitly silent. This does not mean federal officials are powerless to address it. Constitutional text provides indirect solutions, such as the affirmative powers afforded Congress under the Elections Clause to “make or alter” the laws for elections to the federal legislature and implicit protections made by inferences drawn from other provisions, such as the Equal Protection Clause. Nonetheless, as a result of the lack of constitutional specificity regarding this issue, certain problems generated by this underlying phenomenon are treated differently, depending on the circumstances, the class of persons most affected, or the form of the districting problem.

This Article focuses on the problem of the entanglement of race and partisanship in the judicial review of gerrymandering claims. It conducts a brief history of gerrymandering, examines the divergent lines of cases, reveals the factors that contribute to the growing problem of gerrymandering, including the relationship between political segregation and racial residential segregation, and closes with a survey of possible solutions grounded in the constitutional text and structure.

Although Congress could potentially pass laws curbing gerrymandering in the states, and would have the authority to do so under Article I, Section 4, the core of the problem of gerrymandering is that it violates what Madison called the “fundamental principle of free government”—that of majority rule, and therefore should be within the cognizance of the Constitution, not ordinary legislation, to resolve. This is true even though the Constitution is silent on it, an omission that is adequately compensated for by the applicability of indirect provisions that the framers included such as the Guarantee Clause and subsequent Amendments, most notably the Fourteenth, requiring equal protection of the law.

Blame for underestimating the rise of political parties and the harmful effects of extreme partisanship cannot be entirely placed on insufficient foresight of the framers. A number of developments have contributed to the intensity of political partisanship in the federal government, including the enlargement of the sphere of national politics, the evolution of the information and media environment, and technological developments.²¹¹

There is no way that the framers could have fully anticipated the extremities toward which political districting processes designed for partisan purposes might distort many of the principles of representative government that they sought to institutionalize. In particular, they could not have anticipated the development of modern technological tools such as computer databases and programs such as Geographic Information System (“GIS”) technology that would easily permit state legislators to essentially select their voters rather than the other way around. But the framers’ insufficient foresight does not leave us helpless.

Whether the remedy lies in an act of Congress or the courts applying a synthetic reading of the Constitution as a whole, Carolene Products footnote four, the Guarantee Clause, or a novel reading of the Equal Protection Clause, partisan gerrymandering is a problem for our health of democracy that requires resolution. It is a problem in its own right because it undermines the values and foundation of the republic, and because it causes and results in the racial segregation of voters in clear violation of the Constitution without necessarily running afoul of the standards established by the Supreme Court to secure those protections.

96 S. Cal. L. Rev. 301

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Stephen Menendian*

* Stephen Menendian is the Assistant Director at the Othering and Belonging Institute at University of California, Berkeley. The author would like to thank john powell and Dan Tokaji for their insights on this critical issue, Chris Elmendorf and Joshua Clark for their invaluable expert feedback on drafts of this Article, Samir Gambhir and Peter Mattingly for their contributions to the underlying research regarding segregation and assistance in developing the maps and scatterplots, Wenqi (Michael) Xu, Sara Osman, and Yemaj Sheik for their general research and citation assistance.

Fractionalization to Securitization: How the SEC May Regulate the Emerging Assets of NFTs

April 2023April 2023Lauren Au*

Blockchain technology opened the world to a variety of new technological advances that reshaped the way humans interact and transact with one another. One of the most recent and trending applications of blockchain technology is non-fungible tokens or “NFTs.” NFTs are unique digital tokens encoded on a blockchain that represent ownership of specific digital assets such as artwork, collectibles, videos, domain names, and so forth.¹ NFTs can be thought of as certificates of authenticity. Although NFTs resemble cryptocurrencies, NFTs are non-fungible. This means that no two tokens are identical, and they are not interchangeable with one another. They are valuable because each comes with a unique digital signature or ledger that allows it to be easily authenticated, verified, and transferred. This has completely revolutionized the way people trade different assets, and many NFTs are sold online for millions of dollars.² Additionally, NFTs can come in different forms, ranging from whole NFTs of digital artwork or real property to fractionalized NFTs (“f-NFTs”) that break up ownership of an NFT into multiple “shards” so a larger number of people can own a piece of a single digital asset.³

NFTs are a new and influential technology that can have far-reaching implications for current securities law, intellectual property law, and other legal areas. In securities law, NFTs have established a new way for people to invest and gain returns from digital assets. This has disrupted the legal and financial sectors and created new risks for investors such as fraud and hacking.⁴ With the recent rise of NFTs as potential investment assets comes the possibility of government regulation to protect investors. The growing use of NFTs alerted many regulators, such as the Securities and Exchange Commission (“SEC”), to the possibility of regulating these digital assets as some type of security.⁵ However, regulatory and securities laws struggle to keep pace with emerging innovations and financial technologies like NFTs. Much of the SEC’s limited guidance focuses on cryptocurrencies and blockchain technology generally, with little guidance specifically on NFTs as a security. Leaders in the industry have requested no-action letters, although the SEC remains silent.⁶ Leaders believe “it would be a lot easier to operate in an environment where sensible ground rules are laid out that allow for innovation.”⁷ NFT creators, buyers, and exchange platforms must rely on general SEC regulations of other digital assets to guide their decision-making and avoid regulation. Given these issues, it is important for the SEC to provide guidance on NFTs to protect and inform potential investors, while also ensuring issuers can properly develop NFTs and NFT platforms without the fear of strict regulation.

This lack of guidance stems from the fact that many regulators are divided on whether NFTs can be classified as an “investment contract” security or regulated by the SEC. The Securities Act of 1933 defines a “security” as “any note, stock, . . . bond, debenture, . . . [or] investment contract.”⁸ In 1946, the U.S. Supreme Court developed a four-pronged test in SEC v. Howey to clarify whether an asset is an “investment contract” security.⁹ The Howey test holds that a contract, transaction, or scheme is an “investment contract” when an individual (1) makes an investment of money (2) in a common enterprise (3) with a reasonable expectation of profit (4) derived from the efforts of others.¹⁰ While some argue that NFTs are not an “investment contract” security under the Howey test because they do not satisfy either the second or fourth prong, others believe that fractionalized NFTs could pass all four prongs.¹¹ There has been little in-depth legal research and analysis that focuses specifically on f-NFTs as securities and the potential regulatory framework that could control this digital asset.¹² The legal field must catch up with rapid technology developments and take a revised look at current regulations to see how they can be applied to NFTs. To analyze if the SEC can regulate NFTs, two main questions need to be addressed: (1) whether certain NFTs can be classified as a security under federal law; and (2) if NFTs are securities, how SEC requirements can be applied to best protect the public’s interests.

To answer these questions, this Note will apply the Howey test to f-NFTs and identify the risks and opportunities of regulating them as securities to better understand how to protect investors while also allowing for the innovation of digital assets. This Note will first conclude that NFTs can be “investment contract” securities and satisfy the four Howey prongs if they are fractionalized. First, when purchasing f-NFTs, buyers make an investment using digital currency that is considered “money.” Second, having an NFT tied to the success of a company or celebrity, or having multiple fractional interests in an NFT that are shared by a pool of investors, are investments in the “common enterprise” of that individual company, celebrity, or whole NFT. Third, f-NFTs have a “reasonable expectation of profit” given that they are easily traded on secondary markets and promoted as a unique way to “unlock liquidity.” Lastly, an f-NFT’s financial return can be derived from the efforts of platforms or issuers to maintain or improve the f-NFT market and support the popularity or price of the digital asset. This Note will then explain that even if f-NFTs are deemed securities, the SEC will need to adopt a clearer regulatory framework for f-NFT issuers, buyers, and platforms by modernizing established regimes of other digital assets. The SEC may have trouble regulating issuers or buyers of f-NFTs because the decentralized networks of f-NFTs already provide a form of digital “registration” that gives sufficient information to investors and prevents fraud through the easily verifiable digital ledgers of an f-NFT’s transactions. However, a platform that creates and trades f-NFTs may be a security “exchange” under federal law, and thus the SEC may be able to place some modified regulations on these f-NFT platforms, such as notice and disclosure requirements or compliance with capacity, integrity, and security standards, which ensure f-NFT and investor protection.

Part I provides a general overview of NFTs by explaining the blockchain technology that powers them. This Part illustrates what NFTs are, how they work, the concept of fractionalizing NFTs, and the principal applications and potential importance of NFTs in the financial markets. Part II lays out the underlying securities law—in particular SEC v. Howey—and the SEC’s current regulatory framework for other blockchain-based financial assets such as cryptocurrencies and digital tokens. Part III applies the Howey test to f-NFTs to show that they can be classified as securities and bolsters this argument by comparing f-NFTs to a digital asset (DAO Tokens) that the SEC has previously determined to be an “investment contract.” Part IV analyzes the pros and cons of regulating certain NFT issuers, buyers, or exchange platforms and provides recommendations for an NFT regulatory framework using comparisons to other developed digital asset platforms. Part V provides a preliminary exploration of existing regulatory models like those that govern traditional stocks and Real Estate Investment Trusts (“REITs”) and how they can be applied to f-NFTs.

I. NFT BACKGROUND: A TECHNICAL OVERVIEW OF NFTS

A. TECHNICAL ASPECTS OF NFTS

An NFT is a cryptographic unit of data or digital signature stored in a “blockchain” that represents the ownership of a unique digital asset or real-life object.¹³ Since they use blockchain technology, NFTs are typically bought and sold online with cryptocurrency.¹⁴ NFTs are similar to cryptocurrencies such as Bitcoin and Ethereum because they all use blockchain technology to create a digital object (currency or token) using units of data on a digital ledger. The only difference is that digital currencies are meant to be fungible, in that one Bitcoin is the same as and interchangeable with another Bitcoin, while an NFT is meant to be non-fungible, in that each one is one-of-a-kind and not exchangeable with another NFT.¹⁵ The underlying data of an NFT is unique because there can only be one owner, and that person is the only one who can access or transfer that NFT. This non-fungibility and use of blockchain allow NFTs to have a built-in proof of ownership that is easily authenticated, create exclusivity, and allow for verified transfers.

B. BLOCKCHAIN TECHNOLOGY

NFTs rely on blockchain technology, which creates a secure, decentralized network for transactions of various digital assets. The blockchain is essentially a “chain” of “blocks,” each containing specific information regarding a digital asset and its transactions that is then stored on a digital, secure, peer-to-peer ledger.¹⁶ An NFT is a digital database that stores data in the form of a “smart contract” and a unique identification hash bundled together in “blocks” that are all “chained” together in a distributed network. A smart contract is defined as “a computerized transaction protocol that executes terms of a contract” and is meant to minimize fraud and transaction costs.¹⁷ In other words, smart contracts are programs stored on a blockchain that automatically execute certain terms of a contract once certain predetermined conditions are met.¹⁸ Each blockchain “block” contains three components: (1) data, (2) the hash of the block, and (3) the hash from the previous block.¹⁹ The hash is a digitally generated string of digits and letters used to identify each block in a blockchain structure and acts as a type of unique fingerprint.²⁰ The data for an NFT “block” includes a “smart contract” that points to where an NFT is located on the internet and how to retrieve it, dictates the terms of a transaction, provides a verification of ownership, and holds a ledger of the token’s ownership history and transaction record.²¹

FIGURE 1: NFT Blockchain Sequence Diagram

An issuer creates an NFT by deploying a code to develop a specific type of “smart contract” that contains a blockchain address, typically on the Ethereum Blockchain, where the smart contract resides.²² Later, when someone buys or sells an NFT, the blockchain automatically creates a new “block” and a new hash for this block to add this new transaction to the “chain.”²³ The blockchain is essentially recording a “change of state” to the NFT in which the “smart contract” updates its internal ledger and changes the structure of the NFT’s underlying blockchain to reflect the transfer of the NFT to and from different addresses.²⁴ In short, whenever an NFT is sold, this new ownership is noted as a “new block” in the blockchain ledger, and the digital hash of that NFT is changed.

When purchasing an NFT, you are only buying exclusive access to the unit of data that contains the NFT’s location and are relying on the issuer’s obligation to ensure authenticity.²⁵ You do not gain any property rights of the actual digital asset, such as intellectual property rights (right to copy, right to destroy, and so forth.). Similar to buying a painting, when buying an NFT, you are only buying display rights or the right to say that you own it, but nothing else. You are mostly buying a digital certificate of ownership and authenticity or unique access to a digital object, not the actual digital object itself.²⁶ In other words, you own the one-of-a-kind map of where the NFT is located and are the only one who has access to it. The underlying NFT is typically hosted or located on a regular Hypertext Transfer Protocol (“HTTP”) Uniform Resource Locator (“URL”) web address on the internet or on an InterPlanetary File System (“IPFS”) hash, which is a “system designed for hosting, storing, and accessing data in a decentralized manner.”²⁷ Using a regular HTTP web address is typically very risky given that a server owner could easily change the underlying content of that particular address and completely erase the actual NFT content that was originally purchased.²⁸ However, when housing an NFT on IPFS, the NFT gets assigned a unique content identifier (“CID”) hash that links to the data in the IPFS network.²⁹ Using an IPFS CID hash, as opposed to an HTTP URL, allows someone to find the NFT based on its content rather than by its location on a server. Thus, if the content of the NFT is changed, the original CID link would break and create a new one.³⁰

Even though NFTs only give a type of “bragging rights,” they provide various advantages that have changed the tech and financial markets. The benefits of an NFT are that it is easy to authenticate its originality, establish its exclusivity, and transfer the asset.³¹ The permanent digital ledger inherent in an NFT acts as a record of ownership and allows for easy traceability across the blockchain network so that the original creator or past owners can be easily traced through their past transactions.³² This has made NFTs a highly valuable avenue to establish verified ownership over assets such as digital artwork, digital trading cards, video highlight reels, social media posts, collectibles, and even real property.³³ An NFT also has the unique capability to internally incorporate royalty agreements into its “smart contract,” where it automatically carries out an agreed-upon payment system whenever the NFT is licensed, resold, or used for some particular purpose.³⁴ This has provided content creators with new ways to continuously and easily monetize their work through NFTs. Lastly, NFTs have created a new way for people to invest their money in digital assets. With billions of dollars recently being poured into the NFT market, many investors have flocked to these digital assets as a potential high-risk investment strategy.³⁵ However, NFTs have become the target of some security breaches and hacking due to their novelty and outdated or inefficient security protocols.³⁶ Additionally, the value of NFTs and their potential returns can be volatile and speculative because they are only worth as much as other people are willing to pay for them.³⁷ An NFT’s appreciating value seems to be derived either from its creator or its scarcity.³⁸ Thus, depending on these two factors, investors could either win the jackpot to resell their NFT for a large gain or end up with a worthless digital asset and a large loss.

C. FRACTIONALIZATION OF NFTS

One major innovation that has disrupted the way people view and use NFTs as investments is the concept of fractionalizing NFTs. Fractional NFTs, or “f-NFTs,” break an NFT into pieces, or “shards,” which can be subsequently traded and sold in the market at a lower price than the NFT as a whole.³⁹ F-NFTs represent a fraction of the larger digital asset in which an investor can now share a partial interest in an NFT with other investors.⁴⁰ Given that NFTs are routinely sold individually for thousands or millions of dollars, f-NFTs democratize these investments such that average investors can now purchase a smaller portion of a high-priced NFT.⁴¹ F-NFTs opened up access to NFT markets and allowed more people to invest in these new digital assets.

There are currently multiple platforms that facilitate the creation and trading of f-NFTs, such as Niftex, Fractional.art, and DAOfi. These f-NFT platforms allow owners to break NFTs into multiple shards and sell them at an initial fixed price.⁴² The shards can subsequently be traded in an open market on the platform. On Niftex, an f-NFT is created through a four-step process: (1) “Owners of NFTs create fractions (‘shards’) by choosing issuance and pricing”; (2) these fractions are then put on sale on the platform at a fixed price for two weeks or until they sell out; (3) once the fixed sale period ends, the fractions can be traded on a secondary market; and then (4) a whole NFT can be fully retrieved by purchasing all of the shards through the platform’s special “Buyout Clause.”⁴³ This Buyout Clause is embedded within an f-NFT’s smart contract and gives f-NFT investors who own a particular percentage of an NFT’s shards the opportunity to purchase the remaining shards to now own the whole NFT.⁴⁴ F-NFT platforms have also incorporated the ability to automatically give issuers a portion of the f-NFT created or to give some type of “curator fee.”⁴⁵

NFT issuers and platforms have become very creative in the ways in which they utilize and develop this digital asset. One theory is that platforms could put numerous NFTs into one basket and sell f-NFTs of that basket as an investment product or security (“f-NFT bundles”).⁴⁶ While some people do not think a traditional NFT could be a security, an f-NFT may be deemed a security under U.S. securities law. SEC Commissioner Hester Peirce warned issuers of f-NFTs that “the whole concept of an NFT is supposed to be non-fungible [meaning that] in general, it’s less likely to be a security,” but if issuers sell fractional interests in NFTs or NFT bundles, “you better be careful that you’re not creating something that’s an investment product—that is a security.”⁴⁷ Peirce argued that “the definition of a security can be pretty broad,” and thus f-NFTs could fall within the SEC’s definition of a security and be subject to some form of regulation.⁴⁸ With the high costs of a single NFT, the growing availability of blockchain platforms in the mainstream, and the large development of decentralized finance and decentralized applications, “the continued fractionalization of NFTs is almost inevitable.”⁴⁹

II. LEGAL BACKGROUND: DEFINING “SECURITIES”

The main statutes governing securities regulation are the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”). While the Securities Act mostly deals with the issuance of securities, the Exchange Act governs exchanges, brokers, and trading on secondary markets.⁵⁰ Together, these statutes establish a registration and disclosure regime that requires any offer or sale of securities to register with the SEC and any issuers of securities to provide accurate and complete disclosures of material information regarding their securities offering or company. These requirements provide key information to investors so that they can make the most informed decisions. The consequences of being subject to these registration and disclosure requirements include filing documents with the SEC any time you sell securities, such as a Form S-1 registration statement, and filing continuous, periodic reports regarding the company’s business operations and financials, such as Form 10-K, Form 10-Q, or Form 8-K.⁵¹ These statutes, along with regulatory rules, provide definitions and tests to help determine whether an asset is a “security” or an organization is an “exchange” that is subject to federal regulation.

A. SECURITIES ACT OF 1933

The Securities Act makes it illegal for an issuer to offer or sell any unregistered security within interstate commerce unless the security is exempt from registration.⁵² This statute defines an “issuer” as “every person who issues or proposed to issue any security,” where “person” includes “an individual, a corporation, . . . [or] any unincorporated organization.”⁵³ It also provides a broad definition of different types of assets that could be considered securities under U.S. federal securities law.⁵⁴ This definition specifically includes “investment contracts,” which can be seen as a catch-all term for any type of asset that behaves and feels like a security. Thus, it is sometimes difficult to determine if something falls within the definition of a security.

B. SEC V. HOWEY

In SEC v. Howey, the U.S. Supreme Court created the Howey test to help clarify what an “investment contract” security is under the Securities Act. The defendant, W.J. Howey Company, sold real estate contracts for orange groves in Florida for a fixed price per acre.⁵⁵ Howey then encouraged purchasers to set up service contracts in which they would lease the land back to the company to farm the orange groves, and in exchange the buyers would receive a share of the profits.⁵⁶ The Supreme Court held that these orange grove service contracts were “securities,” because purchasers were buying shares in Howey’s profits from the orange groves through these service contracts, not the actual orange groves themselves.⁵⁷ The Court developed a four-pronged test in which “an investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”⁵⁸ There have since been a variety of cases that helped develop and clarify each of the four Howey prongs. The first prong of “an investment in money” does not need to be in the form of cash and can be satisfied using a different form of contribution or investment, such as cryptocurrency.⁵⁹

The second prong of “in a common enterprise” requires that the fortunes of the investor be linked to the success of the overall venture or enterprise. “Fortunes” refers to the “profits” (and benefits) or “losses” (and costs) that occur from a certain asset and that affect a person’s position.⁶⁰ There needs to be a kind of commonality or relationship, either among investors or between the “promoter” and investors, in which the investor depends on the actions and decisions of the promoter of the asset.⁶¹ A promoter is defined as any individual or organization that helps found and organize the business or enterprise of an issuer of any security or that receives ten percent or more of any class of the issuers securities or proceeds from the sale of such securities as consideration for their services or property.⁶² Federal courts have typically required that there be either “horizontal commonality” or “vertical commonality” for an asset to satisfy the “common enterprise” prong.⁶³ Horizontal commonality is defined as the relationship between investors and a pool of other investors. There is commonality when an individual investor’s fortunes are tied to the fortunes of other investors in a common venture by the pooling of assets, usually combined with the

pro-rata distribution of profits.⁶⁴ Vertical commonality is defined as the relationship between the promoter and the body of investors.⁶⁵ Commonality exists when there is a connection between the fortunes (strict vertical commonality) or efforts (broad vertical commonality) of the promoter and the fortunes or efforts of the investors. This type of commonality does not require a pooling of funds.⁶⁶

The third prong of “a reasonable expectation of profits” requires investors to realize some form of appreciation on the development of the asset or participate in the earnings resulting from the use of investors’ funds.⁶⁷ The SEC defines “profits” as “capital appreciation resulting from the development of the initial investment or business enterprise or a participation in earnings resulting from the use of purchasers’ funds.”⁶⁸ Courts also include “dividends, other periodic payments, or the increased value of the investment” in the definition of profits.⁶⁹ However, the SEC notes that “price appreciation resulting solely from external market forces (such as general inflationary trends or the economy) impacting the supply and demand for an underlying asset generally is not considered ‘profit’ under the Howey test.”⁷⁰ This prong is very fact-sensitive, and the SEC looks at several factors, like the trading of the asset on secondary markets, identity of the buyers, and marketing efforts, to determine whether an asset satisfies this prong.⁷¹

Finally, the fourth prong of “from the efforts of others” is satisfied when the promoter or issuer of an investment creates or supports the market for these assets or the value of the asset is dependent on the promoter’s efforts in generating demand.⁷² In Howey, the Supreme Court understood that the Securities Act’s definition of a “security” is broad, so it argued that “[f]orm was disregarded for substance and emphasis was placed upon economic reality.”⁷³ Thus, when determining whether something can be considered a security, one needs to focus on the specific circumstances, facts, and economic impact of the particular asset.⁷⁴ For an asset such as digital currencies or tokens, this test may consider factors such as the token’s design, issuance, and how it interacts with its platform or blockchain. Depending on how an NFT is created, structured, marketed, and sold or distributed, such NFTs could be deemed securities. This would mean that any sale of this NFT would be subject to the existing securities law framework.

C. CURRENT CASE LAW

Although there are few settled cases regarding whether certain digital assets are securities, there are a couple of key cases making their way through the court system. One of the leading cases being decided is SEC v. Ripple Labs, Inc., in which the SEC filed an enforcement action against Ripple Labs for selling crypto tokens that the SEC believed were unregistered securities.⁷⁵ The SEC argues that Ripple Labs failed to register its offer and sale of about $600 million of its digital asset called XRP to retail investors, which was used to finance the business. The SEC stated that XRPs were investment contract securities because purchasers of XRP invested into a common enterprise, given that XRP’s demand is tied to Ripple’s success or failure in propelling its trading, and Ripple publicly promised investors that it would “undertake significant entrepreneurial and managerial efforts to create a liquid market for XRP” that would in turn increase its uses, demand, and price, and led reasonable investors to expect profits from XRPs.⁷⁶ Another notable case that provides arguments for and against regulating NFTs as securities is the class action lawsuit filed against Dapper Labs.⁷⁷ Dapper Labs created the National Basketball Association’s (“NBA”) Top Shot, which sells NFTs of NBA highlights or “Moments” that can be bought or sold using the blockchain and marketplace Dapper Labs developed.⁷⁸ This class action argues that Dapper Labs is selling securities due to how it operates its resale marketplace and promotes the value of its NFTs. The plaintiffs allege that Moments were sold with “the expectation of profit” where “[t]he reality is that the growing fanatical NBA Top Shot database is all about the investment, speculation and appreciation of the Top Shot NFTs and the NBA Top Shot Marketplace.”⁷⁹ However, the plaintiffs conceded that NBA Top Shot’s Service Terms of Use state that users “are using NFTs primarily as objects of play and not for investment or speculative purposes.”⁸⁰ NBA Top Shot is promoting the NFTs as collectables as opposed to investments, which weighs in favor of the NFTs not being securities. Nevertheless, some argue that NBA Moments may still be “investment contracts” because Top Shot creates and maintains the sole marketplace for these NFTs and thus could be an unregistered exchange.⁸¹

D. SECURITIES EXCHANGE ACT OF 1934

Once an asset is deemed a “security,” the SEC and the Exchange Act impose numerous regulatory requirements on the “exchanges” or platforms that facilitate the trading of those assets. Section 5 of the Exchange Act makes it unlawful for any broker, dealer, or exchange to effect any transaction in a security unless the exchange is registered as a national securities exchange under section 6 of the Exchange Act or an appropriate exemption applies.⁸² Registration as a national securities exchange requires any person or entity that offers or sells securities to the public to provide “full and fair disclosure” through the delivery of a statutory prospectus that contains information necessary to give prospective purchasers the proper opportunity to make an informed investment decision.⁸³ Under the Exchange Act, an “exchange” is defined as any organization or group of persons (whether incorporated or unincorporated) that maintains or provides “a market place or facilities for bringing together purchasers and sellers of securities” or conducts functions commonly performed by stock exchanges.⁸⁴ The Code of Federal Regulations attempts to clarify when an entity must register as a national security exchange and provides a functional test to assess whether an entity meets the definition of an “exchange” under the Exchange Act. Rule 3b-16(a) states that an organization, association, or group of persons is considered to constitute or maintain an “exchange” if it (1) “brings together the orders for securities of multiple buyers and sellers” and (2) “uses established, non-discretionary methods (whether by providing a trading facility or by setting rules) under which such orders interact with each other.”⁸⁵ Rule 3b-16(b) then lays out what is excluded from the definition of an exchange.⁸⁶ The SEC has argued that when analyzing whether a “system operates as a marketplace and meets the criteria of an exchange under Rule 3b-16(a),” one must look to “the activity that actually occurs between the buyers and sellers—and not the kind of technology or the terminology used by the entity operating or promoting the system.”⁸⁷ Thus, any trading system that meets the definition of an exchange under

Rule 3b-16(a), and is not excluded under Rule 3b-16(b), must register as a national securities exchange or operate pursuant to an appropriate exemption.⁸⁸

Exempted entities do not need to register as a national securities exchange under section 6.⁸⁹ Rule 3a-1-1(a)(2) states that an organization, association, or group of persons is exempt from the definition of “exchange” if it is operating as an alternative trading system (“ATS”) and is in compliance with Regulation ATS.⁹⁰ ATSs are SEC-regulated electronic trading systems that utilize the process of “dark pools” to match orders for buyers and sellers of securities.⁹¹ The SEC released a report regarding its adoption of new rules and amendments that allow ATSs to “choose whether to register as national securities exchanges, or to register as broker-dealers and comply with additional requirements under Regulation ATS, depending on their activities and trading volume.”⁹² ATSs typically face fewer and simpler regulations than national securities exchanges but still have some requirements, such as registering as a broker-dealer, giving notice of initial operations or material changes, providing fair access, keeping records, complying with capacity, integrity, and security standards, and other reporting requirements to safeguarding customer funds and securities.⁹³

E. RULES, REGULATIONS, AND GUIDANCE FROM AGENCIES

In addition to statutes, issuers and platforms of digital assets also rely on statements, reports, and frameworks from the SEC and other regulatory bodies to guide their decisions. As digital assets grew in popularity, the SEC took notice and came out with formal and informal statements regarding its views on cryptocurrencies and tokens. In 2018, SEC Chairman Jay Clayton testified before a Senate committee arguing that cryptocurrencies could be structured as securities products subject to federal securities laws and warned that certain Initial Coin Offerings (“ICO”) structures could implicate securities registration requirements.⁹⁴ More recently, at the Security Token Summit 2021, Peirce warned issuers of NFTs to be cautious when they create f-NFTs because when used in certain creative ways, they could create a security that is subject to regulation.⁹⁵

The SEC created a branch in 2018 called the Strategic Hub for Innovation and Financial Technology (“FinHub”) to coordinate and respond to emerging financial technology (“fintech”); serve as a public resource by consolidating, clarifying, and communicating the SEC’s views and actions related to fintech innovation; and inform policy research in these areas.⁹⁶ In 2019, FinHub published an SEC document called Framework for ‘Investment Contract’ Analysis of Digital Asset, which provided details on how the SEC applies the Howey Test to analyze whether digital assets could be considered an “investment contract” security.⁹⁷ This is one of the few documents available to guide digital asset creators and platforms.

Although guidance from the SEC regarding digital assets is sparse, there is some case law and reports from the SEC. For example, the SEC issued an enforcement order against the creator of EtherDelta, which provides a marketplace for bringing together buyers and sellers of digital asset securities through the combined use of an order book, a website that displayed orders, and a smart contract run on the Ethereum blockchain.⁹⁸ This case held that EtherDelta violated section 5 of the Exchange Act because it issued digital asset securities using blockchain technology as an unregistered exchange.⁹⁹ This is one of the main cases analyzing whether a platform that houses digital assets can be an unregistered security exchange. Other regulatory bodies have provided reports of their research into the intersection of digital assets and securities law. For example, the Congressional Research Service (“CRS”) published a report containing a broad outline of how federal securities laws and regulations apply to cryptocurrencies, ICOs, and NFTs.¹⁰⁰

The SEC also published the Decentralized Autonomous Organization (“DAO”) Report, which discusses U.S. federal securities laws and their applicability to the new paradigm of “virtual organizations or capital raising entities that use distributed ledger or blockchain technology to facilitate capital raising and/or investment and the related offer and sale of securities.”¹⁰¹ The purpose of this report of investigation is to “advise those who would use a [‘DAO Entity’], or other distributed ledger or blockchain-enabled means for capital raising, to take appropriate steps to ensure compliance with the U.S. federal securities laws.”¹⁰² Slock.it created The DAO, which is a “for-profit entity whose objective was to fund projects in exchange for a return on investment.”¹⁰³ DAO Tokens represented a type of “crowdfunding contract” that would help raise “funds to grow [a] company in the crypto space.”¹⁰⁴ The DAO offered and sold DAO Tokens in exchange for Ether (“ETH”), a virtual currency used on the Ethereum Blockchain, and the proceeds from these sales were used to fund projects.¹⁰⁵ DAO Token holders had the right to vote on these projects and were entitled to any anticipated earnings from the projects it funded.¹⁰⁶ The DAO platform also had a group of individuals called “Curators” who were given “considerable power” to perform “crucial security functions” and maintain “ultimate control over what projects would be submitted to, voted on, and funded by The DAO.”¹⁰⁷ In applying the Howey test to the DAO Token, the SEC’s DAO report found that the tokens meet the criteria of a security and The DAO was required to register as an exchange under Rule 3b-16.¹⁰⁸

Even though there is some guidance for blockchain technologies generally, the SEC has not yet provided any guidance regarding NFTs specifically. Given this small amount of advice, many people have requested that the SEC provide regulatory clarity with respect to NFTs so that they know how to proceed.¹⁰⁹ These requests for guidance come in the form of “no-action” letter requests that encourage “the SEC to engage in a meaningful discussion of how to regulate FinTech companies and individuals that are creating NFTs that may be deemed digital asset securities and the platforms that facilitate the issuance and trading of NFTs.”¹¹⁰ The existing securities framework provides a “crude mechanism” for regulating NFTs, and the SEC needs to reevaluate or reapply these old frameworks to new financial technologies to establish sustainable guidance and prevent NFTs from becoming the “Wild West” of digital investments.¹¹¹

III. HOWEY TEST: ARE F-NFTS SECURITIES?

Although there are few articles or regulations specifically addressing NFTs, the current view is that NFTs may not be an “investment contract” security that can be regulated by the SEC because an NFT may gain its value through its uniqueness, as opposed to “a common enterprise” (second Howey prong), and any profits realized through an NFT may be derived from regular supply and demand, as opposed to the “efforts of others” (fourth Howey prong).¹¹² However, to determine an NFT’s ability to be categorized as a security, regulators need to focus on the “economic reality” and specific circumstances, such as how society defines the NFT’s value, how it is utilized, or how it is marketed. On one hand, if the purchaser is a collector and the NFT’s value comes from its uniqueness and artistry, the main purpose of buying the asset is to “consume” it by enjoying its aesthetics; the NFT may also be marketed as allowing buyers to join the ranks of premier owners and connoisseurs of unique digital objects. In such a scenario, an NFT is less likely to be a security. For example, some people may buy a Pudgy Penguins NFT from OpenSea (an NFT exchange website) because they think it is adorable and just want to look at it or display it as a profile picture on social media.¹¹³ On the other hand, if the purchaser is an investor and the NFT’s value comes from its ability to gain a return on investment, the main purpose of buying the asset is to sell it later for a profit; or if it is marketed as an asset that will appreciate in value to give a substantial return, then an NFT is more likely to be security. Some purchasers’ main goal in buying a Pudgy Penguin may be to increase their capital.¹¹⁴ In the end, NFTs may gain value from both their uniqueness and their ability to provide a return on investment.

Another prevailing view is that fractionalizing NFTs could create a type of security that is subject to regulation.¹¹⁵ F-NFTs could be an investment contract under the Howey test depending on the facts and circumstances of the particular f-NFT, such as if you put multiple NFTs into one basket and then sell f-NFTs out of that basket.¹¹⁶ Although the SEC has yet to initiate any enforcement action against creators or platforms that facilitate the offer and sale of f-NFTs, the SEC and courts have held in many cases that fractional interests in an asset can be a security even if the individual asset itself is not.¹¹⁷ This Part applies the four prongs of the Howey test to analyze whether an f-NFT can be an “investment contract” security and compares

f-NFTs to the DAO Token, which has already been deemed a security.

A. “MAKES AN INVESTMENT IN MONEY”

F-NFTs most likely satisfy the first prong of the Howey test given that people buy f-NFTs using cryptocurrency. The SEC argues that most digital assets, such as f-NFTs, pass the first Howey prong because they are purchased through an exchange for value.¹¹⁸ It does not matter that this exchange for value is in the form of digital currency such as cryptocurrency. Courts have held that an “investment of money” does not need to be in the form of cash, and thus purchasing something with cryptocurrency, as is the case with NFTs or f-NFTs, would satisfy this definition.¹¹⁹ When comparing f-NFTs to the DAO Token, both of these digital assets make an “investment in money” because both purchasers of the DAO Token and f-NFTs use ETH, the digital currency used on the Ethereum blockchain, to buy their respective digital assets.

B. “IN A COMMON ENTERPRISE”

A traditional NFT may not pass this second Howey prong because its value stems from its uniqueness—not a common enterprise—and there may not be a relationship between the seller or promoter of an NFT and a buyer or investors in that NFT. However, the SEC’s FinHub stated that a “common enterprise” typically exists for investments in digital assets because the fortunes of individual purchasers of digital assets are tied to other investors or tied to the success of the promoter’s efforts to expand a digital asset platform.¹²⁰ Also, courts have determined that the “common enterprise” prong is a distinct element of an investment contract analysis and “does not require vertical or horizontal commonality per se.”¹²¹ Thus, there are some arguments that f-NFTs may pass the second prong and have a common enterprise.

Horizontal commonality can be shown for f-NFTs through the fact that if a person owns a partial ownership interest in an underlying NFT, the value of this shard is tied to the fortunes of all the owners of the other shards of that fractionalized NFT.¹²² If the value of the underlying NFT increases, the value of each of its shards also increases. Thus, a common enterprise can be found through the relationship between an investor of an f-NFT and the pool of other investors who share ownership of the same fractionalized NFT. One of the very reasons to fractionalize an NFT is to enable smaller investors to “pool resources” together to purchase a smaller interest in an NFT and share in the returns of the whole NFT.¹²³ This is similar to the investors in the DAO Token who pooled together ETH to help The DAO fund large projects with the hope of a return on their investments.¹²⁴ Both the DAO Token and f-NFTs can satisfy horizontal commonality by pooling investors’ assets and tying their interests together. Also, an NFT can be part of a series of similar NFTs, like a collection of artworks by the same person, where the value of one will rise and fall along with the value of the others in the series.¹²⁵ The fortune of one NFT investor in the series may be tied to the increase and decrease in fortune of the other NFT investors in the same collection.

F-NFTs may also satisfy the vertical commonality requirement, given the relationship between the original issuer of the f-NFTs (promoter) and all the purchasers of the f-NFTs (body of investors). A common enterprise exists under broad vertical commonality when the investors are dependent on the promoter’s efforts or expertise for their increased returns.¹²⁶ For f-NFTs, a common enterprise may exist because the success of f-NFT investors gaining returns is dependent on f-NFT companies making the effort to fractionalize or bundle different NFTs and maintain the platform to protect f-NFTs and keep trading running. Additionally, strict vertical commonality can be established if f-NFT platforms gain some type of fee percentage from their efforts in fractionalizing and selling f-NFTs. Thus, if f-NFT platforms actively manage or charge fees for handling these assets, then the fortunes of f-NFT platforms are connected to the fortunes of the f-NFT investors. When f-NFT investors succeed, so does the f-NFT company.

Even certain, whole NFTs may pass the vertical commonality test. For example, many college and professional athletes have been creating NFTs of themselves through digital artwork, highlight reels, and other digital assets.¹²⁷ These NFTs may satisfy the “common enterprise” requirement because the value of the NFT would depend on the rise and fall of the athlete’s career and how much effort that athlete put into increasing their popularity. If the particular athlete who is issuing an NFT does better professionally in their sport or increases in popularity, then the value of their NFT may also increase. In other words, the fortunes of the owners of the athlete’s NFT would increase in correlation with the fortunes or the career of the athlete also increasing. The same argument can also be made for NFTs from specific artists or celebrities, such as Beeple or Martha Stewart.¹²⁸ Investors of Beeple’s NFTs have their fortunes tied to the efforts of Beeple and his other artworks. The value of an investor’s Beeple NFT will benefit from Beeple and his other artwork becoming more popular or valuable. Thus, there are good arguments that f-NFTs fulfill the second Howey prong.

C. “WITH A REASONABLE EXPECTATION OF PROFIT”

F-NFTs can satisfy the third Howey prong if purchasers buy f-NFTs with the expectation that they will realize some type of gain or profit. Given that this prong is heavily fact–sensitive, the SEC provided a list of characteristics that make it more likely for a digital asset to fulfill the “reasonable expectation of profits” prong.¹²⁹ F-NFTs seem to satisfy three of the characteristics listed: (1) the digital asset is “transferable or traded on or through a secondary market or platform,” (2) the issuer continuously “expend[s] funds from proceeds or operations to enhance the functionality or value of the network or digital asset,” and (3) the digital asset is marketed or promoted in a way that would cause a purchaser to have an expectation of profits. To determine whether an f-NFT can be classified as a security under this prong, one needs to focus on the transaction itself and the way the digital asset is offered and sold.¹³⁰

The first characteristic that increases the likelihood of f-NFTs fulfilling the third Howey prong is the fact that investors can transfer or trade these assets on secondary markets or online blockchain platforms.¹³¹ The ability to sell or buy NFTs or f-NFTs on secondary markets such as OpenSea provides proof that the investor may expect to realize some type of return or appreciation on the digital asset through secondary trading. This is much like how DAO Token holders were able to monetize their investments in DAO Tokens by reselling and trading them on various secondary trading platforms and markets.¹³²

The second characteristic that leans in favor of f-NFTs satisfying the third prong is the fact that f-NFT platforms may “provide essential managerial efforts that affect the success of the enterprise, and investors reasonably expect to derive profit from those efforts.”¹³³ The more likely that f-NFT issuers made efforts to increase the demand or value of the digital asset, the more likely the f-NFT will have a “reasonable expectation of profits.” Different cases have clarified that efforts to “increase the demand or value” include when issuers or platforms (1) create and manage an “ecosystem” for the digital asset which allows them to increase in value, (2) develop the network to inspire creative uses of its assets, or (3) add a new functionality using the proceeds from the token’s sales.¹³⁴ First, f-NFT platforms like Fractional.art and Nitfex made “essential managerial efforts” to increase demand or value of f-NFTs by taking continuous, active steps to fractionalize NFTs and make them more accessible to more investors. This created a new ecosystem where average investors could pool their funds together to share in the gains of valuable NFTs. Second, fractionalization networks inspired new creative uses such as bundling various NFTs together and selling f-NFTs of this bundle. The value of these f-NFTs would be dependent on the values of all the individual NFTs that the issuer chooses to place in the basket. Lastly, f-NFT platforms created a new functionality for NFTs by adding the ability to fractionalize one NFT into multiple shards. This allows purchasers to buy smaller interests in many different NFTs to diversify their collection, thus minimizing the volatility of this digital asset and increasing the potential returns.

This view of f-NFTs can be compared to the DAO Token that satisfied the third Howey prong because the proceeds from selling the DAO Tokens were used to fund different proposed projects in which holders had the potential to gain a share of the profits from these projects.¹³⁵ Also, much like how f-NFT platforms have created an ecosystem for the fractionalized assets, The DAO created a type of ecosystem for its “crowdfunding contracts.” While one may argue that f-NFT platforms are not using the proceeds from selling their tokens to directly improve their network, another may argue that f-NFT platforms collect fees from transactions that occur on their platform and then use these fees to maintain a secure network for f-NFT purchasers. Thus, this characteristic may depend on how the specific f-NFT platform is managed.

The third characteristic that makes f-NFTs more likely to provide a “reasonable expectation of profit” is the way in which f-NFTs are marketed to potential buyers. The SEC provided a list of ways a digital asset could be marketed that weigh in favor of the third Howey prong. F-NFTs may satisfy four of these methods: (1) the “intended use of the proceeds from the sale of the digital asset is to develop the network or digital asset”; (2) a key selling feature of f-NFTs is the ability to readily transfer it; (3) “[t]he potential profitability of the operations of the network, or the potential appreciation in the value of the digital asset, is emphasized in marketing or other promotional materials”; or (4) there is an available market for trading the digital asset or the issuer promises to create or support a trading market.¹³⁶ F-NFTs can satisfy these marketing characteristics, and many of them are also found in the DAO Token.

First, although current f-NFT platforms do not directly market that proceeds from f-NFT sales will be used to develop the network, one can assume that these platforms use the fees they collect from sales to maintain the network and allow for continuous fractionalization of NFTs. Second, the fact that f-NFTs are marketed as being easily transferable on platforms such as Niftex, Fractional.art, or DAOfi lean in favor of there being an “expectation of profit.”¹³⁷ This is similar to the DAO Token, which was promoted as being readily available to buy and sell on “a number of web-based platforms that supported secondary trading.”¹³⁸ Third, certain f-NFT platforms emphasize that these assets are a unique and better way to unlock liquidity, gain greater exposure and price discovery for your NFTs as fractions on the open market, trade NFTs with lower cost and greater diversification, get access to a variety of unique and iconic digital assets with low price thresholds, or provide liquidity for shard markets and earn transaction or curator fees.¹³⁹ These platforms focus on f-NFTs’ ability to increase exposure of a particular NFT in a market and diversify one’s investments in NFTs to spread out the risk of a single NFT losing value. Increased exposure and diversification can increase an f-NFT’s profitability, and a platform’s emphasis on this promotes an f-NFT’s appreciation in value. However, f-NFTs may simply be marketed as an easier, more accessible way for the average investor to partake in the NFT market.¹⁴⁰ If this is the case, it is less likely that f-NFTs satisfy the third Howey prong. The DAO platform emphasized its potential profitability by marketing it as an investment where purchasers could share in the profits of the proposed projects the DAO Token funded and thus gain a return on their initial investment.¹⁴¹ Although this is not exactly similar to how f-NFTs’ profitability were marketed, both seem to promise their purchaser some type of liquidity. Fourth, f-NFT platforms provide a readily available market for the trading of various f-NFTs. Creators or purchasers of f-NFTs can easily sell or buy these assets on different websites. These platforms support an f-NFT trading market by providing information regarding how the platform and fractionalization process operates and how the underlying technology works, a “frequently asked questions” section, a link to create or buy and sell f-NFTs, ways to “join the community,” and so forth.¹⁴² This is similar to the DAO Token issuers who supported a trading market for their token by developing a website, a link to detailed information regarding The DAO entity’s structure and source code, and a link to buy DAO Tokens; providing information on how The DAO operated; soliciting media attention; and posting on online forums.¹⁴³

A counterargument is that traditional NFTs are less likely to be a security because purchasers of traditional NFTs buy them for their artistry or bragging rights, proving that NFTs gain their value from their uniqueness, scarcity, or collectable status—not from any expected profits. An NFT’s value may just be based on the normal market forces of supply and demand, which is not considered “profit.”¹⁴⁴ The SEC also notes that digital assets are less likely to satisfy the Howey test if “[a]ny economic benefit that may be derived from appreciation in the value of the digital asset is incidental to obtaining the right to use it for its intended functionality.”¹⁴⁵ The intended functionality of an NFT may just be bragging rights or display rights, such as displaying a rare NFT artwork as your profile picture on your social media account. Thus, when an NFT increases in value, this may just be incidental to using the asset for its intended functionality of bragging rights. Also, if an f-NFT is marketed in a way that focuses on its role as a piece of digital artwork or a collectible, and not as an opportunity to gain any returns, this may work against f-NFTs being a security.¹⁴⁶ For example, some platforms market f-NFTs as a way to create more accessibility to the NFT market and not necessarily as a way to increase one’s returns.¹⁴⁷ Regulators will need to analyze the specific characteristics of certain f-NFTs and f-NFT platforms to determine whether they satisfy the third Howey prong.

D. “THROUGH THE EFFORTS OF OTHERS”

Some argue that although an NFT may provide the purchaser with a reasonable expectation of profits, this increase in financial returns is not derived from the “efforts of others” and instead comes from the NFT’s own scarcity and uniqueness. Thus, it may be more difficult to argue that an NFT satisfies the fourth and final Howey prong, which requires the asset’s increase in value to come from the “efforts of others.” While a traditional NFT may not fulfill this prong given that its value comes from its uniqueness, an f-NFT may be an exception because its value is derived from the efforts of the f-NFT platforms or issuers who support the f-NFT market. The fourth Howey prong is satisfied if an f-NFT issuer supports a market for f-NFTs or the value of these assets depend on the issuer’s efforts in generating demand.¹⁴⁸ Thus, if an NFT issuer or exchange puts in the work to develop the platform and increase buyers, and the purchasers reasonably expect a return based on this work, then an NFT may pass this last prong.

The SEC Framework for “Investment Contract” Analysis of Digital Assets lays out two key questions to consider when determining whether a digital asset can satisfy the “efforts of others” prong: (1) does the purchaser reasonably expect to rely on the efforts of an “Active Participant,” and (2) are those efforts “the undeniably significant ones, those essential managerial efforts which affect the failure or success of the enterprise”?¹⁴⁹ To help answer these questions, the SEC provided a list of six characteristics that lean in favor of a digital asset fulfilling the fourth Howey prong. While none of the characteristics are dispositive, they provide a good framework to help determine when a digital asset gains its value through the “efforts of others.” F-NFTs may satisfy some of the characteristics and thus satisfy the last Howey prong.

The first characteristic is that an issuer is “responsible for the development, improvement (or enhancement), operation, or promotion of the network, particularly if purchasers of the digital asset expect an [issuer] to be performing or overseeing tasks.”¹⁵⁰ Platforms that issue f-NFTs may have this characteristic because they are responsible for promoting the f-NFTs on their platforms, bringing more buyers onto their networks, and improving their networks by offering more products such as f-NFT bundles or automatic royalties embedded in smart contracts.¹⁵¹ These development efforts can increase the value of the actual platform and thus increase the value of the f-NFTs traded on that specific platform. Also, if a platform markets f-NFTs as producing profit based on royalty payments or f-NFT bundles, purchasers may expect that the issuers are putting in some type of managerial efforts to oversee the asset and increase its value. The value of an f-NFT could come from the efforts of a person or entity promoting, selling, choosing, developing, and managing different f-NFT royalties or bundles. This is similar to the DAO Token Curators who managed different projects for investors to create returns by deciding what projects would be submitted to, voted on, and funded by DAO Token holders.¹⁵² DAO investors relied on the “managerial and entrepreneurial efforts” of the Curators to manage The DAO network and project proposals because the creators of The DAO represented that they “could be relied on to provide the significant managerial efforts required to make The DAO a success.”¹⁵³

The second characteristic is that the issuer performs essential tasks or responsibilities, as opposed to “an unaffiliated, dispersed community of network users (commonly known as a ‘decentralized’ network).”¹⁵⁴ This reference to a “decentralized” network may work against f-NFTs being deemed a security because they are inherently run on a “decentralized” network. One can argue that the blockchain technology, smart contracts, and digital ledger perform the “essential tasks or responsibilities” for f-NFTs as opposed to the issuer or platform. However, the DAO Token was still deemed a security even though it utilized blockchain technology, and smart contracts performed tasks for the usage of the DAO Tokens.¹⁵⁵ Although

f-NFTs are run on a “decentralized” network, issuers can perform essential tasks such as fractionalizing NFTs, using their expertise to bundle NFTs, or maintaining the network to ensure the f-NFTs are protected.

The third characteristic is that an issuer “creates or supports a market for, or the price of, the digital asset,” which can include (1) “control[ing] the creation and issuance of the digital asset,” or (2) “tak[ing] other actions to support a market price of the asset, such as by limiting supply or ensuring scarcity” through activities like buybacks.¹⁵⁶ Issuers of f-NFTs, such as Niftex and Fractional.art, may embody this characteristic because issuers set the original fixed price of an f-NFT when they initially fractionalize an NFT, and many f-NFT platforms have some type of “buyout” provision which lets f-NFT investors purchase the remaining shards to gain ownership of the full NFT.¹⁵⁷ This buyout provision is similar to a buyback because the original f-NFT issuer can buy back the whole NFT, which can subsequently support a market price of the f-NFTs. Also, as more NFTs are bought and sold on a platform, the rarity and scarcity of a specific NFT may increase, which then affects the price of that NFT.¹⁵⁸ Thus, if f-NFT platforms support the growth of their platforms to include more f-NFTs or other products, then these platforms can create a market for and support the price of f-NFTs. A counter argument is that an NFT’s lack of exchangeability with other NFTs impedes its ability to be classified as a security. Traditional securities increase their value from price fluctuation and exchangeability, but due to its uniqueness, an NFT only increases its value through profit increases and not exchangeability.¹⁵⁹ This issue may be limited with f-NFTs, whose value is tied to other types of price fluctuations.

The fourth characteristic is that the issuer has a “lead or central role in the direction of the ongoing development of the network or the digital asset.”¹⁶⁰ By simply maintaining the f-NFT network, these platforms are providing an active management role that contributes to the development and stability of f-NFTs and f-NFT networks. Since the actual NFT is typically hosted on external URLs or IPFS, some caution that NFT networks must be maintained to ensure that NFTs sold on the platform do not disappear, buyers do not lose their purchases, and NFTs do not lose their value. This dynamic can create a system in which “the value of the art is tethered to the value of the platform hosting it.”¹⁶¹ The managerial efforts of the NFT platforms would be directly tied to the value of the NFTs because if the NFT platforms are not run properly or are shut down, the value of the NFTs decreases or disappears altogether. An issuer can also take a lead role in continuously developing f-NFTs if the issuer is an artist, athlete, celebrity, or company, and the value of their f-NFT is tied to that specific issuer’s popularity or the efforts they undertake to grow their popularity. When buying an f-NFT, you are not buying the underlying artwork but instead are purchasing the right to gain profits from the increased popularity of the creator, whether it be an artist like Beeple or an athlete like Patrick Mahomes.¹⁶² People may invest in NFTs with the hope that the creator increases in fame, which can then increase the profits from the particular NFT. For example, many college athletes are creating their own NFTs, and as an athlete’s career progresses to professional sports, the value of that NFT could exponentially increase.¹⁶³ NFTs issued by corporations or influential public figures may also satisfy the “efforts of others” prong. For example, Nike recently announced its plan to sell “digital shoes,” which resemble an NFT for its iconic shoes; Martha Stewart also created an NFT collection consisting of digital art of her home décor.¹⁶⁴ Nike and Martha Stewart may have a central role in the ongoing development of their respective NFTs because as they put in effort to continuously grow the popularity and profitability of their brand, their NFTs may also grow in value. If an NFT is tied to a specific company or person, the NFT’s value relies on the efforts of that issuer to increase their popularity, which will in turn help develop the underlying NFT.

The fifth characteristic is that the issuer has “a continuing managerial role in making decisions about or exercising judgment concerning the network or the characteristics or rights the digital asset represents.”¹⁶⁵ Some examples of what constitutes a “managerial role” include: “determining whether and where the digital asset will trade,” having “responsibility for the ongoing security of the network,” and “making other managerial judgements or decisions that will directly or indirectly impact the success of the network or the value of the digital asset generally.”¹⁶⁶ The DAO Curators had a large managerial role over the DAO Token—and its potential value—because investors relied on the Curators’ expertise to monitor the operation of The DAO, safeguard their funds, and determine when proposed contracts should be put to a vote to fund projects.¹⁶⁷ F-NFT platforms may serve this “managerial role” through providing ongoing security for the network. For example, f-NFT platforms must manage their networks to prevent any hacking attempts or fraud that could steal funds during an NFT transaction or destroy the linkage to the underlying NFT.¹⁶⁸ This is similar to how The DAO and its Curators were relied on for “failsafe protection” and for protecting the system from “malicous [sic] actors.”¹⁶⁹ Current f-NFT platforms have yet to show how their managerial decisions can significantly impact the success of f-NFTs, given that they do not have Curator-type workers who actively control f-NFTs. However, if f-NFT platforms sold

f-NFT bundles, investors would have to rely on the platform’s judgment for what types of NFTs were being pooled together in a bundle and sold as

f-NFTs. The platform’s expertise may then affect the value of the f-NFT bundle, and it would be more likely that f-NFTs had continuous management from others.

The sixth characteristic is that “[p]urchasers would reasonably expect the [issuer] to undertake efforts to promote its own interests and enhance the value of the network or digital asset” where the issuer has a stake in the digital asset and can realize its own gain from the digital asset or monetize the value of the digital asset.¹⁷⁰ Issuers or creators of f-NFTs may satisfy this characteristic because they can program a smart contract to automatically charge a type of royalty or curator fee any time an f-NFT is resold or used in a specific way.¹⁷¹ This enables the issuer to monetize the value of the digital asset and promote its own interests in the digital asset. Some platforms such as Niftex have also automatically programmed their f-NFT smart contracts to set aside five percent of an NFT’s fractions for the artist.¹⁷² In this system, instead of the creator taking a cut every time a fraction is traded on the open market, they now get to share in the profits of just owning some of the shards. It seems that f-NFT issuers may promote their own interests and enhance the value of the digital asset, because the higher the value of the asset, the more money they can make off their own shards.

Whether or not f-NFTs satisfy the fourth Howey prong will once again come down to the specific facts of how the f-NFT is marketed to purchasers and the specific platform or issuer. However, given the various SEC characteristics taken together and their application to f-NFTs, there may be a good argument that f-NFTs can gain their value from the “efforts of others.” After analyzing f-NFTs under the four Howey prongs and comparing them to other established digital asset securities, f-NFTs can be considered securities.

IV. HOW CAN NFTS BE REGULATED?

Even if f-NFTs can satisfy all the Howey prongs and be classified as a security, the question still remains whether the SEC should regulate these digital assets and what regulatory framework should be adopted. The SEC cautioned that as financial technologies continue to innovate, there is a possibility that market participants (such as f-NFT buyers, sellers, and platforms) may be conducting activities that fall within the SEC’s jurisdiction in which their transactions, persons, or entities may be subject to registration, regulation, or oversight.¹⁷³ The SEC can regulate three different types of actors: (1) buyers of a security, (2) sellers or issuers of a security, and (3) platforms facilitating exchanges.¹⁷⁴ If designated as a security, buyers, sellers, or platforms of f-NFTs sold without registration may be subject to penalties, registration requirements, or filing periodic reports with the SEC.¹⁷⁵

The SEC needs to discover what types of regulations it can impose on buyers, sellers, and platforms of f-NFTs. This Part analyzes the risks and opportunities of regulating f-NFTs under the existing regulatory framework and how regulations can be applied to the three different actors within the NFT space to recommend a new, modified framework better suited for this digital asset.

A. REGULATION OF BUYERS

The SEC regulates buyers of securities by only allowing certain “accredited investors” to purchase unregistered securities, which typically are subject to fewer requirements and regulations.¹⁷⁶ SEC Regulation D (“Reg. D”) governs unregistered securities and explains the exemptions from being required to register with the SEC.¹⁷⁷ Under Rule 501(a) of Reg. D, accredited investors can be institutional investors and entities such as banks, mutual funds, insurance companies, or pension plans;¹⁷⁸ insiders within an issuer such as officers or directors of the issuer of the securities;¹⁷⁹ or wealthy natural persons such as those with a net worth of greater than $1 million, excluding primary residence and mortgage,¹⁸⁰ or those with an annual income of greater than $200,000 for the last two years ($300,000 if filing jointly with one’s spouse).¹⁸¹

The policy behind limiting buyers from purchasing certain securities through this regulation is to protect less-knowledgeable individual investors, who may not have the financial stability to absorb the high risks of investing in unregistered securities, while also promoting investments into risky entrepreneurial ventures. Accredited investors are treated differently from the general public because they are sophisticated enough to bear the risks, are more knowledgeable, or have the money to hire someone like a financial advisor to help them make informed decisions. Given that f-NFTs may be unregistered securities, the SEC could regulate f-NFT buyers by only allowing accredited investors to purchase them. However, it may be difficult to prevent people from buying a certain digital asset on a decentralized and easily accessible platform. This would mean that every time an f-NFT was created or sold, an issuer or platform would have to go through the

time-consuming and costly process of ensuring that every purchaser complies with the definition of an accredited investor. The whole purpose of fractionalizing NFTs was to make these digital assets more accessible to average investors. Thus, it seems counterintuitive to place a new barrier in front of average investors and their ability to participate in this emerging market. The accredited investor regulation is meant to protect average investors from more risky activities, but there may be other ways to prevent harm to less-knowledgeable investors than completely cutting them off from these new assets, such as requiring NFT platforms to provide easily accessible and relevant information regarding trading NFTs and maintaining certain security protocols to protect f-NFT investors and their funds. Thus, it is unlikely that the SEC could or should place any regulations on buyers of f-NFTs.

B. REGULATION OF SELLERS OR ISSUERS

The SEC may be able to place registration requirements on the initial creators or issuers of f-NFTs. Under section 5 of the Securities Act, any issuer offering or selling an unregistered security in interstate commerce must register non-exempt securities with the SEC.¹⁸² These registration requirements serve two main goals: (1) to provide investors with financial and other material information regarding the securities being offered or sold and (2) to prohibit and minimize fraud, deceit, misrepresentations, and other dangers in the sale of securities.¹⁸³ Requiring issuers to provide information regarding their assets to investors through the SEC increases the likelihood that investors will make well-informed decisions and provides a certain standard to minimize fraudulent sales. If f-NFTs are deemed to be securities, the individual or entity that initially fractionalizes the NFT and sells these

f-NFTs may be considered an issuer under section 5 and thus be subject to SEC requirements such as filing a registration statement and periodically disclosing material information.¹⁸⁴

The SEC has cracked down on digital assets and ICOs by bringing and winning enforcement actions against a variety of issuers who have offered and sold digital assets that are deemed securities and were not registered pursuant to the Securities Act.¹⁸⁵ In 2019, the SEC brought two high-profile enforcement actions against Kik Interactive Inc. (“Kik”) and Telegram Group Inc. (“Telegram”) arguing that the Kik and Telegram tokens were sold to investors as unregistered securities and thus violated federal securities law. The courts applied the Howey test and found that both tokens were securities because the funds from the token sale were used for operating the companies’ respective ecosystem and messaging apps, the tokens were marketed to prospective investors as a way “you could make a lot of money,” and the value of the investments depended on the companies’ respective efforts to develop their messaging apps.¹⁸⁶ While some issuers of digital assets like cryptocurrency were subject to registration requirements, other issuers of digital assets such as tokens for a membership rewards program (TurnKey Jet, Inc.) or tokens for video game currency (Pocketful of Quarters, Inc.) were given “no-action” letters from the SEC promising that the it would not take any enforcement action against these issuers for selling the digital assets without registration.¹⁸⁷ The SEC held that these rewards and video game tokens were not securities because none of the funds from the token sales were used to develop the issuer’s platform, the tokens were immediately usable for their intended functionality (purchasing air charter services or gaming) at the time they were sold, token transfers were restricted to only the company’s internal “wallets,” and the tokens were both marketed in a way that emphasized the functionality of the token for consumption.¹⁸⁸

Given the unchartered territory of f-NFTs, it is difficult to apply the regulation of issuers to the creators of f-NFTs. Although selling f-NFTs may look like a type of ICO, there may be policy reasons not to require registration every time creators wish to fractionalize their NFT. Registering the sale of an asset is a time-consuming and costly process, and it seems unnecessary to require extensive disclosures given that the costs of registration may outweigh the benefits of having an accessible f-NFT marketplace. The main goals of these registration requirements are to provide investors with sufficient information regarding the f-NFT and to prevent fraud.¹⁸⁹ However, f-NFTs’ blockchain and smart contract technology may satisfy these goals without the need for costly registration. Many platforms always display relevant information regarding an NFT right next to the image of the NFT. This information typically includes a description of the NFT, the total supply of fractionalized shards, the valuation, and some type of table showing all the transactions of that specific NFT, the date on which each sale occurred, the buyers and sellers for each sale, and the price at which it was sold.¹⁹⁰ Thus, potential purchasers can already easily see the relevant financial information regarding the assets to help them make an informed decision. Also, since each f-NFT has a digital ledger that automatically records every transaction and every buyer and seller of that f-NFT, it can be easier to fend off certain types of fraud and easily authenticate true ownership. F-NFTs’ blockchain technology, decentralized network, and easy authentication process can help satisfy the goals that registration requirements aim to reach.

One may argue that if an f-NFT is being sold by a specific entity, artist, or athlete, and the value of that f-NFT is tied to that entity or individual’s external success, then the issuer may need to provide disclosure regarding the entity or individual. For example, would a professional athlete’s f-NFT issuance require a registration statement about their professional sports career? Brands such as Nike and Martha Stewart have recently announced their digital asset plans such as Nike’s “digital shoes” and Martha Stewart’s NFT collection of digital images depicting her home decor and designs.¹⁹¹ Thus, if a company or brand is issuing an NFT or f-NFT, it seems more likely that the SEC may impose registration requirements and disclosures regarding that specific company or brand. Even if the SEC decides to impose registration requirements for the initial fractionalization of an NFT, there should be exemptions for small NFTs of little value or where there is a low number of shards in the initial fractionalization. For example, Reg. D under Rule 504 provides an exemption from registration requirements for companies that issue a small amount of securities, in which they are not allowed to sell more than $10 million worth of securities in any twelve-month period.¹⁹² This rule could easily be applied or adapted to fit small sales of f-NFTs such that issuers would not be required to register the sale of their f-NFTs if the total value of the sale was below a certain threshold. The SEC will need to balance the costs of the registration requirements for initial

f-NFT issuers with the need to promote or encourage new markets and assets and not stifle innovation and creativity.

C. REGULATION OF PLATFORMS OR EXCHANGES

Although it may be more difficult to regulate buyers or the initial creators of f-NFTs, it may be more reasonable to focus securities regulation on f-NFT platforms or networks that provide for the fractionalization of NFTs and manage the secondary market trading of these digital assets. If an f-NFT platform such as Niftex, Fractional.art, or DAOfi satisfies the definition of an “exchange” under Exchange Act Rule 3b-16(a)’s test, then these types of platforms will need to register with the SEC under section 6 of the Exchange Act as a national securities exchange or be exempt from registration, such as by operating as an alternative trading system (“ATS”) in compliance with Regulation ATS.¹⁹³ The registration requirements for exchanges apply regardless if the issuing entity is a decentralized autonomous organization as opposed to a traditional company, if purchased using virtual currencies as opposed to traditional paper currency, or if distributed through ledger technology as opposed to certificated form.¹⁹⁴

Under the Exchange Act Rule 3b-16(a), an entity is an “exchange” if it (1) “brings together orders for securities of multiple buyers and sellers,” and (2) uses “established, non-discretionary methods.”¹⁹⁵ The SEC clarifies this two-pronged functional test by stating that a system “brings together orders” “if it displays, or otherwise represents, trading interests entered on the system to system users” or “if it receives subscribers’ orders centrally for future processing and execution.”¹⁹⁶ The SEC also explains that a system uses “established, non-discretionary methods either by providing a trading facility or by setting rules governing trading . . . among the multiple buyers and sellers entering orders into the system.”¹⁹⁷ These methods include a computer system in which orders interact, a “trading mechanism that provides a means or location for the bringing together and execut[ing] of orders,” or rules that impose execution procedures or priorities on orders.¹⁹⁸

Recently, this test was applied to the EtherDelta, which is an online trading platform that allows buyers and sellers to trade digital assets such as Ether and ERC20 tokens in secondary market trading. The SEC entered an enforcement order arguing that EtherDelta violated section 5 of the Exchange Act because its digital token was a security and the EtherDelta platform was an unregistered “exchange” that was transacting in a security.¹⁹⁹ This enforcement action found that EtherDelta satisfied the criteria of an “exchange” under Exchange Act Rule 3b-16(a) because it (1) operated as a marketplace for bringing together the orders of multiple buyers and sellers of a digital asset that was considered a securities under the Howey test “by receiving and storing orders in token in the EtherDelta order book and displaying the top 500 orders (including token symbol, size, and price) as bids and offers,” and (2) “provided means for orders to interact and execute through the combined use of the EtherDelta’s website, order book, and pre-programmed trading protocols on the EtherDelta smart contract.”²⁰⁰ The EtherDelta website also had numerous features that were similar to online securities trading platforms, such as providing access to the EtherDelta order book, sorting the tokens by price and color, and providing account information, market depth charts, lists of user’s confirmed trades, daily transaction volumes per token, and fields for users to input deposits, withdrawals, and trading interests.²⁰¹ Many of these features are similar to the online trading platforms of f-NFTs. When applying this functional test to f-NFT platforms and comparing them to the EtherDelta, it seems like f-NFT platforms can satisfy Rule 3b-16(a)’s two requirements.

First, f-NFT platforms bring together multiple buyers and sellers onto a single network to transact orders of f-NFTs. f-NFT platforms satisfy the “multiple buyers and sellers” aspect since there is a wide variety of f-NFTs issuers and multiple buyers who can purchase these f-NFTs.²⁰² These platforms satisfy the aspect of “bringing together” people to “transact orders” because they not only provide a place to fractionalize NFTs but also create and maintain marketplaces for users to trade their f-NFTs. Platforms typically receive and store f-NFT orders in a ledger on the Ethereum blockchain that keeps track of all the transactions of a specific f-NFT, much like the EtherDelta order book.²⁰³ All of these orders and f-NFTs are easily displayed on f-NFT platforms where users can see any past f-NFT transactions and execute orders to buy or sell these digital assets. Similar to EtherDelta, f-NFT platforms like Fracitonal.art also display the top orders and include information such as the token name, number of fractions, and price.²⁰⁴

Second, f-NFT platforms use a decentralized network that acts as a trading facility and sets rules for any f-NFT transaction through the underlying smart contracts that these platforms embed in the f-NFTs.²⁰⁵ Like EtherDelta, current f-NFT platforms provide a network or trading facility for orders to interact and execute through their individual websites such as Niftex, Fractional.art, or DAOfi, their digital ledgers, and their pre-programmed smart contracts with embedded trading protocols.²⁰⁶ These websites provide the “means or location” for bringing together users and executing orders for f-NFTs.²⁰⁷ Also, smart contracts use execution procedures and priorities to impose rules and determine the terms for any

f-NFT transaction on the network.²⁰⁸ Smart contracts can confirm the validity of the transactions and set the conditions of the order by checking certain information, such as whether the f-NFT contains a valid cryptographic signature, if the f-NFT comes with some type of royalty, if there is a buyout option, or if there is some type of curator fee.²⁰⁹ These characteristics provide the “established, non-discretionary methods” that govern how f-NFT orders interact with each other.

If an f-NFT platform is considered an “exchange,” it could still escape registration requirements if it satisfies one of the exemptions in Exchange Act Rule 3a1-1(a). It is unlikely that an NFT trading platform would fall under the 3a1-1(a)(1) (exemption for an ATS operated by a national securities association) or 3a1-1(a)(3) (exemption for an ATS not required to comply with Regulation ATS pursuant to Rule 301(a) of Regulation ATS) exemptions.²¹⁰ However one could analyze whether an f-NFT trading platform could be considered an ATS that complies with Regulation ATS and thus fits into the 3a1-1(a)(2) exemption for ATSs. This exemption would allow f-NFT exchanges to register as a broker-dealer, which has lower regulatory costs and fewer notice and reporting requirements, instead of as a national securities exchange.²¹¹ Although operating under this exemption would still come with some notice, reporting, and recordkeeping requirements, it could prevent f-NFT platforms from spending even more time and money on registering as a national securities exchange and dealing with periodic disclosures.

Although digital asset trading platforms resemble traditional exchanges or alternative trading systems, regulators may need to adjust the regulatory framework, much like they did for ATSs, to account for differing characteristics of blockchain-based exchange platforms. Differences between digital asset exchanges and national securities exchanges can include transparency, fairness, and efficiency.²¹² The decentralized aspects of f-NFT platforms may provide their own form of protection that may be more or equally as transparent, fair, and efficient as the regulations the SEC would impose. Thus, the SEC could adopt another new regulatory framework for exchange platforms of digital assets such as f-NFTs that requires less registration or fewer requirements than a national securities exchange and recognizes the fraud and misrepresentation protection that a blockchain platform already affords.

A decentralized platform may be better than SEC-imposed regulation at detecting fraud and protecting users on these types of f-NFT platforms. First, these platforms’ “decentralized” and public nature provides fairness because no one entity controls the network, and therefore anyone can easily access and interact on the platform and all transactions are verified by others on the network. Second, “decentralized” exchanges provide efficiency because the blockchain technology allows them to easily show users “verified business logic [in a publicly verified smart contact],” which a centralized exchange could not do.²¹³ Third, f-NFT platforms provide transparency because while traditional exchanges hold your funds with an “exchange owner,” decentralized ones hold your funds through easily verifiable and public digital ledgers that also contain a list of all transactions for a specific f-NFT, including the buyer, seller, and price.²¹⁴ The cryptographics embedded in f-NFTs make everything in a sense “registered” through its digital ledger, and all transactions are verified through the whole blockchain network. Thus, the sale of these digital assets may not need SEC regulation.

Even in decentralized networks, there is still a chance of hacking, fraud, and loss that may be mitigated through government regulation. Just as the SEC modernized the regulatory framework to “better integrate alternative trading systems into the national market system,” the SEC may need to modernize the regulatory framework again to integrate NFT trading systems and digital asset sales.²¹⁵ For example, the SEC may adopt a new regulatory framework that requires an f-NFT exchange platform to provide or display either convenient one-time reports or costly regular reports on its security protocols and how it deals with bad actors such as hackers that manipulate code to steal the proceeds of an NFT sale.²¹⁶ The SEC may also implement a limiting framework, similar to how Regulation ATS requirements are limited to a subset of ATSs that occupy a certain large percentage of the total trading volume of any security.²¹⁷ For example, the SEC could only require registration for f-NFT exchanges that account for a large volume of the overall traded f-NFTs. This may ensure investor protection from large actors while still allowing for innovation through smaller actors. The SEC can also require platforms to comply with certain capacity, integrity, and security standards to ensure f-NFT investors’ funds and assets are protected, given that an f-NFT’s value may be tied to the platform’s ability to maintain and retrieve the NFT.

SEC Commissioner Hester Peirce’s proposal for a “safe harbor” for digital assets and exchanges shows a glimpse into the beginning of a new framework that can provide guidance for digital asset issuers and exchanges. Peirce proposed a regulation in which digital asset exchanges would be allowed to begin distributing their tokens broadly if they provide disclosures such as plans for the network and who is behind the network.²¹⁸ These exchanges would then have three years from a token’s initial distribution to develop the network before they would be subject to any securities laws.²¹⁹ This three-year safe harbor allows issuers of digital assets to be exempt from SEC regulation for a certain time period and prevents their digital asset from being immediately classified as a security. It also gives digital asset creators time to set up their networks without government regulation and establish whether their digital asset can be classified as a security. This framework may allow creators to innovate digital and financial assets while continuing to protect investors. At the end of the day, the SEC needs to balance “encourag[ing] market innovation while ensuring basic investor protections.”²²⁰

V. PRELIMINARY EXPLORATION OF EXISTING REGULATORY MODELS

The SEC has existing regulation for non-digital securitized products, such as traditional stocks in companies or REITs, which may be applicable to f-NFT products and provide regulators with a starting point from which to develop regulations specific to f-NFTs.

When an individual or entity initially fractionalizes and issues their

f-NFTs, it could be called an “Initial Fractionalization Offering,” or “IFO.” An IFO, in which the issuer sells multiple shards of the same NFT to multiple buyers, is similar to a type of IPO or ICO, in which the issuer sells multiple stocks or tokens of the same company to multiple buyers. F-NFTs can be treated as a stock in the original whole NFT, and the sale of these f-NFTs can be the same as selling a share in an individual company. Thus, instead of developing a whole new set of regulations for f-NFTs, regulators can just look at existing securities laws for traditional stock sales and apply them to f-NFTs sales. The rules governing traditional, non-digital securities such as stocks could be slightly modified to better apply to f-NFT sales. For example, f-NFT creators could be required to register their f-NFT sale or IFOs with the SEC by filing a modified Form S-1 that contains information regarding the past performance of the NFT such as its trading history, information regarding the performance of other similar NFTs if the NFT is part of a collection, or information regarding the company or individual creating the NFT.²²¹ Providing the financial disclosures required by traditional IPOs may be more difficult for traditional NFTs because there is not any managerial or financial information behind a regular NFT besides its intrinsic or artistic value. However, NFTs from a particular brand, celebrity, or company would have an easier time producing accurate managerial and financial disclosures or material information regarding an NFT because these brands and celebrities typically have established financials or data regarding their performance, such as how popular a brand is or the performance statistics of an athlete. For example, Martha Stewart could be required to disclose managerial and financial information regarding her retail company if she tries to issue another NFT collection of her home décor, or Patrick Mahomes could be required to disclose information regarding his football statistics or other brand deals if he issued more NFTs. Thus, traditional registration requirements for issuing stock could be particularly appropriate for a celebrity or company that issues f-NFTs or NFTs and uses the proceeds from the sales to develop their brand or business.

REITs are another securitized product with an established regulatory structure that can be applied to f-NFT regulation. REITs are entities that own and typically operate various “income-producing real estate or real estate-related assets,” such as office buildings, apartments, shopping malls, hotels, or warehouses.²²² In addition to other requirements, a REIT must have seventy-five percent of the entity’s total assets coming from real estate investment, be managed by a board of directors, and distribute at least ninety percent of its taxable income to shareholders annually in the form of dividends.²²³ REITs register and file reports with the SEC, can list and trade their shares on a public stock exchange, and allow investors to invest in and own shares of multiple large-scale, income-producing real estate properties without actually having to buy the real estate.²²⁴ In other words, REITs take a bunch of commercial real estate assets, bundle them together in one company, and then sell shares of that company to investors so they can reap the benefits of owning commercial real estate. Issuing shares of a REIT is like issuing fractional shares of a basket of NFTs. For example, one way to issue f-NFTs is to take multiple whole NFTs, bundle them together in one large NFT basket, and then sell f-NFTs or fractional shares of that basket

(“f-NFT bundles”) to investors so they can own shares in multiple NFTs. Just as REITs sell investors shares of a basket of real estate investment properties, f-NFT bundles sell investors shares of a basket of NFTs.

Given these similarities, securities regulations that apply to REITs may also translate and apply to f-NFTs. Most REITs are registered with the SEC and publicly traded on a stock exchange. Under the Securities Act, REITs are required to register their securities using Form S-11 to make disclosures regarding the REIT’s management team and other significant information and make regular SEC disclosures such as quarterly and yearly financial reports.²²⁵ Regulators could follow this existing regulatory model from REITs and impose similar requirements for fractional shares of NFT bundles. Form S-11 requires REIT issuers to disclose information detailing the price of the deal, how the REIT plans to use the proceeds, certain financial data like trends in revenue and profits, descriptions of the real estate, operating data, information on its directors and executive officers, and other data.²²⁶ These types of requirements could easily be adopted to regulate f-NFT bundles by creating a new, similar form to Form S-11 for issuers of f-NFTs to file with the SEC. For example, issuers of f-NFT bundles could be required to file a form like Form S-11 that discloses information like the price of each f-NFT; how the individual or entity issuing these f-NFT bundles plans to use the proceeds, such as to purchase more NFTs to add to the bundle; a description of the NFTs currently in the bundle as if they are part of a trending collection; certain financial data of each NFT, such as its past transactions or price; information on the individuals managing the bundle, such as their credentials or how they have managed digital assets in the past; and so forth.

However, REITs are different from f-NFTs in that REIT investors earn a share of the income produced through the rent or mortgage interests from the commercial real estate, while f-NFT investors can only earn a share of the increased value of the underlying NFT.²²⁷ It may be possible that an NFT’s smart contract could charge money to anyone who views the particular NFT and then automatically distribute these proceeds out to the

f-NFT investors as a type of dividend, but this has yet to be seen. Thus, REIT regulations may not translate perfectly to regulating f-NFT bundles since it is difficult to see how f-NFT bundles would file quarterly and yearly financial statements regarding just NFTs. REITs can provide financial disclosures regarding the profits and losses of their various real estate properties, but f-NFTs do not have similar financials beside the increase and decrease in value of the various NFTs within the bundle. However, as described above, there may be more financial information when f-NFTs are issued by specific celebrities or companies. Regulators will need to determine how f-NFTs can disclose financial information to best inform investors. Additionally, there has been a surge of investors buying Metaverse Real Estate, which is real estate in virtual worlds bought and sold using NFTs and cryptocurrency.²²⁸ People can now go onto virtual real estate platforms such as SuperWorld where they can buy a plot of land in the form of an NFT and then share in any of the commerce that happens on that piece of property.²²⁹ These types of real estate NFTs would be able to charge rent or gain interest on these virtual properties and thus could then distribute income out to the NFT owners, much like REITs, and be subject to similar regulation. This analysis is outside the scope of this Note, but it is a relevant issue that regulators will need to face in the future. Nevertheless, REITs can provide a baseline to help regulators analyze and develop ways to regulate different types of f-NFTs and NFTs.

CONCLUSION

Given the foregoing analysis, f-NFTs can be deemed an “investment contract” security under the Howey test, and the SEC may be able to regulate the issuers or exchanges that facilitate these fractionalization and trading.

F-NFTs satisfy the four Howey prongs because (1) f-NFT buyers make an investment using money in the form of cryptocurrency; (2) this investment is in a “common enterprise” where the fortunes of the buyer are tied to the successes of either other fractional investors of one NFT or the brand or celebrity that issued the NFT; (3) buyers have a “reasonable expectation of profit” because f-NFTs are traded on secondary markets and promoted as a unique liquidity opportunity; and (4) these financial returns are derived from the efforts of issuers to support the popularity and price of an f-NFT and platforms to maintain and develop f-NFT exchanges and marketplaces.

If f-NFTs or NFTs are deemed securities, the SEC can use the existing regulatory models of digital currencies, traditional stock, and REITs to create initial regulations of a continuously developing digital asset. Due to the wide variety of f-NFTs and the ways in which they are owned and operated, regulators will have difficulty developing one standard that applies broadly. However, by comparing issuers and exchanges of f-NFTs or NFTs to existing securitized products, one can apply slight modifications to established regulations and require disclosures such as an NFT’s transaction history or how an issuer and exchange will use the proceeds from the sale.

Hopefully, this analysis will appeal not only to the legal field and regulators but also to the average investor who is interested in buying, selling, or understanding new digital assets like NFTs. The legal field and the government must face the current issues with NFTs and their classification and regulation as a financial instrument in order to protect investors while also allowing for the innovation of new financial technologies.

96 S. Cal. L. Rev. 253

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Lauren Au*

* J.D., University of Southern California Gould School of Law, 2023. B.A., University of California, Los Angeles, 2019.

Ditching Daimler and Nixing the Nexus: Ford, Mallory, and the Future of Personal Jurisdiction under the Corporate Consent and Estoppel Framework

April 2023April 2023Shauli Bar-On*

While personal jurisdiction is intended to assess whether a defendant should be forced to defend a lawsuit in a location due to the defendant’s contacts with that forum, the doctrine has shifted to require the plaintiff to show a connection to the forum, even if the defendant otherwise has substantial contact with it. In its 2014 decision Daimler AG v. Bauman, the Supreme Court further limited the personal jurisdiction of corporate defendants in the spirit of curtailing forum shopping. But the Court’s 2021 decision concerning personal jurisdiction, Ford Motor Co. v. Montana Eighth Judicial District, and the Court’s granting of certiorari in Mallory v. Norfolk Southern Railway Co. cast doubt on the viability of Daimler. The 2021 Ford decision marks the beginning of an expansion of personal jurisdiction for corporate defendants. Justices Thomas, Sotomayor, and Gorsuch have expressed concerns over the protections afforded to corporate defendants under current doctrine. This Note elaborates on that skepticism. It traces the history of personal jurisdiction to reveal that the doctrine originates from the corporate consent and estoppel model—the very model at issue in Mallory. This Note argues that, absent guidance from Congress, courts must apply the original model—one that is inconsistent with Daimler and the nexus requirement. Finally, this Note argues that returning to the pre-Daimler and pre-nexus era produces favorable policy: it removes baseless corporate protections under the guise of the Fourteenth Amendment, clarifies the murky application of the doctrine in internet and stream of commerce cases, opens more fora for plaintiffs to allow free-market considerations to shape state law, and leaves the door open for Congress to legislate if it deems it necessary.

INTRODUCTION

Ask any athlete, and they will confirm the importance of home-field advantage. Over a large sample size, home teams win between 55% and 60% of National Football League games.¹ A similar phenomenon takes place in the Major League Baseball.² In the National Basketball Association, the numbers are usually higher at around 65% home-team wins.³ Needless to say, if offered a choice, teams would prefer to play at home. The same is true for litigants. The Constitution recognizes that a litigation forum, the location in which a lawsuit is permitted to take place, is limited.⁴ The limitation of where a defendant may be sued is known as where the defendant is subject to the court’s “personal jurisdiction.”

Traditionally, a defendant was subject to personal jurisdiction in a particular location if the defendant was “at home” in that location. But the definition of where a corporate defendant is “at home” has changed dramatically. Prior to 2013, corporate defendants were “at home” in any location in which they engaged in “continuous and systematic” contact.⁵ But under the Supreme Court’s 2013 decision Daimler AG v. Bauman,⁶ corporate defendants are now “at home” only in the locations in which they (1) maintain their headquarters or (2) are incorporated.⁷ Consequently, in order for a plaintiff to sue a corporate defendant outside of these two locations, the plaintiff must comply with a significantly more complicated framework, the most perplexing aspect of which is the “nexus” requirement: in order to sue a defendant away from the defendant’s “home” and ensure that the defendant’s due process rights are not offended, the plaintiff must show a connection between the selected location and the plaintiff’s lawsuit.⁸

This relatively new doctrine produces peculiar results. Masquerading as due process, the doctrine inordinately shields corporations from having to defend lawsuits in locations where they previously would have had to. For example, current doctrine forbids Michigan plaintiffs from suing a New York company in California but permits an identical lawsuit in the same venue for the same injuries based on the same conduct by California-residing plaintiffs.⁹ Moreover, the doctrine forbids a Florida-residing plaintiff from suing a Texas corporation in Florida, even though the corporation was registered to do business in Florida; had an agent for service of process in Florida, a distributor in Florida, and a plant in Florida; had been sued for similar claims in Florida; and had itself initiated lawsuits in Florida.¹⁰ In other words, in locations where the defendant is not “at home,” current doctrine erroneously assesses the plaintiff’s connection to the litigation forum in determining whether the defendant’s due process rights have been violated. The scenarios described above, and other recent Supreme Court decisions, illuminate how far astray from its origins personal jurisdiction doctrine has drifted.¹¹

In 2021, the Court handed down its decision in Ford Motor Co. v. Montana Eighth Judicial District Court,¹² which revealed that at least three sitting Supreme Court Justices¹³ are skeptical of the current personal jurisdiction doctrine, arguing that it provides too much protection for corporate defendants under the guise of the Fourteenth Amendment’s Due Process Clause. In April 2022, the Court also granted certiorari to address the corporate consent and estoppel model head on.¹⁴ This model, described in further detail below, suggests that if a corporation registers to conduct business in a forum, it implicitly consents to jurisdiction in that forum and is estopped from arguing otherwise. This Note expands on the justices’ concerns and offers a way forward consistent with the way personal jurisdiction has historically been understood.

This Note will illustrate that the modern personal jurisdiction doctrine—and the nexus requirement in particular—was improperly created to curtail forum shopping.¹⁵ It will then show that while Congress has passed statutes limiting or expanding jurisdiction in other contexts,¹⁶ and has narrowed jurisdiction of federal courts through venue statutes,¹⁷ it has not done the same to limit personal jurisdiction. Therefore, the sole consideration for personal jurisdiction is due process. And under the Due Process Clause, personal jurisdiction is based on the corporate consent and estoppel model, which inquires only into the corporate defendant’s contacts with the selected forum—it is not so concerned with the plaintiff’s connection to the forum. Accordingly, Daimler and the nexus requirement are inconsistent with this traditional model. This Note will also show how a reversion to this model of personal jurisdiction will clarify the doctrine’s application to cases involving internet sales and the “stream of commerce.”¹⁸

This Note begins by synthesizing the genesis and evolution of personal jurisdiction doctrine, discussing first the nineteenth century norms and moving into how Supreme Court jurisprudence has developed under the lens of the Fourteenth Amendment. The next Part of this Note narrows in on the relatively new distinction between general and specific personal jurisdiction¹⁹ and the “nexus” requirement that has attached to the latter. The Note continues by listing reasons the nexus requirement is troublesome and difficult to apply, given the narrowing of the “at home” definition for corporate defendants.²⁰ Finally, it ends with a preview of where the Court may be heading: given the granting of certiorari in Mallory, the Court appears to be in favor of reverting to the corporate consent and estoppel model and determining personal jurisdiction through assessing the defendant’s connection to the selected forum alone, consequently ditching Daimler and nixing the nexus requirement.

BACKGROUND
An Explanation of Personal Jurisdiction

Personal jurisdiction refers to the power a court has to make rulings relating to a party.²¹ Practically, it refers to the location in which a plaintiff may sue a defendant and hold the defendant to answer for that lawsuit. If a defendant is subject to personal jurisdiction in a particular location, known as a “forum,” the defendant must respond to the lawsuit, and any decision impacting the defendant can be enforced in other jurisdictions.²² If a case is in state court, personal jurisdiction answers the question “which state’s court system?” If the case is in federal court, personal jurisdiction answers the question “the federal court in which state?”

Personal jurisdiction analysis is twofold: statutory and constitutional.²³ States are free to pass statutes defining the personal jurisdiction of their state courts. These are referred to as “long-arm statutes,” as they extend or retract how far the “arm” of their court system can reach. Under Rule 4(k)(1)(A) of the Federal Rules of Civil Procedure, a federal court applies the long-arm statute of the state in which it is located.²⁴ In practice, a federal court in California will first determine whether there exists personal jurisdiction over a defendant under California’s long-arm statute. After making a determination under the long-arm statute, the court would turn to the constitutional analysis of personal jurisdiction.

The constitutional analysis of personal jurisdiction is based on the Due Process Clause of the Fourteenth Amendment. The analysis involves considerations of state sovereignty, federalism, and fairness. Because most states have long-arm statutes that permit personal jurisdiction to the limits of the constitution,²⁵ the personal jurisdiction analysis often blends into just a constitutional question. As such, courts²⁶ in states with to-the-limits-of-the-constitution long-arm statutes will only undertake a single analysis and have to answer one question: Is the exercising of personal jurisdiction in this forum consistent with the Due Process Clause? The remainder of this Note focuses only on the constitutional analysis of personal jurisdiction.

The Distinction Between General and Specific Personal Jurisdiction

Another concept crucial to the understanding of this Note is the distinction between two kinds of personal jurisdiction: “general (sometimes called all-purpose) jurisdiction and specific (sometimes called case-linked) jurisdiction.”²⁷ The former refers to a forum in which any plaintiff can bring any cause of action against the defendant.²⁸ The latter is a forum in which, under current doctrine, plaintiffs may only bring causes of action that “arise out of or relate to” the forum.²⁹ The specific personal jurisdiction requirement that the claim “arise out of or relate to” the forum is known as the “nexus” requirement because the plaintiff must show a “nexus” between the claim and the selected forum.

An example may help illustrate how the doctrine functions. Suppose a defendant is subject to general jurisdiction in Delaware. In that situation, a plaintiff from New York may sue the corporation in Delaware, even if there is no relation between the claim and Delaware—that is, even if the wrong alleged in the complaint took place in Maine. By contrast, suppose that the same defendant is not subject to general personal jurisdiction in Delaware. In the event that the wrong alleged in the complaint took place in Maine, the courts in Delaware would not have personal jurisdiction over the defendant and would not be able to adjudicate the dispute—this is because the plaintiff is unable to show a “nexus” between the claim and the selected forum in Delaware.

The Venue Statutes

Besides the due process requirements that plaintiffs must comply with in deciding where to file a lawsuit, Congress has acted to pass statutes narrowing potential venues for litigation. Specifically, Congress has outlined three locations in which a civil action may be brought: (1) where a defendant “resides”;³⁰ (2) where a “substantial part of the events or omissions giving rise to the claim occurred”;³¹ and (3) if there is no venue that fits (1) or (2), wherever the defendant is subject to the court’s personal jurisdiction.³²

In situations where a plaintiff files a lawsuit in a location in which the defendant is subject to personal jurisdiction, Congress permits defendants to nevertheless file motions to transfer venue or dismiss the case.³³ Congress envisioned two main reasons to permit a transfer of venue despite compliance with the requirements of personal jurisdiction. The first reason is when the plaintiff complies with the requirements of personal jurisdiction but does not comply with the requirements of the venue statute.³⁴ For example, suppose that a corporation is headquartered in San Francisco, California (which is in the Northern District of California) and finds itself to be the defendant in a federal-law dispute³⁵ with an employee over conduct that took place in San Diego, California (which is in the Southern District of California). If the employee files suit in the Central District of California, the defendant corporation may request a transfer to either the Northern or Southern District of California because, while the corporation is subject to personal jurisdiction in California, the Central District of California is an improper venue (it is not the venue where the defendant corporation is located,³⁶ and it is not the location where a “substantial part of the events or omissions giving rise to the claim occurred”).³⁷

The second reason is for convenience.³⁸ That is, even if a plaintiff complies with the requirements of personal jurisdiction and with the requirements of the venue statutes, a defendant may nevertheless request and be granted a motion to transfer venue if “the interest of justice” so demands.³⁹ In making the discretionary determination to transfer a case for convenience purposes, courts consider the following factors, among others: the relative ease of access to sources of proof, the cost of obtaining the attendance of required witnesses, administrative dealings of court congestion, and the local interests of having controversies decided where they took place.⁴⁰ For example,⁴¹ suppose a plane company is headquartered in Great Britain and flies a plane in Scotland. The plane’s parts were manufactured in Pennsylvania and Ohio. While the company was flying the plane in Scotland, it crashed and killed everyone on board. The heirs of the passengers sued the plane company in Pennsylvania.⁴² The Pennsylvania court could dismiss the case under a forum non conveniens theory, concluding that the case should be tried in Scotland.⁴³ In reaching this conclusion, the court would note that the crash had occurred in Scotland; the crash investigation had been conducted in Scotland; the witnesses are in Scotland; and the pilot’s estate, the plane’s owners, and the charter company were all located in Scotland.⁴⁴

The venue statutes supplement personal jurisdiction doctrine. Importantly, though, they are acts of Congress and not judge-made interpretations of the Due Process Clause of the Fourteenth Amendment. As for the forum non conveniens doctrine, there is a common law background to the doctrine, and it existed before the ratification of the Fourteenth Amendment.⁴⁵ This is crucial for originalist judges who believe that that Court should apply common law doctrines only if they existed at the time of the ratification of the amendment at issue. Of course, should Congress desire to narrow or expand the jurisdiction of federal courts and permit more or fewer fora for plaintiffs to file lawsuits, Congress is free to do so.⁴⁶

Recent Supreme Court Doctrine

The Supreme Court has historically been deadlocked in its personal jurisdiction doctrine. Justices seem to agree on dispositions but not the underlying reasoning for them.⁴⁷ In March 2021, the Court handed down its decision in Ford Motor Co. v. Montana Eighth Judicial District.⁴⁸ That decision doubled down on the Court’s previous personal jurisdiction decision, Bristol-Myers Squibb Co. v. Superior Court,⁴⁹ in which the Court required plaintiffs to show a nexus between their claim and the forum state in order to establish specific personal jurisdiction over a defendant corporation that has long been established in the forum selected for the litigation.⁵⁰ In both Ford and Bristol-Myers Squibb, the defendant corporation was not subject to general jurisdiction in the forum state despite its significant market presence there;⁵¹ in other words, the defendant corporation had purposefully availed itself of the forum state, arguably had continuous and systematic⁵² contact in the forum, but nevertheless was not “at home”⁵³ there. In Ford, a plaintiff purchased a malfunctioning car outside of Montana, yet she was permitted to sue Ford in Montana because Montana was the plaintiff’s home state.⁵⁴ In Bristol-Myers Squibb, a group of plaintiffs from Michigan was not permitted to sue in California (even though a group of California residents was permitted to sue there) because the Michigan plaintiffs had no connection to California.⁵⁵ The plaintiffs’ place of residency was thus determinative in failing to establish personal jurisdiction over the corporation defendant and offended the corporation’s right to due process under the Fourteenth Amendment.⁵⁶ Under both the first personal jurisdiction case since the passing of the Fourteenth Amendment, Pennoyer v. Neff,⁵⁷ as well as under the revamped “minimum contacts” test in International Shoe,⁵⁸ both Ford and Bristol-Myers Squibb would arguably be permitted to proceed in the selected fora. This Note will explain how the doctrine has evolved to the point of irreconciliation with these landmark cases.

THE STAKES AND HISTORY OF PERSONAL JURISDICTION
The Stakes of Personal Jurisdiction

Before delving into the history of personal jurisdiction and its development over the turn of two centuries, it is necessary to explain why it has been an area of such fierce contention. Personal jurisdiction is not about geography, not about which physical courthouse may entertain a controversy. Rather, it is about who adjudicates that controversy.⁵⁹

The Concern of State Judges and Congress’s Statutory Remedy

In most states, state judges are elected by the general public.⁶⁰ Accordingly, a case pending in state court is adjudicated by a judge subject to at least some public pressure. The case also has the potential of being tried before a jury composed of individuals from that state. These factors may create disadvantages for an out-of-state corporation, especially if the plaintiff is from the forum state.⁶¹ Hence the saying, “Though the courtroom be an adversarial arena, [the judge] is more than a referee . . . more than a linesman. [The judge] is the game.”⁶²

Congress has addressed the fairness concerns of defendants being sued in state courts outside their place of residence through the mechanism of federal court removal.⁶³ The process of removal, a product of congressional statute, allows defendants to move a case from state court—where judges are usually elected, and plaintiff-friendly state procedural law is likely to apply—to more defendant-friendly federal court if certain criteria apply.⁶⁴ One such criterion is when there exists “diversity jurisdiction.” Diversity jurisdiction occurs when the litigating parties are citizens of different states.⁶⁵ Corporations are citizens of the state in which they are incorporated and the state in which their headquarters is in.⁶⁶ Notably, though, diversity jurisdiction is permitted only in cases of “complete diversity,” which requires all parties on either side of the litigation “v” to be citizens of different states.⁶⁷ Given the complete diversity requirement, plaintiffs will oftentimes strategically sue along with a co-plaintiff from the same state as the defendant in order to preclude removal under diversity jurisdiction.⁶⁸ Congress has taken steps to address these concerns as well. In class actions, defendant-corporations rely on the Class Action Fairness Act, another congressional statute that allows defendants to remove a case to federal court so long as the amount in controversy exceeds $5 million and there is diversity of citizenship.⁶⁹ The Class Action Fairness Act does not require complete diversity.⁷⁰

The Concern of Forum Shopping and Congress’s Inaction

Then there is the issue of “forum shopping.” This term refers to plaintiffs seeking fora that offer the best choice-of-law and substantive law combinations to benefit their case.⁷¹ Plaintiffs also prefer to file claims in their hometown jurisdictions, where juries and judges are more likely to be sympathetic to the hometown plaintiff.⁷² Put another way, plaintiffs will choose to sue in locations where the law the court applies is most favorable to them and courtroom decisionmakers are more likely to favor them. One prominent example of the implications of forum shopping is the application of anti-SLAPP laws in various states and their availability in federal court.⁷³ SLAPP stands for “strategic lawsuits against public participation.” An anti-SLAPP motion is a state-law procedural rule available in many states that allows a defendant to repel and quickly dismiss lawsuits that threaten the defendant’s free-speech rights or matters of public concern. When this motion applies, the burden shifts to the plaintiff to show a likelihood of prevailing in the lawsuit. Without such a showing, the plaintiff’s case is dismissed. Because anti-SLAPP motions are not creatures of federal law, different circuits have different interpretations of when they can apply in federal court.⁷⁴ Some circuits permit the invocation of state anti-SLAPP motions in federal court in diversity jurisdiction cases while others do not.⁷⁵ The difference in these circuits could mean extra litigation costs and a higher potential for settlement.⁷⁶ Accordingly, the location of where a lawsuit is filed is a crucial strategic decision plaintiffs make.

Congress has not fully addressed forum shopping concerns by statute. While Congress has required certain claims to be litigated exclusively in federal court,⁷⁷ Congress has few guidelines about which federal court plaintiffs are required to file in.⁷⁸ This is where personal jurisdiction comes in. Personal jurisdiction’s roots are grounded in the Constitution alone, but its newfound application is in part to curtail forum shopping. The tension between personal jurisdiction doctrine’s roots and its modern significance, along with Congress’s inaction to curtail forum shopping, is the premise of this Note.

The History of Personal Jurisdiction
The Consent and Estoppel Model for Corporations

In the nineteenth century, corporations were subject to personal jurisdiction only in the state in which they were incorporated because they did not have the privilege to exist in other states.⁷⁹ Other states could agree to recognize a corporation by a process called comity.⁸⁰ As part of comity, states could require corporations to consent to being subject to the personal jurisdiction of the state in which they are licensed to conduct business.⁸¹ Accordingly, the estoppel model took form: if a corporation exercised corporate privileges in a state, it would be estopped from arguing that it was not subject to the personal jurisdiction of that state.⁸²

The history⁸³ of this model arose in the 1800s to address the “injustice”⁸⁴ that would result if a corporation could not be subject to suit in a forum where it does business but nonetheless is not headquartered. States passed statutes that required corporations to consent to being sued in the state in exchange for the privilege of doing business in the state. One of the first cases to recognize this model was Ex parte Schollenberger.⁸⁵ The Pennsylvania statute at issue in Schollenberger required corporations to appoint an agent to receive service that would have “the same effect as if served personally on the company within the State.”⁸⁶ The statute in question did not explicitly grant jurisdiction, but the Court held that

if the legislature of a State requires a foreign corporation to consent to be ‘found’ within its territory, for the purpose of the service of process in a suit, as a condition to doing business in the State, and the corporation does so consent, the fact that it is found gives the jurisdiction, notwithstanding the finding was procured by consent.⁸⁷

A few years later, the Court explicitly held that this model was constitutional.⁸⁸

Importantly, the consent and estoppel model did not originally require a nexus between the litigation and the forum. Instead, courts have held that the corporation’s consent to be sued subjects the corporation to general jurisdiction in the forum. For example, in Pennsylvania Fire Insurance Co. v. Gold Issue Mining and Milling Co.,⁸⁹ an insurance company based in Pennsylvania conducted business operations in Missouri and, as required by Missouri law, appointed a Missouri in-state agent for service of process.⁹⁰ The insurance company contracted with an Arizona company to insure its buildings in Colorado.⁹¹ After the Colorado property was struck by lightning and significantly damaged, the Arizona company sued the Pennsylvania insurance company in Missouri over the Colorado contracts.⁹² The Pennsylvania insurance company argued that it was not subject to personal jurisdiction in Missouri because the contracts did not involve Missouri whatsoever; that is, there was no “nexus” between Missouri and the plaintiff’s claim.⁹³ The Court disagreed, explaining that “the construction of the Missouri statute thus adopted hardly leaves a constitutional question open.”⁹⁴ The appointment of an agent to receive service in Missouri, the Court held, showed the insurance company’s consent to be sued in Missouri.⁹⁵ This line of reasoning continued in at least three other cases.⁹⁶

The Erosion: Shift from Corporate Consent to Corporate “Presence”

The explicit corporate consent model could no longer hold up after the Court, in International Textbook Co. v. Pigg,⁹⁷ held that states could not impede interstate commerce by denying out-of-state corporations from exercising corporate privileges in their states. Put another way, the Court forbade states from denying corporations permission to conduct business within their borders. As such, corporations no longer affirmatively consented to being subject to the personal jurisdiction of states in which they engaged in business activities.⁹⁸ To remedy the doctrine, the Court, in International Harvester Co. v. Kentucky,⁹⁹ held that when a corporation was “present” in a jurisdiction, it was subject to the personal jurisdiction of that forum through, presumably, an implied consent.¹⁰⁰

Corporate “presence” proved to be a tricky term to define.¹⁰¹ Nevertheless, the remnants of the consent model held up well.¹⁰² Pennsylvania maintained its consent-by-jurisdiction framework and was the only state to explicitly inform corporations of what they were agreeing to by doing business in the state. Under Title 42, Section 5301(a) of the Pennsylvania Consolidated Statutes, registration to do business in Pennsylvania—which foreign corporations are required to do—constitutes consent to general jurisdiction in Pennsylvania courts.¹⁰³ For a time even after International Shoe, courts continued to enforce the consent and estoppel model in Pennsylvania. For example, the Third Circuit in Bane v. Netlink¹⁰⁴ held that there was no need to conduct a personal jurisdiction analysis (that is, to assess whether the defendant had systematic and continuous contact in the forum) because the defendant corporation consented to being subject to general personal jurisdiction in the state by virtue of the Pennsylvania statute.¹⁰⁵ The court distinguished that situation from another Third Circuit case, Provident National Bank v. California Federal Savings and Loan Association,¹⁰⁶ where the defendant had not registered to do business in Pennsylvania.¹⁰⁷

However, in late 2021, the Pennsylvania Supreme Court struck down the law requiring out-of-state corporations to submit to jurisdiction as a requirement of registering to do business in the state, finding that the statute is incompatible with the Fourteenth Amendment, as interpreted in Daimler.¹⁰⁸ The most recent Pennsylvania Supreme Court decision highlights the split over the constitutionality of such statutes. A number¹⁰⁹ of other state high courts have reached similar conclusions, rejecting the constitutionality of jurisdiction-by-consent statutes.¹¹⁰ And a number of other state high courts have reached the opposite conclusion, finding that such statutes are constitutional.¹¹¹ Other state high courts have used state law to reach conclusions in this area of the law.¹¹² In April of 2022, the Supreme Court granted certiorari over the Pennsylvania Supreme Court’s decision.¹¹³

But what about states that do not explicitly by statute inform defendant corporations that they would be subject to general personal jurisdiction in the state? Nearly every state requires foreign corporations to appoint an agent to receive service of process in the state.¹¹⁴ Courts were split as to whether these schemes subjected corporations to general personal jurisdiction in the state. Minnesota, for example, has a statutory scheme that allows service of process over a foreign corporation through service on the Minnesota Secretary of State.¹¹⁵ In that situation, though, the service is valid “only when based upon a liability or obligation of the corporation incurred within this state or arising out of any business done in this state by the corporation prior to the issuance of a certificate of withdrawal.”¹¹⁶ Various Minnesota state and federal courts have interpreted these statutes as creating consent to general jurisdiction for registered foreign corporations.¹¹⁷ In Knowlton v. Allied Van Lines,¹¹⁸ the Eighth Circuit held that the Minnesota statute requiring a registered agent within the state creates general jurisdiction in that state when service is processed on that agent.¹¹⁹ Particularly, the court noted that “[t]he whole purpose of requiring designation of an agent for service is to make a nonresident suable in the local courts,” and, as such, “appointment of an agent for service of process . . . gives consent to the jurisdiction of Minnesota courts for any cause of action, whether or not arising out of activities within the state.”¹²⁰

A nearly identical phenomenon has occurred in Iowa. Iowa federal courts, relying on Knowlton, found that an Iowa statute is “almost identical to that of Minnesota.”¹²¹ As such, even though it does not explicitly address jurisdictional consequences of registration, the statute confers general jurisdiction in Iowa courts.¹²² The same has been held to be true in Kansas¹²³ and New Mexico.¹²⁴ The Georgia Supreme Court reaffirmed the concept as well.¹²⁵ And even after International Shoe fundamentally changed the personal jurisdiction analysis, several circuit courts continued to hold that consent by registration obviated the due process analysis and that states could exercise general jurisdiction based on that consent.¹²⁶ This is not to say that there are no federal circuits holding to the contrary. While six circuits have found jurisdiction-by-consent statutes to be constitutional,¹²⁷ five circuits reached the opposite conclusion.¹²⁸ And two circuits avoided the constitutional question.¹²⁹ These decisions are all in flux, given the Supreme Court’s decision in 2022 to grant certiorari and review the Pennsylvania statute.¹³⁰

But “presence” and “consent” are two distinct ways of submitting to jurisdiction. Putting aside the question of whether a corporation “consents” through registering to do business—the question that the Supreme Court will aim to answer in Mallory—there is a simpler way to determine the existence of personal jurisdiction: assessing whether the corporation has engaged in systematic and continuous contact in the forum state. The Supreme Court’s guidance in Ford sheds light on where the Court may be heading on the “presence” front. The hallmarks of due process in the context of the consent and estoppel model are reciprocity and fairness.¹³¹ Ford seemed to reiterate the underlying theme of “reciprocal obligations” between a defendant and the forum as the basis for what makes the exercise of personal jurisdiction “fair.”¹³² In that case, because Ford Motor Company enjoyed “the benefits and protections” of state law while doing business in the forum, “allowing jurisdiction in these cases treats Ford fairly.”¹³³

The Fourteenth Amendment: Personal Jurisdiction and the Current Doctrine

With the passing of the Fourteenth Amendment in 1868, the Supreme Court saw it proper to provide guidance on personal jurisdiction under a now-federalized due process standard. In Pennoyer,¹³⁴ the Court held that a court may exercise personal jurisdiction over a party only if that party was served with process in the state seeking to adjudicate the controversy.¹³⁵ As explained above, this ruling was consistent with the consent and estoppel model and the subsequent corporate presence model.

Despite Pennoyer’s overruling by International Shoe, the Court remained true to the spirit of the corporate consent and estoppel model. Pennoyer was overruled and substituted with the “minimum contacts” test in International Shoe.¹³⁶ Under the new International Shoe standard, a defendant becomes subject to the personal jurisdiction of a state with which it engages in “minimum contacts.”¹³⁷ The test was later refined in Hanson v. Denckla¹³⁸ to define “minimum contacts” as contacts that demonstrate a defendant’s “purposeful availment” of the jurisdiction.¹³⁹ In other words, a corporate defendant becomes subject to the personal jurisdiction of a forum if it takes a purposeful action to benefit from the privilege of doing business in that forum.¹⁴⁰ Similarly, under World-Wide Volkswagen Corp. v. Woodson,¹⁴¹ the foreseeability of causing injury in a particular location was held not to be enough to subject a corporation to the personal jurisdiction of the courts in that location.¹⁴² Therefore, while the International Shoe test, along with its refinements in Hansen and World-Wide Volkswagen, departed from the Pennoyer service-of-process test, it remained consistent with the consent and estoppel model and the corporate presence model. “Minimum contacts” and “purposeful availment” became the tests to determine whether a corporation was “present” in a forum such that it should be subject to the personal jurisdiction of the forum. Foreseeability of injury, on the other hand, is not synonymous with corporate presence and therefore was not a basis for personal jurisdiction, just as a corporation cannot be “present” in a location based on foreseeability of injury alone and cannot be said to have “consented” to jurisdiction based on foreseeability of injury alone. Applying the new test, the Court in McGee v. International Life Insurance Co.¹⁴³ found that a California court could subject a Texas insurance company to its personal jurisdiction, even though the insurance company had a single policy contract with a California resident.¹⁴⁴ The corporation was found to have been present in California because it entered into a contract directly in California.¹⁴⁵

The adherence to the origins of the personal jurisdiction consent and estoppel and corporate presence model did not last. In Burger King v. Rudzewicz,¹⁴⁶ the Supreme Court subtly revised its test for personal jurisdiction beyond McGee and bifurcated what was previously a one-step “minimum contacts” test.¹⁴⁷ The Court fractured the original intention of International Shoe, holding that personal jurisdiction can be established if two elements are met: (1) the defendant engaged in minimum contacts/purposeful availment of the forum state; and (2) the subjugation of personal contacts does not offend “traditional notions of fair play and substantial justice.”¹⁴⁸ The Court, in a split decision,¹⁴⁹ later created five factors by which to determine whether establishing personal jurisdiction over an out-of-state defendant would violate “traditional notions of fair play.”¹⁵⁰

Two concurrences are most telling in just how far this doctrine has gone adrift. Justice Brennan’s concurrence in Asahi v. Superior Court argued that a defendant’s placing of a product into the stream of commerce may very well satisfy the minimum contacts prong but that it would not satisfy the “fair play and substantial justice” prong. That is, showing minimum contacts is not enough.¹⁵¹ Justice John Paul Stevens, in concurrence, agreed that jurisdiction would be “unreasonable and unfair,” but he did not join Justice O’Connor’s opinion, in part because the Court should not have even considered minimum contacts. He wrote that “it is not necessary to the Court’s decision. An examination of minimum contacts is not always necessary to determine whether a state court’s assertion of personal jurisdiction is constitutional.”¹⁵² Minimum contacts, however, is the key framework under which corporate presence is determined.¹⁵³

III. THE HISTORY OF THE NEXUS REQUIREMENT

Under current doctrine, a defendant is subject to the specific personal jurisdiction of a forum if the controversy “arises out of” or “relates to” the defendant’s contact with the forum state. This was first hinted at in Shaffer v. Heitner,¹⁵⁴ in which the Court held that in rem jurisdiction—jurisdiction based solely on the presence of a defendant’s property in the forum—is insufficient on its own to establish personal jurisdiction.¹⁵⁵ In Shaffer, plaintiffs filed a shareholder derivative suit against a corporation and corporate executives.¹⁵⁶ The basis for personal jurisdiction in the selected forum was the defendant’s property in the forum. The Court held the following:

The presence of property in a State may bear upon the existence of jurisdiction by providing contacts among the forum State, the defendant, and the litigation, as for example, when claims to the property itself are the source of the underlying controversy between the plaintiff and defendant, where it would be unusual for the State where the property is located not to have jurisdiction. But where, as in the instant quasi in rem action, the property now serving as the basis for state-court jurisdiction is completely unrelated to the plaintiff’s cause of action, the presence of the property alone, i.e., absent other ties among the defendant, the State, and the litigation, would not support the State’s jurisdiction.¹⁵⁷

The Court further explained that

although the presence of the defendant’s property in a State might suggest the existence of other ties among the defendant, the State, and the litigation, the presence of the property alone would not support the State’s jurisdiction. If those other ties did not exist, cases over which the State is now thought to have jurisdiction could not be brought in that forum.¹⁵⁸

In making its determination, the Court acknowledged that it was backtracking from the “long history of jurisdiction based solely on the presence of property in a State”¹⁵⁹ by now requiring a “relationship among the defendant, the forum, and the litigation” in order to establish personal jurisdiction.¹⁶⁰ Therefore, the Court engaged in a policy analysis in its departure from the traditional doctrine. It did so presumably to curtail the shareholders’ forum shopping, despite the fact that the defendant corporation was “present” in Delaware due to its property in the state. As such, the Court looked beyond the original understanding of personal jurisdiction. Under the “long history of jurisdiction,” personal jurisdiction could be established “based solely on the presence of property in a State.”¹⁶¹ Even under the “minimum contacts” test from International Shoe, if a defendant owns property in a state, then that defendant has the minimum contacts necessary to subject it to personal jurisdiction in that forum. Given that Congress has provided no guidance on jurisdiction besides the venue statutes, the proper remedy for defendants faced with lawsuits in locations they prefer not to litigate in is to seek to transfer the case to a more appropriate venue.¹⁶²

In future cases, the Supreme Court attempted to assert that the nexus requirement is, in fact, rooted in the original understanding of the Fourteenth Amendment’s due process standard. In Daimler AG v. Bauman,¹⁶³ the Court explained that the concept of “reciprocal fairness” between corporations and the states in which they conduct business implies a nexus requirement. The Court never attempted to argue that the nexus requirement is rooted in the Pennoyer test, but the Court quoted a passage in International Shoe in support of its argument:

The exercise of th[e] privilege [of conducting corporate activities within a State] may give rise to obligations, and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue.¹⁶⁴

But the reliance on International Shoe for this proposition is not entirely accurate. While International Shoe blessed the exercise of jurisdiction in cases where the suit arose out of the defendant’s contact with the state, it explicitly left open the possibility of the exercise of jurisdiction without such a nexus requirement:

While it has been held in cases on which appellant relies that continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity, there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.¹⁶⁵

Historically, regarding the personal jurisdiction of corporations, there were instances in which a nexus requirement was explicitly rejected, that is, situations in which the exercise of jurisdiction was upheld despite the lawsuit not arising from the defendant’s contact with the forum.¹⁶⁶

While the origins of the nexus requirement have to do with the defendant’s presence connecting with the litigation filed against it, the nexus requirement has now shifted to require the plaintiff’s connection with the forum state as well. The case cited by recent decisions for this proposition is Helicopteros Nacionales de Colombia, S.A. v. Hall.¹⁶⁷ But importantly, Helicopteros’s understanding of “general jurisdiction” differs from what the term means today. Heliopteros specifically maintains that

[e]ven when the cause of action does not arise out of or relate to the foreign corporation’s activities in the forum State, due process is not offended by a State’s subjecting the corporation to its in personam jurisdiction when there are sufficient contacts between the State and the foreign corporation.¹⁶⁸

The Court cited Perkins v. Benguet Consolidated Mining Co.¹⁶⁹ for this proposition. In Perkins the Court found that a foreign corporation not incorporated or headquartered in Ohio could be subject to general jurisdiction in Ohio in a suit filed by a nonresident of Ohio when the cause of action did not arise out of or relate to the forum because “the foreign corporation, through its president, ‘ha[d] been carrying on in Ohio a continuous and systematic, but limited, part of its general business,’ and the exercise of general jurisdiction over the Philippine corporation by an Ohio court was ‘reasonable and just.’ ”¹⁷⁰ In other words, Helicopteros does not require a nexus between the litigation and the forum so long as there is a “continuous and systematic” existence of the corporation in the forum.¹⁷¹ Presumably, then, Helicopteros only requires the plaintiff to show that the litigation “arises out of” or is “related to” the forum in situations where the defendant is not “continuos[ly] and systematic[ally]” present in the forum.¹⁷²

The root of the confusion regarding the nexus requirement is that it was created before the concepts of “specific” and “general” jurisdiction existed or were properly defined. The Helicopteros court, relying on Perkins, held that if a corporation’s presence was “systematic” and “continuous” in a forum, then it would be subject to general jurisdiction in that forum such that no nexus is required at all.¹⁷³ This is no longer the case today. A major reason why this is no longer the case is because of a prophetic article written by two Harvard Law School professors, which influenced the Court significantly.¹⁷⁴ These professors have dubbed the terms we currently refer to as “general jurisdiction” and “specific jurisdiction,” while also defining the two to their near identical meanings in the current doctrine.¹⁷⁵ The Court in Daimler adopted the policy proposed by the article, holding that a corporation is subject to general jurisdiction only in its place of corporation and its principal place of business.¹⁷⁶ There is one crucial problem with the article, however: it is not premised on the Due Process Clause of the Fourteenth Amendment; instead, it is premised on creating the best policy for which to adjudicate matters and includes forum shopping and convenience for the parties as some of its major supporting propositions. But the underlying reasoning for personal jurisdiction is not convenience or effective policy—these are considerations Congress ought to consider in statutes dictating proper venues for litigation. The sole consideration in personal jurisdiction jurisprudence is due process.

After the terms general and personal jurisdiction were given their current definition, the Court in Bristol-Myers Squibb applied the Helicopteros rule without consideration of the Helicopteros Court’s understanding of general jurisdiction.¹⁷⁷ As a result, it muddied the waters significantly. In Bristol-Myers Squibb, a group of medicine users sued in California state court a corporation that manufactured the drugs in California.¹⁷⁸ Some of the plaintiffs were not California residents.¹⁷⁹ The Court held that the non-California plaintiffs could not sue in California because there was no nexus between their litigation and the forum; the non-California plaintiffs’ claims did not “arise out of” or “relate to” California.¹⁸⁰ Put another way, the Court held that it violated the defendant’s due process right to be sued in California by one group of plaintiffs but not another group of plaintiffs for the same cause of action and the same set of events, and the differentiating factor was the plaintiffs’ place of residency¹⁸¹ This analysis of the plaintiffs’ connection to the forum is the current understanding of personal jurisdiction, specifically the nexus requirement.

Notably, for the sake of judicial economy, the Bristol-Myers Squibb litigation was consolidated through multi-district litigation, commonly referred to as “MDL,”¹⁸² and pretrial proceedings for both groups of plaintiffs took place jointly in California. Through the MDL process, the two groups of plaintiffs could litigate only pretrial issues together in California without regard to personal jurisdiction. Courts have struggled with the application of personal jurisdiction to MDL proceedings.¹⁸³ While personal jurisdiction in MDL is outside the scope of this Note, this set of events illustrates that courts take no issue with altering personal jurisdiction doctrine to promote judicial economy and the MDL process, yet they will continue to unnecessarily protect corporate defendants by rigidly upholding the nexus requirement in cases that are not large enough to consolidate through the MDL process.¹⁸⁴

ISSUES WITH THE CURRENT DOCTRINE

Based on the above explanations, personal jurisdiction doctrine has strayed away from its original roots of the Fourteenth Amendment and has drifted into a way of curtailing forum shopping. In many circles, this reason alone is enough to demand alteration.¹⁸⁵ However, as I explain below, not only is the current doctrine inconsistent with the original understanding of personal jurisdiction, but it also causes complications in the context of internet sales and stream of commerce cases. In this section, I detail the current doctrine’s shortcomings. In the following section, I preview a direction the Court may be heading: a reversion to the original understanding of personal jurisdiction based on the corporate consent and estoppel model.

It Provides Corporations with Protections They Are Not Entitled to

While the inconsistency with prior case law and the historical application of personal jurisdiction doctrine are by themselves sufficient to question the nexus requirement in its current form, the present standard is also problematic from a policy perspective. It provides corporations with additional protections not mandated by the Constitution—and nonexistent under statute—under the guise of due process.

Take Ford as an example. The Court held that the Ford Motor Company can be subject to personal jurisdiction in Montana for a case involving Ford Explorer vehicles because it sells Ford Explorers in Montana such that it “cultivated a market” there.¹⁸⁶ But, presumably, if Ford sold different models in Montana and did not sell Explorers, there would be no jurisdiction over the plaintiff’s case in Montana because requiring Ford to answer a complaint in Montana under those circumstances would violate the Due Process Clause. This framing of the “market” being “cultivated” is shaky at best. Does it matter which year Ford started selling the Explorer in Montana? What if the model in question was older than the models Ford has sold in Montana? Does the trim of the model matter? What about the model’s color?¹⁸⁷

The Court also held that the plaintiffs’ contacts with Montana are determinative.¹⁸⁸ The Court held that if Ford sells Explorers in Montana, then Montana can decide any case involving an Explorer accident within its borders, regardless of how it got there, so long as the plaintiff has a connection to Montana.¹⁸⁹ So, no matter how extensive Ford’s contacts with Montana might be, the determinative factor is the plaintiff’s connection with the forum. But what difference does it make to Ford whether the Explorer crash took place in Montana or in Idaho? If Ford already has significant contact with Montana such that it has cases pending in Montana, Ford would not be required to conduct any additional expenses to defend itself in Montana. Requiring Ford to defend one lawsuit in Montana while allowing Ford to dismiss an identical lawsuit solely on the basis of the plaintiff’s place of residency and connection to Montana is perplexing. Requiring Ford to defend the first lawsuit is no more a violation of Ford’s due process rights than it is to require Ford to defend against the second lawsuit.

Similarly, Bristol-Myers Squibb emphasized that the Michigan plaintiff’s suing the defendant corporation in California violated the defendant’s due process rights because the Michigan plaintiffs “did not ingest Plavix in California.”¹⁹⁰ Nevertheless, a group of plaintiffs from California was permitted to sue in California for the same cause of action relating to the same drugs. The only difference between the two groups of plaintiffs is where they ingested the drugs. But that fact should not have been determinative. What difference does it make if a Texan brings his pills on a California vacation and ingests them there or if the Texan ingested the pills in Texas? ¹⁹¹ It is odd to argue that these hypothetical cases, as opposed to the ones previously before the Court, would not violate the defendant’s due process rights by allowing jurisdiction in each of these otherwise-identical cases. Figures 1 through 4 below illustrate how the doctrine plays out.

Figure 1. Nexus with Forum State Through Plaintiffs’ Residence

Figure 2. Nexus with the Forum State Through Plaintiffs’ Vacation

Figure 3. No Nexus Despite Defendant’s Continuous

Figure 4. Scenarios Analyzed Under the Current Doctrine
	Scenario #1	Scenario #2	Scenario #3
Did the Manufacturer purposefully avail itself of CA?	YES. It sold pills in CA.	YES. It sold pills in CA.	YES. It sold pills in CA.
Do the plaintiffs have a “nexus” to CA?	YES. They bought and ingested the pills in CA.	YES. They ingested the pills in CA.	NO. They did not buy or ingest the pills in CA.
Conclusion	CA courts have personal jurisdiction over CA plaintiffs’ claims.	CA courts have personal jurisdiction over TX plaintiffs’ claims.	CA courts do not have personal jurisdiction over TX plaintiffs’ claims.

The Ford decision also raises questions about the general jurisdiction framework. The Court seems to erode that concept, perhaps unintentionally. If Ford can “cultivate a market” in a forum, then it can be subject to personal jurisdiction for claims relating to that forum, so long as the plaintiff has a connection to the forum as well. As explained above, the “market” being “cultivated” can prove to be a difficult term to define. And requiring the plaintiff’s connection to the forum results in illogical and arbitrary grants and denials of jurisdiction, as illustrated in the above figures.

Under current general jurisdiction jurisprudence, a corporation is subject to general jurisdiction wherever it is “at home,” which has been held to mean its place of incorporation and headquarters.¹⁹² But why is it any more compliant with due process for a plaintiff residing in Idaho to sue General Motors (incorporated in Delaware and headquartered in Michigan) in Delaware and Michigan as opposed to Texas, where the company has had a factory and has done business since 1954?

The Court’s attempt at showing that Ford cultivated a market in Montana begins to bleed into the general jurisdiction framework. It would be a much simpler and more predictable test to ask whether Ford has “minimum contacts” such that it “purposefully availed” itself of the privilege of doing business in Montana, and consequently, it is subject to personal jurisdiction in Montana.

Justice Sotomayor pointed this out in her Daimler concurrence, noting that limiting general justification to a corporation’s principal place of business and its place of incorporation would lead to “deep injustice.”¹⁹³ She pointed out that “the majority’s approach unduly curtails the States’ sovereign authority to adjudicate disputes against corporate defendants who have engaged in continuous and substantial business operations within their boundaries.”¹⁹⁴ She then called into question the special protections corporations would be receiving under the newly defined due process requirements:¹⁹⁵ “Put simply, the majority’s rule defines the Due Process Clause so narrowly and arbitrarily as to contravene the States’ sovereign prerogative to subject to judgment defendants who have manifested an unqualified ‘intention to benefit from and thus an intention to submit to the[ir] laws.’ ”¹⁹⁶

There is some indication based on Ford, the Court’s personal jurisdiction case from 2021, that at least some of the Justices are questioning the existing precedent. In particular, Justice Gorsuch’s Ford concurrence, which was joined by Justice Thomas, expressed skepticism of the “at home” test for corporations regarding general jurisdiction.¹⁹⁷ He wrote, “[I]t seems corporations continue to receive special jurisdictional protections in the name of the Constitution. Less clear is why.”¹⁹⁸

Difficult Application to Internet Sales Cases

The current doctrine does not adequately address how courts should apply it to cases involving internet sales. When it comes to determining purposeful availment, courts look to whether online conduct was purposefully directed at the forum state.¹⁹⁹ Courts also use a sliding scale to determine whether the contacts constitute purposeful availment.²⁰⁰ For example, if a website is passive because it only advertises or posts information without any option for users to interact with it, the website may not provide a basis for personal jurisdiction. On the other hand, if the website involves making transactions or entering into contracts through knowing and repeated transmission of files over the internet, personal jurisdiction seems more likely. If the website falls in between these two categories of interactivity, the level of the interactivity and the nature of the website must be examined. In other words, the greater the commercial nature and interactivity associated with the website, the more likely the website operator engaged in purposeful availment of the forum state.

As a corollary to the sliding scale, courts have also recognized that tortious conduct that takes place online can subject a defendant to personal jurisdiction.²⁰¹ If the defendant’s actions were intentional, uniquely or expressly aimed at the forum state, and caused harm in the forum state, personal jurisdiction is proper there, because the defendant is said to have “purposefully directed” actions at the forum state.²⁰² A refined test examines whether the defendant knew and intended the consequences of its actions to be felt in the forum state, not just that the defendant knew where the plaintiff lives.²⁰³ That is, if the mention of the state is incidental and not included for the purposes of having the consequences felt in the forum state, there is likely no personal jurisdiction there.

For example, suppose that an Idaho newspaper, which distributes only in Idaho and the bordering towns in Washington State, publishes a story defaming a California celebrity. Can it be said that the newspaper intended the consequences of its story to be felt in California, given that it does not distribute in California? The newspaper has no contacts with California, so how can it be said that the newspaper purposefully availed itself of the privilege of doing business in California?

The Ford case adds an additional element that muddies the water even more. What if a corporate defendant “cultivates a market” in a forum? Under Ford, plaintiffs would be permitted to sue in that forum so long as they have a nexus to that market. In the above hypothetical, would the California celebrity be permitted to sue in Washington State because of the market the newspaper cultivated there? Also, as explained above, it is difficult to define the product that a company cultivates a market for, and framing the market being cultivated is highly malleable. For example, does Amazon cultivate a market for delivery in California? Or is the cultivated market analyzed by specific products, as it was in Ford? Assuming the latter, what is the justification of looking at the plaintiff’s connection to the forum to assess the due process rights of the defendant?

Difficult Application to Stream of Commerce Cases

There is no agreed-upon framework by which to address stream of commerce cases. A “stream of commerce” case refers to a situation where a manufacturer sells products to a regional distributor and the regional distributor sells the products elsewhere. For example, assume that a car company manufactures its cars in China and then sells the fully manufactured cars to a distributor in California and no distributors in Oregon. Then assume that the California distributor sold the cars to a dealership in Oregon, and an Oregon resident bought a car from that dealership. If the car malfunctions, may the Oregon resident sue the manufacturer in Oregon? The question is whether the car manufacturer engaged in minimum contacts or purposefully availed itself of doing business in Oregon through the stream of commerce that brought its product to Oregon.

Justice White, in dicta in in World-Wide Volkswagen, suggested that there may exist personal jurisdiction over a manufacturer in a forum even if the manufacturer itself did not sell in that forum; he wrote that personal jurisdiction would exist in such a situation only if the sale in the forum was “not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly the market for its product.”²⁰⁴

The Court has been unable to agree on what these instructions practically mean. Justices Breyer and Alito understand this to refer to the number or substantiality of the sale in the forum.²⁰⁵ Justice O’Connor’s plurality opinion in Asahi held that there would be personal jurisdiction over a defendant manufacturer only if Justice White’s criteria were satisfied and the manufacturer engaged in “additional conduct . . . [that indicates] an intent or purpose to serve the market in the forum state.”²⁰⁶ This could include designing the product for the forum state, advertising the product in the forum state, or establishing channels for providing regular contact to consumers in the forum state. Justice Brennan, writing for the split court in Asahi, indicated that if the maker foresees and benefits from the contact with the forum, personal jurisdiction is satisfied, even without an intentional act targeting the forum.²⁰⁷

The Court’s split continued in McIntyre, in which the Justice Kennedy plurality held that a foreign manufacturer that sold products to a U.S. distributor was not subject to personal jurisdiction in the states the distributor subsequently distributed to.²⁰⁸ Justice Ginsberg dissented and wrote that, in her view, there is personal jurisdiction in a state when a manufacturer chooses a distributor who distributes to the entire United States.²⁰⁹ Justices Breyer’s and Alito’s concurrence explained that personal jurisdiction should be dependent on the number of products sold in the state.²¹⁰

Figure 5 synthesizes current steam of commerce doctrine:

Figure 5. Current Stream of Commerce Doctrine

The Ford case presented a slightly nuanced version of the hypothetical discussed above. In Ford, the vehicle that malfunctioned was designed, manufactured, and sold outside of Montana.²¹¹ Later resells and relocations by consumers brought the vehicle to Montana, where it malfunctioned.²¹² As such, it was only through the “stream of commerce” that the particular vehicle at issue was brought to Montana.²¹³ The Court united in its holding that Ford’s advertising in and manufacturing in Montana constituted sufficient purposeful availment, and held that the plaintiffs had a sufficient nexus to the forum simply because the car malfunctioned in Montana, even though they did not purchase the vehicle in Montana.²¹⁴ However, if, through the stream of commerce, the plaintiffs were in the neighboring state of Idaho, then presumably there would be no nexus and no personal jurisdiction in Montana, even though the facts—and Ford’s purposeful availment of the Montana forum—would be identical. It is unclear why Ford’s due process rights would be violated if an Idaho plaintiff sues Ford in Montana but would not be violated if a Montana plaintiff who purchased Ford’s product in Wisconsin and drove to Montana sues in Montana.

Figure 6. The Ford Litigation

WHERE THE COURT IS HEADED AFTER FORD

A reversion to the constitutional underpinnings of personal jurisdiction doctrine means removing the corporate protections available under the guise of the Fourteenth Amendment. The case is easier for removing plaintiffs’ requirement to show a nexus to the litigation when suing a corporation in a forum in which the corporation has systematic and continuous contact. As explained above, the nexus requirement came into being with the explicit understanding that it is a requirement only if the corporate defendant has no systematic and continuous contact with the forum. In other words, the case is easy for overruling Daimler and removing the narrow understanding of general jurisdiction, finding instead that general jurisdiction exists wherever corporations implicitly consent to personal jurisdiction through systematic and continuous contact.

However, some Justices may propose going a step further and removing the distinction between specific and general jurisdiction as it is inconsistent with the Court’s original understanding of personal jurisdiction. Accordingly, plaintiffs would be permitted to pursue causes of action in any forum in which a corporation engages in minimum contacts sufficient to constitute purposeful availment without showing a nexus to the litigation. Corporate defendants would be permitted to transfer cases under the venue statutes alone.

In situations where a corporation had purposefully availed itself of a forum in a previous one-off occurrence, the claim brought in that forum must allege conduct that took place during the purposeful availment of the selected forum.²¹⁵ That is, a corporation would not be able to retroactively cease purposeful availment.

I have already explained why this model is consistent with the original understanding of personal jurisdiction. In many circles, this reason alone would be sufficient to adopt it. However, in this Part I detail why a reversion to this original understanding is good policy as well. It increases fora for plaintiffs, makes for a more predictable personal jurisdiction doctrine (especially in cases involving internet sales and the stream of commerce), and leaves room for Congress to act should it find the need to.

Removing the Distinction Between General and Specific Personal Jurisdiction

One avenue of development post-Ford envisions significantly expanding general jurisdiction in the way it is understood today. This would mean overruling the holding in Daimler, which permits general jurisdiction over a corporation only in its principal place of business and place of incorporation.²¹⁶ As explained above, the case is easy to revert to the pre-Daimler jurisprudence, where general jurisdiction existed in each location where a corporation engaged in continuous and systematic contact with a forum, because that was the original understanding of personal jurisdiction. Nothing in the original understanding of personal jurisdiction, early cases dealing with the doctrine, or the Fourteenth Amendment compels affording corporations protections from being forced to defend lawsuits in fora besides their place of incorporation and headquarters. Such protections limiting personal jurisdiction can only come from statutes, and Congress has not legislated in the arena of personal jurisdiction.

However, assessing personal jurisdiction solely through the lens of purposeful availment reveals that the concept of general jurisdiction is unnecessary, especially after it was eroded in Ford. Ford held that if a corporation systematically serves a market, and the plaintiffs are from that forum state, it is as if there is general jurisdiction for those specific plaintiffs in the forum.²¹⁷ But if a corporation is already prepared to defend against lawsuits in a particular jurisdiction, it does not offend due process rights to require the corporation to defend against all lawsuits in that jurisdiction, subject to transfer of venue “in the interest of justice.”²¹⁸

Furthermore, as Douglas D. McFarland points out in his scholarship,

The original, unpolished International Shoe test is a one-step, unitary test. A court is not required to find “minimum contacts” and “fair play and substantial justice.” Neither is a court required to find “minimum contacts” or “fair play and substantial justice.” The opinion requires a court find “minimum contacts with [the state] such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”²¹⁹

Given this understanding, it becomes clear that it is more consistent with the Due Process Clause and International Shoe to allow jurisdiction for all claims in a forum where the defendant corporation engaged in “minimum contacts.”²²⁰ There need not be a difference between the type of claim permitted to originate in that forum. In other words, personal jurisdiction in a forum should be defined by defendant, not by claim. If a defendant is subject to personal jurisdiction in a particular location, then that defendant should be subject to personal jurisdiction in that location for all claims and should be permitted to transfer cases under the guidelines provided by Congress alone. The following figure is identical to Figure 4 above, referencing the three scenarios in Figures 1, 2, and 3, but it includes an extra row showing how the ultimate conclusion would change should Daimler be overruled.

Figure 7. Scenarios Analyzed Under the Consent and Estoppel Model
	Scenario #1	Scenario #2	Scenario #3
Did the Manufacturer purposefully avail itself of CA?	YES. It sold pills in CA.	YES. It sold pills in CA.	YES. It sold pills in CA.
Do the plaintiffs have a “nexus” to CA?	YES. They bought and ingested the pills in CA.	YES. They ingested the pills in CA.	NO. They did not buy or ingest the pills in CA.
Conclusion under current doctrine	CA courts have personal jurisdiction over CA plaintiff’s claims.	CA courts have personal jurisdiction over TX plaintiff’s claims.	CA courts do not have personal jurisdiction over TX plaintiff’s claims because there is no nexus.
Conclusion without Daimler	CA courts have personal jurisdiction because the manufacturer purposefully availed itself of California law.	CA courts have personal jurisdiction because the manufacturer purposefully availed itself of California law.	CA courts have personal jurisdiction because the manufacturer purposefully availed itself of California law.

Clarifying the Doctrine for Internet Sales Cases

A straightforward and predictable test for personal jurisdiction solves issues relating to internet sales cases. Internet sales would be analyzed in the same way as all other sales cases: if the seller does business in the forum, then the plaintiff should be permitted to sue the seller in that forum. Doing business means selling a product in that forum. If a seller wants to avoid being subject to personal jurisdiction in a particular forum, then it can choose not to sell in that forum.

Take, for example, a 2021 Third Circuit case²²¹ involving a lawsuit against Imgur and Reddit, two internet companies, alleging that the companies were compliant in an authorized use of the plaintiff’s likeness when a photo of her in a convenience store began circulating on these websites in an advertisement for erectile dysfunction and dating websites. Living in Pennsylvania, the plaintiff decided to sue Imgur and Reddit in Pennsylvania, despite knowing neither the convenience store’s location nor how the image was posted online. Both companies conceded that they had purposefully availed themselves of the privilege of doing business in Pennsylvania.²²² They nevertheless argued that their minimum contacts with Pennsylvania were not related to the litigation—in other words, they argued that there was no nexus between the plaintiff’s claim and the forum. The Third Circuit agreed with the District Court’s dismissal for lack of personal jurisdiction.²²³

There are troubling implications with this holding. First, a plaintiff is required to do additional research before the opening of discovery to determine where online harm originated. The court found unconvincing the argument that personal jurisdiction is proper in Pennsylvania because that is where the harm took place. Second, the court’s attempted distinction²²⁴ from Ford draws an arbitrary line. Just as in Ford, in which the motor company “systematically served a market in Montana and Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them in those States,”²²⁵ here, the internet companies systematically served a market for the very product that was used to cause the harm—the platform in which the unauthorized posting of the plaintiff’s photo took place.

In other words, distinguishing the type of product that the market was “systematically served” with is unpredictable and malleable. A much more straightforward approach would be to look only at whether Reddit and Imgur continuously and systematically served the market, which they in all likelihood did. And even if they did not continuously and systematically serve the market, they certainly had minimum contacts with Pennsylvania such that they purposefully availed themselves of the state. The burden would then be on the defendant corporations to move for a transfer of venue. The presumption should be that due process is not violated because of the companies’ purposeful availment within the forum. If the corporate defendants seek to transfer venue, they would need to provide evidence for why there is a more suitable venue.

Accordingly, removing the nexus requirement and analyzing personal jurisdiction solely through purposeful availment—and assessing whether the online activity is in fact a purposeful availment—resolves the issue. To be clear, a company may “cultivate a market” in a forum without ever stepping foot into that forum.²²⁶ As such, in the case described above, the defendants Imgur and Reddit would be subject to personal jurisdiction in the selected forum because of their admitted purposeful availment and presence in the forum.

This approach is consistent with other cases that have analyzed the issue of internet sales: under current doctrine, a corporate defendant can expect to be subject to personal jurisdiction in a venue in which a “substantial number of copies are regularly sold and distributed.”²²⁷ In Keeton v. Hustler Magazine, Inc.,²²⁸ the Supreme Court upheld the exercise of jurisdiction in New Hampshire over a nonresident magazine publisher defendant.²²⁹ The Court reasoned that although the magazine publisher had a nationwide audience and had not targeted the forum particularly, it should reasonably anticipate an action “wherever a substantial number of copies are regularly sold and distributed.”²³⁰ The same should be true when it comes to internet sales. Therefore, if a corporation wants to avoid being subject to personal jurisdiction in a particular location, it may cease its business operations in that state.²³¹

Clarifying the Doctrine for Stream of Commerce Cases

A reversion to the original understanding of personal jurisdiction would simplify the analysis in stream of commerce cases. Removing the nexus requirement shifts the analysis solely to determining whether the defendant purposefully availed itself of a forum. Courts would look not at whether the plaintiff’s alleged harm has a connection to the forum, since these are venue concerns, not due process concerns.

Instead, courts would assess, as the Court did in Ford, whether the manufacturer “cultivated a market” in the forum state such that it is fair and just to require the defendant to defend a lawsuit in that jurisdiction. As with internet sales, if a manufacturer does not want to be subject to personal jurisdiction in a particular state, it may direct its distributor not to distribute products into that state.²³² Without such instruction, and if the distributor supplies products in a state, the manufacturer would have minimum contacts with that state that constitute purposeful availment. Under the original understanding of personal jurisdiction, any plaintiff would be permitted to sue the manufacturer in that state, irrespective of whether the plaintiff’s cause of action arises from the manufacturer’s contacts. The manufacturer would then be permitted to transfer the case using the venue statutes.

Addressing Forum Shopping

It is clear that reverting to the previous personal jurisdiction doctrine would pave a path to forum shopping.²³³ As an initial matter, one must ask whether the negative effects of forum shopping warrant such significant constitutional maneuvering to counter the practice. Perhaps a free market that permits forum shopping is beneficial, as some scholars have argued.²³⁴ Forum shopping may cause beneficial competition among states to alter their laws if they want to stimulate businesses.²³⁵ Just as a company considers taxes, state law, and other benefits, so too should companies consider being subject to personal jurisdiction in a state if they want to maintain a presence in that state.²³⁶

Some scholars have pointed out that the possibility of forum shopping provides judges with incentives to make the law more pro-plaintiff and that these judges’ actions have the possibility of creating wide-ranging effects, given that their courts will likely attract a disproportionate share of cases.²³⁷ Professor Dan Klerman points to several examples of this phenomenon taking place, the most prominent being the patent-plaintiff-friendly Eastern District of Texas and plaintiff-friendly mass tort jurisdictions such as Madison County, Illinois. Both of these venues have seen a dramatic uptick in the number of claims filed there.

As a result of these observations, scholars conclude that “[c]onsideration of forum selling helps justify constitutional constraints on personal jurisdiction. Without constitutional limits on jurisdiction, some courts are likely to be biased in favor of plaintiffs in order to attract litigation.”²³⁸ However, these policy considerations are for Congress to consider. The solution to these concerns is not judge-made constitutional limits on jurisdiction, because the Constitution is silent on forum shopping.²³⁹ Instead, the solution may be statutory limits on jurisdiction.

It goes without mentioning that parties engage in forum shopping in drafting forum-selection and choice-of-law clauses, which require any dispute arising from a transaction to be filed in a particular location and apply particular law.²⁴⁰ If the Constitution prohibits forum shopping, it presumably prohibits forum shopping no matter the context and whether both parties engage in it. Given that courts have continuously upheld forum selection and choice-of-law clauses,²⁴¹ it cannot be said that forum shopping is per se unconstitutional.

More fundamentally, it is important to remember that personal jurisdiction is rooted in due process. Those who argue that it is the Court’s, rather than Congress’s, job to curtail forum shopping assert that impartial judging is a core concept of due process and, as such, personal jurisdiction is the proper route to address these concerns. However, this argument fails to consider that corporations have the option to remove themselves from being subject to personal jurisdiction wherever they feel the judging would not be impartial.²⁴² Therefore, so long as the defendant purposefully availed itself of a forum, the defendant should be prepared to face a lawsuit in the forum, irrespective of whether the Constitution permits forum shopping.

Furthermore, should forum shopping cause such significant burdens, or should the public demand reform, Congress has authority to act. Congress’s venue statutes currently permit parties to transfer venues in cases of forum shopping,²⁴³ and Congress has permitted removal to federal courts specifically to address bias in state courts.²⁴⁴ In cases where the defendant is subject to personal jurisdiction in a forum, the defendant may, if it is more convenient for witnesses or collecting evidence, move to transfer the case to a different jurisdiction.²⁴⁵ Various articles have also proposed statutes that codify personal jurisdiction.²⁴⁶

Miscellaneous Considerations

There is merit to the argument that corporations should be permitted to organize their business strategically to avoid lawsuits in unfavorable locations. This is especially true in situations where the removal statutes do not permit a corporate defendant to remove a proceeding to federal court.²⁴⁷ The way the Court is heading comports with the notion of strategic business organization. Corporations may choose to engage in business in locations by considering whether the risk of liability is worth the profits of doing business in the forum. Just as corporations assess tax, employment law, and various other factors, so too should personal jurisdiction be another factor. This potential future course undoubtedly increases the fora where a business may be sued, and it may encourage states to pass laws that are more plaintiff friendly. The free market should correct any radical laws because corporations can choose whether to engage in commerce in a particular forum based on the laws that forum passes.

True, without Daimler, corporations that engage in internet sales would be subject to personal jurisdiction in many more locations than they otherwise would have been. But these corporations can decide as a matter of corporate policy not to sell to individuals located in a certain jurisdiction for lack of desire to be forced to defend a lawsuit there.²⁴⁸ To be clear, a corporation would not need to suspend access to its passive website in certain locations to avoid being subject to personal jurisdiction there. Making a website available solely for consumer browsing (not purchases) in a certain location would not constitute “purposeful availment” because the website would be passive in nature²⁴⁹ and the corporation’s contact with website visitors would be unilateral action on the part of the website browsers, which the Court has already ruled is insufficient to constitute “purposeful availment.”²⁵⁰ For similar reasons, a corporate defendant would not be subject to personal jurisdiction in a forum if, by the stream of commerce, one of its products makes its way into a state where the corporation does not “serve [the] market.”²⁵¹ Therefore, to avoid being subject to personal jurisdiction in certain locations, a corporation can decide not to cultivate a market in the locations where it wants to avoid defending lawsuits.

Another consideration is the discretionary nature of transfer of venue and choice of law. Review of personal jurisdiction is a matter of law that is conducted de novo.²⁵² By contrast, transfer of venue is discretionary and is conducted under an abuse of discretion standard.²⁵³ But appellate courts have not been shy to tell the district courts they have abused discretion when it comes to motions for transfer of venue. In other words, plaintiffs would be encouraged to forum shop and choose venues that are less willing to transfer cases out of their jurisdiction. While a valid concern, it is not one that should factor into a constitutional analysis of personal jurisdiction. Congress may feel compelled to alter the venue statutes. Even so, despite the discretionary nature of venue transfer, courts have not been afraid to reverse denials of transferring venue, even under the abuse of discretion standard.²⁵⁴

CONCLUSION

This Note began with an analogy to sports teams preferring to play in front of their home crowds. There is no question that teams have such a preference. But the defiance of this preference does not constitute a violation of rights. Surely the Los Angeles Lakers, because the team plays in the National Basketball Association, must play away from home across the nation, including in front of less-than-welcoming Boston fans when they face the Celtics.

When a corporation conducts business in a particular location, it avails itself of that location. Under the traditional corporate consent and estoppel model, the privilege of conducting business creates a reciprocal obligation on the corporation to subject itself to the jurisdiction of that location, irrespective of who sues it there.

While personal jurisdiction purports to assess whether a defendant should be forced to defend a lawsuit in a forum due to the defendant’s contacts with that forum, the doctrine has shifted to requiring the plaintiff to show a connection to the forum, even if the defendant has substantial contact with the forum. This Note has explained the history and development of personal jurisdiction doctrine and showed how the Court has narrowed where corporate defendants are “at home.” Consequently, the Court requires the plaintiff to comply with the nexus requirement when suing in locations besides the corporation’s “home.” In doing so, this Note revealed that the evaluation of personal jurisdiction doctrine is a diversion from the traditional corporate consent and estoppel model and is a result of the Court substituting its judgment for Congress’s regarding the need to curtail forum shopping. It offered a prediction of where the Court may be headed: toward an expansion of corporate personal jurisdiction—by ditching Daimler and nixing the nexus requirement.

96 S. Cal. L. Rev. 207

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Shauli Bar-On*

* University of Southern California Gould School of Law, 2023. B.A., University of Southern California, 2020.

Toward a New Fair Use Standard: Attributive Use and the Closing of Copyright’s Crediting Gap

April 2023April 2023John Tehranian*

A generation ago, Judge Pierre Leval published Toward a Fair Use Standard and forever changed copyright law. Leval advocated for the primacy of an implicit, but previously underappreciated, factor in the fair use calculus—transformative use. Courts quickly heeded this call, rendering the impact of Leval’s article nothing short of seismic. But for all of its merits, Leval’s article failed to acknowledge or consider the salience of another largely underrecognized and heretofore unnamed factor: attributive use.

This Article attempts to address this oversight, particularly when viewed in light of the current law of crediting in the twenty years since Dastar Corp. v. Twentieth Century Fox Film Corp., the Supreme Court’s decision to permanently foreclose the most common method by which creatives had previously vindicated their crediting interests—the Lanham Act’s prohibition on false designations of origin. After assessing the recent body of empirical work highlighting both the quantitative and qualitative importance of attribution to authors and the value of crediting to consumers, investors, and the broader public, the Article scrutinizes the current state of attribution rights to argue that, post-Dastar, the remaining legal mechanisms for securing crediting, including private contracting, have proven insufficient.

To address this crediting gap in the law, the Article considers, but rejects, calls to overturn Dastar or enact an independent general attribution right under the Copyright Act. Instead, I propose a more modest solution that needs no congressional action. Like transformative use, attribution promotes progress in the arts by motivating and incentivizing authorial production. Moreover, as this Article’s careful exegesis of the relevant case law demonstrates, issues of crediting have long shaped the contours of the fair use defense. As such, I advocate for the formal adoption of attributive use as an express consideration in the fair use calculus. The Article therefore builds on Leval’s influential work and calls for the formulation of a new fair use standard that more closely calibrates the defense with the utilitarian goals of our copyright regime.

INTRODUCTION

A. Pierre Leval’s Toward a Fair Use Standard and Copyright’s Crediting Gap

Thirty years ago, Pierre Leval penned¹ what would become one the most influential pieces of legal scholarship of the past generation.² As a federal judge who had then served for twelve years on the Southern District of New York, Leval crafted Toward a Fair Use Standard after he had watched two of his copyright decisions, including his finding that a biographer had made fair use of J.D. Salinger’s unpublished letters, eviscerated by the Second Circuit.³ In reflecting upon these repudiations, Leval critiqued his erstwhile approach to the fair use calculus as excessively ad hoc and sought, instead, to fashion a series of governing principles to guide application of the doctrine in future cases.⁴ In so doing, Leval scrutinized the metes and bounds of the copyright monopoly holistically and posited that infringement claims and fair use defenses both serve the overarching utilitarian goal of the copyright regime, which “stimulate[s] activity and progress in the arts for the intellectual enrichment of the public.”⁵ With the premise that fair use is not an exception to copyright protection but, rather, a part of the design of copyright law to encourage creativity, he then identified transformative, or productive, use—use that “employ[s] the [original] matter in a different manner or for a different purpose”⁶—as a driving⁷ concern⁸ in the calculus.⁹

guarantee success in claiming fair use. The transformative justification must overcome factors favoring the copyright owner. A biographer or critic of a writer may contend that unlimited quotation enriches the portrait or justifies the criticism. The creator of a derivative work based on the original creation of another may claim absolute entitlement because of the transformation. Nonetheless, extensive takings may impinge on creative incentives. And the secondary user’s claim under the first factor is weakened to the extent that her takings exceed the asserted justification. The justification will likely be outweighed if the takings are excessive and other factors favor the copyright owner.

Id. at 1111–12.

Toward a Fair Use Standard quickly precipitated a sea change in the way courts approached application of the fair use doctrine. Only a few years after its publication in the Harvard Law Review, the Supreme Court drew heavily on Leval’s article in famously holding that the transformative nature of 2 Live Crew’s unauthorized parody of Roy Orbison’s Pretty Woman insulated the song from infringement liability under the fair use doctrine.¹⁰ In the process, the Supreme Court elevated the standing of Leval’s work, enshrining it as a seminal tome on copyright law—one that took a rightful place right beside the actual text of section 107 of the Copyright Act in guiding fair use determinations. Toward a Fair Use Standard continues to enjoy a prized place in the copyright firmament. In 2021, in its first fair use pronouncement since Campbell v. Acuff-Rose, the Supreme Court liberally sprinkled citations to Leval’s article through the course of its opinion determining that Google’s exploitation of Oracle’s copyrighted Sun Java application programming interface (“API”) constituted fair use.¹¹ Transformation once again lies at the heart of the analysis, as the Court posited that Google’s actions helped “expand the use and usefulness of Android-based smartphones. . . . [by] creat[ing] a new platform that could be readily used by programmers” to develop new programs in the Android environment.¹²

It should come as no surprise then that, in the words of one observer, “Leval’s commentary on the centrality of transformativeness in interpreting fair use decisively changed the way the copyright doctrine was interpreted. He leveraged the forum successfully to accomplish what he had been unable to accomplish thereto in judicial decision-making.”¹³ This view is not merely anecdotal or impressionistic. The rapid rise of transformation as a crucial, if not decisive, factor in fair use decisions due to Leval’s article is nothing short of stunning. A recent empirical study determined that almost ninety percent of cases now ultimately turn, at least in part, on determinations of transformative use.¹⁴

Thus, with Toward a Fair Use Standard, Leval achieved what most authors of law review articles can only dream of. Of course, his deserved reputation as a thoughtful jurist no doubt assisted in propelling his proposal, and his article’s placement in the venerable Harvard Law Review did not hurt either. But, above all, his prescient thoughts on the limitations on copyright protection embodied in the fair use doctrine made eminent sense in any era when courts were just beginning to grapple with the digital implications of a Copyright Act written before the advent of the modern internet.

To be sure, Leval’s work is not without its critics—in industry, on the bench, and in the bar. These interventions have largely questioned the primacy that Leval’s article and interpreting courts have given to transformative use.¹⁵ Yet for all of its merit, Leval’s article wholly ignored one area of grave importance in both the utilitarian logic of copyright law and, implicitly, the extant jurisprudence on fair use: attribution. Crediting serves as a prime motivator for authorial production, goes to fundamental issues of equity in our copyright regime, and has enjoyed a tacit (but not entirely express) role within the fair use calculus. Nevertheless, it finds no place in Leval’s article, a fact that Leval’s critics have ignored as well. Indeed, even though Leval dedicated a portion of his article to pondering (and rejecting) the value of “other” fair use factors not expressly detailed in section 107’s text—including good faith, artistic integrity, and privacy—he never expressly discusses or even implicitly addresses the issue of crediting.¹⁶ In short, attribution appears to play no role in Leval’s analysis of fair use.

Of course, crediting was not Leval’s focus. Nevertheless, this Article attempts to address and assesses this oversight, particularly when read in light of the current law of crediting in the twenty years since the Supreme Court announced its decision in Dastar Corp. v. Twentieth Century Fox Film Corp.,¹⁷ which permanently foreclosed the most common method by which creatives had previously vindicated their crediting interests—the Lanham Act’s prohibition on false designations of origin. Specifically, this Article proposes to supplement Leval’s work—which lead to the formal adoption of transformative use as a critical part of the first factor in the fair use analysis—by advancing a proposal for the explicit introduction of attributive use¹⁸ to the fair use balancing test.

B. Giving Credit: Toward an Attributive Fair Use Standard

Give credit where credit is due. It is a principle widely embraced in our social norms.¹⁹ But like many of the things we learned in kindergarten, adherence to the precept is far from perfect. Moreover, while the exhortation remains a universal aspiration, it enjoys little legal bite. Indeed, the lack of development in the law of crediting is nothing short of surprising. As Jane Ginsburg has argued, “Of all the many counter-intuitive features of US copyright law—and they abound—the lack of an attribution right may present the greatest gap between perceived justice and reality.”²⁰

If the Copyright Act and our broader intellectual property regime seeks to serve its constitutionally mandated purpose—to promote progress in the arts—by incentivizing the creation of works of authorship, it should ideally respond to what actually motivates creators. To be sure, the exclusive rights of reproduction, distribution, public performance, public display, and derivatization secured for authors under section 106 of the Copyright Act appeal to authorial incentives in at least two ways. First, they serve utilitarian interests by providing monetary rewards to creators by necessitating licenses for the exploitation of their work. Second, they promote natural law and the dignitary interests of authors by enabling them to decide whether (and under what terms) their works are made available to the public at all.²¹ But control over reproduction, distribution, public performance, public display, and derivatization are not the only rights that galvanize creators. Specifically, authors gain value—both monetary and otherwise—through other mechanisms. For example, building one’s brand and reputation for creative excellence—achieved only through attribution—is a powerful means toward earning long-term economic rewards and satisfying the dignitary interests that can also motivate authors. As a result, traditional copyright enforcement is not necessarily profit maximizing for creators, and there is often a disconnect between how creators feel about the unauthorized exploitation of their work and how distributors/publishers might feel about it. Meanwhile, authors who may value attribution over enforcement of their copyrights are not necessarily immune to the temptations of the marketplace or more noble than the rest of us. To be sure, some authors may create solely to fulfill their own needs or to edify, amuse, or impact others, and they may merely seek recognition rather than profit. But there is also a monetary component to proper attribution. In the long run, attribution promotes one’s name and its standing, a phenomenon that eggs on economic demand in a variety of forms—whether it is for further creative production, appearances, endorsements, or ancillary activities. Indeed, attribution is part and parcel of the economic equation of copyright and its incentive structure.

With all of this in mind, if our intellectual property regime serves to encourage progress in the arts by motivating and incentivizing authors, the absence of attribution rights would appear to leave the regime wanting. The Lanham Act, which for a time served as a powerful vehicle for protecting attribution rights, can no longer do so as a result of the Supreme Court’s decision in Dastar two decades ago. Meanwhile, for a variety of reasons we shall explore, alternative legal theories for protection have proven inadequate to provide for general crediting rights. Thus, current law provides little protection for crediting. And it is this crediting gap—what it means, how it came into existence, and how it might be solved—that is the focus of this Article.

Before proceeding further, two important caveats bear mentioning. As a preliminary manner, it is important to lay out what this Article means when it talks about giving credit. Put in the traditional parlance of moral rights, crediting issues can take two general forms. First, there is the positive right of attribution—the ability to have one’s name associated with one’s work. Second, there is the negative right of attribution—the ability to prevent having the work of another falsely attributed to you.²² The former right is about giving credit when credit is due and forms the subject matter of this Article. The latter phenomenon, while important and rife for further analysis, is about misattribution and therefore falls outside of the scope of this analysis.

In addition, as its title suggests, this Article seeks to directly build on Pierre Leval’s influential article. Indeed, it is no less ambitious than Leval’s piece and aims to highlight the fact that considerations of attributive use already permeate (with good reason) the jurisprudence applying and interpreting section 107 of the Copyright Act and seeks to alter the way that courts formally frame the fair use calculus going forward. At the same time, however, the author also understands that he is no Pierre Leval and, as detailed infra,²³ is prone to delusions.

With these caveats in mind, the Article’s analysis begins by scrutinizing the value of crediting. Rather than resting on the mere intuition that attribution matters, Part I delves into both the quantitative and qualitative literature on crediting to determine just how and to what extent crediting fuels authorial motivations and serves broader societal interests. We start with an anecdote to illustrate how authorial reactions to infringement both with and without attribution can differ radically. In the process, we identify and critique the peculiar disconnect between our current legal regime—which fetishizes protection against infringement over failure of attribution—and the economic and dignitary interests of at least a sizeable percentage of creators. Next, we examine the burgeoning scholarship in law, economics, psychology, and organizational behavior to assess and interrogate the value of attribution to creators. As we see, a growing body of empirical work supports the intuition that crediting matters—a lot—and, in fact, authors are often willing to forgo substantial amounts of compensation in return for securing attribution. As such, crediting can and does play a primary role in motivating authorial production. At the same time, a fulsome attribution regime would not merely serve authorial interests. As I argue, it would also inure to the benefit of consumers, investors, and society at large by promoting the efficiency of resource allocation in intellectual property-driven fields (thereby benefiting investor welfare and broader economic interests in optimized markets operating with superior information), reducing consumer search costs, advancing the organizational integrity and coherence of literary and artistic endeavors, and even enhancing public support for the protection of intangible rights such as copyright by bringing the legal regime governing creative works in greater harmony with norms of equity and by humanizing creativity-driven products.

Having established the value of crediting to both authors and the public, this Article turn its attention to assessing the current state of attribution law. Part II therefore begins by exploring the rationale and implications of the Dastar holding and detailing the ways in which the decision effectively ended the ability of creators to bring attribution-related reverse passing off claims under the Lanham Act. Next, we identify the crediting gap left in Dastar’s wake by examining what alternative theories of liability remain to vindicate crediting interests post-Dastar and how said theories have fared in the intervening two decades. In the process, we scrutinize the extant jurisprudence on false advertising claims under the Lanham Act,²⁴ attribution claims under the Visual Artists Rights Act (“VARA”),²⁵ falsification and removal/alteration of Copyright Management Information (“CMI”) claims,²⁶ state unfair competition law, and private contracting. As this Article’s analysis suggests, these theories are insufficient to protect the crediting rights of the vast majority of creators. False advertising claims can, at best, only provide relief to famous authors and only in circumstances of material reliance by consumers in purchasing decisions. VARA claims suffer from myriad subject matter constraints that makes the protections available to only a small corner of the creative universe (certain types of visual art works that are not works made for hire, only in originals or prints of two hundred or less, potentially only in digital form). Claims pertaining to falsification, removal, or alteration of CMI have a high double-scienter requirement that has made relief unlikely. Meanwhile, the statutory scheme regarding CMI primarily serves the goal of infringement prevention rather than the protection of any independent interests that authors may have in crediting. Finally, state unfair competition laws have suffered either from federal preemption under Dastar or from the fact that they are viewed as coterminus with Lanham Act protections.

In the end, therefore, we are left only with private contracting for relief. And while a few notable industries (such as Hollywood and academia) have implemented meaningful attribution regimes, private ordering suffers from the leverage and bargaining disparities inherent to contractual solutions. Indeed, as we demonstrate, the history of private crediting systems is riddled with instances where power dynamics trump actual origination.²⁷ Drawing on several notable examples where crediting abuses fell on racial, gender-based, and socioeconomic fault lines, I argue that continued reliance on such systems could have particularly deleterious implications for social justice issues in intellectual property. In short, therefore, there exists a sizeable crediting gap—a vast disconnect between the high value of attribution to authors and the public and the low value given to it by way of legal protection. Moreover, without the legal vesting of more stout attribution entitlements, ongoing reliance on the pure operation of the marketplace for crediting determinations could continue to have vexing consequences.

Part III considers potential reform to the current state of affairs. Although I caution that social value should not always translate into legal mandate and that good norms do not always make good law, the particular inadequacies of the extant crediting regime and the social and economic (rather than private or familial) interests at play warrant examination of potential legal solutions. To that end, I evaluate but reject two of the most significant mechanisms for change: reversal of the Dastar holding by legislation amending the Lanham Act and passage of an affirmative cause of action under the Copyright Act to provide for crediting rights. As I argue, despite its shortcomings, Dastar revealed the poor fit that the Lanham Act—with its focus on consumer confusion—ultimately provided for attribution protection. Moreover, even if an amendment to the Lanham Act were limited to situations involving works still under copyright protection (so as to avoid the issue of erstwhile rightsholders with expired copyrights attempting to extend their monopoly over creative works through trademark law), it would still raise significant concerns about the potentially onerous scope of crediting requirements and the fine line between providing proper attribution and triggering false endorsement claims. Meanwhile, amendment of the Copyright Act to provide for an affirmative crediting claim has its own shortcomings. In particular, this Article examines the way in which the allocation of a formal crediting entitlement could stifle licensing efforts in the marketplace, a result exacerbated by the combined impact of the endowment and creative effects—behavioral phenomena that have caused economists to question traditional neoclassical assumptions in entitlement allocations in recent years. Finally, as a practical matter, I also observe the particular difficulties in pursuing a legislative change.

Instead, I propose a more modest solution, and one that I argue is already an implicit part of the existing jurisprudence: formal accounting of attributive use as a part of fair use calculus. In conducting a careful exegesis of the extant case law on fair use, I argue that courts have often woven consideration of attributive use into the first, fourth, and “fifth” factors—a move that the important Second and Ninth Circuits have blessed.²⁸ Further, I argue that the implementation of an attributive use subfactor makes doctrinal sense given both the utilitarian and equitable functions of the fair use doctrine and that such a consideration is strongly supported by our existing copyright clearance norms. Thus, just as Pierre Leval identified transformative use as a critical but underappreciated consideration in the fair use calculus, I make a similar argument with respect to attributive use. In the process, I call for crediting to take its place alongside commercial and transformative considerations in courts’ assessment of the first fair use factor—the purpose and character of use. In this way, I advance an incremental, but important, step toward recognition of the value of crediting while also avoiding some of the broader concerns that a general right of attribution—whether achieved under the Lanham Act or the Copyright Act—might present.

I. WHY CREDITING MATTERS

A. One Author, Two Moments

I begin my assessment of the importance of attribution by reflecting upon the perspective of one author—this author—on what motivates creative enterprise. Such a focus is admittedly biased and may be completely unrepresentative. But it illustrates how the current state of affairs in copyright law—where infringement receives stiff punishment but failure to credit receives none—can be inadequate to protect the motivating interests of at least some creatives. Specifically, two recent incidents involving the use of my published work provoked strong, but diametrically opposing, reactions within me. And while I do not claim that my attitude toward these events reflects on how typical authors might respond, my contemplations are nonetheless instructive as to how some authors might experience issues related to infringement and crediting.

Not long ago, while doing some research on the dirty underbelly of the piratical dark web, I came across a site that resembled a veritable Library of Babel,²⁹ providing free access to a remarkable collection of digital books to all comers. While publishers would not hesitate to characterize this “celestial jukebox”³⁰ of books as a cesspool of wanton infringement, I felt compelled, as a good academic, to investigate further before drawing any definitive conclusions. So, in an act of curiosity and thorough vanity, I punched my own name into the site’s search box. To my surprise, a beautiful e-book edition of one of my tomes popped up, available freely to all who had interest in it. I can neither confirm nor deny that I immediately downloaded a copy, but some context might help explain why I may have made a decision to do so.

A number of years earlier, I had posed what I thought was an innocent request of the publisher of one of my forthcoming books: I sought a final PDF copy of the work for my records and personal use. The response was rapid and reproachful. “We don’t do that, John.” The implication was clear: they had to protect against piracy, even if it meant denying authors copies of their book in digital format. Instead, they offered me a compromise: the first three chapters. Since they made it clear this was not a negotiation, I took what they gave me. Fast forward a decade and it should be easy to understand why I may have been elated when this website offered me what my own publisher had denied me: a final, electronic form of my book without any encryption or digital rights management (“DRM”) associated with it.

My book’s appearance on the website also pleased me for an entirely different and more fundamental reason. As a delusional academic, I dream of my ideas getting attention, impacting the way people might approach or think about an issue and, ultimately, influencing policy. So I naturally fantasized about individuals (at least one or two!) potentially stumbling on this website, finding my book, and then reading it when they otherwise may have never known about my work or ponied up the cash necessary to buy it. The royalties I see from my writing are trivial and economically irrelevant. Instead, I want my books to reach as many people as possible (that is, more than my mother) and I want to maximize their exposure. Whether that is accomplished through sales or piracy, I care not. After all, as science fiction writer and librarian Eric Flint once put it, “The real enemy of authors— especially midlist writers—is not piracy . . . It’s obscurity.”³¹

So far from making me angry, the discovery of my book pirated online for anyone to read resulted in nothing but sheer delight. Yes, this was infringement of my copyright, pure and simple. But I was all smiles.

Around the same time, I had another experience related to one of my publications—but, this time, what occurred was far less welcome. One day, I received an email from a local law school about an upcoming distinguished lecture. While I might usually give only fleeting attention to such a notification, this one caught my eye because of the topic, which just so happened to be the exact subject matter of my first book, which I wrote in 2008. So I naturally took an interest and thought about attending. But as I read further, my curiosity turned to disappointment. The talk was about a recently released book whose description was, almost word for word, based on the book I had written. And then I saw the name of the author, which was one I recognized.

I had met the author a decade ago when she was a graduate student attending a talk I had given about my own book. I distinctly remember her chatting with me after my lecture and expressing how much she had enjoyed and appreciated my book. It turns out those comments weren’t mere puffery. She had proven that by writing her own version. As I read the full description of her lecture and then found her recently released book, I was struck by how the summation literally encapsulated my own book in its entirety.

Imitation is the sincerest form of flattery, I told myself in a failed attempt to downplay the anger I felt. But more than flattery, I wanted acknowledgement. Of course, no one’s work is wholly original. But her book came uncomfortably close to mimicry of mine. It was not just drawing on or borrowing ideas to build and expand on my book; it was literally taking my entire work and rehashing it as purportedly original material. Specifically, and most egregiously of all, the use of my work was wholly without proper credit. And, to add insult to injury, as the email before me indicated, she was now giving a distinguished lecture at a local university that had never shown the least bit of interest in my work.

Even if I were inclined to pursue some kind of legal remedy against her, there was none readily forthcoming. Because of the nature of the use, an infringement claim would be difficult to make. Meanwhile, current law provides no general right of crediting or attribution. Admittedly, I did have a form of extralegal relief; if I wanted to pursue the matter, university policies against plagiarism and the failure to properly credit sources offered some remedies. Certainly, I could have notified the author’s publisher and her university-employer to trigger potential investigations. But, at the end of the day, such an effort would be purely punitive and would not undo the real damage I had already suffered; the book, after all, was already published. So, in the end, I concluded that, instead of going through the pain of a vindictive letter-writing campaign that would only waste my own time, I would work out my issues far more constructively: by writing a law review article.

These two incidents—close in time—provided a remarkable study in contrasts.³² In the first matter, I encountered the wholesale piracy of my work, and I found myself not merely indifferent but hopeful. After all, I had received credit for my work and the work’s unauthorized distribution helped disseminate my ideas more broadly. I would take whatever boost I could get. The website in question had undoubtedly infringed my work, but I was perfectly content to let that happen. In the second instance, while it was arguable whether the subsequent author had infringed my work, she had indisputably failed to give me proper credit for my work—upon which she had indisputably and heavily drawn—and had, in my view, violated basic norms of attribution. I was disturbed and troubled by what had happened.

While I found the second incident far more offensive than the first, the law saw things differently. I possessed a colorable claim for infringement if I were inclined to fight the piracy of my book. By contrast, I had little hope of a legal remedy for my fellow academic’s abysmal failure to provide me appropriate attribution. In short, our copyright regime provided no shortage of remedies for an injury that I cared little about—infringement. By sharp contrast, it provided no remedy for something that more directly motivates my production of content—crediting and recognition.

As a result of these two incidents, I began to wonder whether I was the kind of author the Copyright Act wanted to encourage in the first place.³³ As a writer, I meet the definition of what the Framers referred to as “authors” in the Intellectual Property Clause of the Constitution, and my work comes under the subject matter of the Copyright Act. But I am also not the kind of author who makes a living (or even seeks to make a living) on the sale of my works. Consequently, my incentives might be quite different from someone whose income solely or largely comes from authoring works—the kind of author who might care substantially more about piracy.

That said, however, the vast majority of authors make little to no money from their work. Some, of course, may still pursue the craft for (in part) future potential riches. But, for many, remuneration is far lower on the list of their motivations than other factors, such as attribution and recognition. As Laura Heymann points out,

[F]or many creators, particularly individual creators, the profit motivation is not paramount. Rather, the creator is motivated most by the public knowledge that she is the creator—by attribution of the work to her. Indeed, as others have noted, such creators value wide dissemination of their work over compensation, and so benefit from the fair use doctrine and, even, the movement of their work to the public domain, both of which ensure that their work reaches as large an audience as possible.³⁴

As my reaction to the two incidents indicates, I belonged to this class of authors. And, by failing to reflect the importance of attribution and recognition as a motivating factor in the production of creative content, it appeared that the existing copyright regime did not know members of this class very well and did not appear fully responsive to their incentives and needs. For a utilitarian regime dedicated to progress in the arts, this curious result begs further investigation.

B. The Empirics of Attribution

There is no doubt that our moral sensibilities strongly support the practice of proper attribution, and common sense tells us that authors value crediting and recognition as well. As Heymann has posited, “[I]t seems safe to conclude that the two things that virtually all creators desire is to receive credit when appropriate and to eliminate the suggestion of association when it is not.”³⁵ But before taking these assumptions to heart based on mere intuition, it is worth scrutinizing them more closely. While the value of attribution has traditionally received scant attention in the academic literature and little empirical testing, all of that has changed in recent years as an emerging body of data and experimental work has provided overwhelming support for the notion that attribution serves a vital role in motivating and incentivizing creatives.³⁶

One of the largest innovations and behavioral experiments to ever take place in the creative world occurred with the launch of the Creative Commons some twenty years ago. Founded by law professor Larry Lessig, computer scientist Hal Abelson, and literary advocate Eric Eldred, the Creative Commons sought to give creators the ability to opt out of the protection-heavy default rules of copyright, which automatically vest in authors³⁷ the exclusive right to control reproduction, distribution, public display, public performance, and derivatization of their works³⁸ for a period of their lifetime plus seventy years after their death.³⁹ Such rights spring into existence for all original works of authorship fixed in a tangible medium, regardless of formalities. In subverting these default protections and the “permission culture”⁴⁰ that they serve and support, Creative Commons allowed authors to make their works available to the public to promote educational access and spur further creativity by increasing the pool of works from which others can freely build without the need for costly licenses. By ceding their works to the Creative Commons, creators opt into a different regime, where all rights are not reserved. Thus, under various Creative Commons licenses, they can make work available for use without payment for noncommercial purposes—to create new derivative works or for any purpose whatsoever.

The notable success of the Creative Commons and the particular manner in which it has operated illustrates two important points. First, millions of creators have deeded hundreds of millions of creative works to the Creative Commons.⁴¹ As Eric E. Johnson has put it, this fact illustrates “the contemporary existence of an attitude held by at least a significant number of people that the full panoply of copyright entitlements is not important to them.”⁴² Second, while many, but not all, authors want to stop infringement of their works, virtually all authors want attribution and the operation of the Creative Commons provides empirical support for this view. As the data collected over the past twenty years show, authors putting their work on the Creative Commons almost always choose to condition any use on one requirement: proper attribution.⁴³ For at least a certain set of creators, therefore, the right of attribution trumps the right of exploitation and the ability to receive license fees from the use of one’s works.

Even aside from the Creative Commons, the widespread sharing, rather than exclusive reservation, of intellectual property rights in many sectors illustrates the strong incentive social validation can play in promoting creative enterprise. Though long underappreciated in the intellectual property literature,⁴⁴ this widespread “non-market form of exchange,” characterized by sharing, is particularly attractive for an enormous body of works that may not enjoy clear-cut commercial profitability but are also not entirely valueless.⁴⁵ In these sharing regimes, such as open-source software licensing pools and microstock photography collections, pecuniary gain is largely forgone but, quite notably, attribution is retained and reputational satisfaction constitutes a key part of the value proposition for creators, as they derive “a feeling of satisfaction and a sense of social connectedness out of sharing.”⁴⁶

The thriving of the “sharing” economy and of the Creative Commons—where millions of creators are eager to opt out of the default protections of the Copyright Act, but only as long as they continue to receive recognition for their creative efforts—should come as no surprise. Indeed, recent experimental work has validated the intuition and experience that suggests that creators place significant weight on crediting and recognition. Notably, researchers Christopher Sprigman, Christopher Buccafusco, and Zachary Burns have conducted a series of empirical tests in mimic conditions of real-world bargaining meant to put a tangible monetary value on attribution rights. In the first experiment, they found that 180 casual photographers were, in the aggregate, willing to receive far less payment for publication of their work when it came with, rather than without, attribution.⁴⁷ These findings were even more pronounced in their second experiment, which involved professional and advanced amateur photographers.⁴⁸ In short, these tests produced robust results, leading Sprigman, Buccafusco, and Burns to conclude that, on average, creators actually value attribution and the receipt of recognition for their work more than getting paid and that they are “willing to sacrifice financial benefits to obtain [attribution].”⁴⁹

Beyond the valuable case study provided by Creative Commons and the experimental evidence that has quantitatively established the worth of crediting to authors, important qualitative ethnographic and observational work has also supported the stock that creators put in attribution. For example, in her comprehensive qualitative study of innovation, in which she conducted dozens of interviews with creatives and intellectual property professionals across a wide variety of industries,⁵⁰ Jessica Silbey concluded that attribution serves as a primary motivator for creative enterprise.⁵¹ As she notes, “[T]he interviews are replete with expressions of how attribution and integrity are crucial to the work’s optimal promotion and dissemination, whether or not for profit, because they safeguard and manage the development of professional identity and audience.”⁵² Similarly, in her sweeping survey on the legal and normative standards of attribution across a wide range of industries—including Hollywood, journalism, political speechwriting, software, advertising, graphic design, science, and medicine—Catherine Fisk has also documented the significant value creators place on crediting.⁵³ As she puts it, “Attribution is foundational to the modern economy” and, as such, “greater legal recognition of attribution rights is desirable.”⁵⁴

Finally, recent literature in the field of organizational behavior⁵⁵ and psychology⁵⁶ has emphasized the crucial role of crediting in nurturing innovation and promoting perceptions of fairness in creative environments. For example, Teresa Amabile, a leading theorist on creativity and innovation, has highlighted how proper credit allocation can motivate employees to work harder and enhance productivity.⁵⁷ In short, a burgeoning body of work in the social sciences has strongly supported the intuition that crediting matters—a lot.

C. The Societal Value of Attribution

But in focusing largely on the impact of attribution on creatives—both in the way that crediting incentivizes innovation and how it serves the dignitary interests of authors—this emerging literature has actually understated the case of attribution rights. Quite critically, attribution does not merely serve authorial interests. Rather, it also benefits other players in the marketplace for creative works and advances broader societal interests.⁵⁸

First, crediting advances the efficacy of the marketplace, particularly in an information economy dominated by the production of intellectual property. Generally speaking, free and open exchange of relevant information facilitates the optimal functioning of markets by improving the efficiency of allocation decisions. Information about inputs, such as labor, guides the dedication of scarce resources. Crediting provides actionable data about labor involved in the production of intellectual property—data that are often onerous to divine elsewhere or without substantial additional cost. Indeed, “because it is difficult to measure worker knowledge directly in the way that the ability of the typists and machinists of the industrial economy could be tested simply by watching them perform a task,”⁵⁹ credit is particularly valuable in an information economy. A reliable, accurate, and comprehensive crediting regime can therefore dramatically advance interests in the efficient allocation of resources in creative enterprises. Crediting, after all, provides vital information to financiers of those enterprises about the nature and quality of a particular author’s work.⁶⁰

Secondly, crediting advances the interests of those who consume creative works and other forms of intellectual property. Authorship represents a form of branding akin to trademark, and accurate authorship labeling helps promote many of the basic goals of the trademark regime, which serves consumers (and not just authors) by “reduc[ing] the customer’s costs of shopping and making purchasing decisions” and “help[ing] assure a producer that it (and not an imitating competitor) will reap the financial, reputation-related rewards associated with a desirable product.”⁶¹ Heymann has highlighted the value that a meaningful crediting regime provides to even nonauthors. Instead of calling for an attribution right that recognizes an inherent moral right authors might have in proper attribution, she calls for what she dubs “authornymic” attribution, the recognition of crediting for the sake of “organizational integrity”—a “reader-centered” law that ensures that “reader responses [to creative works] will be informed and minimizes the likelihood of confusion a consumer of creative commodities might otherwise experience.”⁶² In this way, she argues, a law of attribution is vital to supporting “efficient literary consumers” who can have “some confidence that the works that we read—and later draw on for our own creative activity—are situated within a coherent literary structure.”⁶³

Thirdly, an attribution regime can also promote public respect for intellectual property law. It does so in at least two different ways. As Stephanie Plamondon Bair argues in her study of the role of fairness in copyright law, when we align copyright law more closely with public perceptions of equity, we heighten the regime’s legitimacy in the eyes of society.⁶⁴ Given the strong popular support for the norm of attribution, a copyright system that protects crediting rights bolsters respect for the regime itself. Separately, the act of putting a real face (or, at least name) behind creative works humanizes them and can help buttress support for the intellectual property rights that protect them. As Catherine Fisk explains, such a task is particularly important “[i]n a world of corporate production, and in particular skepticism about corporate production.”⁶⁵ After all, it is no secret why corporate interest groups bring relatable artists to the forefront when making pitches for greater protection and rights enforcement, especially in the war on piracy—even when those artists are not the real rightsholders.⁶⁶ When the music industry sought to apply pressure to Google to provide more favorable use fees for the exploitation of music on YouTube, it had the likes of Taylor Swift and U2 sign off to an open letter that was used to drum up public support for the cause and to lobby Congress for reform.⁶⁷

[The DMCA] was written and passed in an era that is technologically out-of-date compared to the era in which we live. It has allowed major tech companies to grow and generate huge profits by creating ease of use for consumers to carry out almost every recorded song in history in their pocket via a smartphone, while songwriters’ and artists’ earnings continue to diminish.

Anthony Ha, Taylor Swift and Other Big Names Join the Music Industry’s Campaign Against YouTube, TechCrunch (June 20, 2016, 2:33 PM), https://techcrunch.com/2016/06/20/taylor-swift-dmca-letter [https://perma.cc/JSU6-9NUG] (quoting the letter). And when the Motion Picture Association (“MPA”) sought an alternative to an unpopular litigation campaign against piracy, it put together testimonial advertisements that highlighted the ways in which piracy hurt those people whom we only know as lines at the end of the credit roll.⁶⁸ Thus, attribution promotes the very operation of the intellectual property regime by giving it a human face that legitimizes the sometimes impersonal and intangible rules it enforces. In an era where digital technology has made mass piracy on a global scale all too easy, this function is perhaps of greater value now than ever before.

All told, therefore, our common sense tells us that crediting is deeply important to authors, a position backed by the emerging social science literature on the subject. Meanwhile, a proper attribution regime also has critical benefits to the efficient functioning of the marketplace for creative works and thus has strong benefits for consumers and investors as well. Despite all of this, however, as we have alluded to, the law provides shockingly little protection for crediting rights. This state of affairs that has grown particularly dim in the past two decades in the wake of the Supreme Court’s decision in Dastar, a subject to which we now turn.

II. THE LAW’S SIZEABLE CREDITING GAP

A. Dastar and the Decline of Crediting Law

Although we have established the important value of attribution—to creators, investors, and the public as a whole—we are left with a strange conundrum: the law of crediting is surprisingly thin and underdeveloped. Indeed, it is counterintuitively so, as the wholesale absence of any broad law of attribution runs counter to the assumptions of many in the creative community. As Silbey reported for her survey of artists and authors, “Many interviewees were stunned to learn that copyright law does not require attribution or prohibit misattribution.”⁶⁹

That said, for a period of time in the recent past, rightsholders enjoyed one particular means of crediting protection: a direct vehicle for legal redress when their creative works were being used by others without proper attribution. Specifically, a line of case law had emerged that considered improper crediting of someone else’s work as one’s own to constitute a “false designation of origin . . . or false or misleading representation” actionable under section 43(a) of the Lanham Act.⁷⁰ In these cases, courts found that, in the words of Thomas McCarthy, the Lanham Act “has progressed far beyond the old concept of fraudulent passing off, to encompass any form of competition or selling which contravenes society’s current concepts of ‘fairness.’ ”⁷¹ Such a capacious reading of the Lanham Act allowed for recognition of a cause of action for reverse passing off—when someone passes off the goods or services of another as their own—and, therefore, provided a viable claim for their failure to provide credit.

In 1981, this reading of the Lanham Act received the blessing of the Ninth Circuit for the first time, a move that propelled it to widespread acceptance. In Smith v. Montoro, the Ninth Circuit held that the failure to credit an actor for his role in the movie Convoy Buddies (and, in fact, the substitution of his name with that of another actor in both the film credits and advertising material), constituted reverse passing off under section 43(a).⁷² As a matter of public policy, the court opined, such conduct was “wrongful” in that “the originator of the misidentified product is involuntarily deprived of the advertising value of its name and of the goodwill that otherwise would stem from public knowledge of the true source of the satisfactory product.”⁷³

[B]ig box office names are built, in part, through being prominently featured in popular films and by receiving appropriate recognition in film credits and advertising. Since actors’ fees for pictures, and indeed, their ability to get any work at all, is often based on the drawing power their name may be expected to have at the box office, being accurately credited for films in which they have played would seem to be of critical importance in enabling actors to sell their “services,” i.e., their performances.

Id. The Montoro decision proved widely influential, and within a few short years, federal courts throughout the country were entertaining attribution-related claims under section 43(a) for reverse passing off.⁷⁴ But all of that changed in 2003 when the Supreme Court announced its decision in Dastar.⁷⁵

It was in the shadow of Montoro and its progeny that the Dastar controversy began. To commemorate the fiftieth anniversary of the ending of World War II, Dastar Corporation had decided to put out a new video set titled World War II Campaigns in Europe. The collection made extensive, but unauthorized, use of a television series based on President Dwight Eisenhower’s book, Crusade in Europe.⁷⁶ Twentieth Century Fox had owned the copyrights to this program until it had inadvertently forgotten to renew them and the show fell into the public domain.⁷⁷ As a result, Fox could not sue Dastar for infringement of its Crusade in Europe television series to prevent publication and distribution of World War II Campaigns in Europe.⁷⁸ So, like many other entities who have lost their erstwhile rights in one of our intellectual property regimes, Fox turned to a neighboring intellectual property regime upon which to rest its claims.⁷⁹ It made a Lanham Act claim instead.

The procedural posture of the case was unusual and suggested something significant was afoot by the time it got to the Supreme Court. Both the district court and Ninth Circuit upheld the reverse passing off claim. Indeed, the Ninth Circuit thought so little of the issue’s weight overall significance that the decision was unpublished. The Supreme Court, of course, typically grants certiorari to only a tiny fraction of cases; so, it certainly raised eyebrows when the Supreme Court granted certiorari to a seemingly routine and mundane decision that the Ninth Circuit did not even bother to designate for publication.⁸⁰ The action presaged the Court’s view that the unpublished decision from the Ninth Circuit missed something fundamental and significant, about which the Court appeared ready to opine.

In its decision, the Supreme Court unanimously reversed the Ninth Circuit and rejected Fox’s attempt to use a Lanham Act claim for false designation of origin as a means of preventing Dastar’s reproduction of an audiovisual work (to which Fox had previously owned the copyright) that had fallen into the public domain.⁸¹ In so holding, the Court warned against the risk of creating a “species of mutant” intellectual property protection that would impede the public’s right to make unfettered use of creative works that no longer enjoy copyright protection.⁸²

As the old saw goes, hard facts make bad law. Fox’s gambit to eschew the “limited times” requirement in copyright law by ginning up trademark claims against Dastar struck a nerve with the Court, and the case came before it at a particularly opportune time (as far as Dastar was concerned). As Justin Hughes points out, the close proximity of the Dastar decision to the holding in Eldred v. Ashcroft⁸³ suggests that that the former may have intentionally served as a “2003 Term counterweight” to the latter,⁸⁴ which rejected concerns about the public domain in declining to find a twenty-year extension of copyright terms unconstitutional.⁸⁵ Indeed, concerns about aggrieved former rightsholders, like Fox, attempting to circumvent copyright’s careful calibrated balance between private protection and public access expressly animated the Dastar decision. Specifically, the Court sought to thwart future efforts by lapsed copyright holders to make disingenuous use of trademark law to assert monopolistic control over the exploitation of works that had fallen into the public domain, in contravention of the very intent of the copyright regime and its (constitutionally mandated) policy of allowing ownership over creative works to eventually expire so that the public may make free use of them.⁸⁶

Thus, under Dastar, the Supreme Court found that reference to “origins of goods” in the Lanham Act could not be read to mean the authorial origins of a work; instead, it referred only to the physical source of the embodiment of that work in tangible products.⁸⁷ As the Court rationalized, the reference to “origin of goods” in section 43(a) was “incapable of connoting the person or entity that originated the ideas or communications that ‘goods’ embody or contain. Such an extension would not only stretch the text, but it would be out of accord with the history and purpose of the Lanham Act and inconsistent with precedent.”⁸⁸ So, even if Dastar had failed to give proper credit to the intellectual source(s) of the materials contained in its video collection, this did not, and could not, constitute a violation under the Lanham Act. All that mattered for the purposes of the section 43(a) was that there was not false designation of the origin of the actual physical video collection. Since Dastar literally published and distributed the video collection, self-attribution was entirely proper as far as the Lanham Act was concerned. As such, Fox had no actionable claim for false designation of origin.

At the same time, however, the Court’s holding reached broader than necessary to achieve the laudable goal of protecting the public domain. By grounding its ruling in a reading of the Lanham Act that definitively excluded the intellectual wellspring of a product from the meaning of “origin,” the Court precluded attribution claims under section 43(a) for all creative works. Thus, in the past two decades, courts have generally rejected all such claims, whether they apply to public domain works (as in Dastar) or works still under copyright protection (unlike Dastar).⁸⁹ In the process, therefore, Dastar eliminated relief for those seeking remediation of a harm quite distinct from unlawful reproduction, distribution, display, or performance of a creative work: the act of not giving credit to its original author. In one fell swoop, “the Court swept away close to twenty-five years of precedent that held that failure to give credit to an entertainment product such as a film or song, or providing misleading credit, was a violation of trademark law.”⁹⁰

In part, two other concerns can explain and warrant broader application of the holding to all creative works, not just ones in the public domain. First, the Court noted the difficult position that an attribution-related reverse passing off claim could put manufacturers of products containing creative works. “On the one hand,” notes the Court, “they would face Lanham Act liability for failing to credit the creator of a work on which their lawful copies are based; and on the other hand they could face Lanham Act liability for crediting the creator if that should be regarded as implying the creator’s ‘sponsorship or approval’ of the copy.”⁹¹ In other words, if Dastar had put out its video set and kept the original credits to Fox, Fox could have sued Dastar for violating the Lanham Act for direct passing off by suggesting that Fox sponsored or approved Dastar’s product. Meanwhile, because it had removed Fox’s name, Dastar now faced a claim for failure to attribute under a theory of reverse passing off. If the Court had affirmed the availability of an attribution-related passing off claims, the resulting quagmire could stifle the use of works—both those in the public domain (for which no licensing is required) and for those still under copyright protection (when lawful copyright clearance might leave a licensee subject to exposure for a Lanham Act violation).

Second, the Court raised its concern that an attribution requirement could leave distributors of copyright content with a duty to credit that might grow impossibly burdensome and impractical. The opinion put a fine point on the scope of crediting that a broader reading of section 43(a)’s “designation of origin” reference would compel by assessing the type of attribution that might be required to distribute the film Carmen Jones. As the Court posited, to avoid liability for reversing passing off under Montoroand its progeny, a distributor might have to give attribution “not just to MGM, but to Oscar Hammerstein II (who wrote the musical on which the film was based), to Georges Bizet (who wrote the opera on which the musical was based), and to Prosper Mérimée (who wrote the novel on which the opera was based).”⁹² Determining origin could amount to a complicated task. To illustrate this point, the Court turned no further than the case at hand, opining that

[w]hile Fox might have a claim to being in the line of origin, its involvement with the creation of the television series was limited at best. Time, Inc., was the principal, if not the exclusive, creator, albeit under arrangement with Fox. And of course it was neither Fox nor Time, Inc., that shot the film used in the Crusade television series. Rather, that footage came from the United States Army, Navy, and Coast Guard, the British Ministry of Information and War Office, the National Film Board of Canada, and unidentified ‘Newsreel Pool Cameramen.’ If anyone has a claim to being the original creator of the material used in both the Crusade television series and the Campaigns videotapes, it would be those groups, rather than Fox.⁹³

Interestingly, the Court’s language on this issue referred only to the context of uncopyrighted works, noting that “[w]ithout a copyrighted work as the basepoint, the word ‘origin’ has no discernable limits.”⁹⁴ But unless the reference to uncopyrighted works meant works that had never enjoyed copyright protection in the first place, it is unclear why this problem would be greater with once-copyrighted works that have fallen out of the public domain as opposed to works still under copyright protection.

While these rationales offer substantive justification to eliminate attribution-related reverse passing off claims through the Lanham Act in all instances—not just claims relating to public domain works—the holding in Dastar was not without its significant problems. First, Dastar suffered a seemingly significant incongruity with the purpose of the federal trademark regime. If the goal of the Lanham Act is, indeed, consumer protection, the Supreme Court’s central holding in Dastar—that the Lanham Act’s reference to origin means the source of an actual physical product and not the wellspring of the idea or intellectual property embodied in a particular product—fails to reflect the reality of what factors animate consumer behavior, particularly with respect to intellectual property. Crediting is not just important to authors; it is vital the public’s decision-making process when it comes to consuming entertainment content. As Mary LaFrance has pointed out, contrary to the ultimate thrust of Dastar, which held that trademark law only protects against misidentification of the maker of the actual product rather than the ideas behind it,

in the case of literary works or entertainment works, the identity of the actual author, performer, or creative overseer may frequently be more crucial to the consumer’s purchasing decision, than the identity of the party that manufactured the physical embodiment [because] the identity of key creative participants is often viewed as a source indicator that is an important predictor of the quality or content of the goods.⁹⁵

Indeed, Dastar creates an unusual result for physical products containing intellectual property, as it provides protection to the designation of origin about which consumers arguably care the least. To put a finer point on it, consumers do not care if the movie they are watching was printed on Kodak film or released by Warner Brothers; they care about the fact that it was directed by Martin Scorsese or written by Charlie Kaufman. Readers do not care about whether Random House or Harper Collins was responsible for the paper and ink on which a book appears; they care about whether the book was written by J.K. Rowling or Thomas Pynchon. Music listeners do not care if the album was issued by SubPop or Merge Records; they care about whether it contains performances by Spoon or The Mountain Goats. The disconnect between the law’s protections and this reality could not be more stark or problematic.

Most importantly, for a large swath of creatives, Dastar all but eliminated hope for securing crediting rights through legal claims.⁹⁶ Admittedly, the Supreme Court took pains to caution that its decision had not necessarily eliminated all means to vindicate attribution rights and that Dastar did not speak to alternative causes of action to enforce crediting under common, state, and federal law, including other theories (such as false advertising) available under the Lanham Act. But as one practitioner euphemistically noted in the wake of Dastar, the remaining options relied on “creative lawyering.”⁹⁷ This turned out to be shorthand for shots in the dark that have little chance of working. For as we shall analyze in great detail infra, Dastar marked a significant inflection point in the state of attribution rights—significantly curtailing (if not altogether eliminating) the ability of most creators to receive credit under the law.⁹⁸

B. The State of Crediting Rights in the Two Decades Since Dastar

In his post-Dastar assessment of the state of attribution rights written in 2007, Justin Hughes argued that the crediting gap left by Dastar was not as wide as commonly believed. “[I]f we work through all the possibilities, the practical hole created by Dastar may be operatively modest,” he contended.⁹⁹

Dastar creates a gap in protection for those works and circumstances where there is a failure of appropriate attribution and no cause of action under VARA, under state moral rights laws, under 17 U.S.C. § 1202 for failure to include copyright management information, or under state unfair competition laws in states where the courts hold that Dastarshould not control, and where contract law does not establish a framework to protect attribution.¹⁰⁰

Hughes’s assessment has proven excessively sanguine, unfortunately. Although the legal theories to which he cited as alternative bases for protection may be numerous in quantity, they are qualitatively impoverished and provide scant (if any) relief in the vast majority of situations. Moreover, in the nearly two decades since Dastar, the significant size of the credit gap has become manifest as the jurisprudence of the intervening years has made clear how little bite these alternative legal theories provide for the vindication of crediting interests.

1. False Advertising Claims Under the Lanham Act

The very cause of action to which the Supreme Court cited as continuing to provide attribution protection post-Dastar—the Lanham Act’s prohibition on false advertising or misrepresentations of fact—has proven feeble in this regard. While Dastarexpressly foreclosed the possibility of attribution-related claims under section 43(a)(1)(A), it did not altogether eliminate the ability to vindicate crediting rights under the Lanham Act. Since the Dastar holding only opined as to the meaning of “origin” in the statute (which is invoked in section 43(a)(1)(A), referring to “confusion . . . as to the origin”),¹⁰¹ remaining provisions of the Lanham Act that did not employ that word could still have application to attribution-related issues. This was true for the Lanham Act’s cause of action for false advertising that, under section 43(a)(1)(B), created liability for anyone who “misrepresents the nature, characteristics [or] qualities . . . of . . . goods, services, or commercial activities.”¹⁰² In fact, Dastar expressly pointed to this provision as one ground for relief that may still be possible following the decision. As the Court noted,

If, moreover, the producer of a video that substantially copied the Crusade series were, in advertising or promotion, to give purchasers the impression that the video was quite different from that series, then one or more of the respondents might have a cause of action—not for reverse passing off under the “confusion . . . as to the origin” provision of § 43(a)(1)(A), but for misrepresentation under the “misrepresents the nature, characteristics [or] qualities” provision of § 43(a)(1)(B).¹⁰³

That said, such a path has proven less than promising and the Court’s supposition that such relief might be forthcoming has proven too optimistic, at best—or disingenuous, at worst. First, despite Dastar’s seemingly express exhortations to the contrary, subsequent courts have found that the holding in Dastar actually prevents both section 43(a)(1)(A) and section 43(a)(1)(B) claims on similar facts.¹⁰⁴ Second, and more fundamentally, false advertising claims face additional hurdles not present in an attribution claim under section 43(a)(1)(A). These impediments would be difficult for most plaintiffs seeking vindication of an attribution right to clear. For example, many courts require competitor standing to bring a false advertising suit. Until the Supreme Court recently broke a circuit split, false advertising claims were, in many circuits, per se limited to commercial “actual” (direct?) competitors.¹⁰⁵ Even now, standing remains a significant issue. As the Supreme Court noted in Lexmark International, Inc. v. Static Control Components, Inc., false advertising plaintiffs must show that they “fall within the zone of interests” protected by the statute and must have suffered a harm proximately caused as a result of the act of false advertising.¹⁰⁶ But to fall within the zone of interests, the plaintiff must “allege an injury to a commercial interest in reputation or sales.”¹⁰⁷ Since consumers typically do not lose sales or suffer an injury to reputation, the new standard makes it exceedingly unlikely that consumers can bring a false advertising claim. While plaintiffs need not be direct competitors anymore to bring a claim under section 43(a)(1)(B), they still generally need to be competitors of some sort.

Finally, false advertising is actionable under section 43(a)(1)(B) if and only if the statement is false on its face or the misrepresentation is material, that is, relied upon in consumers’ purchasing decision.¹⁰⁸ This consumer reliance requirement makes eminent sense for false advertising claims, but it makes less sense when dealing with issues of attribution which should be, first and foremost, about vindicating the rights of authors to receive credit for their works rather than rights of the public from being deceived in material consumption decisions. Moreover, while the most famous and acclaimed of authors may survive such a materiality requirement, the vast majority will have a far more difficult time.

2. Attribution Claims Under the Visual Artists Rights Act

On the surface, VARA would appear to provide significant protection for the attribution rights of authors. Codified in section 106A of the Copyright Act, VARA offers creators an independent cause of action “to claim authorship of [their] work,” and “to prevent the use of his or her name as the author of any work of visual art which he or she did not create.”¹⁰⁹ VARA claims are eligible for recovery of both statutory damages and attorneys’ fees and, to make matters even better for putative plaintiffs, unlike for infringement claims, an author does not even need to timely register the work in question as a condition for these remedies.¹¹⁰ Thus, a cursory examination of VARA might elicit hope for the vindication of crediting. But a closer look reveals just how profoundly limited the rights under VARA are.

First, as the very name of the legislation makes clear, VARA’s attribution rights only encompass works of visual art.¹¹¹ As such, the Act fails to apply to large swaths of subject matter otherwise protectible under the Copyright Act, including writings, music, and other important works. But the limits do not end there, as the attribution right does not even attach to all forms of art that might be characterized as visual in nature. Rather, the statute covers only paintings, drawings, prints, sculptures, and photographs created for exhibition purposes only.¹¹² It therefore excludes the most commercially important of visual art—film.¹¹³ It also does not apply to any “poster, map, globe, chart, technical drawing, diagram, model, applied art, . . . book, magazine, newspaper, periodical, data base, electronic information service, electronic publication, or similar publication” or any “merchandising item or advertising, promotional, descriptive, covering, or packaging material or container.”¹¹⁴ In addition, all works made for hire fall entirely outside of VARA’s protections.¹¹⁵ Finally, for the narrow category of visual art works to which VARA might apply, the attribution right only attaches to original versions of those works or limited editions thereof issued in sets of “200 copies or fewer that are signed and consecutively numbered by the author.”¹¹⁶ At the end of the day, therefore, VARA’s attribution right only applies to a limited set of visual art works that are not prepared as works made for hire. In short, VARA provides no crediting protection for the vast majority of authors.

3. Falsification and Removal/Alteration of Copyright Management Information Claims Under the Digital Millennium Copyright Act

Introduced into law with the passage of the Digital Millennium Copyright Act in 1998 (“DMCA”), the provisions of the Copyright Act that make it unlawful to falsify, alter, or remove copyright management information, which includes any authorship and copyright ownership data accompanying a work,¹¹⁷ would seemingly serve as a powerful vehicle to vindicate attribution rights. But while these provisions—codified in 17 U.S.C. § 1202 (“section 1202”)—constitute the sole protection granted to authorship information in all (rather than VARA’s narrow subset of) copyrighted works, their reach is deliberately constrained. Among other things, the structure of the two causes of action provided under section 1202—a claim for falsification of copyright management information (“CMI”)¹¹⁸ and a claim for removal or alteration of CMI¹¹⁹—makes clear that the protections therein are subservient to the goal of fighting infringement and not any inherent value that may come from crediting. In other words, the guiding principle behind section 1202 is preventing further infringement, not vindicating an author’s very real, but potential separate, interest in crediting. As such, section 1202 fails to provide a meaningful right to crediting for authors.

Specifically, a claim for falsification of CMI requires that plaintiffs show that defendants “knowingly and with the intent to induce, enable, facilitate, or conceal infringement . . . provide[d] copyright management information that is false.”¹²⁰ Similarly, a claim for removal/alteration of CMI requires that plaintiffs show that defendants “intentionally remove[d] or alter[ed] copyright management information . . . knowing, or . . . having reasonable grounds to know, that it will induce, enable, facilitate or conceal an infringement.”¹²¹ Thus, both falsification and removal/alteration claims have a strict double scienter requirement that necessitates plaintiffs demonstrate that defendants acted with a particular mens rea—that is, knowingly and with intent to facilitate infringement.

This onerous scienter requirement is significant in at least three ways. First, it contrasts markedly from the complete absence of any scienter requirement in matters of direct copyright infringement.¹²² Specifically, infringement has always been a strict liability tort,¹²³ where a defendant’s state of mind is wholly irrelevant to the issue of liability.¹²⁴ By sharp distinction, to prevail on an attribution claim through section 1202, a plaintiff must meet not one but two (if not three¹²⁵) showings on the defendants’ state of mind.

Second, by conditioning attribution relief on an intent to facilitate infringement, section 1202 firmly grounds its protections in service of the fight against infringement rather than any broad vindication of crediting rights. This position is further buttressed by the fact that section 1202 only protects CMI that is “conveyed in connection with copies or phonorecords of a work or performances or displays of a work.”¹²⁶ Furthermore, some courts have even read the legislative history and intent behind section 1202 to preclude application of falsification and removal/alternation claims to nondigital works.¹²⁷ According to the logic of these courts, section 1202’s primary purpose—fighting the scourge of piracy in the online environment because of the unique ease of digital infringement—compels such a limitation on section 1202 claims. Such a position, however, leaves attribution rights outside of the digital environment unaddressed.

Third, and relatedly, the dual scienter requirement makes it extraordinarily difficult to prevail on a section 1202 claim. To state a cognizable removal/alteration claim, for example, a plaintiff must demonstrate that either a work “came into Defendant’s possession with CMI attached, and Defendant intentionally and improperly removed it” or a work “came into Defendant’s possession without CMI attached, but Defendant knew that CMI had been improperly removed, and Defendant used the [work] anyway.”¹²⁸ A plaintiff may be unable to show how or in what form a work came into the defendant’s possession in the first place¹²⁹ and, even if they can, it is rare to have sufficient evidence showing that the removal/alteration was specifically with the intent to facilitate infringement. For example, an erroneous belief about the copyright status of an image can preclude a finding of the knowledge required to state a claim under section 1202.¹³⁰ Meanwhile, even intentionally cropping out a copyright notice from an image is insufficient to meet the intent to facilitate requirement.¹³¹

Not surprisingly, therefore, CMI claims are frequently adjudicated as a matter of law based on the failure to adequately make even a threshold showing of knowledge and intent.¹³² Consider, for example, the difficulties that an author might face in bringing a section 1202 claim even against someone who both knowingly and intentionally crops an image to cut out the authorship information. Even assuming such authorship information qualifies as actionable CMI, there are myriad reasons (that may have nothing to do with the concealing of infringement) to crop out such authorship information. Among other things, the person making use of the image could claim to have cropped the images for aesthetic purposes, because of inherent space limitations for the usage, or without any idea that they were removing CMI.¹³³ In all of these instances, authors may have legitimate, if not strong, interests in seeing uses of their work include attribution. Yet they would be unactionable under section 1202.

4. Attribution Rights Under State Unfair Competition Law and Other Common Law Theories.

Although there was initially some optimism about attribution rights remaining available under state law post-Dastar, such hopes have proven misplaced. First, in many states, such as California, courts have interpreted unfair competition protections as coextensive with the Lanham Act. Thus, if Dastar renders attribution claims no longer viable under the Lanham Act, such claims must necessarily also fail under state unfair competition law.¹³⁴ Second, in the wake of Dastar, both Tom Bell¹³⁵ and Michael Landau¹³⁶ suggested that copyright preemption issues raised by the decision could preclude use of state or common law theories to protect attribution rights. These predictions turned out to be correct, as courts have regularly read Dastar in such a manner.¹³⁷ In fact, even prior to Dastar, some courts viewed state unfair competition claims seeking credit as preempted.¹³⁸

The absence of clear legal protections for crediting has led some plaintiffs to rely (often futilely) on a veritable smorgasbord of common law theories in an attempt to cobble together some basis for relief. For example, when a Cornell graduate student (Antonia Demas) sued a member of her advisory committee (Professor David A. Levitsky of the School of Human Ecology) for improperly taking credit for research she had conducted into the nutritional habits of elementary schoolchildren, using that research to obtain a significant grant without her name, and then actively and publicly rebuffing her allegations of wrongdoing,¹³⁹ she did not bring a claim under the Lanham Act for misattribution.¹⁴⁰ Instead, she was left reciting the common law’s greatest hits in her complaint by claiming liability for misappropriation, fraud, breach of contract, breach of fiduciary duty, negligence, tortious interference with prospective economic advantage, defamation, and intentional infliction of emotional distress.¹⁴¹ While circumstances may make it possible to prevail on one of these theories, victims of crediting abuse face an uphill battle in meeting all of the required elements of such common law claims.¹⁴²

5. Private Contracting: The Promise and Perils

With false advertising, VARA, CMI falsification/removal/alteration and unfair competition claims providing little relief, creators are left with private contracting to do the work of crediting.¹⁴³ There is no doubt that, in some industries, private contracting and even social norms have gone a long way toward ensuring proper crediting. But significant lacunae remain and, even where private contracting and norms do provide for crediting, it is not always reflective of authorial contributions. As such, reliance on private systems to govern crediting is insufficient to provide for appropriate attribution rights.

There are some fields where private contracting has given rise to deeply nuanced and vigorously patrolled crediting requirements. Two paradigmatic examples are Hollywood and academia.¹⁴⁴ In the movie industry, collective bargaining has helped level the playing field between the studios and talent, and the operative guild agreements have insisted on getting even the most minute of credits done correctly.¹⁴⁵ Though it is not without its flaws,¹⁴⁶ the system has worked relatively well.¹⁴⁷ And even if it might seem a tad onerous to any member of the public who has sat through the credits of a motion picture, those credits instill industry professionals with a sense of pride over their brief moment of acknowledgement on the silver screen. Just as importantly, by making the contributions of industry professional publicly legible in databases such as IMDb.com,¹⁴⁸ the regime also ensures that those individuals can reap the reputational and economic benefits of their credits,¹⁴⁹ or, to give a notable example, help avoid the ruin that might come from an unfair attribution. To wit, from 1968 through 2000, the Directors Guild of America allowed aggrieved directors who believed a studio or other producer had butchered their movie in unimaginable ways to petition to have their directorial credit replaced with the fictional “Alan Smithee” pseudonym, lest the final product sully the real director’s good name.¹⁵⁰

In the Academy of Motion Picture Arts and Sciences, strong attribution norms have given rise to anti-plagiarism codes, which have the bite of law and are frequently enforced against offenders in university disciplinary proceedings. Though not perfect,¹⁵¹ the carrot of the norm and the stick of disciplinary proceedings have served to ensure generally robust crediting practices.

But in other industries without collective bargaining or finely tuned attribution codes, where crediting is just as important and billions of dollars are on the line, there are no such formal crediting regimes. In such endeavors, crediting decisions are often left to general norms and individual negotiations. As a result, crediting often becomes more about power than actual contribution. As Catherine Fisk points out about most fields of entertainment, “Apart from the guild-controlled screen credit system, the credit system for other creative and technical people in entertainment seems to be more governed by norms, charity, and power than by law.”¹⁵² One notable example of this is producer credits, which are not governed by collective bargaining. As a result, producing credits are notoriously corrupt, and a veritable “prestige market” for production credits exists. Meanwhile, even in the guild crediting systems of the Screen Actors Guild-American Federation of Television and Radio Artists, the Writers Guild of America, and the Directors Guild of America, power relations frequently trump creative contributions in determining attribution rights. As Fisk notes,

Because the guild agreements limit the number of people who can be credited in some roles on any one film, power relations among various possible contenders for credit affect who is listed. Individual workers with significant bargaining power (actors, directors, writers, and producers) negotiate for specific treatment on each project, which may or may not reflect the same level of artistic contribution as compared to others who receive a similar type of credit on a different film or who receive the same credit (or no credit) on the same film.¹⁵³

The absence of legal protection for attribution rights outside of private contracting has profound consequences for distributive justice. When viewed through the prisms of race, gender, or socioeconomic disparities, crediting practices have a particularly troubling history. Simply put, those who are not white, male, or wealthy have far too often struggled to receive credit, even when they indisputably authored work. This is because crediting is as much (if not more) about power dynamics and contractual leverage as it is about origination. As K.J. Greene has poignantly noted,

Top directors, such as a Spike Lee or Steven Spielberg, will have no problem obtaining credit [by exercising their bargaining power in negotiations to contract for it], but anyone else dependent on a contract to secure credit will likely lose out. . . . [W]hile Dastar, on its face, seems completely neutral on the subordination issue, it actually promotes greater subordination; despite the Oprah’s and Denzel’s of the world, Blacks, women, and other minorities still occupy the bottom of the totem pole in entertainment hierarchies, making them the most vulnerable to misattribution abuses.¹⁵⁴

Greene’s concern is not speculative or hypothetical. Unfortunately, it is widely reflected in the history of scientific and creative enterprise.

Consider, for example, the systematic undervaluing and underrecognition of innovations by women. In the sciences, the phenomenon even has its own term—the Matilda effect¹⁵⁵—and it is no less prevalent in the world of arts and letters. To take a few illustrative examples, Margaret Keane was the actual painter of the “big-eyed waifs” long credited to her husband, Walter;¹⁵⁶ Elizabeth Magie created the game of Monopoly, not Charles Darrow;¹⁵⁷ and although attributed to Marcel Duchamp, The Fountain—the infamous urinal that rocked the art world at the 1913 Armory Show—was likely the work of Elsa von Freytag-Loringhoven.¹⁵⁸ In short, crediting is often about who has the leverage (and, in the cases of some swindlers, the gall) to claim authorship, not who really created a work.

The dogged persistence of disparities in attribution has far-reaching consequences, exacerbating existing gender gaps in a number of professions, including the law. For example, Jordana Goodman’s empirical study of crediting practices for patent attorneys, which examined a set of over 200,000 patent applications and office action responses before the United States Patent and Trademark Office from 2016–2020, found an alarming divergence between “attribution and presence” for female patent attorneys, even when accounting for nongendered partner-associate power differentials, years of practice, and other relevant experience.¹⁵⁹ In the field of computer software, for instance, Goodman estimates that female attorneys suffered a thirty-one percent shortfall in crediting.¹⁶⁰ As she concludes, the “lack of equitable attribution perpetually disadvantages women, negatively impacts their career progression, and likely creates an insurmountable chasm between their capabilities and their prestige.”¹⁶¹ Ultimately, such practices “contribute[] to women’s systemic underrepresentation at top leadership levels throughout the United States,”¹⁶² a state of affairs presided over by current private ordering regimes such as the workflow structure of modern law firms.¹⁶³

The problematic dynamics in leaving crediting to private contracting are on full display in the music industry. As Fisk points out, “in music there is a not uncommon practice of people who do not contribute to the writing of a song being ‘cut in’ on songwriting credit.”¹⁶⁴ The practice is not always nefarious, of course. Peter Jackson’s Beatlesdocumentary, The Beatles: Get Back,¹⁶⁵ provides a notable example. As the film’s exhaustive studio footage capturing the crafting of the title song makes crystal clear, the work was the singular product of Paul McCartney’s musical ingenuity. But the song’s writing credits—“Lennon/McCartney”—tell a very different tale. In this case, a desire to keep an uneasy (though ultimately unsustainable) peace and to honor the duo’s (soon-to-be dissolved) songwriting partnership came at the expense of accuracy. Less innocuously, however, there are myriad instances where crediting practices reflect power more than creative contribution and cut along disturbing gender or racial fault lines. To take one example, Little Richard coauthored the classic Tutti Frutti with Creole songwriter Dorothy LaBostrie.¹⁶⁶ However, as if it were not bad enough that handlers cajoled him into selling his publishing rights to his record company for a proverbial song (a meager fifty dollars), he also provided songwriting credit to a party that likely had nothing whatsoever to do with the authorship of the song¹⁶⁷—one that may have been the be pseudonym for the owner of Richard’s record label (who reaped the royalties, which continue to be earned on the song to this day).¹⁶⁸ As Greene documents, Richard’s experience was no outlier; it was par for the course. And as he observes, “The fact that minority artists received less protection—or in many cases no protection—for their compositions undermines the incentive theory of intellectual property laws. Many Black artists received little no economic reward for their creations. Others certainly received less than what they should have.”¹⁶⁹

Even beyond issues of race, gender, and socioeconomic status, crediting often reflects relational and power dynamics that may have nothing whatsoever to do with real creative contributions, such as the tenured professor receiving sole authorial credit for a work that includes substantial contributions from graduate students, the law firm partner who has no problem enjoying attribution for the work of a junior associate, or the senator whose “words” are actually those of a speechwriter. Indeed, Spenser Clark’s deep dive into the crediting practices on Hold Up, one of the songs from Beyoncé’s acclaimed concept album Lemonade, illustrates this point in the world of pop music.¹⁷⁰ As Clark explains, Hold Up’s title and some of its lyrics come from a line that Ezra Koenig, the lead singer of Vampire Weekend, had once tweeted (which, itself, was based on a lyrics from Maps, a song by indie rockers the Yeah Yeah Yeahs) and subsequent lyrics Koenig had developed in the studio with Beyoncé’s noted producer, Diplo, while they were working with a loop from an Andy Williams song.¹⁷¹ Beyoncé ultimately gave Koenig and the Yeah Yeah Yeahs songwriting credit on Hold Up and Diplo a producing credit, but, notably, Williams received no credit at all—either as a songwriter or producer.¹⁷² As Clark concludes,

Oftentimes [artist crediting] choices are not based in law, but rather more intangible considerations like the desire to maintain relationships with creators they wish to work with in the future. Andy Williams’ song, for example, was released in 1963, and therefore [Beyoncé] Knowles was probably less concerned with that relationship as she was with other, more relevant artists.¹⁷³

Notably, in the music industry (just as in some other creative fields), crediting is not only of reputational or ethical significance; it also determines payment of royalties related to the exploitation of sound recordings and musical compositions.

Finally, besides the power dynamics inherent in the private negotiation of credits, the fundamental constraints of contracting also limit how far it can go in ensuring proper attribution. Crediting claims that rest on negotiated obligations require privity for enforcement, and the realities of the marketplace dictate that not all uses of one’s work will be by individuals or entities with whom an author could or would contract.¹⁷⁴ Indeed, this is precisely why we do not leave protection against unauthorized reproduction or other unlawful uses of copyrighted works to contracts and, instead, have infringement claims available that require only access and substantial similarity—no privity and, indeed, no knowledge. All told, therefore, while contracting, especially via collective bargaining, has enjoyed some success in certain industries, private law has not proven sufficiently robust to ensure that crediting rights are adequately protected in the many areas of the information economy where they matter vitally to authors, investors, and consumers.

III. REFORM

A. Questioning Attribution Rights: Why Good Norms Do Not Necessarily Make Good Law

Our legal regime’s present crediting gap—the yawning chasm between the high value of attribution and the surprising absence of safeguards in our existing system to protect the practice—would seem to suggest a manifest need for reform. But before wholeheartedly embracing the adoption of some kind of credit-mandating legal regime, it is worth pausing to consider that best practices do not always translate into righteous laws. In other words, while giving credit might be the right thing to do, that does not necessarily mean we should legally require it, either broadly or in limited contexts. To put it bluntly, not all norms need the bite of law. For example, compliance with some norms—like thanking a gift giver—is more meaningful when it results from volition rather than compulsion. Moreover, to limit the scope of potential government intrusion into personal affairs, we do not want the law to microregulate every aspect of human existence. Thus, it is important to approach any effort to expand the law to regulate behavior that was previously not squarely within the aegis of our legal regime with a healthy amount of skepticism.

For example, despite moral entreaties against them, prevarications mostly lie¹⁷⁵ outside of the scope of legal regulation—and with good reason. As Judge Alex Kozinski explained in one of the most mordant and entertaining paragraphs ever to appear in the Federal Reporter, such a societal choice honors the freedom of human expression, regardless of moral valence, and serves greater First Amendment interests. “Living means lying,” Kozinski famously posited (in words that are part of the public domain and thereby forgiving of extended quotation):

Self-expression that risks prison if it strays from the monotonous reporting of strictly accurate facts about oneself is no expression at all. Saints may always tell the truth, but for mortals living means lying. We lie to protect our privacy (“No, I don’t live around here”); to avoid hurt feelings (“Friday is my study night”); to make others feel better (“Gee you’ve gotten skinny”); to avoid recriminations (“I only lost $10 at poker”); to prevent grief (“The doc says you’re getting better”); to maintain domestic tranquility (“She’s just a friend”); to avoid social stigma (“I just haven’t met the right woman”); for career advancement (“I’m sooo lucky to have a smart boss like you”); to avoid being lonely (“I love opera”); to eliminate a rival (“He has a boyfriend”); to achieve an objective (“But I love you so much”); to defeat an objective (“I’m allergic to latex”); to make an exit (“It’s not you, it’s me”); to delay the inevitable (“The check is in the mail”); to communicate displeasure (“There’s nothing wrong”); to get someone off your back (“I’ll call you about lunch”); to escape a nudnik (“My mother’s on the other line”); to namedrop (“We go way back”); to set up a surprise party (“I need help moving the piano”); to buy time (“I’m on my way”); to keep up appearances (“We’re not talking divorce”); to avoid taking out the trash (“My back hurts”); to duck an obligation (“I’ve got a headache”); to maintain a public image (“I go to church every Sunday”); to make a point (“Ich bin ein Berliner”); to save face (“I had too much to drink”); to humor (“Correct as usual, King Friday”); to avoid embarrassment (“That wasn’t me”); to curry favor (“I’ve read all your books”); to get a clerkship (“You’re the greatest living jurist”); to save a dollar (“I gave at the office”); or to maintain innocence (“There are eight tiny reindeer on the rooftop”).

. . . .

Even if untruthful speech were not valuable for its own sake, its protection is clearly required to give breathing room to truthful self-expression, which is unequivocally protected by the First Amendment. . . . If all untruthful speech is unprotected, as the dissenters claim, we could all be made into criminals, depending on which lies those making the laws find offensive. And we would have to censor our speech to avoid the risk of prosecution for saying something that turns out to be false. The First Amendment does not tolerate giving the government such power.¹⁷⁶

We not only insulate certain forms of morally suspect speech from legal liability, but also certain acts. So while we believe cheating on a spouse is repugnant to one’s martial vows, in most states no civil liability attaches to unfaithfulness, and it is largely irrelevant in most divorce proceedings. Thus, while we may have a broad societal consensus that some actions constitute moral wrongs, we do not necessarily criminalize, or impose civil liability on, all of those wrongs.

That said, crediting directly ties to a matter of significant public, rather than solely private or familial, interest. As we have detailed, attribution rights not only strike at the core of the utilitarian function of the copyright regime—advancing progress in the arts by incentivizing the production of creative work—but also other social benefits tied to economic and cultural interests. Indeed, in the conclusion to her exhaustive survey of crediting regimes in a wide variety of industries involved in scientific and cultural production, Fisk concludes that, while private law and norms have provided some protection for attribution rights, the current state of affairs warrants, if not compels, some type of legal intervention.¹⁷⁷ But Fisk also cautions that any reform should supplement, but not supplant, existing practices.¹⁷⁸ Since private ordering and norms have functioned with some success, there appears to be wisdom in approaching attribution rights with a disinclination to implement any new regime that is overly onerous or excessively undermines flexibility. With that caveat in mind, we turn to assess several proposals for reform.

B. The Problem with Overturning Dastar and Amending the Lanham Act

The most immediate and obvious reform measure for addressing the crediting gap created by Dastar and its progeny would involve overturning Dastar’s core holding. For example, as Justin Hughes has suggested, such an action could occur through legislation that amends the Lanham Act to define origin as including the intellectual source of creative works that have not yet fallen into the public domain.¹⁷⁹ In other words, congressional action could restore the availability of attribution-related claims for reverse passing off for works still under copyright protection. But such legislation would also respect the Supreme Court’s rightful concern about limiting erstwhile rightsholders with expired copyrights from attempting to perpetuate their monopolistic stranglehold on the exploitation of creative works by turning the Lanham Act into a “species of mutant copyright law that limits the public’s ‘federal right to “copy and to use” ’ expired copyrights”¹⁸⁰ However, even if the legislation is carefully crafted to apply the holding of Dastar only to works with expired copyrights, such a proposal might create more problems than it solves. Among other things, the Lanham Act is a poor fit for the vindication of attributive interests in creative works, and, even prior to Dastar, those inadequacies and fissures showed.

The ability of litigants to vindicate attribution rights through the vehicle of the Lanham Act has always been less than ideal—the Ninth Circuit’s Montoro decision and its progeny notwithstanding. Indeed, Bobbi Kwall argued this very point in 2002—just before the Dastar ruling—when she highlighted at least three ways in which the extant jurisprudence of the time stunted attribution claims, even under the Lanham Act.¹⁸¹ First, competing interpretations of section 43(a) by the federal courts in different jurisdictions had created a patchwork of inconsistent requirements that hampered the viability of reverse passing off claims for misattribution.¹⁸² Second, courts had sometimes even found such claims preempted under section 301 of the Copyright Act.¹⁸³ Finally, and potentially most problematically, section 43(a)’s ultimate focus on consumer confusion and the prevention of deception¹⁸⁴ led courts to “become preoccupied with different manifestations of ‘falsity’ at the expense of [protecting] an author’s personality and reputational interests.”¹⁸⁵ Thus, dignitary injuries to an artist from a lack of attribution, or even speculative injuries as to the future harm that a lack of recognition may bring, are not cognizable under a section 43(a) claim. So, for example, in 1999, the Fifth Circuit affirmed summary judgment for a record label on a section 43(a) claim for reversing passing off based on the record label’s alleged failure to credit the authors of a digital sample of the authors’ work.¹⁸⁶ Even though it acknowledged the lack of attribution, the Fifth Circuit still denied the claim on the basis that the plaintiffs could not demonstrate a genuine issue of likelihood of confusion.¹⁸⁷ Read strictly, section 43(a)’s requirement of a showing of likelihood of consumer confusion would threaten most attribution claims, especially those that stem from smaller uncredited uses of a work¹⁸⁸ and even larger uses of works by authors that are not sufficiently well-known so as to meet the threshold of consumer confusion necessary to sustain a claim under section 43(a).¹⁸⁹ In other words, the Lanham Act’s conditionality of liability on consumer confusion inherently and significantly narrows the breadth of any protection for attribution it might otherwise provide. Overruling Dastar would do nothing to address this issue.

Meanwhile, although restoration of attribution-related reverse passing off claims for works still under copyright protection might address the Supreme Court’s concern about the potential private recapture of public domain works, it would not address another problem that undergirded the rationale of Dastar: the catch-22 of crediting. As the Dastar Court pointed out, attribution rights can mire users of copyrighted works in a damned if you do, damned if you don’t scenario. On one hand, if they do not provide credit, they might face claims for failure to attribute. On the other hand, if they do attribute, they might face accusations of a type of passing off—effectively engaging in a form unwanted attribution that the attribute regards as connoting sponsorship, endorsement, or affiliation with their product. This, in turn, can produce liability under the Lanham Act.¹⁹⁰

Meanwhile, though the anticompetitive implications of reverse passing off claims related to attribution are most pressing when a work is otherwise in the public domain, the ability of such a cause of action to stifle legitimate uses of works under copyright protection also bears consideration. Specifically, the Supreme Court’s anxieties about a mutant form of copyright law apply more broadly than the re-copyrighting of works that have fallen into the public domain; they apply with equal force to how a crediting regime could entangle and ensnare all sorts of unwitting users of copyrighted works, including properly licensed ones, for failure to make proper crediting. Attribution requirements can be onerous, particularly if we return to the pre-Dastar state of affairs under the Lanham Act, where it was unclear just how much crediting might be required to avert potential reverse passing off claims. Indeed, in the unanimous Dastar opinion, Justice Scalia cited the “serious practical problems” that would result from an attribution requirement without carefully circumscribed limits.¹⁹¹ After detailing the exhaustive list of potential credits that Dastar would have had to give¹⁹² if the Court had found that the Lanham Act’s reference to “origin” required attributions to all of the originators of “the ideas or communications that ‘goods’ embody or contain,”¹⁹³ Scalia quipped that it made no sense to interpret the Lanham Act as requiring a search “for the source of the Nile and all its tributaries.”¹⁹⁴

A restoration of the pre-Dastar state of the law for works still in copyright could adversely impact the rights of legitimate users of copyrighted works and enable a similar type of result as Fox sought to achieve in pursuing its claims in Dastar. An example illustrates this point. If a producer-rightsholder grants a distributor rights to its work and then the distributor properly sublicenses those rights to an exhibitor, there is no issue of copyright infringement and, under our current regime, the exhibitor would feel secure in exploiting the work. But if attribution-related reverse passing off claims are restored under the Lanham Act, all manner of mischief could result in undermining the exhibitor’s properly granted exploitation rights if a purported “source” does not receive the attribution they believe they deserve in conjunction with the exploitation. The broad scope of who or what might constitute a “source”—as illustrated by Dastar’s infamous passage about the “Nile and all its tributaries”—makes this clear.

Thus, it may be with good reason that the period of time during which courts recognized an attribution-related claim for “reverse passing off” was relatively short. Although there were occasional outlier decisions in the distant past, “[w]idespread acceptance of [such] a cause of action began around 1980”¹⁹⁵—meaning that creators enjoyed access to such a claim for less than a quarter century and questions about the practice abounded during that era. Several theorists, for example, argued that use of the Lanham Act in this (admittedly sympathetic) context stood on shaky, if not wholly unjustifiable, legal grounds. Although he acknowledged that the right of attribution was “a commercially valuable right,”¹⁹⁶ Randolph Stuart Sergent asserted that such a claim failed to serve the Lanham Act’s purported goals and was inappropriate under section 43(a).¹⁹⁷ In presciently anticipating Dastar, he bemoaned the power of Montoro-like claims to serve as “a tool for controlling the sale of the underlying product [in a manner that would] reduc[e] marketplace competition . . . to the immediate detriment of consumers.”¹⁹⁸ Meanwhile, John Cross argued that, although “[a]llowing [a] plaintiff to recover for reverse passing off certainly ‘feels’ right,”¹⁹⁹ it is worth noting that “vague feelings of impropriety . . . are not enough to justify a cause of action.”²⁰⁰ In his analysis, imposing liability under the Lanham Act for reverse passing off failed “to prevent or cure any meaningful consumer deception” and undermined the delicate balance between encouraging innovation and promoting competition by allowing original sources to monopolize works that are either ceded to or eventually fall into the public domain by operation of copyright and patent law.²⁰¹ These concerns remain for any effort to overturn Dastar.

In short, even before Dastar, the Lanham Act simply did not provide consistent protection for authorial crediting. As such, simply reforming Dastar does not really get us a proper fix for vindicating attribution rights. Although there is much to criticize about Dastar—the void it has created in the law of crediting and its shaky factual premise—there are also compelling reasons to leave the primary holding of Dastar undisturbed and to eschew reliance on the Lanham Act as a means to vindicate attribution rights. Indeed, if Dastar achieved any good, perhaps it was in taking the issue of authorial attribution out of the scope of the Lanham Act, where it represented a square peg being forced into the proverbial round hole.

C. The Challenges with Creating an Independent Attribution Claim Under the Copyright Act

Other scholars have considered whether it might make sense to amend the Copyright Act to provide for a general attribution right.²⁰² Jane Ginsburg, for one, has advanced such a proposal.²⁰³ While the idea certainly has a great deal of merit, it also suffers from some significant shortcomings. On the positive side, Ginsburg’s proposal seeks to resolve this surprising lacuna in American intellectual property jurisprudence by finally granting creators a general right of attribution. Meanwhile, Ginsburg advocates the duration of the attribution right to match the copyright term—thereby averting instances of attribution liability for the use of public domain works. For reasons that we have also advocated,²⁰⁴ she also recognizes the importance of taking attribution rights outside of the Lanham Act given that attribution should be recognized regardless of proof of economic harm or consumer confusion.²⁰⁵ She also attempts to address potential issues regarding the unwieldy and uncertain scope of attribution obligations pre-Dastar by limiting the affirmative right of attribution to just legal authors and performers.²⁰⁶

But Ginsburg’s proposal has some significant difficulties. While legal authorship is often singular, performers can number into the thousands. Thus, the inclusion of performers in the attribution requirement could create the specter of liability for the unwitting.²⁰⁷ More broadly, crediting of authors is not always practicable. Although Ginsburg addresses this concern by suggesting that the statute would be subject to a standard that incorporates a “reasonableness criterion,”²⁰⁸ such ambiguity is arguably the last thing that copyright law needs. After all, copyright users already have the remarkable illegibility of the fair use analysis with which to contend. Adding an additional crediting requirement that has no restraint other than “reasonableness” adds just another unfortunate layer to the copyright thicket of licensing and clearance requirements that already stifle creative activity.

Indeed, the very example that Ginsburg uses to tout the salutary and nimble nature of an attribution requirement grounded in the ambiguous notion of “reasonableness” demonstrates the very dangers of such a regime. As she writes,

[A] requirement to identify all authors and performers may unreasonably encumber the radio broadcast of a song, but distributed recordings of the song might more conveniently include the listing. This may be particularly true of digital media, where a mouse click can provide information even more extensive than that available on a printed page.²⁰⁹

Admittedly, with its relative dearth of spacing limitations, digital media makes it arguably reasonable (from a spacing point of view) to credit any number of authors and performers. But such a requirement can quickly become onerous. Consider a professor teaching a Russian history course who wants to screen excerpts from Alexander Sokurov’s acclaimed experimental drama Russian Ark, a ninety-six-minute film shot in just a single take one night at the Hermitage with a cast of more than two thousand actors and three orchestras.²¹⁰ Though such an action would likely constitute fair use, meaning the professor could engage in the use without the hassle of payment and permission and without fear of infringement liability, Ginsburg’s proposal would place the professor in jeopardy of a different kind of liability: failure to attribute.

Ginsburg’s proposal also lacks any fair use defense, a point emphasized when she explains that “the test of reasonableness in this context is not the same as for fair use. The question is not whether the use should be prevented or paid for, as it is when fair use is at issue, but whether the use, even if free, should acknowledge the user’s sources.”²¹¹ While such a move is welcome from an equity point of view—for all too long, copyright law has devalued the creative contributions of performers²¹²—it bodes less favorably for those making use of copyrighted works. It is hard enough to prevail on a fair use claim; but now users will have to contend with a whole other issue: liability exposure under an independent and separate cause of action depending on the reasonableness of their crediting practices.

In addition, entitling creators to an affirmative right of attribution could have a surprisingly adverse impact on the functioning of intellectual property licensing markets. For example, while they acknowledge the critical importance of crediting and recognition to authors (a position backed up by their own empirical experiments), Sprigman, Buccafusco, and Burns have suggested that the indisputable value that creators place in attribution should not automatically lead to legislative enactment of an affirmative attribution right.²¹³ As they caution, the operation of a default right of attribution, even if waivable, could result in significant inefficiencies in the licensing market. Most obviously, transaction costs would increase. But less obviously, the combined impact of the endowment and creator effects—which can cause irrational overvaluation of the intellectual property rights held by authors in their creative output—can make licensing transactions increasingly unlikely and more burdensome.

Grounded in the public interest and the efficient functioning of licensing markets, this argument warrants further examination and should give pause to any hasty enactment of attribution legislation. To understand why, an examination of the emerging literature in behavioral economics is in order. Specifically, in recent years, psychologists and economists have observed a phenomenon dubbed the “endowment effect,” wherein the subjective valuation an individual will give a particular object increases significantly when the individual possesses that object, even for a limited time.²¹⁴ As a consequence of this effect, individuals will “demand much more to give up an object than they are willing to spend to acquire it.”²¹⁵ Although not without its critics,²¹⁶ this result appears to subvert neoclassical economic theory, which assumes that an individual’s willingness to pay (“WTP”) for a good should equal the willingness to accept (“WTA”) compensation for the loss of the good. In a now-classic experiment, Kahneman, Knetsch, and Thaler found that randomly assigned buyers valued a particular mug at three dollars, on average.²¹⁷ By sharp contrast, randomly assigned owners of the very same mug required substantially more money (seven dollars, on average) to part with it.²¹⁸ In short, the owners’ loss in divesting themselves of the mug was valued at more than twice the buyers’ gain in acquiring the exact same mug. Thus, under the endowment effect, most people appear to require a much higher price to part with a product to which they hold a legal entitlement (that is, through possession or ownership) than they would pay to purchase the very same product.

As it turns out, the endowment effect can be especially pronounced and dangerous in matters dealing with intangible property such as copyright. The tendency toward overvaluing endowed goods is amplified when measurements of value are more subjective, and the lack of fungibility for creative works can exacerbate holdout problems and make completion of licensing deals more difficult. This leads to what James Surowiecki and others have billed as the “permission problem.”²¹⁹ And the impact is not merely the stifling of creative rights of scholars, critics, satirists, and others. Since the endowment effect raises the price otherwise demanded for access to a copyrighted work, “members of society do not enjoy the increased access to art that the copyright law is designed to provide.”²²⁰

It is at this point that Sprigman, Buccafusco, and Burns’s findings become particularly salient. They found that that endowment effect was particularly extreme when creators engage in transactions involving their own work. This so-called “creativity effect”—what Sprigman, Buccasufsco, and Burns refer to as the “the tendency of creators of goods to assign higher value to their works not only compared to would-be purchasers of the goods, but relative also to mere owners (that is, subjects who had not created but merely been given the works, as in previous studies)”²²¹—can badly “magnify the valuation anomalies associated with the endowment effect. The creativity effect drives creators’ WTA even further away from buyers’ WTP, and in doing so it makes deals over creative goods more difficult to reach.”²²² The data from Sprigman, Buccafusco, and Burns’s work therefore suggests that vesting an affirmative attribution right in creators could serve as a significant impediment on the licensing market and further complicate and stifle the ability of would-be licensees to reach deals for the use of creative content—a cost that impacts consumers of copyrighted works as well as the vast number of authors who draw upon preexisting content to create transformative works.²²³ As a result, they conclude that an affirmative attribution right would ultimately not serve the public weal and could have a disruptive effect on commerce.

But, perhaps most damningly, the biggest drawback against an independent claim for attribution under the Copyright Act is not whether it would make for good law but, rather, whether it would be feasible to pass such legislation in the first place. To illustrate this point, it is worth considering a few salient points about the history of copyright law in our country. It took almost 100 years for the United States to accede to the terms of the Berne Convention of 1886, which, since 1928 and per Article 6bis, requires member states to recognize a right of attribution.²²⁴ When the United States finally acceded to Berne in 1988, the House Report on its implementation concluded that a patchwork of existing laws in the United States already provided sufficient protection for attribution to meet Berne’s minimum standards.²²⁵ The availability of Lanham Act relief for reverse passing off in situations of misattribution was key to this conclusion.²²⁶ Nevertheless, Congress passed a narrow right of attribution under VARA shortly thereafter in 1990 which, as we have discussed, does not cover the vast majority of creative works and provides only scant protection. Furthermore, since Dastar, there has been no meaningful effort to undo its holding in Congress, making the path toward a legislative fix unlikely, at best. As this timeline illustrates, the odds of congressional intervention to add a broad attribution right to the Copyright Act—particularly given how constrained the attribution claim embedded in VARA ultimately became when it was finally passed in 1990—do not seem particularly good.

D. A Modest Proposal: Locating Attributive Use in Section 107

With this analysis in mind, we turn our attention to a modest proposal that I believe would not require legislation and, in fact, already reflects the jurisprudence on fair use: the recognition by courts of attributive use as an express subfactor in the application of the fair use defense to allegations of copyright infringement. This proposal advances the cause of attribution rights in an incremental, but significant, manner; provides flexibility for courts to adapt the concept to contexts and emerging technologies; and bolsters norms of crediting in a way that can lay the framework for future (and bolder) changes in the law.

Moreover, the proposal builds on the important work done by Pierre Leval with his article Toward a Fair Use Standard some three decades ago. Just as Leval argued that transformative use was already, and had good reason to be, playing an important role in fair use determinations, I argue the same with attributive use. In that spirit, as the title of this Article suggests, I advocate a move toward a new fair use standard. As our exegesis of the extant jurisprudence on fair use reveals, attributive use already has an implicit place in the fair use calculus. I argue that courts should lean into this reality and make attribution an explicit consideration in their factor one analysis on the purpose and character of the use. Just like transformative use, which advances the utilitarian aim of the copyright regime to promote progress (by enabling the creation of new work), attributive use serves a key role in the copyright regime by helping advance progress in the arts (by appealing to the incentivizing function of crediting). So, under this scheme, as part of their factor one analysis, future courts would consider: (1) whether a use is commercial; (2) whether a use is transformative; and (3) whether a use is attributive. In short, attributive use would take its place with commercial and transformative use as key factors in determining the purpose and character of a defendant’s unauthorized exploitation of someone’s copyrighted work.

Admittedly, leaving attribution rights to only function as an affirmative defense to infringement still leaves crediting as a tail, wagged by the infringement dog. But this solution avoids the numerous complications posed by either an affirmative attribution right in the Copyright Act or an undoing of the Dastar holding. Under such a proposal, works used with permission can continue to have exploitation governed by licensing terms that can call for proper attribution as appropriate and meaningful, thereby leaving existing crediting regimes in place and enabling further development of new ones. But for unlicensed works, an attributive use subfactor will provide significant encouragement of crediting while not requiring it in every instance and leaving some flexibility around the issue, so that courts can consider the context of a particular use to decide whether attribution is valuable, meaningful, or practicable under the circumstances.²²⁷ As a result, crediting will not become an absolute requirement, thereby addressing the significant concerns that would come from a broad attribution right. Meanwhile, for public domain works, there will be no concern about attribution because such works would not be subject to a fair use defense since their exploitation is, per se, noninfringing. As a result, the proposal averts rightful concern about erstwhile copyright holders using crediting requirements to achieve perpetual protection for works that fall into the public domain.

Moreover, to avoid making attribution overly onerous, the crediting at issue could be limited to legal authorship. As even Ginsburg admits, attribution requirements can be burdensome, potentially causing a problem that Ginsburg characterizes as the “most practical of all”: a regime that mandates “tiny print or endless film credits that no one will look at anyway.”²²⁸ To Ginsburg, criticisms about the potential burdens of crediting requirements are exaggerated. As she opines,

[D]ifficulties in determining whether a contributor at the fringes of a creative enterprise should be denominated an “author” or “co-author” should not obscure attribution claims where authorship is apparent. Moreover, where the creators are multiple, business practice may assist in identifying those entitled to authorship credit. That the resulting credits may not attract most readers’ or viewers’ attention does not warrant forgoing them altogether.²²⁹

But there may also be a simpler refutation to these objections. Specifically, as Ginsburg herself admits, “Our caselaw has enough trouble, in the joint works context, identifying who is an author.”²³⁰ This is certainly true but it is also worth noting that, as a result of this difficulty, courts have shown themselves extraordinarily loathe to recognize joint authorship. Indeed, numerous doctrines, such as the strict reading of the mutual intent requirement, have emerged from courts to avert recognition of joint authorship.²³¹ So, on a practical level, the problem of endless attribution seems quite solvable by considering crediting not of all creative contributors, but of the legal authors—a designation that courts have gone out of their way to make singular and, consequently, quite knowable (despite the many flaws in the way courts define legal authorship). In other words, given that courts already carefully circumscribe the notion of legal authorship in order to avoid the messiness of joint authorship and the accompanying headache it may cause in the fracturing of rights, attribution rights that are limited to recognition of legalauthorship are not quite as complex as objectors may suggest.

All told, this solution draws and expands upon, with some important alterations, a proposal once presented briefly by the late Greg Lastowka at the end of his article considering the (morbid) state of attribution rights post-Dastar.²³² After bemoaning the extant law’s lack of protection for crediting, Lastowka proposed a corrective step: congressional amendment of section 107 to incorporate attribution as an explicit fifth factor in the fair use analysis.²³³ I tweak Lastowka’s proposal for two reasons. First, the addition of an express fifth factor would require legislative amendment, making change less likely (as I have documented with the difficulty in passing any affirmative attribution right in the Copyright Act). Indeed, as the influence of Leval’s 1990 article has suggested, change through the common law is both swifter and more likely. Leval, of course, achieved a dramatic change in the way courts have approached the fair use analysis in the past three decades by emphasizing the importance of a factor that had received scant explicit consideration before: transformation. Secondly, analytically speaking, I argue that attribution already resides in the existing four factors without the need to add a fifth. Most significantly, as I shall detail, courts have both explicitly and implicitly considered attribution in the fair use calculus in the past, often as part of assessing the purpose and character of the use (factor one). Building on the occasional, but unpredictable, judicial solicitude to attribution as a part of the fair use balancing test, I argue that, normatively, such a move makes a great deal of sense.

1. Attributive Use and the Existing Fair Use Calculus

As Lastowka argued, courts have occasionally drawn on attribution as a factor in the fair use calculus. But, as he cautioned,

[w]hat these cases demonstrate is not that attribution is regularly considered by courts as a factor in the fair use analysis. This is most certainly not the case. The cases merely illustrate that in certain cases, plaintiffs and defendants have been successful in persuading courts to incorporate evidence about attribution into a fair use analysis.²³⁴

Lastowka may have understated matters, however. Indeed, a careful exegesis of the relevant jurisprudence—including noted decisions from the two circuits (the Second and the Ninth) that most prominently opine on copyright law, as well as consideration of the broad attributive practices in clearance norms—strongly suggests that attribution is already a guiding factor in the fair use calculus and, either explicitly or implicitly, is playing a (rightful) role in fair use determinations. As such, the proposal advanced here calls for overt recognition of attribution as a key subfactor in how courts weigh the purpose and character of a use.

The fair use doctrine finds its origins in Justice Joseph Story’s influential 1841 opinion in Folsom v. Marsh.²³⁵ Eventually codified in section 107 of the 1976 Copyright Act, fair use typically involves the weighing of a four-part balancing test to determine whether an unauthorized use of a copyrighted work is excused from infringement liability. These factors include:

(1) the purpose and character of the use, including whether such use is of a commercial nature . . . ; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.²³⁶

However, with its use of open-ended language, the text of section 107 suggests that the four listed factors are not exhaustive of the considerations a court may undertake.²³⁷ As a result, courts have always had the freedom to introduce other relevant factors to their fair use analysis. Indeed, some have accepted the invitation, including many that have made attribution and crediting practices a consideration.

2. The Role of Attribution in the First, Fourth, and “Fifth” Fair Use Factors

In Haberman v. Hustler Magazine, Inc., for example, a Massachusetts district court drew on “equitable considerations” as a fifth factor and found that the defendant’s attribution practices supported a fair use defense against infringement claims for unauthorized reproduction of two fine art photographs in a magazine.²³⁸ Specifically, the defendant’s fair use claim was substantially aided by the fact that it made “no effort . . . to palm [the photos] off as anything other than [the photographer’s] creations.”²³⁹ Thus, in some cases, attribution can and has become a part of the fair use calculus through an unofficial “fifth factor.”

That said, courts do not necessarily have to resort to the introduction of a fifth factor to make room for crediting. In fact, numerous decisions have integrated attributive use into their analysis of the existing four factors.²⁴⁰ This body of case law suggests that attribution already has a place (and voice) in the existing four fair use factors—particularly the first (“purchase and character of the use”) and fourth (“market harm”).

Melville and David Nimmer, for example, have argued that attribution can and should be a proper consideration in the first factor,²⁴¹ as it speaks to nature and character of the use being made by a defendant. Numerous courts have subscribed to this view, whose application is illustrated in Williamson v. Pearson Education, Inc.²⁴² In the suit, Pearson Education offered up a fair use defense to infringement claims stemming from its publication of a book featuring unauthorized quotation of a number of passages from a prior work on General Patton’s leadership principles. Drawing on Harper & Row, Publishers, Inc. v. Nation Enterprises’s instruction to consider the “propriety of the defendant’s conduct” as part of the nature and character of a defendant’s use of a copyrighted work, the Court found that the first fair use factor favored defendants because, among other things, they were “not attempting to pass [the] fact-gathering off as their own. Rather they are crediting [the plaintiff] as the source of the factual information that defendants use to construct some of the arguments in their book.”²⁴³ Similarly, in Rubin v. Brooks/Cole Publishing Co., a court identified the propriety of the defendant’s conduct as one of three subfactors under the “purpose and character of the use” consideration and found this factor favored the defendant since the defendant had “credited [the plaintiff] clearly and favorably in the text.”²⁴⁴ In another infringement case—one involving unauthorized use of a portion of a report about a hydropower facility—a federal court deemed that the defendants’ acknowledgement of the source of the original work helped the first fair use factor “weigh[] heavily in favor of a finding of fair use.”²⁴⁵

It is not just the first factor that makes room for attribution. While “good faith” is the most common doctrinal vehicle through which crediting finds a voice in the first factor, economic factors form the doctrinal vehicle through which crediting finds a voice in the fourth factor. Meanwhile, the market harm factor also leaves room for consideration of attribution. Specifically, as Rebecca Tushnet has argued in the context of fan fiction, giving attribution attenuates the possibility of market harm.²⁴⁶ As she reasons, “Correct attribution helps prevent confusion and preserves the market for the official product and bears an indirect relation to the fourth fair use factor.”²⁴⁷ Tushnet’s view is not merely aspirational; it is also already reflected in some cases. In Richard Feiner & Co. v. H.R. Industries, Inc., for instance, a New York federal district court declined to grant a fair use defense to The Hollywood Reporter/HRI for its unauthorized use of a photograph of Laurel and Hardy in a feature spread on special effects and stunts.²⁴⁸ The failure to attribute the photograph to its author played an important role in the court’s calculus. “HRI’s use of the photograph without attribution to Feiner represents to the world that the photograph is in public domain,” the court concluded, “thus potentially impairing Feiner’s future revenue both in income and in the costs of protecting its rights.”²⁴⁹ Based on this logic, the court found significant market harm in HRI’s actions and found the fourth fair use factor militated against the defendant. Indeed, the Feiner case stands in contrast to Nuñez v. Caribbean International News Corp., in which a different member of the media—a Puerto Rican newspaper named El Vocero—also published an article making unauthorized use of a photograph—an image from the modeling portfolio of the former Miss Puerto Rico Universe 1997.²⁵⁰ In Nuñez, crediting played a role in the fair use analysis under both factors one and four. On the first factor, the court considered good faith, which favored El Vocero since it had “attributed the photographs to Núñez.”²⁵¹ On the fourth factor, the court pointed to the fact that “the only discernible effect of the publication in El Vocero was to increase demand for the photograph”²⁵²—a consequence doubtlessly buttressed by the credit that El Vocero provided to Nuñez, which enabled future licensees to know whom to approach for permissions to use the image.

3. Harper & Row’s Good Faith Admonition

With all of this said, it is important to acknowledge that the consideration of “good faith,” which courts have often used to raise attributive concerns, has come under fire in recent years. On the surface, this might suggest increasing judicial resistance to the factoring of crediting in the fair use calculus. But a closer examination of this trend says otherwise.

The clearest expression of the invitation to consider good faith in fair use determinations (and the basis upon which some courts have invoked attribution) came in Harper & Row, in which the Supreme Court dictated, in seemingly absolutist terms, that “fair use presupposes ‘good faith.’ ”²⁵³ Despite the blusterous verbiage, the exhortation remained inchoate, as the case gave little guidance as to just constituted “good faith.” In that particular instance, the Court was referring to how The Nation’s knowing exploitation of a purloined manuscript that remained unpublished demonstrated bad faith because the magazine had usurped the copyright holder’s valuable commercial rights of first publication. The Court then grafted this assessment of propriety to its consideration of the first, second and fourth fair use factors in finding that The Nation’s actions had no refuge in the defense.²⁵⁴ Notably, the matter of attribution (as a form of good faith or otherwise) had nothing whatsoever to do with that case.

In the intervening years, the Supreme Court has walked back on Harper & Row’s language about good faith. In both of its two most recent fair use pronouncements—Campbell in 1994 and Oracle in 2021—the Court has expressly downplayed the consideration. In Campbell, the Supreme Court acknowledged a split in persuasive authorities as to whether fair use must necessarily presuppose good faith.²⁵⁵ In Oracle’s dicta, the Court cited to Leval’s work to express its skepticism as to whether good faith should ever be a factor in fair use determinations.²⁵⁶Ultimately, however, the Oracle Court eschewed taking a definitive position on the issue, leaving the weight (if any) given to good faith squarely to lower courts to determine. As the Court mused, “We have no occasion here to say whether good faith is as a general matter a helpful inquiry.”²⁵⁷ Nevertheless, it would not be stretch for lower courts to view the commentary in Campbell and Oracle as dampening enthusiasm for further use of a general good faith consideration in the fair use calculus.

The evolving concern about consideration of “good faith” as dictated in Harper & Row is compelling—at least in the manner in which the Harper & Row, Campbell, and Oracle Courts used the term, where they considered if an alleged infringer had engaged in related wrongdoing, such as exploiting a purloined manuscript or proceeding with making use of a work despite being denied permission.²⁵⁸ After all, if someone asks for, and is denied, permission but proceeds with a use anyway, it is worth considering whether that demonstrates good faith or bad faith, or does not necessarily suggest anything at all. As Elina Lae points out, courts have gone both ways on this issue²⁵⁹—a fact that speaks to the unworkability of the factor.²⁶⁰ Or if a defendant genuinely believes that their actions constitute fair use and does not ask for permission, it is hard to understand why that factor should be held against them in the very determination of whether something is fair use.²⁶¹ Indeed, while conceding the potential the utility of a good faith consideration in the fair use calculus,²⁶² the Ninth Circuit long ago pointed out that “to consider [a defendant] blameworthy because he asked permission [and went ahead with the use after not receiving it] would penalize him for this modest show of consideration. Even though such gestures are predictably futile, we refuse to discourage them.”²⁶³

More pointedly, reading the Copyright Act holistically, the introduction of considerations of propriety into the fair use calculus would appear unbalanced, particularly when one acknowledges that courts do not typically weigh such factors in determining putative rightsholders’ entitlement to copyright protection. As Leval has forcefully argued,

Copyright seeks to maximize the creation and publication of socially useful material. Copyright is not a privilege reserved for the well-behaved. Copyright protection is not withheld from authors who lie, cheat, or steal to obtain their information. If they have stolen information, they may be prosecuted or sued civilly, but this has no bearing on the applicability of the copyright. Copyright is not a reward for goodness but a protection for the profits of activity that is useful to the public education. The same considerations govern fair use.²⁶⁴

In the end, therefore, when viewing fair use as an integral part of the utilitarian goal of our copyright regime, the ultimate focus on progress in the arts would appear to preclude consideration of the subjective mental state of a defendant or a defendant’s general intentions.

But, quite critically for our purposes, the discussion about good faith in Harper & Row, Campbell, and Oracle has never once touched on the issue of attribution. And although both Campbell and Oracle cited to Leval’s admonition to decouple fair use from good behavior,²⁶⁵ his entreaty also had nothing to with attributive practices. Indeed, as Leval reasons, fair use should be focused on progress in the arts. As we have detailed, that is precisely the reason why attribution should be considered, while other good faith factors, such as a defendant’s state of mind or general intentions, should not. Thus, despite the concern about good faith expressed in Campbell and Oracle and by Leval, these contemplations do not speak to the issue of crediting. And, if anything, the case law’s continued emphasis on promoting a vision of fair use dominated by the utilitarian goals of the copyright regime favors the consideration of attribution (though perhaps not general good faith) in the fair use calculus.

4. The Existing Role of Attribution in Second and Ninth Circuit Jurisprudence

All the while, attribution has and continues to play a role in the existing body of fair use jurisprudence in the influential Second and Ninth Circuits—from which the plurality, if not majority, of copyright caselaw stems.²⁶⁶ While these decisions that explicitly invoke attribution do not take the next step of formally mandating a role for crediting in the enumerated factors, when read together they suggest that such a role—much like the transformative use element identified by Leval in Toward a Fair Use Standard—would be consistent with the existing fair use rubric. Indeed, if district courts in these circuits hewed more closely to this extant jurisprudence, attribution would enjoy more overt recognition as a fair use factor.

The precedent of the Second Circuit is replete with cases where attribution has played a key, if not decisive, role in the fair use calculus. Weissmann v. Freeman²⁶⁷ is a particularly instructive case because it stemmed from an academic dispute where credits and notoriety, rather than significant profits, were at stake.²⁶⁸ In the suit, a professor at the Albert Einstein School of Medicine, Heidi S. Weissmann, took legal action against her colleague and erstwhile collaborator, Leonard Freeman, for copyright infringement, claiming that Freeman had unlawfully reproduced fifty copies of one of her articles for use in a special review course he was giving at the Mount Sinai School of Medicine. Ordinarily, such a relatively de minimis and educational use of a work would not give rise to infringement litigation. But one key fact made this case atypical: Freeman had deleted Weissmann’s name from the paper and, after adding three additional words to the title, put his own name on it.²⁶⁹ Although Weissmann might have pursued a claim for reverse passing off (albeit with some potential hurdles²⁷⁰), she focused on a copyright infringement claim.²⁷¹ Though the lower court had held Freeman’s use was a fair one, the Second Circuit reversed.

Despite claims that Freeman’s use was noncommercial and for academic purposes, his failure to credit Weissmann (and his substitution of his own name as the author) proved outcome determinative in the Second Circuit, and the court cited the crediting issue in its analysis on the first, second, and fourth fair use factors. On the first factor, the court determined that, in wresting credit from Weissmann, Freeman’s motivations were commercial in nature as he profited from the use, which enhanced his professional reputation. As the court noted, “Particularly in an academic setting, profit is ill-measured in dollars. Instead, what is valuable is recognition because it so often influences professional advancement and academic tenure.”²⁷² On the second factor, the court noted the importance of weighing the incentives for continued creation of scholarly work and thereby linked attribution and progress in the arts. As it reasoned, crediting provided the likes of Weissmann “with an incentive to continue research—an endeavor that, if successful, would and has led to professional and monetary benefits [and that courts] need to uphold those incentives necessary to the creation of works such as [the article].”²⁷³ Finally, on the fourth factor, the court saw clear market harm because “[i]n scholarly circles such as, for example, the small community of nuclear medicine specialists involved in this suit, recognition of one’s scientific achievements is a vital part of one’s professional life.”²⁷⁴

The fact that Dr. Freeman’s planned use of [the article] was for the same intrinsic purpose as that intended by Dr. Weissmann not only undermines Dr. Weissmann’s ability to enjoy the fruits of her labor, but also creates a distinct disincentive for her to continue to research and publish in the field of nuclear medicine.

Id. In short, the issue of crediting permeated the entire fair use analysis in Weissmann. In the end, the court also emphasized that “[n]o case was cited—and [they] found none—that sustained [a fair use] defense under circumstances where copying involved total deletion of the original author’s name and substitution of the copier’s.”²⁷⁵ This observation alone suggests the implicit role of attribution (and the disfavor with which misattribution is viewed) in the extant fair use jurisprudence.

Rogers v. Koons,²⁷⁶ one of the most well-known copyright decisions from the Second Circuit, also emphasizes the role of attribution in fair use determinations. The Rogers controversy started when prominent modern artist Jeff Koons found inspiration in a cheap tourist postcard featuring Art Rogers’s Puppies, a photograph of a couple and their dogs posing in Rockwellian tranquility.²⁷⁷ Koons appropriated the depiction without Rogers’s permission and accentuated various elements to create a sculptural work, String of Puppies, that satirized suburban American aesthetic sensibilities.²⁷⁸

saw sentimentality, inanity and kitsch. When he blew up the image to larger than life size, stuck daisies in the hair of the sickly sweet smiling couple (the flowers were not in the photograph) and painted the finished ceramic, the sculpture acquired a horrific quality quite distinct from the original.

Martin Garbus, Book Review, Lolita and the Lawyers, N.Y. Times, Sept. 26, 1999 (§ 7), at 35. Rogers, unamused by Koons actions, sued for copyright infringement and Koons claimed fair use. The district court rejected Koons’s defense, holding that, among other things, his activities were not sufficiently transformative because they did not criticize or comment upon Rogers’s original photograph.²⁷⁹ On appeal, the Second Circuit affirmed, noting that, “though the satire need not be only of the copied work and may . . . also be a parody of modern society, the copied work must be, at least in part, an object of the parody, otherwise there would be no need to conjure up the original work.”²⁸⁰ Because Koons purportedly did not “need” the original work to make his expressive point, there could be no fair use.²⁸¹ The result of the case was a debacle for Koons. In addition to damages, he was ordered to pay the plaintiff’s attorneys’ fees.²⁸²

To critics of the decision—which came down before Campbell, the trumpeting of Leval’s Toward a Fair Use Standard, and its advocacy for the primacy of an expansive notion of transformative use²⁸³—the court gave short shrift to the transformative use that Koons had arguably made of Rogers’s original work.²⁸⁴ Indeed, one could argue that the Second Circuit implicitly reversed itself in its next case involving Jeff Koons and appropriationist art, in which it reached an exact opposite conclusion.²⁸⁵

That said, the absence of proper crediting served as a critical factor in justifying the court’s rejection of Koons’s fair use defense. Specifically, in considering the first factor—the purpose and character of the use—the court drew on notions of attribution in two separate ways to weigh against a finding of fair use. First, employing the “good faith” criteria, the court pointed to Koons’s decision to remove a copyright notice from one of Rogers’s notecards that he sent to Italian artisans when he commissioned fabrication of his statue based on the Rogers photograph. As the court concluded, this action “suggests bad faith in defendant’s use of plaintiff’s work, and militates against a finding of fair use.”²⁸⁶ Second, the court concluded that the failure to credit supported its finding that Koons’s work was not commenting sufficiently on the original work to qualify for the heightened protection usually given to parody. As the court argued, Koons’s use failed to make the public aware of the original work and the resulting lack of proper crediting undermined a key reason why certain types of commentary—attributive ones—get fair use protection. “If an infringement of copyrightable expression could be justified as fair use solely on the basis of the infringer’s claim to a higher or different artistic use—without insuring public awareness of the original work—there would be no practicable boundary to the fair use defense,” noted the court.²⁸⁷

Koons’ claim that his infringement of Rogers’ work is fair use solely because he is acting within an artistic tradition of commenting upon the commonplace thus cannot be accepted. The rule’s function is to insure that credit is given where credit is due. By requiring that the copied work be an object of the parody, we merely insist that the audience be aware that underlying the parody there is an original and separate expression, attributable to a different artist. This awareness may come from the fact that the copied work is publicly known or because its existence is in some manner acknowledged by the parodist in connection with the parody.²⁸⁸

Courts within the Second Circuit continue to pick up this language from Rogers to emphasize the importance of crediting in the fair use calculus. For example, in a recent published decision, the Southern District of New York drew upon Rogers’s bad faith analysis to find this subfactor within the “purpose and character of use” weighed in favor of the plaintiff when the defendant removed the copyright mark, thereby robbing the use of attribution.²⁸⁹ All the while, at least one Second Circuit decision, NXIVM Corp. v. Ross Institute, has mandated that good faith be considered by any court conducting a fair use analysis.²⁹⁰

The Ninth Circuit has also cited the failure to provide authorial attribution as an important factor weighing against fair use. In Marcus v. Rowley, the court hewed to Harper & Row’s good faith edict in making attribution a part of the first fair use factor.²⁹¹ Thus, the defendant’s failure to provide credit weighed against a finding of fair use.²⁹² As in Weissmann, the complete absence of any pecuniary harm and the use of the work in an academic setting did not trump the failure to credit.²⁹³ Meanwhile, in Narell v. Freeman, the author of a best-selling novel, Cynthia Freeman, was caught having lifted, word-for-word, portions of her work from a previously published book by Irena Narell about the history of Jewish migration to San Francisco.²⁹⁴ Although the Ninth Circuit ultimately found that the misappropriated sections were largely factual in nature and not protectible expression, it nevertheless addressed the issue of fair use. And while it ultimately found Freeman’s actions protected by the fair use doctrine, it held that the first factor “weigh[ed] heavily against Freeman because she did not acknowledge in her work that she had consulted Our City in writing Illusions.”²⁹⁵

The Narell court cautioned that acknowledgment would not, by itself, excuse infringement.²⁹⁶ And that has certainly proven true in other cases. For example, when a luxury fashion designer pushed back against claims that it had infringed a photograph of a model wearing its clothing, it advanced its fair use defense by pointing out that it had credited the photographer. The court demurred, noting that

Defendant has not pointed to any precedent supporting its theories that because Defendant credited the photographer in the caption of the Photograph or because Plaintiff hired the model to wear Defendant’s clothing, Defendant has a right to use the Photograph. Simply put, attribution is not a defense against copyright infringement.²⁹⁷

Even there, however, the court reaffirmed the value of attribution in the fair use calculus by citing to Narell favorably and noting that, while “acknowledgement does not itself excuse infringement,” a “finding [of] failure to properly attribute copyrighted material weighs against fair use.”²⁹⁸

5. The Implicit Role of Attribution in Transpurposive Use Cases

Beyond the case law from the Second and Ninth Circuits explicitly embracing attribution as a factor, there are instances where crediting has played an implicit role in fair use determinations. This is particularly true in a body of recent cases involving technology-related transpurposive uses excused by courts under the defense. So, for example, in Kelly v. Arriba Soft Corp., the Ninth Circuit blessed the unauthorized creation of thumbnail versions of online images to facilitate search engine functionality.²⁹⁹ This judgment was famously reaffirmed in Perfect 10, Inc. v. Amazon.com, Inc., when the Ninth Circuit found that Google’s creation of thumbnails for its search engine was also protected.³⁰⁰

The Kelly suit resulted from Arriba’s practice of crawling websites and indexing them by creating thumbnail versions of images that it found on those sites.³⁰¹ Arriba would then provide these thumbnails to its users, as relevant, in results on its search engine.³⁰² Photographer Leslie Kelly, a chronicler of the American West in her images, objected and sued for infringement. The Ninth Circuit, however, held that Arriba’s activities constituted fair use and the attributive nature of Arriba’s use helped propel both the first and fourth factors.

On the first factor, the court placed great weight on the fact that the use of the photographs was both transformative and attributive. Unlike the original images, which were intended to inform and provide visual enjoyment, Arriba’s thumbnails served no aesthetic purpose and, instead, functioned solely as “a tool to help index and improve access to images on the internet and their related web sites.”³⁰³ Here, the attributive characteristics of Arriba’s thumbnails become important, as they were instrumental to the transformative functionality they embodied. As the court noted, clicking on thumbnails would produce an “Images Attributes” page that would provide a link back to the original page, which was the photographer’s home page, where sourcing information and attribution would naturally follow.³⁰⁴ If the thumbnails did not produce sourcing and attribution, they would not serve a true indexing purpose and, consequently, they would not promote the locational function of search engines.³⁰⁵

As for the fourth fair use factor, the court found no market harm precisely because of the link-back attribution feature: “By showing the thumbnails on its results page when users entered terms related to Kelly’s images, the search engine would guide users to Kelly’s web site rather than away from it.”³⁰⁶ Steering users to the home webpage for the original source of the photographs would then provide them with crediting and attribution information and, if they were interested, the ability to license. Although the Kelly court never invoked the language of crediting, attribution played an implicit role in permitting its creation and use of thumbnails under the fair use doctrine.³⁰⁷ If the thumbnails were created without an ability to link back to the original source (where attribution would be given), they would be neither “transpurposive”³⁰⁸ nor without market harm.

Similarly, when evaluating whether Google’s creation of cached copies of websites and the images of them for its search engine would be excused from infringement liability, the court in Field v. Google Inc., drew on prior Ninth Circuit authority³⁰⁹ and the open-ended language of the Copyright Act³¹⁰ to find authority to weigh as a fifth factor in the fair use calculus “a comparison of the equities.”³¹¹ Notably, the equities and good faith that mattered to the court revolved around Google’s decision to provide a link back to cached websites—a key mechanism for digital attribution.

6. Attribution and Copyright Clearance Norms

Finally, the copyright norms we hold most dear as a society also support attribution as a mitigating factor in practices that might otherwise constitute infringement. For example, although the practice of quotation literally reproduces and distributes copyrighted material without permission, notwithstanding the antics of the James Joyce Estate,³¹² it is universally viewed as per se fair use. Indeed, the decision that gave rise to the fair use defense in the first place, Folsom v. Marsh, announced the obviousness of this proposition when Justice Story wrote that “no one can doubt that a reviewer may fairly cite largely from the original work, if his design be really and truly to use the passages for the purposes of fair and reasonable criticism.”³¹³Quotation inherently involves attribution. The use of inverted commas around a sentence directly indicates that the sentence’s origins lie with a third party and not with the author of the text that one is reading. Critically, those inverted commas are then accompanied by some form of attribution. Admittedly, the attribution is part of the transformative function of quoting. After all, criticism or commentary about someone else’s work cannot occur unless that other work is identified. But the equitable nature of a quotation—giving attribution—distinguishes it from the act of taking someone else’s words without permission in the exact same way but without attribution—an act that can amount to infringement. Or, to put it in the form of a Zen-like koan:

Q: What is a quotation without quotation marks?

A: An infringement.

When using portions of someone else’s work, a key differentiator between infringement and fair use is the act of attribution.

Common beliefs about copyright law reflect our mores (even when they do not entirely match up with the law), and these popular notions have also long viewed attribution as a factor in what actions should or should not constitute infringement. As any copyright practitioner knows, popular misconceptions about fair use abound.³¹⁴ Members of the public will often cite a particular bright-line threshold of use (no more than five percent of a work, for example) as providing insulation from infringement liability; they will claim that, so long as one does not profit from unauthorized exploitation of a copyrighted work, it constitutes fair use; or they will contend that any educational use automatically constitutes fair use. Of course, each of these absolute statements is wrong. But the beliefs are all based on a kernel of truth: the less one uses of a work, the less one profits from an unauthorized exploitation, and the more academic a use, the more likely it is to constitute fair use. The same dynamic is at play with another popular myth: that giving proper credit can insulate you from infringement liability for the unauthorized exploitation of someone else’s work.³¹⁵ While this notion is obviously incorrect, it is not entirely without basis. Although it may be infringing just the same, a credited use is indubitably more fair than an uncredited use, as the former better complies with societal norms against plagiarism and advances authorial interests in attribution. As such, the former is more likely (even if marginally so) than the latter to enjoy a viable fair use defense.

For example, consider a recent controversy at the intersection of intellectual property and cultural appropriation. In 2021, Addison Rae Easterling, a popular social media influencer, appeared on The Tonight Show to “teach” Jimmy Fallon eight of the most popular dances trending on TikTok and other social media sites. Although the dances can enjoy copyright protection as choreographic works,³¹⁶ the routines were not licensed from their creators, and, to make matters worse, Easterling and Fallon originally failed to give any credit at all to the originators of the dances. As Kamilah Moore, an entertainment attorney and the chairperson of the California Assembly’s Reparations Task Force, has noted, this misstep was particularly pernicious because of its racial valence: it “received major backlash” because white TikTok superstars “have often gained notoriety and received millions of views by parroting dance routines primarily created by Black creators and other creators of color” while failing to provide “proper attribution in the marketplace.”³¹⁷ Easterling and Fallon’s unauthorized recreation of the dances could well constitute fair use, but there is a vast difference between an unlicensed use that is also uncredited versus one that is at least attributive. Recognizing this and responding to public pressure, Fallon subsequently attempted to make amends by hosting the dance creators in a later broadcast of his show.³¹⁸ Given the importance of correcting for persistent gaps in crediting that troublingly fall along racial, gender, and socioeconomic lines as well acknowledging the economic value of proper attribution,³¹⁹ a fair use regime that incorporates attribution as a factor would incentivize users of intellectual property to at least recognize the cultural influencers from whom they draw.

As this survey of the fair use landscape and extant jurisprudence has shown, acknowledged or not, crediting is already an implicit fair use factor. The only remaining question is to what degree it is or should be. That query provides rife fodder for future scholarship, as the weight accorded to attributive use, just like the other fair use factors in section 107, would be something left firmly to the discretion of judges who can consider the particular context in an adaptive and holistic manner.

CONCLUSION

The Supreme Court decided Dastar almost twenty years ago. Since that time, the sky has admittedly not fallen.³²⁰ As such, it would be hyperbole to suggest there is some kind of pressing emergency to address the absence of attribution rights. Nevertheless, as we have detailed, the lack of substantive legal protection for crediting in the post-Dastar era has impoverished the responsiveness of our intellectual property regime to the interests and motivations of authors. With this in mind, change through legislation would face difficult odds. After all, it took almost a century for the United States to accede to the Berne Convention and, when it did, that only sparked the most minimal of efforts to comply with Berne’s attribution requirements through the relatively limited scope of VARA. The most significant legislative efforts on attribution in the past generation came through the falsification, removal, and alteration of CMI provisions passed as part of the DMCA. But even there, facilitation of infringement, rather than vindication of crediting interests, drove the statute—a fact made clearly by the claims’ onerous double-scienter requirements. As such, it would be disingenuous to fail to recognize that the prospects for legislative action for broader crediting protection are dim, at best. Moreover, there are good reasons to doubt whether the benefits of providing affirmative attribution rights either by overruling Dastar or by providing an independent cause of action for crediting under the Copyright Act would outweigh the risks. Instead, change can come in another, more incremental fashion—one that averts key dangers of an affirmative cause of action for crediting, has grounding in the existing jurisprudence, and could occur without legislation action.

A generation ago, Pierre Leval’s Toward a Fair Use Standard forced a first major change in fair use jurisprudence. I argue for a second. Like the implementation of transformative use, attributive use fits comfortably into the existing jurisprudence on fair use, speaks to the purpose and character of the use and even market harm factors, and ultimately supports the underlying purpose of the overall copyright regime: promotion of progress in the arts. Since fair use only represents a defense to infringement, such an admittedly restrained approach still tethers attribution to infringement and, as such, it does not represent a complete victory for the independent value of crediting. Nevertheless, as the success of Leval’s appeal to transformative use shows, such an entreaty for change can have an impact. Moreover, if implemented, recognition of attributive use would promote further development of a culture of crediting, a particularly important move at the dawn of the digital age, when all individuals make daily (infringing) use of copyrighted works thousands of times per day.³²¹ Ultimately, therefore, the attributive use doctrine could not only enable fair use to operate in a way that is more consistent with the utilitarian design of our copyright regime, but it can also help build support for further recognition of attribution rights in the future.

96 S. Cal. L. Rev. 1

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John Tehranian*

* A.B. Harvard, J.D. Yale Law School. Paul W. Wildman Chair and Professor of Law, Southwestern Law School; Visiting Professor of Law, University of California, Los Angeles (“UCLA”) School of Law.