Notes Archives – Southern California Law Review

The Default Rule and Due Process: Diverging Interpretations of “The Charging Document” Requirement in Extradition Treaties

July 2025July 2025Jacob M. Karlin*

INTRODUCTION

The United States is a party to over one hundred bilateral extradition treaties with foreign governments.¹ These treaties allow the U.S. and foreign countries to facilitate the transfer of individuals accused of crimes to the jurisdictions seeking to prosecute them.² Extradition is an ancient practice: processes resembling extradition have existed since antiquity, and the United States has entered into versions of bilateral extradition treaties and received extradition requests since shortly after the country’s founding in the 18th century.³

As the world continues to grow smaller by means of technological advances and ever-increasing accessibility to international travel, extradition has become increasingly important as a means of international law enforcement.⁴ This growth in extradition has forced the judiciary of the United States to face unique issues of law that relate to the constitutional rights of the individuals whose extradition from the United States is requested by foreign countries. In that same vein, the recognition and enforcement of international human rights law has grown in the last century, and as rules of international human rights law have become binding on the United States judiciary, courts are faced with new, conflicting demands of both extradition requests and international law-derived rights of relators (that is, the individuals whose extradition is requested by foreign countries).

In 2023, two federal circuit courts analyzed the phrase “the charging document” in two bilateral extradition treaties: the Fourth Circuit reviewed an extradition treaty between the United States and Lithuania, and the Ninth Circuit reviewed an extradition treaty between the United States and Peru. The Fourth and Ninth Circuits disagreed over how to approach the phrase and its effect on the extradition process. In Manrique v. Kolc, the Ninth Circuit found “the charging document” requirement in the U.S.-Peru Extradition Treaty to be ambiguous and subject to multiple interpretations. Utilizing court precedents on treaty interpretation, the Ninth Circuit deferred to the executive branch’s interpretation of the phrase. In doing so, the court found that Peru had provided the necessary documents to satisfy the “charging document” requirement. On the other hand, the Fourth Circuit found that the phrase was clear and unambiguous, holding in Vitkus v. Blinken that the judiciary was compelled to decline Lithuania’s extradition request upon analyzing the “charging document” requirement in the U.S.-Lithuania Extradition Treaty. The Fourth Circuit found that the inclusion of “the charging document” in the U.S.-Lithuania treaty was a requirement that Lithuania had not satisfied when it had presented prosecutorial documents to the Secretary of State in an extradition request. The court rejected the Secretary of State’s argument as to the adequacy of Lithuania’s submitted documents.

The discrepancy between these two circuit courts illustrates how the judiciary’s deference to the executive branch (a deference codified by the Supreme Court in the early 20th century and referred to in this Note as the “default rule”) in matters of extradition treaty interpretation has manifested in the 2020s. At least twenty-eight extradition treaties that the United States has entered into with foreign nations reference the “charging document” in their lists of documents that a foreign nation is required to provide in an extradition request to the United States.⁵ As the judiciary will likely be called to interpret the “charging document” in future extradition requests, the judiciary’s decision to give deference to the executive branch in interpreting this phrase merits attention. The interpretation of the “charging document” requirement implicates due process concerns of relators, given that the charging document requirement ensures that the country requesting extradition complies with the procedure outlined in its treaty. This Note argues that courts, when faced with extradition requests from countries whose treaties include the “charging document” requirement, are bound by precedent to apply the default rule in a way that may conflict with a relator’s constitutional, due process rights. This Note also contends that this form of deferential interpretation to the executive branch may conflict with the fundamental right of due process afforded to relators by international law. However, departing from executive deference affects the United States’ foreign relations with other sovereign countries—this Note will briefly explore this ramification as well.

Part I of this Note provides an overview of how extradition treaties are utilized by the United States and how they are interpreted by both the executive and judicial branches. In brief, the statute governing extraditions in the United States bestows the judiciary with the responsibility of certifying an individual for extradition: the judiciary interprets the relevant extradition treaty to determine whether the person being sought by the requesting country may be certified as extraditable.⁶ Once the court certifies the extraditability of a relator, the Secretary of State has the discretion to either extradite the relator or deny the foreign country’s extradition request.⁷ Importantly, although extradition is neither a full trial nor a solely administrative function, relators are deemed to have certain constitutional rights when subject to extradition proceedings in the United States.⁸ However, the unique procedural characteristics of extradition do not align with notions of constitutionally mandated due process, as relators do not benefit from the constitutional protections that courts have recognized for criminal defendants.⁹ Judicial precedent also mandates that courts defer to the executive branch’s interpretation of extradition treaties.¹⁰ This deference has created friction between the judicial and executive branches, as the judiciary has been tasked with balancing relators’ due process rights against the executive branch’s foreign relations commitments to other sovereign nations. As the fundamental right to due process has been developed by international human rights bodies over the course of the 20th century, the judiciary’s deference to the executive branch has come into conflict with the advancement of due process as an international human right as well.¹¹

Part II surveys two appellate court cases decided in 2023, Vitkus v. Blinken and Manrique v. Kolc. In these cases, the Fourth and Ninth Circuits both analyzed “the charging document” requirement in extradition treaties, and in doing so, they exemplify the divergent approaches to granting deference to the executive branch in extradition procedures. In their divergent outcomes, these cases demonstrate the impact the default rule may have on a court’s decision to determine whether a relator is extraditable.

Part III of this Note analyzes the decisions of the Fourth and Ninth Circuits in Vitkus v. Blinken and Manrique v. Kolc. In analyzing the decisions, this Note argues that the Fourth Circuit’s avoidance of the default rule in reviewing “the charging document” requirement protects the relator from a potential infringement of their constitutional due process rights under domestic law, even at the cost of the executive branch’s ability to maintain foreign relations. The Fourth Circuit’s interpretation also respects the relator’s fundamental right to due process as established by international human rights law. This Note contends that the Fourth Circuit’s interpretation of a bilateral extradition treaty is one example of how the judiciary should approach the “charging document” requirement, notwithstanding other circumstances in the extradition process.

I. BACKGROUND

A.Executing Bilateral Extradition Treaties

The United States and foreign countries usually coordinate the extradition of relators through bilateral extradition treaties. A treaty is “[a]n agreement formally signed, ratified, or adhered to between two countries or sovereigns; [or] an international agreement concluded between two or more states in written form and governed by international law.”¹² In the United States, treaties are “international agreements made by the President with the advice and consent of the Senate in accordance with Article II, [S]ection 2 of the Constitution of the United States.”¹³ Extradition treaties are treaties that contain the general, agreed-upon terms of the extradition process that both signatories must abide by. There are various forms of extradition treaties¹⁴: there are bilateral extradition treaties, which are “concluded between [a country adopting the law] and a foreign country,” and multilateral treaties, which contain “provisions governing extradition of persons who are present in the territory of [country adopting the law].”¹⁵

The United States has entered into extradition agreements with foreign countries since shortly after its founding in the 18th century.¹⁶ The United States primarily executes bilateral extradition treaties.¹⁷ This means that for the United States to engage in an extradition proceeding, the United States usually must have executed an extradition treaty directly with the foreign country requesting extradition in order to consider an extradition request.¹⁸

The extradition process falls under the umbrella of the United States’ foreign relations responsibilities and therefore, extradition is considered by the United States as a responsibility of the executive branch. The executive branch is authorized to manage the extradition process “by virtue of its constitutional power to conduct foreign relations.”¹⁹ The treaties that the executive branch enters into on behalf of the United States can be divided into two kinds of treaties: self-executing treaties, which are akin to legislative acts, and non-self-executing treaties, which are treaties that the federal legislature is required to ratify and enforce.²⁰ Self-executing treaties do not need legislation to be enacted, as their self-executing nature imbues them with the power of domestically-created federal legislation that supersedes both state law and prior federal law.²¹ Bilateral extradition treaties are self-executing.²² Upon ratification of the bilateral extradition treaty with a foreign government, the legislative branch enacts statutes, based on the terms of the extradition treaties, that govern the procedures by which the executive and judicial branches respond to extradition requests.²³ When domestic legislation and treaty provisions conflict, treaty provisions “prevail.”²⁴

A pertinent aspect of treaty enforcement for purposes of this Note is the inclusion of the “documents required” section in an extradition treaty. In the modern era of extradition treaty drafting, extradition treaties usually list the required documents a requesting foreign country must provide to the Secretary of State to initiate proceedings in the United States.²⁵ Under the Revised Manuals on the Model Treaty on Extradition and on the Model Treaty Mutual Assistance in Criminal Matters (the “Manual”), the UN provides recommendations on drafting extradition treaties, including how parties should list the documents that accompany an extradition request:

[T]he request must contain a precise description of the person sought; a copy of the applicable legal provisions (or a statement of the relevant law), a statement of the penalty that can be imposed for the offence; proof of the enforceable sentence or of the warrant of arrest (as the case requires) and any other documents having the same force; and an exposition of the facts for which extradition is requested (including a description of the acts or omissions constituting the alleged offence and an indication of the time and place of its commission). A reference to the basis of jurisdiction has been found to be useful. Additional requirements apply where the person has been convicted of an offence in his or her absence and where the person has been convicted of an offence but no sentence has yet been imposed.²⁶

The Manual explains that in order “[t]o obtain speedy and efficient execution of requests, [the treaty] should provide a precise description of the information to be included in the request,” and that “[t]he treaty will then act as a guide for those who are called upon to provide the information.”²⁷ Given the discrepancy between countries’ legal systems, the Manual recommends that the negotiating parties draft the treaty with reference to specific documents relevant to each country’s criminal procedure to avoid erroneous interpretation of foreign criminal procedure.²⁸ Although guidance on how parties should draft treaties is publicly available, drafting histories of treaties are rarely accessible to the public.²⁹ As such, this Note does not address how bilateral extradition treaties are negotiated and executed by two sovereign nations.

B.The Extradition Process in the United States: Foreign Requests

The extradition process is initiated when a foreign government makes an extradition request to the U.S. State Department. Usually, a foreign government makes this request by providing the supporting documents that are listed in the “documents required” section of the relevant extradition treaty.³⁰ The procedure for responding to an extradition request is codified in 18 U.S.C. § 3184.³¹ Under 18 U.S.C. § 3184, once a foreign country with an extradition treaty with the United States has submitted an extradition request to the Department of State, a warrant is issued for the wanted individual.³² Once the individual is located and arrested, “any justice or judge of the United States” may hear evidence of the “criminality” being heard and considered, and “[i]f, on such hearing, he deems the evidence sufficient to sustain the charge . . . he shall certify the same . . . to the Secretary of State . . . for the surrender of such person, according to the stipulations of the treaty or convention.”³³

When a court hears evidence of the criminality of an individual sought by a foreign government, “the extradition magistrate examines the treaty to ascertain whether it allows extradition in the circumstances presented by the relator.”³⁴ Generally, the magistrate is required to review whether the government has established:

(1) probable cause that the relator committed the alleged offense at the requesting country; (2) the offense upon which extradition is requested is extraditable according to the applicable treaty; (3) the offense in question constitutes a crime [in] both the requesting country and the United States (“dual criminality”); (4) an enforceable extradition treaty exists between the United States and the requesting country; and (5) the arrested individual is the person sought by the requesting country.³⁵

The extradition court does not determine the “guilt or innocence” of the relator.³⁶ The extradition court is limited to hearing the evidence of a case to determine whether “the facts alleged constitute a crime in the prosecuting country”; interpreting the provisions of the treaty to ensure their applicability to the extradition request; and ensuring that the extradition process complies with the relevant constitutional provisions.³⁷ Given its responsibilities, the extradition court’s role in the extradition process is akin to its role in a preliminary hearing in United States criminal court.³⁸ Following the extradition court’s findings on the extradition request, the extradition court may enter “an order certifying extradition to the Secretary of State.”³⁹ Once the judiciary certifies the relator for extradition, the certification is passed on to the Secretary of State, who has the ultimate discretion to either accept or deny the extradition request.⁴⁰

The judiciary’s role in extradition proceedings is somewhat “constrained” by the executive branch.⁴¹ The judiciary is “limited because it cannot enjoin, prohibit, or mandate the executive’s negotiation of an agreement or a treaty, nor can it enjoin or mandate the executive’s exercise of discretion to request a relator’s extradition or to refuse to grant extradition although the terms of the applicable treaty have been satisfied.”⁴² The court reviewing a request for extradition does not determine whether the accused is innocent or guilty, as the extradition process only serves to begin the “criminal proceedings against an accused” individual—the foreign court ultimately decides the guilt or innocence of the accused.⁴³ Therefore, the extradition court in the United States is required to review whether a foreign country’s extradition request satisfies the provisions of the relevant treaty “and that no valid defense or exception to extradition is in order.”⁴⁴

Importantly, extradition orders by the extradition court can only be challenged through petitions for writs of habeas corpus,⁴⁵ and habeas petitions “can challenge detention by the government if [the detention] is in violation of the Constitution, laws or treaties of the United States.”⁴⁶ In general, when considering a habeas petition following a magistrate’s extradition order, the reviewing court considers the following factors: (1) the jurisdiction of the judge presiding over the extradition proceeding; (2) the jurisdiction of the relevant court over the relator; (3) the applicable treaty provisions and their requirements; (4) “the character of the crime charged and whether” the crime is included within the treaty provisions; and (5) whether the government has provided evidence to substantiate a claim of extraditability.⁴⁷

C.Extradition Treaty Interpretation in the United States

The magistrate court is responsible for reviewing an extradition treaty to determine whether the requesting country has satisfied the requirements listed in the extradition treaty.⁴⁸ When an extradition court finds that written portions of a treaty are ambiguous and subject to multiple meanings, the court is tasked with interpreting those ambiguous terms. The interpretation of treaty provisions highlights the relationship between the judiciary and the executive branches in enforcing the provisions of an extradition treaty. The executive branch “has authority to determine the interpretation of an international agreement to be asserted by the U.S. in its relations with other states,” but “[c]ourts in the U.S. have final authority to interpret an international agreement for purposes of applying it.”⁴⁹

The judiciary analyzes extradition treaties in the same manner that it analyzes contracts and statutes.⁵⁰ Courts begin their analysis of treaties by first examining the text of the treaty, or the four corners of the document.⁵¹ Much like the interpretation of statutes or contracts, “[w]hen interpreting a treaty, [courts] begin with the text of the treaty and the context in which the written words are used.”⁵² If the court finds that a treaty’s language is clear and unambiguous, the court will cease its analysis of the meaning of the words of the treaty and “apply the words of the treaty as written.”⁵³

When interpreting treaty provisions, courts may find that the treaty provisions, much like statutory provisions, are ambiguous. When courts encounter ambiguous provisions in treaties, they expand their scope of focus to incorporate intrinsic and extrinsic evidence to evaluate the text of the treaty “in light of its object and purpose.”⁵⁴ In understanding ambiguous terms, courts are meant to undertake an interpretation in a “ ‘holistic endeavor’ and must account for the statute’s ‘full language, text, language as well as punctuation, structure and subject matter.’ ”⁵⁵ In ascertaining ambiguous terms in a treaty, courts “may look . . . to the history of the treaty, the negotiations, and the practical construction adopted by the parties.”⁵⁶

One of the most important tools of extradition treaty interpretation used by the judiciary, and which scholars and courts have both criticized and utilized since the Supreme Court issued its opinion in 1933, is the extradition treaty interpretation principle established in Factor v. Laubenheimer.⁵⁷ Factor v. Laubenheimer involved an extradition request by the United Kingdom for Factor, who had allegedly committed a financial crime there and fled to Illinois. Factor argued that because Illinois did not have a comparable criminal statute, the extradition treaty between the United States and the United Kingdom could not be used to extradite him.⁵⁸ In one of the most influential and long-standing guides on how courts should interpret treaties, the court in Factor considered whether a broad or narrow interpretation of a treaty should be utilized by an extradition court:

In choosing between conflicting interpretations of a treaty obligation, a narrow and restricted construction is to be avoided as not consonant with the principles deemed controlling in the interpretation of international agreements. Considerations which should govern the diplomatic relations between nations, and the good faith of treaties, as well, require that their obligations should be liberally construed so as to effect the apparent intention of the parties to secure equality and reciprocity between them. For that reason if a treaty fairly admits of two constructions, one restricting the rights which may be claimed under it, and the other enlarging it, the more liberal construction is to be preferred.⁵⁹

This construction—that when faced with two possible constructions of an ambiguous term in a treaty, courts should broaden the interpretive scope of the extradition treaty in favor of the executive branch—is referred to as the default rule of extradition treaty interpretation.⁶⁰ This rule has been used to argue that, as the purpose of the extradition treaty is to extradite individuals, courts should interpret treaty provisions broadly to fulfill that purpose.⁶¹ This principle has been articulated by various courts since 1933, such as the Sixth Circuit in the 2016 case Martinez v. United States, in which the court stated that “ambiguity in an extradition treaty must be construed in favor of the ‘rights’ the ‘parties’ may claim under it,” and in extradition proceedings, the parties are the countries and the “right the treaty creates is the right of one country to demand the extradition of fugitives in the other country,” as “[t]he point of an extradition after all is to facilitate extradition, as any country surely would agree at the time of signing.”⁶²

The judiciary’s deference to the executive’s interpretation of international treaties is noteworthy.⁶³ This deference stems from the executive branch’s role in foreign relations. Since United States v. Curtiss-Wright Export Corporation in 1936, the U.S. Supreme Court has codified the executive branch’s power in foreign relations by proclaiming the “exclusive power of the President as the sole organ of the federal government in the field of international relations.”⁶⁴ Later, in Kolovrat v. Oregon, the Supreme Court stated that “[w]hile courts interpret treaties for themselves, the meaning given them by the departments of government particularly charged with their negotiation and enforcement is given great weight.”⁶⁵ Additionally, courts will consider how the parties to the treaty constructed and interact with the treaty, as such behavior informs its application.⁶⁶

There are foreign policy concerns when courts are called to interpret extradition treaties. Courts are likely to give deference to an executive branch’s interpretation given its role “in diplomatic negotiation with other countries, on the ground that the U.S. should speak with one voice, than to one adopted by the Executive in relation to a case before the courts, especially where individual rights or interests are involved.”⁶⁷ There are also concerns that the executive branch, in finding that an extradition request is inadequate, should not “expand the obligations of another nation in a treaty.”⁶⁸ In 2020, the Supreme Court noted that it has “never provided a full explanation of the basis for [its] practice of giving weight to the Executive’s interpretation of a treaty. Nor [has it] delineated the limitations of this practice.”⁶⁹ As it is generally understood that United States’ compliance with extradition treaties is beneficial to U.S. foreign policy, the executive branch’s interpretation of an extradition treaty that favors a relator’s extradition has considerable influence in extradition court proceedings.⁷⁰

D.Due Process in the Extradition Process

Relators who are physically present in the United States and who a foreign government wishes to extradite are subject to the Due Process Clause of the Fifth Amendment of the U.S. Constitution.⁷¹ Relators are also the beneficiaries of due process under international law. It is worthwhile to explore the domestic and international understandings of due process: both understandings of due process apply to extradition proceedings that occur in the United States.

Procedural due process “asks whether the government has followed the proper procedures when it takes away life, liberty or property.”⁷² Due process is contextually dependent on the type of liberty interests over which a court or agency is ruling.⁷³ In considering due process claims, courts, depending on their context, are often compelled to balance the following factors established by the Court in Mathews v. Eldridge:

First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.⁷⁴

Although the extradition process is neither a criminal proceeding nor a trial, the extradition process affects relators’ liberty interests; relators do enjoy Constitutional rights, albeit in a different capacity than those protections the courts recognize for criminal defendants.⁷⁵ Given that extradition in the United States is a “bifurcated procedure” between the executive and judiciary branches, extradition is considered an executive process under the executive branch of the government⁷⁶, and the judiciary is tasked with applying its expertise in statutory interpretation, evidentiary requirements, and understandings of probable cause as well as other related legal concepts.⁷⁷ The Ninth Circuit has found that extradition courts have discretion in conducting their proceedings—as relators are not criminal defendants in United States criminal courts, the courts do not need to follow the procedural safeguards enforced in criminal proceedings, such as the Federal Rules of Civil Procedure and the Federal Rules of Evidence.⁷⁸ Rather, their role is limited to “ensur[ing] that the government complies with the requirements of the extradition treaty and the extradition statute.”⁷⁹ The judiciary is mindful that the extradition process is an executive function, and thus attempts to balance the interests of the relators with the interests of the executive branch.⁸⁰

The Due Process Clause is applicable to the liberty interests of relators, as “the consequences of extradition—the forceful surrender of a relator to a foreign country for criminal prosecution and imprisonment—affect” a relator’s Constitutional rights.⁸¹ This is because “[r]elators face tremendous liberty losses” upon extradition, as the process is aimed at surrendering a relator to a foreign jurisdiction for criminal prosecution and imprisonment.⁸² Therefore, the court hearing the extradition case must ensure that the extradition proceeding comports with a relator’s right to due process “in a manner consistent with the Constitution.”⁸³

As the purpose and structure of an extradition hearing differs from those of domestic criminal and civil proceedings, courts have deemed that the amount of procedures, and therefore due process, owed to relators differs from the procedures that are owed to criminal defendants.⁸⁴ Unlike its application of the Mathews analysis to other categories of cases that involve the deprivation of liberty, extradition courts do not uniformly apply the Mathews analysis factors of due process to determine whether the relator has sufficient due process.⁸⁵ In reviewing challenges to the constitutionality of extradition proceedings, the judiciary has found that “the totality” of the proceedings conducted by both judicial and executive branch “comports with the requirements of the Fifth Amendment, in light of the substantial process afforded in the judicial phase and the executive’s broad discretion to decide matters of foreign policy.”⁸⁶ Courts find that the procedural requirements of 18 U.S.C. § 3186 and § 3184 are sufficiently protective of a relator’s due process rights and commensurate with the due process owed to relators to ensure that a relator is not extradited entirely “by Executive whim,” as the executive branch exercises its discretion “only if the magistrate determines that there is ‘evidence sufficient to sustain the charge under the provisions of the proper treaty.’ ”⁸⁷ The D.C. District Court rationalized the adequacy of the procedural due process given to relators in extradition proceedings:

[T]he risk of an erroneous deprivation absent an additional hearing conducted by the State Department and the furnishing of any unclassified documents relied upon is minimal . . . given [the relator’s] active role . . . in developing the record in his judicial proceedings and challenging the key determinations there, not to mention his ability to supplement the record in whatever way he wished before the State Department. Further, requiring the State Department to provide the additional opportunities for participation . . . would unnecessarily overtax Department resources without meaningfully expanding the scope of information considered and risks chilling the Department’s ability to freely obtain information and assurances from relevant foreign governments, which might be less willing to speak frankly if the information disclosed was not kept confidential.⁸⁸

International law also affords due process rights to relators in the extradition process; due process is a fundamental human right under customary international law.⁸⁹ For context, customary international law can be defined as the “general and consistent practice of states followed by them from a sense of legal obligation.”⁹⁰ The United States has signed the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the Convention on Torture, the Hostage Convention, and, along with “other treaties, the United States has agreed, with certain reservations, to be bound by their provisions and to incorporate them into U.S. law.”⁹¹ Within the United States, the federal judiciary has “applied rules of customary international law in countless cases since the founding of the Republic . . . treating customary international law rules in the same manner as U.S. treaties and other international agreements.”⁹² The United States is bound by customary international law on its treatment of human rights, as human rights standards “are binding [on the federal judiciary] as jus cogens (i.e., overriding principles) under international law”—human rights treaties “may provide guidance in determining contemporary human rights norms that should inform a court’s decisions in extradition proceedings.”⁹³ For the most part, as the judiciary has “treated rules of customary international law as rules of federal law,” the judiciary is compelled to uphold customary international law.⁹⁴

On the other hand, the principles of international law are made up of “rules of international law” that are “accepted as such by the international community of states . . . by derivation from general principles common to the major legal systems of the world.⁹⁵ Under principles of customary international law, due process is defined as “procedural norms . . . that are applicable to . . . limit governmental powers”—these norms include “[t]he right of equal access to courts, the right to equal treatment of litigants, the right to an effective remedy and the right to a fair hearing.”⁹⁶ Other aspects of the due process under international law include that “there shall be no common interest between the parties and the judge”⁹⁷ and that each party has a “reasonable opportunity of presenting [their] case . . . under conditions which do not place [them] at substantial disadvantage vis-à-vis [their] opponent.”⁹⁸ Importantly, as explored in Part III, another element of international due process is the “assurance that ‘the judiciary [is not] dominated by the political branches of government or by an opposing litigant . . . .’ ”⁹⁹ Charles T. Kotuby, Jr. and Luke Sobota, in General Principles of Law and International Due Process, outline the human rights conventions that affirm the obligation of sovereign nations to uphold the fundamental due process right of individuals:

The Inter-American Convention on Human Rights (IACHR)—building upon the principles set forth in “the Charter of the Organization of American States, in the American Declaration of the Rights and Duties of Man, and in the Universal Declaration of Human Rights”—imposes upon States the obligation to “respect the rights and freedoms” it enshrines “without any discrimination.” Included is the “right to a hearing, with due guarantees and within a reasonable time, by a competent, independent, and impartial tribunal, previously established by law.” The European Convention for the Protection of Human Rights and Fundamental Freedoms follows a similar pattern, providing . . . that “everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”¹⁰⁰

Within the U.S., the intersection of extradition and due process is especially poignant under the rule of non-inquiry. Non-inquiry is the concept that the judiciary is not compelled to inquire into the adequacy of the foreign proceedings to ensure that the proceedings in the foreign jurisdiction preceding the extradition request comport with “fundamental rights to due process”—this rule raises concerns about the judiciary’s role in complying with international due process requirements when responding to extradition requests from foreign jurisdictions.¹⁰¹ In reviewing the procedures of the requesting country, the Ninth Circuit has said that it gives “credence to foreign proceedings” and that it declines “to rule on the procedural requirements of foreign law out of respect for other nations’ sovereignty.”¹⁰² In doing so, the Ninth Circuit has understood the risk of “erroneous interpretation” of a foreign country’s legal system.¹⁰³ Courts generally see that the Secretary of State’s understanding of the treaty and of foreign criminal procedure should be considered as part of its considerations when interpreting a treaty document. This becomes especially important when questions regarding the foreign country’s political intentions for extraditing individuals are brought before the U.S. judiciary.

Relators often argue that the extradition proceedings lack due process even though the extradition process is not considered a full-fledged criminal trial.¹⁰⁴ These complaints relate to the statutes of limitations of crimes committed in foreign countries, the discretion of the court to consider whether the requesting country might torture the relator, the admissibility of hearsay evidence in extradition proceedings, and other findings that the procedure owed to relators is inadequate.¹⁰⁵ However, relators have little redress when they argue that extradition proceedings are violative of due process, as the standard for finding a procedural defect in the process is high: this is due to the unique nature of an extradition proceeding as a proceeding akin to a preliminary hearing. The judiciary often finds that extradition processes should not be encumbered by more procedure.¹⁰⁶ The judiciary has found that,

[S]o long as the United States has not breached a specific promise to an accused regarding his or her extradition, and bases its extradition decisions on diplomatic considerations without regard to such constitutionally impermissible factors as race, color, sex, national origin, religion, or political beliefs, and in accordance with such other exceptional constitutional limits as may exist because of particularly atrocious procedures or punishments employed by the foreign jurisdiction, those decisions will not be disturbed.¹⁰⁷

Accordingly, as the discretion to extradite lies with the executive branch, “[t]he judiciary has no authority to impose requirements on the decision-making process that go beyond the scope of what is required under the Constitution.”¹⁰⁸

II. INTERPRETING THE “CHARGING DOCUMENT”

A.Overview of the Circuit Split

Part II of this Note explores the difference in treatment of the phrase the “charging document” which the U.S. has included in at least twenty-eight bilateral extradition treaties.¹⁰⁹ Part I outlined the history and reasoning behind the different tools of interpretation courts utilize in interpreting extradition treaties, and the due process rights that relators are afforded in the extradition process. Part II will cover how these interpretation tools have been implemented by the judiciary in its treatment of extradition treaties that include “the charging document” requirement in 2023.

In 2023, the Ninth and Fourth Circuits were charged with interpreting the phrase “the charging document” in two bilateral extradition treaties: the Ninth Circuit analyzed a bilateral extradition treaty between the U.S. and Peru, and the Fourth Circuit analyzed a bilateral extradition treaty between the U.S. and Lithuania.¹¹⁰ These cases, Vitkus v. Blinken and Manrique v. Kolc, involved foreign nationals residing in the U.S. who were wanted by foreign countries for crimes allegedly committed by the foreign nationals in their respective countries of nationality. Both cases rose to the federal circuit courts after the foreign nationals petitioned for stays and preliminary injunctions on their extradition requests. The relators in each case argued that they were not extraditable as the foreign countries did not provide “the charging document,” a document listed under the required documents section of the relevant extradition treaties that a requesting country must provide in its extradition request. The two courts diverged over how to interpret the phrase, or even whether there was a need to interpret the phrase and apply the default rule. The implications of this divergence will be explored in Part III of this Note.¹¹¹

B.Manrique v. Kolc

In 2023, the Ninth Circuit reviewed a petition filed by former president of Peru, Alejandro Toledo Manrique,¹¹² to stay Toledo’s extradition from the U.S. to Peru while appealing the denial of his petition for writ of habeas by the U.S. District Court for the Northern District of California.¹¹³ Peruvian prosecutors sought to extradite Toledo to Peru from the United States after they alleged that Toledo had committed money laundering and collusion, specifically “taking $20 million in bribes from Odebrecht, a giant Brazilian construction company that has admitted to U.S. authorities that it bribed officials to win contracts throughout Latin America for decades.”¹¹⁴ The Peruvian investigators had investigated or put on trial almost every living former president of Peru while conducting sweeping investigations of those who might have participated in the bribery with the Odebrecht company.¹¹⁵

Peru brought the accusations against Toledo in “two Prosecutor’s Decisions, documents that summarize the ongoing investigation, and in an Acusación Fiscal, a document produced at the end of an investigation that lays out the crimes allegedly committed and supporting evidence.”¹¹⁶ After the Supreme Court of Justice of Peru approved an extradition request for Toledo, the Peruvian government filed an extradition request with the United States in 2018 and sent a supplemental request in August 2020.¹¹⁷

In July 2019, a United States federal prosecutor filed a criminal complaint against Toledo, and two years later, a United States magistrate judge in the U.S District Court for the Northern District of California certified Toledo’s extradition.¹¹⁸ Separately, Toledo filed suit in the D.C. District Court to enjoin the U.S. Department of State from extraditing him to Peru, claiming that his extradition was politically motivated and that the decision to extradite him violated due process because the Secretary of State “did not ‘disclose the unclassified bases for its decisions’ or ‘afford Dr. Toledo and his counsel an opportunity to rebut those bases in a full and fair exchange of views.’ ”¹¹⁹ The District Court rejected Toledo’s arguments and wrote that the Secretary of State’s decision to extradite Toledo was based on considerations of international law on political extradition and that Toledo had been afforded adequate due process in the proceedings prior to the Secretary of State’s decision to extradite Toledo.¹²⁰ Following multiple appeals, the Ninth Circuit heard Toledo’s appeal of the denial of his writ of habeas corpus in April 2023.¹²¹

Toledo asserted that “he was not ‘charged with’ an extraditable offense because the extradition treaty requires a formal charge” and that “the ‘charging document’ Peru submitted was insufficient.”¹²² In reviewing Toledo’s appeal, the Ninth Circuit took a holistic approach to Toledo’s assertions regarding the charging document requirement within the United States-Peru Extradition Treaty. First, the Ninth Circuit analyzed the purpose of the United States-Peru Extradition Treaty, noting that “Article I of the United States-Peru Extradition Treaty provides for extradition of ‘persons whom the authorities in the Requesting State have charged with, found guilty of, or sentenced for, the commission of an extraditable offense.’ ”¹²³ Next, the Ninth Circuit provided background on Peruvian criminal procedure:

[A] Peruvian criminal proceeding has three phases: (1) preliminary or investigative, (2) intermediate or examining, and (3) trial. First, during the investigative phase, a prosecutor examines the facts and presents allegations to a judge of the Preliminary Investigation Court. When the investigation ends, the prosecutor must decide whether to dismiss the case or to issue an Acusación Fiscal and then seek a formal charge. Once a formal charge is sought, the prosecutor cannot further investigate. Second, during the examining phase, a judge of the Preliminary Investigation Court holds a preliminary hearing, during which the accused may object and present exculpatory evidence. At the end of this hearing, if the judge believes a formal charge is warranted, the judge issues an Orden de Enjuiciamiento. Finally, if an Orden de Enjuiciamiento issues, the parties proceed to a trial presided over by the Criminal Judge or the President of the Collegiate Court.¹²⁴

As Peru had issued an Acusación Fiscal in the corruption case against Toledo, the parties fought over “whether the accusations contained in the Acusación Fiscal suffice to ‘charge’ Toledo ‘with’ an extraditable offense under the Treaty.”¹²⁵ Toledo argued “that the United States-Peru treaty . . . requires ‘a copy of the charging document’ in addition to an arrest warrant.”¹²⁶ In rebutting Toledo’s assertion that a charging document was necessary and was not satisfied by the Acusación Fiscal, the U.S. government supported its argument by noting that the provision “charged with” elsewhere in the treaty was sufficient for the extraditing country to argue that a relator could be extradited without providing any specific document or official charge—therefore, the Acusación Fiscal satisfied the charging document.¹²⁷

The Ninth Circuit looked at the text of the treaty to determine the significance of the “charging document” provision within the United States-Peru Extradition Treaty in its entirety. The court found that the addition of “the charging document” was not necessary to find that Peru satisfied the requirements of the extradition treaty, finding support in Emami v. United States District Court for the Northern District and In re Assarsson. In both Emami and Assarsson, there was no “formal charge” listed in the U.S.-Sweden and U.S.-Federal Republic of Germany treaties to find that a relator might be extraditable, and as such, the requirement that there be “formal charges” in the foreign jurisdiction before the foreign country filed an extradition request was not a necessary requirement to find that the relators were extraditable.¹²⁸ The court utilized these cases even though neither case dealt with a “charging document” requirement. In Toledo’s case, the court found that “the Treaty does not mention formal charges or the Orden de Enjuiciamiento anywhere. And the requirement of a ‘copy of the charging document’—which specifies no particular document—does not define the level of formality [they] should read into ‘charged with.’ ”¹²⁹ The court found that such a reading would allow the Acusación Fiscal to be permitted as a “charging document” given that language elsewhere in the U.S.-Peru treaty equated “charged with” to “sought for prosecution,” and that the documents indicating an individual was “sought for prosecution” could encompass documents submitted before the Orden de Enjuiciamiento in Peruvian criminal proceedings—that is, the Acusación Fiscal—therefore satisfying the treaty’s requirements.¹³⁰

The Ninth Circuit furthered its analysis, finding that if “the charging document” was ambiguous, then the treaty’s drafting history and judicial precedents would assist the court in determining how to interpret the provision. The court stated that “charged with” could be broadly interpreted to mean any warrant-backed accusation presented by the Peruvian or United States governments, essentially making “the charging document” requirement null.¹³¹ The court looked to the Technical Analysis of the United States-Peru Extradition Treaty, which stated:

[T]he negotiating delegations intended that “charged” persons include those who are sought for prosecution for an extraditable offense based on an outstanding warrant of arrest, regardless of whether such warrant was issued pursuant to an indictment, complaint, information, affidavit, or other lawful means for initiating an arrest for prosecution under the laws in Peru or the United States.¹³²

The court further noted that “[their] rules of interpretation militate against reading in a requirement of particular formal charges where the treaty makes no such specification.”¹³³ Critically, the Ninth Circuit applied the default rule of treaty interpretation to Toledo’s case. Utilizing support from Supreme Court precedents, the court found that it should defer to the government agencies who were charged with negotiating and enforcing the treaty, as “such a construction enlarges the rights of the signatories and respects the interpretations given by [the] Executive Branch and the Peruvian government.”¹³⁴ The court found that because the treaty does not require that the requesting country provide formal charges to satisfy the extradition treaty’s requirements when submitting an extradition request, the Acusación Fiscal was sufficient to satisfy “the charging document” mandate. Moreover, in analyzing Peruvian criminal procedure, the court found that the Acusación Fiscal was a “charging document” as it provided a plethora of evidence, serving “the important purpose in the Peruvian system of signaling the end of discovery and moving the case from the prosecutor’s office to a judge of the Preliminary Investigation Court.”¹³⁵

In summary, the Ninth Circuit found that “the charging document” was an ambiguous term; properly interpreting it required extrinsic evidence and consideration of the two sovereign countries’ rights. Accordingly, the court relied on the draft treaty provisions and the Peruvian government’s standards around criminal procedure to analogize the Acusación Fiscal to a document that would satisfy “the charging document” requirement of the United States-Peru Extradition Treaty. It did so under the standard default rule. Because the Treaty was meant to expand the rights of the parties involved (in this case, the United States and Peru) to encourage extradition and the Treaty did not specify what document was required to extradite Toledo under the “charging document” requirement, Acusación Fiscal could be construed to be the charging document. However, as mentioned earlier in this Note, the Ninth Circuit had historically found that this approach might be prone to error.¹³⁶

Notably, as previously discussed, the Ninth Circuit utilized two cases regarding two treaties which did not include “the charging document” requirement to find that the Secretary of State had satisfied the requirements to extradite Toledo. By doing so, the court diminished the requirement that Peru provide a “charging document” when it found that the treaty had allowed for the extradition of individuals who were simply “charged with” extraditable offenses. Ultimately, this approach to “the charging document” requirement in the United States-Peru Extradition Treaty hints at the judiciary’s use of the default rule to ensure that the rights of sovereign nations are not infringed upon when they file an extradition request with the United States. After the Ninth Circuit’s decision, Toledo surrendered to be extradited to Peru in April 2023.¹³⁷

C.Vitkus v. Blinken

In 2023, the Fourth Circuit heard an appeal of a denial of preliminary injunction brought by Darius Vitkus, a citizen of the Republic of Lithuania.¹³⁸ Vitkus sought to prevent Lithuania from extraditing him for crimes he allegedly committed in 2008 and 2009 by filing for preliminary injunctive relief and a petition for writ of habeas corpus.¹³⁹ Vitkus owned a real estate business in Lithuania, and after it fell into bankruptcy proceedings, the Lithuanian authorities investigated him for various financial crimes between 2008 and 2010.¹⁴⁰ Notably, following the Lithuanian authority’s summons for questioning, Vitkus testified “that the Lithuanian police officers tied him to a chair, beat him, deprived him of water . . . , burned him with cigarettes” and asked about his political activities.¹⁴¹

Vitkus received three “Notification of Suspicion” documents during Lithuania’s criminal investigations, which all separately informed Vitkus that (1) he was a suspect in the Lithuanian authorities’ investigation of him, (2) he allegedly violated specific “Lithuanian code provisions,” and (3) he had engaged in “suspected criminal conduct.”¹⁴² After Vitkus left Lithuania, the Lithuanian authorities issued two orders of arrest for Vitkus.¹⁴³ The Lithuanian prosecutors created a document called a “Decision to Recognize D. Vitkus as a Suspect,” which “described Vitkus’s suspected criminal conduct and identified the implicated provisions of the Lithuanian criminal code”—this was allegedly decided based on the evidence the Lithuanian prosecutor gathered.¹⁴⁴ After moving to the United States, Vitkus applied for asylum and protection under the Convention Against Torture given his treatment by the Lithuanian government, which the Board of Immigration Appeals certified.¹⁴⁵

In May 2015, the Lithuanian government requested that the United States extradite Vitkus to Lithuania, advising the Department of State that Vitkus was a suspect in a criminal investigation and “wanted for prosecution in Lithuania in connection” with the various criminal investigations.¹⁴⁶ Lithuanian prosecutors provided supporting documents for their allegations against Vitkus that “summarized evidence gathered during the three investigations, along with copies of three orders for Vitkus’s arrest issued in connection with those investigations.”¹⁴⁷ Lithuania provided three Notifications of Suspicion and two Suspect Decisions to the United States, which later became the subjects of debate in the Secretary of State’s argument for extraditing Vitkus.¹⁴⁸

In response to Lithuania’s request, “the Secretary of State filed an extradition complaint in the Southern District of Florida, where Vitkus was then residing,” and extradition proceedings commenced in the Southern District of Florida.¹⁴⁹ During the proceeding, Vitkus argued that the Notifications of Suspicion and Suspect Decision did not “satisfy the charging document mandate” of the United States-Lithuania Extradition Treaty.¹⁵⁰ Vitkus also utilized the evidence provided by a Lithuanian attorney “who testified that, under Lithuanian law, only one document—an ‘indictment’—can be a ‘charging document’ for purposes of the charging document mandate.”¹⁵¹ The extradition court found that “deference was warranted to the Treaty interpretation of the Secretary of State and supported by Lithuania” and “ruled that the Notifications of Suspicion and Suspect Decisions ‘are sufficient to meet the requirements of’ the charging document mandate.”¹⁵² The court analyzed the extradition treaty between Lithuania and the United States, and utilized the executive branch’s argument to deny Vitkus’s argument that Lithuania did not comply with “the charging document” requirement of the extradition treaty:

The Secretary argued that the only purpose of the charging document mandate is to identify the charges for which Lithuania seeks to extradite Vitkus, and that the mandate does not require the initiation of any criminal charges. According to the Secretary, the charging document mandate is satisfied by the Notifications of Suspicion and Suspect Decisions. The Secretary supported that position with an affidavit of an attorney at the Department of State . . . and with a letter from a Lithuanian official called the Prosecutor General . . . . The State Department Affidavit averred that the Notifications of Suspicion and the Suspect Decisions are sufficient to satisfy the charging document mandate. And the Prosecutor General Letter maintained that the Notifications of Suspicion and Suspect Decisions ‘would be the equivalent of the charging documents referred to in’ the charging document mandate. The Letter also asserted that the proof required to identify a person as a suspect—and thus issue a Notification of Suspicion or Suspect Decision—‘should not be of the same level as necessary to substantiate the judgment of conviction or bringing charges (this occurs at a later stage of the criminal proceedings).’ ”¹⁵³

In a separate procedure following his transfer to Virginia, Vitkus filed a petition for a writ of habeas corpus and sought declaratory and injunctive relief in the Eastern District of Virginia. The court rejected Vitkus’s charging document argument, as it stated “that it gave ‘great weight’ to the Treaty interpretation presented by the Secretary of State,” and found that, along with the affidavits provided by the State Department and Prosecutor, the charging document mandate “can be satisfied by a document identifying ‘the violations of Lithuanian law that form the basis of Mr. Vitkus’s extradition, and . . . describ[ing] the facts underlying those alleged violations.’ ”¹⁵⁴

The Eastern District of Virginia summarized the Secretary of State’s argument in support of Vitkus’s extradition:

Lithuania has complied with the charging document mandate. Similar to Vitkus, the Secretary maintains that the language of the charging document mandate is plain and unambiguous. The Secretary maintains, however, that the charging document mandate does not require production of any particular type of charging document, and that it does not demand production of an indictment or something similar. According to the Secretary, the charging document mandate only requires the Requesting State to produce documents that sufficiently detail the alleged criminal violations and conduct, such as the Notifications of Suspicion and Suspect Decisions. The Secretary argues that the federal courts have consistently interpreted other treaties made by the United States to allow for extradition of persons who have not actually been criminally charged. Finally, the Secretary insists that, if the relevant text of the Treaty is ambiguous, his proposed construction thereof—that the charging document mandate requires only a document detailing suspected criminal conduct—adheres to the Treaty’s requirements and is entitled to deference.¹⁵⁵

The Fourth Circuit overturned the Eastern District of Virginia’s judgment. The majority of the Fourth Circuit found that “the Secretary’s construction of the charging document mandate does not ‘follow from the clear Treaty language’ ” and, therefore, the district court erred in utilizing it in its decision to reject Vitkus’s petition for a preliminary injunction.¹⁵⁶ The Court of Appeals for the Fourth Circuit first looked to the text of the treaty, finding that “if the [treaty’s] textual meaning is plain and cannot reasonably bear the government’s construction, then [the court] must reject that construction.”¹⁵⁷ The court looked to Article 8 § 3 of the Treaty, which requires that the Requesting State produce “a copy of the charging document.”¹⁵⁸ The Fourth Circuit noted that the “Secretary of State is not entitled to extradite Vitkus unless Lithuania first produces . . . a copy of ‘the charging document.’ ”¹⁵⁹ Looking at the grammatical structure of the phrase “the charging document,” the court found that the treaty required a “discrete document that initiates criminal charges” and that “the charging document mandate is plain and unambiguous, and it cannot be fulfilled by some document (or set of documents) that fails to perform the charging function—even if it or they contain similar information to ‘the charging document.’ ”¹⁶⁰

Moreover, the court utilized extrinsic evidence and looked to the Federal Rules of Criminal Procedure to analyze the “charging document” requirement in the treaty between the United States and Lithuania and analogize documents that the Lithuanian prosecutors produced in their investigation of Vitkus to relevant documents in U.S. criminal procedure.¹⁶¹ The Fourth Circuit found that the charging document mandate required that a requesting country produce a document “that performs the same function as an indictment, information, or complaint” in the United States.¹⁶² The court found that the documents that the Lithuanian government produced were akin to the “subject letters” and “target letters” which are used by federal prosecutors in the United States to inform individuals that they “are either a ‘subject’ or a ‘target’ of a federal criminal investigation.”¹⁶³ The Fourth Circuit summarized their findings on the matter by stating:

Critically, those identified as federal “subjects” and “targets” of criminal investigations have not been charged—unless and until they become defendants by virtue of an indictment, an information, or a complaint. The Notifications of Suspicion and Suspect Decisions relied on by the Secretary of State did not initiate criminal charges against Vitkus. They simply characterize him as a suspect, and thus do not satisfy the plain and unambiguous language of the Treaty’s charging document mandate.¹⁶⁴

The court also relied on the evidence provided by the Lithuanian attorney supporting this argument, noting that the documents provided by the Lithuanian government “remain in a pretrial investigation stage” and that there is a difference “between the sufficiency of evidence needed to confer the status of ‘suspect’ and that needed to ‘bring[] charges,’ which ‘occurs at a later stage of the criminal proceedings.’ ”¹⁶⁵ The Fourth Circuit acknowledged the Secretary of State’s argument that the United States had extradited individuals who had not been formally charged in the requesting country prior to the extradition request.¹⁶⁶ The Fourth Circuit compared the United States-Lithuania treaty to other treaties which show either the absence of “the charging document” requirement—in a form of expressio unius interpretation—or contain the requirement that requesting countries produce “a copy of the charging document, if any” to indicate the importance of a specific charging document in extradition proceedings between Lithuania and the United States.¹⁶⁷ Additionally, the Fourth Circuit found that the inclusion of the charging document requirement was intentional, and that “the Treaty language agreed to by the parties must be adhered to and carry the day.”¹⁶⁸ The Fourth Circuit stated that Lithuania could not proceed with the extradition without producing the charging document, as Lithuania “cannot produce ‘the charging document’ when no criminal charges have been filed.”¹⁶⁹

The Fourth Circuit explicitly rejected the Ninth Circuit’s statement that “the charging document mandate ‘makes no difference’ ” given its arguments regarding the grammatical structure of the phrase, the evidence provided by both parties, and the text of the treaty.¹⁷⁰ The Fourth Circuit also denied the Secretary of State’s interpretation of the treaty, arguing that as the charging document mandate was clear and unambiguous, the court “do[es] not owe deference to the Secretary.”¹⁷¹ In doing so, it found that the Notifications of Suspicion and Suspect Decisions produced by the Lithuanian prosecutors did not initiate criminal charges against Vitkus and were insufficient to satisfy the extradition treaty’s requirements.

Judge Quattlebaum, writing the dissenting opinion in Vitkus v. Blinken, highlighted the majority’s unwillingness to utilize the default rule. Judge Quattlebaum noted that “the district court’s decision to side with the Secretary’s interpretation over Vitkus’ faithfully applies Supreme Court precedent requiring deference to the Secretary.”¹⁷² Judge Quattlebaum found that “the Secretary produced evidence supporting a broader interpretation of [the charging document] in the context of an international extradition treaty,” by providing context regarding the nature of the Lithuanian prosecutor’s documents in support of its extradition of Vitkus to Lithuania.¹⁷³ Judge Quattlebaum also appeared to be persuaded by an affidavit written by a State Department attorney, who noted that the treaty between Lithuania and United States includes provisions for extraditing individuals who are “sought for prosecution,” and “that a formal indictment cannot be sought under Lithuanian law until the prosecution receives Vitkus’ position on the notification of suspicion documents.”¹⁷⁴

Judge Quattlebaum found both the Secretary’s interpretation of the treaty and Vitkus’s interpretation of the treaty plausible.¹⁷⁵ He found that within the extradition treaty between the United States and Lithuania,

Article 8, the section setting forth the required documentation that must accompany an extradition request, refers to individuals ‘sought for prosecution.’ [W]hile . . . ‘charged with’ may suggest a formal charge, ‘sought for prosecution’ is broader. It could also be plausibly read . . . to include persons wanted for prosecution by Lithuania, such as Vitkus, who are wanted to stand trial for specific crimes, but for whom a formal charging document akin to the ones used in the United States may not have been issued.¹⁷⁶

In stating that the Secretary’s argument was plausible, Judge Quattlebaum utilized the default rule to argue that the judiciary should defer to the executive branch’s interpretation of a treaty when two possible interpretations are apparent.¹⁷⁷ Judge Quattlebaum found that the Ninth Circuit’s opinion in Manrique v. Kolc was persuasive, given that the Ninth Circuit similarly analyzed “the charging mandate” within the extradition treaty between the United States and Peru, and that Vitkus presented the same argument that Toledo presented to the Ninth Circuit.¹⁷⁸ Judge Quattlebaum noted that the court denied Toledo’s argument, as the treaty between Peru and the United States did not have explicit language mentioning “formal charges or the Orden de Enjuiciamiento,” and that the court “noted that documents submitted by Peru sufficiently identified the crimes that the petitioner was accused of and summarized the supporting evidence.”¹⁷⁹ Judge Quattlebaum also found the court’s deference to the executive branch indicative of how the treaty between Lithuania and the United States should be interpreted.¹⁸⁰ Finally, in concluding, Judge Quattlebaum stated, “the Secretary’s view that documents submitted by Lithuania satisfy the treaty’s charging document requirement is, at the very least plausible. When that is the case, we must defer to the Executive Branch’s interpretation of treaties that it has been charged with negotiating and enforcing.”¹⁸¹

Given the discrepancy between the foreign criminal court procedures in Peru and Lithuania, it is unclear whether the Fourth Circuit would have found that Peru satisfied the requirements of its extradition request. However, the Fourth Circuit’s opinion sheds light on the relationship between the executive and judiciary branches in extradition proceedings: it is apparent that the Secretary of State’s influence on extradition is substantial, especially when the judiciary analyzes treaty agreements. When the court in Vitkus v. Blinken acknowledged the default rule, it noted the competing interests at stake in Lithuania’s extradition request, namely the executive’s interest in maintaining foreign relations and the public’s interest “in seeing its governmental institutions follow the law.”¹⁸² Nevertheless, by determining that the “charging document” lacked the requisite ambiguity to apply the default rule, and accordingly, finding the executive’s interest did not outweigh the public’s interest in seeing the government follow the law, the Fourth Circuit upheld Vitkus’s fundamental due process rights by following the procedures outlined in the treaty as written and ensuring that the extradition proceeding was fair. The Fourth Circuit’s decision and its implications will be explored further in Part III.

III. INTERNATIONAL RELATIONS AND DUE PROCESS

A.Due Process and Treaty Interpretation

Although not directly stated in the circuit courts’ opinions, the analyses of the Lithuania-United States and Peru-United States extradition treaties shed light on the due process rights afforded to relators in the United States. The constitutional rights of relators, vested in them by their presence in the United States, are at odds with the executive branch’s responsibility to uphold relations between the United States and foreign nations.¹⁸³ The Fourth Circuit’s interpretation of “the charging document” upheld Vitkus’s due process rights—the Fourth Circuit deferred to the plain language of the treaty, and finding the executive branch’s argument unpersuasive, ensured that the executive’s influence did not overshadow the judiciary’s role in the extradition process.

Legal scholars have analyzed the intersection of due process and the extradition process, focusing on the rule of non-inquiry, the possibility of double jeopardy, the rule of specialty, and hearsay exceptions. Additionally, due process concerns intersect with the appropriateness of a court’s use of the default rule to interpret provisions of extradition treaties because broadening of the rights of the nations who sign extradition treaties affects the liberty of a person sought for extradition.¹⁸⁴

International due process encompasses “the assurance that ‘the judiciary [is not] dominated by the political branches of government,’ ”¹⁸⁵ and implicitly in accordance with this principle, the Fourth Circuit limited the executive’s political objective by enforcing its statutorily granted power to deny extradition. Powerless to change the structure of the United States-Lithuania treaty, the Fourth Circuit, in its decision in Vitkus v. Blinken, highlights not only the importance of specificity in extradition treaties but also the risk of harming an individual’s fundamental right to due process by giving undue deference to the executive branch’s interpretation of extradition treaties.

The default rule of treaty interpretation, as addressed in Part I of this Note, has been criticized by scholars for being outdated: it was formed before human rights concerns of relators were properly addressed by courts in considering whether to certify the relators’ extradition to the requesting country.¹⁸⁶ The judiciary implemented the default rule at a time when human beings were not subjects of international law—when the Supreme Court issued its Laubenheimer decision in 1933, sovereign countries, not individuals, were considered the beneficiaries of rights that flowed from treaties.¹⁸⁷ The default rule upheld the sovereign signatories’ right to extradite individuals wanted for prosecution, and continues to be upheld in some form by the Vienna Convention on the Law of Treaties.¹⁸⁸ The default rule continues to exert influence over the extradition interpretation process even as the human rights of relators have become a prominent and important consideration in the extradition process.¹⁸⁹

The Ninth Circuit’s understanding of Peruvian criminal procedure and the deference it afforded the United States executive branch bring to light the potential risks of applying the default rule. The court in Manrique v. Kolc considered the evidence provided by both the Peruvian prosecutors and the State Department to understand “the charging document” requirement in the Peru-United States Extradition Treaty, and in doing so, the court contextualized the requirements of the treaty.¹⁹⁰ This analysis favored the Secretary of State’s interpretation—as noted previously, extradition proceedings are distinct from criminal trials, and the judiciary may be comfortable with some bias in a proceeding that does not determine the guilt or innocence of the accused.¹⁹¹ However, the court’s deference to the Secretary of State’s interpretation of the “charging document” could be read as the court’s inclination to uphold foreign relations with Peru at the potential expense of Toledo’s liberty rights. As the court acknowledged, the risk of misinterpreting the requirements of the treaty was great: Toledo would be sent to Peru to face trial and be imprisoned, and his ability to file a habeas petition would be nullified by his presence in the Peruvian criminal justice system.¹⁹²

Vitkus v. Blinken implicitly renounces the traditional application of the default rule: the Fourth Circuit alludes to the pressure the executive branch places on the judiciary to comply with the Secretary of States’s understanding of a provision of a treaty—especially when the judiciary finds that the provision in question is clear and unambiguous.¹⁹³ In finding that “the charging document” mandate was clear and unambiguous in its requirement that a discrete document was to be produced by the Lithuanian government, the Fourth Circuit protected Vitkus from a questionable extradition request when it found that the treaty required that the requesting country produce a specific document charging him with a crime. By doing so, the Fourth Circuit found clarity in the procedural requirements established in the extradition treaty and potentially upheld Vitkus’s Fifth Amendment due process rights. However, it is important to note that should the majority of the Fourth Circuit have found that “the charging document” requirement was an ambiguous provision in the treaty, then there would have been a possibility that the court would have applied the default rule.

The Fourth Circuit also implicitly respected principles of international law on due process by ensuring that the political branch did not dominate the proceeding by compelling the court to recognize its interpretation of “the charging document” requirement.¹⁹⁴ International due process requires that trials are “fair” and are not “dominated” by the political branch.¹⁹⁵ However, as discussed previously, extradition proceedings are not trials, and a challenge against an extradition proceeding for being “unfair” was notably discounted by a Nevada District Court in 2023 in Sridej v. Blinken, in which the court referenced two cases from the 19th and early 20th centuries to note that the extradition procedure did not require the formalities of other judicial proceedings.¹⁹⁶ This case also underscores contemporary federal judiciary’s deference to understandings of international law codified before the duties of upholding international due process became binding on the American judiciary. Accordingly, although Vitkus might have been able to raise that the executive branch’s interpretation of “the charging document” would not be “fair,” it would be unlikely to be held as a viable argument against the certification of his extradition by the judiciary.

The interpretive dissonance surrounding “the charging document” requirement could be remedied by diminishing deference to the executive branch in treaty interpretation: the judiciary is tasked with interpretation in the extradition process specifically because its legal acumen regarding interpretation is more developed than the executive branch’s legal acumen. By not affording as much deference to the Secretary of State’s interpretation of “the charging document” as the Ninth Circuit had afforded, the Fourth Circuit’s approach to interpreting the U.S.-Lithuania treaty was more consistent with its obligations under international law: it sought to provide a fair hearing to Vitkus and did not near the point of acting “at the whim” of the executive branch.

Another consideration for remedying this tension between the judiciary and executive branch, with some limitations, would be to include more specific language in bilateral extradition treaties regarding a sovereign nation’s criminal procedure. Although, as stated in Part I of this Note, the judiciary has no authority to alter bilateral extradition treaties that the United States executes with foreign governments, Vitkus v. Blinken exemplifies the kind of case that could incentivize the executive branch to negotiate extradition treaties that have specific language relevant to the parties’ criminal procedures. By doing so, the U.S. and a sovereign signatory to a bilateral extradition treaty could prevent interpretive friction in the United States judiciary and allow for more expeditious extradition processing. Specifying the documents that better ascertain the level of probable cause established in a foreign proceeding could not only protect relators from extradition that invades their constitutional and international human rights but also the judiciary from breaching rules of non-inquiry and incorrectly interpreting a foreign country’s criminal procedure.¹⁹⁷ However, this would not be a salve to the protection of international human rights of relators: a country without an independent judiciary could likely still satisfy the document requirement even if it were specified, and the risk of violating a relators’ due process rights might still be an issue, albeit in a different form than the one at issue in this Note.

B.Relevant Background

The two circuit opinions may also differ for reasons not explicitly stated by the published decisions. Although Toledo raised the possibility of maltreatment and suffering while awaiting trial in a Peruvian prison, his argument failed to trigger a humanitarian concern by the court.¹⁹⁸ Notably, courts in the United States may disavow the rule of non-inquiry should the relator raise the possibility of meeting human rights abuses by the requesting state in the event the extradition court certifies extradition—Toledo’s argument regarding his ill health does not align with the circumstances the court considers in extradition.¹⁹⁹ On the other hand, Vitkus’s testimony about his arrest in Lithuania does support a contention that he could be tortured should the U.S. certify Lithuania’s extradition request, given that while applying for asylum, the “Board of Immigration Appeals (the ‘BIA’) found in 2014 that Vitkus’s ‘credible testimony established that he was beaten, burned, and nearly asphyxiated by [Lithuanian] police officers, who inquired into his contributions to a political party.”²⁰⁰ The findings of the Board of Immigration Appeals did not preclude the extradition court from certifying Vitkus for extradition.²⁰¹ Vitkus’s torture in Lithuania—allegedly related to his political involvement in Lithuania with a political group called “the Russia party”²⁰²—may have implicitly prompted the court to consider that the Lithuanian criminal proceedings would violate Vitkus’s human rights upon returning to Lithuania. This concern might have informed the Fourth Circuit’s view that “the charging document” requirement was a clear and unambiguous requirement that Lithuania provide a discrete charging document.

C.Foreign relations and the interpretation of “the Charging Document” requirement

The United States uses extradition treaties to prevent U.S. citizens and non-U.S. citizens alike from utilizing the United States as a safe haven when they have committed crimes on foreign soil, and are tools used by the United States to uphold its relationships with foreign countries.²⁰³ The default rule of treaty interpretation supports the executive branch’s role of upholding its treaty obligations as the governmental body responsible for foreign relations. Extradition treaties are entered into by the executive branch in its process of conducting foreign relations, creating international agreements regarding extradition unifies countries in a common, collaborative law enforcement apparatus.²⁰⁴ There are many reasons for entering into a collaborative law enforcement apparatus, including “ensuring that fugitive criminals do not go unpunished for their alleged crimes, discouraging crime throughout the world, and protecting nations from fugitive criminals by eliminating the possibility of safe havens for fugitive criminals.”²⁰⁵ Allowing countries to extradite individuals strengthens the relationship between the two countries, while not cooperating with an extradition request, especially when issues regarding erroneous treaty interpretation arise, hampers international relations between the countries.²⁰⁶ When considering the factors for staying a pending appeal (“(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; “and (4) where the public interest lies”),²⁰⁷ courts have noted that noncompliance with extradition requests diminishes the “force” of extradition treaties, and that “[i]f other countries lose confidence that the United States will abide by its treaties, the United States risks losing the ability to obtain the extraditions of people who commit crimes here and flee to other countries.”²⁰⁸ This may be the reason why the Secretary of State, who ultimately decides whether to proceed with an extradition request once the court certifies a relator for extradition, does not often refuse to surrender those sought by a foreign country for prosecution.²⁰⁹

In denying Lithuania’s extradition request, the Fourth Circuit may have chipped at the United States’ relationship with the Lithuanian government by rejecting the default rule.²¹⁰ Although the U.S. government does not rescind the entire extradition treaty when the requestor country fails to extradite an individual, failing to extradite prohibits the flow of criminals between countries, and can encourage the impression that the U.S. can be held as a safe haven for criminals.²¹¹ Moreover, international comity would be ill-served by the uncertainty a requesting country may face when summoning an individual from the United States, should the relevant treaty have a “charging document” requirement.

CONCLUSION

As the two circuit court opinions in 2023 demonstrate, the default rule of treaty interpretation continues to influence the judiciary’s role in determining whether to certify a foreign nation’s extradition request. In the Ninth Circuit opinion in Manrique v. Kolc, the court was partial to the Secretary of State’s interpretation of “the charging document” requirement in its extradition of Toledo—the court found the “charging document” requirement to be relatively inconsequential in finding that the Peruvian government had satisfied its extradition request by providing an Acusación Fiscal. However, in Vitkus v. Blinken, the court was more dubious of the Secretary of State’s interpretation of the treaty and disagreed that the documents that the Lithuanian government had provided to extradite Vitkus satisfied the requirements listed in the U.S.-Lithuania Extradition Treaty.

By continuing to find opportunities to utilize the default rule in interpreting extradition treaties, the judiciary is more likely to impinge on the constitutional due process rights of relators in an effort to appease the executive’s concern with maintaining foreign relations with sovereign countries.²¹² The divergence in interpretation of “the charging document” highlights the possibility of two diametrically opposite outcomes for those who face extradition, with important implications: the removal of an individual from the United States to a requesting country, and therefore, the removal of the constitutional rights afforded to them when they are physically in the United States. Vitkus v. Blinken, in acknowledging the default rule, noted that although there is a legitimate public interest in extraditing criminals to the countries that request them, the executive’s obligations to follow the law should not be outweighed by its duty to maintain foreign relations; doing so honors the procedural safeguards written into a treaty.

The judiciary’s continued use of the default rule is in tension with the development of international human rights. Manrique v. Kolc embodies the risk to internationally recognized due process rights when courts cite to the default rule of treaty interpretation: the court in Manrique appeared to interpret “the charging document” to conciliate the executive branch. Toledo is not the only relator who has argued that the extradition process did not comport with due process: relators have raised arguments about various components of the extradition process that violate fundamental due process rights. As precedents almost require that the judiciary does not consider these arguments, the judiciary should gradually reduce the weight of the default rule of treaty interpretation so that extradition proceedings align more closely with the fairness and juridical equality requirements of the fundamental human right to due process.

Because the United States is a party to at least twenty-eight bilateral extradition treaties that contain “the charging document” requirement, arguments as to its ambiguity will likely arise again. Accordingly, to better uphold the due process rights of relators, courts should defer to the executive branch and the plain text of the relevant extradition treaty proportionally to ensure that decisions are in line with customary international law on due process. By critically analyzing the default rule, the courts will be better equipped to uphold their obligations to the rights of relators: rights granted by the Constitution and by international law on the fundamental right to due process.

98 S. Cal. L. Rev. 761

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Jacob M. Karlin*

* Executive Senior Editor, Southern California Law Review, Volume 98; J.D. Candidate 2025, University of Southern California Gould School of Law; B.A. 2017, Science in Society Program, Wesleyan University. All views and conclusions expressed in this Note are solely my own and do not express the opinions or positions of my employer. Many thanks to Professor Marcela Prieto for her invaluable guidance throughout the drafting process. I also want to thank the talented Southern California Law Review staff and editors for their work throughout the publication process.

A Whole-of-Government Approach to Protect Unaccompanied Children from Labor Exploitation

July 2025July 2025Charlie Murphy*

A sharp rise in illegal child labor and an influx of unaccompanied migrant children into the United States combined to dominate headlines in 2023. Despite federal authorities placing migrant children in sponsor care, reports detailed such children being exploited in hazardous occupations across the country, with some losing their lives. An aging patchwork of federal immigration and labor laws and underfunded enforcement agencies have left an incredibly vulnerable subset of children at risk of exploitation or worse, and congressional action is needed to ensure that sponsored children are properly cared for and kept out of hazardous workplaces. While the federal government’s processing of unaccompanied children and illegal child labor have been separately examined by scholars, there is a glaring lack of scholarship on how the gaps in the immigration system and federal labor law combine to put unaccompanied minors at a greater risk of labor exploitation. This Note argues that the federal government must comprehensively update existing immigration and labor laws and increase interagency coordination to lower the risk of labor exploitation for unaccompanied children. If the United States wants to fulfill a humanitarian mission of caring for unaccompanied children, it must take responsibility for every child’s wellbeing throughout their immigration journey by taking a whole-of-government approach to the problem.

Introduction

News reports broke midway through the Biden presidency detailing shocking and troubling findings of migrant children working in punishing and dangerous jobs across the United States in violation of federal law. One report detailed the experience of a migrant child named Antonio, a fourteen-year-old who had left his home in Guatemala and made the perilous trek north to the United States.¹ After arriving at the U.S. border alone, the U.S. government placed Antonio into its custody in a shelter for several weeks until a former neighbor residing in Florida agreed to sponsor him while Antonio made his way through the immigration system. Upon his release to the sponsor, Antonio enrolled in the eighth grade and went to work for anyone who would hire a child without a work permit. Work took priority, and Antonio soon stopped attending school in order to survive. While sponsors of undocumented children are supposed to provide for the children in their care, Antonio’s sponsor instead kept track of the costs required to transport, house, and feed Antonio and required him to pay that money back, which took a year of work. Antonio cleaned houses, landscaped, and packed vegetables overnight. He worked for companies that claimed not to hire minors. He did not stay in his sponsor’s care long, instead living in apartments with several other people. Rather than attend school like other children, Antonio was forced to support himself. He now lives in a neighborhood in which children as young as twelve years old work in hazardous occupations such as construction in order to survive.²

Antonio’s story is a common one. Children who arrive at the U.S. border alone often find themselves forced to work rather than attend school in order to survive or pay off debts that sponsors or other parties impose on them, creating a real risk of child labor exploitation or even labor trafficking. “Labor exploitation” is an oft-used term without an exact definition, but as used in this Note, it generally describes employers committing workplace violations for profit, usually by scheduling employees for excessively long hours, underpaying them in violation of law, or disregarding safety rules and regulations meant to protect workers.³ “Labor trafficking” is a crime in which traffickers force people to work while taking the fruits of workers’ labor for themselves.⁴ Labor trafficking turns on an element of force, fraud, or coercion, by which labor exploitation is elevated from harmful, but possibly blameless, conduct to criminal and morally reprehensible behavior.⁵ Unaccompanied children are meant to be protected from such abuses in the United States by federal immigration and labor law.⁶

When children arrive at the U.S. border without permission to enter the country, they are apprehended and detained, usually by United States Customs and Border Protection (“CBP”).⁷ Children with no parent or legal guardian present are separated from whoever they are with and held in temporary facilities made for adults. They are then questioned by federal agents and, if found to be unaccompanied, are transferred to the custody of the Department of Health and Human Services’ (“HHS”) Office of Refugee Resettlement (“ORR”). In ORR custody, children are put into some form of group facility with other children, generally for about thirty days. ORR houses and feeds these children, and case managers eventually speak with each child to determine a suitable sponsor for the child to be placed with. While finding sponsors, the U.S. government enters each child into formal removal proceedings, unless a child asks to be repatriated.

ORR screens each potential sponsor, but screening requirements often change with presidential administrations or with a rise in the backlog of children in federal custody. Changes in sponsor screening can affect the length of time that children are in ORR custody, which is particularly problematic given that longer stays in government custody can cause lasting trauma to children. With a backlog of children in federal custody upon taking office in 2021, the Biden administration pushed to release children as quickly as possible to sponsor homes and lowered the hurdles that sponsors must clear when applying to ORR’s Unaccompanied Alien Children Bureau (“UAC Bureau”), the federal program that places unaccompanied children in sponsor homes.⁸ In its haste, the administration may have unintentionally increased the risk of unaccompanied children landing in unsuitable environments in which labor exploitation or trafficking can occur.

In the best-case scenario, ORR places a child with a sponsor that the child knows, such as a parent or family member, who will properly care for them and enroll them in school while the child’s immigration proceedings play out. The worst-case scenario is that the child is placed with a sponsor whom they have never met, who will take advantage of the child financially or otherwise. In this worst-case scenario, sponsors might charge children for basic expenses like rent, food, clothing, and school supplies, essentially forcing the child to work after school (or in lieu of attending) to repay their debt.⁹ Worse, the sponsor may force the child to work and take the child’s entire earnings for themselves. Migrant children who must work often find themselves in workplaces considered dangerous by the federal government, even for adults.¹⁰ These children may not make enough money to pay their debts working normal shifts after school hours, so they may work overnight shifts or stop attending school altogether to work full-time. In such workplaces, child workers have been injured, maimed, and killed while working in violation of federal labor law.¹¹ Despite the risk, the harsh reality is that many unaccompanied children feel they have to work due to their vulnerable circumstances. What choice do they have otherwise?

The scenario described may seem horrific, or even unrealistic, but it has happened repeatedly in the United States. While such stories surface in the news annually, Congress finally put a renewed focus on the issue of child labor in 2023 after Hannah Dreier’s reporting in The New York Times detailed just how widespread the issue of migrant children working in dangerous American workplaces is.¹² Some migrant children have allegedly been trafficked into forced labor, and multiple federal agencies have been criticized for failing to adequately prevent or respond to the risk these children face, particularly ORR and the Department of Labor (“DOL”). Exposés like Dreier’s have cropped up amidst an unprecedented spike in unaccompanied children arriving at the U.S.-Mexico border, a spike that strained the government’s ability to adequately care for unaccompanied children. Particularly concerning to some members of Congress and the public was an allegation that ORR was unable to get in touch with over 80,000 unaccompanied children that the agency had released from its custody into sponsor homes.¹³ ORR’s inability to get in touch with tens of thousands of children coincided with a dramatic surge in documented cases of illegal child labor nationwide. Although congressional Republicans and Democrats held hearings with ORR and DOL officials to understand why children could not be contacted and why child labor violations were increasing,¹⁴ there was little in the way of a coordinated government response to deal with these crises as related issues that may increase the risk of unaccompanied children being exploited for their labor.

Encouragingly, in 2023, ORR and DOL agreed to share information in an effort to jointly combat child labor trafficking and exploitation.¹⁵ But between ORR’s limitations in providing post-release services to children paroled into sponsor care and DOL’s lack of resources and relatively toothless enforcement options, migrant children still have inadequate protections and can fall prey to labor trafficking or exploitation. While some scholarship exists on the inadequacies of the UAC Bureau,¹⁶ few if any scholars have focused on how gaps in immigration law and federal labor law combine to increase the risk of exploitation to unaccompanied children. This Note aims to fill the gap in current scholarship relating to unaccompanied children by undertaking a novel and holistic review of both federal immigration law and labor law. The aim is to identify gaps in both areas of law that contribute to the risk of unaccompanied children being exploited for their labor by either their sponsors or irresponsible employers and discuss how these areas can be addressed in a comprehensive manner to lower that risk of harm.

This Note attempts to make sense of the various statutes, regulations, and government agencies that are meant to protect migrant children in different ways and argues for a coordinated, whole-of-government approach to minimize the risk that unaccompanied children fall into labor exploitation. While this Note touches on labor trafficking, its main focus is labor exploitation, as there is no comprehensive source of reliable data on labor trafficking among unaccompanied minors. Part I of this Note begins by quantifying the historic levels of unaccompanied minors arriving at the U.S. border since 2019 and explores the shifting immigration policies and rationales that have contributed to the crisis. Part II explains the legal foundation governing the apprehension of unaccompanied minors and discusses ORR’s role in placing minors into custody. Part III examines child labor violations nationwide and delves into the legal framework that is supposed to protect children from being exploited in the workplace. Part IV analyzes the current failings of both federal immigration law and labor law to protect unaccompanied children and offers possible solutions that can minimize the risk of exploitation for these children. The Note concludes by laying the groundwork for future discussion.

By addressing the labor exploitation of unaccompanied children through a multipronged review of separate but overlapping areas of law, this Note endeavors to change the discourse surrounding the federal government’s approach from a conversation of unilateral federal agency failures to one that discusses how our patchwork system of laws can be updated to best serve the needs of unaccompanied children. The Biden administration correctly approached influxes of unaccompanied minors with a humanitarian focus, but federal law needs to be updated to ensure that the federal government takes full responsibility for ensuring the safety of each child it welcomes into the country.¹⁷

I.A Historic Influx of Unaccompanied Children

Before exploring what happens when unaccompanied children enter the United States, it is important to highlight who these children are, where they come from, why they flee their homes, and what happens when they encounter border authorities in the United States. To begin, a migrant child who arrives at the U.S. border unaccompanied by a parent or guardian is referred to by CBP as an “unaccompanied alien child,” or “UC,” for short.¹⁸ A UC is statutorily defined as a child under eighteen years old who has no lawful immigration status in the United States and who either has no parent or legal guardian accompanying them into the United States or has no parent or guardian who can provide immediate care and physical custody.¹⁹ From 2010 until 2019, CBP apprehended an average of 43,425 unaccompanied children per year at the U.S. border, with nearly all of those apprehensions occurring at the Southwest border.²⁰ The number of apprehensions trended upward over that ten-year span, hitting a then-record high of 76,136 during the first Trump presidency in 2019.²¹ Decreased migration and public health border enforcement during the COVID-19 pandemic led to a sharp downturn in apprehensions in 2020, but since 2021, there has been a massive spike in the number of unaccompanied children arriving at the U.S. border, with an average of 130,122 CBP apprehensions per year.²² This average nearly doubles the pre-pandemic record high for apprehensions of unaccompanied children in a single year.

The majority of unaccompanied children are consistently aged between fifteen and seventeen years old.²³ For years, most unaccompanied children arrived from Mexico, but that majority has shifted dramatically over the last ten years to the Northern Triangle countries of El Salvador, Guatemala, and Honduras.²⁴ Regardless of country of origin, similar explanations underlie why migrant children are traveling to the U.S. border en masse. Many migrant children seek economic opportunity, which has always been a factor driving immigration, but many others flee extreme violence, poverty, and ecological disaster.²⁵ Others are driven by a desire to reunite with family already in the United States, with an estimated 80% of unaccompanied children having at least one family member in the country as of 2021.²⁶ While some politicians and pundits may try to ascribe nefarious motives to the spike in migration, there are usually reasonable economic and socio-political explanations for why children arrive at the U.S. border.

Where an unaccompanied child is from makes a large difference in what happens when they encounter border officials. Under the Trafficking Victims Protection Reauthorization Act of 2008 (“TVPRA”),²⁷ children arriving from noncontiguous countries such as El Salvador, Guatemala, and Honduras are usually detained by CBP and transferred into the custody of ORR.²⁸ Once transferred, these children are put into formal removal proceedings and given an opportunity to seek different forms of immigration relief, such as asylum.²⁹ In contrast, children arriving from Mexico or Canada are usually repatriated immediately, so long as they are not trafficking victims and raise no fear of persecution upon return to their home countries.³⁰

Waves of unaccompanied minors arriving at the U.S. border have challenged the last four presidential administrations. Fearing that children were being trafficked into the United States, the George W. Bush administration passed the TVPRA in 2008, which barred the quick deportation of unaccompanied minors from countries other than Mexico.³¹ The Obama administration used the TVPRA to greatly expand the government’s ability to respond to unaccompanied arrivals, housing children in temporary camps on military bases and spending billions of dollars expanding a network of shelters that ORR could place unaccompanied children into while they awaited placement in the United States.³² The Trump administration responded to surges in arrivals in 2019 and 2020 by trying to limit both legal and illegal immigration, focusing on deterrence through family separation policies and the solicitation of Congress for funds to erect a border wall, all while allowing ORR’s shelters to fill near capacity.³³ When the COVID-19 pandemic struck in 2020, the Trump administration seized on a Center for Disease Control and Prevention (“CDC”) public health order called Title 42 to promptly deport most unaccompanied children detained by CBP to Mexico, in violation of the TVPRA.³⁴ The use of Title 42 cut encounters with unaccompanied children at the southern border by more than half,³⁵ but left kids to fend for themselves along the U.S.-Mexico border. In 2021, the Biden administration reversed course, formally exempting unaccompanied minors from Title 42 expulsions and requiring that they be processed under the TVPRA’s Title 8 procedures.³⁶ Unaccompanied minor apprehensions rebounded in 2021 to what was then a new record high of 140,191, before jumping again in 2022 to 149,086.³⁷

Whether any executive policy has been particularly effective in properly addressing surges in unaccompanied-minor arrivals is up for debate. The Trump administration’s hardline policies against immigration lessened the number of encounters with unaccompanied minors, but a survey of Central American children in transit revealed that 66% would try to flee their country again if detained and deported by the U.S. government,³⁸ showing that hardline tactics are not likely to stop unaccompanied children from arriving at the U.S. border. The Obama and Biden administrations took a two-pronged humanitarian approach by housing minors in shelters as a short-term solution with a goal of family reunification or sponsor placement, while attempting to address the root causes of immigration by working with foreign governments to dissuade foreign citizens from immigrating and providing legal pathways for children to apply for entry into the United States without arriving at the border unannounced.³⁹ While the Obama and Biden approaches were humanitarian in nature, such approaches were also unlikely to disincentivize children from traveling to the border.

This Note is not meant to tackle the root causes of child migration or question whether the U.S. border should be accessible or closed to migrant children. Whether increased child migration is driven by violence, poverty, ecological disaster, economic opportunity, or governmental policy, it almost certainly will persist. Rather, this Note recognizes that unaccompanied minors are uniquely vulnerable to labor exploitation and trafficking and that current U.S. law is ill equipped to protect children from such realities. The question is, how can current legal structures be changed or improved to handle arrivals of unaccompanied minors in a way that best meets the needs of such children?

II.The Legal Foundation Underpinning ORR’s Apprehension, Custody, and placement of Unaccompanied Children

The apprehension and administrative processing of unaccompanied children is governed by a court settlement known as the Flores Settlement Agreement of 1997 (“Flores Agreement”), the Homeland Security Act of 2002 (“HSA”), the TVPRA, and various regulations. Understanding the legal foundation underpinning the UAC Bureau is critical to evaluating the gaps in the system that expose unaccompanied minors to a greater risk of labor exploitation.

A.The Flores Settlement Agreement of 1997

The modern-day treatment of unaccompanied children detained by the government was largely shaped by the Flores Agreement. The Flores Agreement resulted from a class action lawsuit between the former Immigration and Naturalization Service (“INS”) and two organizations representing the legal interests of immigrant children held in INS detention. The lawsuit was brought on behalf of detained children who were held in “suboptimal conditions” and “subjected to daily strip searches by immigration officers.”⁴⁰ In 1984, the INS “adopted a policy prohibiting the release of detained minors to anyone other than ‘a parent or lawful guardian, except in unusual or extraordinary cases.’ ”⁴¹ These children were held in government detention despite many having other adult family members who were willing to care for them while their immigration proceedings played out.⁴²

In 1997, the plaintiff class and the government reached a settlement which set out a nationwide policy governing the detention, release, and treatment of minors in INS custody.⁴³ The settlement required the humane treatment of migrant children held in federal custody⁴⁴ and created a presumption in favor of release and family reunification for minors who were not at risk of missing appearances in immigration court or whose safety did not need to be ensured.⁴⁵ Under the agreement, minors were to be released from INS custody, in order of preference, to (1) a parent, (2) a legal guardian, (3) an adult relative, (4) an adult individual or entity designated by the parent or legal guardian, (5) a licensed program willing to accept legal custody, or (6) an adult individual or entity seeking custody.⁴⁶ Unreleased children were to be placed in a state-licensed and non-secure program that provided residential, group, or foster-care services for children.⁴⁷

While the district court that approved the Flores Agreement continues to monitor the federal government’s compliance with its terms,⁴⁸ developments in statutory law (particularly the passage of the HSA and TVPRA) and federal regulations have changed the structure of U.S. immigration and modified the Flores Agreement’s nationwide policy regarding the detention and release of minors held in government custody.

B.The Homeland Security Act of 2002

The HSA abolished the INS and created the Department of Homeland Security (“DHS”) to fulfill most of INS’s functions,⁴⁹ including immigrant detention and removal responsibilities.⁵⁰ Importantly, section 462 of the HSA transferred INS’s jurisdiction over unaccompanied children to ORR.⁵¹ Section 462(b)(1) made ORR responsible for “the care and placement of unaccompanied alien children,” requiring the agency to consider the interests of each child when making care and custody decisions and make placement determinations for every unaccompanied child in federal custody by reason of immigration status.⁵² The HSA defined “unaccompanied alien children” as children under eighteen years of age who have no lawful immigration status and no accompanying parent or guardian present in the United States⁵³ and defined the term “placement” as the “placement of an unaccompanied child in either a detention facility or an alternative to such a facility.”⁵⁴ ORR inherited both INS’s custodial responsibilities and its responsibilities arising under the Flores Agreement, specifically the mandate to place unaccompanied minors into the care of a suitable sponsor, per the list of placement preferences.

C.The William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008

Congress enacted the TVPRA, in part, to address concerns that unaccompanied minors in government custody were being inadequately screened for evidence of human trafficking.⁵⁵ The TVPRA builds on the HSA and requires that the Secretary of Homeland Security develop policies and procedures to ensure that unaccompanied children are safely repatriated to their country of nationality or to the last country they lived in.⁵⁶ Section 235 of the TVPRA lays out “special rules” allowing children from contiguous countries (Mexico and Canada) to be safely repatriated to their country of origin or last habitual residence.⁵⁷ Under section 235(a), an immigration officer may remove an unaccompanied child appearing at a land border or U.S. port of entry from the country so long as the child is from a contiguous country, has not been nor is at risk of being a victim of a severe form of human trafficking, and does not have a credible fear of persecution in their home country, and so long as the child is allowed to make an independent decision to withdraw their application for admission to the United States.⁵⁸ Children must be screened for evidence of trafficking or persecution within forty-eight hours of apprehension.⁵⁹

Unaccompanied children from noncontiguous countries, like those comprising the Northern Triangle, must be transferred to ORR’s custody within seventy-two hours, consistent with the HSA.⁶⁰ The Secretary of HHS, in collaboration with the Secretary of Homeland Security, Attorney General, and Secretary of State, is tasked with promulgating policies and programs for ORR to follow to ensure that unaccompanied children are “protected from traffickers and other persons seeking to victimize or otherwise engage such children in criminal, harmful, or exploitative activity.”⁶¹ Importantly, children in ORR’s care and custody are to be promptly placed in the “least restrictive setting that is in the best interest of the child.”⁶² The least restrictive setting requirement works hand in hand with the HSA requirement of sponsor placement and prevents children from being held in government detention indefinitely while awaiting their immigration hearings.

The TVPRA directs ORR to find each child a suitable sponsor who is capable of providing for the child’s physical and mental well-being.⁶³ ORR is tasked with verifying a sponsor’s identity and relationship to the child and is responsible for ensuring that a sponsor has not engaged in any activity that would signal potential risk to the child.⁶⁴ ORR must also determine whether a study of the sponsor’s home is necessary before placement, which is required for children who were victims of severe forms of trafficking or of physical or sexual abuse, who have disabilities, or whose proposed sponsors clearly present a risk of “abuse, maltreatment, exploitation, or trafficking.”⁶⁵ After placement, the TVPRA requires ORR to conduct “follow-up services” only for children for whom a home study was conducted, but ORR is authorized to conduct such services for children who could “benefit from ongoing assistance from a social welfare agency.”⁶⁶ What follow-up services entail is not defined in the law, nor is there guidance as to which children would benefit from ongoing assistance, leaving ORR with discretion unless directed otherwise. Put another way, if no home study is performed, ORR has no responsibility under the TVPRA to follow up with a child whom it placed into a sponsor’s care.

D.ORR’s Role in Child Custody and Placement

As laid out in the HSA and TVPRA, ORR is the branch of HHS tasked with caring for and placing unaccompanied minors into sponsor homes. Those two statutes, and by extension, the Flores Agreement, provide the legal basis for ORR’s UAC Bureau, which puts the statutory schemes of child detention and placement into practice. Exploring the reality of the UAC Bureau, including how and where children are actually placed and what occurs after placement, is essential to understanding how immigration law and ORR practices place migrant children at an increased risk of labor exploitation.

The majority of unaccompanied children are referred to ORR’s UAC Bureau after being apprehended by DHS border patrol officers, with some children referred by other federal agencies in rare circumstances.⁶⁷ When a child is referred to ORR, ORR obtains background information on the child from the referring agency and attempts to determine the most appropriate and least restrictive setting in which to hold the child until a sponsor determination is made.⁶⁸ Settings may include a shelter facility, foster care or group home, staff secure or secure care facility, residential treatment center, or other special needs care facility.⁶⁹ In moments of high influx, settings have included temporary influx care facilities (“ICFs”), in which hundreds or thousands of children can be kept, usually on army bases or in remote locations.⁷⁰

The initial setting that children are held in is part of the problem with ORR’s UAC Bureau. While some shelters are appropriate for children, the use of ICFs is controversial due to the “facilities’ large sizes, remote locations, durations of stay, and processes for transferring children to the facilities.”⁷¹ ORR internal reports have revealed thousands of allegations of sexual abuse and harassment in ICFs and identified shortcomings for reporting such incidents within ORR’s shelter network.⁷² Even in smaller settings, children are often traumatized by their stays in government custody. Minors are often surrounded by strangers and limited to two short phone calls per week with family members or potential sponsors, facing a lack of caregiver support that can cause toxic stress in children.⁷³ Studies have shown that children detained in federal custody can suffer from “high rates of PTSD, anxiety, depression, and suicidal ideation.”⁷⁴ Thus, the longer children are detained, the more likely they will suffer harm of some sort. As of March 2025, the average stay for children in ORR custody was eighty-two days, which ORR is continually working to reduce.⁷⁵

The placement of children in sponsor homes and ORR’s follow-up services are of particular interest in this Note. As discussed, ORR’s placement of a child with a sponsor begins as soon as ORR takes custody, with the Flores Agreement preferences used as a guideline in placement. Parents, relatives, and close family members in the United States may apply to have a child in custody released to their care.⁷⁶ If no family member comes forward, ORR works with the child to identify a potential sponsor, or with the child’s consulate or a reputable family tracing organization if the child is too young to provide potential sponsor information.⁷⁷

ORR requires each potential sponsor to be screened using safe screening methods. A non-exhaustive list of safe screening methods includes identifying the sponsor, verifying a familial relationship, coordinating with a child’s parents, legal guardians, or closest relative to contact nonrelative adult sponsors, screening for exploitation or trafficking concerns, or communicating with the child directly about his or her own sense of safety.⁷⁸

Sponsor requirements are not extensive. For the most part, a sponsor simply needs to fill out an application, undergo a background check, address any criminal history, and provide proof of their identity and address, the identity of the child whom they wish to sponsor, and any sponsor-child relationship.⁷⁹ Sponsors are assessed based on a number of factors. A non-exhaustive list includes the sponsor’s relationship with the child, their resources and motivation to care for the child, the child’s view on the release, the sponsor’s understanding of the child’s needs, and risk factors that may impact the child, such as the sponsor’s criminal background, history of substance abuse, mental health issues, or domestic violence or child welfare concerns.⁸⁰ ORR does not disqualify sponsors “based solely on their immigration status or for law enforcement purposes.”⁸¹ Importantly, while sponsors enter into agreements with the federal government to provide for the physical and mental well-being of children,⁸² there appears to be no enforcement mechanism at ORR’s disposal to ensure that sponsors live up to their agreements.

Once a child is transferred to a sponsor’s custody, “ORR’s custodial relationship with the child terminates,” and care providers are required only to keep a child’s case file open for thirty days to conduct a “Safety and Well-Being Follow Up Call.”⁸³ The purpose of the safety call is to determine whether the child is safe, still in the sponsor’s care, enrolled in or attending school, and aware of upcoming immigration court dates.⁸⁴ If the care provider cannot get in touch with the child or sponsor, the provider is required only to document that fact in the child’s file,⁸⁵ a somewhat inadequate requirement given that the government has tasked itself with ensuring the well-being of unaccompanied children.⁸⁶ While ORR provides post-release services to some children with certain needs, most children and sponsors are given access only to a national hotline to be called when needed. With hotline reports of labor trafficking and exploitation of unaccompanied children jumping up in 2023,⁸⁷ it is alarming that ORR was able to contact only 81% of sponsor households between 2021 and 2022.⁸⁸ But even more alarming is that ORR has no legal responsibility to track children once they leave its custody⁸⁹ or to remove children from unfit sponsors in the event a child is exploited.⁹⁰

III. Labor Law’s Role in protecting Unaccompanied Children

While the federal government grappled with an influx of unaccompanied minors during the Biden presidency, the United States saw a 69% increase nationwide in the number of documented cases involving children employed illegally from 2018 through 2022, notably in dangerous workplaces such as meatpacking plants, construction sites, and food-processing factories.⁹¹ This increase corresponded with several news reports in 2023 detailing migrant children working in dangerous workplaces in violation of child labor laws,⁹² along with reports documenting the possible trafficking of migrant children into forced labor.⁹³ While this Note has explored the leaky system of sponsor placement for unaccompanied minors, an exploration of the laws governing child labor protections also needs to be conducted before the holes in the system can be addressed.

A. The Fair Labor Standards Act of 1938 and Related Child Labor Policies

The federal law governing the employment of child labor is the Fair Labor Standards Act of 1938 (“FLSA”).⁹⁴ The FLSA imposes occupational and hourly restrictions for children of different ages and provides penalties for employers who violate these restrictions. According to § 212(c) of the FLSA, employers⁹⁵ cannot employ any “oppressive child labor” in commerce, the “production of goods for commerce,” or any “enterprise engaged in commerce or the production of goods for commerce.”⁹⁶ Oppressive child labor means that an employer employs a child under the age of sixteen in any industry except for those exempted by the Secretary of Labor⁹⁷ or that a child between sixteen and eighteen is employed in any occupation declared as particularly hazardous for the child or detrimental to the child’s health.⁹⁸

There are several subparts in the Code of Federal Regulations (“CFR”) that either permit or prohibit specific jobs that children are allowed to work, with jobs not explicitly allowed by the CFR considered prohibited.⁹⁹ The CFR allows minors to work in jobs like babysitting, newspaper delivery, and retail work,¹⁰⁰ but minors are generally not allowed to work in hazardous occupations such as manufacturing, mining, processing, construction, roofing, warehousing, or transportation of persons.¹⁰¹ Working hours for children between the ages of fourteen and fifteen are restricted by the FLSA, with such children generally not allowed to work during school hours, more than three hours a day or eighteen hours a week while school is in session, or beyond 7 p.m. during the school year or 9 p.m. during the summer.¹⁰² Children sixteen and older can generally work without hourly restriction in any jobs that have not been declared hazardous or detrimental to their health. While occupational restrictions remain in place as children age, federal law removes hourly restrictions when children turn sixteen, a somewhat arbitrary line, but one that corresponds with the maximum age of compulsory school attendance in many states. The main thrust of the FLSA’s restrictions is that children should not be working in hazardous workplaces or doing jobs that are detrimental to their health, nor should work interfere with their education.

An employer who violates the FLSA is subject to civil money penalties and possibly up to six months in prison if they willfully violate a child labor provision subsequent to an earlier conviction.¹⁰³ Employers are subject to a maximum fine of $15,138 for each employee who was the subject of a child labor violation and can face fines up to $68,801 for each violation that causes the death or serious injury of employees under eighteen.¹⁰⁴ For repeated or willful violations that lead to the death or serious injury of a child employee, the fine may double.¹⁰⁵ There is no private cause of action under the FLSA for children who suffer child labor violations, a problematic omission that will be discussed in Section IV.B.2.

DOL’s Wage and Hour Division (“WHD”) is responsible for investigating and determining whether employers are in compliance with the FLSA’s child labor provisions.¹⁰⁶ In 2023, WHD concluded 955 cases involving child labor violations, finding 5,792 minors were employed in violation of the FLSA, of which 502 were employed in hazardous occupations.¹⁰⁷ During the Biden presidency, WHD stepped up enforcement significantly, levying multi-million dollars in fines that nearly doubled in amount year-over-year between 2022 and 2024.¹⁰⁸ Unfortunately, the number of cases involving migrant children is not tracked by WHD, but the number of children employed in violation of federal law increased 88% between 2019 and 2023,¹⁰⁹ corresponding with the influx of unaccompanied child arrivals.

In February 2023, DOL and ORR recognized the link between increased child migration and increased child labor exploitation and entered into an interagency agreement to combat child labor exploitation amongst unaccompanied children.¹¹⁰ Pursuant to this agreement, DOL and ORR collaborate and share information regarding child labor investigations and child placements.¹¹¹ The agencies gave an example of what this information sharing looks like: DOL shares information regarding an active child labor investigation with ORR, and ORR scrutinizes its sponsor vetting process in the related geographic location for signs of exploitation affecting unaccompanied children placed nearby.¹¹² In the agreement, WHD pledged to affirmatively initiate investigations in which child labor violations are most likely to occur, while ORR pledged to follow up with any child who calls the ORR National Call Center with a safety concern, a practice that was not previously utilized.¹¹³ Most importantly, the agreement called on Congress to increase funding for WHD and the Office of the Solicitor to investigate child labor cases and to increase civil penalties for child labor violations to be more of a deterrent for employers.¹¹⁴ WHD and the Office of the Solicitor have been chronically underfunded for decades, costing WHD 12% of its staff between 2010 and 2019 and resulting in more than a hundred attorneys leaving the Office of the Solicitor.¹¹⁵ Those losses have limited the number of child labor cases that WHD and the Office of the Solicitor can investigate and conclude. Given that the actual number of child labor violations in the United States is currently unknown and WHD’s budget shortfalls leave it unable to properly investigate, there is no telling how many children are actually being exploited in U.S. workplaces.

B. Varying State Child Labor Laws

As mentioned earlier, state law plays a role in the child labor protection scheme, with each state having its own system for policing illegal child labor. Some states simply implement FLSA’s provisions into their labor codes, but many create stronger protections for minors. For instance, California follows the FLSA structure of occupational and hourly restrictions but imposes hourly restrictions on children over sixteen.¹¹⁶ California’s labor code also expands the reach of its child labor protections to any person who owns or controls real property where a minor is employed if that person benefits from the minor’s employment and knowingly permits a child labor violation.¹¹⁷ Extending liability to those who own or control property covers situations in which no employment relationship exists between the property holder and a minor. For example, if a business entity hires an independent contractor to work on the entity’s property and the contractor uses illegal child labor, the entity could be liable despite having no control over the contractor’s employee. State laws also often require children and employers to obtain work permits that can provide proof of age and detail any restrictions in working hours or tasks a minor is qualified to do.¹¹⁸

Troublingly, at least twenty-eight states have reworked their labor codes to loosen restrictions on child labor since 2021, with some states loosening hourly and occupational restrictions to the point of conflict with the FLSA.¹¹⁹ Iowa, for example, loosened occupational restrictions to allow children to work in dangerous occupations like brick manufacturing, roofing, and excavation, which are prohibited under the FLSA.¹²⁰ Iowa’s approach of allowing children to work in direct violation of FLSA restrictions is reflective of a recent push by some states to create a point of tension between state and federal law, which puts DOL on alert moving forward.¹²¹

Due to the varying approaches states take to child labor protections, state law generally is not the best tool with which to protect unaccompanied minors. While states like California may offer stronger protections than states like Iowa, unaccompanied minors will only be protected by the laws of the states in which they reside with their sponsors. Relying on state law to cure the gaps in federal law creates a system in which unaccompanied minors will be exposed to various levels of risk depending on how much emphasis states put on protecting children in the workplace.

C. Anti-Trafficking Laws Protecting Unaccompanied Children

Labor trafficking of unaccompanied minors is the ultimate concern when it comes to labor exploitation. Although the TVPRA is written to help protect minors from being trafficked by requiring DHS to determine whether an unaccompanied minor has been a victim of a severe form of trafficking or whether a child is at risk of being a victim in the future,¹²² there are not many preventative measures once a child leaves ORR custody. The precursor to the TVPRA, the Trafficking Victims Protection Act of 2000 (“TVPA”), added criminal offenses relating to human trafficking to the United States Code, which are supposed to act as a deterrent to would-be traffickers.¹²³ Under 18 U.S.C. § 1589, defendants found to be trafficking in persons can face fines and be imprisoned for up to twenty years.¹²⁴ If a trafficking violation includes kidnapping or an attempt to kidnap, aggravated sexual abuse, or an attempt to kill, the trafficker can be imprisoned for life.¹²⁵ Traffickers are people who knowingly provide or obtain the labor or services of a person by means or threats of force, physical restraint, serious harm, the actual or threatened abuse of law or legal process, or by any scheme, plan, or pattern intended to cause a person to believe that if they do not perform labor or services, they or another person would suffer serious harm or physical restraint.¹²⁶ The meaning of the term “serious harm” is broad, including physical, psychological, financial, or reputational harm that is serious enough to compel a reasonable person of the same background and in the same circumstances to perform labor or services to avoid the harm.¹²⁷ Traffickers are also subject to civil penalties, including full restitution to a victim for the full amount of the victim’s losses.¹²⁸

On its face, the penalty scheme for trafficking has robust enough punishments to deter sponsors or third parties from trafficking unaccompanied minors and abusing their labor. But the actual effectiveness of those deterrents is unknown given that there are no readily available and reliable statistics about how often traffickers are prosecuted for the labor trafficking of unaccompanied minors. Unaccompanied children have a remedy under the TVPA in the event that trafficking is proven, but trafficking tends to be very hard to prosecute, and the TVPA’s deterrents are unlikely to keep migrant children from being pressured or forced into hazardous labor in the first place. As discussed, migrant children often want to work to help their families, and it is unlikely that many know what a textbook case of labor trafficking consists of or when to report it. While these protections for unaccompanied children and punishments for traffickers are important to keep in mind, a lack of information from the government prevents this Note from being able to adequately explore and critique the TVPA’s efficacy.

IV. ISSUES WITH and possible solutions for ORR’s PLACEMENT OF UNACCOMPANIED MINORS AND Federal enforcement of Child LABOR LAWs

Migrant children working in hazardous occupations is not a new issue, but the rate at which child labor violations are increasing and the holes in the placement and supervision of unaccompanied children portend serious failings in U.S. law and the procedures that federal agencies employ. At best, the current gaps in immigration and labor law increase the risk of migrant children being exploited or harmed by working in jobs they should not be in. At worst, the gaps are large enough to allow labor trafficking to occur. Determining how to solve the issue is not a straightforward exercise. Federal agencies, shelter networks, and individuals all have a part to play, but the complex web of federal laws, regulations, and interagency agreements has been built by dealing with one symptom of the unaccompanied arrivals issue at a time. The government should take a more comprehensive approach, updating existing laws as a complete system to protect children from point A (arrival at the border) to point B (the resolution of immigration proceedings). The Biden administration rightfully responded to unaccompanied arrivals with a humanitarian approach focused on quickly getting children out of federal custody, but current law does not ensure that unaccompanied children will be adequately taken care of after their release. The TVPRA alone does not mandate ORR to do enough to protect children, nor does the FLSA provide robust enough enforcement mechanisms to properly deter irresponsible employers or third parties from exploiting children who are motivated to work for a variety of reasons. State law also cannot be relied on to adequately protect unaccompanied children due to the various different enforcement schemes at hand across the nation.

This Part will identify issues with ORR’s custody, placement, and post-release supervision of unaccompanied minors and DOL’s inability to properly deter illegal child labor. It will also discuss possible solutions that can be implemented in a way that balances humanitarian principles with employer realities and government capabilities, presenting a series of adjustments in U.S immigration and labor law that could combine to minimize the risk that unaccompanied children face labor exploitation. This Part assumes that the majority of employers are responsible and seek to fully comply with the law. It uses the term “irresponsible employers” to mean those that would willingly resort to illegal child labor in violation of state or federal law.

A.Issues with ORR’s Custody, Placement, and Post-Release Supervision of Unaccompanied Minors

1.Proper Vetting of Sponsors Versus Speed of Release

As discussed in Part III, there are many drawbacks to holding children in ORR custody. Children may suffer sexual harassment and abuse in government facilities,¹²⁹ and a child’s lack of contact with their family can lead to toxic stress that permanently alters brain chemistry.¹³⁰ Children being traumatized in federal custody is real. Studies show that detention is “deleterious to the mental health of immigrants” and that detained children experience significant psychological distress, especially when separated from their caretakers.¹³¹ While the risk of harm to migrant children in ORR’s custody has been clearly documented, releasing a child to a sponsor too quickly can put the child at risk of not being properly cared for, possibly leading to the child’s exploitation or trafficking, examples of which reporters have repeatedly identified.¹³² Thus, the government must strike a risk-minimizing balance between quickly placing unaccompanied children with sponsors to avoid prolonged detention and properly vetting sponsor households to ensure a safe environment for paroled children.

During the first Trump presidency, the average length of time that unaccompanied children remained in ORR custody ballooned to 102 days, partially as a result of an information-sharing agreement between ORR, Immigration and Customs Enforcement (“ICE”), and CBP that was geared toward increasing the due diligence required for sponsors.¹³³ The agreement called for ORR to share the citizenship and immigration status, criminal and immigration history, and biographic and biometric information about potential sponsors and their household members with ICE.¹³⁴ In turn, ICE would provide summaries of a sponsor’s immigration and criminal histories for ORR to make a more thorough decision on a sponsor’s suitability.¹³⁵ While the Trump administration sold the agreement as a more stringent vetting of sponsors to ensure the well-being and protection of unaccompanied minors, the policy was ultimately used by ICE to arrest and deport undocumented migrants who applied to sponsor children, causing a chilling effect on the number of sponsors willing to apply to take children in.¹³⁶ With fewer sponsors, increases in minors’ detention time naturally resulted. A massive backlog of unaccompanied minors in prolonged detention led the Biden administration to terminate the Trump-era information sharing agreement between ORR and ICE and temporarily waive background check requirements for sponsor applicant household members,¹³⁷ adopting a controversial policy of moving children more rapidly through the shelter system.¹³⁸ These policy changes created a major issue for the UAC Bureau: the risk of harm to children in custody was traded for the risk that children would end up in an inappropriate sponsor home. Moving back into a Trump presidency begs the question of whether President Biden’s approach should persist.

The second Trump administration should not return to a policy of sharing sponsor information between ORR and ICE, as it greatly prolonged child stays in detention while being used as a tool to deport family members who sought to reunite with children in federal custody. The Biden administration’s decision to terminate the information sharing agreement to speed up sponsor placements was the correct call, as it is not in the best interests of unaccompanied children or the government to discourage sponsorship by involving ICE in the vetting process. A child’s best interest is to be released quickly and safely, ideally into a family member’s care. But many family members of unaccompanied children may themselves be undocumented or live with others who are. Allowing ICE to scrutinize members of a sponsor’s household will undoubtedly disincentivize family members from applying as sponsors and lead to longer detention for children, as seen during the first Trump presidency. It is also unlikely that the immigration status of a member of a sponsor’s household, on its own, increases any risk to a child placed in the sponsor’s care. Likewise, the government’s best interest is also to quickly and safely place a child in a sponsor’s care, as it is not feasible for ORR to house, educate, and care for tens of thousands of children for any prolonged period of time. In its current state, the U.S. immigration system is not equipped to care for unaccompanied minors for more than a few weeks, if at all. Placing children with sponsors quickly, even if a member of a sponsor’s household may not have legal status in the United States, is better than leaving children languishing in federal detention and meets the needs of both unaccompanied minors and the federal government.

While the second Trump administration should not return to its former policies, the Biden administration’s policy of speeding up sponsor placements by waiving background checks for members of a sponsor applicant’s household should also not be used in the future. When ORR’s ability to properly care for children in custody is maxed out, sponsor placement is the only option, absent an uptick in resources meted out by Congress. That is the situation the Biden administration found itself in after taking office. But while speeding up placements is the only adequate option during times of agency overwhelm, the executive branch should not be able to resort to outright waivers of background checks for members of sponsor-applicants’ homes, as such measures impose unnecessary risk on the children that ORR is tasked to protect. The TVPRA already spells out minimum considerations ORR must make regarding sponsors,¹³⁹ and agency officials should remain beholden to minimal legal standards for the safety of unaccompanied minors.

Congress can likely address the shortcomings of both the Trump and Biden administrations by amending the TVPRA to ensure that anti-immigration administrations cannot impose unnecessary burdens on the UAC Bureau that slow child placement and that immigration-neutral or pro-immigration administrations cannot waive necessary background checks. Rather than setting a minimum standard, the TVPRA could be amended to define what a proper background check consists of, while making that background check non-waivable. While the TVPRA has minimum background check standards, Congress should take some discretion out of the hands of the Secretary of HHS by laying down a comprehensive and non-waivable background check via statute. Congress is in the best position to listen to stakeholders and balance the needs of children and HHS in outlining a background check. It can define the full scope of what a proper background check should consist of, prohibiting unnecessary steps like the extra ICE check, while ensuring that background checks cannot be legally waived by the HHS Secretary. Moreover, Congress should also statutorily guarantee that it will adjust ORR’s funding in times of system overwhelm. Such measures would add a layer of accountability and oversight over HHS in order to protect children from the harm of being released to unsuitable sponsors and guarantee that ORR has the resources it needs to properly ramp up operations during times of influx.

2.Keeping Track of Migrant Children Paroled into Sponsor Homes

The true impact of the Biden administration’s changes to sponsor vetting and child placement is currently unknown due to a lack of information about children placed into a sponsor’s care after a waived background check, which is a large part of the issue. According to former HHS Secretary Xavier Becerra, ORR has no legal requirement to keep track of children once it releases them from its custody, nor do paroled children or their sponsors have an obligation to follow up with ORR.¹⁴⁰ This is a major gap in the TVPRA and related regulations that raises the risk of labor exploitation. ORR increasingly lost touch with the children it paroled into sponsor care during the Biden presidency, as evidenced by the fact that it could not reach roughly 85,000 children for follow-up calls.¹⁴¹ Without a legal mandate to keep track of unaccompanied children upon release, ORR cannot be expected to prioritize critical measures that could help ensure the well-being of paroled children. ORR is the first line of defense in ensuring that children are in proper homes in which education is the priority, and the agency should be required to procure and maintain post-release data about whether children are attending school full-time or working, the nature of any such employment, and whether sponsors are adequately caring for them. Such data is critical in evaluating whether children are at a greater risk of harm by remaining in government custody or by being released as quickly as possible. At a minimum, Congress should amend the TVPRA to require ORR to keep track of children formerly in its custody and record statistics regarding school attendance and work performed, along with qualitative data about the child’s experience with their sponsor.

ORR does voluntarily contact children thirty days after their release and offers post-release services to a decent number of children,¹⁴² which shows that some infrastructure exists that could be scaled up. But ORR is not currently equipped to keep track of the tens of thousands of sponsored children currently in the United States and would certainly need further funding from Congress to do so. It is important to note that children would not need to be monitored indefinitely. The length of time that monitoring would be required is limited temporally by two factors: first, all unaccompanied minors are placed into removal proceedings immediately upon being transferred into ORR’s custody,¹⁴³ meaning each child’s monitoring has a guaranteed end date based on a determination of their immigration status; and second, children age out of the unaccompanied child program when they turn eighteen.¹⁴⁴ While ORR would need to significantly scale up its post-release capabilities to comprehensively track where every unaccompanied child goes and what happens to them post-release, this is likely a matter of political will that could have the backing of both conservative politicians concerned about undocumented immigrants in the country and liberal politicians concerned about the wellbeing of migrant children.

Monitoring whether unaccompanied children are attending school regularly would greatly improve the ability of ORR and DOL to identify children who may be at risk of exploitation. Much of the victimization discussed in this Note centers on unaccompanied minors who are working in hazardous conditions in violation of federal child labor laws. Children released to sponsors are usually required to attend school under state law,¹⁴⁵ but news reports make clear that many are not attending school regularly, if at all, and instead working long shifts in dangerous workplaces.¹⁴⁶ These children should be attending school full-time and focusing on their immigration matters. If a child’s attendance record in school is sparse, it may be evidence that the child is being overworked outside of school, which could point to exploitation from a third party. While ORR alone does not have the capacity or infrastructure to monitor every child it places into a sponsor home, it could enter into an information-sharing agreement with the Department of Education (“DOE”) to monitor school attendance for paroled children attending public schools. Local and state education boards regularly track student attendance in schools, and public schools that receive federal funding have the ability to share attendance statistics with DOE under the Federal Educational Rights and Privacy Act (“FERPA”).¹⁴⁷ Although FERPA protects the privacy of students’ education records (including history of attendance) and prevents them from being shared with any individual, agency, or organization without the written consent of parents,¹⁴⁸ the law only specifically affords privacy protections to parents and eligible students.¹⁴⁹ FERPA arguably does not apply to unaccompanied minors who are not in the care of their parents and, as such, would not be an impediment to DOE sharing student records with ORR. This kind of interagency agreement would provide ORR with vital information that could help tip the government off to potential exploitation of children who are not regularly attending class.

Through congressional mandate or interagency cooperation, keeping track of paroled children is the surest way to monitor their wellbeing and prevent them from working in dangerous situations. If the TVPRA were amended to mandate that ORR keep track of paroled children, an information-sharing agreement with DOE would likely be an efficient and cost-effective way to fulfill part of that mandate. Along with ORR’s information-sharing agreement with DOL, an agreement with DOE would enable federal agencies to pool their resources and work together to protect unaccompanied minors, without requiring a massive increase in funding from Congress. In today’s polarized political climate, a targeted amendment to the TVPRA and an interagency agreement are probably the most realistic and practical solutions.

3.Implementing Reporting Requirements for Sponsors

Even if ORR was mandated to monitor every unaccompanied child post-release, its efforts would not be effective without a change in current law to require sponsors and paroled children to report in to the agency. As previously noted, ORR was able to contact only about 81% of sponsor households with thirty-day wellness checks between 2022 and 2023.¹⁵⁰ Mandating ORR to contact children will not ensure contact will be made. Sponsors and children may simply be unreachable. While each sponsor signs an agreement with the federal government promising to provide for a child’s well-being, there is seemingly no requirement that a sponsor prove that they are doing so. For instance, if a sponsor coerces a child to work in order to pay for rent or meals that the sponsor is supposed to provide, ORR will not know unless the child reports the abuse to ORR’s National Call Center. The current system puts the onus squarely on children to voluntarily report their own abuse, which leads to guaranteed underreporting issues.¹⁵¹ A more humane system would require sponsors to check in with ORR at regular intervals to certify that children are being cared for, with an emphasis placed on hearing from the child directly. While such reporting requirements would still be vulnerable to sponsor misrepresentation or noncompliance, an affirmative obligation would exist for sponsors that could deter unsuitable sponsors from applying in the first place.

There may be some question as to whether tracking children post-release is actually necessary, as most children who arrive unaccompanied at the border are fifteen or older.¹⁵² Indeed, the idea of fifteen- and sixteen-year-olds entering the workforce is common in the United States,¹⁵³ but it is important to remember we are talking about a specific subset of particularly vulnerable children. It should not be controversial to say that a child’s focus should be on completing a primary education rather than working in a factory or slaughterhouse. As it stands, children who fail to attend school regularly, regardless of the reason, tend to suffer worse outcomes than those who do.¹⁵⁴ If the federal government is intent on meeting arrivals of unaccompanied children with a humanitarian focus, as it was under President Biden, it must create an immigration system that focuses on providing unaccompanied children with a proper education while keeping them from working in illegal occupations. Knowing where children are and what their condition is post-release is an important step toward meeting those goals and lowering the risk of harm.

4.Enforcement Mechanism Needed

The last major problem with ORR that this Note will address is ORR’s inability to act when sponsors fail to properly care for children. ORR’s role is limited to placing children safely into sponsor homes. It is not a federal law enforcement agency, and it is not statutorily tasked with scrutinizing whether sponsorships are successful. But ORR does require sponsors to agree to provide care for paroled children,¹⁵⁵ and it has an interest in knowing that sponsors comply with those agreements. If a sponsor’s care is lacking, ORR does not have many options to enforce its agreement and ensure that children are getting the help they need. According to former ORR Director Robin Dunn Marcos, ORR’s only recourse in such cases is to refer the matter “to local law enforcement, child protective service[s], and other federal entities as appropriate.”¹⁵⁶ ORR itself has no power to remove a child from a sponsor’s care. While referring allegations of sponsor abuse to state and local agencies seems like a reasonable process, the reliance on third-party entities to make a determination adds complexity to the UAC Bureau system and shifts the burden of protection away from the federal government. Unaccompanied children have distinct needs due to their immigration status, such that being placed into a foster home by a state or local agency may complicate their ability to seek familial help or legal representation during their immigration processes. Rather than relying on state agencies using differing processes to address sponsor abuse or abandonment, the federal government should be responsible for managing each unaccompanied minor to ensure continuity of care throughout the immigration process.

If an ORR sponsor credibly fails to honor their agreement with the federal government, there should be tangible actions that ORR can take, such as reclaiming custody of any child in the sponsor’s care and revoking that sponsor’s right to sponsor other children in the future. Rather than letting paroled children bounce between local, state, and federal agencies in the event of a failed sponsorship, Congress should amend the TVPRA to allow ORR to reassign children to suitable sponsors. Failed sponsorships include not only cases of abuse and exploitation, but also cases of neglect and abandonment in which sponsors help children get out of federal custody but then leave them to fend for themselves after release, which are not always foreseeable situations when vetting sponsors. By allowing or requiring ORR to retake custody of unaccompanied minors, Congress would incentivize ORR to follow sponsor-vetting procedures and find the right match at the outset, while allowing for continuity of contact between paroled children and the agency in the event a child is exploited by their sponsor. Increased continuity would lessen the confusion that unaccompanied children experience throughout the UAC Bureau and task ORR with the responsibility to make the program a success.

B. Inadequacies in FLSA Penalties and DOL Enforcement Capabilities

In 2023, then former ORR Director Dunn Marcos told the House Oversight and Accountability Subcommittee on National Security, the Border, and Foreign Affairs that combatting labor exploitation among unaccompanied children requires “a whole-of-government approach,”¹⁵⁷ intimating that ORR alone cannot solve the issue. Despite facing heavy bipartisan criticism for ORR’s performance, Director Dunn Marcos was correct. The federal government must act in tandem across agencies and government branches to properly safeguard unaccompanied minors. Collaborating with DOE would be a start in terms of monitoring children’s well-being post-release, but ORR cannot also monitor children in the workplace. That task belongs to DOL. While an existing agreement between the agencies exists to tackle possible labor exploitation of unaccompanied minors, congressional action and statutory changes are needed to further reduce the risk of exploitation for unaccompanied minors. This Section will address DOL’s chronic underfunding and FLSA’s insufficient statutory penalties as two issues that can be remedied to reduce the risk of unaccompanied minor exploitation. Further, it will discuss the need for a private cause of action for victims of willful child labor violations to provide children with a remedy for the harm they suffer.

1.DOL’s Chronic Underfunding Increases the Risk that Unaccompanied Minors Go Unnoticed by Federal Investigators

2023 and 2024 marked DOL’s most aggressive enforcement years in the agency’s history in terms of punishing employers who illegally employed child labor.¹⁵⁸ In response to a reported 88% jump in illegal child labor between 2019 and 2023,¹⁵⁹ DOL made clear that the rising rate “is a direct result of [the agency’s] increased emphasis on identifying child labor cases and bringing enforcement actions when [it] find[s] companies violating the law.”¹⁶⁰ The agency’s focus on expanding enforcement actions is welcome news for those concerned about unaccompanied children facing labor exploitation or trafficking, but Congress has left DOL chronically underfunded for years, undercutting WHD’s ability to properly investigate and enforce child labor laws.

In reviewing DOL’s 2024 budget, the number of investigators that WHD employed is near the lowest it has been in the last fifty years, down significantly from the peak level achieved in the 2013 fiscal year.¹⁶¹ According to the agency, reduced staffing levels limit WHD’s ability to “develop impactful cases,” and “[c]ontinuing to operate at these levels poses significant risks to the [agency’s] mission.”¹⁶² As of April 2023, WHD employed a mere 794 investigators¹⁶³ to police 11 million workplaces and enforce laws protecting roughly 165 million workers.¹⁶⁴ The number of investigators that WHD can afford to hire has eroded year-after-year since the agency employed over a thousand investigators per year from 2010 to 2013.¹⁶⁵ WHD’s 2023 operating budget authority of roughly $310 million was a slight increase over 2022’s $299 million,¹⁶⁶ but in terms of inflation-adjusted dollars, those funding figures are roughly even with the amount of money appropriated by Congress back in 2006,¹⁶⁷ demonstrating that Congress has been unwilling to increase its investment in the enforcement of child labor protections for decades. Without adequate funding, WHD cannot ensure it has an adequate number of investigators to look into allegations of illegal child labor.¹⁶⁸

The sheer number of workplaces that WHD is responsible for illustrates the problem of underfunding. If each of WHD’s 794 investigators began individually reviewing one workplace per day for signs of child labor violations, it would take roughly thirty-eight years to complete a single round of investigations of all eleven million workplaces in the United States.¹⁶⁹ Obviously, not every employer needs to be investigated for child labor violations, as many (if not most) do everything in their power to follow the law, but the illustration serves to show how thinly stretched WHD is. Under all of the statutes that WHD enforces, it concluded 20,215 compliance actions in 2023, its lowest total in ten years.¹⁷⁰ Even though its number of closed cases involving child labor violations reached a ten-year high in 2023,¹⁷¹ WHD failed to conclude the same number of compliance actions as the previous year for the sixth straight year.¹⁷² These figures should not be read to assume that federal labor law violations are on the decline. As evidenced by the sharp increase in child labor law violations nationwide, the rate of violations tends to increase in areas in which WHD focuses its attention in the first place.

The only solution to the issue of inadequate enforcement caused by understaffing is proper funding. Both chambers of Congress have made a point to try to address child labor violations by presenting bills with expanded penalties for violators,¹⁷³ but increasing penalties alone will not lessen WHD’s burden as it attempts to enforce child labor laws. Harsher penalties may deter some irresponsible employers and lead them back to a place of compliance, but the agency will likely still be stymied by the same erosion of resources and investigators as has been the case the past ten years. If Congress is serious about addressing the harms that unaccompanied children (and U.S. children) face in abusive workplaces, it needs to fully fund DOL, as the Biden administration requested in its 2024 budget. With full agency funding, WHD would have the capacity to increase child labor investigations, thereby reducing the risk that unaccompanied minors working in some of the United States’ most dangerous workplaces go unnoticed. Without adequate funding, WHD will be continually forced to ration its enforcement capabilities with an ever-shrinking roster of investigators, thus ensuring that labor exploitation of unaccompanied minors goes unnoticed.

2. Current FLSA Penalties Are Inadequate to Deter Bad Actors from Committing Child Labor Law Violations

Even if Congress adequately funded DOL, there would still be an issue of inadequate penalties for child labor law violators. As mentioned in Section III.A, FLSA violators are currently subject to a maximum fine of $15,138 for each child labor violation and can be fined up to $68,801 for each violation that causes the death or serious injury of any employee under eighteen.¹⁷⁴ By assessing fines per violation,¹⁷⁵ WHD is also able to stack penalties against violators depending on the severity of the conduct. But while these fines may be costly, the FLSA penalization scheme often feels woefully insufficient based on the harm suffered.

For instance, a contractor that hired a fifteen-year-old boy to do roofing work on a corporate building was fined $117,175 in civil penalties for FLSA child labor violations, but the harm the boy suffered included falling fifty feet to his death on his first day of work.¹⁷⁶ Proportionally, the civil penalty feels inadequate given that the boy lost his life in a job he should have never been hired for. To make matters worse, the fines collected in such a tragedy only go toward “reimbursement of [WHD’s] costs of determining the violations and assessing and collecting such penalties.”¹⁷⁷ No compensation exists under the FLSA for the victim or their family. Depending on the size of the irresponsible employer cited, a six-figure fine may not be enough of a deterrent for risky behavior.

In lieu of fines, WHD may hold an irresponsible employer accountable by activating the “hot goods” provision of the FLSA, allowing WHD to prevent the sale of any goods made using oppressive child labor.¹⁷⁸ This provision was used in 2023 against a Wisconsin sawmill operator following the death of a sixteen-year-old who was caught in a wood-stacking machine, resulting in the company’s goods being withheld from shipment.¹⁷⁹ Ultimately, in exchange for WHD releasing its hold on the goods, the sawmill operator agreed to $190,696 in civil penalties for numerous child labor violations and to place labels and signage to prevent children under eighteen from using dangerous equipment at the sawmill.¹⁸⁰ The company then fired all employees under the age of eighteen.¹⁸¹ While costly and inconvenient for the sawmill operator, the threat of such fines did not prevent the tragic outcome in the first place.

Given that child labor violations, even those involving the death of children, generally result only in civil monetary penalties that are limited by statute, Congress should revisit the effectiveness of the FLSA’s penalization scheme. The current scheme does not make up for the serious harm children sometimes suffer, nor are the penalties adequate to deter irresponsible actors from using and abusing the labor of unaccompanied children. While many responsible employers will be sure to hire competent counsel to guide their compliance efforts, irresponsible employers may not and might expose children to risk based on a cost-benefit analysis.

To illustrate an extreme case, a slaughterhouse sanitation company was fined more than $1.5 million after WHD investigators found over one hundred children employed by the company cleaning slaughterhouses across the country.¹⁸² Some of these children were as young as thirteen and suffered chemical burns, and DHS investigated possible human trafficking after finding that some of the children were unaccompanied minors.¹⁸³ In addition to chemical burns and working overnight shifts after attending school all day,¹⁸⁴ the children also lost their jobs in response to government fines and saw no compensation from the penalties levied on their employer, aside from the end of their exploitation. While the sanitation company lost some contracts with major corporations¹⁸⁵ and paid a hefty WHD fine, it otherwise showed few, if any, signs of a long-term setback in operations and still employs about 16,500 workers nationwide.¹⁸⁶ The children who were the subject of the violations arguably fared much worse, specifically the unaccompanied minors, as such children are often motivated to work to send money home to their families¹⁸⁷ and probably needed their jobs, however exploitative. Moreover, if the sanitation company properly terminated the unaccompanied minors in its employ, the unaccompanied minors were likely left with no recourse whatsoever, as the FLSA provides no private cause of action for victims of child labor violations.

While this Note assumes that most employers want to do the right thing and do not wish to exploit children, irresponsible or negligent actors do exist. So, what statutory fixes can be made to increase deterrence? As noted earlier, several bipartisan bills have been proposed in Congress in recent years to strengthen the penalties for child labor violations.¹⁸⁸ An interesting bill advanced by Senators Brian Schatz and Todd Young, the Stop Child Labor Act,¹⁸⁹ proposed to increase the maximum FLSA fines to $132,270 for common child labor violations and $601,150 for violations that result in serious injury or death to a minor.¹⁹⁰ It also proposed a private cause of action for exploited children to seek up to $250,000 in punitive and compensatory damages in federal court.¹⁹¹ By proposing increased fines and a private cause of action, the senators’ bill addressed two issues that make current labor law so ineffective as a deterrent for irresponsible employers, thus serving as an intriguing model for how labor law could evolve to safeguard unaccompanied minors.

First, FLSA fines are currently far too low to deter many employers. Even the sizeable $1.5 million fine mentioned above can be a drop in the bucket for many companies. The sanitation company that absorbed the $1.5 million fine was bought for close to $1 billion in 2014¹⁹² and sold for an undisclosed amount in 2018 to a private equity firm with a January 2025 market cap of $210 billion.¹⁹³ While most employers are responsible and seek to avoid child labor violations, irresponsible actors may simply conduct a cost-benefit analysis and turn a blind eye to potential child labor violations in their workplaces if the payoff is high enough. There is also an issue of companies failing to recognize an appreciable risk of harm to children when utilizing staffing agencies or contractors who place children in company workplaces.¹⁹⁴ To have any kind of a deterrent effect, FLSA fines need to be high enough to convince irresponsible employers to seek full compliance with the law. Otherwise, if the cost is negligible, irresponsible actors will simply build potential penalties into their business models and accept the risk of getting caught. The Stop Child Labor Act proposed increasing the minimum and maximum fines nearly tenfold, with penalties increasing annually in lockstep with the consumer price index for all urban consumers.¹⁹⁵ It is hard to say whether these increases would be enough to properly incentivize every irresponsible actor to comply with the law or too punitive for responsible employers who mistakenly violate the law, but increases of any kind are a start and are recommended by this Note.¹⁹⁶

Second, granting a private cause of action to children who suffer exploitation may be more effective than assessing WHD penalties in remedying the harm caused, provided that responsible employers are protected from unnecessary and unfair litigation. The Stop Child Labor Act’s inclusion of liability in the form of punitive and compensatory damages for child victims is a model that could help increase deterrence and provide an avenue for unaccompanied minors to seek justice, an avenue which does not currently exist. As seen earlier, employers who are fined by WHD for child labor violations sometimes terminate all minors in their employ, even children who are not the subjects of the violations. Due to the particular needs of unaccompanied minors, they may be incentivized to work, even if the work is exploitative. Thus, losing a job, even an exploitative one, can harm these children more than it helps at times. In such a situation, government action essentially victimizes unaccompanied minors further, exposing them to a vicious cycle in which they are exploited in a job that they need, fired when DOL cracks down, and then forced to find another available job, even if it too is dangerous. Providing such children with a cause of action would give them a remedy to their individualized harm. Moreover, litigation can enable facts to come to light that demonstrate the true harm that unaccompanied minors at times suffer.

The federal government will soon be able to look to Colorado to see whether a private cause of action is viable. Colorado added a private cause of action to its labor code for aggrieved children who suffer child labor violations, which became effective on January 1, 2025.¹⁹⁷ Depending on the violation suffered, a child can recover anywhere from $500 to $65,000.¹⁹⁸ This scheme provides an outlet for exploited children to seek redress where they otherwise may not have been able to. It is worth noting, however, that such a system could be abused by children who lie about their ages, thus burdening responsible employers. Unaccompanied minors seeking work are not immune to misrepresenting their ages to employers. Importantly, Colorado’s additions to its labor code protect responsible employers by allowing actions against an employer to be waived if a minor intentionally misleads the employer about their age.¹⁹⁹ Further employer protections may be needed to avoid incentivizing frivolous litigation, such as limiting an employer’s liability in situations in which the employer was merely negligent. A delicate balance must be struck so that unaccompanied minors can seek justice and compensation without employers bearing an undue burden by having to litigate unnecessarily.

Increased fines and the availability of a private cause of action for exploited minors, with some guardrails to protect responsible employers, would add an appropriate level of deterrence to existing law and provide an avenue for unaccompanied children who are wronged to actually be compensated for their harm. Without strong deterrents, the rate of child labor violations nationwide may continue to increase, leaving unaccompanied minors at an increased risk of exploitation. At a minimum, Congress must properly fund DOL so that WHD can continue its important mission of uncovering exploitation of unaccompanied minors in the workplace.

C. Summary of Solutions

To reduce the risk of unaccompanied minors being exploited in U.S. workplaces, a number of measures need to be taken. As discussed in Section IV.A, Congress should first ensure that ORR never waives background checks for sponsors. Next, Congress should amend the TVPRA to require ORR to monitor children formerly in its custody and record school attendance and employment statistics for unaccompanied children, as well as qualitative data about each child’s experience with their sponsor. This monitoring can be accomplished by ORR increasing post-release services for all children and creating an information-sharing agreement with DOE to track school attendance among unaccompanied minors. Moreover, regulations should be implemented to require sponsors and unaccompanied children placed into their care to report to ORR periodically. To meet the mission of monitoring hundreds of thousands of paroled children, Congress will have to direct proper funding and resources to ORR, as well grant ORR the statutory authority to reclaim custody and find new sponsor homes for children whose sponsors fail to care for them.

Addressing ORR’s issues alone is not sufficient. A whole-of-government approach is required, whereby Congress must properly fund DOL so it can increase enforcement actions against irresponsible parties engaging in illegal child labor. Increased enforcement can be accomplished only by properly staffing WHD, which requires DOL to be fully funded. Additionally, Congress should act to increase the penalties that DOL can assess for child labor violations and create a cause of action for victims of illegal child labor, provided that any cause of action has proper protections built in for responsible employers. If implemented as a comprehensive set of reforms, these solutions will minimize the risk of unaccompanied children being victimized and exploited for their labor.

CONCLUSION

This Note sought to identify the gaps in federal immigration law and labor law that increase the risk of labor exploitation for unaccompanied minors who are placed in sponsor homes in the United States. While immigration law and labor law are usually looked at separately, this Note set out to recommend a comprehensive set of measures that could be taken in both areas of law to meet the common goal of mitigating the risk of harm that unaccompanied minors face due to their unique circumstances.

In making these recommendations, this Note examined a series of overlapping statutes and policies that are either structurally unsound or undermined by congressional inaction and underfunding. The TVPRA’s text and ORR’s approach to child placement are too relaxed and put unaccompanied children at an increased risk of exploitation. The TVPRA mandates government action only while unaccompanied minors are in ORR custody and relieves the government of any responsibility once children are placed into sponsor homes. Moreover, ORR does not have the resources or infrastructure available to effectively monitor every child that it releases from its custody. Similarly, while the basic structure of the FLSA is sound, the statute is undermined by relatively weak penalties and provides no avenue for child victims to seek compensation for the harm they suffer. Moreover, although Congress has signaled that it wants child labor protections to be enforced, it has underfunded the agency responsible for upholding child labor laws for years, leaving DOL understaffed and unable to meet its critical mission of holding irresponsible employers accountable and ensuring a safe workplace for children and adults alike.

Protecting unaccompanied children from labor exploitation cannot be accomplished by addressing only one set of laws or a single federal agency. A whole-of-government approach is needed whereby the legislative branch addresses gaps in current law and the executive branch uses all of the levers at its disposal to combat the issue. Legal adjustments in both immigration law and labor law and congressional funding are needed to empower ORR and DOL to fulfill their missions, and interagency agreements should be entered into and maintained in order to safeguard unaccompanied minors through their entire journey with the UAC Bureau. In the immigration arena, Congress should amend the TVPRA to require ORR to monitor children who are released from government custody until their immigration matters are settled or they age out of the UAC Bureau, and ORR must be given the authority to reclaim custody and find new sponsor homes for children who are being abused or exploited by their sponsors. ORR should also find creative ways to monitor children in lieu of increased federal funding, such as entering into an information-sharing agreement with DOE. Finally, sponsors and unaccompanied children should be required to check in with ORR as a means to demonstrate that the child is being properly cared for.

Once children have been released from ORR custody, DOL is uniquely positioned to safeguard them from employer exploitation. But DOL needs to be properly funded by Congress to be able to adequately monitor and respond to reports of illegal child labor. Understaffing has hindered DOL’s ability to investigate illegal child labor, which puts unaccompanied minors at a greater risk of harm in dangerous workplaces. While an information-sharing agreement with ORR to identify potential exploitation or trafficking amongst unaccompanied minors is a good start, DOL needs help from Congress regarding enforcement. Congress should first update the FLSA to ensure that financial penalties are high enough to act as a proper deterrent against illegal child labor. Congress should also consider providing victims of illegal child labor with a private cause of action to seek individual justice, so long as proper protections exist to prevent frivolous litigation against responsible employers.

Unaccompanied children are a particularly vulnerable group, made even more so by the shifting political winds in the United States. With the current gaps in federal law and new leadership in the executive branch every four years, unaccompanied minors are falling through the cracks and ending up in prohibited workplaces. No single agency or statutory scheme is capable of protecting each child through every step of their immigration journey. But through a collaborative and whole-of-government approach, the United States can address the shortcomings in federal immigration and labor law to properly mitigate the risk that unaccompanied children face exploitation. If Congress truly cares about children being exploited in the workplace, it should not hesitate to act by amending the TVPRA and FLSA and properly funding ORR and DOL. Congressional critiques of these agencies will not fix the structural problems hampering their performances; only congressional action can do that. The federal government has properly committed itself to protecting unaccompanied children, but it is long past time that it lives up to that commitment.

98 S. Cal. L. Rev. 761

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Charlie Murphy*

* Senior Editor, Southern California Law Review, Volume 98; J.D. Candidate 2025, University of Southern California Gould School of Law; B.A. 2011, Emerson College. Thank you to Jeremy Gartland, Isabelle Yuan, Michelle Solarczyk, and the staff of the Southern California Law Review for their expert edits and wonderful feedback, and to Professor Rebecca Brown for her guidance and tutelage.

I especially want to thank Professor Henna Pithia and my International Human Rights Clinic classmates. Advocating for the rights of vulnerable and politically unpopular groups requires bravery and sacrifice, and the passion that Professor Pithia and my IHRC family brought to their work inspired me in writing this Note and left me in awe.

Criminalization: An Exceptionally American Response to Homelessness

July 2025July 2025Jacob Schwessinger*

This Note analyzes the recent trend of criminalizing homelessness in the United States. The first half discusses homelessness through the lens of American exceptionalism as a comparative tool. Comparing America to its international peers helps us better understand why America’s response to homelessness has become increasingly punitive. In doing so, the Note makes a novel contribution to American exceptionalism literature in applying the concept to homelessness. Specifically, it shows that while American homelessness rates are not unusually high, American shelter rates are unusually low relative to other western democracies. The Note shows this by combining national homelessness reports into a single dataset and document. The second half of the Note discusses current constitutional doctrine relating to homelessness, focusing on City of Grants Pass v. Johnson. This section uses the first half’s analysis to show why, contrary to the Supreme Court’s decision, the Ninth Circuit’s ruling was, at its core, correct on a legal and sociological level in applying status crimes doctrine to homelessness. In doing so, the Note builds on others’ defenses of the Ninth Circuit’s ruling by both adding to those legal arguments and bolstering them with a sociological grounding, offering a new way of thinking about status crimes in general and homelessness in particular. The Note mounts a defense not only of now-outdated homelessness constitutional doctrine, but also of a shift in American political culture that recognizes homelessness as a product of social circumstances rather than individual failure. Such a change is a necessary prerequisite for curbing, on legal and political levels, America’s intensifying trend of criminalizing homelessness, the first step in bringing America in line with its peers and actually solving homelessness.

Introduction

In 2010, Debra Blake, a resident of Grants Pass, Oregon, lost her job.¹ Already in a precarious financial position, she could not afford to remain in her home and was forced out.² For the next ten years, she had no choice but to spend her nights in a variety of locations, either in temporary shelters or on the streets of Grants Pass.³ This already devastating and tumultuous experience was made worse beginning in 2013, when Grants Pass began issuing civil citations to people sleeping on public property.⁴ Between 2013 and 2019, Blake accumulated over $5,000 in fines.⁵ If she did not pay those fines and was caught by the police on city property, she would be subject to criminal prosecution for trespass.⁶ With nowhere else to go, Blake was on the brink of just such a prosecution. Before any prosecution could take place, however, Debra Blake died. Little is publicly known about her death. She was sixty-two.⁷

Blake’s story is tragic, but it is far from unique in the United States. As of 2024,⁸ over 770,000 people were living without a home or apartment in America.⁹ In response, cities across the country, including Grants Pass, have passed laws and regulations increasingly hostile to their homeless residents.¹⁰ Before passing away, Blake filed a class action lawsuit with other homeless residents against Grants Pass.¹¹ She alleged that the practice of fining people for sleeping on public property violated the Eighth Amendment’s ban on status crimes—crimes which criminalize people solely for their states of being rather than their actions.¹² Although she did not live to see the result, the Ninth Circuit agreed with her claim that the city’s practice was unconstitutional.¹³ Grants Pass, however, appealed the case to the Supreme Court, which in 2024 ruled in favor of the city.¹⁴ The ruling solidified and gave constitutional cover to the nationwide trend of municipalities criminalizing homelessness.

How did we get here? What has led to so many towns and cities in the United States to criminalize homelessness? Is America unique in this regard? How should the Court have ruled? This Note explores these questions through the concept of American exceptionalism and American history to better understand and justify legal doctrine and arguments surrounding the criminalization of homelessness.

The first half of this Note, Part I, explains American homelessness and compares it to America’s international peers. Section I.A outlines its methodology showing that an approach to legal scholarship that puts black-letter law in social context is imperative for understanding law. Section I.B introduces newly synthesized data on homelessness rates and shelter rates among western democracies where data is available, showing that while America’s homelessness rate is not uniquely high, its rate of unsheltered homeless people is. The subsequent parts of this Section explain these findings. Section I.C examines government spending and America’s comparatively weak social safety net writ large. Section I.D outlines American public opinion and ideology, unveiling a culture of individualism over collectivism using a variety of political documents and public opinion polling. Section I.E discusses the role of race and homelessness, showing how America’s history of racial oppression enables and exacerbates the problem of homelessness. Section I.F explains America’s turn towards criminalization as a “solution” to homelessness, embedding it in larger trends of American history and ideology.

The second half of this Note, Part II, outlines and defends current Ninth Circuit legal doctrine on homelessness. Section II.A gives an outline of current law, showing how the Ninth Circuit used the Eighth Amendment’s status crime doctrine to bar cities from utilizing what is effectively a loophole in constitutional law. Section II.B examines the arguments made in City of Grants Pass v. Johnson. Section II.C analyzes the Supreme Court’s eventual decision in the case. Section II.D defends the Ninths Circuit’s ruling against the Court’s decision. It takes the stance that the Ninth Circuit’s understanding and application of status crime doctrine fits well within the more collectivist understanding of reality as comprehended by those in other western democracies. Finally, Section II.E calls for a change in popular American ideology that is likely to motivate the Court’s decision and current municipal law. Only a shift away from an individualist and towards a collectivist understanding of society can fuel the political will to change homelessness law.

Homelessness Compared and Explained

This Part uses the lens of American exceptionalism to elucidate homelessness data and policy in the United States, comparing it to other western democracies in order to better understand America’s turn to criminalization as a “solution” to homelessness.

A.A Preliminary Note on Method

This Note takes a relatively unique approach to the study of homelessness law and doctrine. That is, it does not take law as an isolated field that can (or should) be studied on its own, or with a mere dash of policy analysis thrown in at the end. Rather, it sees law as embedded in and determined by social context. Such a strategy, according to some, has been described as “the single most revolutionary development in modern legal thought.”¹⁵ This is not to say that all legal research must consider law this way. Rather, it is to say that doing so is useful and worthwhile, one of many forms that legal analysis and thought can take. Thus, while not all analysis in this Note is directly legal, the consequences of the ideology and governmental policies outlined in this Note are directly legal, manifesting in municipal decisions to criminalize homelessness and court decisions responding thereto. In addition to the strictly legal arguments made below, another contribution of this Note is an analysis of what motivates recent American legal trends. Such an analysis is imperative not only for understanding and evaluating current trends, but also for analyzing the root causes and offering solutions in domains that extend outside of law yet influence law, such as notions about what has to change in popular American political ideology. When legal arguments go hand-in-hand with political arguments, since law is always bound up with politics,¹⁶ they become all the more potent. As such, this Note takes an approach that is interdisciplinary and necessarily so.

The first half of this Note uses the lens of American exceptionalism to help explain homelessness. There are many approaches to the understanding and use of the concept “American exceptionalism.”¹⁷ This Note seeks to add to the body of literature exploring American exceptionalism by examining a previously understudied topic: homelessness and homelessness policy. The Note deploys a method close to that developed by Charles Lockhart in The Roots of American Exceptionalism. That is, it utilizes a schema that draws on historical, institutional, and cultural variables to explain both the nuances of America’s homelessness problem as well as America’s political reaction to homelessness.¹⁸ In doing so, this Note shows certain aspects in which America is exceptional with regard to its stance towards homelessness, which is reflected both in its policy and ideological belief system.

Moreover, placing America in a comparative light helps explain why America’s response has been increasingly punitive. By analyzing recent American history, one can see how criminalizing homelessness fits within larger cultural and structural trends. A comparative understanding of American societal disposition towards economic opportunity in general and homelessness in particular is imperative for understanding why America is making the choice to criminalize homeless people. These trends explain why the Supreme Court chose to reverse the Ninth Circuit’s ruling in Johnson.¹⁹ But first, these underlying trends must be identified, and they are examined below.

B. Homelessness Compared

This Section conducts a brief, international comparison of homelessness rates to see if and how America is unique with regard to its treatment of homeless people. Delving into a data collection that is the first of its kind, this Section shows that while the rate of homelessness in America is not exceptional, the percentage of homeless Americans who are unsheltered is very high relative to other western democracies.

Numerous reasons might lead one to suspect that America has an exceptionally high homelessness rate compared to other western democracies.²⁰ For instance, the United States, even after taxes and monetary transfers, has a very high level of income inequality relative to other western democracies.²¹ Its “Gini Coefficient,” which measures income inequality, ranks higher than Australia, New Zealand, Canada, and most European Union countries.²² Moreover, since the 1980s, the share of income going to the top 10% of earners has consistently increased on an annual basis.²³ While the United States used to have a more egalitarian distribution of income in the early 20th century, this is no longer the case today.²⁴

However, a closer examination of the data²⁵ on homelessness rates from other western democracies reveals that, in this realm, America is unexceptional:

Figure 1. Percentage of Population Homeless by Country

Note: Data assembled by the author. See Appendix infra for methods.

Figure 1 shows the rate of people experiencing homelessness by the percentage of the population of the country in which they reside. Essentially, it is the homelessness rate of each country. As the chart shows, the homelessness rate in the United States is not particularly high compared to other western democracies. Among seventeen other countries where data is available, the United States ranks as having the seventh highest homelessness rate. Its rate almost exactly matches the overall homelessness rate for the European Union.²⁶

But homelessness rates alone do not tell the whole story. Delving deeper into the data, when one examines the percentage of homeless people spending nights unsheltered, one sees a very different picture:

Figure 2. Percentage of Homeless Population Unsheltered by Country

Note: Data assembled by the author. See Appendix infra for methods.

Not all countries included in Figure 1 have data available for the rate of unsheltered homeless people in the studies used. Still, thirteen countries do. Figure 2 shows that the percentage of unsheltered homeless people is far higher in the United States than it is in most other western democracies. Its rate of unsheltered homeless people is 33% higher than the next closest country, New Zealand. It is approximately double the EU average. Of the countries examined, only Czechia has a higher rate. Thus, while the United States does not differ in kind from other western democracies in this respect, it does significantly differ in degree.

As such, although there is not a particularly large number of people experiencing homelessness in the United States relative to other western democracies, the percentage of these people that are unsheltered in the United States is relatively high. This difference is important for both analyzing the problem itself and for understanding how America has reacted to homelessness. If America had a unique level of homelessness, one would seek to explain this phenomenon by examining the root causes of homelessness. However, given that America has an unusually high number of people living outdoors or on the streets, this means that shelter availability is comparatively low in the United States relative to other western democracies.

This specific intervention is important. Homelessness has been hitherto neglected in the debate around American exceptionalism. This is likely because, at first blush as shown above, America does not have an exceptionally high rate of homelessness. Still, there is a popular perception that America does have a much higher homelessness rate than other western democracies.²⁷ The major difference between America and its peers is the rate of shelter availability. Because people (especially in the United States) do not see the level of homelessness in Europe, they think it does not exist.

Therefore, to understand why America is exceptional in the realm of homelessness, the subsequent four Sections of this Note seek to understand America’s response to homelessness rather than homelessness’s causes.

C. The Social Safety Net

The first factor that helps explain why America lacks the homeless shelters that other western democracies have is the relatively weak social safety net its state, local, and federal governments maintain. Seen in this light, America’s lack of homeless shelters is not an isolated fact that sets it apart from other western democracies. Rather, it is part of a larger trend concerning America’s relatively weak social safety net.

In general, American total government expenditure is less, as a proportion of its total GDP, than most other western democracies. In 2019, for example, the U.S. government’s expenditure as a percentage of GDP was 36%, while France’s was 55%, Sweden’s was 48%, the United Kingdom’s was 38%, and New Zealand’s was 39%.²⁸ Although these are only a few examples, there is a general historical trend of the United States’ government being outspent by other western democracies.²⁹ This is in spite of the fact that America wildly outspends those same countries on maintaining its military, accounting for 39% of the world’s military expenditure.³⁰

This difference in government spending is reflected in the provision of a variety of social services. For example, many other western democracies own and operate their railroad and airline systems.³¹ In America, however, the federal government has not made a similar commitment. The same can be said for the operation of utilities. While other western democracies often directly operate means of communication (like telephone lines) or energy distribution (like gas and electricity), the United States has largely left the operation of these basic necessities to the private sector.³² There is thus a more minimal role of government in the coordination of economic activity in America compared to other western democracies.

America’s social safety net is similarly weak. In a wide variety of areas, from mandated maternity leave to child day care to low-income housing, the U.S. government³³ provides comparatively less to its residents than most other western democracies.³⁴ A paradigmatic example of this trend is healthcare. The United States is the only western democracy to not ensure medical insurance coverage for virtually all of its residents.³⁵ This is partially due to the fact that the United States achieves its 90% health care coverage through a patchwork system of private insurers and government programs like Medicare and Medicaid.³⁶ Moreover, the story goes further than simply who is providing the care. The United States has largely left other key elements of the healthcare system to the private sector, such as price-setting. This has also contributed to the United States’ relatively high cost of healthcare.³⁷

In sum, America has a relatively weak social safety net compared to other western democracies. This is intertwined with the fact that the U.S. Constitution does not announce rights in a positive sense. Rather, it accords negative rights. The Constitution’s Bill of Rights consists of private activities that the government will be largely restrained from infringing upon, like the right to freedom of speech, the right to bear arms, and the right against cruel and unusual punishment.³⁸ Commonplace in other western democracies, however, are positive rights. These are rights that promise positive provisions that the government accords its citizens, such as food, shelter, and healthcare.³⁹ While not all of these guarantees are necessarily lived up to by those governments, particularly those of poorer nations, the presence of de jure positive rights nonetheless signals a difference between America and its peers.

Thus, on a structural level, the United States’ relative lack of shelter for people experiencing homelessness fits well in this larger picture. America’s government spending in general and social safety net in particular are far weaker than other western democracies. Even though America’s economic and housing systems have not produced more homeless people, a relative lack of spending in social programs can begin to shed light on why American governments—federal, state, and local—have not been willing to build more shelters for those experiencing homelessness.

But more explanation is needed. America is, after all, a democracy.⁴⁰ Why have Americans refrained from voting to expand their welfare state? Why are they not voting to expand government funding to include the construction of homeless shelters? What explains the gap between America and its peers?

D. Public Opinion and Ideology

To explain America’s relatively weak social safety net in general and its refusal to adequately shelter homeless people in particular, a deeper dive into American ideology and voter belief is necessary.⁴¹ This Section does exactly that, using a variety of public opinion polling as well as the documents of elected officials to show how ideological beliefs around individualism inform American social policy and homelessness policy.

To engage popular ideology, public opinion polling is a useful place to start. Karabel and Laurison summarized a number of useful studies comparing American public opinion to public opinion in a variety of other countries.⁴² Their analysis was enlightening. America was an outlier relative to other western democracies in a variety of ways. Americans were more likely to value freedom over equality than those in other western democracies surveyed.⁴³ More specifically, Americans were more likely to believe that the freedom to pursue life’s goals outweighed the importance of the state guaranteeing that no one is in need.⁴⁴ While the percentage of people favoring this statement was roughly 25% in France and 31% in Germany, it was over 60% in the United States.⁴⁵ Additionally, almost 50% of Americans in one survey thought that “it should not be the responsibility of government to reduce income differences.”⁴⁶ Amongst the other countries included in the survey, only New Zealand scored higher, and did so only by a small margin. The analogous proportion in most other western democracies was far lower. In another poll, the percentage of Americans surveyed who thought that private ownership of business is preferable to government ownership of business was over 60%, higher than any other western democracy surveyed.⁴⁷ The analogous figures for Germany, Australia, and Canada were roughly 38%, 39%, and 52%. Finally, most on the nose, Americans agreed with the statement “it should not be the responsibility of government to provide for the unemployed” at a rate of roughly 49%.⁴⁸ This rate was higher than every other country surveyed, except for New Zealand.

From these surveys, we can conclude that Americans not only value personal freedom more than economic equality at a higher rate than other western democracies, but also that Americans are less willing to endorse government action to assist people in dire economic straits.

Still, the differences run deeper than mere social values and government actions. Americans surveyed also differed in their explanations for the root causes of social realities themselves. For instance, one question asked whether “people are poor because of laziness and lack of willpower” or “poor because of an unfair society.” In America, 62% agreed with the former, the highest proportion of any western democracy surveyed.⁴⁹ While 50% of both New Zealanders and Australians agreed with that statement, the analogous rate for Finland and Germany was 23% and 17%, respectively.⁵⁰ Relatedly, Americans were more likely to believe that their society is meritocratic. For instance, 63% of Americans believed that success is determined by hard work rather than luck and connections, scoring higher than all other western democracies except for Finland.⁵¹ Finally, the United States had the highest rate of disagreement with the statement “success in life is pretty much determined by forces outside our control,” relative to other western democracies.⁵² Almost 70% of Americans disagreed, while most other countries surveyed had disagreement rates of 50% or less.⁵³

Thus, majorities of Americans tend to see poverty not as a social failure, but as a personal one. Moreover, Americans tend to hold these views at much higher rates than most if not all other western democracies.

These attitudes are not only passively held by Americans, but also actively practiced by their elected officials. One can see these ideas made manifest in Paul Ryan’s A Roadmap for America’s Future.⁵⁴ In the proposal, the former Speaker of the House of Representatives meticulously lays out not only policy proposals, but also philosophical and historical rationales for those proposals. These policies largely consist of scaling back levels of spending on the federal government’s social safety net. To justify these rollbacks, he appeals to many of the values outlined above, such as personal freedom and individual responsibility. He justifies his favor of markets and individual freedom by stating that in market-based economies, like America’s, “no individual or family is bound to their circumstances: they can advance, they can improve their conditions, through their own efforts.”⁵⁵

Ryan sees this “freedom” as being threatened by government intrusion into the economy through the expansion of the social safety net. Writing of efforts to expand welfare programs, he writes that “government increasingly dictates how Americans live their lives . . . [b]ut dependency drains individual character, which in turn weakens American society.”⁵⁶ Thus, although Ryan is a partisan actor arguing for particular policy solutions, here he is appealing to broader sentiments that resonate with large majorities of the American public.⁵⁷ The economic failures of individuals are not seen as rooted in structural economic forces. Rather, they are seen as failures of individuals not “bound to their circumstances.’’⁵⁸ Moreover, government action aimed at solving these problems not only fails but exacerbates them. This is in marked contrast to other western democracies, in which even conservative party members do not seek to dismantle welfare state policies.⁵⁹

Government entities, however, are not the only entities that can be used to combat poverty in general and homelessness in particular. Private charity and faith-based organizations can also play a role. The United States has the highest rate of religious belief among western democracies.⁶⁰ Although the religious belief of its residents has been moderately decreasing in recent decades, it remains comparatively strong.⁶¹ Churches are an increasingly used source of housing for homeless shelters.⁶² Some politicians have also voiced support for faith-based solutions to homelessness.⁶³ Given these facts, one might suspect that while Americans may be averse to government-run shelters, they may be more supportive of private, faith-based shelters. The data, however, simply does not support such a view. Faith-based shelters make up only 4% of shelter beds available to homeless people.⁶⁴ Thus, the American ideological emphasis on self-responsibility for one’s economic conditions outweighs both private, charitable responses as well as publicly funded ones.

Of course, many Americans see economically deprived individuals as the products of circumstances and many Europeans view poor individuals as personally responsible for their economic circumstances. America has no monopoly on these views. However, these ideas are substantially more widespread in the United States than in other western democracies. They are also reflected in U.S. government policy. When economically destitute individuals, like Debra Blake, are seen as solely, personally responsible for their situation, it is less likely that people holding those views will favor government policies to help people falling on hard times. This means that government-run shelters are less likely to receive political support. Other western democracies, meanwhile, are more likely to see homelessness as a product of social circumstances and societal failure, and therefore provide shelter.

Seen through this lens, America’s disinclination to build shelters for individuals facing homelessness does not arise through some unique hatred that America has for homeless people, but rather as part of a larger narrative about the way Americans and policy-makers think about poverty and its root causes.

E. Race and Homelessness

Inextricable from an explanation of homelessness in the United States is an account of who experiences homelessness. This Section shows not only the racial disparities of those experiencing homelessness, but also uses those demographics to help explain American homelessness policy and posture.

Obviously, the people who experience homelessness are those in poverty. Along these lines, Black and Latino people are already overrepresented, with roughly 20.1% of Black folks living in poverty in the United States today, despite being only 13.5% of the population.⁶⁵ The respective numbers for Latino folks are 28.4% and 19.3%.⁶⁶ But the numbers are even more exacerbated when it comes to homelessness. While 24.1% of homeless people are Latino, a staggering 37.3% of homeless people identify as Black.⁶⁷ Thus, the intersection of homelessness and race, at least for Black folks, is not merely equivalent to that of poverty and race. Rather, homeless people are disproportionately Black at a rate even more extreme than that of poverty.

We know that the general causation of these gaps in economic wealth, income, and opportunity are due to longstanding racial oppression.⁶⁸ But what effect does the fact that the majority of people sleeping on America’s streets are nonwhite have on our homelessness policy? Although a concrete answer is multifaceted and can probably only be arrived at indirectly, critical race theory can help provide answers. Doing so will help explain why America’s majority-minority homeless population does not receive the same amount of government and public care and attention as other countries.⁶⁹

One book within the discipline of critical race theory that can help explain why the racial makeup of the homeless population likely has an impact on the way homeless people are treated in the United States is Jody Armour’s book, provocatively titled N*gga Theory.⁷⁰ Although the book largely focuses on criminal law, it highlights important developments in both the history of American racism and recent research into white Americans’ relationship with Black Americans in the realm of cognitive science.

One of Armour’s central claims is that “the dominant brand of anti-black discrimination in post-civil rights era America is not active racial animus but unconscious racial bias.”⁷¹ This view leads Armour to locate the disparities in treatment across races not as the result of conscious racial hatred but rather that of unconscious or subconscious behavior of white Americans.

One of the ways this unconscious bias operates is through disparities in empathy for others as manifested in specific “neuroanatomical circuits underlying . . . cognitive processes.”⁷² Specifically, recent studies show that particular parts of the brain, such as the bilateral anterior insula, the anterior cingulate cortex, and the medial prefrontal cortex are active when individuals are feeling empathy, in both the emotional and cognitive realm.⁷³ Functional magnetic resonance imaging (“fMRI”) technology has allowed neuroscientists to measure when humans are and are not feeling empathy towards others. Unsurprisingly, many Americans tested in these studies show decreased empathetic neural activity when viewing people of different racial groups.⁷⁴ This was true, for instance, when twenty-eight participants were shown scenes depicting individuals of varying racial groups in painful or neutral situations.⁷⁵ Upon viewing these images, people who shared a social-racial identity with the person in need exhibited a higher level of empathetic neural activity than they did with those who did not share their ethnic group.⁷⁶ This was despite the fact that many people would not likely claim they have explicit racial bias, since the social consequences of having such a bias are negative.⁷⁷ Other studies involving mirror-neuron systems, which are responsible for unconsciously mirroring other individuals, show a similar level of racial bias.⁷⁸ Thus, there are empathy gaps across racial lines.

Here, it is important to note that these are not inevitable biological responses to inherent human differences. On the contrary, race is not a biological category, but a social one.⁷⁹ Thus, the status of who is “in” and “out” of one’s social group are constantly in flux.⁸⁰ More importantly, the categories are historically contingent, the outcome of social oppression and not biology.⁸¹ It is likely not the supposed differences in look or skin color that is the cause of these empathy-deficits, but rather socially-reinforced differentiation and hierarchies. Thus, America, as a multiracial liberal democracy, does not inherently have these issues of empathy gaps, but rather has them because of its specifically racist past and present, one that had a beginning and therefore (hopefully) has an end.⁸²

Armour eventually goes on to discuss how these empathy barriers contribute to disparities in judge and jury convictions of Black Americans. How do they apply to homelessness? The answer is probably intuitive: in a majority white country⁸³ with politics dominated by white individuals and interests,⁸⁴ a problem that largely affects nonwhite people is likely to be neglected. The fact that most homeless people are mostly not white means that our political system is less likely to respond urgently to the problem. It is a classic case of structural racism. This was true, for instance, of the natural disaster of Hurricane Katrina in 2005, wherein the government responded slower than it could have, an action which many people attributed to the fact that the people most in need were disproportionately Black.⁸⁵ Moreover, in the man-made disaster of the Flint, Michigan water crisis of 2014, the largely Black population of Flint likely suffered more intensely and received a less urgent response from the state due to the demographic of who was suffering.⁸⁶ In each of these catastrophes, it is likely that the empathy deficits that white officials and members of the public exhibited towards the Black victims contributed to the lackadaisical response by government actors. The same can likely be said for homelessness. If homeless people were not members of an oppressed group, it is likely that there would be a more urgent government response to their plight.

Unconscious bias may explain the lack of a response, but why the personal blame? How does the attribution of individual responsibility to those in poverty (a view that is popular in America and described above) intersect with the government’s general unwillingness to provide shelter to homeless people given the racial lens with which we are operating? Armour’s book has even more answers here. In it, he uses the work of Fritz Heider to show how people ascribe moral blame to individuals.⁸⁷ Specifically, when judging others, people who attribute one’s actions to their social circumstances are less likely to morally blame them for those actions than when they see those actions as stemming from an inner psychology.⁸⁸ When people focus on the situations in which others find themselves, they are less likely to morally blame those others for their bad acts. Applying this to the criminal sphere, a study done by Birt Duncan found that “violent acts tended to be attributed to internal causes when the harm-doer was black, but to situational causes when the harm-doer was white.”⁸⁹ Other studies have verified these findings.⁹⁰

If this phenomenon is occurring in the lab and in the courtroom, it is likely also occurring on the streets. In a country where people are already largely blamed for their actions, and the role of social circumstance is neglected, it makes sense that a racially-charged issue like homelessness would exacerbate this phenomenon. Racial minorities are likely being blamed for being homeless even more intensely than their white peers. Indeed, America’s response to homelessness exhibits precisely the kind of response we would expect if this were the case. Racism, individual and structural, is therefore not only responsible for Black people disproportionately becoming homeless, but also for their remaining homeless. The unwillingness to build homeless shelters and the tendency to blame people for the economic circumstances, which is exacerbated by the history of racial oppression and division in the United States, makes America’s response to homelessness much more understandable (though not justifiable). Thus, the empathy deficit and tendency to blame racial minorities—particularly Black folks—for their actions and economic status intensifies America’s lackluster response to homelessness.⁹¹

F. America’s Turn to Criminalization

The above sections explain why a substantial number of Americans likely, to a sizeable extent, blame homeless people for being homeless, but they do not explain why there has been an increasing trend towards criminalization of homelessness.⁹² This Section addresses this issue. Making sense of this trend requires a broader examination of criminal law and policy. Through this analysis, one can see that criminalizing homelessness and imprisoning people like Debra Blake makes sense according to the ideology of self-responsibility and America’s comparatively harsh criminal system.⁹³

The United States has the highest rate of incarceration of any western democracy, and nearly the highest incarceration rate in the world.⁹⁴ America is remarkably punitive in a number of ways. Not only is it the only western democracy to retain capital punishment, but its sentencing structure is also one of the harshest in the world.⁹⁵ This trend is relatively new. Beginning in the early 1970s, an explosion in the prison population—known popularly as “mass incarceration”—made the United States the world leader in imprisonment rates.⁹⁶ America’s recently learned penal instinct for dealing with social problems is more intense than in any other western democracy.

Coupled with this well-known trend is a lesser known but related trend: a proliferation in economic sanctions incorporated into the criminal system. There has been a surge in civil fines, court fines, and other financial penalties levied against individuals since the early 1980s.⁹⁷ Although debtors’ prisons are officially banned in every state, people who are unable to pay a variety of civil or court-imposed fines are being increasingly imprisoned as a result.⁹⁸

While laws directly, explicitly criminalizing homelessness are practically nonexistent, laws that impose fines on homeless people are increasingly being passed around the country.⁹⁹ This is the kind of criminal penalty that Debra Blake was facing. Although the statute she violated by sleeping on public land only resulted in a fine, a repeated violation of the statute, combined with her inability to pay, would have resulted in a jail sentence.¹⁰⁰ She would not have been the only homeless person with such a fate.¹⁰¹ While other countries have laws that criminalize some behavior associated with sleeping on public property,¹⁰² the wider availability of shelters makes those laws far less relevant to homeless people abroad.

The American instinct to not only blame people facing homelessness for their camping in public but also to actively oppose them through criminalization is also part of a larger trend. Violent attacks on homeless people have been on the rise in recent years.¹⁰³ When homelessness is seen by members of the public as a problem of individual responsibility, it makes sense that when one sees individuals taking up space on public streets or parks, they are angry at the individual rather than the socio-economic system that created the situation. The instinct to criminalize such behavior therefore follows from an individualization of the problem combined with an existing propensity for criminalization. If homeless people are solely responsible for their situation, and their situation interferes with a pedestrian’s ability to move about public grounds unimpeded, the justification for imprisonment on the grounds of public interference also begins to make sense. Imprisonment will solve the immediate problem of getting the person off the street and is justified due to that person’s inability to maintain the economic resources necessary to maintain shelter for themselves.

Of course, such a logic is withdrawn from the social realities that actually create homelessness.¹⁰⁴ While experts disagree on the specific means of reducing homelessness, there is a consensus that to do so, one must dramatically increase the supply of affordable housing and connect homeless people with social services and employment opportunities.¹⁰⁵ Unfortunately, for homeless people and housed people, Americans have a long history of not only ignoring expert opinion, but actively loathing expert opinion and intellectualism writ large. As Richard Hofstadter wrote in Anti-Intellectualism in American Life over 50 years ago, “intellectuals . . . are [seen as] pretentious, conceited, effeminate, and snobbish . . . .”¹⁰⁶ America has no monopoly on anti-intellectualism. Nor has anti-intellectualism as a cultural force been constant in its history. Rather, it is one that fluctuates in intensity.¹⁰⁷ Our current time, however, sees a more intense moment of this fluctuation, rendering a penal response to homelessness that deviates from expert opinion even more likely.¹⁰⁸

This hostility towards both homeless people and experts on homelessness can be seen in America’s current populist wave. While a deep analysis on the relationship between homelessness and populism is worthwhile, it extends beyond the scope of this Note. Still, a brief discussion can be given. Jan-Werner Müller defines populism as “a particular moralistic imagination of politics,” one that establishes a “morally pure” people against elites and outsiders.¹⁰⁹ While modern populists have long derided experts as part of the elite outsiders,¹¹⁰ homeless people themselves are increasingly considered outsiders (and paradoxically paired with elites), deviants who are apart from and opposed to “normal” people. For instance, former Fox News host Tucker Carlson recently argued that homelessness is the result of liberal leaders becoming “more lenient on petty crime” and that “because of their liberal attitudes and the mild climate, [Seattle] is a magnet for vagrants.”¹¹¹ Overall, political populism and a history of punitive responses to social problems are worryingly combining to produce laws that criminalize homelessness in spite of expert opinion.

In sum, America’s penal response to homelessness stems from both its conception of homelessness as a problem of individual failings combined with its comparatively harsh penal system. As a result, homelessness has become a hot-button political issue, one for which populists have whipped up anti-elite sentiment and anger about homelessness to create false narratives about homelessness and advocate punitive solutions thereto.

Homelessness and the Law

Now that an overview of homelessness, in both a comparative and historic-domestic light, has been given, we can return to an analysis of Debra Blake’s case and use it as a microcosm to understand and evaluate homelessness law in general. This Part, divided into several sections, outlines law concerning homelessness, both before and after the Court’s ruling in Grants Pass. Next, this Part argues that America needs a fundamental reckoning on not only the legal level, but also the ideological and social level. Only once our attitudes towards homeless people change from an individualist understanding to a collectivist understanding can our laws change to reflect that understanding. Absent such a deep reckoning, political and legal responses reflecting such a change are virtually impossible.

A. Law Prior to Grants Pass

Although Debra Blake passed away, the case she and her fellow residents filed, City of Grants Pass v. Johnson, did not. This Section outlines the case law surrounding Blake’s claim.

In 1962, the Supreme Court decided Robinson v. California. In Robinson, the Court struck down as unconstitutional part of a California statute that made it illegal “to be addicted to the use of narcotics.”¹¹² The Court reasoned that while it was within California’s power to regulate behavior surrounding and including the use of drugs, criminalizing someone for their status of being addicted to illegal drugs was fundamentally different. In doing so, California was enforcing a “statute which makes the ‘status’ of narcotic addiction a criminal offense.”¹¹³ Rather than criminalizing an action, the status of being addicted to an illegal narcotic was criminalized. The Court likened addiction to a chronic disease, one over which the defendant had little to no control.¹¹⁴ The Court reasoned that “in the light of contemporary human knowledge, a law which made a criminal offense of such a disease would doubtless be universally thought to be an infliction of cruel and unusual punishment in violation of the Eighth and Fourteenth Amendments.”¹¹⁵ This ruling established what became popularly known as the Eighth Amendment’s ban on “status crimes.”

Six years after Robinson, however, this doctrine was complicated by a case titled Powell v. Texas.¹¹⁶ The case concerned whether or not the state of Texas could criminalize being found drunk “in any public place, or at any private house except his own.”¹¹⁷ The petitioners argued that the statute violated the Eighth Amendment’s ban on status crimes since an alcoholic would have to drink, and would therefore inevitably violate the statute. The Powell Court distinguished the Texas statute from California’s statute in Robinson, however, in a number of ways. While certain parts of the decision argued that being drunk was an act rather than a status,¹¹⁸ other parts highlighted the fact that alcoholic individuals could choose to be drunk in their homes and therefore avoid violating the statute while maintaining their status as alcoholics.¹¹⁹ In a 4 plus 1 plurality, the Powell Court upheld the statute. Although the precedential impact of this decision was disputed,¹²⁰ it is affirmed in the Supreme Court’s decision in City of Grants Pass.

In 2006, a Ninth Circuit ruling found that the Constitution’s ban on status crimes covered homeless individuals. In Jones v. City of Los Angeles, six homeless individuals brought suit against the city of Los Angeles for an ordinance that criminalized “sitting, lying, or sleeping on public streets and sidewalks at all times and in all places.”¹²¹ The Ninth Circuit ruled that the City could neither criminalize the status of being homeless, nor acts that are an inevitable result of being homeless.¹²² The Court linked the status of being homeless to the number of shelter beds available. If the number of homeless people in a municipality “far exceed[ed]” the number of shelter beds available at any given time, the municipality will have violated the homeless individuals’ Eighth Amendment rights by enforcing a statute that criminalizes an integral aspect of their status as homeless people.¹²³ Although this specific ruling was later vacated on technical grounds, its logic and holdings were reincorporated into law for the Ninth Circuit in 2019, in Martin v. City of Boise.¹²⁴ While these holdings were not binding outside of the Ninth Circuit, they are highly relevant, as many states within the Ninth Circuit, like California, Hawaii, Arizona, and Oregon, have some of the highest rates of homelessness in the nation.¹²⁵

B. City of Grants Pass Heads to the Supreme Court

Before Martin, the City of Grants Pass enforced ordinances that fined individuals for sleeping on public grounds.¹²⁶ Although the city modified these ordinances in the aftermath of Martin, it did not repeal them. Rather, it tweaked them to only ban “camping,” which it broadly defined as sleeping while using even rudimentary assistance, like sleeping bags.¹²⁷ Still, after Debra Blake was cited for sleeping while using a sleeping bag on public property in 2019, she filed a class action lawsuit on behalf of all homeless people in Grants Pass, arguing that the city’s ordinance constituted a violation of her Eighth Amendment rights.¹²⁸ The Ninth Circuit agreed, since Grants Pass did not have enough shelter beds to house the homeless population within city limits.¹²⁹ Although the ordinance did not directly criminalize camping, mandating only civil fines, the Ninth Circuit panel found that these fines would still lead to criminal prosecution when they were inevitably unpaid by the homeless people fined.¹³⁰ Furthermore, although one could still “sleep” on public property, sleeping outside in Grants Pass, Oregon, where temperatures regularly dip into the 30s,¹³¹ surely constituted an untenable option. To sleep outside with the assistance of a blanket was the only option for the city’s homeless residents. Thus, the ordinance was struck down as violating the plaintiffs’ Eighth Amendment rights.¹³²

This ruling seemed like a hopeful victory for homelessness advocates, one that put a check on the trend of criminalizing homelessness. But the city appealed the case to the Supreme Court, who in 2024 announced their decision overturning the Ninth Circuit’s ruling to allow municipalities to criminalize homelessness.¹³³

C. The Supreme Court’s Ruling

In a decision that made headlines nationwide in June of 2024,¹³⁴ the Supreme Court reversed the Ninth Circuit’s decision and allowed Grants Pass to enforce its ordinance. Justice Gorsuch authored the opinion and was joined by the Court’s five other conservative Justices. The Court’s three liberals, meanwhile, dissented in an opinion written by Justice Sotomayor. Although the Court split along ideological lines in the decision, the decision was celebrated by conservative and liberal lawmakers alike.¹³⁵ This Section provides an overview of the opinion.

The Court’s decision does not explicitly argue that homelessness is the fault of the individual and therefore subject to criminal liability. Rather, it is implied. Moreover, personal responsibility for homelessness is the result of the Court’s logic. Nonetheless, it is still worth examining the Court’s reasoning in detail. The policy arguments are analyzed first, then the more strictly doctrinal arguments.

Almost cynically, the Court, largely parroting amicus curiae briefs submitted on behalf of Grants Pass, frames the policy criminalizing sleeping in public as one “protecting the rights, dignity[,] and private property of the homeless.”¹³⁶ The decision to ban sleeping in public, by the opinion’s logic, has as much to do with protecting homeless people as it does with serving the interests of the housed public.¹³⁷ The Court also highlights that others (with whom it is siding) have concluded that “[j]ust building more shelter beds and public housing options is almost certainly not the answer by itself.”¹³⁸ Rather, the Court concludes in its first section, after laying out the severity of America’s homelessness problem, that municipalities need “access to the full panoply of tools in the policy toolbox” to combat the issue.¹³⁹

What is odd about this abstract characterization of the problem is that it sees the Ninth Circuit’s ruling as limiting the options that municipalities have to combat the issue. But the ruling does not ban cities from criminalizing homelessness outright. Rather, it limits municipalities from doing so when the number of homeless people exceeds the number of shelter beds. All cities would have to do is build homeless shelters. They could then criminalize sleeping in public as much as they want. This argument is only engaged with indirectly by the Court. Rather than engaging with it substantively, the opinion argues that the standard is somehow not clear enough, since it may be difficult to count the number of homeless people on any given night and because it may be difficult for cities to estimate the number of shelter beds available and build adequate housing.¹⁴⁰ All the analysis really shows, however, is that many cities have not made good-faith efforts to comply with the ruling. Rather, cities have routinely crafted threadbare policies to “comply” in appearance only with the requirements set forth in Boise, then been challenged in court when their policies are shown for what they are, then complained to the courts that the standards are unworkable using their own ineptitude as the evidence. Thus, the Court uses the city governments’ incompetence to justify overturning the Ninth Circuit’s precedent. The logic does not acknowledge the agency of the cities and locates the failure as a lack of possibility rather than a lack of will. In reality, it is not the former, but rather the latter.¹⁴¹

Doctrinally, the Court all but overturns Robinson. The Court states clearly that “[t]he Cruel and Unusual Punishments Clause focuses on the question what ‘method or kind of punishment’ a government may impose after a criminal conviction, not on the question whether a government may criminalize particular behavior in the first place or how it may go about securing a conviction for that offense.”¹⁴² This language leaves no room for Robinson, since that ruling did place substantive limits on what could be punished. The Court states that it does not overrule Robinson because no party argued for it to do so.¹⁴³ Instead, it emphasizes that Grants Pass’s ordinance nominally criminalizes the act of camping rather than the act of being homeless. Responding to the argument that those acts inevitably follow from a status, the Court relies on the plurality in Powell, not discussing the argument that being intoxicated in public as an alcoholic is more voluntary than sleeping outside as a homeless person.¹⁴⁴ The Court gives brief mention of a possible common law “necessity” defense, but does not enforce it against Grants Pass and cites a case in which an Oregon appellate court appears to refuse to apply it to the homeless person cited.¹⁴⁵ Finally, the Court argues that there is no limiting principle that would restrict the conduct possibly off limits from punishment, arguing that the decision is better left to the legislature.¹⁴⁶ Given this, laws that criminalize acts that inevitably follow from a status are constitutional under the Court’s standard.¹⁴⁷ The decision reduces the power of Robinson to a mere linguistic limitation. As long as the government body does not explicitly criminalize a status, it is practically free to do so by punishing an act inevitably flowing from a status.

D. What Should the Court Have Done?

This Section devotes some time to defending the logic of the Ninth Circuit’s ruling and engaging critics who have spoken out against the ruling.

While many in the activist community and some in the legal community have already defended the Ninth Circuit’s logic,¹⁴⁸ many more in the legal academy have criticized it.¹⁴⁹ To defend many of the justifications already set forth above, the Ninth Circuit’s logic makes sense. If it is unconstitutional to punish someone for their “state of being,” something that does not have an actus reus and cannot be controlled by the individual in question, how can one criminalize acts that inevitably flow from one’s state of being? Being homeless, as the Ninth Circuit said in Jones, is no more in one’s control than being addicted to narcotics.¹⁵⁰ Moreover, even though Los Angeles attempted to ban “sleeping” on public property, which is an act rather than a status, the court’s logic was that to ban an act that inevitably follows from a status would be to offer a gaping loophole in status crime doctrine.¹⁵¹ It would allow the government, through a simple workaround, to criminalize statuses just as they had in Robinson. The law can and should hold accountable people who commit acts over which they have control, not acts that they are forced to do out of circumstance. Here, Justice White, in his concurrence in Powell, put the reasoning best:

If it cannot be a crime to have an irresistible compulsion to use narcotics, I do not see how it can constitutionally be a crime to yield to such a compulsion. Punishing an addict for using drugs convicts for addiction under a different name. Distinguishing between the two crimes is like forbidding criminal conviction for being sick with flu or epilepsy but permitting punishment for running a fever or having a convulsion. Unless Robinson is to be abandoned, the use of narcotics by an addict must be beyond the reach of the criminal law.¹⁵²

The same goes for homelessness. If it is unconstitutional to explicitly punish the status of “being homeless,” it should also be unconstitutional to punish acts that inevitably follow from being homeless, like sleeping on the street with a blanket in Oregon.

Moreover, it practically goes without saying that a prison sentence for homelessness will likely be short and will not solve the root causes of homelessness in the first place.¹⁵³ It will merely create a cycle of imprisonment and release that will only intensify and worsen the already terrible experience of homelessness.¹⁵⁴

Other legal scholars, like Martin Gardner, have argued that the logic of five Justices in Powell, and their logical descendants in Jones, apply a logic that would implode the entire criminal justice system.¹⁵⁵ Gardner argues that courts inquiring into the social circumstances of individuals who commit certain acts to determine whether or not they have the proper mens rea for violating a statute “is unwise and poses a radical threat to traditional criminal law doctrine that perhaps even threatens the continued existence of the criminal law itself.”¹⁵⁶ Such hand-wringing is likely unwarranted. Realistically, it is hard to imagine the doctrine of banning status crimes and statutes that indirectly criminalize statuses as going much further than narcotics addiction, homelessness, and perhaps some immigration status issues. Indeed, Gardner himself is light on examples.¹⁵⁷ Thus, a worry that criminal law in general faces a “radical threat” from Robinson and its progeny is likely undue.

But, for a moment, let us assume Gardner is correct, and that the logic of Robinson, Powell, and Jones, which begin to consider the social circumstances that affect the human agency of individuals who commit crimes, does begin to question the underlying premises of criminal law. Below, this Note will take the view that the aforementioned European view of human nature and decision-making is the more accurate one than the hyper-individualistic American view. Considering that view with specific regard to this case, this Note asks: why not? If people accept the underlying logic of Robinson, why not “carry things to their logical conclusion”¹⁵⁸ and begin to inquire into the social circumstances of criminals? It seems that Gardner, like the majority in McCleskey v. Kemp according to Justice Brennan, is simply afraid of “too much justice.”¹⁵⁹

From a more abstract standpoint, the status crime doctrine juxtaposed to the traditional schema for construing criminal law through actus reus and mens rea can be understood as a counter-principle juxtaposed to a principle. That is, while in current law the counter-principle takes up a minority space relative to the space occupied by the general principle, this Note argues in the general spirit of critical legal studies that there should be an inversion between the two.¹⁶⁰ That is, the status crime doctrine could be the central principle from which courts begin their analysis, while the classical view could take the minority, exceptional position.

Finally, as elaborated on below, extending the status crime doctrine to include homeless individuals better reflects the reality of their circumstances. Homelessness is a status, and sleeping on the street is an inevitable act that follows from that status. Legally acknowledging this reality not only offers protections to homeless people, but also narrows the legislative path to policies that actually address the root causes of homelessness.

Although Gardner concedes that such a reconsideration might be warranted, he argues that it must come from the legislative process rather than through courts.¹⁶¹ While there is some merit to this argument, other movements for social change have seen courts play a pivotal role in leading the way, like Brown v. Board of Education, which was responsible for ending the policy of separate but equal across the United States.¹⁶² Furthermore, others have argued that dramatic changes that moderate or curtail criminal punishment are far more likely to come from political elites (even democratically elected ones) than through mass movements or popular referenda.¹⁶³ Thus, the mere fact that courts would be responsible for such a change is not enough to object to the possibility of such change where an alternative route is not possible or highly unlikely to yield results.¹⁶⁴

One aspect of the doctrine that Gardner is correct to criticize is the status crime doctrine’s placement in the Eighth Amendment. Indeed, the Eighth Amendment was originally intended only to curtail certain methods of punishments, rather than impose substantive limits on what could be punished.¹⁶⁵ While originalism is a deeply flawed and unwise approach to constitutional law,¹⁶⁶ the original intent of an amendment should probably carry some weight. As such, Gardner thinks that the status crime doctrine should be constitutionally grounded in the Fourteenth Amendment’s Due Process Clause rather than in the Eighth Amendment.¹⁶⁷ Indeed, Robinson is the only case that has imposed substantive limits on what can be punished under the Eighth Amendment.¹⁶⁸ This Note agrees that a Fourteenth Amendment grounding is the superior place to couch the status crime doctrine. Still, this Note does not agree with Gardner that doing so would necessarily limit the logical and doctrinal consequences of Robinson, nor should it. The same arguments will inevitably be made no matter where in the Constitution status crime doctrine is placed.

In sum, the Court should have upheld the Ninth Circuit’s decision and not allowed municipalities a cheap workaround to avoid status crime doctrine. In doing so, the Court has solidified and given legal sanction to the nation’s increasing trend of criminalizing homelessness.

E. A Change in Ideology Must Now Precede a Change in Law

Now that the Court has delivered its ruling and allowed the criminalization of homelessness, a change in popular ideology and legislative posture must now precede any novel constitutional argument or policy proposals to tackle homelessness. Essentially, popular consciousness must change and precede any future change in legality in this domain. Ultimately, this Note takes the view that the European conceptualization of economic conditions in general, and homelessness in particular, better recognizes reality. People are products of their environment.¹⁶⁹ Luck plays a role not only in the situations into which people are thrown, but also the decisions they end up making in those situations.¹⁷⁰ Once more Americans begin to agree with the statement “people are poor because of an unfair society” than “people are poor because of laziness and lack of willpower,” homelessness policy can turn away from its increasingly penal tendencies and towards building shelters and restructuring economic relations. While the Ninth Circuit’s ruling was imperfect in that it did not explicitly guarantee minimum requirements of safety and standards for homeless shelters,¹⁷¹ it acknowledged that homelessness is a “status” akin to drug addiction—one that is dependent on social circumstances and not controllable predominantly by the individual. Thus, the Ninth Circuit’s ruling already contains in it the ideological shift required by the rest of the country for combatting homelessness. But absent a larger, popular recognition of the principle, our law is unlikely to reflect such a principle.

Many specific policies for ending homelessness do already exist.¹⁷² Moreover, legal arguments, like the ones outlined above and ignored by the Court, also already exist. But all of these are moot absent a shift in popular consciousness away from individualism and towards collectivism.

Conclusion

The Supreme Court decision reversing the Ninth Circuit’s ruling in Johnson is the culmination of long-standing trends of the individualization of societal problems. While America’s homelessness rate is not particularly high relative to other western democracies, its rate of unsheltered homeless people is. This is explained by America’s comparative unwillingness to spend as much as other western democracies on its social safety net. But it is also more fundamentally the product of broadly and deeply held beliefs about the root causes of poverty and homelessness as problems of individual rather than societal failure, beliefs that are exacerbated by structural racism.

The Ninth Circuit’s interpretation of the Constitution’s status crime doctrine makes sense in this light, since it accurately and shrewdly closed a loophole that governments could use to circumvent status crime doctrine. Nonetheless, the Court reversed the ruling and allowed municipalities to criminalize homelessness. The Court’s ruling effectively legitimized the view that homelessness is an individual “failing” like murder and allowed cities to criminalize people like Debra Blake. This Note has argued not only that such a ruling is misguided, but also that it rests on a fundamentally flawed view of how individuals and society interact. America’s legal approach to homelessness must see it as a social problem rather than a problem arising from a set of atomized individuals. The Supreme Court, however, has taken the opposite view. Seen through the lens of American exceptionalism, it is an exceptionally American response to further allow the criminalization of homelessness.

Appendix

Unable to find a previously published report comparing international homelessness rates, the author assembled this data using a variety of sources. This the first known assemblage of such data and should help contribute to future research in the realm of comparative politics and sociology. For Europe and the U.K., the source used is Fédération Européenne d’Associations Nationales Travaillant avec les Sans-Abri (“FEANTSA”)’s 2023 report titled Eighth Overview of Housing Exclusion.¹⁷³ For America, the U.S. Department of Housing and Urban Development’s report titled The 2022 Annual Homelessness Assessment Report (AHAR) to Congress is used.¹⁷⁴ For Canada, the report used is the Government of Canada’s “Everyone Counts 2020-2022” survey.¹⁷⁵ For Australia, see the Australian Institute of Health and Welfare’s data on homelessness and homelessness services.¹⁷⁶ For New Zealand, see the New Zealand Ministry of Housing and Urban Development, Homelessness Outlook report.¹⁷⁷ These reports consist of the most recent available data for each respective country.

Each study qualifies that their methods are imperfect and likely undercount the number of homeless people. The point of this Note is not to be the authoritative comparative source on national homelessness rates, since the data is constantly changing and not always reliable, but rather to generally observe that America has a higher rate of unsheltered homeless people than all western democracies analyzed but one, a limited claim which is justified despite some uncertainty in the data. Furthermore, this Note is meant to offer a starting point for future research on the subject, as homelessness is in flux in both the United States and in Europe.

For the population counts, this Note used the following reports: For Europe, see the same FEANTSA report referenced above.¹⁷⁸ For the United States, see the 2022 Census Bureau Data.¹⁷⁹ For Canada, see 2021 Canadian Census data.¹⁸⁰ For Australia, see the Australian Bureau of Statistics.¹⁸¹ For New Zealand, see the New Zealand Government “Stats.”¹⁸²

It is important to note, however, that various countries define homelessness differently. For instance, New Zealand counts as “homeless” people who are staying with relatives temporarily,¹⁸³ while the United States and other countries do not count this group.¹⁸⁴ Thus, in order to ensure that the proper, equivalent numbers are being compared, the data selected from each of the above sources is limited to people falling into one of three categories: (1) people “sleeping rough,” generally outdoors, (2) people sleeping in various forms of short-term emergency housing, and (3) people spending nights in designated homeless shelters. Thus, for the European data, the data from categories one, two, and three from the European Typology of Homelessness and Housing Exclusion (“ETHOS”) is used.¹⁸⁵ For the U.S. data, no special selection is required. For the Canadian data, “sheltered” and “unsheltered” people are counted.¹⁸⁶ For Australia, the categories of “[p]eople temporarily staying with other households” and “[p]eople living in ‘severely’ crowded dwellings” are excluded.¹⁸⁷ For New Zealand, the number of total homeless people is limited to people “[w]ithout shelter” and to those living in “[t]emporary accommodation,” since including the other categories would have been overinclusive.¹⁸⁸

Compiling the data from the preceding sources yields the following chart:

Figure 1. Percentage of Population Homeless by Country

The table with the raw numbers is included at the end of this Appendix for reference. For the second round of comparisons, which compared countries’ homelessness rate relative to shelter available, the following method of calculation was used. The number of people living without shelter was divided by the number of homeless people using the above methods for determining the number of homeless people. Thus, for the European data, ETHOS category 1 was used.¹⁸⁹ For the United States, the “unsheltered” category was used.¹⁹⁰ For Canada, the “[u]nsheltered” category was used.¹⁹¹ For Australia, the “[p]eople living in improvised dwellings, tents, or sleeping out (rough sleepers)” category was used.¹⁹² For New Zealand, the “[w]ithout shelter” category was used.¹⁹³ The data yields the following chart:

Figure 2. Percentage of Homeless Population Unsheltered by Country

It should be noted that not all countries, particularly in the FEANTSA report, had specific data for the number of people sheltered versus unsheltered. Five countries were unable to be included, therefore, in Figure 2: Finland, France, Ireland, Luxembourg, and Sweden. For the specific numerical breakdown of each category, a chart of the collected data is pasted below. Each number in the chart was collected using the methodology outlined above, and each chart is compiled using this data:

Table 1. Homelessness Data by Country
Country	Homeless Count	National Population	% of Population	Homeless Unsheltered	% of Homeless Population Unsheltered
Belgium	6,700	11,554,767	0.058	1,187	17.71641791
Czechia	19,653	10,649,800	0.185	8,892	45.24500076
Denmark	3,738	5,873,420	0.064	535	14.31246656
Finland	794	5,548,241	0.014	N/A	. . .
France	209,074	67,656,682	0.309	N/A	. . .
Germany	210,612	83,237,124	0.253	32,467	15.41555087
Hungary	6,944	9,689,010	0.072	1,649	23.74711982
Ireland	11,632	5,060,005	0.230	N/A	. . .
Luxembourg	420	590,667	0.071	N/A	. . .
Poland	23,812	37,972,812	0.063	2,551	10.71308584
Portugal	9,604	10,298,252	0.093	N/A	. . .
Spain	16,006	47,432,805	0.034	4,508	28.16443834
Sweden	14,065	9,995,153	0.141	990	7.0387487
EU Rate (FEANTSA)	533,054	305,558,738	0.174	N/A	. . .
United States	582,462	333,287,557	0.175	233,832	40.14545155
United Kingdom	86,288	66,796,807	0.129	17,012	19.71537178
Canada	20,000	36,991,981	0.054	5,000	25.0
Australia	58,002	25,760,867	0.220	7,636	13.165063
New Zealand	11,553	4,900,600	0.230	3,624	31.3684757

Note: Data used to produce Figures 1 and 2.

98 S. Cal. L. Rev. 761

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Jacob Schwessinger*

*Articles Editor, Southern California Law Review, Volume 98; J.D. Candidate 2025, University of Southern California Gould School of Law; M.A. 2021, University of Warwick; B.A. 2020, University of Southern California.

Wage Theft in Los Angeles: Evaluating the Deputization of Worker Centers as an Enforcement Measure

April 2025April 2025Kalysa To*

In 2023, Los Angeles County was called the “wage theft capital of the nation,” with up to $28 million stolen from workers every week. This form of theft especially places low-income workers at risk; 80% of low-wage Los Angeles County workers reportedly experience wage theft. In spite of this vast problem, however, government agencies tasked with the enforcement of wage theft have been overworked and underfunded. The under-resourcing of government agencies results in short-staffed labor offices, prolonging the time it takes to resolve wage theft claims and increasing the likelihood that victims of wage theft either drop their claim or fail to raise a claim at all.

To address this problem in Los Angeles City, deputization by the Los Angeles Office of Wage Standards could extend authority to worker centers—community-based workers’ rights organizations—to support the enforcement of wage theft. The Los Angeles Municipal Code could grant worker centers the power to advise workers on their rights, inspect employer records for wage violations, and ultimately expand the enforcement of the issue and thereby reduce wage theft. This Note provides the first analysis of deputization within this space and at this depth, introducing new legal analysis and proposing a new enforcement tool with which to address the massive issue of wage theft.

This Note argues that the deputization of worker centers fits within Los Angeles’s existing statutory framework and would be a constitutional delegation of the legislature’s power under the California Constitution. In so doing, this Note makes recommendations to bolster the constitutionality of the deputization of worker centers by the Los Angeles Office of Wage Standards so that more resources can be put in place to reduce the rampant wage theft problem throughout the city.

Introduction

Wage theft is a pervasive problem in the United States, affecting over two million workers¹ and costing as much as $50 billion in lost wages each year.² Wage theft is one of the most common crimes committed in the United States,³ with employers stealing more wages from workers each year than is stolen in “bank robberies, convenience store robberies, street and highway robberies, and gas station robberies combined.”⁴ A “form of fraud” that “occurs when employers do not pay their workers” what they are legally entitled to, wage theft encompasses a broad range of employers’ activities that deprive workers of earned compensation.⁵ Victims of wage theft include workers who are (1) paid less than the legally mandated minimum wage (affecting almost two million workers in the United States),⁶ (2) misclassified as “independent contractors” and not provided with the legal rights employees are entitled to,⁷ or (3) not properly paid for overtime or provided with meal breaks.⁸

The problem is particularly prevalent in Los Angeles. In 2023, the Los Angeles Worker Center Network called Los Angeles the “wage theft capital of the nation,” with $26 to $28 million stolen from workers every week in Los Angeles County.⁹ The study also found that workers who stand up for their rights against wage theft place themselves at risk of retaliation, facing consequences such as “reduced hours, increased workload, firing and threats of deportation.”¹⁰ In addition, a 2024 report found that the Los Angeles metropolitan area lost an average of $1.6 to $2.5 billion a year between 2014 and 2023 through minimum wage violations alone,¹¹ and that over 7% of workers were paid below California’s state minimum wage.¹²

Recent findings about the prevalence of wage theft in Los Angeles have led lawmakers to introduce new legislation to ameliorate the problem.¹³ In April 2024, California’s Labor Commissioner’s Office created the Workers’ Rights Enforcement Grant to provide a new funding source targeted at deterring wage theft and other workplace exploitations.¹⁴ The Workers’ Rights Enforcement Grant awards grants to California public prosecutors to “develop and implement a wage theft enforcement program.”¹⁵ The grants are to be used to fund staff salaries and benefits; $8,550,000 was awarded during the first grant cycle in 2024–2025 and another $8,550,000 will be awarded between 2025–2026, with a maximum grant of $750,000 per applicant.¹⁶

While there have been recent laws targeting wage theft, laws aimed at remedying this issue have been in existence for several years. Various administrative agencies are tasked with the enforcement of employment laws, including determining whether workers are being paid the legally mandated minimum wage, whether employees are properly compensated for overtime worked, and whether employers have violated other employment laws. On the federal level, the Department of Labor’s Wage and Hour Division monitors the enforcement of laws including the federal minimum wage.¹⁷ On the state level, California’s Labor Commissioner’s Office (known formally as the Division of Labor Standards Enforcement) combats wage theft and protects workers from retaliation.¹⁸ On the local level, some cities have established agencies that enforce local laws and ordinances. Within the city of Los Angeles, the Office of Wage Standards “is responsible for implementing and administering the guidelines of the Los Angeles Minimum Wage and Minimum Wage Enforcement Ordinances.”¹⁹

However, agencies tasked with the enforcement of employment and labor laws have been “chronically” underfunded.²⁰ A 2018 report by Politico found that, in fifteen states, 41% of lost wages were unrecovered.²¹ This underenforcement comes even as employers’ violations of these laws grow rampant. A 2021 report published by the nonprofit advocacy group National Employment Law Project found that, in 2019 alone, workers earning less than $13 an hour were prevented from recovering over $9.27 billion in stolen wages because of employer-forced arbitration.²² In spite of this, the nonpartisan Economic Policy Institute (“EPI”) found that, between 2017 and 2020, only “$3.24 billion in stolen wages was recovered for workers” nationwide.²³ The underenforcement of minimum wage laws is a problem in California, where workers were owed $280 million in unrecovered claims from unpaid wages in 2017.²⁴ And these claims arise only when workers report these wage theft violations; underenforcement of these laws may mean there are a great number of workers who suffer wage theft but either choose not to report a violation or are not sufficiently informed of their rights to be aware that a violation has occurred.²⁵

The inefficiency of agencies enforcing wage theft has also become apparent in recent years. A report by the California Legislative Analyst’s Office found that, although state law requires wage claims to be adjudicated within 120 days, the average claim took nearly 400 days to be adjudicated in 2018.²⁶ These long wait times disadvantage victims of wage theft by discouraging affected workers from filing claims, increasing the likelihood that the worker will drop their claim before resolution, and potentially compelling workers “to settle their claims for smaller amounts.”²⁷

Wage theft has far-reaching and pernicious effects. Wage theft can cause economic insecurity by introducing financial uncertainty and causing workers to fear the repercussions of speaking up.²⁸ In addition, a 2014 study from a nonprofit public health organization found that wage theft reduces the income that is necessary to provide for an employee’s family, which gives way to downstream effects: employees’ children are “less likely to succeed in school,” and workers’ increased stress causes them to feel more anxious and experience poor mental and socioemotional health.²⁹ Wage theft also has effects on society at large, such as creating unfair competition with businesses that do comply with the law, increasing the need for safety-net and welfare programs, and “reducing needed tax revenues.”³⁰

Given the seriousness of wage theft and the inadequacy of its current enforcement, deputization offers a solution. Deputization would endow private citizens with the authority extended to governmental wage theft authorities. The rights granted to private citizens could vary widely, ranging from entering work sites and advising workers of their rights to accessing employer records to inspect wage violations. However, more rigorous embracing of deputization would lead to more momentum for addressing the enforcement of wage and hour law and decreasing the instances of wage theft suffered by workers.

I. Deputization

Despite the enormity of the wage theft problem in the U.S., the enforcement and containment of the issue is limited. Victims of wage theft currently have a few potential avenues of recourse: (1) file a complaint with the relevant federal, state, or local labor agency;³¹ (2) file a private lawsuit under the federal Fair Labor Standards Act (“FLSA”); (3) file a private lawsuit under state or local wage and hour standards; or (4) do all three.³² Filing a private lawsuit is burdensome and sometimes out of the question for low-income and marginalized workers (whom wage theft disproportionately affects and who may face difficulty finding attorneys interested in taking low-dollar cases).³³

However, leaving the enforcement of wage theft up to the designated government entities is not a solution either—most state and local governments lack sufficient resources to investigate and enforce workplace standards.³⁴ In recent years, the California Labor Commissioner’s office has reportedly been “too short-staffed to do its job,” an issue that was exacerbated by the COVID-19 pandemic and resulting labor shortage.³⁵ In 2023, employees at the California Labor Commissioner’s office cited a 30%–40% vacancy rate in the office and reported that these vacancies caused employee burnout, stress, lowered morale, and sometimes the decision to leave the office altogether.³⁶ A high vacancy rate, overworked staff, and the resulting “exodus of talented workers” result in an office that is poorly equipped to handle the sheer volume of wage theft claims.³⁷

One way to address this problem is to deputize private citizens to provide them with the same authorizations that a governmental entity is granted under relevant statutes. Deputized citizens could help the agency more effectively use its authority to enforce the laws among a greater number of affected employers and employees. In particular, private citizens may be deputized to investigate wage theft such that they could enter worksites, speak with employees, and inspect employer records. Sharing the responsibilities of wage theft enforcement with private citizens would reduce the workload of government employees, allowing them to focus their resources on the other stages of resolving a wage theft claim, such as settlements, hearings, and recommendations.

A. What Is Deputization?

Deputization occurs when a principal party “empowers an agent” (“deputizes” the agent) to perform some agreed-upon function,³⁸ authorizing the agent to act on the principal’s behalf in limited ways.³⁹ Throughout history, deputization has taken many forms and currently exists in many different contexts.⁴⁰ The judiciary has engaged in deputization; as early as the 19th century, federal courts deputized employer-hired private security personnel to enforce federal injunctions against striking workers.⁴¹ Today, the deputization of private attorneys by local prosecutorial agencies to head criminal prosecutions is still common.⁴² The federal government has also deputized state and local officials to enforce laws; for instance, the legislature authorizes state and local law enforcement agencies to perform immigration law enforcement functions through the Immigration and Naturalization Act.⁴³

In addition to deputization of government officials, existing examples of deputization also involve private individuals. The Private Attorneys General Act (“PAGA”) is a model of deputization which gives authority to private citizens under California law,⁴⁴ meaning that an official government entity is not needed to litigate these violations. This statute “deputizes” private citizens by “authoriz[ing] aggrieved employees to file lawsuits to recover civil penalties on behalf of the State of California for Labor Code violations.”⁴⁵ PAGA was passed in response to deficiencies in the state’s ability to “effectively investigate and prosecute” labor law abuses,⁴⁶ especially as there was an increasing “disparity between California’s large labor force” and the “finite” resources of California’s enforcement agencies.⁴⁷ The statute essentially deputizes private citizens to “step into the shoes” of the state and prosecute employers’ statutory labor violations.⁴⁸ In allowing private citizens to act as “attorneys general,” PAGA enables these private citizens to “recover civil penalties for Labor Code violations” committed against them, with the official enforcement agencies retaining “primacy” over the private enforcement efforts.⁴⁹ PAGA has been successful in recovering the stolen wages of employees, collecting “more than $88 million from lawbreaking corporations in 2019.”⁵⁰

Despite PAGA’s achievements and enforcement measures against lawbreaking corporations, PAGA has a large shortcoming: it only allows employees who have experienced or are experiencing the alleged Labor Code violation to bring the action. Aggrieved employees must bring actions “on behalf of the employee and other current or former employees.”⁵¹ Although PAGA permits employees to bring suit on behalf of other employees and form a class action–like group of employees as plaintiffs,⁵² many of these cases have been called “unmanageable” by courts when there are “a large number of allegedly aggrieved individuals who would require a multitude of individual assessments to prove liability.”⁵³ To proceed on the case following an “unmanageability” ruling by the court, the plaintiff must demonstrate liability of thousands of individually aggrieved employees,⁵⁴ which poses an immense obstacle for plaintiffs.

In addition to the barriers employees face when attempting to file PAGA suits, there may also be employees who are eligible to file a PAGA suit but simply do not do so. To commence an action, an aggrieved employee must give notice of the alleged violation to the California Division of Occupational Safety and Health, stating the provisions that they allege their employer violated and “the facts and theories support[ing] the alleged violation.”⁵⁵ This lengthy process may exclude employees who are both unfamiliar with the administrative process and with the law. Furthermore, not all employees who are “aggrieved” may be aware that their employer is violating a law or willing to file a suit through PAGA.

While PAGA has expanded the accessibility of enforcement remedies to aggrieved employees, some localities have also arranged for deputization of community organizations to enter work sites and perform outreach to inform workers of their rights. For example, the Santa Clara County Office of Labor Standards Enforcement (“OLSE”) has partnered with the Fair Workplace Collaborative (“FWC”), a coalition of dedicated community organizations and advocates who directly engage with employees through flyering, training, and legal services.⁵⁶ The FWC is made up of several community-based organizations, including the Pilipino Association of Workers & Immigrants,⁵⁷ the Vietnamese American Roundtable,⁵⁸ and the Day Worker Center of Mountain View,⁵⁹ among other organizations.⁶⁰ According to Ruth Silver-Taube, a member of Santa Clara County’s FWC and Supervising Attorney of Santa Clara County’s OLSE Legal Advice Line, as of December 2023, the FWC is made up of about twenty-five people, three of whom are attorneys; the others work through the organizations that compose the FWC.⁶¹ Since 2018, the FWC has formed yearly contracts with the Santa Clara County OLSE that authorize FWC members to enter work sites and perform outreach, advising employees of their rights.⁶² Bearing a Santa Clara County badge, the FWC members go into work sites and speak with employees to assess whether they have experienced wage theft.⁶³ The contracts also set out deliverables the FWC must achieve, and require the FWC to provide monthly updates and regularly check in with the OLSE regarding its progress on the deliverables.⁶⁴

The authority that the FWC gains through deputization comes from Santa Clara County’s Food Permit Enforcement Program.⁶⁵ The Program enforces wage theft judgments against employers by suspending food facility permits from businesses who have “outstanding wage theft judgments” from the state.⁶⁶ Each year, the FWC is provided a list of Santa Clara County food vendor employers (employers who require health permits) and the FWC enters those work sites and speaks with its employees.⁶⁷ The FWC speaks with employees to assess whether they may have experienced wage theft or whether they may be facing abuse in the workplace—asking them whether they have received paychecks, whether they have been compensated for overtime, and whether there is violence in their workplace.⁶⁸ But the outreach efforts of the FWC are not limited just to food vendor employers; they can and have entered workplaces and spoken with employees outside of the food industry.⁶⁹

In addition to checking on worksites and speaking with employees, the contract between FWC and Santa Clara County also requires FWC to perform outreach efforts. As a result, the FWC organizes and presents training programs, during which it educates workers on their rights in the workplace.⁷⁰ Silver-Taube, who leads these trainings, hosts at least one training a month, each tailored to the different organizations making up the FWC.⁷¹ In total, her training efforts have reached more than one hundred workers in one year, as she has hosted trainings in conjunction with the Pilipino Association of Workers & Immigrants, the Vietnamese American Roundtable, and the Day Worker Center.⁷²

Silver-Taube also supervises the Santa Clara County’s OLSE Legal Advice Line, another outreach effort that has emerged from the partnership between FWC and Santa Clara County OLSE.⁷³ Offered in six different languages, the advice line helps workers who have questions about their rights or are seeking legal advice.⁷⁴ Silver-Taube estimates that, in about 90% of the calls, workers identify some actionable violation that their employer committed.⁷⁵ The three FWC lawyers can file claims on behalf of employees who suffer an actionable violation or can, alternatively, refer these employees to other attorneys to pursue their claims.⁷⁶

Deputization under the Santa Clara OLSE and FWC partnership benefits employees, but the work that the partnership is authorized to perform is limited. The partnership’s members may speak with employees but cannot access employer records or more thoroughly investigate wage theft. In Los Angeles, deputization is even more constrained, as no program similar to the Santa Clara OLSE and FWC partnership currently exists. Initiating deputization in Los Angeles as well as expanding the deputized functions so that private individuals can perform enforcement actions like inspecting employer records could broadly bolster wage theft enforcement.

The enormity of the wage theft problem in Los Angeles City could be addressed by deputizing private citizens to enter work sites and inform workers of their rights as well as inspect employer records to determine whether wage theft has occurred. Deputization is effective and important for several reasons. First, deputization expands the quantity of people authorized to perform an important government function. State enforcers have said that having a “million eyes on the ground” in the form of private citizens has been especially successful in deterring unlawful action.⁷⁷ Additionally, deputizing private citizens to enter work sites and investigate wage theft violations would increase the number of people actively working to disincentivize employers’ illegal actions, increasing the likelihood that victims of wage theft could become more knowledgeable of their rights and learn how to seek redress.

B. Who Would Deputize?

1. California Bureau of Field Enforcement

As an investigator of minimum wage and overtime claims and a subsection of California’s Labor Commissioner’s Office, California’s Bureau of Field Enforcement (“BOFE”) could deputize private citizens to perform investigations of wage theft.⁷⁸ The BOFE investigates and enforces statutes covering minimum wage, overtime, “workers’ compensation insurance, child labor, cash pay, unlicensed contractors, [and] Industrial Welfare Commission orders.”⁷⁹ The BOFE investigates “on behalf of all affected workers,” meaning that when workers file a complaint, the BOFE performs site-wide investigations and accordingly issues citations for violations it discovers.⁸⁰ When a violation is discovered, the BOFE collects and distributes unpaid wages to affected workers, but keeps the remaining penalties and fines to account for the costs incurred while performing the investigation.⁸¹

Although the BOFE has not deputized people to perform labor investigations, it has formed partnerships with workers’ rights advocacy groups, including worker centers.⁸² Formed in 2016, the California Strategic Enforcement Partnership “is a collaboration between the Labor Commissioner’s Office, the National Employment Law Project, and 14 workers’ rights and legal advocacy organizations.”⁸³ The partnership was formed to boost California’s efforts against wage theft, and partnering with worker organizations was meant to encourage a culture of compliance with labor law.⁸⁴

The BOFE “investigates reports of widespread labor law violations by interviewing workers, inspecting workplaces, issuing citations for violations, and collecting unpaid wages for distribution to workers.”⁸⁵ In the 2015–2016 fiscal year, the BOFE conducted 2,424 inspections and assessed over $81 million in wages and penalties. The BOFE engages with worker organizations through the California Strategic Enforcement Partnership by (1) meeting regularly in teams to share knowledge, identify and address wage theft, and discuss emerging complaints, (2) convening annually to build skills and relationships throughout the partnership, and (3) facilitating monthly conference meetings to share strategies and cross-train on tools for labor law enforcement.⁸⁶ Worker centers support workers throughout “every step of the investigation process”⁸⁷ and can convince “groups of workers to testify in an investigation.”⁸⁸

The California Strategic Enforcement Partnership recognizes the importance of worker centers and labor organizations in the fight against wage theft. However, there may be untapped potential behind these worker organizations because they have not been deputized such that they can act with the same authority as the BOFE when it comes to enforcement of wage theft. According to a BOFE 2020–2021 fiscal year report, the department collected around $29 million across wages, penalties, and interest from employers who committed violations.⁸⁹ Although this number indicates that the BOFE has made strong enforcement progress, it still has a long way to go. This number encompasses several violation categories that the BOFE is responsible for (including wage theft categories like overtime and misclassification, but also adding up outside categories like workers’ compensation and child labor).⁹⁰ However, California’s Legislative Analyst’s Office found that, in 2017, workers alleged a total of $320 million in unpaid wages alone, revealing a massive disparity.⁹¹ Expanding the BOFE’s partnership with worker centers such that worker centers are deputized with legal authority to investigate wage theft—entering work sites, inspecting employer records, interviewing employees, and ultimately identifying wage theft—could increase the BOFE’s capability to discover and address wage theft violations.

Los Angeles Office of Wage Standards

The Los Angeles Office of Wage Standards (“OWS”) is also well-positioned to deputize private citizens to combat wage theft within the city of Los Angeles. The OWS is a city government agency within the Bureau of Contract Administration of the Department of Public Works.⁹² The agency “enforces minimum wage, paid sick leave (PSL), and ban-the-box requirements for all employees who perform work in the City of Los Angeles.”⁹³ In the city of Los Angeles, the OWS is authorized to investigate violations of wage and hour laws.⁹⁴ Pursuant to the Los Angeles Municipal Code (“LAMC”), the OWS is statutorily authorized to enforce and implement several ordinances governing employment law in Los Angeles, including the Minimum Wage Ordinance (“MWO”),⁹⁵ the Fair Work Week Ordinance,⁹⁶ and the Hotel Worker Ordinance⁹⁷ (among others).

The OWS exists within the broader context of federal and state law. The federal government established standards for minimum wage, overtime pay, and employment standards for employees in the enactment of the FLSA in 1938.⁹⁸ The FLSA sets many wage and hour standards for employees, including restricting the employment of minors,⁹⁹ and establishing recordkeeping mandates that require employers to display an official poster outlining the requirements of the FLSA¹⁰⁰ and to keep employee time and pay records for at least three years.¹⁰¹ In addition, the FLSA offers overtime protection; the statute mandates that covered, nonexempt employees receive overtime pay for hours worked over forty per workweek at a rate of least one and one-half times the regular rate of pay.¹⁰²

The FLSA also governs the federal minimum wage, which promises employees a baseline pay for hours worked.¹⁰³ However, the federal minimum wage has remained $7.25 since 2007,¹⁰⁴ which, as inflation increases, is becoming less of a livable wage for earners. Many states have filled this gap by raising their state minimum wage well above the federal minimum wage. Effective January 1, 2025, California’s minimum wage was set at $16.50 per hour for all employers.¹⁰⁵ Within California, the city of Los Angeles updates its minimum wage annually based on the Consumer Price Index (“CPI”) for Urban Wage Earners and Clerical Workers (“CPI-W”) for the Los Angeles metropolitan area, which is published by the Bureau of Labor Statistics.¹⁰⁶ As of July 1, 2024, the minimum wage in the city of Los Angeles for all employers is $17.28 per hour¹⁰⁷ The Los Angeles Minimum Wage Ordinance, codified in Article 7 of Chapter XVIII of the Los Angeles Municipal Code, establishes that the City will pay higher than the California-mandated minimum wage and provide sick time benefits to employees.¹⁰⁸ The OWS is tasked with bearing administrative responsibilities under the MWO.¹⁰⁹

As of December 2023, the OWS has one Division Head and thirty employees.¹¹⁰ It is comprised of three sections: Outreach and Information (eight employees), Investigation and Compliance (sixteen employees), and Fair Work Week (six employees).¹¹¹ The first two sections (Outreach and Information and Investigation and Compliance) are, collectively, tasked with effectively implementing and enforcing the MWO.¹¹² The Investigation and Compliance Section “investigates complaints of wage underpayment” and sick time violations to assess where penalties may be applicable.¹¹³ The Information and Outreach Section informs businesses and employees about legal minimum wage and paid sick leave requirements, while helping with community outreach.¹¹⁴ On the outreach side, the OWS has attended outreach events, hosted training sessions for government staff, and made over 241 million media impressions since 2016.¹¹⁵

Within its investigation wing, from July 2016 to September 2023, the OWS received 1,084 complaints and closed 785 of them, collecting $540,600 in total penalties.¹¹⁶ The OWS’s investigation process generally follows five steps: (1) the complaint is vetted to ensure it falls within the OWS’s “jurisdiction and employee requirements are met”; (2) “the case is assigned to an investigator and additional information is obtained”; (3) “the employer is notified of the investigation and relevant records are requested”; (4) “the records are analyzed to determine whether the employer is complying with the MWO requirements”; and (5) “the case is then submitted to management for an evaluation of the investigative findings and recommendations.”¹¹⁷

In addition to the MWO, the third section of the OWS bears administrative responsibilities for the Fair Work Week Ordinance (“FWWO”), which provides a more predictable work schedule for retail workers.¹¹⁸ The FWWO requires that employers provide work schedules to employees before they begin employment.¹¹⁹ The FWWO also establishes “Predictability Pay,” which requires that employers compensate employees “with one additional hour of pay” for each change to a scheduled date, time, or location that either “does not result in loss of time to the” employee or “results in additional work time exceeding fifteen minutes.”¹²⁰ There are some exceptions to this predictability pay requirement, such as if the employee initiates the work schedule change or if the employer’s operations are compromised due to force majeure.¹²¹ However, in general, the FWWO aims to establish a more predictable work schedule with which retail employees can more accurately predict the sizes of their paychecks.

Furthermore, the LAMC’s Los Angeles Office of Wage Standards Ordinance, which was effective as of April 1, 2023, explicitly sets forth the OWS’s authority to enforce violations of wage theft and sick time benefits under the Los Angeles MWO and to enforce the rights and benefits provided to retail employees by the FWWO.¹²² The Los Angeles Office of Wage Standards Ordinance requires employers to retain employee records for at least four years and allows the OWS to access these records to monitor compliance with the MWO.¹²³ The Los Angeles Office of Wage Standards Ordinance also gives the OWS authority to investigate employers for possible violations of the Los Angeles MWO, Sick Time Benefits, and FWWO.¹²⁴

Given the vast amount of authority provided to the OWS to enforce wage and hour laws in Los Angeles, deputized private entities through this division could expand the OWS’s ability to investigate and enforce LAMC ordinances. Sharing the OWS’s investigative power with private individuals would enable them to broaden their capabilities, allowing them not only to identify more instances of illegal employer action, but also to seek remedies for employees who have been victims of wage theft.

The OWS serves as a robust starting point to analyze the potential of deputization within the City of Los Angeles. Because it exists within a defined statutory framework, the OWS’s legal structure can be examined to determine the possibility of deputization. Furthermore, because the OWS governs a city, it can pave the way for potential future applications to the BOFE and evaluations of deputization on a broader, statewide level.

C. Who Would Be Deputized?

There have not been any legal restrictions placed on who can be “deputized,” and previous examples of deputization in the law have provided for both private individuals (as in PAGA)¹²⁵ and nonprofit organizations (as in the worker centers in Santa Clara County’s FWC)¹²⁶ to be deputized. Since one of the benefits of deputization towards wage theft is to expand enforcement and ensure that more workers know about their rights and can seek redress when they have experienced wage theft, deputizing an organization would be more helpful than deputizing an individual. Organizations, which are generally equipped with more resources, can train their members to provide outreach and education to workers and can also gain rapport with workers so that workers have a resource to turn to.

Unions are organizations that have traditionally been thought of as advocates for workers’ rights, but they have seen “a significant decline in membership” in recent years.¹²⁷ The union membership rate was 10.0% in 2023.¹²⁸ The 2023 rate was very similar to the 10.1% rate in 2022, which was “down from 10.3% in 2021” and was the lowest union membership rate since 1983, the earliest year with comparable data on record.¹²⁹ Since the low union membership rate indicates that fewer workers can seek workplace protection through a union, a different source of workplace protection is needed. To meet this growing need, worker centers have become one of the most important means through which change is sought within the workplace.¹³⁰

Worker centers are nonprofit, community-led organizations aimed especially at supporting low-wage and immigrant workers.¹³¹ There are hundreds of worker centers throughout the United States, and California has forty-seven worker centers—more than any other state.¹³² Worker centers’ advocacy work ranges from lobbying and community organizing to direct engagement and research.¹³³ Some key characteristics define worker centers: (1) they mainly focus on low-income immigrant workers from a particular occupation or industry or from a particular ethnic group; (2) they place special focus on “organizing and leadership development” among their members; (3) they “provide a case management system for their members that focuses on labor violations,” including wage and hour claims; and (4) they lead “workshops on health and safety issues.”¹³⁴

The deputization of worker centers also carries many benefits because worker centers have distinct characteristics that enable them to serve the community. Worker centers have existed since the 1920s but grew enormously in the early 2000s.¹³⁵ Although worker centers have changed in scope and objectives throughout their history, they still maintain a focus on being community-led.¹³⁶ The members of worker centers are workers themselves—employees who are also seeking an improved workplace.¹³⁷ Furthermore, the cornerstone of worker centers is that they are made up of a “strong base of workers at the local level” who frequently play key roles in the “organizational decision-making” of their employers.¹³⁸

Worker centers use a combination of approaches, including: (1) “[s]ervice delivery, including legal representation to recover unpaid wages, English classes, worker rights education, and access to health clinics”; (2) advocacy, including researching employment conditions in low-wage industries and improving monitoring and grievance processes; and (3) organizing, including engaging in “leadership development.”¹³⁹ Because worker centers offer services, advocacy, and organizing, they provide unique services to help “low-wage immigrants navigate the world of work in the United States.”¹⁴⁰ Unlike labor unions, worker centers do not typically operate a dues-paying system;¹⁴¹ instead, they usually require people to become involved in the work or take courses on workers’ rights in order to join.¹⁴² Worker centers also engage in direct community outreach and educational workshops that can benefit people who are not members of the worker centers, making their services accessible to many.¹⁴³

Since worker centers provide a broad range of services and are accessible to workers, they are well-positioned to handle the authority that would come with deputization by a government agent. The efforts that worker centers engage in are wide-ranging; thus, they could absorb the responsibilities of being deputized by a government agent to enforce wage theft. Moreover, the deputization of Santa Clara County’s FWC is an example of successful deputization of worker centers. Most of the organizations that make up the FWC are worker centers that consist of members of the community and whose purpose is to serve a specific subset of marginalized workers.¹⁴⁴ The deputization of worker centers has seen success in Santa Clara County, and worker centers’ deputization to educate workers and investigate wage theft would also be impactful within the city of Los Angeles.

II. Deputization to Perform Outreach

Deputization of private citizens to assist in reducing the wage theft problem in Los Angeles can come in many forms, but two specific areas could benefit from deputization: outreach and investigation. Outreach is already contemplated through the LAMC. Under the LAMC, the OWS is given express statutory authority to develop an outreach program and inform employers and employees of minimum wage laws.¹⁴⁵ Section 188.12 of the LAMC states:

The Division shall establish a community-based outreach program to conduct education and outreach to Employers and Employees. In partnership with organizations involved in the community-based outreach program, the Division shall create outreach materials that are designed for Employers and Employees in particular industries.¹⁴⁶

Although the outreach program that the OWS has been charged with creating and implementing is not detailed in the statute, the OWS has taken several actions as part of its outreach efforts. As noted in its September 2023 Milestone Report, the OWS’s outreach included: (1) notifying businesses registered with the Office of Finance through mailed business tax statements, online renewals, and direct emails to business owners; (2) providing content for chambers of commerce & business associations, business improvement districts, and the Department of Neighborhood Empowerment to include in member newsletters; (3) holding training sessions and delivering information materials to staff from the “Mayor’s Office, [c]ouncil [d]istricts, [p]ublic [l]ibraries, [a]nimal [s]helters, BusinessSource Centers, and WorkSource Centers”; (4) attending outreach events; (5) establishing a toll-free hotline, email, and website to field inquiries and provide information; and (6) issuing requests for quotes and establishing an on-call list of contractors who will “provide community outreach and other support services.”¹⁴⁷

Its mention of “partnership with organizations” and “community-based outreach” indicates that the authority extended to the OWS includes partnership with organizations like worker centers. Thus, express deputization of worker centers to perform outreach could be framed within LAMC section 188.12, allowing private parties to communicate directly with workers to educate them about their rights under the law.

III. Deputization to Investigate

In addition to outreach, the LAMC also gives the OWS authority to investigate violations of Los Angeles ordinances relating to wages:

The [OWS] shall be responsible for investigating possible violations of the Los Angeles Minimum Wage, Sick Time Benefits, Fair Work Week Ordinance, and this article by an Employer or other person. The Employer shall cooperate fully in any investigation by the Division. The Division shall have access to all business sites and places of labor subject to the Minimum Wage and Fair Work Week Ordinances during business hours to inspect and request copies of books and records, interview employees and any other relevant witnesses, investigate such matters necessary or appropriate and request the Board of Public Works to issue a subpoena for books, papers, records, or other items relevant to the enforcement of this article. The Employer is required to provide to the Division its legal name, address, and telephone number in writing.¹⁴⁸

Employees can submit complaints regarding violations of the MWO directly to the OWS.¹⁴⁹ Employees also have the option of filing separate or additional complaints through the State Labor Commissioner’s office.¹⁵⁰ According to its September 2023 milestone report, the OWS received 1,084 complaints and closed 785 of them (202 with violations) since July 2016, thus handling complaints at a rate of 72%.¹⁵¹ But even as the OWS addresses complaints submitted to it, data indicates that the complaints received encompass only a small proportion of Angelenos who have experienced wage theft. For example, Los Angeles Worker Center Network’s 2023 concept paper called Los Angeles the “wage theft capital of the nation”¹⁵² after a UCLA survey revealed that 88.5% of low-wage Los Angeles County workers in the sample experienced at least one type of pay-related workplace violation in the week of work before the survey.¹⁵³ According to 2023 Census Bureau data, 66.5% of Los Angeles City’s population of 3,820,914 were in the civilian labor force from 2019–2023.¹⁵⁴ These numbers indicate that over two and a half million working Angelenos are at risk of wage violations per year. Thus, even though the city provides a method for reporting complaints relating to wage violations through the OWS, many violations appear to be slipping through the cracks.¹⁵⁵

Given the magnitude of the wage theft problem in Los Angeles, deputizing private citizens through the OWS could identify more employees who are experiencing wage theft and, in doing so, disincentivize employers from stealing wages. Deputization to investigate would enable worker centers to access employer records to identify wage theft victims, speak directly with employees, and encourage them to file complaints to seek redress.

Currently, the enforcement power given to the OWS is explicitly limited to only designated OWS officials. The Los Angeles Office of Wage Standards Ordinance provides the OWS with the following investigative authority:

The head of the [OWS] or their designee shall have access to all business sites and places of labor subject to the Minimum Wage Ordinance, the Fair Work Week Ordinance, and [the Los Angeles Office of Wage Standards Ordinance] during business hours to inspect books and records, interview employees and any other relevant witnesses, and investigate such matters necessary or appropriate to determine whether an Employer has violated any provisions of the Minimum Wage Ordinance, the Fair Work Week Ordinance, or [the Los Angeles Office of Wage Standards Ordinance].¹⁵⁶

The OWS Ordinance grants broad discretion to the OWS and allows it to perform an extensive range of investigative functions, subject to several separate ordinances. Rules and regulations implementing the FWWO even extend this authority, allowing the OWS to “conduct inquiries and investigations into areas outside of the FWWO to determine compliance with the FWWO.”¹⁵⁷

Although the OWS’s powers are wide-ranging, the determination of who can exercise these powers has not been clearly defined. The OWS Ordinance expressly grants access and authority to the OWS’s head and the head’s designee. The “head” of the OWS can likely be straightforwardly pinpointed to the OWS’s “Division Manager,” who leads the Office.¹⁵⁸ However, the determination of who can be categorized a “designee” is not so clear. Although there are defined terms under both the FWWO section authorizing the OWS¹⁵⁹ and under the FWWO’s rules and regulations,¹⁶⁰ neither provide a definition for whom exactly a “designee” may be. This lack of clarity leaves open the possibility that the designee may not necessarily be a government entity employed with the OWS and may instead be a third party. Thus, private citizens could be deputized to investigate with authorization as a “designee” by the head of the OWS. However, whether the Division head of the OWS may grant such authority to the private citizens of a worker center is circumscribed by the California Constitution and relevant case law.

A. The Municipal Nondelegation Doctrine

The California Constitution restricts private persons from performing certain governmental functions. Los Angeles is a charter city, meaning the basic law of the city’s government is found in the City Charter, rather than in general law.¹⁶¹ While a general law city organizes itself with “local government provisions in the state constitution and state statutes,” a charter city like Los Angeles can design its own government, developing some “political and governmental autonomy.”¹⁶² The Los Angeles City Charter is the fundamental document of the city,¹⁶³ giving the city control over its own “municipal affairs.”¹⁶⁴ The California Constitution authorizes charter cities the ability to exercise plenary authority over municipal affairs, subject only to constitutional limitations.¹⁶⁵ The city charter “identifies the main governing bodies of the city, along with their powers and duties.”¹⁶⁶ No changes to the charter can be made “without a vote of the people.”¹⁶⁷

Still, all cities must comply with the state constitution; the California Constitution governs both county and city government within California.¹⁶⁸ Of particular relevance, the California Constitution includes a nondelegation doctrine in article XI, section 11: “The Legislature may not delegate to a private person or body power to make, control, appropriate, supervise, or interfere with county or municipal corporation improvements, money, or property, or to levy taxes or assessments, or perform municipal functions.”¹⁶⁹

This prohibition against legislative delegations of power to private entities was initially enacted as article XI, section 13 of the California Constitution on May 7, 1879.¹⁷⁰ On June 1970, California voters passed Proposition 2, a ballot measure aimed at revising the substance and language of the California Constitution.¹⁷¹ As part of this revision, Section 13 was redesignated as Section 11, and the section was amended to its current language.¹⁷² The provision went into effect on November 23, 1970.¹⁷³

Although the restriction against delegating municipal functions is a narrower subsection of the nondelegation doctrine, laws against delegating governmental power exist on a broader level. The nondelegation doctrine has been examined both within federal law¹⁷⁴ and state law. Under state law, the doctrine is applied in many different circumstances, spanning a wide range of applications such as “delegations to private parties, other state governments, and nearly all types of interbranch delegations.”¹⁷⁵ Yet, although state courts apply the nondelegation doctrine in more contexts than federal courts, scholarship on state nondelegation doctrine is scarce; only two to three studies about the state nondelegation doctrines have been published throughout the past few decades.¹⁷⁶ Furthermore, states frequently apply the nondelegation doctrine in many different contexts, resulting in little coherence.¹⁷⁷

The two most recently published treatments of state nondelegation doctrines both categorize California as a state with a more lenient nondelegation doctrine.¹⁷⁸ The first study is Gary Greco’s article, published in 1994, which grouped states into three categories. Eighteen states were categorized as “strict” nondelegation states, meaning these states require the legislature to “provide definite and clear standards with the delegation” of power in a statute.¹⁷⁹ Twenty-four states were categorized as a “loose standards” state, meaning that standards or safeguards must be provided by either the legislature or administrative agency, and the administrative agency is required to adopt “procedural safeguards” to follow when making a decision.¹⁸⁰ Greco’s final category, containing six states, was “procedural safeguards” states, which do not require even minimal statutory standards to uphold a delegation, leaving legislatures with less effect on policy.¹⁸¹ Greco categorized California as a procedural safeguards state.¹⁸²

The second, more recent study is Jim Rossi’s, published in 1999, which also places states into three separate categories to “update and refine” Greco’s summary of the state doctrines.¹⁸³ Rossi grouped twenty states into the “strong” nondelegation category, meaning these states have statutes which are “periodically struck on non-delegation grounds.”¹⁸⁴ Twenty-three states were categorized in Rossi’s “moderate” category, which “do not always require specific standards,” but can vary the standards necessary depending on the statute.¹⁸⁵ Rossi categorized seven states in the “weak” category; these states uphold delegations as long as the agency has “adequate procedural safeguards.”¹⁸⁶ California was grouped into Rossi’s “weak” category.¹⁸⁷ Although these studies and groupings are imperfect,¹⁸⁸ they provide a general framework to understand how California’s nondelegation doctrine compares to other states: California’s nondelegation doctrine is more lenient than several other states’ nondelegation doctrines.

California is not alone in restricting delegation of legislative power to municipal functions; more than a dozen states forbid their legislatures from delegating powers, including their municipal powers.¹⁸⁹ Colorado and Wyoming each forbid their state legislatures from delegating “any municipal function whatever” to private parties.¹⁹⁰ Similarly, Utah prohibits legislative delegations from “perform[ing] any municipal functions.”¹⁹¹

Importantly, this provision of the California Constitution does not preclude all delegation of the legislature’s power. Instead, the prohibition on delegation is cabined such that the legislature may not delegate the power to “perform municipal functions.” As a result, case law regarding the municipal nondelegation doctrine involves determining what constitutes a nondelegable activity, who the delegated party can be, and whether the delegation was proper.

Legislative Actions

Since California “prohibit[s] delegation of legislative power,”¹⁹² case law interpreting the nondelegation doctrine addresses the preliminary question of whether a legislative action was taken. In Kugler v. Yocum, Alhambra city residents contested a proposed ordinance by their city council which would set Los Angeles wage rates as the minimum for Alhambra firefighters’ salaries.¹⁹³ The court found that this proposed ordinance was a legislative action by the city council because wage rates were expressly provided for as a council power in the city charter; the city council was therefore acting in its “legislative” capacity.¹⁹⁴ Decisions about wage rates are an explicit authority of the council in Alhambra, making it a legislative action.¹⁹⁵

Like the wage rates of firefighters in Kugler, the investigative powers for wage theft are expressly left to the OWS under the Los Angeles City Charter. The Los Angeles City Charter states that all legislative power of the City is “vested in the Council and shall be exercised by ordinance.”¹⁹⁶ The LAMC is the ordinance granting authority to the OWS;¹⁹⁷ under the LAMC, the OWS is given specific duties under the MWO¹⁹⁸ and FWWO.¹⁹⁹ Thus, the passage of this local legislation is likely a legislative function. As a result, any delegations of these powers would likely be a legislative action subject to the nondelegation doctrine of the California Constitution.

Municipal Actions

In addition, California’s municipal nondelegation doctrine prohibits delegation of municipal functions. The determination of what constitutes a “municipal function” such that it cannot be delegated to private persons within the constraints of the California Constitution is a fact-specific inquiry. Courts must “decide, under the facts of each case, whether the subject matter under discussion is . . . municipal.”²⁰⁰ Article XI of the California Constitution, which sets forth the nondelegation doctrine, does not define “municipal functions.” To define this term, courts have looked to other provisions of the California Constitution to determine the responsibilities that the governing body is assigned.²⁰¹

The question of what constitutes a “municipal affair” has been addressed by courts when it comes to several different provisions of the California Constitution.²⁰² Within these contexts, courts generally view municipal functions as “problems which exhibit exclusively local characteristics at certain times in the life of a community.”²⁰³ Acknowledging that this view encompasses ever-changing characteristics, the California Supreme Court has said, “It is . . . settled that the constitutional concept of municipal affairs is not a fixed or static quantity. It changes with the changing conditions upon which it is to operate.”²⁰⁴ The subject matter of cases addressing the municipal nondelegation doctrine are diverse, but courts generally hold that municipal matters relate to “local function”—functions so limited in scope to a particular region that they can be “adequately handled by the municipal authorities of a single town.”²⁰⁵

In People ex rel. Younger v. County of El Dorado, the Tahoe Regional Planning Compact was created to plan for the future and preservation of Lake Tahoe.²⁰⁶ The Compact created an internal agency that made “plans for land use, transportation, conservation, recreation, and public services and facilities” throughout the entire Lake Tahoe region, which spanned California and Nevada.²⁰⁷ The Compact’s authority was challenged as an unconstitutional delegation of municipal power.²⁰⁸ The California Supreme Court held the Compact was constitutional because the delegation of power was not for municipal functions; the Compact was enacted to serve regional purposes, not just local purposes.²⁰⁹ The Compact did not have the authority to perform municipal functions such as building “local parks”; instead, it operated on a larger regional basis.²¹⁰ Because it served a regional and not a municipal function, the Compact did not violate the California Constitution.²¹¹

Applying that reasoning here, the deputization of worker centers by the OWS is likely a municipal function because it is limited in scope and region—affecting only workers in the city of Los Angeles. Since this deputization would likely be seen as both a legislative action and a municipal action, it would likely trigger application of the municipal nondelegation doctrine.

Private Parties

Legislatures may be prohibited from delegating municipal matters when such delegation lands in the hands of private parties. In Howard Jarvis Taxpayers’ Assn. v. Fresno Metropolitan Projects Authority, the Fresno legislature created the Fresno Metropolitan Projects Authority and gave it the ability to tax. The California Court of Appeal found that levying taxes was a legislative function because the California Constitution has explicitly identified the imposition of taxes as a function of local government.²¹² In addition, eleven of the Authority’s thirteen board members were individuals from private organizations with no “governmental subservience”; thus, they were private parties.²¹³ The court therefore found that the Authority was a private body to whom the legislature could not delegate its taxing power, a legislative function.

Simi Valley Recreation & Park, in which the legislature passed a statute that delegated decisions regarding undeveloped land to a local agency formation commission, serves as a contrast.²¹⁴ In this case, the California Court of Appeal found this delegation did not violate article XI, section 11 of the California Constitution because local agency formation commissions are government agencies, not “a private person or body” under the language of the constitution.²¹⁵ The court also noted that, prior to its amendment and while it was categorized as section 13, California’s nondelegation doctrine expressly precluded delegation to a “special commission.”²¹⁶ However, this language was repealed in the section 11 amendment in 1970.²¹⁷ Courts no longer apply the former section 13 language, and special commissions are no longer an indication of an unconstitutional delegation.²¹⁸

Worker centers are not government-affiliated and are thus private parties. Since this deputization structure would be a delegation of legislative power to a private party, it must meet the standards courts require for a proper delegation to avoid being banned under the municipal nondelegation doctrine. But this private aspect of worker centers is, in this context, actually a virtue. After all, one of the values of deputization is its separateness from resource-strapped government entities.

Standard for Delegation

Even when a legislature allows a private party to commit an action which is found to be legislative and municipal, such delegation may still be acceptable if a sufficient standard for delegation exists. In Kugler v. Yocum, the California Supreme Court set out the standard for determining whether legislative power is validly delegated.²¹⁹ The court stated that legislative power can be delegated if it is “channeled by a sufficient standard”; after the Legislature creates a policy and sets the standards for it, it may leave the “power to fill up the details” to executive or administrative officers by giving these officers the ability to prescribe rules and regulations that will effectuate the law.²²⁰ In addition, “[w]hile the legislative body cannot delegate its power to make a law, it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend.”²²¹

In Kugler, the court rejected the residents’ argument that a new ordinance tying Alhambra city firemen’s salaries to the Los Angeles salaries would be an unlawful delegation of legislative power to those parties who establish salaries for Los Angeles firemen.²²² Instead, the court concluded that the legislature’s decision to adopt the ordinance itself would “constitute the legislative body’s resolution of the ‘fundamental issue,’ ” and any subsequent steps taken to fill in the application and execution of policy is not legislative delegation.²²³

More recently, California courts have determined whether a sufficient standard for delegation exists by looking at whether the legislature is stripped of its ability to make final decisions.²²⁴ The California Court of Appeal stated: “The constitutionality of [a statute’s] factfinding provisions turns on whether the provisions divest the County of its final decision-making authority.”²²⁵ The California Supreme Court has not addressed whether final decision-making authority meets a sufficient standard for delegation. However, lower courts have relied on this principle, finding that a municipal function has not been improperly delegated when the Legislature leaves the task of achieving their goals to some other body—whether public or private—so long as it is the Legislature who makes the “fundamental policy decisions.”²²⁶ In general, California courts have been relatively generous in finding that an agency did not improperly delegate power so long as a county or city has not been divested of its authority to make final decisions.²²⁷ Courts are also deferential to the legislature, noting, “If there is any doubt as to the Legislature’s power to act in any given case, the doubt should be resolved in favor of the Legislature’s action.”²²⁸

The municipal nondelegation doctrine was not violated in California Renters Legal Advocacy & Education Fund v. City of San Mateo. In that case, the legislature added a provision to its Housing Accountability Act (“HAA”) allowing a reasonable person standard to determine compliance with a housing project.²²⁹ When a renters group’s residential project was denied by the City of San Mateo, it argued that this denial violated the HAA.²³⁰ The City of San Mateo challenged the HAA provision as unconstitutional, arguing it would allow a private person to place evidence into the record that a project is compliant with objective standards.²³¹ The City argued this was a violation of the nondelegation doctrine because a private person could force a local agency to approve the project, stripping the legislature of its decision-making function.²³² However, the court of appeal found this provision did not violate the municipal nondelegation doctrine. The court of appeal stated:

[The] city’s governing body retains broad authority, subject to judicial review, to exercise decisionmaking authority: to determine whether there is substantial evidence from which a reasonable person could conclude the project is consistent with the city’s applicable objective requirements; to deny or reduce the density of a project that does not meet such standards or that causes an unavoidable adverse impact on public health or safety; and to impose conditions of approval that do not reduce the project’s density where applicable objective standards are met.”²³³

In contrast, the municipal nondelegation doctrine was violated in County of Riverside v. Superior Court when a sheriff’s association ordered the county to binding arbitration to resolve economic issues arising from negotiations with unions representing firefighters or law enforcement officers.²³⁴ Analysis of nondelegation was triggered: the compensation of these individuals was a municipal function expressly provided to the legislature in the California Constitution,²³⁵ and the arbitrators of the issues were private entities, not public officials.²³⁶ The court ultimately held the statute unconstitutional because the arbitration it required, from which the results would be binding on the public agency,²³⁷ deprived the public agency of the ultimate power to make its own decisions.²³⁸

In sum, although deputization by the OWS to worker centers is a delegation of a municipal function by a legislative body to a private party, the municipal nondelegation doctrine is still likely not violated. As long as the OWS retains final decision-making authority, extending the authority granted to the Los Angeles OWS to private citizens within worker centers is likely permissible and not in violation of the municipal nondelegation doctrine. Entering worksites to perform investigations on employer wage practices and inspecting employer records does not bind the public agency of the OWS to any final decision. On the other hand, a worker center’s ability to take actions such as filing wage claims or arbitrating with employers would likely be characterized as final decisions. As to these binding choices, a worker center’s authority should be thoroughly constrained; the decision of whether or not to take these steps must belong to the OWS. However, when it comes to non-binding decisions, the deputization of worker centers under the LAMC is likely permissible under the California Constitution.

To further strengthen the constitutionality of this deputization, the reservation of this final decision-making authority should be made explicit in contracts between deputized entities and the OWS. In particular, all contracts between the OWS and the worker centers should precisely note that the deputized entities may not file suit, begin employment action, or make any final decisions without prior written approval of the OWS. Contracts should state expressly that the work product of deputized worker centers are subject to the approval of and final decisions are to be made by the OWS. This clarity and explicitness would bolster the legitimacy of the deputization relationship between the OWS and private citizens, preventing the relationship from being barred by the California Constitution’s municipal nondelegation doctrine.

Conclusion

The enormity of the wage theft problem affecting millions of American employees requires a solution beyond the underenforced laws currently in place. Located in the “wage theft capital of the nation,”²³⁹ the city of Los Angeles is particularly affected by this issue.

The deputization of private citizens by Los Angeles’s Office of Wage Standards offers a path through which the city government can more effectively enforce wage laws and hold employers accountable. Deputization could not only endow workers with knowledge about their rights through outreach, but would also enable private citizens to inspect employer records to identify victims of wage theft. Deputizing private citizens would broaden the enforcement powers available to the OWS and encourage workers to file complaints while discouraging employers from violating the law. Although deputization through the OWS would still result in some limitations on Los Angeles City’s enforcement abilities, its successes and drawbacks should be

studied to assess the potential of statewide deputization through a larger entity such as the BOFE.

Deputization of worker centers to perform worker outreach and investigate wage theft within work sites could provide greater enforcement of wage laws. However, such deputization is vulnerable to attack under the California Constitution’s municipal nondelegation doctrine. Deputization of worker centers would be a delegation of municipal action by the Los Angeles legislature to worker centers, a private party. Although these factors make the municipal nondelegation doctrine applicable, a clear standard for delegation would likely allow deputization to survive. In particular, unambiguous language that the OWS would retain ultimate control over any decision-making would help strengthen the legality of this deputization and prevent it from violating the California Constitution’s municipal nondelegation doctrine. This explicit language could be found in formal documentation of a deputization relationship, or in rules and regulations from the LAMC regarding the OWS.

Overall, with the proper boundaries and constraints, the deputization of worker centers by the OWS to perform outreach to employees and to investigate wage theft is likely permissible and constitutional. Taking advantage of the community ties and expertise of worker centers could enable the OWS to better serve the workers of Los Angeles while discouraging wage theft by employers. Deputization of worker centers offers a powerful avenue to combat Los Angeles’s enormous and persistent wage theft problem.

98 S. Cal. L. Rev. 725

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Kalysa To*

* Executive Senior Editor, Southern California Law Review, Volume 98; J.D. Candidate 2025, University of Southern California Gould School of Law; B.A. English & Psychology 2021, University of California, Los Angeles. My sincere gratitude to Professor Clare Pastore, Yvonne Medrano, Victor Narro, and Ruth Silver-Taube for providing their valuable insight. Thank you also to the editors of the Southern California Law Review for their work, and to my family for their support.

“Fake Drake”: Vindicating Copyright Ownership in the Advent of Generative AI Music

April 2025April 2025Melissa Schneider*

INTRODUCTION

In April 2023, “Heart on My Sleeve” almost instantly went viral on TikTok, grabbing the attention of millions of viewers who were intrigued by what seemed to be an unreleased collaboration between Drake and The Weeknd.¹ The song not only sounded extremely similar to its alleged vocalists and their music styles, but the lyrics also reflected events and people relevant to their lives, resulting in a very convincing piece of music. But it quickly became clear that this song was not, in fact, created nor sung by Drake and The Weeknd; instead, it was the product of artificial intelligence (“AI”) music-generating programs used by Ghostwriter977, the poster of the video.² After amassing millions of views across various platforms in just a few days, streaming services pulled the song,³ and those searching for it on YouTube were met with a message stating the video was “no longer available due to a copyright claim by Universal Music Group.”⁴

While concerns about this particular song seem to have been adequately addressed by streaming services quickly pulling it from their platforms, the impact of Ghostwriter977’s video was profound and widespread. While generative AI had already aroused questions and concerns generally, ⁵ “Heart on My Sleeve” directed the world’s attention to the music context. While this is not the first instance of a controversial AI-generated musical work,⁶ the nature and quality of the song revealed just how advanced generative AI technology has become, sparking strong responses ranging from excited curiosity to extreme outrage.⁷

The key question that the world is now more intently wondering, as artists, labels, and music representatives wave the flag of “copyright infringement,” is whether U.S. copyright law, as it stands today, can be a source of recourse for artists to take legal action in response to AI-generated music. Due to the novelty of the technology and the nuances of copyright law in the music context, we are without the legal precedent one would usually look at to find a more definitive answer. Because copyright holders’ concerns are pressing and nothing suggests that copyright law will soon be amended to address them, analogizing to similar cases and drawing on the fundamental principles of, and rationales for, copyright protection is necessary to develop predictions as to how courts will rule in a copyright case of Artist v. AI User.

Copyright is concerned with protecting the rights of creators and encouraging innovation, meaning that there remains an additional concern about being overly restrictive and inhibiting creativity and progress. In the context of AI-generated music and copyright infringement, we are placed at what some deem a crossroads,⁸ left to decide whether we value human artists’ creativity and resulting work more or less than we value technological innovation and its potential for important advancements. On one side of this policy debate is the music industry, which generated $15.9 billion in revenue in 2022 in the United States alone,⁹ and represents an art form that has brought humans together since the beginning of time. There is a high barrier to achieving conventional success in the music industry, which some interpret to mean that only the very best succeed as a result of their hard work and dedication. But the other side of the debate takes these same ideas to highlight how innovative generative AI music should be encouraged. Unlike the music industry, which is extremely difficult to break into, there is a very low barrier to entry for generative AI use, as it is largely accessible and there are many tools one can use to learn how to harness the technology.¹⁰ Some see this as an opportunity to diversify music and the people making it, which has many benefits. There are strong opinions on both sides, placing this debate squarely within the realm of what legislators anticipated would be a subject of copyright controversy—how can we balance protecting existing creations and encouraging future innovations? ¹¹

Absent both a clear answer to this question and any indications that existing copyright law will soon be amended to specifically address the issue of potential copyright infringement by generative AI music outputs, we must look to the interpretation of current copyright law in similar situations. This Note will use case law to shed light on how courts might treat copyright infringement suits involving AI-generated music. To illustrate how current copyright law will apply to real AI-generated music, two hypothetical songs will be used as examples, both based on songs that could be created using existing generative AI music systems.¹²

Sample Song A is a rap song created by User A using Uberduck.ai (“Uberduck”). Sample Song A was created using a generic punk rap beat provided by Uberduck. The voice used to create Sample Song A is an option specifically labeled as Kanye West in the era of Yeezus, West’s provocative 2013 album. The lyrics are generated by Uberduck, using the prompt “rebellion, slavery, superiority, unapologetic, perseverance, individuality, and power,” all of which are words that have been used to describe West’s reputation, as well as the themes of Yeezus and particularly, the hit song “Black Skinhead.”¹³ The resulting rap sounds nearly identical to West, with lyrics closely tied to themes he has focused on. The unsuspecting listener may very likely mistake the song for a new release by West himself. While the song sounds like it would fit in with West’s discography, the actual music and lyrics are completely different from any of his prior releases.

Sample Song B is an emotional ballad, and User B created the musical composition using MuseNet. In creating Sample Song B, they selected Adele as the vocal style for the song, and the selected instrument was limited to piano. The introduction to Sample Song B uses the well-known piano phrase that functions as a melodic hook throughout Adele’s “Someone Like You,” an option provided by MuseNet. This piano segment is arguably the most distinctive musical feature of “Someone Like You,” and is known as an arpeggio, which melodizes chords.¹⁴ The exact piano chords and resulting melody are used—just slightly sped up—but after the introduction, the chords begin to differ. However, the song returns to the piano phrase after the chorus, resulting in a song that is musically similar to “Someone Like You.” User B added lyrics using an outside platform after MuseNet finalized the composition. Sample Song B’s lyrics were written to evoke feelings of both love and despair, and the words themselves speak to a failed relationship, regret, and a longing for love; thus, the song, both lyrically and musically, bears a notable resemblance to “Someone Like You” and Adele’s music generally.¹⁵ The lyrics are sung in a feminine, mezzo-soprano voice, but unlike Sample Song A, the voice does not directly imitate its style inspiration.

Before applying copyright law to the sample songs, this Note provides relevant background information. Part I introduces generative AI, providing an overview of how the technology works and details on how the systems used to make the sample songs produce musical works. Additionally, the U.S. Copyright Office’s statements about AI are discussed. Part II focuses on current copyright law—what it requires, what it protects, and how infringement actions work. Music occupies a unique area of copyright law because of the separation between the composition and the sound recording, so limitations and exclusions are discussed in detail. Because courts have not specifically addressed AI on many occasions, analogizing to other cases involving technology helps anticipate the judicial response to this novel technology. Part III applies copyright law to the sample songs and predicts likely outcomes. This includes an analysis of how the songs may fare in all steps of an infringement action, from defenses to statutorily imposed limitations on what can be the basis of a lawsuit. This analysis reveals how copyright law might help artists and how it may hurt them. While artists may potentially find support in trademark law or the right of publicity, this Note will focus solely on copyright law as a vehicle for attempting to vindicate their rights. Finally, Part IV discusses policy implications associated with trying to fit AI-generated music into our developed system of copyright law, highlights the key concerns for artists, and points to gray areas that warrant clarification. The conclusion of this Note summarizes anticipated outcomes and the complicated nature of fitting new technology into the current framework of copyright law.

I. BACKGROUND: GENERATIVE ARTIFICIAL INTELLIGENCE

A. How the Technology Works

AI is “a science and a set of computational techniques that are inspired by the way in which human beings use their nervous system and their body to feel, learn, reason, and act.”¹⁶ More simply, AI can be thought of as “a man-made object with thinking power.”¹⁷ At the foundation of any program is data input, a starting point akin to the intaking of information that constitutes the first step of the human learning process; the difference between AI and human learning in this respect, however, is that AI systems require massive amounts of data to be effective.¹⁸ How exactly systems use data and produce desired results depends on the learning approach. The most prominent systems are machine learning (“ML”) and deep learning (“DL”).

ML is the “most promising and most relevant domain” to apply AI.¹⁹ ML is a way of learning from big data, and its algorithm is self-adaptive, meaning that through experience, it can get new patterns and improve “perception, knowledge, decisions, or actions.”²⁰ The key feature that distinguishes ML is that the goal is for the algorithm to learn to find its own solutions, as opposed to learning to follow human-defined rules.²¹ DL uses “large multi-layer (artificial) neural networks”²² (“ANNs”) to carry out tasks. ²³ DL algorithms “filter[] the input through many layers,” resulting in the ability to “classify and predict the data.”²⁴ “Computational nodes” are created and trained, and ultimately make decisions through a filtering process that is similar to the human brain.²⁵

This Note will focus specifically on generative AI applications, which are created using generative modeling.²⁶ Generative AI models have a “machine learning architecture” and use learned patterns to generate new data samples.²⁷ There are various generative AI systems, each tailored to a desired output goal; for example, ChatGPT is a generative AI system that generates text and is based on an “X-to-text” model.²⁸ Because generative AI is a subset of ML, the training process requires substantial amounts of data. How models are trained can vary greatly, so this Note will focus on the training used for the specific systems that generate music.

B. Generative AI in the Music Context

There are important nuances to note when discussing generative AI systems that create music as opposed to other output domains. Systems that generate music have attracted a lot of attention purely because the output is something we have long considered to be an “innate pursuit of human beings,” as music is viewed as a human expression that encompasses both “creativity” and “collaboration.”²⁹ While many people remain very opposed to generative AI music,³⁰ it is undeniable that the technology has advanced rapidly in ways that have vastly improved the output quality; many generative AI music systems are now able to account for the subtle but important nuances in recorded music and generate output accordingly.³¹

Most music-generating systems involve combinations of ML, DL, and ANNs. The sample songs guiding this Note’s application of copyright law to AI-generated music used the following two noteworthy systems: Uberduck.ai and MuseNet, both of which exist on different ends of the technology spectrum. While these systems are different in relevant ways that will be discussed, it is important to note a key similarity is that they are trained on existing music, so it is almost guaranteed that at least some of the input includes copyrighted songs that train the model to invoke a sound or style.

Uberduck, used for Sample Song A, is a speech synthesis system powered by DL that generates “high-quality and expressive voice output.”³² Uberduck utilizes several models for speech synthesis, including SO-VITS-SVC, HiFi-GAN, and other text-to-speech models.³³ SO-VITS-SVC is a DL model, trained using audio files to convert recordings into singing voices.³⁴ SO-VITS-SVC references “SoftVC,” “[c]onditional [v]ariational [a]utoencoder with [a]dversarial [l]earning,” and “singing voice conversion.”³⁵ Using a source audio, SoftVC, or “soft voice conversion” separates a singer’s voice into “frequency bands,” which are encoded to analyze “distinct characteristics” of a voice.³⁶ A conditional variational autoencoder with adversarial learning uses adversarial training aimed at enabling text-to-speech models to handle more varied data.³⁷ Lastly, singing voice conversion, which can be thought of like a voice cloner, converts one singing voice into another while maintaining features like pitch, rhythm, and notes from the original input.³⁸ Uberduck also uses HiFi-GAN, which is a specialized variant of the generative model Generative Adversarial Network (“GAN”).³⁹ GANs use generators and discriminators, which work together in a repeated feedback process to help the generator produce results that pass the discriminator’s authenticity test.⁴⁰ The discriminator is trained to determine whether an audio sample is real or fake, which aids the generator in “better approximat[ing] the distribution of real data,” resulting in more realistic-sounding outputs.⁴¹ Through its “loss function,” the generator improves its output by incorporating feedback from the error in results, which is the difference between actual and predicted outputs.⁴² This process is illustrated in Figure 1 below. The difference with HiFi-GAN, specifically, is that it is tailored to “transform recorded speech to sound as though it had been recorded in a studio.”⁴³ The use of HiFi-GAN is an important component of making the resulting song sound believable. Together, these technologies and the other text-to-speech models work to mimic the voice of an input audio and make it sound as authentic as possible.

Figure 1. The HiFi-GAN Process

While both systems use DL, MuseNet, used for Sample Song B, is not a text-to-speech system, and is instead a music composition generator that uses a transformer model, which is illustrated in Figure 2 below. MuseNet uses MIDI files encompassing a wide variety of musical styles as its training data.⁴⁴ In training the system, sequential data is provided in the form of sets of notes, and it is asked to predict what the next note will be.⁴⁵ Data is encoded in a way that “combines expressivity with conciseness.”⁴⁶ Similar to the adversarial elements of Uberduck, MuseNet has an “inner critic” during training which asks the model if a sample was generated by the model or from the dataset.⁴⁷ Additionally, MuseNet created composer and instrumentation tokens which are used during training to teach the model to utilize such information when making predictions; the result is that the model can be conditioned to generate output in a certain style using prompts.⁴⁸ Essentially, MuseNet uses the music styles and MIDI files it has been trained on to generate note sequences that sound realistic, as if human-generated.⁴⁹

Figure 2. Transformer Model Training

With the internal side of the technology having been established, the next component is the user side. When using Uberduck—specifically the “AI Generated Rap” feature used to create Sample Song A—the user is able to select a beat from a list of premade generic beats.⁵⁰ After that is chosen, users have a choice to input custom lyrics or utilize Uberduck’s AI lyric generator, which requires entering a detailed “description of what you want your rap to be about.”⁵¹ Finally, the user selects an artist from a list of “[r]appers” to be the voice of their song.⁵² The end result is a complete rap song. As for MuseNet, the initial prompts include style, introduction, instruments, and number of tokens.⁵³ Style options range from Mozart to Lady Gaga to Disney.⁵⁴ Similarly, the introduction options cover a wide range, including the intro from “Someone Like You” by Adele, which is used in Sample Song B.⁵⁵ The number of tokens used corresponds to the length of the song. The end product is a musical composition, to which lyrics can be added outside the platform.⁵⁶

C. Copyright Office on AI

In August 2023, the U.S. Copyright Office (“Office”) published a notice of inquiry on copyright and AI, which followed the March 2023 launch of the Office’s AI Initiative.⁵⁷ This inquiry specifically focused on policy issues relating to copyrighted works being used to train models, the copyrightability of AI-generated works, potential liability for AI-generated work that infringes on a copyright, and how to treat AI-generated works that imitate artists.⁵⁸ In July 2024, the Office published Part 1 of the Report on Copyright and Artificial Intelligence (“Report”), which addresses the topic of digital replicas.⁵⁹ Specifically referencing “Heart on My Sleeve,” the Office ultimately concluded that it believes the time has come for a new federal law to address unauthorized digital replicas.⁶⁰ With respect to copyright law specifically, the Office broadly indicated that a victim of a digital replica in the form of a musical work may have a claim for infringement of the copyrighted work, but clarified that a replica of one’s voice alone does not seem to constitute copyright infringement.⁶¹ Because Part 1 of the Report provides little insight with respect to the potential vitality of such copyright claims and primarily focuses on legislative suggestions, the Office’s previous statements and approaches in similar technology-related contexts remain potentially revelatory.

While this inquiry is the Office’s most comprehensive look into AI, it is not the first time it has addressed AI. The Office addressed concerns about technology-generated works in 1965, especially after receiving an application for registration of a “musical composition created by a computer.”⁶² Although the issues posed by AI today are, in many respects, far more complex given the vast technological advancements in recent years, the general questions about how non-human-generated works fit or do not fit into copyright have been pondered for nearly six decades. The Office, in operating a copyright registration system, necessarily adjusts its practices according to shifts in technology.⁶³ In deciding whether to register a claim, a “registration specialist” is tasked with determining whether a work qualifies as copyrightable subject matter and satisfies the formal and legal requirements of the copyright statutes and the Office’s practices.⁶⁴ As such, the Office’s practices regarding what is registered generally reflect contemporary understandings of the scope of copyright law in light of modern developments.

The question of copyright protection for AI-generated works has notably been addressed in three recent situations. The first situation, which ripened into litigation, involved the Office’s denial of registration for “A Recent Entrance to Paradise,” an artwork created by an AI system, the “Creativity Machine,” which was listed as the author. The Office cited the lack of human authorship as its basis for denial, a requirement that derives from the statutory criteria that protection is extended only to “original works of authorship.”⁶⁵ While “original work of authorship” is not defined statutorily, courts have uniformly interpreted it to limit protection to human authors,⁶⁶ and the Office has adhered to that.⁶⁷ The Office also rejected the argument that AI can be an author under a “work-for-hire” theory.⁶⁸ The user challenged the denial as an “arbitrary, capricious, . . . abuse of discretion . . . not in accordance with the law, . . . and in excess of [the Office’s] statutory authority.”⁶⁹ The court upheld the denial, stating the lack of human involvement pointed to the “clear and straightforward answer” that it does not give rise to copyright.⁷⁰ This situation differs from a second scenario in which the Office registered “Zarya of the Dawn,” a comic book created using an AI system known as Midjourney.⁷¹ The images in the book were created by Midjourney in response to the user’s text prompts, but the user did not control the creation process; as such, the images themselves were not protectable based on the human authorship requirement, so copyright extended only to the text she wrote herself and the selection and arrangement of the elements of the book, including the images.⁷² The third situation involved the denial of copyright registration for an AI-generated artwork entitled “Théâtre D’opéra Spatial” based on the Office’s conclusion that it contained “more than a de minimis amount of content generated by [AI].”⁷³ The Office offered to register the work if the user would exclude AI-generated features, as there were some elements of human creation, but he refused and challenged that requirement; nonetheless, the Office stood by the requirement of disclosing AI-generation.⁷⁴

Due to situations like these,⁷⁵ the Office clarified how AI-generated works are examined and registered in a recent statement.⁷⁶ In the statement, the Office explains that in making registration decisions about works created using AI, the first question is whether the work is “basically one of human authorship, with the computer [or other device] merely being an assisting instrument,” or if a machine conceived and executed the traditional elements of human authorship.⁷⁷ The Office notes that when AI systems receive prompts from humans that enable the generation of “complex . . . musical works,” the author is the technology, not the prompt-writing human, so it would not be registered.⁷⁸ The Office states that there are cases in which AI is used in conjunction with sufficient human effort to permit registration. In such situations, copyright protects only human-authored elements.⁷⁹ While AI adds nuance to registration inquiries, an important takeaway is that the Office stands firmly behind the human authorship requirement.

II. LEGAL BACKGROUND: COPYRIGHT LAW

Codified in Title 17 of the United States Code, the Copyright Act of 1976 (“Copyright Act”), including its subsequent amendments, is the governing source of copyright law.⁸⁰ Congressional authority to enact such legislation arises from the “Copyright Clause” in the U.S. Constitution, which vests in Congress the power to “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”⁸¹ In the time since the enactment of the Copyright Act, there have been many amendments, resulting in a large body of law that simultaneously outlines rules and requirements with specificity and leaves considerable room for judicial interpretation.

A. Requirements for Protection

Under the Copyright Act, copyright “subsists . . . in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”⁸² Copyright does not extend to underlying ideas.⁸³ The Copyright Act explicitly includes “musical works, including any accompanying words” and “sound recordings.”⁸⁴ Generally, the requirements for copyright protection break down into four separate but interrelated requirements: (1) work of authorship, (2) tangible fixation, (3) originality, and (4) creativity.

Legislative history indicates that the phrase “work of authorship” is intended to provide flexibility.⁸⁵ The broad categories of works of authorship in § 102 of the Copyright Act are illustrative, not exclusive.⁸⁶ As mentioned, this requirement has been interpreted to require human authorship, but the Office’s recent statement suggests technology can be involved in the “authorship,” so long as there is sufficient human involvement.⁸⁷ A work satisfies the fixation requirement if it is fixed in a “tangible medium of expression” that is “sufficiently permanent or stable.”⁸⁸ Congress has indicated that fixation form does not matter.⁸⁹ A fixed composition may be written sheet music, while a fixed sound recording may be a recording saved onto a compact disc.⁹⁰

Fixed works of authorship must also satisfy the requirements of originality and creativity,⁹¹ which require “independent creation plus a modicum of creativity.”⁹² Therefore, so long as the work is independently created, a lack of novelty does not preclude copyright protection.⁹³ The “modicum of creativity” standard is a relatively low threshold, requiring only that the work goes beyond independent effort⁹⁴ and bears a “spark of distinctiveness in copyrightable expression.”⁹⁵

There are unique considerations with regard to these requirements in the context of musical works because determining the requisite creativity in music can be contentious.⁹⁶ Creativity is said to inhere in one of three key elements of a musical work—harmony, melody, or rhythm.⁹⁷ While the typical source of protection for compositions is melody, courts vary in this regard, with sufficient creativity being found and denied on each basis.⁹⁸ Protection for musical works includes “accompanying words” or lyrics;⁹⁹ when lyrics and musical elements are integrated into one work, they are protected together and on their own.¹⁰⁰ Lyrics must also satisfy the requirements for protection, and whether lyrics qualify for protection is very situation-dependent.¹⁰¹

B. Rights Conferred by Copyright Ownership

Section 106 of the Copyright Act outlines the exclusive rights of a copyright holder, which broadly include reproduction, distribution, adaptation, performance, and display rights.¹⁰² Actionable copying may pertain to infringement of any of these exclusive rights but must include infringement of at least one.¹⁰³ AI-generated music is most likely to implicate the reproduction, adaptation, and distribution rights.

Reproduction Right

The first exclusive right relevant to AI music is the right to “reproduce the copyrighted work in copies or phonorecords.”¹⁰⁴ In the music context, a USB with a sound recording would qualify as a phonorecord, while a written composition of the song, like sheet music, would be considered a copy.¹⁰⁵ To infringe on the reproduction right, the subsequent work must be a tangible, material, fixed object. An important music-specific caveat in 17 U.S.C. § 114 (“section 114”) is that the reproduction right in recordings is “limited to the right to duplicate the sound recording in . . . phonorecords or copies that directly or indirectly recapture the actual sounds fixed in the recording.”¹⁰⁶ This means that phonorecords with sounds that merely imitate the original sound, as opposed to actually recapturing the original sounds, do not infringe on the reproduction right, “even though such sounds imitate or simulate those in the copyrighted sound recording.”¹⁰⁷ This has been interpreted as precluding liability for substantially similar imitations of a recording absent any exact copying; this is important in the context of music sampling, as it requires proof of exact duplication.¹⁰⁸

Adaptation Right

Copyright owners also have the exclusive right to “prepare derivative works based upon the copyrighted work,” as well as to authorize others to do so.¹⁰⁹ A derivative work is one that must be “based upon one or more pre-existing works,” which is interpreted to mean that a latter work incorporates a sufficient amount of the original work to go beyond mere inspiration.¹¹⁰ The adaptation right is closely tied to the other exclusive rights, namely the reproduction and performance rights. When a work is deemed to be a derivative, there is a necessary implication that the reproduction or performance right was also infringed because the second work is substantially similar.¹¹¹ With respect to sound recordings, the right to produce derivative works is limited to those in which “actual sounds fixed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality.”¹¹² The independent fixation exclusion to the reproduction right also applies to the adaptation right.¹¹³ As with the reproduction right, this limitation finds notable importance in the realm of music sampling and licensing.¹¹⁴

Distribution Right

The third exclusive right relevant to music is the right to “distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership.”¹¹⁵ To violate the distribution right, there must be a tangible product, whether a phonorecord or a copy. The distribution right in the music context involves the right to sell copies, like sheet music, and phonorecords, such as CDs, of the musical work to the public. In the context of Internet platforms, specifically music platforms for sharing sound recordings, there are questions as to whether making copyrighted works available to the public constitutes a violation of this right. Although courts have not unanimously agreed on the answer, it seems clear that making sound recordings available for download by the public on file sharing networks is likely sufficient to demonstrate infringement.¹¹⁶ Unlike the reproduction and adaptation rights, section 114 does not explicitly name the distribution right in limiting exclusive rights in a recording to exact copies; however, this is likely immaterial because a mere imitation of sounds in the original would seemingly fall outside the definition of the right as applying to distributing copies or phonorecords of the original work.¹¹⁷

C. Additional Music-Specific Considerations

1. Musical Composition Versus Sound Recordings

One unique aspect of music copyright is that there are two sources of protection in a song: the musical composition and the sound recording.¹¹⁸ These are considered distinct elements of a musical work, with each being independently copyrightable.¹¹⁹ While both elements are subject to the same requirements for protection, it is important to distinguish between the two, as the law applies differently to each in certain respects. This distinction plays an overall significant role in infringement actions, from whether something is actionable to what royalties are owed for a use.

While some cases have blurred the line between the composition and recording,¹²⁰ others reflect the importance of keeping them separate, as it is clear that determining applicable case law and potential arguments depends on whether the claim is based on recording or composition. Cases are also revelatory of how outcomes differ based on which element is allegedly infringed.¹²¹ Pertinent to this Note’s discussion, it is both possible and not necessarily uncommon for a work to infringe on the rights of ownership of the composition, but not the recording. Because infringement of the recording has been read to require actual duplication of sounds, a work that recreates but does not directly sample a guitar solo can infringe on the composition but give rise to no cause of action for infringement of the sound recording. Thus, this Note will continue to emphasize the line between these two elements, and how AI-generated music may or may not infringe on each.

Licensing and Sampling

Licensing and sampling are unique considerations in the music context. Licensing, whether it is compulsory and imposed by the Copyright Act or voluntarily negotiated,¹²² functions as a means of ensuring that owners are compensated for the use of their work. How licenses are obtained and what they allow a licensee to do depends on what aspect of the musical work is involved and who is seeking to license it. Central to the discussion in this Note, however, is the royalty aspect of licensing. Because the hypothetical uses analyzed in this Note did not involve licensing the songs, the artists did not receive compensation in royalty payments for these uses.

A very common practice in the music industry that potentially implicates the need for obtaining a license is sampling. “Sampling” refers to the practice of incorporating short segments of sound recordings into new recordings.¹²³ Typically, when the word sampling is used, it means there is a literal duplication of some portion of the original work, not merely an imitation.¹²⁴ Because sampling involves using a clip in an identical sounding way or with limited alterations, the issues presented by sampling usually fall under the substantial similarity inquiry.¹²⁵ Courts are divided on how to approach sampling, particularly with regard to whether applying the de minimis doctrine is appropriate. On one end of the spectrum, the Sixth Circuit in Bridgeport Music, Inc. v. Dimension Films held that sound recording owners have exclusive rights to sample their own recordings, which led to the strong recommendation to “[g]et a license or do not sample.”¹²⁶ This indicated a bright-line rule that any unauthorized use of the recording constitutes infringement, dispensing of the substantial similarity requirement as it pertains to sound recordings.¹²⁷ This view has been sharply criticized by many courts on the other end of the spectrum. Rejecting the Bridgeport view, the Ninth Circuit in VMG Salsoul, LLC v. Ciccone held that the de minimis doctrine extends to sound recordings, thereby necessitating the usual substantial similarity inquiry.¹²⁸ As such, the assessment of sampling in AI-generated music will differ based upon whether the court applies a sampling friendly or unfriendly approach.

D. Copyright Infringement Actions

To establish an actionable copyright infringement claim, the owner must prove the following: (1) they own a valid copyright and (2) there has been copying of the original expression contained therein.¹²⁹

Ownership of a Valid Copyright

As to the first requirement, valid copyright exists when an original work falls within the protectable subject matter of copyright law and adheres to statutory formalities, including fixation, duration, and national origin.¹³⁰ Additionally, registration of the work with the Office is typically a prerequisite for an infringement claim and serves as prima facie evidence of both a valid copyright and ownership thereof.¹³¹ The second prong, ownership, is a legal conclusion based on relevant facts;¹³² ownership is particularly important in the music context given the separation of the composition and recording. Once this is established, one can draw a conclusion as to which exclusive rights the owner has, which then form the basis of an infringement claim.

Copying

Despite extensive similarity, there can be no infringement without copying. Actionable copying must relate to protectable elements of the original work.¹³³ This requirement is best understood as consisting of two elements: factual copying and legal copying.¹³⁴ Factual copying poses a purely factual question: did the defendant know of the protected work, have access to it, and use it in some way in the production of their work?¹³⁵ To establish that the defendant actually copied the original, direct or indirect evidence may be used.¹³⁶ Absent direct proof, copying can be established circumstantially if the plaintiff can show the defendant “had access to the copyrighted material,”¹³⁷ and similarities exist between the works that are “probative of copying.”¹³⁸

Legal copying is often referred to as “improper appropriation” or “substantial similarity.”¹³⁹ Copying does not require verbatim replication of the original work, rather it requires that copying result in the production of a substantially similar work.¹⁴⁰ Experts describe the question of when similarity rises to the level of “substantial” as one of the toughest questions in copyright law.¹⁴¹ Similarity exists on a spectrum, spanning from the most trivial similarities, which are not actionable, to absolute, literal similarity that renders a second work identical. One approach to similarity divides it into two types: “comprehensive nonliteral similarity” and “fragmented literal similarity.”¹⁴² Comprehensive nonliteral similarity speaks to similarity in the “fundamental essence or structure” of a work. Fragmented literal similarity refers to duplication of literal elements of an original, but only in a fragmented manner, such as the exact duplication of only three lines of text. Fragmented literal similarity is often described as a de minimis doctrine, as the question gets at whether a use is de minimis or not.¹⁴³

Regardless of the type of similarity involved, courts imposed one additional barrier for copying of protected elements to be actionable: the copying must not be de minimis.¹⁴⁴ In the context of copyright, “de minimis copying” can be understood as the opposite of substantial similarity.¹⁴⁵ While the idea of de minimis copying sounds simple, its application is not necessarily straightforward because it is highly fact dependent. A de minimis determination pertains both to the quantity and quality of the use, therefore a “simple word count” is not alone enough to determine infringement.¹⁴⁶ In the music context, whether uses are deemed de minimis can vary greatly; in one instance, a six-second segment of a four-and-a-half-minute song was deemed a de minimis use,¹⁴⁷ but in another, a three-second orchestra sequence was not.¹⁴⁸

Courts have developed a wide variety of approaches to determine when similarity rises to the level of substantial in these types of cases. The three test categories that are most commonly used in similar music-related cases are the extrinsic-intrinsic, ordinary observer, and fragmented literal similarity tests.¹⁴⁹ While they each take slightly different approaches to determining the presence of substantial similarity, they are all ultimately rooted in the foundational question of whether there is similarity in those elements to which copyright protection would extend.

Fair Use Defense

Section 107 carves out a limitation on exclusive rights, commonly known as the fair use defense. Four factors are considered in determining whether a use is a fair use:

(1) [T]he purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (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.¹⁵⁰

While the Copyright Act dictates that these four factors “shall” be considered, how they have actually factored in has developed over time through judicial interpretation. The seminal case that guides all applications of the fair use defense is Campbell v. Acuff-Rose Music, Inc., a 1994 Supreme Court case that addressed a musical parody.¹⁵¹ The Court cautioned against simplifying the analysis to bright-line rules, emphasizing that fair use determinations must be done on a case-by-case basis, weighing each factor together.¹⁵² While the general principles from Campbell remain, the Supreme Court recently addressed fair use again in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, in which the Court limited the fair use defense with regard to the first factor’s transformation inquiry.¹⁵³ This will likely have particular salience in infringement cases involving AI because AI is inherently transformative; however, this type of transformation may not hold as much weight under the new understanding of the first factor post-Goldsmith.

While fair use is regularly litigated in many copyright cases generally, musicians tend to avoid it.¹⁵⁴ This initially seems odd given that the seminal case for fair use, Campbell, involves music; but Campbell is really a parody case. Outside the context of parody,¹⁵⁵ Estate of Smith v. Cash Money Records, Inc., is the only federal case recognizing a songwriter’s fair use in copying another song.¹⁵⁶ While artist-defendants have pled fair use in their answers to infringement cases, they typically defend their work on other grounds.¹⁵⁷ A 2018 empirical study revealed that, up to that point, no defendant had successfully established a non-parody fair use of another work’s musical notes.¹⁵⁸ Therefore, how fair use will operate in this context will be somewhat speculative.

III. APPLICATION AND ANALYSIS

A. Sample Song A

Sample Song A is highly similar to “Heart on My Sleeve” by “Fake Drake.” While it sounds deceptively like Kanye West, both in the voice and in that it employs lyrics that intentionally evoke similar themes to his recent works, these similarities are highly unlikely to be cognizable under copyright law for several reasons. Rather than being copyright infringement, this Kanye-inspired song is almost certain to be considered what the courts have called a “soundalike.” But because songs like this have already been the source of contention regarding music and copyright, it is helpful to understand the basis for why this is unlikely to be a successful claim.

For the purposes of this application, it is assumed that there are valid copyrights for the songs from Yeezus that were used in creating Sample Song A, including “Black Skinhead.” It is also assumed that West owns the valid copyrights for both the sound recordings and underlying compositions.¹⁵⁹ Thus, the first requirement of a copyright infringement claim, ownership of a valid copyright, is presumed to be satisfied. This means that West is entitled to the exclusive rights outlined in the Copyright Act. Infringement of one of these rights must be the basis of his claim against User A, which presents just one of many road bumps in an attempted lawsuit based on this type of activity: copying as it relates to his voice or style can pertain only to the sound recording. As such, he is limited to claiming infringement on his right to reproduce, adapt, distribute, and perform the sound recording.¹⁶⁰

Factual Copying

Whether or not there is any possibility of an actionable claim will depend on the second requirement of copying, which is divided into two prongs: factual copying and legal copying. West’s claim would most likely have to rest on an infringement of a right associated with “Black Skinhead” specifically because satisfying the copying requirements for an entire album comprised of a variety of types of songs seems very unlikely. Turning first to factual copying, this prong asks the question of whether the defendant knew of, had access to, and in some way used the protected work in the production of their work. This requirement would seemingly be satisfied by the AI system’s owner, as the question could be answered by looking at the songs the system is trained on to produce work that sounds like West. However, it is likely more complicated when the infringer is merely the user who is not responsible for or involved with inputting data. While the prompt used by User A strongly suggests their desire and intent to use Yeezus and “Black Skinhead” in some way, it is not obvious whether this satisfies the factual copying requirement. This inquiry raises two key questions: can the use by Uberduck be imputed onto User A or can indirect evidence be used to sufficiently prove factual copying by User A themselves?

While it can arguably be assumed that Uberduck is trained on Yeezus and “Black Skinhead” given its option of West’s voice in the style of Yeezus, it cannot be verified for certain absent an admission from Uberduck’s programmer. However, this is not detrimental to a claim by West because factual copying can be proven using indirect evidence, which requires only demonstrating that defendant had access to the copyrighted work and that there are substantial similarities between the works that are “probative of copying.”¹⁶¹ While access cannot be demonstrated by showing a bare possibility that the defendant accessed it, a reasonable possibility of access can.¹⁶² Where these two key questions diverge is on how that possibility of access is demonstrated, whether it be access by the system imputed onto User A or access by User A themselves. Starting with the system, the offering of a Yeezus-style voice suggests a reasonable possibility of access to “Black Skinhead” for a few reasons. First, from a technological perspective, Uberduck utilizes DL, which alone requires significant amounts of data input for the system to learn; for a model to be able to replicate West’s voice from a specific album, it can be inferred that the whole album would have been used to provide as much learning material as possible to create the most authentic results. So-VITS-SVC, the specific DL model Uberduck uses to make songs that sound like West, involves a process of using relevant source audios of West to separate out his voice, which is then encoded to analyze and use the distinctive characteristics of his voice from those songs. Additionally, the HiFi-GAN model that Uberduck uses helps to train the generator to recognize authentic versus fake West samples until it can produce highly realistic-sounding speech.

Asserting that the voice can sound specifically like West in Yeezus, together with the technological understanding that this would require as much relevant training data as possible, it seems fair to conclude it is reasonably possible that the system had access to “Black Skinhead,” which is one of only ten songs on the album. Even considering the unlikely possibility that not all ten songs were used to create a Yeezus-inspired voice, it seems very reasonable to conclude that “Black Skinhead” would be used because it was the first single released from the album,¹⁶³ it has since been certified platinum in the United States three times, and West performed it repeatedly,¹⁶⁴ all of which arguably make it a hallmark of the Yeezus era.¹⁶⁵ It is difficult to imagine a Yeezus-style voice could be trained without the use of this song. Technology aside, access can also be shown through a theory of widespread dissemination,¹⁶⁶ and, for the reasons just stated, “Black Skinhead” was clearly widely disseminated. However, this theory of access is likely not applicable to the system itself outside the context of liability for input.

Having established a relatively strong claim of reasonably likely access, the next question turns on whether that access could be imputed onto User A. Courts have held that there was a reasonable possibility of access by the defendant in certain circumstances in which such access is inferred based on an “intermediary.”¹⁶⁷ One iteration of this theory of access is that access can be inferred if the intermediary or third party is connected to the copyright owner and the infringer.¹⁶⁸ Courts that have entertained this argument have varied on the relationship the intermediary must have with both parties, but a key characterization appears to be that it is a “close relationship,” which might be found when the intermediary contributes creative ideas to the infringer, supervises the infringer’s work, or has worked together in the same department as the infringer.¹⁶⁹ There are two wrinkles in trying to apply this argument here. First, most cases involve the intermediary being given the copyrighted work by the owner.¹⁷⁰ This is potentially less damaging because it still seems relevant whether the third party heard the song, as this also factors into the conclusions in addition to whether the intermediary was given a copy.¹⁷¹ Second, the relevant cases involving inferences based on intermediary access have involved a human intermediary.¹⁷² This may be particularly problematic for a plaintiff in a situation like West because it is hard to apply a framework of a close human relationship to the relationship between a computer program, a user, and input data. However, given the novelty of generative AI technology and the unique issues presented by generative AI music, there is a chance courts will not deem this fatal.

One reason to think courts may be flexible here is because of the expanded willingness to hold Internet intermediary sites vicariously or contributorily liable for failing to monitor infringing material available on or through the use of the Internet’s system.¹⁷³ While this speaks more to potential liability of the system as the sole infringer, it may still help convince a court to accept arguments based on non-traditional assistance in infringement, which is required here to first find the technology to have been an intermediary, and then impute liability onto a user. An indication that courts may be less likely to consider an AI system to be an intermediary turns on the assessment of AI in Thaler v. Perlmutter. As discussed, the court in Thaler emphasized the importance of human authorship for copyright protection.¹⁷⁴ The court rejected the plaintiff’s “work-for-hire” argument, which he used to suggest that he had hired the AI system to create the painting for him; the court rejected the argument for several reasons, but most importantly noted that such provisions of the Copyright Act clearly only contemplated the involvement of humans as employees and the contractual relationship outlined in the provision required a meeting of the minds that cannot occur with a non-human entity.¹⁷⁵ While again, this speaks to a different type of imputation onto technology, it nonetheless reflects a hesitancy to treat technology itself like a human. This provides good reason to question whether a court would find an AI system to be a sufficient intermediary to justify an inference of access.

Given that courts have at times expressed the need to be careful in imposing liability when infringement is not done directly,¹⁷⁶ it is worth considering the possibility that a court assessing generative AI may have trepidations about holding a user liable for infringement that may technically be executed through the complex algorithm of an AI system without any input from the user besides a brief prompt.¹⁷⁷ However, case law has consistently indicated that a finding of infringement is not dependent upon finding that the defendant intended to infringe.¹⁷⁸ As such, it seems unlikely that an individual could escape potential imputation of access by simply arguing they intended to use the system to create a new song, not to infringe on the copyright of another.

Assuming the inference of access could not be imputed onto User A by way of an intermediary theory, there remains the question of whether factual copying by User A can be proven through the same indirect evidence approach without any imputation or involvement of the AI system. As mentioned earlier, one avenue for demonstrating a reasonable probability of access is by pointing to widespread dissemination of the song, which certainly seems like an available option here.¹⁷⁹ This assertion is likely bolstered by the fact that User A clearly knew of Yeezus, as they selected the Yeezus style, and had to have been familiar with the album generally because of the themes in their prompt. These facts, in addition to the widespread dissemination of the song and selection of a rap beat and lyrical themes so similar to “Black Skinhead” form a strong basis for concluding there is a reasonable likelihood of access to the song by User A. The potential issue that could arise is that User A may argue that they were not involved in the creation aside from the prompt and the few general selections. They may try to argue that, even if they had heard the song, this would not matter because their awareness was not involved in the actual creation of the song or what it sounds like. Ultimately, this would likely come down to a determination of whether the selections and prompt constitute sufficient involvement in the creation, but it seems possible that it would be enough because User A did in fact direct Uberduck in a very pointed direction, even if they did so through simple or general means. Additionally, this is unlikely to be where West’s case completely crumbles, and User A has stronger, more important arguments in other areas.

Even if access is proven, the factual copying prong remains unsatisfied until West can demonstrate probative similarity. The probative similarity prong is likely much more straightforward in this case than the access prong. The idea behind probative similarity is that, combined with a reasonable probability of access, a level of similarity will give rise to a reasonable inference that the copyrighted work served as the source for the allegedly infringing work.¹⁸⁰ Determining the presence of probative similarity requires an examination of the two works as wholes to assess whether similarities are those which would not be expected to arise independently.¹⁸¹ An important difference between this inquiry and the legal inquiry of substantial similarity is that probative similarity is not limited to protectable elements, meaning the inquiry takes a holistic approach focused on drawing a historical conclusion as to whether the copyrighted work was the basis in some way for the second work.¹⁸² This could give West a small glimmer of hope because the songs may sound sufficiently similar when compared side-by-side, especially given that unprotectable elements of his style and voice can technically be considered. Because the song sounds like West and expresses themes common to “Black Skinhead” and Yeezus more generally, a jury looking holistically at the two songs may find the similarity to be probative of copying. The level of similarity required to satisfy this requirement is lower than that of substantial similarity, as West must show only that Sample Song A overall is similar to “Black Skinhead” in a way that would be unexpected had User A not had access to the original.¹⁸³ But this is an uncertain outcome because it ultimately comes down to the jury’s assessment of how the songs actually sound and is not dependent upon any legal criteria aside from the general rule of what probative similarity is. Although there is a chance West might prevail on factual copying by demonstrating access and probative similarity, it is likely short-lived because the legal copying inquiry remains.

Legal Copying

The end of the road for those like West who seek to vindicate their exclusive rights by legally challenging soundalikes almost certainly comes at the legal copying phase, if the claim even reaches that point. The substantial similarity prong of the copying requirement raises questions that a song like Sample Song A cannot satisfactorily answer. The chief problem here is that we are assuming the only real similarity is that it sounds like West’s voice or is sung in his distinctive style, neither of which are copyrightable elements of his work. The exclusion of voice and style from the scope of copyright protection was confirmed solidly in the well-known case Midler v. Ford Motor Co., in which Bette Midler lost on a claim of infringement based on a soundalike song that mimicked her voice almost exactly; the infringement claim relied solely on her voice, as the user had obtained rights to the song itself.¹⁸⁴ The Ninth Circuit stated bluntly that “voice[s] [are] not copyrightable,” as they are not fixed works of authorship as required by the Copyright Act.¹⁸⁵ While West may try to point to the similar themes, copyright extends only to expression and not ideas. Regardless of what test is used, when a work is substantially similar only in regard to separate, unprotectable elements, there can be no infringement. There are instances in which unprotectable elements together can form the basis of substantial similarity, but that would not be possible when two songs do not sound alike aside from the voice and general genre or theme. Absent some concrete similarity, such as instrumental interludes, phrases, or even lyrics, there can be no actionable substantial similarity. Section 114 of the Copyright Act likely blocks this type of claim, as it states that the reproduction and adaptation rights do not extend to independent fixations, even if the recording imitates a copyrighted recording.¹⁸⁶ Therefore, Sample Song A would not qualify as a derivative work because, as a mere imitation, it cannot infringe on the adaptation right.

While all signs point to dismissal, there are two potential unique considerations that may be worth discussing. First, there is the question of whether Sample Song A should be considered a reproduction and adaptation, even though it is not the exact same, because the exact song was used to train the outputs of the generative AI system. Technically, AI is trained to the point that it can create its own patterns, but ultimately those are still developed using the copyrighted work. In the case of Sample Song A and Uberduck, So-VITS-SVC isolates the artist’s voice, uses that voice to create and encode frequency bands that correspond to the distinctive characteristics of the voice in that audio, and then learns to make audio that uses those frequencies. There is potentially an argument that this is a literal reproduction of sounds in a way that should be separated from the intangible concept of a voice or style, and instead look at it like a remixed sample of audio of West’s voice.¹⁸⁷ Under this theory, not only could the use be an infringement of the reproduction and distribution right, but Sample Song A would also potentially qualify as a derivative work, as it is a new song based on parts of West’s recording in “Black Skinhead.”¹⁸⁸ If this were to be considered a sample, under the Bridgeport view, this would qualify as infringement without even delving into the substantial similarity inquiry.¹⁸⁹ However, this is far from the only approach to sampling. Likely, the question of substantial similarity will remain central to determining whether this use of sampling constitutes infringement. As already discussed, Sample Song A and “Black Skinhead” cannot be substantially similar because their chief “similarity,” West’s voice and style, is not a protectable element of the song, so it would not be able to serve as the sole basis for infringement under any of the judicial tests. The use of West’s vocal frequency bands would likely be deemed a de minimis use, which is a use in which “the average audience would not recognize the appropriation.”¹⁹⁰ It seems very unlikely that the average audience would recognize Sample Song A’s use of vocal frequency bands extracted from “Black Skinhead” and West’s other music, even though they might recognize that the voice generally sounds alike. This is certainly more complicated than an ordinary sampling inquiry because the use involves very small fragments used in very different ways; nonetheless, because the statutory language prohibits only that which is actually duplicated, the substantial similarity inquiry and de minimis interpretation would have to be based solely on those exact duplications of frequency bands. As such, if this is considered sampling, it would nonetheless likely be dismissed as a de minimis use.

However, even if the use is considered sampling, fair use will likely be an issue for West, whether or not the legal copying issue is addressed with a substantial similarity inquiry. If the sets of sounds from the source audio were actually sampled to make Sample Song A, they are fundamentally different because the frequencies inherently change when forming sounds that say different words. Therefore, if that could be considered an exact reproduction and adaptation of those sounds, it seems likely that a court would find that to be a fair use. While Goldsmith instructed the transformation inquiry to be reined in, this type of use is undeniably transformative in a way similar to the code transformed in Google LLC v. Oracle America, Inc.¹⁹¹ While the basis for the sound of West’s voice, the frequencies, were used, they were manipulated and restructured to such a significant degree, as evidenced by the creation of an entirely new set of lyrics rapped. This is comparable to the reverse engineering of object code in Sega Enterprises Ltd. v. Accolade, Inc., in which the Ninth Circuit found reverse engineering in order to transform code into something entirely new to be a fair use.¹⁹² In Sega, the court rejected the argument that a use in order to create competing products precludes a fair use finding, and emphasized the need to focus on several factors, including but not limited to commercial purposes; there, the use of copyrighted code was to understand the program’s mechanisms and then create something entirely new that would be compatible with the program, which outweighed its purpose of creating an ultimately commercial product.¹⁹³ Here, the decoding of songs into frequency bands could be understood as an attempt to understand why West’s voice sounds the way it does, and the subsequent use of such frequency bands to say new words and make an entirely new song is a transformative purpose sufficient to count toward a fair use. While User A likely hoped their song would achieve commercial success, that does not negate the transformative purpose behind their use of frequency bands from West’s music. Thus, the first fair use factor leans strongly in favor of the user.

As to the second factor, the nature of the work, West’s music is inherently creative, which tends to count against fair use.¹⁹⁴ However, this is often not the most significant factor, and courts have not refused to find a fair use in situations involving creative works.¹⁹⁵ The third factor, amount and substantiality used, counts very strongly in favor of fair use. Vocal frequency bands constitute a very small amount of everything that goes into a song. Considering that all other elements, including instrumentals and lyrics, are entirely different, the use of frequency bands is a minor taking from the original, although West may try to argue that whole songs, presumably including “Black Skinhead,” were encoded. In Sega, in which the entire program was encoded, the court noted that while that fact counts against fair use, the factor is of little weight when the actual use of that information is so limited.¹⁹⁶ Here, certainly not all of that which is encoded is used. What was encoded was a sufficient amount of frequency bands to analyze and understand vocal characteristics for future imitations;¹⁹⁷ while this may have involved a large number of frequency bands, that was what was required to serve the ultimately transformative purpose of creating a high-quality song that did not itself utilize all that was encoded for training purposes.¹⁹⁸ Because the third fair use factor asks about substantiality as well, there is an opening for West to try to argue that, even if frequency bands are one small part of a song, they are nonetheless substantial in relation to the whole work because they are responsible for creating his distinctive voice. This argument would face a few barriers, the first being that it is completely acceptable to make a song that simply sounds like someone else. Additionally, he may have a more compelling argument if those vocal frequencies were placed together and used to rap lyrics from one of his songs. But the frequency bands themselves, isolated from the other bands that together create his voice, are hardly the “heart” of his original work, especially with how they have been changed in Sample Song A.¹⁹⁹

The fourth fair use factor, the effect on the market, has received limited attention in the context of music. However, in Frisby v. Sony Music Entertainment, the court noted that two songs in the similar genres of rap and hip-hop were marketplace competitors.²⁰⁰ As competitors, one copying the other could reasonably be expected to diminish the value and sales of the original.²⁰¹ Here, Sample Song A and “Black Skinhead” are certainly in the same genre, so they may properly be considered competitors in the music market. Following the line of reasoning in Frisby, this means it can be assumed that Sample Song A would have a negative impact on the value of “Black Skinhead” and, further, would harm the market for derivatives because it was used without a license.²⁰² Because sampling is so prevalent in the rap and hip-hop genres, this is particularly relevant here; West may argue that finding this a fair use would set the precedent that following proper sampling procedures is unnecessary. However, the facts here separate this case from that of Frisby because the potential sampling that occurred could have easily gone unnoticed absent the knowledge that it was created using an AI system that had encoded these vocal frequencies. To suggest that this use of “Black Skinhead” would have such a chilling effect on licensing in the industry seems to be taking Frisby’s presumptions too far.

Taking all four factors together, it seems that the highly transformative purpose and minimal amount used may be enough to weigh in favor of finding this to be a fair use, especially in light of the highly speculative arguments about market harm given that this does not involve sampling in the traditional sense. However, because the fourth factor is “undoubtedly the single most important element of fair use,”²⁰³ it is possible that if a court adopts the view that sampling without a license has such an impact on the market for future derivatives, the fourth factor could be enough to compel the finding that this is not fair use. Of course, this would be a judicial determination, so it is not impossible that a court would accept these arguments, but it does not seem overly promising at this point. Given how courts have viewed voice and style thus far, it seems like a stretch to imagine the argument that vocals are really just compilations of protectable sounds would suddenly work because of the technology involved.

The second consideration is that some may believe Williams v. Gaye opened the opportunity to argue style infringement. While the dissenting opinion in Gaye criticized the majority’s conclusion as endorsing the idea of copyright protection for a musical style,²⁰⁴ the bases for infringement included elements like signature phrases, hooks, and structural similarities.²⁰⁵ These were similarities that, although alone may not have been protected, together led to substantial enough similarity that a jury concluded rights had been infringed. While these elements could be considered aspects of the plaintiff-artist’s style, they clearly went beyond sounding like a voice. Additionally, Gaye focused on the composition, whereas Sample Song A’s mimicking of West’s voice could only speak to infringement of the recording because the alleged similarities relate only to what the vocals sound like, which is not fixed on a page like the phrases in Gaye. Putting aside the differences between Sample Song A and the infringing song in Gaye, a key weakness in West’s style argument and whether Gaye made that argument an option is that this idea has not been embraced by other courts. While some courts have embraced a “total concept and feel” test for substantial similarity, both on its own and as part of an “intrinsic” test,²⁰⁶ that test requires at least a claim based on original arrangement of unprotected elements.²⁰⁷ Without some protectable element, whether it be lyrics or a drum beat,²⁰⁸ a similar “feeling” song will not pass a substantial similarity test.²⁰⁹ Here, even if a lay person has an initial reaction that the songs sound similar because the voice mimics West, that, again, is not copyrightable. Given that there are no elements of the instrumental track or lyrics to be the basis of this claim because these are original lyrics and a generic rap beat unlike “Black Skinhead,” the mimicking of his voice is the only thing West could point to and that cannot pass the test. Therefore, even if Gaye introduced a way to litigate style infringement, which is debatable given other courts’ avoidance of such a conclusion, it appears that there must be some sort of protectable expression in that style to base one’s claim on. While West’s voice may evoke a certain aesthetic style and certainly speaks to his creative expression, there is nothing in that expression that can be the source of a successful claim here.

None of this discussion is intended to denigrate the frustration on the part of West and similarly situated artists who understandably want to fight back against AI-generated songs that intentionally mimic their voices and do so in a way that misleads listeners. This certainly reflects Drake’s perspective in response to “Heart on My Sleeve,” which nearly duped the world.²¹⁰ However, these valid concerns do not bear a clear or logical connection to copyright law and its subject matter. Instead, these concerns likely find more coherence in the protections afforded by the laws relating to trademark, unfair competition, and state rights of publicity, which are tailored to protect against the unauthorized use of one’s identity.²¹¹ This is not to suggest that such claims are certain to be successful, or even actionable, but the aims of those laws, which includes protecting identity, are likely more amenable to the concerns of West and others.²¹²

B. Sample Song B

Unlike Sample Song A, Sample Song B presents questions of infringement that, on their face, seem more likely to be answerable with copyright law. While Sample Song B also seems to generally mimic Adele’s style in “Someone Like You,” it importantly incorporates more than that, particularly by way of a nearly identical melodic hook. As with Sample Song A, it is assumed that Adele owns a valid copyright in both the sound recording and the musical composition of “Someone Like You.”²¹³ Accordingly, Adele would have a potential claim for infringement upon her rights of reproduction, adaptation, distribution, and performance. With valid ownership established, the inquiry begins with the copying requirement as it pertains to the composition.

Factual Copying

The trajectory for proving factual copying is much clearer for Sample Song B. On MuseNet, User B specifically selected the introduction from “Someone Like You” by Adele, and that introduction, though slightly modified, is present from the starting note of Sample Song B. If admitted or witnessed, this would constitute direct evidence of factual copying. However, direct proof is often unavailable because “[p]lagiarists rarely work in the open.”²¹⁴ Nonetheless, it seems very likely that indirect evidence would satisfy this requirement. Regarding access, the theory of widespread dissemination would operate well here. When dealing with songs that have gained notable popularity, plaintiffs have tended to invoke a variety of data points to support theories of widespread dissemination including references to airplay frequency and locations, billboard charts, certifications, record sales, nominations and awards, and royalty revenues.²¹⁵ Here, Adele will be able to construct a very convincing claim of widespread dissemination because she can invoke all of these data points with regard to “Someone Like You”: the song has been streamed over two billion times on Spotify alone;²¹⁶ won several awards, including a Grammy;²¹⁷ was certified platinum five times in the United States;²¹⁸ and is the twenty-fifth-best-selling song of all time in the United Kingdom.²¹⁹ Occasionally, widespread dissemination arguments are accompanied by theories of subconscious copying, which speak to the fact that copyright infringement does not have a scienter requirement.²²⁰ User B did, in fact, see on MuseNet that the intro was “Someone Like You,” suggesting this was not subconscious copying. However, the leeway to argue that the use did not need to be with full knowledge of the circumstances may be help Adele’s case; at a minimum, if User B does not admit selecting the intro, they cannot invoke a willful blindness-type argument. Therefore, an attempt to rebut the argument of widespread dissemination is unlikely to be persuasive.

As discussed with Sample Song A, substantial probability of access usually needs to be accompanied by probative similarity to successfully prove factual copying with indirect evidence. However, there are instances in which the probative similarity is convincing enough that it alone can satisfy the copying requirement. This is often referred to as “striking similarity,” and it arises when the similarity is so extensive that it is “effectively impossible for one to have arisen independently of the other.”²²¹ In analyzing striking similarity in music, it has been held that degree of similarity cannot pertain only to the quantity of identical notes, but must also look to the uniqueness and intricateness of the similar aspects and the places in which the two are dissimilar.²²² Oftentimes, because of how high the bar is set for striking similarity, expert testimony is needed when the subject matter is as highly technical as music. Here, while the melodic hook created by the use of an arpeggio is very recognizable and may seem unique to “Someone Like You,” the use of arpeggios generally is common.²²³ While there seems to be a possibility that, with the help of an expert, Sample Song B could be found strikingly similar to “Someone Like You,” the high bar for such a determination, coupled with the infrequency of successful arguments for striking similarity, makes it reasonable to assume that the normal requirements of access and probative similarity will need to be met; this is not damaging for Adele’s claim, as those are almost certainly provable.

Assuming striking similarity is not found, the indirect evidence just needs to show probative similarity. Comparing the two works side-by-side, protected and unprotected elements alike, a factfinder could certainly conclude that “Someone Like You” was the basis, at least in part, for Sample Song B. This holistic comparison would likely highlight the nearly identical melodic hook, which consists of arpeggiated chords and underlies the distinctive harmony, along with the general similarities in terms of the theme and vocal range. While the use of an arpeggio is not itself uncommon and could occur absent copying, the distinctive chord progression, melody, and harmony created in Sample Song B is similar in all the ways that make the instrumental portion of “Someone Like You,” so memorable and impactful. While remaining careful about maintaining the distinction between probative and substantial similarity, there is likely enough similarity to be probative of copying; whether that similarity is substantial in a legal sense remains to be addressed.

Legal Copying

Substantial similarity is thought of as existing on a spectrum, thereby requiring close examination to attempt to identify the line between trivial similarities and actionable improper appropriation. Here, Adele’s infringement action would allege both comprehensive nonliteral and fragmented literal similarity. The most obvious claim is that of literal similarity with regard to the piano phrase, which functions as a melodic hook, because it is reproduced nearly identically in Sample Song B. A potentially important note is that an arpeggio would appear on the sheet music for a composition because it is notated to guide the playing of chord progressions.²²⁴ Further, the use of an arpeggio is key here because it melodizes the chords being used, which tends to then be an important aspect of the resulting harmony; thus, it is potentially very significant to the substantial similarity analysis because arpeggios may take harmony into the protectable range of copyright law.²²⁵ As for nonliteral similarity, this is a situation in which the nonliteral similarity may be characterized as comprehensive; both songs are played in common time, have a somber, emotional sound, and nearly identical lyrical themes, although they are different on a word-for-word basis. As noted, courts use different tests for determining substantial similarity. While these tests are similar in many ways and may yield similar results, the most thorough prediction of how a song like Sample Song B will fare against infringement allegations must consider the nuances of each. Expert testimony is almost always used to help guide complex questions of infringement in music, so any conclusions are subject to elaboration or criticism by a technical expert.

Before applying any of the tests, it is an appropriate moment to address the doctrine of de minimis copying. Because a determination that a use is de minimis negates the need for a full substantial similarity inquiry, courts often address this “defense”²²⁶ at the outset. De minimis copying essentially means there is a lack of substantial similarity, so the conclusion that a use is de minimis generally arises when “the average audience would not recognize the appropriation.”²²⁷ It is important to keep this concept separate from that of characterizing an element as de minimis itself, such as saying that one note is de minimis and not protectable. As the inverse of substantial similarity, the de minimis inquiry similarly must consider the quantitative and qualitative importance of a use because both get at what an ordinary listener would find substantial. Essentially, the inquiry here would follow the same steps as the fragmented literal similarity test, as that test is viewed as a de minimis doctrine.²²⁸ Because the details of those steps will be discussed in detail in applying the fragmented literal similarity test,²²⁹ they need not be laid out here, largely because it seems unlikely that a court would deem the copying here to be de minimis. The focus of this inquiry is on how much of the original was used or copied; the piano phrase is repeated throughout most of “Someone Like You,” so it seems highly likely an audience would recognize the appropriation. Given that the phrase constitutes a quantitatively large part of the original and arguably has significant qualitative importance because the piano is intentionally the only instrument to create a particular feeling, the phrase opens the song instrumentally, and it may be seen as the song’s backbone, a determination that this use is de minimis copying seems unlikely. Thus, it is appropriate to analyze potential outcomes under each of the substantial similarity tests.

i. Extrinsic-Intrinsic Test

The extrinsic-intrinsic test is a two-prong test. The extrinsic prong is the objective prong and requires identifying concrete elements of expression that are similar.²³⁰ Because this test is part of a substantial similarity inquiry, the dissection of elements involves identifying those that are and are not protected by copyright. Music often presents a more complicated case for analysis because, unlike books and films, it cannot easily be classified into a few protectable and unprotectable elements;²³¹ thus, courts applying the extrinsic prong have looked to a wide variety of elements, including title hooks, lyrics, melodies, chord progression, pitch, instrumentation, accents, and basslines.²³² The combination of these expressive elements can be protected by copyright and often form the basis of claims involving instrumental phrases.²³³ Therefore, it can be helpful to think of the first question as relating to separating protectable elements or compilations of elements, and the second question as analyzing those elements to determine whether they are objectively substantially similar. In Skidmore v. Led Zeppelin, the district court concluded on a summary judgment motion that there was sufficient extrinsic similarity for the issue to go to the jury; the basis for such similarity focused on a “repeated A-minor descending chromatic bass lines lasting [thirteen] seconds” that appeared within the first two minutes of both songs and was arguably the “most recognizable and important segments of the respective works.”²³⁴ Additionally, the “harmonic setting” of the sections used the same chords.²³⁵ The court concluded that even though a “descending chromatic four-chord progression” is common, the placement in the song, pitch, and recognizability make it appropriate for analysis under the extrinsic test.²³⁶ Ultimately, however, the jury concluded that, despite the combination of objective similarities, the songs were not extrinsically similar. The jury reached a different conclusion in Three Boys Music Corp. v. Bolton, in which the jury found substantial extrinsic similarity in the compilation of five unprotectable elements.²³⁷

Here, Adele could likely make an argument similar to that of the plaintiffs in both Skidmore and Three Boys Music, arguing that although arpeggiating chords to achieve certain melodic or harmonic goals is not uncommon, the very same chord progression starts both songs without lyrical accompaniment, is repeated several times in both songs at the same pitch, and is “arguably the most recognizable and important”²³⁸ part of each work; invoking the device that made the Three Boys Music plaintiffs successful, Adele would want to emphasize that it is the compilation of expressive elements that form the basis of actionable extrinsic similarity. While the knowledge that MuseNet took the actual intro from “Someone Like You,” and used generative AI to make “predictions” for the rest of the song according to prompts suggests objective similarity of these elements, expert testimony would still be helpful and needed to confirm which elements are really present in Sample Song B; for example, there may be subtle note differences that do not necessarily make the song sound different, but are objective differences, nonetheless.²³⁹ This conclusion is ultimately a question of fact requiring technical breakdown by an expert to evaluate the compilation of expressive elements, including those that are part of the melodic hook, for originality. Based on this analysis, a jury can make an informed determination as to whether these elements are sufficiently original to be protected, and if so, whether Sample Song B is substantially similar with regard to that protected expression. Assuming an expert can corroborate the objective similarity that appears to exist, there seems to be a strong case against User B as it pertains to the extrinsic prong. This is especially true in light of cases in which experts found extrinsic similarity in hooks and signature phrases,²⁴⁰ as well as those that emphasized compilations as sufficient for extrinsic similarity.²⁴¹ Within this framework, the copied melodical hook—consisting of the same or at least similar chord progressions, use of arpeggio, pitch, and harmony—coupled with the prominence and similar repetition in both songs, sets up a strong claim for extrinsic similarity.

Importantly in the context of AI-generated music, Adele may want to point to the fact that the song is “in her style” and that the voice sounds very similar to hers. As discussed with Sample Song A, however, courts have been very reluctant to recognize copyright in a style or someone’s voice. Especially in the case of Sample Song B—which is even closer to what has been identified as a soundalike in past cases, as Adele’s voice is not being used at all—it is at most an imitation of her voice type, and thus it seems unlikely that this part of the similarity between the songs could be actionable itself.²⁴² However, this similarity may work to Adele’s benefit under the intrinsic test.

If satisfied, the extrinsic test must be followed by an intrinsic test, which is the subjective prong that puts aside analytical dissection in favor of taking the approach of a reasonable listener. The intrinsic test asks whether ordinary listeners would find the “total concept and feel of the works to be substantially similar.”²⁴³ A jury may find substantial similarity from an overall view, even when individual similarities alone seem trivial.²⁴⁴ This may be important for Adele’s case because the similarity technically boils down to a few chords and how they are played. However, the impact of the arrangement resulted in an internationally recognized piano phrase, as well as a melody and harmony that have been highly successful in conveying a message. In both songs, the phrase starts at the first second, plays without lyrics initially, and repeats after the chorus. While there are some differences in instrumental content and lyrics, a jury could subjectively find that the repeated phrase is substantial. The ordinary listener would likely also find subjective similarity in the combination of those instrumental choices and thematically similar lyrics, suggesting that the songs genuinely evoke similar meanings. In a subjective analysis of the total concept and feel, the similar-sounding vocals may potentially factor in, particularly because both songs are sung by mezzo-sopranos. However, this is unlikely to be the most salient reason for finding intrinsic similarity because mezzo-soprano is the most common female singing voice, and the intrinsic test assumes an untrained ear who would likely attribute the similarity to the unremarkable fact that both vocalists sound feminine, rather than recognizing the specific vocal range.²⁴⁵ Nonetheless, it seems reasonable to conclude that the songs are substantially similar overall. But because the ordinary listener is supposed to truly reflect an ordinary person with no music expertise, it could also go the other way. While the hook phrase is distinctive and impactful, a jury could conclude that in Sample Song B, because of the variation in the accompaniment aside from the phrase, it is not as salient, therefore finding that the works holistically lack the requisite similarity. This ultimately speaks to the challenging nature of anticipating intrinsic analysis results, as the conclusions depend on unknown variables and subjective judgments. Courts consistently reiterate that they will not question the jury’s intrinsic conclusions, therefore there is less to rely on by way of case law because it is not judges who engage in this inquiry.²⁴⁶

The extrinsic-intrinsic test has been criticized for lack of clarity as to both prongs. As will also be discussed with aspects of the following tests, the “total concept and feel” approach seems to conflict with copyright law’s very specific intent to protect original expressions rather than ideas or commonplace expressions of ideas.²⁴⁷ Assuming this test remains in use, however, it may be the approach applied in the litigation of User B. Without knowing the quality of potential expert testimony, it is hard to predict with certainty the outcome. However, case law does suggest that the type of elements that were copied could, if framed as a compilation, satisfy the extrinsic test because there are clearly musical elements that are objectively the same. As for the intrinsic test, the subjective conclusions of the factfinder will ultimately determine the outcome; however, the prominence of the copied phrase, as well as the concept and feel of the emotional ballads, suggest that a jury could potentially find the songs to be substantially similar.

ii. Ordinary Observer Test

The ordinary observer test asks “whether defendant took from plaintiff’s works so much of what is pleasing to the ears of lay listeners, who comprise the audience for whom such popular music is composed, that defendant wrongfully appropriated something which belongs to the plaintiff.”²⁴⁸ Here, because there are similarities between protectable and unprotectable elements, the test will probably be more discerning. In conducting the more discerning inquiry, courts are to try to extract the unprotectable elements and ask whether the remaining protectable elements are substantially similar.²⁴⁹ Protectable elements may either be completely original or original contributions by way of selection, coordination, or arrangement.²⁵⁰ For Adele, this would likely mean focusing on the original selection, coordination, and arrangement of the piano phrase itself and its function in the song through repetition. Once those elements are identified, the factfinder will look to the total concept and feel, focusing on whether the defendant misappropriated the original aspects of the copyright owner’s work. While the original formulation of the ordinary observer test in Arnstein v. Porter references the intended audience, that factor has not typically played a large role and is usually understood to mean the lay listener.²⁵¹ Because the emphasis is almost entirely on total concept and feel, whether MuseNet made minor, audibly imperceptible changes to the phrase may be less important than in the extrinsic inquiry of the extrinsic-intrinsic test.²⁵²

The analysis of Sample Song B under an ordinary observer test will likely resemble the analysis in New Old Music Group, Inc. v. Gottwald.²⁵³ In New Old Music, the infringement claim was based on a drum part consisting of a single measure, which was repeated throughout the allegedly infringing work, ultimately accounting for eighty-three percent of the original work.²⁵⁴ The defendant argued that the individual elements were not sufficiently original to be protected, but the court held that the totality of the drum part could suffice as copyrightable based on its original selection, coordination, and arrangement.²⁵⁵ A reasonable juror in New Old Music could have concluded that the use of the drum part, which could be seen as the original song’s “backbone,” took so much of “what is pleasing to the ears of lay listeners, . . . that [the] defendant wrongfully appropriated something” from the plaintiff.²⁵⁶ Here, the repeated piano phrase could be described as the backbone of “Someone Like You,” and be protected as a unique and original arrangement despite the unoriginality of any individual note. Analyzing the total concept and feel of both songs, a reasonable jury could likely conclude User B substantially misappropriated Adele’s original compilations and thereby infringed on her copyright.

Because this test relies on subjective judgments, the outcome could go the other way. A jury could conclude that the piano phrase and its arrangement were not original,²⁵⁷ or that it is a de minimis aspect of the work²⁵⁸ and therefore the similarity does not pertain to what lay listeners deem pleasing in “Someone Like You.” This was the case in Velez v. Sony Discos, in which the combination of eight-measure phrases was a structure widely used and therefore not original to the plaintiff’s song, and also constituted de minimis aspects of the original song.²⁵⁹ Sample Song B differs from the allegedly infringing song in Velez in that, aside from that structure of phrases, the song was not otherwise similar to the original in melody, harmony, or lyrics;²⁶⁰ Sample Song B, on the other hand, can be alleged to infringe on the arrangement of piano phrases, as well as the resulting melody and harmony that is affected by other expressive choices like arpeggiating the chords. Because of these similarities, it seems likely that a jury could find for Adele under the ordinary observer test, assuming expert testimony does not exclude the possibility of originality.

A key reason the ordinary observer test, discerning or traditional, comes under criticism is that it asks a factfinder to simultaneously separate protectable elements for careful examination and determine substantial similarity based solely on the total concept and feel.²⁶¹ Additionally, ordinary listeners’ impressions regarding whether copying has occurred do not necessarily prove that a violation of the Copyright Act has taken place. These shortcomings could affect Adele’s case against User B in two opposing ways. On one hand, the meticulous separation of protectable elements before conducting a net effect-type of analysis might lead the jury to conclude that what they are merely dealing with individual phrases. Focusing too closely on the individual phrases, as opposed to the whole arrangement, might cause this similarity to be overlooked in a total concept and feel inquiry. If, however, the jury recognizes the arrangement as the “backbone” of the song, this could lessen the issue. Further, in focusing on the total concept and feel, a jury might unintentionally be overinclusive when the vibe of the songs is as similar as “Someone Like You” and Sample Song B. If anything, this emphasizes the importance of expert testimony regarding the originality, or lack thereof, of the elements—whether on their own or as a compilation—to guide the jury before their total concept and feel analysis.

iii. Fragmented Literal Similarity Test

The last test is the fragmented literal similarity test, which has less applicable case law. This test focuses on “localized” similarity based on the idea that identifiable fragments of identical or nearly identical expression should be the basis for an infringement action.²⁶² As such, the substantial similarity question under this test turns on whether the copying involves trivial or substantial elements of the original work, which is determined by quantitative and qualitative assessments.²⁶³ Most cases specifically addressing fragmented literal similarity involve lyrics, so the qualitative significance of instrumental phrases is less explored. However, when considering the qualitative importance of instrumental phrases outside the context of fragmented literal similarity, it has been recognized that small sections can have great qualitative import, such as the four-note opening melody in Beethoven’s Fifth Symphony.²⁶⁴ Here, the specific piano phrase appears at the first second of “Someone Like You,” initially without lyrics for about fourteen seconds; the same phrase continues through nearly three and a half minutes of the song, although there are some additional notes played and volume changes.²⁶⁵ Quantitatively, this is clearly significant. In TufAmerica, Inc. v. Diamond, the court determined that a “distinctive orchestra sequence” from the original song that was about three seconds and consisted of “a series of five punchy ascending chords” was quantitatively significant given that it was repeated seventeen times to ultimately constitute about fifteen percent of the song.²⁶⁶ While a musical expert would need to confirm the actual length of time the phrase appears in original form in “Someone Like You,” it certainly seems to exceed that threshold. The qualitative importance also seems convincing given that the piano is the only instrument, the phrase opens the song instrumentally, making it very recognizable, and the phrase continues with only slight alterations, thereby functioning as a common thread through the whole work. Under this test, it seems highly likely Adele would prevail.

However, this test seems least likely to apply. First, it is not as commonly used as the other tests. Second, there is much more at issue than just fragmented literal similarity, especially considering that the desire to legally target Sample Song B likely has as much to do with the fact that User B used AI to create a song that intentionally sounds like Adele as it has to do with the use of the phrase; “local” and “global” similarity are expected concerns for artists whose works are pirated by AI. Third, the fact that the phrase is slightly sped up and may contain slight differences due to how it was generated suggests the other tests may be better suited for this case.

User B’s final opportunity to argue that their conduct falls within the bounds of the Copyright Act without constituting infringement is by asserting the fair use defense. Because the same analysis likely applies to User B’s use of the recording as well, the fair use discussion below addresses both components of the song together.

The Sound Recording

The analysis thus far has focused on the composition. Infringement of the sound recording of “Someone Like You” requires a literal duplication of the recording.²⁶⁷ Based on the language of the Copyright Act, whether the rights in the recording have been infringed depends entirely on how MuseNet creates music using introductions from existing songs:

(a) The exclusive rights of the owner of copyright in a sound recording are limited to the rights specified by [the] clauses [pertaining to the reproduction, adaptation, distribution, and the public performance by digital audio transmission rights] . . . . (b) The exclusive right of the owner of copyright in a sound recording under [the reproduction right] is limited to the right to duplicate the sound recording in the form of phonorecords or copies that directly or indirectly recapture the actual sounds fixed in the recording. The exclusive right of the owner of copyright in a sound recording under [the adaptation right] is limited to the right to prepare a derivative work in which the actual sounds fixed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality.²⁶⁸

MuseNet trains on MIDI files, which capture data that can be seen as a “symbolic representation of music.”²⁶⁹ Essentially, a MIDI file records data about the notes in a song, including pitch, volume, and time nodes, which can then instruct the reproduction of musical compositions.²⁷⁰ Importantly, MIDI files are not audio recordings and cannot transmit audio.²⁷¹ This means that, unlike Uberduck, MuseNet technically never even “hears” the sound recording; it only trains on the computer language that indicates how the composition is played. Therefore, a MIDI file of “Someone Like You” could not possibly result in exact duplication of the protected recording being used in Sample Song B because the recording itself is not transmitted. This information alone suggests that User B cannot be liable for infringement of the sound recording of “Someone Like You,” and Adele would have to rely on allegations of infringement of the composition as discussed earlier.

While the literal language of the statute suggests that copying using a MIDI file is not an actionable infringement of the recording, a more in-depth inquiry as to whether this is so black-and-white is warranted considering that many AI music generators train on MIDI files. The starting point for this inquiry is legislative intent. The Digital Performance Right in Sound Recordings Act of 1995 (“DPRA”) created an exclusive performance right for sound recordings, specifically granting the right to perform by “means of a digital audio transmission.”²⁷² In doing so, section 114 was also amended to add the relevant limitations on the performance right. The House Report accompanying the DPRA explicitly states that the right applies only to digital audio transmissions, which is consistent with the language of section 114 concerning reproduction and adaptation rights.²⁷³ Additionally, it specifies that a “digital phonorecord delivery” refers to the delivery of a recording by digital transmission.²⁷⁴ From this, it is clear that while the rights associated with sound recordings were expanded to adapt to technological developments, they were not explicitly extended beyond the transmission of the actual recording. However, the House Report does note that because the bill does not “precisely anticipate particular technological changes,” they intend that the rights, exemptions, and limitations created should be interpreted to “achieve their intended purposes.”²⁷⁵ This is at least suggestive of the understanding that the language may not be precise enough to cover all technologies and potential infringements. In 2018, Congress passed the Musical Works Modernization Act with the intent of updating copyright law to increase fairness for creators regarding statutory licensing.²⁷⁶ While this points to an ongoing concern about protecting artists in the advent of technological innovation, it does not change how digital transmission is defined. Legislative intent seems to indicate that Congress’s focus is to protect the actual sound recording. However, the concern about the future evolution of technology nonetheless remains relevant.

The Office has also provided some perspective on MIDI files and the sound recording requirement. As of 2021, the Office “does not consider standard [MIDI] files to be phonorecords and will not register a copyright claim in a sound recording contained in a standard [MIDI] file.”²⁷⁷ The Office elaborates that, because MIDI files do not capture sounds and only capture the underlying score, they are insufficiently fixed to be copyrighted as sound recordings, though they may suffice for musical works.²⁷⁸ While this does not directly address MIDI files in the context of infringement, this is clear evidence that the Office is aware of how MIDI files operate in the music context and continues to view them as fundamentally different from sound recordings. If the Office does not consider MIDI files to be fixations of the recording itself, it is a difficult argument to suggest it should constitute a sound recording for the purposes of infringement.

Case law does not seem to have addressed this issue directly. However, there is a wealth of judicial interpretation of section 114 and what is meant by the requirement that sound recordings be duplicated to qualify as infringement.²⁷⁹ This conclusion aligns with the language of the statute and its intended purpose. Therefore, even if Sample Song B sounds like it was sampled, current interpretations of the Copyright Act would instruct a court to conclude that Sample Song B did not infringe on Adele’s exclusive rights in the sound recording of “Someone Like You.” Undeniably this would be incredibly frustrating for an artist in Adele’s shoes; changing one fact—how the song was duplicated—could open the door to receiving royalties for sampling. This bears similarity to the frustration artists feel in cases involving songs like Sample Song A in which they justifiably feel that their hard work has been “appropriated,” yet that appropriation is simply not cognizable under current copyright law.

However, given that this case presents new issues that have not yet been addressed directly, it is possible that using the original in this specific way could be considered an exact duplication. Based on the DPRA and Congress’s intent to protect the ability to earn royalty revenues in the digital age, it may be a fair extension to consider the extraction and use of exact portions of a song using MIDI technology to be within what was meant by an actual duplication. There is no human involvement in using MIDI files to recreate the exact instrumentals; they are fed to the AI system to learn, train on, and reproduce with predictions. By possessing the MIDI file, the system autonomously makes an exact replica of the song. In fact, the point of MIDI files is to enable the creation of exact replicas, as it is a type of file that can direct notes and instruments to be played. While that seems to sound like a process akin to a person who uses their own instrument to recreate a song, which is acceptable under the Copyright Act, the lack of human involvement may persuade a court to conclude that this process falls outside the scope of what Congress intended to allow without obtaining a license.

If this is considered to be sampling, there are several potential rights for Adele to argue infringement upon; by its very nature, sampling may infringe on the reproduction and distribution rights, and courts have found that sampling infringes on the adaptation right by harming the market for future derivatives.²⁸⁰ In determining whether this sample infringed on those rights, courts would likely apply the same requirements for a successful infringement action. The only instance in which the fact of sampling alone would be sufficient is if a court strictly adheres to the holding and reasoning from Bridgeport. Because this would be considered an exact duplication, the factual copying prong would easily be satisfied. As to the legal prong, it seems that Sample Song B would likely be found to be substantially similar to “Someone Like You” for the same reasons as discussed regarding the musical composition. Further, the fair use inquiry would be important in determining whether User B is liable for infringing Adele’s copyright.

Absent such a change in interpretation or amendment of the Copyright Act, it seems unlikely that Adele would succeed on a claim of infringement on the sound recording. Given that AI systems often train on MIDI data, this is something that may be addressed in the Office’s future reports. While arguments about style pirating by generative AI systems seem unlikely to influence changes in copyright protections, arguments about near-duplication by MIDI files align more with adjusting copyright law to address technological changes. Ongoing concerns about royalties and protecting rights in ownership of a sound recording may demand attention to this MIDI “loophole.” Because this situation presents a good opportunity to reconsider what exactly is meant by exact duplications, it is worth considering how Adele’s infringement action would proceed if User B’s use of MIDI files does qualify as sampling. Since the required elements of an infringement cause of action are likely satisfied, the outcome for the recording probably depends on fair use, as that is User B’s last opportunity to attempt to show that their conduct is not prohibited by the Copyright Act.

Fair Use Defense

Regarding both the musical composition and the sound recording, User B will likely at least plead fair use in their answer to a suit alleging infringement by Adele. Nevertheless, like other music copyright cases, it is not guaranteed that this defense will be litigated. In asserting a fair use defense, User B will have the burden of justifying their use of the original phrase, including its intact melody, harmony, and rhythm. If successful, they will be relieved from liability because fair use is an affirmative defense.²⁸¹ Because there are only a handful of fair use music cases that involve non-parody uses, with a notable absence of case law addressing the use of instrumental sections, the following analysis largely relies on analogies to other applications of the defense.

The first factor is the “purpose and character” of the use.²⁸² The key question is one of transformation. Post-Goldsmith, this inquiry is more demanding and requires looking beyond whether the use adds something new. When the use is essentially the same as the original, as is the case here, a compelling justification is required.²⁸³ There is certainly an argument that the use here is transformative, simply based on the nature of MuseNet and the resulting composition. The intro to “Someone Like You” served as the basis for Song B, but then the AI system used predictive technology to construct much of the remaining composition, revisiting the original phrase only occasionally. In a literal sense, User B, via MuseNet, transformed the phrase by pairing it with new instrumental phrases. While this fits the definition of literal transformation, a more compelling argument would exist if the song retained less of the original in its essentially unchanged form. Since most uses incorporate some addition, the inquiry must also consider the extent to which the purpose differs.²⁸⁴ Sample Song B does not fit into any of the criteria from the preamble of § 107,²⁸⁵ but that does not preclude a sufficiently different purpose. In Estate of Smith, the court found that the use of lyrics to discuss music generally served a “sharply different” purpose than the lyric’s original purpose or goal of commenting on the “primacy of jazz music.”²⁸⁶ Whether this conclusion would be accepted under Goldsmith, which was decided later, is questionable because the Court held that transformation cannot be based on the “stated or perceived intent of the artist.”²⁸⁷

Regardless, while there are changes in the instrumental phrasing and added lyrics, the lyrics reflect very similar themes, and the music serves the same purpose of setting a somber tone. While more specifics about the lyrics and the message of Sample Song B are needed to confirm this conclusion, the available information suggests that the purpose of using the piano phrase is not even as different as that of the use in Estate of Smith, which also arguably lacked significant differences. Because of the exact portions of piano used, along with several other nonliteral similarities, it seems unlikely that User B could sufficiently demonstrate a compelling justification or a distinct purpose. The Goldsmith Court noted that Campbell cannot be read to say that any use that adds something new counts in favor of fair use because, if it did, a “commercial remix of Prince’s ‘Purple Rain’” would weigh in favor of fair use purely because it added some new expression to the song.²⁸⁸ Thus, Sample Song B is arguably just a remix of the instrumentals in “Someone Like You,” which fails to serve any significant unique purpose because it uses the phrasing to evoke the same theme and musical vibe. Therefore, it seems unlikely that a court would find the first factor to favor fair use here.

The second factor is “the nature of the copyrighted work.”²⁸⁹ This factor examines whether the work is creative or expressive.²⁹⁰ This factor weighs strongly against fair use because the copyrighted work is an original, creative musical work. Because this is somewhat uncharted territory, User B could argue that the creative nature of the original song is less relevant because what was used can be broken down into a chord progression, and there are only so many combinations of such progressions; User B may then argue that courts should look at these chords more like facts or nonfiction works. This argument is not particularly persuasive given that Sample Song B uses the same arrangement of the chord progressions, maintaining the original melody and harmony, which clearly speaks to the creative choices made in “Someone Like You.” Nonetheless, this factor is rarely significant in a final fair use determination.²⁹¹

The third factor pertains to the “amount and substantiality of the portion used in relation to the copyrighted work as a whole.”²⁹² User B will certainly argue that they used only what was required for the generative AI system to create predictions and compose a new song in accordance with those predictions. While User B is not required to use only the minimum amount needed for the system to function,²⁹³ the significant amount used, coupled with the lack of obvious transformation in the resulting song, will likely work against them. This factor is less likely to favor fair use when there is extensive copying or when the use encompasses “the most important parts of the original.”²⁹⁴ While in Oracle, the amount of code used was reasonable in proportion to the transformative use,²⁹⁵ the use of exact news segments in Fox News Network, LLC v. TVEyes, Inc. was extensive and included all of the important parts of the original news segments, thereby failing to qualify as fair use.²⁹⁶ User B’s use of the piano phrase likely falls between these two cases, as it does not use the entire composition, but still uses so much of what is important from it. As with the other two factors, this factor would likely count against fair use here.

The final factor, often deemed the most important, asks about the “effect of the use upon the potential market for or value of the copyrighted work.”²⁹⁷ This factor requires looking beyond the immediate situation to consider whether widespread conduct of this kind “[might] adversely affect the potential market for the copyrighted work.”²⁹⁸ As noted earlier, this factor’s application in the music context is unclear, as it has received little judicial attention. Since the use is unlikely to be deemed transformative, Song B is more likely to pose a risk of market substitution. However, this conclusion is based on an approach that is not typically applied to music cases like this one. User B will certainly argue that listening preferences are subjective and the use of the piano phrase to create a similarly emotional ballad may not clearly harm the market for the original the way the complete replication of news segments and distribution of clips would render paying for the original largely unnecessary.²⁹⁹ However, a California court, addressing an allegedly infringing song in Frisby, held that two songs within similar genres were competitors; as such, the court concluded that when a latter song copies important elements of the original, the value and sales of the original are expected to be diminished because “the copy supersedes the objects of the original creation thereby supplanting [it].”³⁰⁰ Sample Song B is clearly within the same genre as “Someone Like You,” so a court may deem them to be market competitors. Assuming these two songs qualify as market competitors, the subsequent question becomes whether Sample Song B copies an important element of “Someone Like You,” thereby supplanting the original. For the reasons discussed throughout this Note, the copied piano phrase is clearly a critical part of “Someone Like You,” as it is recognizable and serves as the instrumental accompaniment for most of the song. If a court agrees with this determination of importance, it will likely count against fair use.

The court in Frisby further explained the importance of considering the market for derivative works that may be affected by a later use; in that case, the court found that if the sample were considered fair use, it would “destroy the market for derivative works based on [the original song].”³⁰¹ While that conclusion was linked to the existence of a “flourishing market” for derivatives of the original song,³⁰² the premise that such a decision would result in future users not bothering to pay licensing fees would still apply here, even if there is no such flourishing market for “Someone Like You.” Fair use cases pertaining to all types of work often consider the potential chilling effects on the market. Finding Sample Song B’s use to be fair use could certainly undermine the efficacy and profitability of an established system of licensing.³⁰³ By referencing sound recordings, the DPRA reflects congressional concern about the livelihoods of artists and individuals who rely on licensing revenue. Allowing this substantial amount of copying to be fair use would likely lead many future users to forgo obtaining a license. Further, the court in Sony Music Entertainment v. Vital Pharmaceuticals, Inc. held that when a user “completely ignore[d] the market for music licensing,” the burden shifts to the user to demonstrate that their use is not likely to harm the market for the original.³⁰⁴ Therefore, because User B did not obtain a license to use any part of “Someone Like You,” they would be responsible for producing evidence that Sample Song B did not negatively affect the market for the original. Adele’s unrealized royalties in this case would be limited to licensing revenues for “traditional, reasonable, or likely to be developed markets.”³⁰⁵ However, based on statutory requirements and industry practices, music licensing qualifies as a developed market. Therefore, this limitation is unlikely to have a significant impact in the music context.

Even if the use of MIDI files renders the use a mere imitation rather than a duplication infringing upon Adele’s rights in the recording, the result may be the same for this fourth factor, as a finding of fair use would necessarily imply that the MIDI loophole provides an acceptable way to avert infringement. This is problematic for the sampling and licensing market because those who would normally obtain a license to sample “Someone Like You” and other songs may instead copy the songs via MIDI technology. While such an approach would be unwise, considering that it does not remove potential liability for infringement of the musical composition, it would nonetheless provide a way to avoid paying licensing fees, which some AI users would likely exploit. Therefore, the chilling effect is likely to occur regardless of whether the use is characterized as sampling or a literal duplication. Further, the piano phrase is an important part of “Someone Like You,” both in the actual recording and in the composition, which is copied exactly. Therefore, Sample Song B may supplant the composition and thereby harm the sales and value of “Someone Like You.”

While predictions about fair use are necessarily speculative given the unique factors here, the application of analogous precedent suggests that, at a minimum, User B does not have a very compelling fair use defense. Future application of fair use in music by courts will be instructive, as will opinions addressing generative AI more specifically. A particularly important question to be answered will be how generative AI works that use predictive models will hold up against a transformation inquiry, as that factor typically seeps into the other three as well. Until courts provide such insight on how fair use and infringement apply to generative AI songs, Adele seems to have a decent case for infringement of the composition, so long as the subjective assessment leans in her favor. Infringement of the rights in the sound recording copyright, however, seems to present a less promising case under current interpretations of the Copyright Act.

IV. POLICY IMPLICATIONS

The analyses of Sample Songs A and B clearly suggest that current copyright law does not provide obvious answers to several questions that arise in the context of generative AI music and, more generally, AI technology. While certain provisions of the Copyright Act are intentionally broad to allow for changes, and amendments have addressed specific deficiencies identified by Congress, a fundamental deficiency arises from the fact that they did not design the Act with this advanced of technology in mind. For example, the limitation of rights in a sound recording to exact duplications was not promulgated with the expectation that machine learning algorithms would eventually train on data and duplicate it exactly through what technically qualifies as an independent fixation under the statute. Whether these deficiencies are addressed through amendments, judicial decisions, or administrative policies, a determination stands to be made as to whether specific new rules or exceptions are needed, or if the broad language of the Act should remain, with adjusted, AI-specific or AI-sensitive interpretations.³⁰⁶

Specific rules aside, the contentious situations created by generative AI music highlights the continuing struggle to balance protection for creators with the benefits of rapidly advancing technology. As the Court noted in Twentieth Century Music Corporation v. Aiken, the Copyright Act and its provisions are intended to reflect “a balance of competing claims upon the public interest.”³⁰⁷ On one side of the spectrum, it is important to recognize the societal value of music and properly appreciate the talent it takes to release authentic, moving pieces of work.³⁰⁸ If we want musically talented individuals to continue to pursue these creative aims and provide us with entertainment, their creative expression must continue to enjoy protection. This is a particularly salient concern given the sensitivity of the creation involved, as one artist is a vulnerable human, baring their soul, and the other “artist” is an inherently non-creative and non-vulnerable trained machine.

On the other end of the spectrum is the necessary recognition of the importance of encouraging technological advancement and pursuing a more efficient society. If the use of generative AI is aggressively cabined by the risk of copyright infringement litigation, the world may miss out on valuable works. While the protection of artists is undeniably important, it cannot be forgotten that protections are limited because the ultimate goal is to promote creativity for the public good.³⁰⁹ Further, this could have a chilling effect beyond the music industry, impacting industries in which the use and advancement of this technology could change the world or save lives. Even within the music industry, if we limit the usage of AI by non-owners, how might that precedent impact the use of AI by owners themselves? Currently, similar technology is used in recording studios to make original songs and, particularly, to improve songs before they are released.³¹⁰ Artists would agree that this use is not the aim of cracking down on copyright infringement, but it would potentially be difficult to keep these uses separate and may result in frivolous and undesired suits between disgruntled artists and producers. Further, we need to determine the weight that the creative input of the user has on what uses are more permissible because not all AI systems dominate the creation without meaningful human input. Determining how and where to draw this line is far from simple and will necessarily depend on an increased understanding of the technology, assessment of policy priorities, and, to some degree, value judgments regarding what aims our society deems most important.

CONCLUSION

Generative AI music presents a whole host of new questions, considerations, and potential implications for how copyright holders vindicate their ownership. While the application of current copyright law and precedents to these situations involving AI-generated music does not provide fully satisfying answers as to what will happen when songs like these land on court dockets, it does direct attention to the chief policy concerns and areas in which artists are vulnerable. With regard to “Fake Drake,” the analysis of Sample Song A suggests that an infringement suit based on AI-generated soundalikes is unlikely to be successful. While a better understanding of the technology involved in AI-generated music may lead to stronger sampling claims, addressing “Fake Drake” is likely a matter better suited for trademark law and the right of publicity. Sample Song B presents slightly brighter prospects for artists to litigate AI-generated songs they believe infringe on their existing, copyrighted work. But these results are somewhat tentative, pending a better understanding of the technology and, ideally, insight from the Office.

What can be said for certain is that our understanding and expectation of how these cases will unfold are crucially informed by our understanding of the generative technology that ultimately creates the works. From the amount of user input to training data, there are many more considerations for actionable infringement than in a case of one person consciously copying the lyrics of a song by copying and pasting them onto new sheet music. As more is understood about how this technology actually uses existing songs to create new ones, the more we can apply the principles of copyright law and identify the gray areas that need clarification. To call these situations and concerns complicated would be a vast understatement. But if copyright law is to achieve its aims of “promot[ing] the Progress of Science and useful Arts,”³¹¹ while also continuing to provide adequate protection for “original works of authorship,”³¹² even in the face of alluring technological developments, work must be done to decipher between these considerations and identify those that are legally cognizable. While Drake likely cannot

vindicate his copyright ownership rights by taking Fake Drake to court, future artists similarly affected might face a different trajectory thanks to “Heart on My Sleeve,” and how it turned the country’s attention to the question of how copyright law interacts with generative AI music.

98 S. Cal. L. Rev. 663

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Melissa Schneider*

* Executive Senior Editor, Southern California Law Review, Volume 98; J.D. Candidate 2025, University of Southern California Gould School of Law; B.A. 2022, University of Arizona, W.A. Franke Honors College. Thank you to Professor Barnett for his support and guidance, and to the members of the Southern California Law Review for their thoughtful suggestions.

Transforming Special Education Litigation: The Milestone of Perez v. Sturgis Public Schools

April 2025April 2025Isabelle Yuan*

In March 2023, the Supreme Court issued a landmark decision in Perez v. Sturgis Public Schools, which held that individuals seeking compensatory damages under federal anti-discrimination laws, like the Americans with Disabilities Act, no longer need to satisfy the administrative exhaustion requirement in the Individuals with Disabilities Act (“IDEA”). Under IDEA, all students with disabilities are entitled to a free appropriate public education, which means that students with disabilities are entitled to individualized education services that meet their needs. In Perez, the plaintiff, Miguel Luna Perez, was a deaf student who alleged that the Sturgis Public Schools discriminated against him by not providing proper accommodations, such as a qualified sign language interpreter in his classes. The district court and the Sixth Circuit dismissed the plaintiff’s claims because of an IDEA provision that requires the plaintiff exhaust all administrative procedures before seeking relief in court. The Supreme Court reversed the Sixth Circuit decision, reasoning that the exhaustion requirement did not apply to Perez as he sought compensatory damages, which are unavailable under IDEA. This ruling means that families can now directly hold schools financially accountable for IDEA violations. This Note discusses Perez’s profound impact on the special education landscape. The greater accessibility for families to litigate will ideally lead to greater accountability and IDEA compliance as schools strategize to avoid litigation and paying costly compensatory damages. Although this decision is a victory for students with disabilities, a major downside of Perez is that paying compensatory damages increases schools’ financial strain and may hinder their abilities to address systemic issues in their special education framework. To ensure that school districts can properly address structural issues and adequately support students with disabilities post-Perez, this Note argues for clearer IDEA guidelines and robust monitoring systems. There are many uncertainties that follow in the wake of Perez, but the decision has the potential to encourage much-needed progress in special education services nationwide.

INTRODUCTION

In March 2023, the United States Supreme Court delivered a landmark decision for students with disabilities. The Court unanimously ruled in Perez v. Sturgis Public Schools that a student with a disability is not required to exhaust the administrative due process procedures under the Individuals with Disabilities Education Act (“IDEA”) before seeking monetary damages under the Americans with Disabilities Act of 1990 (“ADA”) or other federal antidiscrimination laws.¹ Under IDEA, students with disabilities are required to receive a “free and appropriate public education,” but money damages are not available as relief.²

IDEA mandates that students with disabilities receive a free appropriate public education (“FAPE”), which includes providing special education and related services from preschool through secondary school that meet state educational agency standards and conform with the student’s individualized education program (“IEP”).³ An IEP is a written statement developed by a local educational agency, like a school district. It is a collaboration between a child’s parents and school personnel to identify a student’s needs and to develop a plan to achieve educational goals.⁴ Parents are intended to play “a significant role” in the IEP process.⁵ IEPs also prescribe the types of supplementary services the student will receive, along with an explanation of whether the child is able to participate in regular classes with nondisabled children.⁶

Three main federal laws exist to protect children with disabilities: IDEA,⁷ the ADA,⁸ and section 504 of the Rehabilitation Act of 1973 (“section 504”).⁹ Both IDEA and section 504 confer a right to FAPE, though the two have distinct conceptions of the meaning.¹⁰ Though the ADA does not contain a FAPE obligation, its regulations are mandated to be consistent with all section 504 regulations, so it does not undermine section 504’s FAPE obligation.¹¹ The ADA was enacted twenty-five years after IDEA to “provide a clear and comprehensive national mandate” to address pervasive discrimination against individuals with disabilities in areas such as “employment, housing, public accommodations, [and] education . . . .”¹² The ADA mandates that employers and public entities make reasonable modifications to their policies or facilities to accommodate individuals with disabilities. Section 504 is an antidiscrimination statute that also protects individuals with disabilities from being denied benefits or excluded from participation in any program receiving federal funding, including public schools.¹³

IDEA, the ADA, and section 504 all define “disability” differently, although there are overlaps among them. In this Note, “students with disabilities” refers to students who qualify under IDEA. IDEA defines a student with a disability as a child, aged between three to twenty-one, “with 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” who thereby “needs special education and related services.”¹⁴ The ADA’s definition for “disability” is more stringent, as an individual must have “a physical or mental impairment that substantially limits one or more major life activities” and a record of the impairment.¹⁵ Section 504 incorporates part of the ADA definition, but requires that an individual with a disability have a physical or mental impairment that “results in a substantial impediment to employment” and can benefit from vocational rehabilitation services.¹⁶ The ADA and section 504 operate similarly to prohibit discrimination on the basis of disability in programs that receive federal funding.¹⁷ So, although IDEA and ADA both provide relief for individuals with disabilities, they function differently; the ADA addresses broader discrimination in major areas of public life like employment and public accommodations, while IDEA is focused only on special education services in public education.¹⁸ Importantly, the different “disability” definitions mean that a person who receives special education services under IDEA does not necessarily have a disability recognized under the ADA and section 504.¹⁹

In Perez v. Sturgis Public Schools, Miguel Luna Perez, a deaf student in Michigan, faced significant challenges in his education. Perez attended schools in the Sturgis Public School District (“SPSD”) and was entitled to a sign language interpreter during class.²⁰ Although the school provided him with a classroom aide, Perez’s assigned aide was unqualified to teach sign language.²¹ As Perez neared high school graduation, the school informed his parents that he did not fulfill his diploma requirements and would not graduate, which prompted Perez to file a complaint with the Michigan Department of Education.²² Perez alleged that SPSD denied him an adequate education in violation of IDEA, the ADA, section 504, and two other disability laws.²³ SPSD and Perez agreed to a settlement that included post-secondary compensatory education and sign language instruction for Perez.²⁴ Perez subsequently sued SPSD in federal district court.²⁵ The Western District of Michigan dismissed Perez’s ADA claim, citing his failure to exhaust administrative proceedings because he had settled his IDEA claim—a decision the Sixth Circuit affirmed.²⁶

The central question before the Supreme Court in this case was whether IDEA and the ADA required a student to exhaust administrative proceedings against the school district, even when such proceedings would not provide the relief sought.²⁷ The Court’s unanimous opinion held that an ADA lawsuit seeking compensatory damages could proceed without exhausting the administrative processes of IDEA because the remedy sought under the ADA was not one provided by IDEA.²⁸ Perez is important because it changes the landscape of special education law, opening the door for families to seek compensatory damages without undergoing an extensive exhaustion process. Rather than being forced to participate in due process hearings, families can readily hold school districts financially accountable for IDEA noncompliance.

This ruling will have significant implications for the rights of children with disabilities and how school districts handle future litigation. One implication is that the process for seeking compensatory damages from school districts became more streamlined, since families may bypass IDEA’s exhaustion requirement. Previously, the burden of exhausting IDEA’s administrative procedures was a deterrent for families seeking remedies under federal statutes like the ADA and section 504. Another implication is that the rights of students with disabilities are enhanced, as families have more leverage when negotiating settlements with school districts. Families may feel more empowered by the possibility of receiving monetary damages that will offset their litigation costs and propel school districts to address their inadequate special education programs. The availability of compensatory damages will likely lead to an increase in the number of cases brought against school districts.

However, there may be unforeseen negative consequences of increased family advocacy: prolonged legal battles and compensatory damage payouts may strain school districts’ resources and divert attention away from students. School districts that are already struggling financially might experience a further breakdown in their special education services as reduced funding and resources prevent them from addressing the educational needs of students. It may be that some families will receive rightful compensation while other students with disabilities struggle against systemic issues in the administration of special education programs exacerbated by the effects of the Perez decision.

This Note proposes that the Supreme Court’s decision in Perez will have far-reaching consequences for the families of students with disabilities and school districts’ approaches to litigation, as well as policy implications for educational agencies in the implementation of special education services under IDEA. Part I of this Note offers an overview of IDEA’s history, the statute’s requirements and procedural framework, and an explanation of IDEA’s exhaustion requirement that is central to the discussion in Perez. Also, Part I offers a brief explanation of the ADA and section 504 in relation to IDEA and the standards for receiving compensatory damages through these laws. Part II discusses a few important Supreme Court cases that litigated standards and definitions under IDEA. To fully understand the importance of the Perez decision, it is important to contextualize Perez alongside other IDEA cases heard by the Supreme Court. Part III explores the background and discussion of Perez and its implications for future special education litigation. Finally, Part IV explores potential consequences of the Perez decision and offers policy recommendations on how educational agencies can better meet IDEA requirements and address the needs of students with disabilities.

I. FOUNDATIONS OF SPECIAL EDUCATION LAW

This Part provides background information about the creation of IDEA and a detailed explanation of the statute’s intentions, procedural framework, and enforcement through state educational agencies. This Part also briefly explains IDEA’s exhaustion requirement, which is central to Perez. The final Section of this Part describes the process and standards for a party bringing a discrimination claim for money damages under the ADA and section 504, since compensatory damages are unavailable under IDEA.

A. History of IDEA

Beginning with the Civil Rights Movement, advocates for students with disabilities argued that the exclusion of students with disabilities from schools was a denial of equal educational opportunities analogous to racial segregation in schools.²⁹ Advocacy organizations and parents sued states, alleging that inappropriate educational services violated the Constitution.³⁰ Congress responded by enacting the Elementary and Secondary Education Act of 1965, in which the federal government provided funding to educate students below the poverty line and improve the education of students with disabilities in public schools.³¹ In 1970, the Education of the Handicapped Act (“EHA”) was passed and provided grant funding for higher education institutions to develop special education teacher training programs.³² Two 1972 cases, Pennsylvania Ass’n for Retarded Children (PARC) v. Pennsylvania and Mills v. District of Columbia, are considered to be the most notable cases in special education and foundational to the ideas in IDEA.³³ In PARC, the district court approved an amended consent agreement that obligated the state of Pennsylvania to place every child with a disability “in a free, public program of education and training appropriate to the child’s capacity.”³⁴ In Mills, the district court held that the District of Columbia public school system must utilize their financial resources so “that no child is entirely excluded from a publicly supported education consistent with [their] needs and ability to benefit therefrom,” especially for students with disabilities.³⁵ Though PARC and Mills are most frequently referenced, there were more than thirty federal cases during this period in which courts upheld the same principles outlined in PARC and Mills.³⁶

In the early 1970s, only 3.9 million of the 8 million children with documented disabilities in the United States had access to an adequate education.³⁷ In 1975, President Gerald Ford signed into law an amendment to the EHA, the Education for All Handicapped Children Act (“EAHCA”).³⁸ The EAHCA’s purpose was to ensure that students with disabilities received a FAPE, to protect the rights of students and parents, and to assist states and school districts in providing services.³⁹ The EAHCA’s enactment was significant because it marked the first time that a FAPE was memorialized in the law.⁴⁰

In 1990, amendments were passed to the EAHCA, and the law was renamed as the Individuals with Disabilities Education Act, as it is known today.⁴¹ IDEA’s purpose is to ensure that every child with a disability received a FAPE.⁴² Importantly, IDEA provides funding to states and school districts that comply with its mandates.⁴³ The combination of IDEA’s function and purpose make it both an educational grant program and a civil rights statute, rendering it a unique piece of legislation. In 1997, amendments restructured IDEA into four parts: (1) general provisions; (2) assistance for all children with disabilities; (3) infants and toddlers with disabilities; and (4) national activities to improve the education of students with disabilities.⁴⁴

B. Inside IDEA

1. IDEA Requirements and Procedural Framework

IDEA contains an administrative framework that was intended to ensure that parents of students with disabilities have enforceable opportunities to participate in all aspects of their children’s education.⁴⁵ The Supreme Court has made it clear that IDEA guarantees a substantively adequate program to all eligible students with disabilities, which is satisfied when a child’s IEP sets out an educational program that reasonably allows the child to receive educational benefits and advance from grade to grade.⁴⁶ IDEA is centered around the provision of a FAPE, which must be made in conformity with the IEP.⁴⁷ IDEA does this by guaranteeing a FAPE in the least restrictive environment (“LRE”) for all students with disabilities and through the creation and implementation of IEPs.⁴⁸ A FAPE in conformity with an IEP must be specially designed to meet the unique needs of a child with a disability and include any related services that would benefit the child.⁴⁹ All states covered by IDEA must provide a child with a disability with special education and related services as prescribed by his IEP.⁵⁰ IDEA defines “special education” as specially designed instruction to meet the unique needs of a child with a disability, and “related services” as the support services required to assist a child to benefit from that instruction.⁵¹ These services can include speech-language pathology, interpreters, occupational therapy, and counseling services.⁵²

A FAPE must “have been provided at public expense, under public supervision and direction, and without charge” at an appropriate level of education that meets state standards.⁵³ The LRE means that, to the “maximum extent appropriate,” children with disabilities are to be educated with children who are not disabled in a regular classroom setting, and that removal of children with disabilities from the regular classroom environment occurs only in cases of severe disability or when supplementary services “cannot be achieved satisfactorily.”⁵⁴

IDEA requires school districts to develop an IEP for each child with a disability.⁵⁵ Parental concerns regarding their child’s education must be considered by the team.⁵⁶ States are required to oversee this process and ensure that parents of a child with a disability are involved in the IEP discussion and any decisions about the educational placement of their child.⁵⁷ A student’s IEP must state the special education and related services that will be provided so that the child may advance toward achieving the annual goals set in their IEP.⁵⁸ An IEP must also state the child’s current levels of academic achievement and functional performance, while explaining how the child’s progress toward achieving their annual goals will be measured.⁵⁹ Based on these goals, an IEP will prescribe the special education and related services that will be provided.⁶⁰

IDEA has a comprehensive enforcement scheme that requires states to establish and maintain procedural safeguards to ensure that students with disabilities are receiving their basic right to education—a FAPE.⁶¹ State and local compliance with IDEA is monitored by federal review.⁶² Procedural safeguards are in place to “guarantee parents both an opportunity for meaningful input into all decisions affecting their child’s education and the right to seek review of any decisions they think inappropriate.”⁶³ For example, states are mandated to provide an opportunity for parents to examine all relevant school records.⁶⁴ Whenever parents have complaints about the adequacy of their child’s education, like in the development of their IEP, the involved state must provide an opportunity for the party to present a complaint “with respect to any matter relating to the identification, evaluation, or educational placement of the child, or the provision of a free appropriate public education to such child.”⁶⁵

Once a party presents a complaint, a review process begins, in which the parents of the child with a disability discuss their complaint with the local educational agency in a preliminary meeting and the parties work to reach a resolution.⁶⁶ If the agency fails to resolve the complaint to the parent’s satisfaction within thirty days, the party may request an impartial due process hearing, which can be conducted by either the local educational agency or the state educational agency.⁶⁷ A due process hearing is overseen by an impartial hearing officer who considers sworn testimony and evidence to make a decision.⁶⁸ The hearing officer’s decision must be made on substantive grounds based on a determination of whether the child received a FAPE.⁶⁹ For a hearing officer to be “impartial,” they must not be an employee of the state educational agency or the child’s school district.⁷⁰ The officer may find a violation of a FAPE only if the procedural inadequacies “impeded the child’s right to a free appropriate public education,” “significantly impeded the parents’ opportunity to participate in the decisionmaking process,” or deprived the child of educational benefits.⁷¹ Notably, decisions made in due process hearings are binding on both parties, though parties may appeal a decision of the local educational agency to the state educational agency.⁷² Once the state educational agency reaches a decision, the aggrieved party may bring an action in state or federal district court.⁷³ The court will then review the administrative record, with supplementary evidence submitted at the request of a party, before granting “such relief as the court determines is appropriate” to the prevailing party.⁷⁴

IDEA does not grant compensatory damages, but it does provide for discretionary attorneys’ fees.⁷⁵ Most IDEA remedies have been equitable remedies, such as tuition reimbursement or injunctive relief.⁷⁶ Courts have also been given broad discretion in providing equitable relief that it finds appropriate and consistent with the purposes of IDEA, ADA, and section 504.⁷⁷ A court or hearing officer may require an educational agency to reimburse the parents of a child with a disability for the cost of private school enrollment if the school district cannot adequately provide a FAPE.⁷⁸

Once a state accepts IDEA’s financial assistance, an eligible child under the statute has a substantive right to a FAPE.⁷⁹ IDEA has six categories of mandates that states must meet to receive funding: (1) educational agencies must provide services to all qualified students with disabilities, regardless of the severity of their disabilities; (2) educational agencies must evaluate each student with a disability that requests a FAPE; (3) all students with disabilities aged between three and twenty-one who need special education and related services must receive a FAPE; (4) students with disabilities must be educated in the general classroom or the LRE as much as possible; (5) several procedural safeguards must be followed to guarantee a FAPE; and (6) parents must be involved at every stage of the process.⁸⁰

2. State Responsibilities Under IDEA

In the United States, Congress does not have constitutional authority over education, so it exerts pressure on states using its spending powers,⁸¹ particularly by offering federal funding to state and local agencies that meet IDEA conditions.⁸² This funding allows the federal government to oversee state educational authorities, such as state departments of education. State educational authorities then oversee local educational authorities, which are responsible for the implementation of IDEA mandates in schools.⁸³ But IDEA serves only as a floor for student rights, and many states have established their own statutes to further expand upon federal mandates in the special education context. These state laws play a critical role in shaping the law for students with disabilities, so the landscape of disability-rights law can vary significantly from one jurisdiction to another. For example, what a student must do to exhaust IDEA administrative requirements before bringing a lawsuit depends on each state’s rules. IDEA allows states to choose between a one- or two-tiered system for administrative review. In a one-tiered system, a state educational agency decides a student’s case.⁸⁴ In a two-tiered system, a local educational agency decides the case before a party can appeal for an impartial hearing conducted by the state educational agency; all of which must happen before a civil action may be brought in a state or federal district court.⁸⁵

Under IDEA, state and local departments of education receive federal financial assistance if they provide a FAPE for children with disabilities.⁸⁶ A state may provide educational benefits that exceed those required by IDEA, with the state standards being equally enforceable through IDEA.⁸⁷ A state must certify to the Secretary of Education that it has policies and procedures that will meet IDEA’s conditions, especially IDEA’s principal obligation to provide a FAPE to all eligible students with disabilities.⁸⁸ A local educational agency or school district is eligible to receive a share of the state’s federal funding if it has policies and programs that are consistent with the state’s policies.⁸⁹ Thus, a school district’s obligations under IDEA are dependent on the state’s formal procedures and obligations, which must align with IDEA.

3. Section 1415(l): IDEA Exhaustion Requirement

In § 1415(l) of IDEA (“section 1415(l)”), the statute requires that parties first exhaust administrative remedies before filing a complaint in state or federal court regarding the denial of a FAPE.⁹⁰ As the Supreme Court explained in Weinberger v. Salfi,

Exhaustion is generally required as a matter of preventing premature interference with agency processes, so that the agency may function efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review.⁹¹

The exhaustion doctrine is also premised on the idea “that [educational] agencies, not the courts, ought to have primary responsibility for the programs that Congress has charged them to administer.”⁹² Although courts have discretion in their decision to rule on exceptions to the exhaustion requirement, the “[a]pplication of the doctrine to specific cases requires an understanding of its purposes and of the particular administrative scheme involved.”⁹³

In analyzing whether an exception to the rule should be granted, courts previously considered whether the purposes of exhaustion would be served by requiring plaintiffs to exhaust administrative remedies.⁹⁴ Congress’s aim was to allow educational agencies and parents to work together in developing a child’s IEP.⁹⁵ Requiring the exhaustion of administrative processes allows for an exploration of the educational issues at hand, a complete consideration of the factual record, and the opportunity for educational agencies to correct the problems in their special education programs.⁹⁶

There have been exceptions to the exhaustion requirement in certain situations, though the accepted exceptions differ across circuits.⁹⁷ Before the Perez decision, courts recognized that there were instances in which the exhaustion requirement did not further the goals of IDEA and excused exhaustion, but only “in cases of futility and inadequacy.”⁹⁸

C. The ADA and Section 504 of the Rehabilitation Act

The ADA and section 504 of the Rehabilitation Act of 1973 are federal statutes focused on preventing discrimination against individuals with disabilities.⁹⁹ Section 504 applies to all organizations that receive federal funding, which includes public schools.¹⁰⁰ Prior to section 504, neither federal, state, nor local law protected people with disabilities from discrimination in schools.¹⁰¹ The ADA extends to secular private schools that do not receive federal funding.¹⁰² The ADA was enacted twenty-five years after IDEA “to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities.”¹⁰³ The ADA covers a broader range of areas than IDEA since it focuses on all types of discrimination individuals face in areas such as employment, housing, and health services, in addition to education.¹⁰⁴ Title II of the ADA forbids any public entity, including schools, from discriminating based on disability,¹⁰⁵ and section 504 applies the same prohibition to any federally funded program.¹⁰⁶ The Supreme Court has interpreted section 504 as “demanding certain ‘reasonable’ modifications to existing practices in order to ‘accommodate’ persons with disabilities.”¹⁰⁷

Unlike IDEA, both the ADA and section 504 authorize individuals to seek redress for violations of their rights by bringing suits for money damages.¹⁰⁸ The available remedies under section 203 of the ADA are the same remedies available under section 504 of the Rehabilitation Act, which are also the same remedies available under Title VI of the Civil Rights Act of 1964.¹⁰⁹ Based on that statutory language, the Supreme Court has found that “the remedies for violations of § 202 of the ADA and § 504 of the Rehabilitation Act are coextensive with the remedies available in a private cause of action brought under Title VI of the Civil Rights Act of 1964.”¹¹⁰

Although the ADA is intended to protect individuals with disabilities, many people have been refused coverage.¹¹¹ Many courts have ruled that plaintiffs were not covered under the ADA’s definition of “disability,” as they did not fulfill any of the ADA’s three requirements of having “a physical or mental impairment that substantially limits one or more major life activities,” having “a record of such an impairment,” or “being regarded as having such an impairment.”¹¹² The narrow interpretation of the definition has shrunk the number of people in this protected class.¹¹³

The standard for obtaining compensatory damages under the ADA or section 504 is substantial. Different circuits have adopted similar requirements to establish a discrimination case under either the ADA or section 504.¹¹⁴ To establish a disability discrimination claim under the ADA or section 504, a plaintiff must demonstrate that a student is a “qualified individual with a disability”; “was excluded from participation in,” or otherwise discriminated against by “a public entity’s services, programs or activities”; and that exclusion or discrimination was the result of the student’s disability.¹¹⁵ Claims for compensatory damages under the ADA require a finding of intentional discrimination or an intentional denial of benefits, such as deliberate indifference from a school district.¹¹⁶ For example, in the Ninth Circuit, to prevail on a section 504 claim, a plaintiff must establish that (1) they have a disability; (2) they were otherwise qualified to receive a benefit; (3) they were denied the benefit solely because of their disability; and (4) the program receives federal financial assistance.¹¹⁷ To receive compensatory damages, a plaintiff must additionally prove intentional discrimination, such as showing deliberate indifference.¹¹⁸

II. JUDICIAL MILESTONES IN SPECIAL EDUCATION

This Part gives a brief overview of a few important IDEA cases in which the Supreme Court has decided individual disputes between children and their schools. It also aims to contextualize the Supreme Court’s decision in Perez by highlighting the Court’s role in clarifying IDEA provisions and its consistent deference to parents advocating for their children’s educational rights. Finally, this Part explains Fry v. Napoleon Community Schools, which is the last IDEA case the Supreme Court heard before Perez and addresses related questions about IDEA’s exhaustion requirement.

In Board of Education v. Rowley, the Supreme Court interpreted the term “appropriate” in IDEA’s statutory construct pertaining to FAPE.¹¹⁹ The Court rejected lower court decisions that required educational achievement to a child’s “full potential,” instead concluding that one of the main functions of IDEA was to create “access to specialized instruction and related services which are individually designed to provide educational benefit to” a child with disabilities.¹²⁰ The Court interpreted “appropriate” to establish a “basic floor of opportunity” that required school districts to provide disabled children with an “educational benefit.”¹²¹ This case has been extremely important in clarifying the level of service school districts are required to provide to students.

Amy Rowley, a deaf student, attended public school and received services under the then EAHCA.¹²² When Rowley’s parents requested that the school provide her with a sign language interpreter, school officials refused, maintaining that the services she had already received were sufficient for her needs.¹²³ Rowley received speech and language therapy and had an audio amplification system, which the school argued was sufficient due to Rowley’s passing grades.¹²⁴ Rowley’s parents filed an administrative complaint based on the school’s refusal to provide her with a sign language interpreter, which resulted in a favorable decision for the school district. The federal district court then ruled in the parents’ favor, which was affirmed by the Second Circuit.¹²⁵ The school district appealed to the Supreme Court, which discussed two central questions: “What is meant by the [EAHCA’s] requirement of a ‘free appropriate public education’? And what is the role of state and federal courts in exercising the review granted by [EAHCA]?”¹²⁶

The Court’s majority opinion looked at the Congressional intent of the EAHCA, which focused on remedying the exclusion of children with disabilities from normal school environments. Justice Rehnquist wrote that “the intent of the Act was more to open the door of public education to handicapped children on appropriate terms than to guarantee any particular level of education once inside.”¹²⁷ The Court explained that a school’s obligation was satisfied by providing the basic floor of services rather than the maximum needed for a child to succeed, since that would go farther than what the Court believed Congress intended.¹²⁸ Notably, the Court also declared that a court had the authority to grant whatever relief it deemed appropriate under the EAHCA where a school failed to satisfy procedural obligations, but emphasized that this authority was limited to procedural compliance rather than imposing substantive educational standards.¹²⁹ The Court’s decision in Rowley had practical implications for district courts, as many were guided by the two questions the Rowley Court posited: “First, has the State complied with the procedures set forth in the [EAHCA]? And second, is the individualized educational program developed through the [EAHCA’s] procedures reasonably calculated to enable the child to receive educational benefits?”¹³⁰ Courts have used these two questions to determine whether school districts have done enough for students, and maintain that they may not substitute any preferred policies over the school’s discretion.¹³¹ The Rowley Court also recognized that states have the primary responsibility for developing and executing educational programs and determining educational policies since “courts lack the ‘specialized knowledge and experience’ necessary to resolve ‘persistent and difficult questions of educational policy.’ ”¹³²

In Endrew F. v. Douglas County School District RE-1, the Supreme Court clarified its position on IDEA’s FAPE provision, finding that an IEP must be “reasonably calculated to enable a child to make progress appropriate in light of the child’s circumstances.”¹³³ A child with disabilities should still have the opportunity to be educated in a regular classroom that will “ ‘enable the child to achieve passing marks and advance from grade to grade.’ ”¹³⁴ In Endrew, the parents of a fifth-grade student with autism sought reimbursement of tuition costs for placement in a private school.¹³⁵ His parents were dissatisfied with his progress in public school because his IEP goals carried over year-to-year and he failed to make progress in his learning.¹³⁶ Endrew’s parents filed a complaint with the Colorado Department of Education seeking reimbursement, which required them to demonstrate that the school district had not provided Endrew with a FAPE.¹³⁷ The district court felt that modifications to Endrew’s IEP each year were “sufficient to show a pattern of, at the least, minimal progress.”¹³⁸ The district court explained that minimal progress was all that the Rowley standard required of a school district.¹³⁹ The Tenth Circuit affirmed the lower court’s decision, agreeing that special education services only need to allow a student with disabilities to make “some progress.”¹⁴⁰

The Supreme Court stated that, “To meet its substantive obligation under IDEA, a school must offer an IEP reasonably calculated to enable a child to make progress appropriate in light of the child’s circumstances.”¹⁴¹ The Court felt that an IEP was designed to create a plan for “pursuing academic and functional advancement,” which connected with IDEA’s purpose to help prevent the exclusion of children with disabilities in classrooms.¹⁴² Thus, a student offered an education that merely allowed some progress “can hardly be said to have been offered an education at all.”¹⁴³ The Court refrained from creating a bright-line test for determining what “appropriate progress” meant, reasoning that it should be determined depending on each unique child.¹⁴⁴

Parents of students with disabilities “often do not feel they are empowered when the [IDEA] system fails them,” as litigation is not an accessible avenue for everyone.¹⁴⁵ In Endrew, Endrew’s parents first paid for private specialized schooling before filing a complaint seeking reimbursement from the state,¹⁴⁶ requiring them to pay for expert witnesses and an attorney.¹⁴⁷ IDEA litigation is a lengthy process with a difficult standard for many families to meet. Endrew had to prove that the school district did not allow him to make appropriate progress on his IEP. To meet that standard, he needed professional experts who could attest to the progress he was capable of making and what services he needed to make that amount of progress beyond what the school district provided. Without the means for litigation costs and private education, Endrew would not have been able to present evidence of his progress. His case illustrates how difficult IDEA due process procedures are for parents who lack the means, agency, or understanding to navigate the process.

In Fry v. Napoleon Community Schools, the Supreme Court clarified the procedure that applies when a plaintiff files a complaint under a statute other than IDEA, finding that IDEA’s exhaustion requirement is “not necessary when the gravamen of the plaintiff’s suit is something other than the denial of IDEA’s core guarantee” of a FAPE.¹⁴⁸ There was confusion in lower courts about how to determine whether a complaint qualified as a claim under IDEA or under the ADA, section 504, or other federal laws.¹⁴⁹ In Fry, the parents of a kindergartener with cerebral palsy sought permission to let their daughter bring her service dog to school.¹⁵⁰ The school district denied the request because she already received similar services and a service dog would be “superfluous.”¹⁵¹ The parents first filed a complaint with the U.S. Department of Education’s Office for Civil Rights, alleging ADA and section 504 violations, which resulted in a favorable decision for the parents.¹⁵² The parents then brought these actions against the school district, seeking monetary and declaratory relief due to the school’s denial of their daughter’s right to equal access.¹⁵³ The district court dismissed their action pursuant to section 1415(l) of IDEA because the parents failed to exhaust their administrative remedies under IDEA.¹⁵⁴ The Sixth Circuit affirmed the district court’s decision because, when the injuries alleged relate to the child’s education and there is a remedy available through IDEA, “waiving the exhaustion requirement would prevent state and local educational agencies from addressing problems they specialize in addressing . . . .”¹⁵⁵

The Supreme Court examined section 1415(l)’s exhaustion requirement, finding that it “hinges on whether a lawsuit seeks relief for the denial of a FAPE.”¹⁵⁶ If a lawsuit alleges a denial of a FAPE, then it cannot circumvent section 1415(l), even if the plaintiff sues under a different federal law.¹⁵⁷ However, the Court did specify that if a lawsuit is brought under a different federal law and “the remedy sought is not for the denial of a FAPE, then exhaustion of IDEA’s procedures is not required.”¹⁵⁸ This is because an administrative hearing under IDEA could not provide any relief, even if the claim originates from the mistreatment of a child with disabilities.¹⁵⁹

While Fry clarified certain aspects of the exhaustion requirement, the issue of monetary damages under IDEA remained unsettled, as circuit courts were divided on whether courts could excuse exhaustion.¹⁶⁰ Congress had crafted IDEA “exhaustion requirement to be flexible so that meritorious cases would get a judicial hearing, [but] many courts have applied the rule rigidly, barring cases even when the plaintiffs present persuasive reasons for excusing exhaustion.”¹⁶¹ Fry left an unresolved issue regarding IDEA’s exhaustion requirement, meaning that the plaintiffs continued to be barred when trying to seek compensatory damages under the ADA or section 504 when they failed to first exhaust their options. Had the Court answered the question then, school district responses likely would have handled IDEA complaints with more care and screened them for potential ADA and section 504 violations.

III. PEREZ V. STURGIS PUBLIC SCHOOLS: A TURNING POINT IN DISABILITY RIGHTS ADVOCACY

Part III delves into Perez, explaining how the petitioner, Miguel Luna Perez, faced educational neglect and misrepresentation from his school district before pursuing an ADA claim for emotional distress. Perez establishes a precedent for families to pursue claims under federal laws like the ADA and section 504 without exhausting IDEA procedures, offering new legal avenues for students with disabilities. This Part argues that this decision will have significant repercussions for special education litigation, as it enhances families’ leverage in legal disputes and places financial strain on school districts’ budgets and abilities to provide special education services.

A. Discussion of Perez v. Sturgis Public Schools

Petitioner Miguel Luna Perez was a deaf student who attended schools in Michigan’s Sturgis Public School District from ages nine to twenty.¹⁶² Perez was an individual who qualified as having a disability under IDEA and the ADA because he had a physical and mental impairment that substantially limited multiple major life activities, like hearing and speaking.¹⁶³ Perez claimed that SPSD was required to provide an aide to translate classroom instruction and that his aides were unqualified sign language interpreters.¹⁶⁴ SPSD made multiple misrepresentations to Perez and his parents, including his academic achievements by inflating his grades, that his aides knew sign language, and that he had access to the same educational services as his peers.¹⁶⁵ Perez claimed that, in March 2016, just months before his high school graduation, SPSD informed him and his parents that he would not receive a high school diploma and instead would receive a “certificate of completion.”¹⁶⁶

This prompted Perez and his family to file an administrative due process claim with the Michigan Department of Education.¹⁶⁷ Perez and SPSD reached a settlement that included payment for additional schooling at the Michigan School for the Deaf, sign language instruction for Perez and his family, and payment of the family’s attorneys’ fees.¹⁶⁸ The settlement gave Perez what he was entitled to under IDEA, but there was another legal problem—SPSD also violated Perez’s rights under the ADA.

Perez subsequently sued in the Western District Court of Michigan, seeking compensatory damages for emotional distress under the ADA.¹⁶⁹ SPSD moved to dismiss, claiming that under section 1415(l) of IDEA, Perez was barred from bringing his ADA claim until he exhausted IDEA’s administrative procedures.¹⁷⁰ The district court agreed with SPSD’s argument and dismissed the suit, which the Sixth Circuit affirmed due to circuit precedent that previously addressed the issue.¹⁷¹ The Sixth Circuit opinion stated that, because Perez settled his IDEA claim, he was “barred from bringing a similar case against the school in court—even under a different federal law.”¹⁷² The Sixth Circuit found that federal law requires families to first exhaust IDEA’s administrative procedures as if the action was brought under IDEA, even if they were suing under another statute.¹⁷³ Because Perez’s core complaint was that SPSD denied him a FAPE, his suit sought relief that was available under IDEA, meaning he had to complete IDEA’s exhaustion requirements even if he wanted to bring a separate ADA claim.¹⁷⁴

The case was then brought before the Supreme Court, and the central question concerned “the extent to which children with disabilities must exhaust the[] administrative procedures under IDEA before seeking relief under other federal antidiscrimination statutes, such as the [ADA].”¹⁷⁵ There had been circuit splits on the interpretation of section 1415(l), so the Court finally decided to address this issue.¹⁷⁶ Previously, the Court declined to address this issue in Fry, articulating that “we leave for another day a further question about the meaning of § 1415(l): Is exhaustion required when the plaintiff complains of the denial of a FAPE, but the specific remedy she requests—here, money damages for emotional distress—is not one that an IDEA hearing officer may award?”¹⁷⁷

Here, the Court examined two features in section 1415(l): first, that IDEA is not meant to restrict an individual’s ability to seek remedies under the ADA or “ ‘other Federal laws protecting the rights of children with disabilities,’ ”¹⁷⁸ and second, that a qualification in the statute prohibits certain lawsuits with the language, “except that before the filing of a civil action under such laws seeking relief that is also available under [section 1415(l)], the procedures under subsections (f) and (g) shall be exhausted . . . .”¹⁷⁹ The preceding subsections (f) and (g) discuss children’s rights to due process hearings and the ability to appeal decisions to state educational agencies.¹⁸⁰

Perez interpreted the statute to require exhaustion of the administrative processes discussed in subsections (f) and (g) only to the extent he pursued a suit for remedies IDEA provided.¹⁸¹ Perez argued that this reading would not “foreclose[] his . . . claim because his ADA complaint [sought] only compensatory damages, a remedy everyone before [the Court] agree[d] IDEA cannot supply.”¹⁸² In contrast, SPSD interpreted the statute “as requiring a plaintiff to exhaust subsections (f) and (g) before [they] may pursue a suit under another federal law if that suit seeks relief for the same underlying harm IDEA exists to address.”¹⁸³ This reading would have prevented Perez from bringing his ADA suit because it stemmed from a FAPE violation, which is a harm IDEA addressed.¹⁸⁴ And Perez had already settled his administrative complaint instead of exhausting the administrative processes in subsections (f) and (g), so he would have been foreclosed from his ADA suit.¹⁸⁵

The Court found Perez’s interpretation comported more consistently with IDEA, particularly with section 1415(l)’s use of “remedies,” which treated it synonymously with “relief.”¹⁸⁶ The first clause discusses remedies, the dictionary definition of which is an enforcement of rights like money damages or an injunction.¹⁸⁷ The statute reads that “[n]othing in this chapter shall be construed to restrict or limit the rights, procedures, and remedies available under the Constitution, the Americans with Disabilities Act of 1990, title V of the Rehabilitation Act of 1973, or other Federal laws protecting the rights of children with disabilities,” so it should be construed that IDEA does not restrict or limit the availability of remedies like money damages under federal statutes, including the ADA.¹⁸⁸ The Court noted that there is an exception to this rule, which prevents individuals from seeking redress under other federal laws unless they exhaust the administrative procedures.¹⁸⁹ But the exception “does not apply to all suits seeking relief that other federal laws provide.”¹⁹⁰ The statute requires the exhaustion of administrative processes to apply only to lawsuits that seek relief that is also available under IDEA.¹⁹¹ Thus, the Court concluded that the exception did not bar Perez from his ADA suit, because he sought compensatory damages—a form of relief that IDEA does not provide.¹⁹² This interpretation required the Court to treat “remedies” and “relief” synonymously, which the Court found IDEA did in various places.¹⁹³ For example, the second clause in section 1415(l) refers to “seeking relief,” which complements how a plaintiff’s complaint includes “a demand for the relief sought.”¹⁹⁴

SPSD then responded by raising Fry as precedent.¹⁹⁵ However, Fry “went out of its way to reserve rather than decide [the] question” brought up in Perez, so it did not advance the school district’s argument.¹⁹⁶ In Fry, the Court held that IDEA’s exhaustion requirement does not apply unless a plaintiff seeks relief for a denial of a FAPE, since that is the only relief available from IDEA.¹⁹⁷ The Court found that Perez presented an analogous situation but ultimately asked a different question about whether a plaintiff needs to exhaust the administrative remedies when they are seeking a remedy that IDEA does not provide.¹⁹⁸ Similar to the Court’s answer in Fry, a plaintiff does not need to exhaust administrative processes under IDEA in this situation.¹⁹⁹ SPSD argued that Congress had practical reasons for requiring exhaustion, no matter the plaintiff’s preferred remedy, because exhaustion enables agencies to exercise their “special expertise” and promotes efficiency.²⁰⁰ The Court found SPSD’s argument “unclear” and that it was a “mistake[] to assume . . . that any interpretation of a law” that better serves its presumed objectives “must be the law,” as laws are the result of “compromise[s],” and no law relentlessly pursues its purposes.²⁰¹ Moreover, the Court reasoned that Congress might have aimed to ease the demand for administrative exhaustion when a plaintiff seeks a remedy available under IDEA but allow an exemption from exhaustion when a plaintiff seeks a remedy that IDEA cannot provide.²⁰² The Court found Perez’s argument more persuasive, reversed the decision of the Sixth Circuit, and remanded the case so Perez could proceed with his ADA lawsuit in district court.²⁰³

B. Perez’s Impact on Special Education Litigation

The Perez decision will impact how school districts and other educational agencies approach and settle IDEA complaints in the future. Families now have more leverage against school districts because they are not barred from seeking compensatory damages for failure to exhaust administrative procedures. School districts will likely approach settlement discussions differently, knowing that families now have an opportunity to be awarded compensatory damages. Although families may have more leverage during negotiations, a potential consequence could be that the Perez decision may lead to greater financial strain on school districts, which would prevent other students with disabilities from receiving their basic educational rights. School districts should anticipate an increase in the number of cases litigated because students can now “bypass [the] often slow-moving administrative proceedings under IDEA when their chief claim is for damages under other federal laws . . . .”²⁰⁴

It is worth noting that, due to systemic issues within school districts and state departments of education, even when families are awarded compensatory remedies, educational agencies may not disburse payments promptly or at all. For example, in New York City, parents of children with disabilities have sought the enforcement of orders from impartial hearings entered pursuant to IDEA, which the state department of education has failed to execute due to limited resources.²⁰⁵ In LV v. New York City Department of Education, parents sued the New York City Department of Education (“NYC DOE”) for failure to implement orders, such as funding tuition programs.²⁰⁶ The parents alleged that the NYC DOE had a “systemic problem” due to its failure to maintain a dedicated system for the timely enforcement of the orders, which deprived the plaintiffs of their right to a FAPE.²⁰⁷ In 2008, a settlement agreement between the parents and the NYC DOE was approved.²⁰⁸ Under the settlement, the NYC DOE was required to implement all impartial hearing orders within the time frame stipulated in the order or thirty-five calendar days after the order date if no time limit was specified.²⁰⁹ However, the NYC DOE failed to comply with the settlement terms for more than a decade. A Special Master was appointed in 2021 to investigate the NYC DOE’s delays in the implementation of the orders. In March 2023, the Special Master issued a report after conducting interviews with the plaintiffs, families, school staff, and NYC DOE staff.²¹⁰

The report highlighted that impartial hearings and orders have reached an all-time high in New York City, with the increased volume of requests attributable to the COVID-19 pandemic.²¹¹ It was recommended that the NYC DOE address its staffing crises in the short term and then digitalize its orders for better organization.²¹² One reason the NYC DOE provided for its inability to implement orders was due to NYC DOE staffing shortages.²¹³ The Special Master report was extremely detailed and included many short- and long-term action steps for the NYC DOE, including forty-one required steps that the NYC DOE had to take within a year. There were suggestions for the hiring, training, and retention of staff in the Implementation Unit, which oversees implementing decisions from impartial hearings, while other changes included creating a structure for parents to contact the NYC DOE when their orders are not implemented, providing a support hotline, and building better technology systems to implement orders.²¹⁴

Although this is a victory for families of students with disabilities in New York City, it comes after a decade of inaction by the NYC DOE. This was due to systemic failures on multiple levels, which is not uncommon in school districts and state educational agencies around the country. This is just one example of how structural issues in a system and a consistently underfunded agency will lead to ineffective educational opportunities. LV v. New York City Department of Education is an example of the persistent challenges in ensuring the effective implementation of special education remedies, even when the law provides for a favorable solution. Students legally entitled to reimbursements or tuition assistance from a school district remained in complex litigation for years to accomplish their goals. The tuition some of the plaintiffs requested was only a few thousand dollars, but the NYC DOE was so ill-equipped at executing orders that it remained noncompliant for years. Unfortunately, there is no simple solution for the NYC DOE’s structural issues. Rather, the NYC DOE faces a complex undertaking as it will need to upgrade its infrastructure and rehaul its staff to better respond to the influx of settlements that have piled up and the new hearings that are coming down the horizon.

This case is illustrative of how receiving monetary compensation is important and helpful for students with disabilities to receive a FAPE under IDEA, but a compensatory remedy might not yield anything substantial. The NYC DOE was bound by court orders, but the plaintiffs in LV still waited more than a decade for compensation. And it is unclear whether the recent judicial order will actually result in greater implementation of orders for other students with disabilities. It seems likely that students with disabilities will continue to endure neglect in the system if the state and educational agencies do not have proper mechanisms in place to provide students with their remedies. The NYC DOE manages the largest public school system in the nation, with a 2023–2024 school year budget of $37.5 billion.²¹⁵ Even as the NYC DOE likely has more resources than other school districts, it still struggles with the volume of orders and order implementation. As more decisions ordering monetary remedies are made post-Perez, school districts and state education departments will need to upgrade their infrastructure to deal with outstanding orders and future settlements. Another concern is whether there is funding and leadership dedicated to making those changes. At schools that struggle with leadership turnover among superintendents or principals, this can lead to inconsistency with vision and changing priorities affecting staff effectiveness and cohesiveness and making it even more difficult to train staff and support teachers in developing strong relationships with students.²¹⁶ Educational agencies should take the Perez decision seriously and take LV as a precautionary tale for judicial orders that compel major changes to address structural issues in regard to special education programs and the rights of students with disabilities.

In recent cases decided in the months following the Perez decision, courts have put together IDEA statute and the precedents from Fry and Perez to evaluate suits against public schools for alleged violations of IDEA, the ADA, or other antidiscrimination statutes. In Dale v. Suffern Central School District, the Southern District of New York found that the plaintiffs were not required to exhaust administrative remedies because the plaintiffs sought “a form of relief that IDEA cannot provide—specifically, compensatory damages,” and because exhaustion was not required in the circumstances because of the ruling precedent of Perez.²¹⁷ In Roe v. Healey, a First Circuit case decided in August 2023, the district court below found that plaintiffs were required to exhaust all their FAPE-related claims first, which included claims under IDEA, associated Massachusetts regulations, section 504 of the Rehabilitation Act, the ADA, and the Fourteenth Amendment (enforced through § 1983).²¹⁸ The Fifth Circuit now looks at whether a complaint concerns a denial of a FAPE.²¹⁹ If it does not concern the denial of a FAPE, then administrative exhaustion is not necessary.²²⁰ If the complaint concerns a denial of a FAPE, the court then looks to the relief sought, and if IDEA cannot provide the relief sought, like compensatory damages, the plaintiff does not need to exhaust IDEA’s administrative requirements.²²¹ Courts appear to be applying Perez consistently and are not barring plaintiffs from seeking relief for a FAPE violation that is not provided by IDEA, even if they have not exhausted the administrative procedures pursuant to section 1415(l).²²² At the very least, Perez clarified a confusing question for district and circuit courts left previously unanswered in Fry, so there is greater clarity for families seeking relief under IDEA or other antidiscrimination statutes.

IV. BEYOND PEREZ: IMPLICATIONS AND CHALLENGES IN SPECIAL EDUCATION POLICY

This Part explores the policy implications of the Perez decision, including whether this decision may cause more harm than benefit. It examines the advantages of allowing compensatory damages for families of children with disabilities, while also weighing the significant financial burdens such damages could impose on school districts. This Part also underscores the need for more explicit and accessible IDEA guidelines, so school districts can better understand and fulfill their obligations under IDEA.

A. Implications of the Perez Decision

IDEA’s exhaustion requirement applies to suits alleging violations under IDEA and to “civil action[s] under [other] laws seeking relief that is also available under [chapter 33].”²²³ Prior to the Perez decision, plaintiffs alleging a denial of a FAPE and requesting a remedy that IDEA did not provide still had to exhaust administrative remedies under IDEA.²²⁴ However, now the Perez Court has opened up the possibilities for families of children with disabilities by allowing them to pursue money damages under different federal laws, even when they are seeking a denial of a FAPE. Following this decision, district courts and courts of appeal have issued decisions citing and applying Perez, acknowledging that exhaustion is required only if the plaintiff seeks relief that is available under IDEA.²²⁵ However, plaintiffs attempting to argue that the exhaustion requirements are no longer relevant in IDEA suits will likely still be unsuccessful, since Perez applies only to plaintiffs who bring suits under a separate federal law besides IDEA and for compensatory damages that IDEA does not provide.²²⁶ Various circuit courts have remanded matters to district courts so they can apply the Perez ruling.²²⁷

While it appears beneficial for families of children with disabilities to receive compensatory damages for inadequate educational opportunities under IDEA, the traditional remedies offered for IDEA noncompliance may be more appropriate for various reasons. For example, when a school district fails to comply with IDEA, restructuring the education system to provide adequate services for its students in the future seems more reasonable than offering a sum of money. Although there is an argument that financial penalties can motivate substantial changes from educational agencies, this approach overlooks the systemic problems within a school district and potential oversight from the state educational agency. In addition, the increased focus on litigation now that parents can bypass administrative procedures, will divert resources from addressing structural issues in school districts’ special education programs, especially given the potential for increased non-meritorious litigation to seek money damages after the Perez decision. The aggregate effect of school districts paying compensatory damages and dedicating more time toward lawsuits could detract attention from students, leaving school districts unable to enhance their special education services and at risk of providing reduced educational quality with reduced financial resources at their disposal.

The NYC DOE published data that showed that 37% of preschoolers with disabilities did not receive their mandated special education services in the 2021–2022 school year.²²⁸ More than 6,500 preschoolers who needed speech therapy did not have one session in the entire school year.²²⁹ Advocates for Children of New York, a non-profit dedicated to helping at-risk students receive a high-quality education, recommends New York City invest $50 million into the city’s upcoming budget to increase preschool special education services.²³⁰ That investment would go into hiring more teachers, increasing pay, and providing services similar to those recommended by the Special Master in LV.²³¹ With thousands of students struggling in school districts to access their services, and even more students potentially not being identified as needing services, it is concerning that, following Perez, more money might be paid out to plaintiffs, while less money goes toward special education services.

Another avenue school districts should turn toward is the Office of Special Education and Rehabilitative Services’ Office of Special Education Programs (“OSEP”), which provides discretionary grant awards.²³² In the 2023 fiscal year, OSEP provided over $110 million under IDEA to fund new programs to help educate children with disabilities.²³³ This includes hiring and training special education staff, early intervention services, and technical assistance to help states meet IDEA data collection.²³⁴ Investment in infrastructure and staffing will help school districts avoid lawsuits in the first place and avoid violating IDEA by providing inadequate special education services or failing to identify and track students with disabilities.

Another effect the Perez decision may have on educational agencies is in their assessment and implementation of IEPs and other accommodations for students with disabilities. School districts and states must account for the possibility of being sued under the ADA and other federal laws regarding equal access. Student requests should be addressed not just through IDEA’s lens but also through the lenses of the ADA and section 504. Failure to do so will leave educational agencies open to greater liability now that the remedy of money damages is accessible to students and families. School districts that are most vulnerable to increased lawsuits are clearly those with longstanding violations of students’ FAPE. For school districts that are diligent about abiding by IDEA’s requirements and providing proper FAPE to their students who require accommodations, the implications of Perez will not be as intense.

The Perez decision allows students with disabilities to bring discrimination claims under the ADA to receive compensatory damages, but plaintiffs will need to prove their discrimination claims. While this presents an enormous opportunity for students like Perez to have their day in court, plaintiffs still need to prove intentional discrimination to receive monetary claims under the ADA.²³⁵ The bar to receive monetary damages under either the ADA or section 504 remains high²³⁶ because proving intentional discrimination is difficult.²³⁷ Plaintiffs have to demonstrate that school districts were “deliberately indifferent to [a] student’s rights, exercised gross misjudgment, or acted in bad faith.”²³⁸ So, although it seems like there will be an uptick in lawsuits against educational agencies post-Perez, that does not mean that plaintiffs will prevail and actually receive monetary damages.

It is more likely that families can leverage this change into receiving larger settlement payouts from school districts, since they can threaten to escalate their claims from negotiations to court.²³⁹ Perry A. Zirkel, a special education law expert and law professor, expressed that the special education field remains “entirely unaffected” because the chances of courts awarding money damages for ADA or section 504 lawsuits “remain very strongly against the parents.”²⁴⁰ Zirkel does acknowledge, however, that after Perez, there will likely be more litigation that increases court congestion and parents’ leverage during settlement negotiations.²⁴¹ Another reason Perez strengthens families’ positions is that attorneys for school districts view litigating IDEA claims as overly cumbersome and in need of major reform.²⁴² Even when school districts prevail, they must pay substantial attorney’s fees for trial preparations and attending hearings, while special education teachers must spend time attending additional IEP meetings, interviewing with attorneys, and preparing to testify—all of which takes them away from their normal classroom responsibilities.²⁴³ Even if a parent’s complaint is frivolous, school districts sometimes agree to parental demands simply because a school district’s own attorney’s fees would likely be greater to litigate than the requested changes to IEPs or compensatory education.²⁴⁴

On the other hand, the ADA could help alleviate financial difficulties with litigation, as judges could award monetary remedies along with discretionary attorney’s fees.²⁴⁵ This potential source of funding could change lawyers’ strategies to bring ADA claims against school districts simultaneously with a due process hearing over IDEA complaints. Special education lawyers could also work on a contingency fee basis now that monetary damages are available. The decision to litigate in court is a personal one, however, and even with monetary damages, families may be reluctant to pursue that avenue.

Another critical factor to consider is the financial constraints and pressure on school districts Perez may cause. There is a strong possibility that allowing compensatory damages and having school districts pay out monetary awards to families will affect school districts’ ability to provide adequate special education services. School districts often operate under tight budgets, with funds allocated across various departments and needs. Because more parents have begun requesting services from school districts under the ADA and section 504, aggregate costs for accommodations like special transportation, testing accommodations, and publicly provided education at private schools have compounded.²⁴⁶ With budget constraints and added costs from litigation and monetary damages, fulfilling all IDEA requirements following Perez could overwhelm school budgets.²⁴⁷ This could lead to the trimming of other operational expenses or essential educational services, like school psychologists, speech pathologists, and extracurricular teachers. Diverting funds from valuable programs for children is a concern, especially because districts in lower-income areas will likely be affected at disproportionate rates. School districts primarily rely on local property taxes, state funding, and federal assistance for their budgets, so the financial ability to comply with IDEA procedures might not be feasible for school districts, even those that want to eradicate the educational inequities that students with disabilities experience. Another possibility is that school districts might be able to wield their insurance coverage effectively, depending on their coverage, to cover or defend against an ADA claim.²⁴⁸ This could reduce litigation costs and help offset higher settlement payouts to plaintiffs for school districts, but it depends on the insurance coverage plan and whether premiums might increase with more claims submitted.

B. Challenges in Policy Implementation and Compliance

School districts should not use an unclear statute as an excuse for their failure to provide adequate learning, however. The long-term harm caused to Perez by SPSD could have been mitigated if SPSD simply provided a certified sign language interpreter from the beginning. Even if IDEA standards are confusing, SPSD should have informed Perez’s family about his actual performance and not given inflated grades. There was a serious violation of Perez’s basic education for twelve years, and such egregiousness in school districts must be prevented. The lack of following basic standards of practice for deaf students in Perez is unacceptable considering there is usually guidance available from each state’s department of education.²⁴⁹ For example, SPSD could have reached out to the Michigan Department of Education Low Incidence Outreach to receive resources about serving students with hearing or visual disabilities.²⁵⁰

Even though there may be financial strain on school districts, it is still essential for school districts to strengthen their special education staff, services, and administration, not merely to avoid lawsuits and financial penalties following Perez, but to genuinely meet the needs of students with disabilities. To reduce the risk of litigation and ensure effective compliance, there is a pressing need for clear, specific guidelines detailing the standards school districts must meet under applicable statutes. That is an imperative issue that Congress should address in the near future, now that Perez has been decided. The National Council on Disability (“NCD”), an independent federal agency, was created to provide recommendations that promote disability policies, programs, and procedures that enhance the lives of individuals with disabilities.²⁵¹ Congress should rely more on the NCD’s recommendations and have the NCD host forums and publish more reports about how to improve IDEA implementation for school districts. Clarifying these compliance standards would provide much-needed direction for school districts, helping them fulfill their legal obligations to students with disabilities and reducing the likelihood of costly legal battles.

Although there is potential for Perez to compel school districts that do not currently meet IDEA requirements to reform their special education programs, the statute’s broad and not-well-defined framework presents additional challenges to effectively complying with IDEA.²⁵² The statute’s ambiguity can lead to varied interpretations of what it requires, which is especially challenging for school districts with limited resources that already struggle to determine what services need to be rendered from convoluted state and IDEA legislation. School districts also need well-trained, qualified professionals available to provide services to students with disabilities, another challenge for districts with limited budgets, as it is difficult to attract and retain talent with low salaries. Training and professional development for the latest requirements in special education law specific to a school district’s city or state is also costly. For successful IEP implementation, there needs to be continuous monitoring and evaluation of students with disabilities in their regular classrooms and during their services. Overworked special education teachers may struggle to manage observations and oversee regular IEP meetings. Limited resources can easily result in poor infrastructure and ineffective tracking of student performance and students with disabilities.

Increased advocacy for state and federal funding to address IDEA noncompliance and ease the burden of responding to an influx of complaints could ease the pressure on school districts. There should also be clearer guidelines and frameworks for districts to better understand and implement IDEA requirements. Establishing a state-level advisory body, for example, can offer guidance and assistance for the state-specific rules, in addition to IDEA procedures. Congress may also choose to address this situation through amendments to IDEA or when IDEA is reauthorized.²⁵³

Race and socioeconomic status are also important considerations for the impact of Perez on students with disabilities. Students of color are generally overrepresented in special education settings, in which they are “disproportionately labeled in ‘soft’ disability categories such as emotionally disturbed, [and] ADHD . . . .”²⁵⁴ Once labeled in those categories, those children often “receive differential access to high-quality education, are not tracked toward college, experience higher rates of suspension and expulsion, and are disproportionately represented in juvenile justice prisons.”²⁵⁵ In 1997, a reauthorization and amendment to IDEA acknowledged the problem of overrepresentation of minority students in special education classes, specifically that “[s]tudies have found that schools with predominately White students and teachers have placed disproportionately high numbers of their minority students into special education.”²⁵⁶ A major weakness in the due process model is that parents who have little agency in the process, like those with limited sophistication in educational advocacy and access to legal representation, struggle to advocate on behalf of their children.²⁵⁷

Additionally, even though families have the option to sue, it is expensive to hire a private attorney to sue a school district, and a family’s socioeconomic means often influences the outcome.²⁵⁸ In Endrew, Endrew’s parents paid for expert witnesses in addition to their lawyer and initially funded a private, specialized education before pursuing reimbursement.²⁵⁹ Endrew had to demonstrate that the school district prevented him from making the necessary progress toward his IEP. If Endrew’s family did not have the funds to cover the fees of the lawsuit and private schooling, he would not have been able to demonstrate his progress. Low-income parents can hardly be expected to undergo this financial burden without a guarantee, since money damages might not offset the cost of expensive litigation. Not to mention, their child might continue to fall further behind while the legal proceedings unfold. As an overwhelming percentage of children with disabilities who qualify for IDEA services are low-income, it is unclear whether more parents will go through with litigation, even with the potential for compensatory damages, simply due to a lack of legal sophistication or limited resources.²⁶⁰

C. Strategic Approaches and Systemic Changes in Special Education

In July 2023, the U.S. Department of Education released guidance to help states address and better understand IDEA requirements, focused on providing students with a FAPE.²⁶¹ “With this guidance, States will have the information necessary to exercise their general supervision responsibilities under IDEA and ensure appropriate monitoring, technical assistance . . . , and enforcement regarding local programs.”²⁶² The guidance is thorough in identifying noncompliance, while outlining the timeline for correcting noncompliance, the enforcement actions a state must take if a program does not meet IDEA requirements, and the proper way to monitor local educational agency programs.²⁶³ States bear the primary responsibility of ensuring that districts are adequately serving students under IDEA through “general supervision,” so better state oversight of local school districts is critical to ensuring that schools meet their obligations to students with disabilities.²⁶⁴

The federal guidance recommends that each state set up a robust monitoring system that “swiftly identifies and corrects noncompliance; increases accountability through the collection of timely and accurate data; and ensures the full implementation of IDEA to improve functional outcomes.”²⁶⁵ This guidance came out after OSEP identified a failure of multiple states to comply with IDEA, so OSEP is providing “accessible and actionable information” for states to exercise their duties to help protect the rights of students with disabilities.²⁶⁶ Between 2014 and 2023, on average, only seven states received the “meets requirements” determination in accordance with IDEA statute for Part B responsibilities regarding providing a FAPE.²⁶⁷ OSEP released this guidance to increase accountability by strengthening states’ general supervision programs to improve compliance. Ideally, this new guidance will take the onus off parents filing formal complaints as more states bolster their oversight mechanisms.

This guidance is another step in the right direction, especially after Perez, because it forces states to take more aggressive actions against noncompliant school districts. Notably, the guidance notes that allegations about IDEA violations can come from media reports, feedback sessions, and other areas beyond the normal formal-complaint setting.²⁶⁸ Now, a school district cannot be found in compliance with IDEA until they have completely resolved the issue that was raised, and school districts must address noncompliance as soon as possible and no later than a year after it is flagged.²⁶⁹ Monitoring ensures that school districts are following IDEA requirements, but OSEP will need to take action beyond issuing guidance for school districts to truly start remedying their IDEA noncompliance.

School districts now face the challenge of adapting to a new legal environment, in which IDEA’s due process procedures may no longer serve as an efficient and exclusive avenue to address the needs of students with disabilities, but as a potential battleground for financial claims. As more complaints and cases are heard in district courts, the Perez decision will likely be a reckoning for school districts with a history of neglecting students with disabilities. This will hopefully provide enough financial incentive for those school districts and state education departments to shore up their management and oversight of special education services. Like the NYC DOE’s new plan, other educational agencies should consider evaluating areas for improvement in their own special education services to avoid litigation and provide an inclusive classroom environment for students with disabilities that IDEA was created to address. Educational agencies are also likely to place greater care in crafting settlements to comprehensively address all issues that families are alleging, so there is greater potential for children with disabilities to access a broader range of remedies and legal protections. There is great potential for the Perez decision to initiate comprehensive and thoughtful change for the treatment and schooling of students with disabilities in classrooms, as educational agencies elect to avoid costly litigation and expensive compensatory damages in favor of addressing systemic issues within their schools.

CONCLUSION

As Justice Gorsuch stated, the Perez decision “holds consequences not just for Mr. Perez but for a great many children with disabilities and their parents.”²⁷⁰ Perez’s heartbreaking story about attending SPSD for over a decade with unqualified interpreters, leaving him unable to understand material or even learn sign language properly, is unfortunately just one of the many stories of students with disabilities who have been failed by their school systems. The Court’s unanimous decision removes unnecessary burdens and clarifies the requirements and remedies that are available for children with disabilities and their families when they pursue litigation against school districts.²⁷¹ The Court explained that a student with a disability need not first exhaust the administrative requirements of IDEA before filing a lawsuit seeking compensatory damages under the ADA or other federal antidiscrimination laws, since IDEA cannot provide those remedies. Though the lasting effects of this decision are yet to be seen, there are practical implications for school districts effective immediately, including a greater urgency to be responsive to parent concerns and student needs, abide by IDEA procedures, and implement student IEPs effectively. At the very least, the special education world can feel cautiously optimistic that Perez will help more students be made whole by the legal system and by educators who ensure that students with disabilities’ unique needs are met. After all, there were approximately 7.6 million children receiving services under IDEA in the 2022–2023 school year, so Perez has far-reaching implications.²⁷²

While this decision empowers families by holding school districts financially accountable, school districts’ ability to provide adequate special education services may be hindered if schools spend more time battling litigation and paying money damages. Nonetheless, this unanimous decision preserves IDEA’s clear purpose of allowing students with disabilities to receive a FAPE as soon as possible and to preserve their legal rights under other federal statutes.²⁷³ Perez is momentous because, as Justice Kagan acknowledged, oftentimes, it is “the parents [of students with disabilities] that have the greater incentive to get the education fixed for their child[ren],” and this decision allows students with disabilities to receive everything they are entitled to under IDEA and also receive compensatory damages under the ADA.²⁷⁴ The decision underscores the need for school districts to address structural problems that prevent students with disabilities from access to their rightful educational opportunities. As school districts grapple with Perez, we will surely see whether the Court’s holding delivers financial redress to children with disabilities who are discriminated against, suffer harm from, and have claims under both IDEA and the ADA, and how the future landscape of special education is transformed as a result.

98 S. Cal. L. Rev. 473

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Isabelle Yuan*

* Executive Senior Editor, Southern California Law Review, Volume 98; J.D. Candidate 2025, University of Southern California Gould School of Law; B.A. History 2020, Wellesley College. Many thanks to the editors of the Southern California Law Review for their thoughtful feedback. Thank you also to Maia Lee and William Wang for their invaluable guidance and support. All mistakes are my own.

Getting a Bad “Wrap”: An Analysis of Online Contract Cases in California After Step-Saver and ProCD

April 2025April 2025Sophie Lee*

Consumers routinely enter contracts when engaging in online commerce. Such “contracts of adhesion” are created by sellers and provide no opportunity to negotiate. By surveying California state and federal court cases, this Note explores how California courts evaluate notice. Courts recognize four types of online contracts: clickwrap, browsewrap, scrollwrap, and sign-in-wrap. This Note also draws on the seminal cases Step-Saver Data Systems v. Wyse and ProCD, Inc. v. Zeidenberg to discuss and compare the standards of notice used by courts. Overall, a uniform standard of notice has not yet emerged in California, and Step-Saver and ProCD remain relevant as courts primarily rely on fact-specific notice analysis. The utility of the four types of “wrap” categories may be diminishing as the online landscape evolves and changes.

INTRODUCTION

Imagine that you are purchasing something online, as you have likely done in the past. You enter the seller’s website and pick out the product you want to buy—say, a pair of socks—then start the payment process by entering your personal information. As you are about to click “Complete Purchase,” you see a notice pop up on the screen: “By completing your purchase, you agree to our Terms and Conditions.” You pause for a moment, wondering whether you should review the terms, but that would involve opening another webpage and parsing through pages of dense legal language. You have purchased socks online before—what is the worst that can happen? Instead, you agree and complete your purchase. When you think back to the transaction, perhaps you will remember seeing the pop-up notice, or perhaps you will not. The result will likely be the same. You have assented to the seller’s terms and entered a contract.

It is a common law principle that buyers and sellers should be held accountable for the contracts that they create, but one-sided form contracts are sometimes regarded differently. Courts have grappled with the issue of assent to sales contracts since before the Internet became the commercial engine that it is today. “Box-top” or “shrinkwrap” contracts list the terms of the agreement on the outside of a product’s packaging. By opening the packaging, a buyer manifests their intent to be bound by the terms. In 1991, the Third Circuit Court of Appeals decided a case involving a box-top license on a software product.¹ The court ruled for the software buyer, deeming the box-top license a proposal for new terms of agreement rather than a binding contract.² In contrast, when a similar case made its way to the Seventh Circuit Court of Appeals in 1996, the court ruled in favor of a software seller.³ The seller’s shrinkwrap agreement was binding because opening a package was a valid way for a buyer to accept the seller’s offer.⁴ Step-Saver Data Systems v. Wyse (“Step-Saver”) and ProCD, Inc. v. Zeidenberg (“ProCD”), respectively, came to represent two distinct views on box-top and shrinkwrap contracts. Simply put, Step-Saver placed a greater burden on sellers by giving buyers the benefit of the doubt as to their awareness of new terms. ProCD, however, placed a greater burden on buyers to apprise themselves of a seller’s terms. Though nearly three decades old, Step-Saver and ProCD still form the foundation of how courts approach disputes over online contracts.

Today, the average consumer would struggle to avoid such “contracts of adhesion” (also called form or “boilerplate” contracts), which offer no opportunity for negotiation on the part of the buyer. These contracts are efficient for sellers; modern commerce would not be nearly as fast or profitable if it were not for these contracts. But the ubiquity of online contracting and the rapid evolution of sellers’ websites raises questions about contract law and consumer protection. How should courts balance enabling transaction efficiency while ensuring buyers are aware of sellers’ terms?

California generally categorizes online contracts by modes of assent and into four types: “clickwraps,” “browsewraps,” “scrollwraps,” and “sign-in-wraps.”⁵ Clickwrap agreements require an affirmative act of assent to become binding (e.g., clicking a button that reads “I have read and accepted the Terms and Conditions”).⁶ In contrast, browsewrap agreements do not require an affirmative act as to specific terms of the contract; “an internet user accepts a website’s terms of use merely by browsing the site” ⁷ (e.g., a text banner that reads, “Use of this website constitutes agreement to the Terms and Conditions”). Scrollwrap agreements require a user to physically scroll to the bottom of a page containing the terms before proceeding to use a website.⁸ Finally, sign-in-wrap agreements require a user to sign up for an Internet service or product, the process of which indicates assent to the seller’s terms.⁹ These four types of “wrap” create contracts of adhesion and, as their names suggest, are regarded by courts as the digital successors of shrinkwrap. Thus, when faced with a clickwrap, browsewrap, scrollwrap, or sign-in-wrap agreement, buyers are offered no opportunity to negotiate and can only “take it or leave it.”¹⁰

This Note presents a case law survey of California state and federal district court cases between the years 2014 and 2024. It discusses the validity of the four commonly recognized types of online agreements and analyzes how courts’ approaches differ depending on the type of “wrap.” Part I provides background on contract common law, Step-Saver and ProCD, and significant U.S. Court of Appeals decisions. Part II details the case law survey: Section II.A describes state court cases and Section II.B describes federal district court cases. Section II.C summarizes the results of the survey and considers its implications for the way courts categorize online agreements and for the legacy of Step-Saver and ProCD.

This Note concludes that state and federal components of the case law survey largely reached the same outcomes with similar reasoning. Courts used multiple standards to determine whether a buyer received adequate or sufficient notice of a seller’s terms, including both a “reasonable notice” and a “reasonably prudent” user standard that can be traced back to ProCD and Step-Saver. This survey shows that a predominant standard for notice has not yet emerged in California (although recent approaches set out by the Ninth Circuit may promote greater consistency going forward). Overall, courts generally remained deferential to sellers and their offers. Fact-specific inquiries into whether a buyer was given reasonable notice were common among the cases surveyed. Thus, meaningful categories of “wrap” types may be gradually losing utility. Finally, this Note briefly considers whether Step-Saver and ProCD are still relevant to current and prevalent forms of online contracts and explains that these cases establish and solidify California’s most prevalent notice standards.

I. BACKGROUND

It is a basic principle of common law that the formation of a contract requires an “offer” and “acceptance.”¹¹ Step-Saver Data Systems v. Wyse and ProCD, Inc. v. Zeidenberg are seminal cases for their applications of common law principles within the context of box-top and shrinkwrap sales agreements. The same fundamental issues and principles remain relevant among newer types of agreements for selling goods and services on the Internet, such as clickwrap and browsewrap agreements. Today, courts often defer to sellers’ proposed modes of assent while using a fact-based “adequate notice” standard to evaluate the validity of a “wrap” agreement.¹²

A. Contract Common Law: Offer and Acceptance

Because the “elemental principles of contract formation apply with equal force to contracts formed online,”¹³ the same principles of contract common law are relevant when considering the validity of an online agreement.¹⁴ For a contract to be enforceable, common law requires that the parties’ bargaining process must meet two basic requirements: (1) both parties must assent to be bound, and (2) the agreement must be “definite” enough to be enforceable.¹⁵ The first requirement incorporates the presumption that one must consent to be bound, while the second requirement emphasizes the importance of receiving what one contracted for.¹⁶ The process of assenting can be broken down into two steps: “offer” and “acceptance.”¹⁷ An offer is a “promise” conditional on an action by the offeree.¹⁸ When an offeror makes an offer to the offeree, the offeree can accept, conveying their assent to be bound by the offeror’s terms. Offers can take many forms, and the offeror has the ability and authority to set the terms of their offer and to specify a mode of acceptance.¹⁹ Disputes can arise over whether the offeree had reason to believe that an offer was intended by the offeror to constitute an offer.²⁰ As discussed further below, in the realm of online contracts, consumers are often unaware that completing a purchase or signing into an account indicates assent to the terms of a seller’s agreement or even that a contract is being formed at all.

Parties can manifest assent in writing, through spoken word, or through conduct.²¹ Doctrine on assent is split between a subjective theory of assent, which focuses on the actual intent of the parties to be bound through a “meeting of the minds,” and an objective theory of assent, which focuses on the “external . . . appearance of the parties’ intentions as manifested by their actions.”²² To avoid issues related to the negotiation process, many sellers use form contracts that set out standard, nonnegotiable terms for transactions.²³ An offeree has only two options: to proceed with the transaction and accept the terms, or to decline.²⁴ These contracts are highly efficient for offerors but can come with drawbacks for offerees. For example, under common law, it does not matter if an offeree assents carelessly or fails to consider the legal consequences of a contract. Failure to read a contract is not a defense to breach of contract.²⁵

B. From Shrinkwrap to Clickwrap

The court in Step-Saver invalidated a shrinkwrap contract and deemed it a modification of an existing contract to which the buyer did not affirmatively assent. In contrast, the court in ProCD held that a shrinkwrap license was valid because the buyer was provided notice of the terms. Courts generally examine whether a seller provided adequate notice of its terms because online modes of assent to form contracts and website checkout flows greatly vary. In California, online contracts are sorted into four categories: clickwrap, browsewrap, scrollwrap, and sign-in-wrap. Each category has its own unique implications.

1. Step-Saver and ProCD

The box-top license printed on each package in Step-Saver Data Systems v. Wyse was a form contract that stated, “Opening this package indicates your acceptance of these terms and conditions. If you do not agree with them, you should promptly return the package unopened to the person from whom you purchased it . . . .”²⁶ Step-Saver, the buyer, argued that the box-top license materially altered a contract that was previously negotiated over the phone with The Software Link, Inc. (“TSL”), the seller, and that it was not binding under Uniform Commercial Code (“UCC”) Section 2-207.²⁷ On the other hand, TSL argued that a contract came into existence when Step-Saver received the terms of the license on the package and still proceeded to open the box; thus, phone conversations were merely counteroffers and negotiations.²⁸ The court ruled for Step-Saver, deciding that the box-top license should be seen as “one more form in a battle of forms”²⁹ and that the terms were not binding because they materially altered the parties’ agreement.³⁰ Judge John Minor Wisdom emphasized the fact that based on the parties’ previous negotiations, Step-Saver would not have expected to be bound by the box-top license.³¹ In response to TSL’s argument that its offer to issue a refund protected Step-Saver enough to validate the box-top license, Judge Wisdom wrote, “[w]e see no basis in the terms of the box-top license for inferring that a reasonable offeror would understand from the refund offer that certain terms of the box-top license, such as the warranty disclaimers, were essential to TSL.”³² In his holding, he wrote that “Step-Saver [could] reasonably believe that, while TSL desires certain terms, it has agreed to do business on other terms.”³³ Thus, this decision implies that a contract should not be binding unless a buyer affirmatively assents to a form contract and the parties reasonably believe that it is binding.

Judge Wisdom also rejected the seller’s arguments that ruling in favor of Step-Saver would adversely affect the industry. He wrote:

We are not persuaded that requiring software companies to stand behind representations concerning their products will inevitably destroy the software industry. We emphasize, however, that we are following the well-established distinction between conspicuous disclaimers made available before the contract is formed and disclaimers made available only after the contract is formed.³⁴

The court also speculated that sellers who justify the use of a box-top license with an optional refund provision might be “relying on the purchaser’s investment in time and energy in reaching this point in the transaction to prevent the purchaser from returning the item,” suggesting that a refund provision is generally not an adequate safeguard for consumers who assent to a license by opening a package.³⁵ Step-Saver represents a rare victory for consumers subjected to form contracts because it held the parties accountable to only the terms that were explicitly negotiated and agreed on.

In ProCD, Inc. v. Zeidenberg, a buyer violated a software license that restricted use of the software to “noncommercial” activity only.³⁶ The buyer, Matthew Zeidenberg, claimed that the shrinkwrap license should not be valid because it did not appear on the outside of the packaging and the terms could only be viewed by opening and using the software.³⁷ However, Judge Frank Easterbrook treated the license like an ordinary contract for the sale of goods, concluding that Zeidenberg could validly assent by doing as ProCD had requested: opening and using the software.³⁸ Judge Easterbrook stated that consumers can generally assent through any means held out as a form of acceptance by the seller, with exceptions for a seller’s bad faith.³⁹ Judge Easterbrook used UCC § 2-204 to support the common law principle that a seller is the “master of the offer” who can invite and limit means of acceptance;⁴⁰ “[a] buyer may accept by performing the acts the vendor proposes to treat as acceptance.”⁴¹ Contracts can be formed in many ways and “ProCD proposed such a different way, and without protest Zeidenberg agreed.”⁴² Further, ProCD was reasonable in its proposed form of acceptance because even after the package was opened “the software splashed the license on the screen and would not let [the buyer] proceed without indicating acceptance.”⁴³ An important part of Judge Easterbrook’s decision was that the software incorporated a pop-up box containing the agreement terms, creating reasonable notice of the terms for the buyer.⁴⁴ Additionally, contrary to Judge Wisdom’s reasoning in Step-Saver, Judge Easterbrook determined that an option to return the product for a full refund added to the validity of the buyer’s assent (though interestingly, in a 2004 interview of Matthew Zeidenberg and attorney David Austin, Austin claimed that the deposition of ProCD President James Bryant had revealed that ProCD did not have an actual return policy).⁴⁵ Sellers and businesses embraced Judge Easterbrook’s decision and shrinkwrap licenses became “generally accepted” “[w]ithin six years” of the ProCD case.⁴⁶ Eric Posner wrote that Judge Easterbrook “reformulate[d] [the] offer-acceptance doctrine so as to permit enforcement of ‘terms later’ contracts, an important new business tool.”⁴⁷

In the wake of Step-Saver, ProCD came to represent a validation of the use of form contracts to conduct business. Judge Easterbrook stated that “[t]ransactions in which the exchange of money precedes the communication of detailed terms are common” and used the purchase of insurance as an example.⁴⁸ In a subsequent case, Hill v. Gateway 2000, Inc., Judge Easterbrook clarified that ProCD was not just limited to software and was about “the law of contract” in general.⁴⁹ Furthermore, “[p]ractical considerations support[ed] allowing vendors to enclose the full legal terms with their products.”⁵⁰ For example, cashiers could not “be expected to read legal documents to customers before ringing up sales.”⁵¹ Judge Easterbrook’s words feel especially relevant today given the fast-paced nature of commerce. Notably, and perhaps regrettably, ProCD did not set real standards for what sellers should actually include on packaging in order to create notice of agreement terms. The court may have declined to create bright-line requirements for notice out of fear that restrictions would interfere with a seller’s packaging.⁵² Nevertheless, since the 1990s, when Step-Saver and ProCD created a circuit split, both decisions have been highly influential in the development of online contract law.

2. Online Contracts Today

Like shrinkwrap contracts, online form contracts for the sale of goods or services require a manifestation of assent for an offeree to be bound by a seller’s nonnegotiable set of terms.⁵³ Clickwrap, browsewrap, scrollwrap, and sign-in-wrap agreements govern millions of transactions, drawing on the same common law principles as the shrinkwrap contracts in Step-Saver and ProCD. “While Internet commerce has exposed courts to many new situations, it has not fundamentally changed the requirement that ‘[m]utual manifestation of assent, whether by written or spoken word or by conduct, is the touchstone of contract.’ ”⁵⁴ Shrinkwrap agreements find a modern analogue in browsewrap agreements: neither shrinkwrap nor browsewrap requires an affirmative act of assent to specific terms to be binding. Like the buyer in Step-Saver who needed only to continue opening the package to accept the seller’s terms, a buyer subject to a browsewrap agreement need only to continue interacting with a website to accept a set of terms. There is no clear instruction to, for example, click a checkbox before making a purchase. Judge Wisdom might be skeptical of the validity of browsewrap because it might not be reasonable for a buyer to expect to be bound in such a way. Indeed, California courts are generally more inclined to rule for the validity of a clickwrap or a scrollwrap contract than a browsewrap contract because clickwrap and scrollwrap require an affirmative act, evincing that the buyer was more likely to be put on notice instead of passively clicking.⁵⁵

Because wrap agreements are contracts of adhesion that offer no opportunity for a buyer to negotiate, a buyer’s only choices are to assent and complete the transaction or to walk away. Karl Llewellyn theorized in The Common Law Tradition that “there is no assent at all” to the specific terms within a boilerplate agreement; instead, there is “a blanket assent” to all terms of the agreement.⁵⁶ In other words, buyers either assent to all the terms, or they do not. Thus, buyers accepting clickwrap contracts should not be construed as assenting to one provision or another, but rather as assenting to the seller’s entire agreement.

The “take-it-or-leave-it” nature of these contracts has potential to leave buyers stuck with terms they do not like. The court in Step-Saver considered the imbalanced nature of contracts of adhesion, reasoning that the seller may have been relying on the fact that the buyer had already invested time and energy into the transaction.⁵⁷ Some legal scholars, including Cheryl B. Preston, are skeptical about the ability of online contracts to be anything but one sided.⁵⁸ Buyers often fail to understand the terms to which they are assenting. Though it is a common law principle that whether a buyer has actually read a form contract is not dispositive of whether they will be bound, buyers who attempt to read the terms may find them inaccessible and full of legalese. A 2019 study by two law professors analyzed the sign-in-wrap contracts of 500 popular U.S. websites and found that 99% of them could be categorized as “unreadable.”⁵⁹

On the other hand, Judge Easterbrook might argue that form contracts do not leave buyers without options because the nature of a competitive market forces sellers to create favorable terms for buyers.⁶⁰ He wrote in his opinion for ProCD that “[c]ompetition among vendors, not judicial revision of a package’s contents, is how consumers are protected in a market economy.”⁶¹ Additionally, efficiency and convenience are important to online consumers, who are generally unwilling to complicate a transaction. Eric Posner uses the term “cognitive overload” to describe how buyers may be dissuaded if too much information is received up front.⁶² “If the seller conveys too much information, she will drive away buyers. If the seller conveys too little information, she will mislead buyers and possibly drive them away as well.”⁶³ Even minor setbacks in a checkout process can mean the difference between completing a purchase or not. Forbes reported that around twenty-five percent of online shoppers choose not to go through with a purchase if the website forces them to create a new account.⁶⁴ For certain customers, the risk of potential legal complications down the road is a fair substitute for simple and efficient online processes.⁶⁵

The validity of online form contracts often turns on whether the mode of acceptance created by seller-offerors adequately notifies buyers of the formation of an agreement on the seller’s terms. The theory behind notice is that it can level the playing field within the realm of online contracting. E. Allan Farnsworth notes that the “lack of equality between a person who is meticulous or who chances to have knowledge and a person who is blissfully unknowing is a patent point for dissatisfaction.”⁶⁶ Because there is always an inherent potential for unfairness when there is no real negotiation of terms, there should be an attempt to create awareness for the non-drafting party. This is a defining characteristic of clickwrap and browsewrap contracts, especially because the ubiquity of ecommerce means that they are accessible to the expert as well as the layperson. In Step-Saver, Judge Wisdom considered whether a “reasonable” buyer could expect to be notified of the seller’s priorities.⁶⁷ In ProCD, the conspicuousness of the seller’s pop-up notice box was an important factor in creating objective notice for the buyer.⁶⁸

It is challenging to synthesize a common standard for notice because clickwrap, browsewrap, scrollwrap, and sign-in-wrap can be nebulous categories. For example, courts frequently characterize contracts containing elements of both browsewrap and clickwrap as “hybridwrap.”⁶⁹ One example of hybridwrap is acknowledged by courts when “the button required to perform the action manifesting assent (e.g., signing up for an account or executing a purchase) is located directly next to a hyperlink to the terms and a notice informing the user that, by clicking the button, the user is agreeing to those terms.”⁷⁰ Hybridwrap may exist when users are reasonably notified of “the existence of the website’s terms of use” and are often guided to click a button to signify agreement.⁷¹ The case law survey in Part II shows that courts often struggle to categorize wrap agreements, and in lacking categorical rules to guide them, courts must look for adequate notice of the seller’s terms.

Additionally, as will be discussed at length in Section II.C.1, adequate notice has advantages and disadvantages as a legal standard. One advantage is that it allows room for evolution in response to the rapidly evolving digital world. Ecommerce is still growing, especially given the recent COVID-19 pandemic, during which many businesses and consumers relied on online orders. The global ecommerce market is expected to total $6.3 billion in 2024 and $7.9 trillion by 2027.⁷² Additionally, buyers today make online purchases faster and more casually than they have in the past. Consumers who make habitual and trivial purchases online may not be privy to a seller’s terms when, from the consumer’s perspective, the transaction is as inconsequential as a “pair of socks.”⁷³ Thus, not only are the means of business evolving, but the role and mindset of the consumer are changing as well. Courts have applied similar notice standards for the past three decades, but these standards can sometimes be a moving target.

C. Second and Ninth Circuit Decisions: Nguyen, Berman, and Specht

Major circuit court decisions from the past two decades show that courts often defer to sellers’ proposed modes of assent to their agreements while using a fact-based adequate notice standard to evaluate the validity of a wrap agreement.

In Nguyen v. Barnes & Noble Inc., a buyer unwittingly assented to Barnes & Noble’s terms of use through a browsewrap agreement while shopping online.⁷⁴ The disputed arbitration term could not be viewed unless the buyer clicked on a hyperlink that was placed at the bottom of the webpage.⁷⁵ Additionally, Barnes & Noble did not require any affirmative act of assent as part of the transaction.⁷⁶ The court held for the buyer and denied Barnes and Noble’s motion to compel arbitration.⁷⁷ The Nguyen court characterized online contracts as primarily coming in “two flavors”: “clickwrap” and “browsewrap.”⁷⁸ Browsewrap was defined as an agreement where “a website’s terms and conditions of use are generally posted on the website via a hyperlink at the bottom of the screen.”⁷⁹ Because browsewrap, unlike clickwrap, lacks an act of affirmative assent, the standard in Nguyen turned on “whether the user ha[d] actual or constructive knowledge.”⁸⁰ Thus, the buyer was not bound by the terms of use because he was not adequately put on notice by the design of the website and the inconspicuous and “buried” hyperlink to the terms and conditions.⁸¹ A rare bright-line rule for browsewrap emerged from this case:

[W]here a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice.⁸²

Few other notice-related bright-line rules have been articulated, but Nguyen represented a turning point in the world of online contracts, discouraging sellers from implementing browsewrap agreements without a buyer’s affirmative act of assent.

By 2021, scrollwrap and sign-in-wrap found their way into the lexicon of the courts, and California came to recognize four categories instead of the “two flavors” set forth in Nguyen.⁸³ The Ninth Circuit affirmed Nguyen in Berman v. Freedom Financial Network, in which a company’s terms and conditions were not conspicuous or noticeable on the website.⁸⁴ The terms were hyperlinked, but displayed in the same font and color as an adjacent sentence, not in the typical blue color a reasonable buyer would expect of a hyperlink.⁸⁵ The court held that the company did not call sufficient attention to the fact that clicking “continue” would indicate assent to the company’s terms, using a “reasonably conspicuous notice” standard to decide that the contract should be unenforceable.⁸⁶ Its fact-specific inquiry also assessed whether a “reasonably prudent Internet user” would be given notice given the webpage’s fonts, font sizes, colors, overall design, and readability of the webpage.⁸⁷ The court found that such a user would not be put on notice given that the hyperlink was not conspicuous in color or design.⁸⁸ This standard is consistent with Step-Saver, which looked to the reasonable beliefs of the parties in assessing notice.⁸⁹ Lastly, the Berman court provided a two-part framework for courts’ inquiries into notice:

Unless the website operator can show that a consumer has actual knowledge of the agreement, an enforceable contract will be found based on an inquiry notice theory only if: (1) the website provides reasonably conspicuous notice of the terms to which the consumer will be bound; and (2) the consumer takes some action, such as clicking a button or checking a box, that unambiguously manifests his or her assent to those terms.⁹⁰

Berman is a recent case, and lower courts have generally been slow to adopt this exact two-part framework. As will be discussed in Part II, courts take—and have taken—a variety of approaches to conduct similar notice inquiries. ⁹¹

In Oberstein v. Live Nation Entertainment, Inc., the Ninth Circuit considered another factor when assessing notice: the expectation of a continued relationship with a seller.⁹² A ticketing company’s website presented users with buttons that read “you agree to our Terms of Use” at three independent stages: creating an account, signing into an account, and completing a purchase.⁹³ The court considered both “the context of the transaction” and the “placement of the notice.”⁹⁴ Because the context of the transaction required full registration and implied somewhat of a “continuing relationship,” users should have been notified of the terms of that relationship.⁹⁵ Thus, the court ruled for the ticketing company and added a new dimension to the adequate notice standard.⁹⁶

Keebaugh v. Warner Bros. Entertainment Inc., a 2024 Ninth Circuit case, further clarified the standard set forth in Berman.⁹⁷ On a mobile entertainment app, users were presented with a large button that read “Play,” and small text below the button that read “By tapping ‘Play,’ I agree to the Terms of Service.”⁹⁸ Using both the Berman two-part inquiry and the “context” standard from Oberstein, the court categorized the agreement as sign-in-wrap and ruled for the entertainment company.⁹⁹ The court defined the “conspicuous” notice part of the Berman standard as “displayed in a font size and format such that the court can fairly assume that a reasonably prudent Internet user would have seen it.”¹⁰⁰ Additionally, “[s]imply underscoring words or phrases . . . will often be insufficient to alert a reasonably prudent user that a clickable link exists.”¹⁰¹ In terms of a continuing relationship between company and user, the court emphasized that the context of downloading a mobile app carries an implication of long-term use.¹⁰² Again, as demonstrated in Part II, courts in California have yet to latch onto the Berman standard. Courts have been using—and continue to use—similar, but not identical, standards.

New York law and California law often “dictate the same outcome” and draw from the same precedent.¹⁰³ The jurisdictions frequently exchange standards and reference the same lines of reasoning for cases considering the validity of an online contract. Further, other U.S. Courts of Appeal frequently apply California contract law as well.¹⁰⁴ In the 2002 Second Circuit case Specht v. Netscape Communications Corp., then-Judge Sotomayor applied California law in denying a software company’s motion to compel arbitration after a buyer was unaware of the terms of the contract.¹⁰⁵ In circumstances where consumers are “urged to download free software,” “clicking on a download button does not communicate assent to contractual terms” without adequate notice.¹⁰⁶ Judge Sotomayor used a “reasonably prudent offeree of downloadable software” standard in determining whether it would be reasonable to conclude that the buyer should have been aware of the terms.¹⁰⁷ Like Judge Wisdom in Step-Saver and the Ninth Circuit in Berman, Judge Sotomayor examined the belief of the parties in determining that a “reasonably prudent offeree in plaintiffs’ position would necessarily have known or learned of the existence of the SmartDownload license agreement.”¹⁰⁸ She held that “a reference to the existence of license terms on a submerged screen is not sufficient to place consumers on inquiry or constructive notice of those terms.”¹⁰⁹ Finally, Judge Sotomayor also distinguished the facts of Specht from the facts of ProCD, in which the buyer “was confronted with conspicuous, mandatory license terms every time he ran the software on his computer.”¹¹⁰ However, she also noted that cases such as ProCD “do not help defendants” and emphasized the necessity of reasonably conspicuous notice “if electronic bargaining is to have integrity and credibility” going forward.¹¹¹

In 2017, the Second Circuit decided Meyer v. Uber Technologies, Inc., an influential case among a slew of recent rideshare-related contract cases. The court held that a consumer unambiguously manifested assent to Uber’s terms of service because a reasonable user would have seen and known that clicking a registration button would constitute assent to terms accessible via hyperlink.¹¹² Even though the sign-in-wrap agreement served two functions—“creation of a user account and assent to the Terms of Service”—the consumer’s assent was still valid given the “physical proximity of the notice to the register button and the placement of the language in the registration flow.”¹¹³ Interestingly, the court seemed to prioritize the creation of notice over the type of wrap in dispute. The court stated that “[c]lassification of web-based contracts alone . . . does not resolve the notice inquiry.”¹¹⁴ In this case, the user was bound because they were “expressly warned . . . that by creating an Uber account, the user was agreeing to be bound by the linked terms.”¹¹⁵

In general, Nguyen, Berman, Oberstein, Keebaugh, Specht, and Meyer show that courts must consider notice standards within the reality of the Internet and recognize the necessity of electronic form contracts to conduct ecommerce. Finding a balance between a consistent standard for sufficient notice and offeror efficiency, however, has proven to be challenging. Courts have issued very few bright-line requirements for offerors and generally take an “ex ante approach by emphasizing what the drafter should have done to make the terms prominent and noticeable.”¹¹⁶ This approach might be criticized as reactive and too deferential to sellers, who are in a better position to create awareness of their terms because they can exercise more control over a buyer’s experience by designing the website.

Indeed, the common law principle that the offeror remains the “master” of the offer holds true in the realm of online form contracts. However, cases like Berman and Specht also highlight more buyer-centric common law principles, accounting for the reasonable expectations of the average “prudent” buyer. A dominant standard has not yet been established by the Ninth Circuit, and California law encompasses both the “reasonable notice” and the “reasonably prudent” user standard. Thus, this Note’s case law survey attempts to analyze and identify how California courts utilize these flexible standards of notice to analyze buyers’ acceptance of sellers’ offers.

II. CASE LAW SURVEY

This survey examines state and federal district court cases to paint a picture of California courts’ treatment of wrap agreements. Section II.A focuses on California state courts and discusses notable cases within the context of Step-Saver, ProCD, Nguyen, and Specht. It concludes that clickwrap agreements remain presumably enforceable, browsewrap agreements require a more fact-specific inquiry, and sign-in-wrap agreements are not yet fully distinguishable from browsewrap agreements. Section II.B focuses on the ways in which cases in federal district courts in California are consistent or inconsistent with cases in state courts. Section II.B concludes that district court decisions are largely in line with state court decisions, factoring in scrollwrap cases as presumptively enforceable. Finally, Section II.C further analyzes and summarizes differences between the forums and comments on the lasting influence of Step-Saver and ProCD. Overall, this case law survey shows that standards of notice from both Step-Saver and ProCD have been incorporated into California law, but a predominant standard for assessing adequate notice for wrap contracts has yet to take hold.

Twenty California state court cases and twenty U.S. District Court cases involving online form contracts for the sale of goods or services were chosen for this survey as a representative sample. This Note provides a brief quantitative analysis, then a substantive qualitative analysis of cases in each group. There were two main reasons for conducting a more comprehensive qualitative analysis: (1) the reasoning in the following cases was often fact specific, especially when the agreements in question defied easy categorization; and (2) although the chosen cases are representative of recent decisions, many similar cases exist beyond what is depicted here. It should be noted that some cases surveyed involved multiple types of wrap, or contained agreements that could have plausibly been categorized in more than one way. Importantly, the cases in this survey were sorted by the courts’ own labels and characterizations for the wrap agreements in dispute.

Additionally, as discussed in Section I.B.2, the clauses most frequently in dispute—arbitration clauses, choice-of-forum clauses, and class-action waiver clauses—are small parts of long agreements.¹¹⁷ As per Llewellyn’s theory of “blanket assent” to terms in a boilerplate contract,¹¹⁸ courts consider the validity of entire contracts rather than specific provisions. Thus, the cases in this survey generally either enforced the validity of an agreement or found the agreement to be invalid as a whole.

Figure 1. Outcomes of Cases Included in Case Law Survey

A. California State Courts

Cases were chosen based on the following criteria: (1) cases arose out of California state courts; (2) cases were decided between the years 2014 and 2024 (inclusive); (3) the relationship between the parties to the case was that of a buyer and seller (or lessee/lessor), or the agreement in dispute arose out of a transaction for goods or services; and (4) the court addressed the validity of a clickwrap, browsewrap, scrollwrap, or sign-in-wrap contract. Interestingly, there have not yet been any cases concerning the validity of a pure scrollwrap agreement in this jurisdiction. This Note will not include substantial speculation as to how state courts might treat scrollwrap agreements, but the latter half of this case law survey involving federal cases will discuss how California state law is applied to scrollwrap. Generally, scrollwrap agreements appear to be more or less unanimously enforceable.¹¹⁹

Most of the selected cases involved disputes regarding forum-selection clauses and arbitration clauses, however, the nature of the disputed terms was of secondary importance because courts only consider whether the entire agreement is valid. It should be noted that the Federal Arbitration Act (“FAA”) generally treats the enforcement of arbitration agreements favorably.¹²⁰ However, the FAA also limits the role of the courts to two related inquiries: (1) “whether a valid arbitration agreement exists,” and (2) “whether the agreement encompasses the disputes at issue.”¹²¹ Online contract cases often turn on the first issue, as the second issue is typically less disputed by the parties. Thus, the court’s inquiry was often whether a valid contract—and therefore, a valid arbitration agreement—existed.¹²²

Of the twenty cases examined, nine cases involved clickwrap agreements, eight cases involved browsewrap, and four cases involved sign-in-wrap (one case involved both a browsewrap agreement and a sign-in-wrap agreement).¹²³ Seven of nine clickwrap cases held for the seller, three of eight browsewrap cases held for the seller, and two of four sign-in-wrap cases held for the seller.¹²⁴ The numeric breakdown of the case outcomes was secondary to the reasoning of the courts. In general, the courts found clickwrap contracts largely enforceable, barring unique circumstances with extraneous issues. Browsewrap agreements were examined more closely, and the courts were more inclined to prioritize fact-based notice inquiries in such cases, echoing Berman and Specht. Cases involving sign-in-wrap were less unified by a single standard, and Sellers v. JustAnswer LLC highlighted some of the inconsistencies and issues with the various standards set forth by state and federal courts. Overall, although the reasoning of the courts closely followed Ninth and Second Circuit precedent, the standards for notice were inconsistently applied, even within wrap categories.

1. Clickwrap Agreements

As the Ninth and Second Circuits have noted, courts often presume clickwrap agreements to be enforceable because buyers must affirmatively manifest assent to the terms in question by physically clicking to proceed with an online transaction.¹²⁵ This is consistent with the Berman standard, but of the cases decided after Berman, none used the two-part framework. Overall, the courts generally presumed the validity of clickwrap and occasionally looked for adequate notice.

The cases surveyed revealed that a notice inquiry was secondary to the presumption of enforceability of pure clickwrap agreements. For example, it typically did not matter what was written on the digital button or box that users were directed to click; the action of clicking was enough of an affirmative act to bind the user. In B.D. v. Blizzard Entertainment, Inc., a buyer clicked a button marked “Continue” and was bound by a seller’s License Agreement.¹²⁶ The button was accompanied by a pop-up notice that notified buyers that continuing with the transaction would manifest assent.¹²⁷ In Pierre v. Dexcom Inc. and Jackson v. Vines, the court declared that clickwrap agreements are “generally considered enforceable.”¹²⁸

Courts were less likely to presume that clickwrap agreements were enforceable if they found elements of other wrap agreements present in a seller’s website flow. Two clickwrap cases held for buyers. The first case is Doe v. Massage Envy Franchising, LLC, in which a buyer did not assent to a seller’s terms of service on an in-store electronic tablet because the font color of the statement of notice was not conspicuous, and the terms were hyperlinked, not plainly visible.¹²⁹ The seller motioned to compel arbitration after the buyer alleged that she was sexually assaulted at the seller’s franchise location.¹³⁰ The court emphasized that the buyer was under pressure to complete the forms quickly by seller’s staff, which factored into the assessment of whether the buyer was actually aware of the terms.¹³¹

The second case in which a buyer prevailed is Herzog v. Superior Court. In Herzog, a healthcare company prompted users to assent to its terms of use before using a glucose monitoring app.¹³² The agreement appeared to be “classic ‘clickwrap,’ ” prompting a user to click a box stating: “I agree to Terms of Use.”¹³³ However, merely “categorizing the purported agreement as a clickwrap [did] not resolve the formation question.”¹³⁴ The court looked for “reasonably conspicuous notice” of the existence of terms to which users would be bound—specifically, the idea that “the content of [the app’s] ‘Legal’ screen support[ed] the inference that the user’s action on that screen—here, clicking the checkbox—constituted an unambiguous manifestation of assent to those terms.”¹³⁵ The company’s notice did not suggest assent; it read: “By ticking the boxes below you understand that your personal information, including your sensitive health information, will be collected, used and shared consistently with the Privacy Policy and Terms of Use.”¹³⁶ The court concluded that a reasonably prudent user would fail to understand the relationship between the Terms of Use, the Privacy Policy, and the company’s data collection.¹³⁷ Furthermore, users were confused by the fact that the company’s app was not necessary to use its glucose monitoring technology.¹³⁸ Herzog can be distinguished from other cases in this survey because it involved clickwrap pertaining to multiple sets of terms and services. Nevertheless, Massage Envy and Herzog both provide interesting points of contrast to the general presumption that clickwrap creates a valid agreement.

Overall, with a couple exceptions, courts viewed clickwrap agreements as largely enforceable, sometimes presumptively so.

2. Browsewrap Agreements

California State courts were generally protective of buyers confronted with browsewrap agreements but were inconsistent in their applications of standards of notice. In 2014, the Ninth Circuit wrote that it was “more willing to find the requisite notice for constructive assent where the browsewrap agreement resemble[d] a clickwrap agreement—that is, where the user is required to affirmatively acknowledge the agreement before proceeding with use of the website.”¹³⁹ Following Nguyen and Berman, pure browsewrap agreements became rare; offerors began to require more from consumers using their websites in order to indicate assent to their terms.

When confronted with hybridwrap or browsewrap agreements, courts largely adhered to the precedent set by three main decisions applying California law to facts involving browsewrap agreements: Nguyen, Specht, and Long v. Provide Commerce Inc.¹⁴⁰ In Long, a flower seller’s checkout flow did not create adequate notice that placing an order indicated a buyer’s acceptance, nor did a link sent to the buyer’s email create notice of the seller’s terms.¹⁴¹ Because browsewrap agreements require no affirmative action, “absent actual notice, ‘the validity of [a] browsewrap agreement turns on whether the website puts a reasonably prudent user on inquiry notice of the terms of the contract.’ ”¹⁴² The court examined whether the conspicuousness of the hyperlinks and design elements of the seller’s website would put a reasonably prudent user on notice.¹⁴³ In dicta, the court agreed with the Nguyen court; simply displaying a hyperlink without further notice is likely not enough to “alert a reasonably prudent Internet consumer to click the hyperlink.”¹⁴⁴

But not all courts applied these notice standards in the same way, and some courts were more concerned with buyer protections than others. Drawing from Long and Nguyen, Kellman v. Honest Co. looked for “something more” in addition to a seller’s browsewrap agreement that would put a reasonably prudent buyer on notice.¹⁴⁵ The court found that while a hyperlink and notice of the seller’s terms were not buried on the webpage, “they were in small print of a lighter color” and were “surrounded by text that did not suggest that the hyperlink was important.”¹⁴⁶ The court also emphasized the “realities of internet marketing and use,” citing Judge Sotomayor’s reasoning in Specht, and stressed that notice of a seller’s terms is essential to the “integrity and credibility” of online contracting and the ecommerce industry.¹⁴⁷ Because sellers are aware that very few buyers read terms of use, some sellers “design their websites to take advantage of consumer inattention.”¹⁴⁸ The court also cited Woodrow Hartzog who coined the phrase “malicious interface” to describe websites that deceive consumers.¹⁴⁹ It is a common law principle that parties should be bound to contracts that they enter into. But Kellman and Specht may suggest that unwitting assent is not assent at all.¹⁵⁰ These concerns are reminiscent of the Step-Saver court’s suggestion that sellers might take advantage of buyers’ reluctance to return a product if they dispute the terms of a shrinkwrap agreement.¹⁵¹

A few cases in the study attempted to provide definitions for various types of browsewrap and utilize appropriate standards of notice. Rabbani v. Tesla Motors described “pure-form browsewrap agreement[s]” as follows: “by visiting the Web site—something that the user has already done—the user agrees to the Terms of Use not listed on the site itself but available only by clicking a hyperlink.”¹⁵² Esparza v. 23andMe Inc. emphasized that an agreement is browsewrap if the offeror “assumes assent based upon the mere use of the website.”¹⁵³ “Website users are entitled to assume that important provisions—such as those that disclose the existence of proposed contractual terms—will be prominently displayed, not buried in fine print.”¹⁵⁴

Generally, when browsewrap agreements contained elements of clickwrap, they were more likely to be enforceable. This was due to the creation of “reasonable notice” through the affirmative act of clicking. Even when terms were hyperlinked or not immediately noticeable, website flows that incorporated an affirmative act on the part of the buyer were enforceable. In Collins v. Priceline, a website’s terms were only visible via a hyperlink but were enforced by the court because the buyer had adequate notice that “[b]y selecting Confirm Your Reservation [they] agree[d] to the Booking Conditions.” ¹⁵⁵ The affirmative act of clicking to move forward with the reservation resembled clickwrap enough for the court to hold the buyer to the terms.¹⁵⁶ Esparza and Collins were consistent with the Berman standard in that they emphasized the importance of an affirmative act, but Esparza did not apply the Berman framework, despite being decided in 2023.

Esparza also used a reasonably prudent user standard to determine whether a buyer had “adequate or constructive notice.” The court examined factors that the Nguyen and Long courts examined, such as “ ‘placement,’ color, and contrast of hyperlinks (i.e., ‘color-contrasting text’) and ‘the website’s general design.’ ”¹⁵⁷ The court in Rabbani v. Tesla Motors, Inc. also mentioned the reasonably prudent user standard but based its determination on the presence of “immediately visible notice,” quoting Specht.¹⁵⁸ Thus, although these cases used many similar standards of notice, they were inconsistent in their approaches to finding reasonable notice.

Overall, the courts were most protective of buyers in cases involving browsewrap agreements, unless the agreements involved an affirmative act of assent. The greater amount of inconsistency was likely due to the variation in what browsewrap agreements look like. Thus, courts looked for elements that resembled clickwrap, leaning on its presumptive enforceability. Courts also used a reasonably prudent user standard to determine whether reasonable notice was present, but there was no predominant standard among browsewrap cases.

3. Sign-In-Wrap Agreements

Sign-in-wrap resembles browsewrap in that it can cause a buyer—who believes they are merely signing up for an account or email list—to unwittingly assent to terms. But sign-in-wrap can also resemble clickwrap in that it can incorporate an affirmative act of assent into the sign-up flow. Courts generally struggled with a consistent treatment for sign-in-wrap and used several standards from browsewrap cases such as the reasonable notice and the reasonably prudent user standard.

A California appellate court was confronted with the issue of a sign-in-wrap agreement for the first time in 2021 in the case Sellers v. JustAnswer LLC.¹⁵⁹ A question-answering website prompted users with a button that read: “Start my trial” and small text below that read: “By clicking ‘Start my trial’ you indicate that you agree to the terms of service and are 13+ years old.”¹⁶⁰ Although the court noted that sign-in-wrap should be enforceable “based on the existence of essentially any textual notice that purports to inform consumers they agree to the terms by signing up for an account,” the court decided that the website’s notice was not “clear and conspicuous,” and the agreement was unenforceable.¹⁶¹ The Sellers court used a reasonableness standard to determine that the website’s notice was insufficient.¹⁶² The factors identified in Nguyen and Long (including text size, text color, text location, proximity to clickable buttons, obviousness of hyperlinks, and “clutter” on the screen) provided a baseline for the factual inquiry.¹⁶³ Additionally, the fact that the user was signing up for a free trial of a service and was not expecting to enter into an ongoing contractual relationship contributed to the lack of conspicuousness.¹⁶⁴ The court quoted Long: “California law is clear—‘an offeree, regardless of apparent manifestation of [their] consent, is not bound by inconspicuous contractual provisions of which [they were] unaware, contained in a document whose contractual nature is not obvious.’ ”¹⁶⁵ This set the stage for Oberstein, which solidified the “context” of a transaction standard that has yet to be embraced.¹⁶⁶

Sellers is also notable for its focus on how an average user or consumer behaves, echoing parts of the opinion from Step-Saver. While the defendant-seller urged the court to set bright-line rules governing sign-in-wrap agreements, the court declined to do so.¹⁶⁷ This was also the case in ProCD, in which Judge Easterbrook did not create specific requirements for sellers’ packaging out of fear of stifling business. The Sellers court commented on trends in online form contracting law, observing that courts have been inconsistent in their conceptualizations of a “typical online consumer.”¹⁶⁸ The court declared that “not all internet users are alike”;¹⁶⁹ some federal courts assume that “ ‘[a]ny reasonably-active adult consumer will almost certainly appreciate that by signing up for a particular service, he or she is accepting the terms and conditions of the provider.’ ”¹⁷⁰ Other Internet users might have “only recently, and perhaps begrudgingly, began to use cell phones, or other internet-enabled devices, for the purpose of online commerce.”¹⁷¹ Thus, federal courts have been inconsistent in their treatment, relying on “subjective criteria” as opposed to the aforementioned factors.¹⁷² An example is a court treating “conspicuousness” as the relevant question of law when it is “actually conducting . . . a fact-intensive inquiry.”¹⁷³ The Sellers court zoomed into the reasonably prudent user standard employed by many courts, setting the stage for Keebaugh.¹⁷⁴

Following the lead of Sellers, other sign-in-wrap cases in the case law survey did not establish or utilize a single standard. Instead, the cases likened sign-in-wrap agreements to browsewrap agreements and applied a broader “actual or constructive notice” standard. In Thompson v. Live Nation Entertainment, for example, the court emphasized the fact that a buyer received more than one opportunity to acknowledge a seller’s Terms of Use, and the use of a different font color for the terms created adequate notice.¹⁷⁵ On one hand, these are commonly examined factors within a notice inquiry. On the other hand, the courts’ decisions about which factors to examine were seemingly arbitrary.

The other case besides Sellers that held for a buyer was O’Connor v. Road Runner Sports, Inc., which turned on the fact that the buyer did not manifest assent because he did not use one of the modes of acceptance established by the seller.¹⁷⁶ The terms and conditions of the loyalty program provided “three ways a customer could manifest his or her assent to be bound: purchasing a membership, using a membership, or renewing a membership.”¹⁷⁷ Instead, the buyer called the seller’s toll-free phone line, so he did not agree to the seller’s terms.¹⁷⁸ As per common law, the offeror is the master of the offer, and in this case, the offeree did not undertake any of the modes of acceptance held out by the offeror.

Given the Sellers decision, California courts have not yet settled on a singular standard for determining whether a sign-in-wrap agreement is enforceable because they have taken varied approaches to assessing adequate notice. Further, Sellers casts doubt on courts’ adherence to so-called objective standards of notice. As the case law survey shows, courts have instead been using somewhat free-flowing, fact-based criteria.

In conclusion, California state courts were relatively consistent in presuming clickwrap agreements to be enforceable but were inconsistent in employing uniform standards of notice in browsewrap and sign-in-wrap cases. Part of the issue was the inability to define certain browsewrap agreements that did not fit cleanly into a single wrap category. Another issue, however, was the courts’ inconsistent application of standards, through which they examined a variety of factors to assess reasonable notice and sometimes relied on a reasonably prudent user or context of the transaction standard. These standards were somewhat selectively employed by the courts in the surveyed cases, which still showed deference to the presumptive enforceability of some agreement types over others.

B. U.S. District Courts in California

This Note examined twenty cases to provide a point of comparison to the state court case survey and to show that recent federal cases in California reach conclusions largely consistent with those of the state courts. Mirroring the state court case law survey, federal cases were chosen based on four criteria: (1) cases arose out of U.S. District Courts from districts in California; (2) cases were decided between the years 2014 and 2024 (inclusive); (3) the relationship between the parties to the case was that of a buyer and seller (or lessee/lessor), or the agreement in dispute arose out of a transaction for goods or services; and (4) the court addressed the validity of a clickwrap, browsewrap, scrollwrap, or sign-in-wrap contract. While the state court case law survey yielded no instances of scrollwrap contracts, this part of the survey will analyze four cases involving scrollwrap, finding that the courts’ conclusions were unsurprising and consistent with the former half of the case law survey. Again, the types of provisions in dispute in these cases were not relevant because the agreement was considered as a whole. Indeed, most of the selected cases involved disputes regarding forum-selection clauses and arbitration clauses.

Three cases contained discussions of the validity of clickwrap agreements, three contained scrollwrap, nine contained browsewrap, and seven contained sign-in-wrap (two browsewrap cases also contained aspects of sign-in-wrap).¹⁷⁹ In each of the cases involving clickwrap or scrollwrap, the court held for the seller. In the browsewrap cases, the court held for the seller in six out of nine instances. In the sign-in-wrap cases, the court held for the seller two out of five times. The ratio of pro-buyer and pro-seller decisions for each type of wrap were not drastically different from those in state courts (see Figure 1, supra). More important than these numbers, however, was the consistency found in the reasoning within the decisions.

The cases largely adhered to the general standards established by pre-Berman Ninth Circuit precedent. Some courts modeled their analysis on the facts of past cases. For example, in Friedman v. Guthy-Renker, the Central District Court of California closely followed the blueprint established in Nguyen in order to determine the validity of a browsewrap agreement.¹⁸⁰ In Peter v. Doordash, Inc., the court compared the actual webpage in question to the webpage in Meyer v. Uber Technologies.¹⁸¹ As was the case in state courts, it still remains to be seen whether the two-part test from Berman or the context of a transaction test will gain traction over time. Cases concerning scrollwrap agreements came out as expected; courts ruled for sellers because scrolling generally constituted an affirmative act of assent. When considering the enforceability of browsewrap or hybridwrap agreements, federal courts favored sellers slightly more than state courts. But overall, these decisions were unsurprising and largely consistent with California state courts.

1. Clickwrap Agreements

The courts followed a deferential presumption of validity when it came to pure clickwrap agreements, and referenced recent decisions in state or other federal courts. In Vanden Berge v. Masanto, the court noted that “[c]lickwrap agreements ‘have been routinely upheld by circuit and district courts.’ ”¹⁸² In Tingyu Cheng v. Paypal, Inc., the court declared that “[c]lickwrap agreements are routinely recognized by courts and are enforceable . . . .”¹⁸³ Determining that an agreement was identifiably clickwrap often ended a court’s inquiry into the agreement’s enforceability. As in state courts, notice was secondary to the presumption of validity.

Overall, there were no federal district court decisions concerning clickwrap that deviated from precedent. As was true in California state court cases, pure clickwrap agreements are still regarded as constituting an affirmative act of assent that binds a buyer.

2. Scrollwrap Agreements

The same consistency was true of cases involving scrollwrap agreements. Like pure clickwrap agreements, scrollwrap requires an affirmative act of assent through the action of physically scrolling down a webpage. However, scrollwrap arguably creates greater notice for a buyer because the entirety of the seller’s terms is built directly into the website flow. When the buyer is forced to acknowledge the entirety of the agreement, it is harder to argue that the buyer did not receive adequate notice. Generally, the discussions of the validity of pure scrollwrap agreements were not accompanied by fact-specific inquiries into the reasonableness of the notice.¹⁸⁴ Courts were simply willing to accept the reasoning found within other binding or persuasive precedent once the type of wrap was established. In 2023, the court in Flores v. Coinbase declared that “ ‘scrollwrap’ agreements are consistently found to be enforceable in California,” referencing Sellers.¹⁸⁵ In Perez v. Bath & Body Works, the court cited the Ninth Circuit in Berman, stating that there is “little doubt” as to the blanket enforceability of scrollwrap agreements because “they affirmatively show the terms to the user before obtaining assent rather than linking to a separate page containing the terms that does not need to be viewed prior to agreement.”¹⁸⁶

Though California state courts have not yet decided any scrollwrap cases, it is likely that those courts would reach similar conclusions. Of all the types of wrap, scrollwrap probably creates the greatest presumption of validity because it requires an affirmative act, and the terms are conspicuous and accessible, by definition.

3. Browsewrap Agreements

In contrast, courts were generally more skeptical of browsewrap agreements because of the passive nature of browsewrap. Some courts even expressed a presumption of invalidity for pure browsewrap agreements.¹⁸⁷ In Brooks v. IT Works Marketing, the court stated that “[i]nternet contracts fall on two ends of a spectrum; courts routinely find clickwrap agreements enforceable but are generally more reluctant to enforce browsewrap agreements.”¹⁸⁸ Moyer v. Chegg quoted Berman: “Courts are more reluctant to enforce browsewrap agreements because consumers are frequently left unaware that contractual terms were even offered, much less that continued use of the website will be deemed to manifest acceptance of those terms.”¹⁸⁹ As the court reasoned in Nguyen, a buyer is not expected to seek out the terms of an agreement and sellers should be responsible for providing notice.¹⁹⁰ Of the cases surveyed, when cases involved a pure browsewrap agreement that contained no elements of clickwrap or sign-in-wrap, the court ruled in favor of the buyer.¹⁹¹ This is consistent with the former part of the case law survey.

Courts’ inquiries became more complicated when browsewrap was combined with elements of clickwrap or sign-in-wrap. Notice of the terms of the agreement was almost always the standard, and courts again examined various factors.¹⁹² In some of the cases examined, the courts did not even deem it necessary to categorize a website as offering one of the four recognized types. Eight out of nine browsewrap cases examined involved a form of hybridwrap, and given the variation in those agreements, the courts utilized a fact-specific inquiry across the board.

Reasonable notice or reasonably prudent user standards were most common. In Friedman v. Guthy-Renker, the court looked for “browsewrap that resemble[d] a clickwrap” because such an agreement would require an affirmative act of assent, evincing notice.¹⁹³ Applying the reasonably prudent user standard adapted from Nguyen, the court held for one of the plaintiff-buyers and found that “a reasonably prudent person would not believe that the common noun ‘terms’ associated with the checkbox [were] the same terms found in the proper noun ‘Terms & Conditions’ at the bottom of the page.”¹⁹⁴ Similarly, in Chien v. Bumble, a “blocker card contain[ed] aspects of both clickwrap and browsewrap agreements” and was “comparable to a pop-up screen in that users must click ‘I accept’ before they may proceed” but needed to click a hyperlink to view the full terms.¹⁹⁵ However, the notice was “reasonably conspicuous,” and the agreement was therefore valid.¹⁹⁶

In Shultz v. TTAC Publishing, a hybrid browsewrap agreement was invalidated because the checkbox next to the statement, “I agree to the terms and conditions,” was already checked by default when a customer navigated to the checkout page; therefore, there was no affirmative act of assent.¹⁹⁷ Nevertheless, the court engaged in a factual inquiry as to whether there was sufficient notice to justify the browsewrap agreement, finding that “the webpage design [made] it exceedingly difficult to discern the significance of the hyperlink.”¹⁹⁸ As was true in state courts, federal courts in California routinely applied similar, yet not identical, standards for notice. In a way, it did not matter that each of these cases involved browsewrap because the courts did not assign much inherent meaning to the category. The importance of browsewrap as a distinct category eroded in the face of many distinct types of hybridwrap.

In one sense, these cases validate the observation of the Sellers court: federal courts have relied on “subjective criteria” as opposed to one consistent version of a reasonable notice standard.¹⁹⁹ That being said, the courts consistently drew from the same pool of examinable factors in evaluating whether adequate notice was given, including fonts, sizes, colors, and proximity to clickable buttons. Generally, like the cases surveyed in Section II.A, federal courts in California preferred to draw on multiple factors and standards used by precedent in assessing notice. A singular, objective standard of reasonable notice thus remains elusive.

4. Sign-In-Wrap Agreements

Like state court cases, federal cases involving sign-in-wrap agreements involved a fact-specific inquiry into the buyer’s experience and did not place much inherent value on the sign-in-wrap category. A fact-based inquiry was typically warranted. Serrano v. Open Road Delivery Holdings cited Sellers, stating,

[I]t is not apparent that the consumer is aware that they are agreeing to contractual terms simply by clicking some other button. Instead, the consumer’s assent is largely passive, and the existence of a contract turns on whether a reasonably prudent offeree would be on inquiry notice of the terms at issue.²⁰⁰

The webpage should have provided “conspicuous notice to permit an inference that the user had manifested assent.”²⁰¹ The court held for the consumer and found that notice was not conspicuous because of the small size of the text informing consumers that they were assenting to the terms of use by signing up.²⁰²

Courts employed a few other means of assessing notice. In addition to performing a broader factors-based inquiry, the court in Peter v. Doordash directly compared a seller’s sign-up page to the page considered by the Second Circuit in Meyer v. Uber Technologies.²⁰³ The court stated that “[t]he screens are similarly uncluttered and wholly visible, and the notice text appears even closer to the sign-up button on DoorDash’s page than on Uber’s.”²⁰⁴ In addition to using a more general standard, the court relied on a side-by-side comparison of two webpages.²⁰⁵ Lastly, the court in Regan v. Pinger declined to settle on a precise label for the sign-in-based agreement and instead looked for broadly “sufficient notice to manifest mutual assent,”²⁰⁶ as was true for some browsewrap cases as well.

Overall, sign-in-wrap cases in federal district courts also applied standards of reasonable notice in an inconsistent manner. Courts employed various techniques, including comparing the webpage in question to webpages from past cases and examining website elements, such as fonts, separately. These cases support the Sellers court’s criticism of the inconsistent application of notice standards in federal courts.

In conclusion, this case law survey reveals consistency with California state courts. Beyond the presumptions of validity for clickwrap and scrollwrap contracts, standards of notice generally became nebulous as courts utilized any combination of website factors as well as other methods such as direct comparisons to websites from previous cases. Both state and federal courts struggled to pinpoint a consistent method of assessing whether reasonable notice was present, and even the reasonably prudent user standard yielded different results depending on how the court chose to define an average user. Thus, federal courts in California were largely consistent with state courts in their treatment of clickwrap, scrollwrap, browsewrap, and sign-in-wrap cases.

C. Summary of Findings

To summarize, this case law survey shows consistency among state and federal courts in California. Courts were generally deferential to sellers and their offers if adequate notice was given to the buyer. This aligns with Judge Easterbrook’s perspective in ProCD. However, California courts also employed a reasonably prudent user standard, which can be traced back to Berman, Specht, and Step-Saver. Finally, this Note concludes by arguing that Step-Saver and ProCD remain relevant as online contracts evolve because they establish and contextualize the most commonly used standards of notice in California. Courts will likely continue to lean on their reasoning in applying common law principles as new types of contracts emerge over time.

1. Standards of Notice

In some clickwrap and scrollwrap cases, courts were willing to declare an agreement valid solely because courts have presumed clickwrap and scrollwrap to be enforceable in the past.²⁰⁷ On the other hand, some courts seemed reluctant to rely on categories at all.²⁰⁸ However, most cases in the case law survey engaged in some level of fact-specific inquiry, and a few main standards were seen most frequently. It remains to be seen whether the two-part standard from Berman or the transactional “context” standard from Oberstein will gain traction in the coming years.

The reasonable notice standard was almost always applied throughout the case law survey. Consistent with the precedent set by Nguyen, Specht, and Berman, courts examined various website design factors such as font size, font color, proximity to clickable buttons, underlining on hyperlinks, and the presence of an affirmative act of assent before completing a transaction.²⁰⁹ Though Nguyen provided some specific rules pertaining to browsewrap,²¹⁰ there is still no requirement that courts examine certain factors or website elements. Perhaps this approach is practical considering the wide variation in sellers’ website flows. However, the looseness of the standard was also a source of inconsistency throughout the survey, and courts created their own interpretations by picking and choosing certain factors to examine.²¹¹

The reasonably prudent user standard was often used with the reasonable notice standard and acted as a loose benchmark for courts analyzing the experience of a consumer engaging with a seller’s interface. Some courts treated it as an independent standard,²¹² while some courts treated is as a subset of reasonable notice.²¹³ The court in Sellers criticized some courts’ exercise of the reasonably prudent user standard as being too subjective and inconsistent.²¹⁴ In considering the potential longevity of this standard, it is difficult to imagine whether the average Internet user of the future will be more or less prudent. Perhaps the average American will be more digitally literate in twenty or fifty years than they are today. Or perhaps technology will continue to evolve, leaving some generations and users behind. Nevertheless, it is certain that sellers and their offers will continue to evolve, causing standards to continue to adapt.

A few other methods of assessing notice were seen in the case law survey. The court in Sellers also wrote that some federal courts were using adjacent, but different, standards to determine whether sufficient notice was present, such as “conspicuousness.”²¹⁵ Conspicuousness was sometimes employed as an independent test, as one of many factors of the reasonable notice standard, and as a separate prong of the Berman test.²¹⁶ Overall, courts have been inconsistent in their application and analysis of conspicuousness. Additionally, some courts decided to forgo tests and standards in favor of making comparisons to websites and agreements that have been seen in courts already. Those decisions focused on the fact that the browsewrap or sign-in-wrap agreement in question resembled a similar agreement in a previous case. For example, the court in Peter v. Doordash compared the seller’s sign-up page to the website in Meyer, stating that “DoorDash’s sign-up page looks markedly similar to the page approved by Meyer. The screens are similarly uncluttered and wholly visible, and the notice text appears even closer to the sign-up button on DoorDash’s page than on Uber’s.”²¹⁷ Comparing agreements to others that have already been “approved” by courts may be temporarily efficient. Looking forward, however, this method may not be sustainable if online agreements continue to evolve at a fast pace. Some legal scholars, including Cheryl B. Preston, are not optimistic about the potential of evolving notice standards to sufficiently protect consumers, especially given the needs of the “Internet-instant-gratification generation.”²¹⁸ Perhaps Judge Easterbrook and the Sellers court were wise in declining to create bright-line rules; standards offer greater flexibility and adaptability to the online contracts of tomorrow.

This Note will not propose what alternative, more successful standards of notice might look like.²¹⁹ However, some other jurisdictions adopt combinations of these tests. Within the last few years, for example, Maine has embraced a “two-step inquiry” in which the first step focuses on a reasonably prudent user being put on reasonable notice of the contract terms, and the second step focuses on whether the user has manifested their assent.²²⁰ Perhaps California courts embrace the Berman standard and the context of the transaction test, which seek to combine many of the standards that have been employed within the past decade. A more uniform standard for notice would create consistency and reduce the current reliance on courts to define the scope of a notice inquiry.

This case law survey shows that a singular notice standard remains to be established in California. While reasonable notice was almost universally considered important, courts created their own interpretations of this standard and applied it in many different ways.

2. The Erosion of Distinct Wrap Categories

The results of this case law survey also show that courts did not always utilize California’s four wrap categories in evaluating the validity of an agreement. While the clickwrap and scrollwrap categories carried presumptions of validity,²²¹ the browsewrap and sign-in-wrap categories lacked definite boundaries and uniform standards of notice. A concurring opinion in Berman made a bold proposition: “browsewrap agreements are unenforceable per se; sign-in wrap agreements are in a gray zone; and clickwrap and scrollwrap agreements are presumptively enforceable.”²²² While this may be true for now, the Berman court’s declaration may lose relevance as soon as wrap contracts further evolve—or devolve.

One issue is that courts were not always consistent in their categorization of wrap agreements. In state and federal courts, there was a struggle to define agreements when they incorporated elements of more than one type of wrap. Some of the decisions labelled by the courts as browsewrap or hybridwrap involved website flows that also directed users to sign-in or create accounts.²²³ Thus, going forward, the wrap categories may only be useful insofar as the courts are consistent in their categorizations. Further, sellers are constantly adapting to standards set by new case law. For example, because Nguyen discouraged the use of a pure browsewrap agreement,²²⁴ sellers have expanded the world of browsewrap to include many hybrid variations. Courts often fail to characterize these agreements in specific or useful ways. For example, the state court case Kellman v. Honest Co. adopted the language used in Long v. Provide Commerce to describe the type of agreement in dispute: browsewrap with “something more.”²²⁵ Not only was this definition of an agreement vague, but it also relied on a clear definition of browsewrap, which may no longer exist.

The fact that courts have recognized new types of wrap in the past may suggest that there is room for further types of agreements in California contract law. However, even if courts were to acknowledge new categories, such a process would likely occur gradually, moving at a speed much slower than the speed at which sellers create new website flows. As mentioned before, courts still take a reactionary, ex ante approach when assessing the validity of an online contract.²²⁶

Looking forward, advances in technology may further blur the lines. Companies today are converting customers by monetizing places that are not traditionally used as marketplaces. “Social commerce,” for example, allows users of social media platforms like Instagram and Facebook to “purchase products without ever leaving the platform.”²²⁷ “Experience commerce” is another new example, promising to put the “customer first” and remove “the product from the center of the sales solution or offering” to create an “immersive . . . experience.”²²⁸ This Note does not speculate extensively about the future of ecommerce, but as Internet users find themselves becoming buyers in new contexts, they probably run a greater risk of assenting to terms unwittingly.

Overall, as sellers continue to adapt to current standards and hybridwrap becomes more pervasive, a fact-specific inquiry tailored to the agreement in question might always be necessary—even for cases involving clickwrap or scrollwrap. Thus, it is also worth considering whether these categorizations remain useful at all. First, there were the “two flavors” of contracts, clickwrap and browsewrap, and today, California courts recognize four. Moving forward, perhaps there will be many more—or none at all. This case law survey shows that the categories are already breaking down as sellers’ websites resist simple categorization. If courts continue to prefer reasonable notice or reasonably prudent user standards, then perhaps hard-and-fast contract categories will cease to be necessary because these standards apply regardless of the wrap type. Browsewrap and sign-in-wrap have arguably already lost their efficacy as distinct categories because there is so much variation among website flows. Indeed, courts sometimes declined to categorize agreements at all and instead prioritized a notice analysis.²²⁹

It is unclear whether the deterioration of wrap categories and emergence of fact-specific inquiries will create more protection for buyers. On the one hand, a fact-specific inquiry could benefit buyers because sellers exercise the most control over their websites. As masters of their own offers, they alone have the power to set the terms of the transaction. As Judge Wisdom suggested in Step-Saver, the fact that there is often no transaction history between parties to these contracts might cause buyers to assent to agreements that they do not anticipate or expect.²³⁰ On the other hand, and as emphasized by Judge Easterbrook in ProCD, the ubiquity of ecommerce and the natural competition of the market may create enough protection,²³¹ even as website flows evolve to become more complex. Although most consumers do not read sellers’ terms, reputation matters in a saturated market and might incentivize sellers to provide more favorable terms. Whether distinct wrap categories have longevity or not, courts likely need to define the appropriate notice standard that should be applied, which could eliminate some of the inconsistency highlighted by the Sellers court.

For now, this case law survey also shows that the four distinct contract categories still center in California courts’ preliminary analysis of the validity of an online contract, though hybridwrap is becoming more pervasive. Courts almost always begin their analysis of an agreement’s enforceability with an acknowledgement of the types of wrap, whether they use the categorization to presume validity or proceed to look for adequate notice by the seller. Because all wrap types can be potentially valid, courts are generally deferential to sellers and how they want to set the terms of their offers. There are still few bright-line requirements for sellers in this area of contract law, and parties are generally free to contract as they please.

3. The Relevance of Step-Saver and ProCD

The precedent set by Step-Saver and ProCD three decades ago is still applicable today. An important part of the ProCD decision was Judge Easterbrook’s adherence to the common law principle that any mode of acceptance set by an offeror—hence, any type of wrap—is valid as long as the buyer has notice. The offeror is the master of the offer and can propose specific modes of assent. The reasonable notice standard used widely in California is consistent with Judge Easterbrook’s determination that ProCD’s pop-up box gave the buyer enough notice of the seller’s agreement.²³² Many of the cases surveyed also prioritized the experience of buyers as part of an analysis of adequate notice. Relatedly, the reasonably prudent user standard can be traced to Step-Saver and Specht. It forces sellers to acknowledge the other party in designing an offer and work around the experience of the buyer or user. Perhaps this amounts to more protection for buyers. In some cases, the court went so far as to insinuate that sellers take advantage of buyers in formulating their modes of acceptance.²³³ Yet, this case law survey also shows that the ProCD and Step-Saver perspectives are not incompatible. Elements of both cases have made their way into California contract law, though Judge Easterbrook’s approach seems to be slightly more pervasive today.

Step-Saver and ProCD are often seen as cases that are pro-buyer or pro-seller. Step-Saver was largely concerned with holding businesses accountable and is an important check on sellers. In contrast, Eric Posner termed ProCD a “masterpiece of realist judging” in the “canon of contract law cases” because it encouraged sellers to continue conducting business as they had been.²³⁴ However, given the landscape of online contracting and the importance of notice, perhaps the cases should be recast as simply endorsing different standards of notice. Step-Saver is more aligned with the reasonably prudent user standard while ProCD is more aligned with reasonable notice. Online contract cases today implicitly recognize that form contracts enable the marketplace to function efficiently. Yet, because online sellers’ website flows vary to such a great degree, it is difficult to make blanket statements as to the validity of certain agreements. Thus, notice will almost certainly remain a point of discussion for courts, and these cases will remain relevant as the sources of two significant standards of notice.

The world of online contracting is quickly outpacing the factual relevance of the two cases because new means of manifesting assent are rapidly being invented. For example, the box-top licenses in Step-Saver and ProCD can be likened to browsewrap agreements today, but many sellers have already stopped creating pure browsewrap agreements after Nguyen. While form contracts will likely remain important and necessary for online contracting, current shrinkwrap-like modes of acceptance may not. Nevertheless, these cases connect the concept of notice in form contracts to essential contract common law principles. As long as online modes of contracting are held to the same requirements of offer and acceptance, the reasoning of Judge Wisdom and Judge Easterbrook should remain in contract casebooks. These two cases contributed to the development of major standards of notice.

CONCLUSION

As was true three decades ago when Step-Saver and ProCD created a circuit split, courts are still determining how to evaluate notice when considering the validity of form contracts. When courts evaluate the validity of a clickwrap or scrollwrap agreement, precedent alone may dictate a certain outcome. For cases involving browsewrap or sign-in-wrap, a fact-specific inquiry is almost always necessary. While it remains to be seen whether California’s four types of wrap will continue to be useful or important in evaluating sellers’ offers and agreements, it is likely that courts will continue to look for adequate notice. This case law survey demonstrates that there are two main standards of notice that can be traced back to ProCD and Step-Saver: a factor-based reasonable notice standard and a reasonably prudent user standard. There is presently no uniform method of applying these standards in California, but most courts nevertheless acknowledge that elements of both are important. Overall, case law is trending towards the ProCD view that contracting should not be impeded by burdensome standards for sellers. However, sellers should still be held to reasonable standards to keep consumers informed, which is consistent with Step-Saver. In conclusion, these two cases remain important as courts continue to evaluate whether buyers were sufficiently notified of sellers’ terms.

APPENDIX A. Surveyed Cases in California State Courts
	Case	Held For	Type of Contract	Disputed Terms	Summary
1	B.D. v. Blizzard Ent., Inc., 292 Cal. Rptr. 3d 47 (Ct. App. 2022)	Seller	Clickwrap	Arbitration Provision	Seller’s pop-up box gave sufficiently conspicuous notice that clicking a “Continue” button would manifest assent to the terms of a License Agreement.
2	Bowers v. Ritchie Bros., No. RG21095426., 2021 Cal. Super. LEXIS 33293 (Aug. 18, 2021)	Seller	Clickwrap	Forum-Selection Provision	Buyer assented to an agreement by clicking “I agree to the IronPlanet Buyer Terms and Conditions,” which was necessary to proceed with the transaction.
3	Doe v. Massage Envy Franchising, LLC, 303 Cal. Rptr. 3d 269 (Ct. App. 2022)	Buyer	Clickwrap	Arbitration Provision	Buyer brought an action for sexual assault, to which a seller moved to compel arbitration based on a clause in seller’s agreement. Buyer did not assent to a seller’s terms of service on an electronic tablet because the font color of the notice statement was not conspicuous, and terms were hyperlinked. Buyer was pressured to complete the forms quickly by seller’s staff.
4	Herzog v. Superior Ct., 321 Cal. Rptr. 3d 93 (Ct. App. 2024)	Buyer	Clickwrap	Arbitration Provision	Buyer assented to a healthcare company’s terms by clicking a box, but the agreement was deemed unenforceable because clicking the box also constituted authorization for the company to collect and store the personal health information; thus, there was no unambiguous assent to the terms.
5	Jackson v. Vines, No. CVRI2201731, 2023 Cal. Super. LEXIS 69073 (Jan 10, 2023)	Seller	Clickwrap	Arbitration Provision	Buyer assented to terms via a clickwrap agreement and could not use the fact that he did not recall doing so as a defense.
6	Njoku v. Airbnb, Inc., No. 21STCV34610, 2021 Cal. Super. LEXIS 84568 (Dec. 23, 2021)	Seller	Clickwrap	Arbitration Provision	Buyers were bound by an agreement because they clicked an electronic button that indicated their assent, even though the actual terms were hyperlinked and on another page.
7	Pierre v. Dexcom Inc., No. 37-2023-00014471, 2023 Cal. Super. LEXIS 56618 (July 28, 2023)	Seller	Clickwrap	Arbitration Provision	Buyer was bound by a clickwrap agreement that read “I agree” or “I accept” and was provided with a link to the readily available agreement.
8	Shaw v. U-Haul, No. 21STCV20248, 2022 Cal. Super. LEXIS 23561 (Mar. 16, 2022)	Seller	Clickwrap	Arbitration Provision	Buyer manifested assent by clicking “Accept” with respect to seller’s Arbitration Agreement.
9	Xiong v. Jeunesse Glob., LLC, No. 30-2019-01095448, 2020 Cal. Super. LEXIS 5220 (Oct. 6, 2020)	Seller	Clickwrap	Arbitration Provision	Buyer was bound by a clickwrap agreement that read “I agree,” and her inability to remember whether she clicked the box was an insufficient defense.
10	Blood v. L.T.D. Commodities LLC, No. 37-2020-00034050, 2021 Cal. Super. LEXIS 56220 (Sept. 24, 2021)	Buyer	Browsewrap	Arbitration Provision	A button on seller’s website that read “START SAVING” did not notify buyer that clicking the button would constitute assent to seller’s terms.
11	Collins v. Priceline.com, LLC, No. 20STCV10231, 2020 Cal. Super. LEXIS 5739 (Dec. 22, 2020)	Seller	Browsewrap	Arbitration Provision	Seller’s website contained an enforceable part-browsewrap, part-clickwrap agreement because buyer had to click to assent and complete a reservation.
12	Esparza v. 23andMe Inc., No. 37-2022-00051047, 2023 Cal. Super. LEXIS 54347 (July 21, 2023)	Buyer	Browsewrap	Arbitration Provision	A website’s terms of use were not binding because they were only available by clicking a hyperlink after scrolling to the bottom of the page or in the site’s chat feature.
13	Kellman v. Honest Co., No. RG16 813421, 2016 Cal. Super. LEXIS 20519 (Nov. 28, 2016)	Buyer	Browsewrap/ Hybridwrap	Arbitration Provision	Seller’s website design did not include design elements that would put a reasonably prudent buyer on notice of a browsewrap agreement.
14	Long v. Provide Com., Inc., 200 Cal. Rptr. 3d 117 (Ct. App. 2016)	Buyer	Browsewrap	Arbitration Provision	Seller’s checkout flow did not create adequate notice that placing an order indicated acceptance, nor did a link sent to buyer’s email create notice.
15	Pradmore v. J2 Glob., Inc., No. CGC-17-561916, 2018 Cal. Super. LEXIS 739 (Apr. 20, 2018)	Seller	Browsewrap/ Hybridwrap	Arbitration Provision	Seller’s agreement was enforceable because it contained elements of browsewrap but also required buyer to click a box to assent to complete a transaction.
16	Rabbani v. Tesla Motors Inc., No. 37-2021-00004478, 2021 Cal. Super. LEXIS 56460 (May 21, 2021)	Seller	Browsewrap	Arbitration Provision	Buyer was notified that placing an order would indicate assent to seller’s terms and did not click on hyperlinks that would have revealed said terms.
17	O’Connor v. Rd. Runner Sports, Inc., 299 Cal. Rptr. 3d 785 (Ct. App. 2022)	Buyer	Sign-In-Wrap	Arbitration Provision	In manifesting assent to cancel his membership to a seller’s loyalty program, buyer did not use seller’s preferred method to cancel the membership and seller’s arbitration agreement was found to be unenforceable.
18	Sellers v. JustAnswer LLC, 289 Cal. Rptr. 3d 1 (Ct. App. 2021)	Buyer	Sign-In-Wrap	Arbitration Provision	A sign-in-wrap agreement was not binding when buyer signed up for a free trial of a service because notice was not clear and conspicuous, and this was not the type of transaction that would entail an ongoing contractual relationship.
19	Skurskiy v. Neutron Holdings, Inc., No. 19STCV36846,Cal. Super. LEXIS 104325 (Cal. Super. Ct. Apr. 15, 2021)	Seller	Sign-In-Wrap	Arbitration Provision	In signing up for a seller’s service, buyer clicked an “I Agree” button where language on the page was apparent that clicking would indicate assent to seller’s user agreement.
20	Thompson v. Live Nation Ent., No. 30-2018-00976153, 2018 Cal. Super. LEXIS 42847 (May 4, 2018)	Seller	Sign-In-Wrap/Browsewrap	Arbitration Provision	Buyer was required to acknowledge seller’s terms twice in the process of creating an account and therefore assented. Key terms were set apart in a different color from other words.

APPENDIX B. Surveyed Cases in U.S. District Courts in California
	Case	Held For	Type of Contract	Disputed Terms	Summary
1	Brown v. Madison Reed, Inc., No. 21-cv-01233, 2021 U.S. Dist. LEXIS 164002 (N.D. Cal. Aug. 30, 2021)	Seller	Clickwrap	Arbitration Provision	Buyer was bound by seller’s agreement because notice of the terms was set apart in bold and in a different color. Clicking to manifest assent was required to place an order.
2	Tingyu Cheng v. Paypal, Inc., No. 21-cv-03608, 2022 U.S. Dist. LEXIS 7245 (N.D. Cal. Jan 13, 2022)	Seller	Clickwrap	Arbitration Provision	Seller’s agreement was binding on buyer because he had to check a box indicating that he had read and agreed to a User Agreement and clicked a large blue button to indicate assent to creating an account.
3	Vanden Berge v. Masanto, No. 20-cv-00509, 2020 U.S. Dist. LEXIS 261762 (S.D. Cal. Sept. 22, 2020)	Seller	Clickwrap	Arbitration Provision	Buyer was bound by seller’s terms because she affirmatively agreed to a clickwrap agreement while making a purchase.
4	Flores v. Coinbase, Inc., No. CV 22-8274, 2023 U.S. Dist. LEXIS 90926 (C.D. Cal. Apr. 6, 2023)	Seller	Scrollwrap	Arbitration Provision	Seller’s scrollwrap agreement was valid because the full text of the User Agreement was placed before buyer.
5	Perez v. Bath & Body Works, LLC, No. 21-cv-05606, 2022 U.S. Dist. LEXIS 116039 (N.D. Cal. June 30, 2022)	Seller	Scrollwrap	Arbitration Provision	Seller’s agreement was valid because buyer was physically required to scroll through the terms in order to assent.
6	Stewart v. Acer Inc., No. 22-cv-04684, 2023 U.S. Dist. LEXIS 10241 (N.D. Cal. Jan. 20, 2023)	Seller	Scrollwrap	Arbitration Provision	Seller’s agreement was enforced because the terms appeared after turning on the product (a computer) and constituted adequate notice.
7	Allen v. Shutterfly, Inc., No. 20-cv-02448, 2020 U.S. Dist. LEXIS 167910 (N.D. Cal. Sept. 14, 2020)	Seller	Browsewrap/ Hybridwrap	Arbitration Provision	Buyer was bound by a browsewrap agreement where constructive notice was present due to the conspicuousness of the terms, although they were hyperlinked.
8	Brooks v. IT Works Mktg., No. 21-cv-01341, 2022 U.S. Dist. LEXIS 103732 (E.D. Cal. June 9, 2022)	Buyer	Browsewrap	Arbitration Provision	Buyer was not bound by seller’s terms because she never saw the link to the Terms of Use as they were in a small font and an inconspicuous color.
9	Chien v. Bumble Inc., 641 F. Supp. 3d 913 (S.D. Cal. 2022)	Seller	Browsewrap/ Hybridwrap	Arbitration Provision	Buyer was bound by seller’s agreement because a pop-up blocker card containing the Terms and Conditions and a button stating “I accept” was reasonable notice.
10	Crawford v. Beachbody, LLC, No. 14cv1583, 2014 U.S. Dist. LEXIS 156658 (S.D. Cal. Nov. 5, 2014)	Seller	Browsewrap/ Hybridwrap	Forum-Selection Provision	An enforceable agreement was made because seller’s Terms and Conditions were in a conspicuous font directly below the “PLACE ORDER” button to complete the transaction.
11	DeVries v. Experian Info. Sols., Inc., No. 16-cv-02953, 2017 U.S. Dist. LEXIS 26471 (N.D. Cal. Feb. 24, 2017)	Seller	Browsewrap/ Hybridwrap	Arbitration Provision	Seller’s browsewrap agreement was valid because there was adequate notice when the phrase “Terms and Conditions” was in a different color and in close proximity to a clickable button.
12	Friedman v. Guthy-Renker LLC, No. 14-cv-06009-, 2015 U.S. Dist. LEXIS 24307 (C.D. Cal. Feb. 27, 2015)	Buyer	Browsewrap/ Hybridwrap	Arbitration Provision	Buyer was not bound by seller’s terms and conditions because the hyperlink to the terms was “buried” at the bottom of the screen and not enough notice was provided of their existence.
13	Hansen v. Ticketmaster Ent., Inc., No. 20-cv-02685, 2020 U.S. Dist. LEXIS 233538 (N.D. Cal. Dec. 11, 2020)	Seller	Browsewrap/ Sign-In-Wrap	Arbitration Provision	Seller’s browsewrap agreement was valid because assenting to terms was required before buyer had the option to purchase tickets from seller.
14	Moyer v. Chegg, Inc., No. 22-cv-09123, 2023 U.S. Dist. LEXIS 128352 (N.D. Cal. July 25, 2023)	Seller	Browsewrap/ Sign-In-Wrap	Arbitration Provision	Buyer was bound because she received conspicuous notice of the terms, which were hyperlinked right below a button that buyer needed to click to create an account.
15	Shultz v. TTAC Publ’g, LLC, No. 20-cv-04375, 2020 U.S. Dist. LEXIS 198834 (N.D. Cal. Oct. 26, 2020)	Buyer	Browsewrap/ Hybridwrap	Arbitration Provision	Buyer was not bound by seller’s browsewrap/clickwrap agreement because the checkbox next to the statement “I agree to the terms and conditions” was checked by default, requiring no act of assent by the user.
16	Colgate v. Juul Labs, Inc., 402 F. Supp. 3d 728 (N.D. Cal. 2019)	Buyer	Sign-In-Wrap	Arbitration Provision	Seller’s notice was not conspicuous enough to notify buyer because the hyperlink to the Terms and Conditions was not underlined, italicized, or visually distinct from the surrounding text.
17	Seneca v. Homeaglow, Inc., No. 23-cv-02308, 2024 U.S. Dist. LEXIS 33698 (C.D. Cal. Feb. 7, 2024)	Buyer	Sign-In-Wrap	Arbitration Provision	Seller’s sign-in-wrap agreement was not binding on buyer because buyer had already purchased services from seller when the agreement was presented, and the notice was not conspicuous.
18	Peter v. Doordash, Inc., 445 F. Supp. 3d 580 (N.D. Cal. 2020)	Seller	Sign-In-Wrap	Arbitration Provision	Seller’s agreement was notably similar to the agreement in Meyer and the notice text was conspicuous. Thus, the agreement was binding on buyer.
19	Regan v. Pinger, Inc., No. 20-CV-02221, 2021 U.S. Dist. LEXIS 33839 (N.D. Cal. Feb. 23, 2021)	Seller	Sign-In-Wrap	Arbitration Provision	Seller’s repeated notice that the creation of an account would constitute assent to the Terms of Service was enough to bind a user.
20	Serrano v. Open Rd. Delivery Holdings, Inc., 666 F. Supp. 3d 1089 (C.D. Cal. 2023)	Buyer	Sign-In-Wrap	Arbitration Provision	Seller’s webpage did not provide reasonably conspicuous notice of the terms and conditions because the notice text was small and in a light-colored font.

98 S. Cal. L. Rev. 419

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Sophie Lee*

* Executive Membership Editor, Southern California Law Review, Volume 98; J.D. Candidate 2025, University of Southern California Gould School of Law; B.A. History, Creative Writing 2022, Columbia University. Thank you to Professor Jonathan Barnett and Professor Jordan Barry for the thoughtful feedback and to my friends and family for their consideration and acceptance.

Stringing Along the Songwriter: Successes and Shortcomings of Copyright Policy in Title I of the Music Modernization Act

March 2025March 2025Tara Steinmetz*

Congress’s enactment of the Music Modernization Act (“MMA”) in 2018 introduced the most substantial revision to copyright law in two decades and represented a landmark moment for the music industry. Over the prior decade, the rise of music streaming had taken the music business to the brink of disaster, as many of artists’ most foundational rights within music copyright law proved fundamentally incongruent with a digital future. Amongst the worst hit were songwriters and composers whose royalties had so drastically declined that many throughout the industry felt it was just a matter of time before the profession ceased to exist.

The MMA—particularly its Title I—sought to revive the industry, and five years on from its passage, music industry leaders and lawmakers on Capitol Hill reopened a conversation around the law’s successes and shortcomings given the new era of technological innovation around the corner. Through the lens of music copyright law’s three policy goals—access, incentive, and reduction of transaction costs—this Note closely examines Title I’s implementation to date. It provides a new analysis of the law’s key provisions, including the accomplishments of the Mechanical Licensing Collective and the adoption of a new willing-buyer willing-seller royalty rate setting standard in the most recent Copyright Royalty Board rate proceeding. This Note ultimately argues that Title I of the MMA successfully responded to the most immediate challenges in music copyright law, effectively eliminating untenable transaction costs that left an antiquated licensing system nearly nonfunctional. However, it has achieved relatively marginal results for one of its central aspirations and one of the industry’s most looming concerns: the hollowing out of the songwriting profession, as artists can no longer afford to create for such little return. The plight of the songwriter thus remains one of the music industry’s most fundamental yet unanswered problems in the digital age.

INTRODUCTION

In June 2023, the Recording Industry Association of America, the nation’s leading trade organization for the recording industry, announced that Avicii’s 2013 hit song “Wake Me Up” had become the highest-selling dance track in the organization’s seventy-year history.¹ Just two months later, that August, the chart-topping track joined the ranks of just over forty songs ever to have reached two billion streams on Spotify.² When it was first released over ten years ago, the song quickly rose to become Spotify’s then-most streamed song of all time and Pandora’s thirteenth most streamed song of all time.³ However, in November 2014, Aloe Blacc, the now-famous artist who wrote and sang the song’s ubiquitous chorus, publicly revealed that the song had made only $12,259 in royalties off of 168 million streams on Pandora’s digital streaming platform.⁴ From there, the sum was split amongst the song’s publishers, Aloe Blacc, and his two other co-writers, leaving Blacc with less than $4,000 made off of the United States’ largest music streaming platform at the time.⁵

While Blacc once could have received consistent royalty payments from physical album and digital download sales, an antiquated copyright system controlling songwriters’ work left him and other songwriters defenseless in the new music streaming era. Blacc lamented that the digital age presented a disappointing irony that while more people than ever enjoyed widespread access to music and benefited from songwriters’ creative labor, songwriters were being paid out by streaming services at “abhorrently low rates” and struggling to make ends meet.⁶ Despite incredible demand for their craft, he said that songwriters like him had “no power” to protect the music they created, signaling to songwriters that their work was not valued.⁷

Blacc’s story was a dime a dozen in the 2010s as music streaming services rapidly became the primary mode of music consumption. Kevin Kadish, who wrote Meghan Trainor’s 2014 breakout hit “All About the Base,” told the House Judiciary Committee in a 2015 roundtable that he had made just $5,679 off of 178 million streams of the song,⁸ despite the fact that it had spent eight consecutive weeks at number one on the Billboard Hot 100—the longest of any female artist that year⁹—and was the bestselling song of the decade by any female artist.¹⁰ Kadish was just one of over a hundred testimonies at that roundtable relaying the plight of songwriters in the digital age.¹¹

While digital streaming rapidly transformed the music industry, the legal framework for music copyright fell drastically behind. Ad hoc solutions to monopoly and antitrust concerns from eras of long-dead technologies were cemented into the legal regime, saddling musical composition copyrights with an incoherent patchwork of restrictive copyright laws. Songwriters’ and composers’ most foundational rights thus reflected early twentieth-century problem-solving that was fundamentally incongruent with a digital future.

The shortcomings of the old music copyright landscape became evident throughout the 2010s’ massive decline of songwriter remuneration. Songwriters like Blacc and Kadish penned some of the most recognizable songs of the past decade and wrote hits for some of the country’s greatest pop stars. Yet still, Kadish asked members of Congress how he was to feed his family, making just $5,600 off about “as big a song as a songwriter can have in their career.”¹² Meanwhile, the majority of songwriters, accustomed to a generally middle-class life in their profession before the streaming era,¹³ would never write a song with anywhere near this level of success; for them, the situation was even more distressing.

Concurrently, music publishing companies, which often own and manage songwriters’ copyrights in whole or in part, encountered financial challenges mirroring those of the songwriters they represented. Even digital streaming providers felt the constraints of working within an outdated legal system, which made it nearly impossible to properly license songwriters’ works as required by their business model. Then-fledgling music streaming providers faced a barrage of infringement lawsuits, jeopardizing their ability to grow despite widespread public popularity.

In 2018, Congress enacted the Orrin G. Hatch–Bob Goodlatte Music Modernization Act (“Music Modernization Act” or “MMA”), a major step towards aligning the music industry with modern digital technology.¹⁴ The MMA emerged from a comprehensive negotiation amongst numerous industry players—from publishers and songwriters to record labels and recording artists to fast-growing digital music streaming services. It represented unprecedented consensus across the music industry.

The MMA amended Title 17 of the U.S. Code, also known as the Copyright Act, which, despite two decades of major technological innovation, had not seen any major revision since 1998.¹⁵ Its three titles each aimed to tackle distinct issues in the music copyright landscape. Title I, known more specifically as the Musical Works Modernization Act (“MWMA”), addressed songwriter and publisher concerns emerging from the digital age and is the focus of this Note. Specifically, it redefined the administration of the compulsory mechanical license in response to the incompatibility of interactive streaming services with the old music copyright regime.¹⁶ The remaining two Titles of the MMA addressed copyright concerns for recording artists: Title II, the Classics Protection and Access Act, fixed a gap in prior copyright law by bringing pre-1972 sound recordings under copyright protection, and Title III, the Allocation for Music Producers Act, enables music producers, mixers, and sound engineers to receive royalties on sound recordings.¹⁷

2023 marked the fifth anniversary of the Music Modernization Act, rekindling conversations around its successes and shortcomings, particularly concerning Title I. This Note will discuss the ways in which the development of Title I of the MMA embodies a classic copyright struggle between incentive, access, and transaction costs, arguing that while it aimed to better address deep transaction cost and incentive gap concerns arising from the streaming industry—and succeeds in doing so where an urgent solution was required—there remain important unresolved tensions in music copyright law for songwriters. The songwriters upon which the music industry is built still insist that their profession is dying, and early indicators suggest that the MMA did not go far enough to fully correct failures of traditional copyright policy goals. Ultimately, Title I of the MMA recalibrated messy transaction costs that became glaringly apparent in the pre-MMA regime, but policymakers have yet to strike the right balance between incentive and access that underlies copyright policy.

I. THE MUSIC COPYRIGHT LANDSCAPE

A. Mechanics of Music Copyright

1. Copyright Basics

Each song you listen to on the radio or stream on Spotify contains two separate copyrights: a copyright to the song’s sound recording, known as a master recording or a “master,” and a copyright to the underlying musical composition embodied in the sound recording.¹⁸ Thus, the performance and distribution of a song’s recordings trigger royalties payable to both the holder of the composition copyright and the sound recording copyright.¹⁹ Sound recording copyrights are held by record labels and artists, while copyrights to musical compositions are held by music publishers, songwriters, and composers.²⁰ For example, as depicted in Figure 1, SZA’s 2022 song “Kill Bill” is copyrighted as a master sound recording and as a musical composition.²¹ Use of the sound recording would require royalties to be paid to SZA’s record label, Top Dawg RCA, and SZA as the recording artist. Conversely, the song’s underlying musical composition and lyrics also have a copyright; royalties for its use would be distributed amongst the three rights-holding music publishers and three credited songwriters. While these two types of copyrights, in theory, are granted the same exclusive rights, the licensing regimes arising out of these two copyrights have diverged over time, altering how these two categories of rights holders benefit from their exclusive rights. This Note will focus on the copyright licensing regime for music compositions owned by publishers and songwriters, as Title I of the Music Modernization Act introduced a drastic alteration in this licensing landscape.

Figure 1. Two Copyrights, One Song

Sources: Adapted from Sarah Jeong, A $1.6 Billion Spotify Lawsuit Is Based on a Law Made for Player Pianos, The Verge (Mar. 14, 2018, 9:28 AM), https://www.theverge.com/2018/3/14/17117160/spotify-mechanical-license-copyright-wixen-explainer [https://perma.cc/2QHB-DTPY]. Copyright ownership data is from The MLC Public Work Search, The MLC, https://portal.themlc.com/search#work [https://perma.cc/T6LA-4Z6X] (searched under “Work Title” for the song “Kill Bill,” added writer name criteria, and searched for Rob Bisel).

Under § 106 of the Copyright Act, copyright holders gain six primary exclusive rights as a result of their copyright including (1) the right to reproduce the copyrighted work; (2) the right to prepare derivative works based upon the work; (3) the right to distribute copies of the work; (4) the right to perform the work publicly; and (5) the right to display the work publicly, a right tending to be less prevalent in music copyright beyond displaying lyrics publicly or online.²² Copyright holders thus can license these defined rights to any willing buyer.

The licensing of a musical composition can be broken down into two primary buckets. The right to perform a composition publicly, or a “public performance right,” generates what are known as performance royalties any time someone plays a composition copyright holder’s song publicly.²³ This right, therefore, is most likely to come into play when a song is played on the radio or performed live (and now, when streamed on demand).²⁴ These royalties, which will be of limited discussion in this Note, are administered through collective licensing organizations called performing rights organizations, or “PROs.” PROs are private, non-governmental entities that work on behalf of songwriters and publishers to license performance rights through “blanket licensing”—a licensing model that allows a licensee to use any works in a PRO’s catalog pursuant to the terms of a “blanket” agreement.²⁵ The second license, called a mechanical license, encompasses the right to “reproduce musical works in formats used for mechanical playback.”²⁶ Money paid to use these licenses is known as a mechanical royalty.²⁷ Typically, songwriters and composers “sell or license their composition copyrights to publishing companies, which will administer the copyright in return for 25–50% of the proceeds.”²⁸ In such arrangements, licensees pay royalties to the publishers, who take their cut and distribute the remaining funds to the songwriters they represent.²⁹ As seen in the Figure 1 example, SZA’s “Kill Bill” is co-owned by three publishing companies, each of which receives royalties based on an agreed-upon percentage share of ownership in the song. Subsequently, these publishers distribute royalties to the songwriters they represent after taking their cut from the royalty pool.³⁰

Figure 2. Basic Framework of Copyright Royalties Within a Song

Source: Adapted from Ben Lowe, What Are Music Royalties? The Difference Between Recording and Composition Royalties, Songtrust (Feb. 16, 2023), https://blog.songtrust.com/what-are-music-royalties [https://perma.cc/3E6F-UMA8].

2. Understanding the Compulsory Mechanical License

To understand the mechanical license’s original purpose, it is helpful to briefly look at its origin. In 1908, the Supreme Court decision in White-Smith Music Publishing Co. v. Apollo Co. held that piano rolls—scrolls of perforated paper used in player piano devices to mechanically operate piano keys—did not infringe upon a composition’s copyright because they did not constitute “copies within the meaning of the copyright act.”³¹ Thus, under White-Smith, only traditional copies of sheet music were deemed entitled to protection, and songwriters and composers (or the publishers that represented them) were powerless when others reproduced their music mechanically. While the Court hesitated to expand its understanding of composition copyright protection, Congress responded by establishing the mechanical license in the 1909 Copyright Act, mitigating songwriters’ and composers’ drastic loss of control over their musical compositions.³² Today, “mechanical” music production is largely gone, making the mechanical license’s name and history a cause for confusion when contemplating how such a license might map onto modern technology. Regardless, the mechanical license still refers to the distribution of a piece of music—including on vinyl, CDs, digital downloads, and distribution via streaming services.

While the establishment of a mechanical right brought great relief to music composition copyright holders at the time, it came with one catch—a compulsory licensing requirement.³³ This compulsory license, created under § 115 of the Copyright Act, was the first of its kind in copyright law.³⁴ It converts the copyright holder’s right to license into an obligation to license, allowing interested licensees to use a copyright holder’s composition without permission, provided that they pay a set mechanical royalty fee and comply with a specified list of statutory requirements.³⁵ Thus, if you wish to cover SZA’s song “Kill Bill,” you do not need to ask the “Kill Bill” songwriters or their publishers for permission, though you are obligated to pay a royalty fee and adhere to statutory requirements. Similarly, when interactive music streamers like Spotify³⁶ seek a license to stream “Kill Bill” on their platforms, these companies are not required to ask the songwriters or publishers for permission—they, too, are responsible only for the statutory fee and requirements.³⁷

Beyond imposing a compulsory license regime, the Copyright Act set royalty payments at a frozen statutory rate, which was well below market value at a mere two cents per use.³⁸ This fixed rate’s inability to adjust, even in the face of inflation over the next seventy years, led to its significant criticism as an injustice to composition copyright holders.³⁹ Eventually, the 1976 Copyright Act created a statutory rate-setting entity, the Copyright Royalty Tribunal (“CRT”), to adjust rates at five-year intervals.⁴⁰ The tribunal was the predecessor to the current rate-setting entity, the Copyright Royalty Board (“CRB”), established by Congress in 2004.⁴¹

Before the MMA’s enactment, the CRB (and previously, the CRT) was guided by four copyright policy goals defined in 17 U.S.C. § 801(b) to determine adjusted compulsory license royalty rates.⁴² These “801(b) [policy] factors,” as they came to be known, were intended to “identify the royalty amount that would reward copyright owners and disseminators commensurate to their ‘relative roles’ in providing the public with access to creative works,”⁴³ reflecting the standard utilitarian theory of copyright discussed later in this Note.⁴⁴

Despite the establishment of policy factors claiming to prioritize “fair return” to creators in consideration of “fair income under existing economic conditions,”⁴⁵ the policy-driven statutory rates nonetheless continued to depress mechanical licensing rates by “plac[ing] artificial limits on the free marketplace.”⁴⁶ Notably, one of the MMA’s main goals was to address grievances with the rate-setting process.

B. Complicating the Picture: The Rise of Streaming

For decades, lawmakers dealt with new technologies and the copyright questions they posed by bolstering a “patchwork of laws, industry conventions and private deals.”⁴⁷ Over time, the music copyright landscape has become increasingly fragmented and complex, contorting to fit each new iteration of technology.⁴⁸ This confusing legal scheme ultimately came to a head as digital streaming providers, or “DSPs,” began to dominate the music industry.⁴⁹

Imposing mechanical royalty obligations upon discrete products such as CDs or digital downloads ultimately proved relatively straightforward, despite initial backroom quarrels about which exclusive rights were implicated by these technologies.⁵⁰ For each record manufactured and distributed or each digital copy downloaded, publishers are paid a set mechanical royalty rate—currently set at twelve cents per copy.⁵¹ Because these are privately owned copies of music, each play is not a public performance, and thus, no performance royalty payment is required.

Ironing out royalty calculations for DSPs was much more complicated. When a listener streams a song aloud, is that a public performance, much like terrestrial radio? Or is it a mechanical reproduction and distribution of a song, like a digital download? Here, the traditional line between a performance and a mechanical distribution is not so clear.⁵² To help with this dilemma, DSPs are categorized into two modes of digital music delivery—noninteractive and interactive.⁵³ Noninteractive streaming services, such as Pandora’s traditional genre-based, radio-like streaming platform, “substantially limit user control” of the music they consume, as the platform makes most of the user’s listening choices.⁵⁴ Since this type of streaming was similar to radio, it was eventually determined that songwriters would only get performance royalties for noninteractive streams, mirroring what a songwriter would receive if the radio played their song on air.⁵⁵ In contrast, interactive streaming platforms, such as Spotify, Apple Music, and Amazon Music, allow listeners to stream songs on-demand (“interactively”) by selecting and immediately transmitting the music they wish to listen to.⁵⁶ These platforms fit neither a radio model nor a CD or download model, and existing law failed to provide guidance for resolving this tension. Thus, as interactive DSPs burst into the industry in the late 2000s, legal disputes broke out between publishers and DSPs to decide whether, upon deep analysis of streaming technology, such streams implicated either performance or mechanical rights.⁵⁷

Figure 3. U.S. Recorded Music Revenues by Format

Source: U.S. Music Revenue Database, Recording Indus. Ass’n of Am., https://www.riaa.com/U-S-SALES-DATABASE [https://perma.cc/2X4U-6EG4] (toggled date range from 1998 onwards and opted to adjust for inflation). It should also be noted that Figure 3 displays the source of all revenue in the industry—not just songwriter royalties—to indicate general trends in music consumption. Such revenue streams would be split among composition and sound recording copyright holders, depending on applicable copyrights and contractual agreements.

Publishing companies and songwriters vigorously fought for interactive streaming to encompass both performance and mechanical royalties.⁵⁸ Both royalties were two critical “pillars” of income that the industry had relied on for over a century,⁵⁹ and the industry worried—with good foresight⁶⁰—that music streaming would eat away at these traditional revenue sources from radio, physical sales, and digital downloads, which it so desperately depended upon for adequate income.⁶¹ DSPs inevitably pushed back, arguing that the publishers’ demands that they pay both performance and mechanical royalties for a digital transmission of a single song amounted to “double-dipping.”⁶²

Ultimately, the DSPs’ argument failed, and interactive streaming platforms were deemed to need both a public performance license—reflective of the instantaneous nature of streaming—and a mechanical license—reflective of DSPs’ distribution through streaming—to utilize a musical composition.⁶³ Thus, interactive streaming services, many of which began as small start-ups, had to invest an immense amount of time and money to properly license content from both publishing and sound recording stakeholders. This extraordinarily cumbersome licensing system posed a challenge to the growth of DSPs and, as will be discussed further in Section I.D, created a tension that significantly instigated the enactment of the MMA.⁶⁴

Unlike the simple mechanical rate for CDs and digital downloads, mechanical royalty rates for streams are determined by a complicated rate calculation formula.⁶⁵ The rates are calculated using the greater of (a) a designated percentage of a DSP’s total revenue, accounting for total earnings through both paid subscription and advertising revenue or (b) a designated percentage of the Total Content Cost (“TCC”).⁶⁶ TCC represents the total amount that a DSP spends on sound recording and music composition licensing for interactive streaming.⁶⁷ For instance, the most recent CRB rate proceeding for 2023 to 2027, Phonorecords IV, held that the DSPs’ mechanical royalty rate is the greater of 15.35% of their total revenue or 26.2% of TCC.⁶⁸ The rate measurement that is chosen is known as the “headline rate.” The amount DSPs pay for performance licenses is subtracted from the total money pool determined by the headline rate.⁶⁹ The remaining amount is then compared to a “mechanical floor” rate, calculated by multiplying each paid DSP subscriber by a “per subscriber minimum” mechanical royalty fee.⁷⁰ The final mechanical rate is determined by the greater of the original bucket of money or the mechanical floor calculation. This summary merely offers a high-level overview of a complex calculation, highlighting the music copyright system’s intricate and often inaccessible nature when applied to digital streaming.

Figure 4. Summary of a Musical Composition Copyright

Source: Adapted from Jeong, supra Figure 1.

C. The Underlying Theory: Access, Incentives, and Transaction Costs

The patchwork of laws and licenses that make up the music industry, in theory, serve to honor very fundamental policy goals that lie at the heart of all copyright law. For music, in particular, policy is triangulated around three concerns: incentive, access, and transaction costs.

1. Balancing Incentive and Access

In the American free market, intellectual property presents a rare occasion in which the state grants a monopoly—albeit a limited one—to incentivize innovation. The Constitution outlines that from the outset of the country’s establishment, the United States sought to protect creators via the “promot[ion of] the Progress of Science and useful Arts . . . securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”⁷¹

Simply put by music attorney Donald Passman, it is entirely understandable that “if you created something and everybody had the right to use it without paying you, not very many people would go through the trouble of creating anything.”⁷² However, while a monopoly over one’s creation drives an incentive to produce and innovate, it equally presents the risk that rights holders may place exorbitantly high prices on their works, blocking the public from accessing the “science and useful arts” the Constitution aimed to protect in the first place. Thus, under the predominant utilitarian theory of copyright, the story of intellectual property law is an “ ‘access versus incentives’ tradeoff”—a balancing game between maximizing incentive for creators while tempering the scope of their exclusive rights so that consumers can still access and benefit from their work.⁷³ This tension repeatedly comes to the forefront during the proliferation of new dissemination technologies—from the advent of the piano roll to digital downloads to modern streaming services. Each technological inflection point has illustrated that the balance between access and incentive—and between control held by users and creators—is in constant flux.⁷⁴

The introduction of the compulsory mechanical license marked the beginning of numerous legislative decisions in the music regulatory regime that aimed to “recalibrate the balance between creators’ financial incentives and public access to expressive works” when rights holders’ exclusive control over their copyright and ability to pursue “free market licensing” would cause a failure of the copyright equilibrium.⁷⁵ When Congress crafted the 1909 Copyright Act in response to the White-Smith decision,⁷⁶ it hesitated to restore music composition copyright holders’ full exclusive rights.⁷⁷ It feared that doing so within the new mechanical licensing regime would allow copyright holders to “monopolize the business of [music] manufacturing” and prevent the growth of the piano player, a new music distribution technology with vast potential to increase the public’s access to music.⁷⁸ Thus, the compulsory license provided a new legal solution to the incentive-access tension; in exchange for continued compensation, composition copyright holders—songwriters, composers, and music publishers—have been forced to sacrifice the control over their copyright and their right to freely negotiate prices on an open market.

This policy objectively appears to honor a balance between incentive and access; however, the strict pre-MMA rate-setting mechanisms rarely resulted in adjustments to royalty rates over time,⁷⁹ raising questions as to whether the “incentive” provided by these statutory rates was able to respond to songwriters’ and composers’ shifting real-world incentives (or lack thereof). Notably, the prevailing utilitarian theory of copyright policy does not center artists and their incentives to create but rather views supporting artists with an incentive as a means to an end, with the goal of stimulating creation and idea production.⁸⁰ However, if copyright policy ignores artists and fails to truly consider whether it grants them adequate incentives, the access-incentive equilibrium will ultimately fail.

To properly gauge the effectiveness of the access-incentive equilibrium for artists, artists’ incentives must be examined within the industry structure in which they operate. In constructing the copyright system, Congress contemplated that creators would contract with corporate intermediaries such as record labels and publishers, transferring their copyrights in exchange for commercial distribution of their work.⁸¹ Thus, copyright incentive theory generally accounts for providing incentives to both economic actors—creators and intermediaries.⁸² Incentive theory “assumes a chain of value” in which money trickles down from listeners and music distributors to intermediaries and finally to the creators.⁸³ While creators sit furthest in the chain from any source of financial remuneration, they are the source of the creative work that copyright policy hopes to incentivize. Ultimately, one will not know if this “quid pro quo” between incentive and access is working unless one “know[s] how much the creators are getting from the bargain.”⁸⁴ Therefore, even though artist incentive is not the sole purpose of copyright policy, this Note frequently homes in on the growing disincentive to create in the songwriting field, both pre- and post-MMA, which jeopardizes the songwriting profession and the basic copyright equilibrium.

2. Reducing Transaction Costs

For nearly all copyright interests in the American “free market licensing” system, “creators of . . . copyrighted works . . . are free to choose their licensees and negotiate royalties.”⁸⁵ This free-market commitment falls away in a limited number of exceptions; only five categories of compulsory licenses exist—three of which are implemented within the music copyright regime, with the most obtrusive and well-known being the compulsory mechanical license.⁸⁶ What makes music different? Given that the incentive-access trade-off underlies all areas of copyright law, it cannot be the sole explanation for singling out songwriters to be subjected to a compulsory license.

Theorists widely believe that the strongest explanation for the compulsory license is that it not only balances incentive and access but also serves to “remedy market failures related to transaction costs by allowing licensees to bypass costly or unfeasible negotiations.”⁸⁷ When the cost of a licensing regime to the parties is “substantial and logistically difficult,” transaction costs associated with licensing become prohibitively high and deter dissemination of copyrighted work.⁸⁸ This concern of prohibitively high transaction costs is specific to music due to how music is inherently accessed and consumed by the public; unlike other forms of copyrightable works, it is comprised of numerous little pieces of content, all of which must be individually negotiated and licensed in order to be distributed as a larger catalog.⁸⁹ The compulsory license thus aims to eliminate, or at least reduce, the cost of licensing negotiations. Although transaction costs have become the predominant explanation for the persistence of the mechanical license today, some caution that this justification has also been overstated.⁹⁰ For example, on the public performance side of music composition copyright, PROs issue blanket licenses⁹¹ that similarly function to reduce transaction costs that arise from licensing each discrete piece of music.

Access, incentive, and transaction costs cannot, on their own, explain the logic of copyright policy. However, together, this triad of policy considerations is an essential framework to consider when assessing the legal landscape before the MMA’s enactment to explain its aims and determine the overall efficacy of the legislation post-MMA.

D. Framing the Issue: Where Are We Before the MMA?

The challenge underlying copyright law is finding an equilibrium at which the three competing policy goals can coexist. The Music Modernization Act emerged from a rising tension between what publishers and songwriters felt was a desperate imbalance between the incentives provided to them by the music copyright system and the public’s unprecedented and increased access to their work via modern music streaming services. If more people were listening to music than ever before thanks to the mass proliferation of DSPs, why weren’t creators and their intermediaries sharing in that success?⁹² This tension was most acutely felt by songwriters, who sit at the bottom of the copyright “chain of value” and whose livelihoods were increasingly at risk due to the diminishing return for their creative works.⁹³ Publishers, as corporate entities, suffered less financially overall than individual songwriters but were still concerned about their decline in revenue at the hands of the music streaming landscape. Publishers, represented by the National Music Publishers Association (“NMPA”), became a major lobbying force for change and ultimately were key negotiators in drafting the MMA.

Recording artists and record labels had similar grievances with DSPs, although to a lesser degree, due to less government interference and noticeably higher royalties granted to sound recording copyright holders. Further, recording artists could earn revenue through concert ticket sales to help buffer some of the DSP-era royalty losses.⁹⁴ Concerts were potentially a substantial source of income for successful artists—and a source of income not available to songwriters. Nonetheless, mounting concerns around the evolving music industry also drew in the Recording Industry Association of America (“RIAA”) as another key player in crafting the MMA.

1. Compulsory Mechanical License Causes Drastic Disincentive

Musical composition copyright holders were particularly at a detriment prior to the MMA, given the limitations imposed on their copyrights by extensive governmental regulation, including compulsory mechanical licenses and restrictive consent decrees imposed on PROs.⁹⁵ Further, DSPs and composition copyright holders alike found that the compulsory mechanical license did not sufficiently reduce transaction costs, as the mechanical licensing regime prior to the MMA proved far too cumbersome to allow for streamlined payments to rights holders. In 2015, in response to mounting dissatisfaction with the convoluted music copyright regime, the U.S. Copyright Office released a comprehensive 245-page report (hereinafter referred to as the Copyright Office Music Marketplace Report), studying the landscape and proposing changes that would “promote greater fairness, efficiency, consistency, and transparency.”⁹⁶

The Copyright Office Music Marketplace Report admitted that “[v]iewed in the abstract, it is almost hard to believe that the U.S. government sets prices for music. In today’s world, there is virtually no equivalent for this type of federal intervention.”⁹⁷ For composition copyright holders, the singling out of their works to be placed under a restrictive, involuntary licensing regime has caused deep frustration, as the mechanical compulsory license left them subject to rates far below free-market compensation. To be clear, songwriters and publishers are free to negotiate with mechanical licensees—and they often do. However, as mentioned in Section I.A, the pre-MMA statutory rates set by the Copyright Royalty Board (and its prior equivalent, the Copyright Royalty Tribunal) prevented free market rates from being achieved; even though licensees rarely paid the bare minimum statutory rate, the low statutory rate tethered negotiations to a lower price window.⁹⁸ CRB has openly acknowledged that their rates “have considerable impact on the private agreements that enable copyright users to clear the rights for reproduction and distribution of musical works.”⁹⁹

As such, publishers and songwriters were left with no real leverage when attempting to negotiate against licensees who knew that if publishers or songwriters defected from a negotiation, the licensee could just go get the license using the compulsory rate. To illustrate the extent to which the compulsory license depresses profits earned by songwriters, one can look at the overall split of Spotify revenue in 2016: for every dollar of revenue earned on Spotify, 58.5 cents went to the owner of a song’s sound recording (a record label or the artist), 29.38 cents stayed with Spotify as profit, 6.12 cents went to the composition rights holder to cover performance royalties, and 6 cents went to the composition rights holder to cover mechanical royalties.¹⁰⁰ Apple Music’s revenue distribution did not look all that different, though it paid about 6.75 cents on mechanicals and 6.75 cents on performance rights per dollar of revenue.¹⁰¹ While this is framed in terms of revenue split per dollar, each stream produces just a fraction of a cent for a songwriter, requiring approximately 1,000 streams for composition copyright holders to earn a single dollar.¹⁰² Each royalty paid for the use of a musical composition is even further divided amongst the publisher and the songwriters who worked on the composition.

Figure 5. What Happened to a Dollar of Revenue on Spotify and Apple Music (in 2016)

Source: Adapted from Manatt, Phelps & Phillips, supra note 100.

Overall, streaming represented a shift toward listening behaviors that do not “generate significant income for artists.”¹⁰³ Streaming ushered in an overall increase in performance royalties earned; however, this slight increase in revenue—at royalty rates already persistently lower than publishers or songwriters would like—was unable to make up for the significant “downward spiral of record sales and therefore artist and mechanical royalties.”¹⁰⁴ Many songwriters at the time reported “ ‘a reduction of 60 to 70% or more’ in mechanical royalties” since the introduction of streaming services onto the music market, noting that their amount of mechanical royalties only continued to decrease rapidly.¹⁰⁵

The below-market statutory rate for mechanical royalties and the shift in revenue sources gradually diminished the overall incentive for songwriters to write music in the pre-MMA market.¹⁰⁶ By the time the MMA was enacted in 2018, it had been years since songwriters felt they could make a living off songwriting as they had before the era of streaming services. In 2014, Nashville Songwriters Association International reported that Nashville, a well-known national hub for songwriters, saw an 80% decrease between 2001 and 2014 in individuals claiming songwriting as a full-time occupation, lamenting that many songwriters have been “forced out of the profession” in the wake of digital streaming.¹⁰⁷ In 2016, acclaimed music attorney Dina LaPolt told one songwriter client, who was shocked by her measly royalty check after achieving a hit song, that “unless streaming rates [] changed and the music-licensing system [was] overhauled for the digital age, the profession of songwriting was on its way to extinction.”¹⁰⁸

By applying the incentive theory of copyright to examine the music industry’s structure, one can see the creator and intermediary dynamic at play, such that even though publishers decried their diminishing incentives to administer the copyrights they held, even less remuneration trickled down to the creative mind whose work copyright policy seeks to encourage.¹⁰⁹ While publishers’ services are an essential part of the music industry, the incentive problem was exacerbated by the degree to which the publisher’s share of royalties also diminishes a songwriter’s return for their efforts, as they stand last in line for compensation.

It has often been asserted that when the compulsory license forces rights holders to give up control over otherwise exclusive intellectual property rights, the expected trade-off is, at the very least, an assurance of payment to copyright owners—this is what makes the license work within the balance of copyright policy goals.¹¹⁰ In reality, this guarantee of payment meant little in the way of incentives once DSPs became the primary mode of music consumption, and the royalty system no longer matched the predominant music technology of the day. While testifying in front of the Senate Judiciary Committee in favor of passing the MMA, Grammy-award-winning songwriter Josh Kear said of his community of songwriters in Nashville, “we have lost our entire middle class of songwriters—they’re gone.”¹¹¹ Grammy-nominated artist Will Sheff affirmed this sentiment, telling the Washington Post that “ ‘[a]round 2011, the bottom fell out,’ . . . [marking] the beginning of the end of a ‘musical middle class.’ ”¹¹²

While copyright policy does not center incentives to artists, the Supreme Court has acknowledged that, at a minimum, “[t]he rights conferred by copyright are designed to assure contributors to the store of knowledge a fair return for their labors.”¹¹³ The bounds of such a “fair return” may be debated; however, when incentive dissipated and songwriters left the profession en masse, something was surely off in the copyright access-incentive equilibrium. Ultimately, in the context of a new digital age, the pre-MMA legal regime failed to maintain an adequate incentivization system as had been a pillar of copyright law.¹¹⁴

2. Compulsory Mechanical License Overflows with Transaction Costs

In addition to songwriter grievances, the pre-MMA system also strained the growth and capabilities of DSPs. Streaming companies were immediately overwhelmed by the licensing demands of their business model as they attempted to manage a catalog of tens of millions of songs and an untenable amount of data.¹¹⁵ Further, many of the song files that record labels shared with DSPs for upload onto their services had missing songwriter identification in their metadata, meaning that DSPs often had no idea to whom they owed money on the publishing and songwriter side.¹¹⁶ Due to a simultaneous inundation of information and a lack of information, unpaid mechanical royalties began to pile up.

In the pre-MMA legal regime, section 115 of the Copyright Act allowed DSPs to file a “Notice of Intent” (“NOI”) with the Copyright Office for each song it intended to use.¹¹⁷ By declaring their intent to use a copyrighted musical composition via an NOI, DSPs were granted legal immunity from copyright infringement “until and if the songwriter or their publisher could be identified.”¹¹⁸ DSPs filed NOIs by the tens of thousands, but without the infrastructure to locate rights holders, NOIs essentially enabled DSPs to use copyrighted material without being held accountable for finding and paying rights holders. At the same time, the Copyright Office did not review notices for “legal sufficiency” or errors¹¹⁹ and was overwhelmed by the massive volume of notices submitted by DSPs.¹²⁰

Further, rights holders bore the burden of claiming their royalties yet had no way of knowing when they went missing nor an understanding of how to claim them in a convoluted and complex system.¹²¹ This burden created yet another layer of transaction costs on the rights holders’ side; not only would it take immense time and effort on the part of the rights holder to navigate an impossibly complex web of mechanical licenses, but it also required cultivating a copyright licensing expertise that many creatives in the music industry simply did not have. Very frequently, this hurt independent songwriters the most, as they had little business or legal savviness to understand how and why they needed to assert their copyright ownership.

The mechanical licensing system quickly proved inefficient, burdensome, and unaccountable to rights holders in the context of the streaming business model. As NMPA President and CEO David Israelite pointed out in the MMA’s Senate Judiciary Committee hearing, the music industry was relying on “a [licensing] system that was built for licensing individual albums—ten at a time, twelve at a time—and using it to try to empower digital companies to put up 40 million songs overnight”; he asserted bluntly, “It doesn’t work.”¹²² By 2015, an estimated $50 to $75 million dollars sat unmatched and unpaid by DSPs.¹²³ The music industry thus dubbed these unmatched royalties “black box royalties.” This problem came to a head as publishing companies began launching lawsuits against the DSPs for, in essence, operating their businesses under a model that relied on copyright infringement, even if unintentionally.¹²⁴ In interviews, Israelite estimated that for roughly twenty-five percent of all streams, composition copyright owners were not properly identified, and “as much as 25 percent of royalty payments [were] not being paid to publishers, or [were] being distributed to the wrong entities.”¹²⁵ DSPs, daunted by lawsuits and claiming they wanted to “pay every penny,” began calling on the industry to work with them to develop a transparent and accountable way to manage publishing rights.¹²⁶

Here, the problem pre-MMA was twofold. First, the compulsory mechanical license was no longer serving its purpose of reducing the burden of transaction costs because while licensing negotiations were feasible due to the compulsory license, the DSPs’ task of complying with licensing obligations was still near logistically impossible—DSPs simply could not figure out who to pay. Rather than prohibiting the DSPs from operating, the pre-MMA licensing regime compelled DSPs to function on an “infringement model,” which was damning to the legitimacy of music’s copyright laws. While the compulsory mechanical license may have once been an effective mechanism to constrain transaction costs, when imposed upon streaming technology, the transaction costs of mechanical licensing had shifted and were ultimately too high. Secondly, this issue further harmed the already-diminished incentive for songwriters to create because even as they produced work, it took ages to see that money return to their pockets—if it ever did.¹²⁷

Amongst the triad of copyright policy goals, it at least seemed that access to music was at an all-time high. Subscribers to DSPs only continued to increase, and Americans were listening to more music than ever. However, increased access cannot be considered without its tether to copyright’s countervailing need to incentivize creation. Rapidly decreasing songwriter incentive to create, coupled with the public’s disproportionate new-found access to music, likely signaled that the pre-MMA access-incentive trade-off was sorely out of balance.

Additionally, as publishers and songwriters fought to increase royalty rates, the DSPs had their own impending “access” problem looming over them. Since its invention in the mid-2000s, music streaming had never been profitable; even the major DSPs consistently operated at a loss since their founding.¹²⁸ Though the DSPs’ business models ushered in a new level of public access to music, it remained a concern that these tides could turn. For how long could DSPs continue providing such a high level of access if their business model did not turn a profit? This long-term concern made DSPs fearful that royalty rate increases would stifle company revenue and further challenge the DSPs’ business model.

Table 1. Pre-MMA Policy Concerns
Policy Goal	Score
Incentives	Incentive for songwriters is LOW, as attributable to a minimal statutory royalty rate, governmental restrictions on both types of songwriters’ royalties, and industry structure providing equal payout between publishers and songwriters.
Transaction Costs	Transaction costs are HIGH. While the compulsory license reduces transaction costs of licensing negotiation, matching royalties to songwriters imposes high transaction costs for DSPs and songwriters alike.
Access	Access is HIGH in the short term with concern that this variable may shift if DSPs continue operating at a deficit.

II. SHIFTS UNDER TITLE I OF THE MUSIC MODERNIZATION ACT

The MMA passed the House and Senate unanimously in 2018 and received unprecedented support from a multitude of players in the music industry. It signified the culmination of years of negotiation and bargaining between music publishers, songwriters, and DSPs, which legislators facilitated in a moment when the parties’ interests were at last relatively aligned.¹²⁹ DSPs, faced with a wave of crushing infringement lawsuits, had a major incentive to support the passage of an act that would accommodate their business model and protect them from future liability.¹³⁰ Songwriters and publishers, on the other hand, were desperate for a legal solution that would restore the value of their mechanical rights to something comparable to those before the streaming age or that, at the very least, resulted in a fairer system than the one they had been operating in for nearly a decade.¹³¹ Signed into law on October 11, 2018, the Music Modernization Act was the most substantial revision to copyright law in two decades.¹³² Title I of the MMA, known as the Musical Works Modernization Act, not only endeavored to adapt the Copyright Act’s musical composition provisions to better accommodate streaming technology, but it also tweaked aspects of the musical composition copyright in ways that bettered the position of publishers and songwriters overall to counter issues raised by the streaming model.

At a high level, Title I of the MMA implemented three primary changes to improve how songwriters received their royalties and the standard for calculating them. First, it allowed DSPs to obtain a blanket mechanical compulsory license specifically for streaming mechanicals that would cover all musical compositions held in a licensor’s catalog, much like the blanket license used for granting public performance rights.¹³³ In conjunction, Title I also established the Mechanical Licensing Collective (“MLC”), a non-governmental, non-profit entity authorized to “offer and administer blanket licenses” to DSPs, “[c]ollect and distribute royalties from digital music providers,” and maintain a “musical works database” to track information about licensing and ownership of mechanical rights.¹³⁴ These first two major changes enacted in Title I were designed to resolve “long-festering pain points” between publishers and DSPs due to the DSPs’ inability to pay out licensing obligations under the pre-MMA legal regime.¹³⁵ As discussed further in the next subsection, these two additions to music copyright law aimed to address head-on the mechanical license’s growing transaction cost problem that emerged from DSPs’ massive streaming catalogs. Lastly, Title I imposed alterations to the royalty tribunal procedures, “direct[ing] the Copyright Royalty Board (CRB) . . . to employ a ‘willing buyer, willing seller’ standard to reduce the potential for compulsory licenses to undervalue the mechanical right.”¹³⁶ Ultimately, Title I of the MMA represents an acknowledgment that the fundamental balance of interests demanded by copyright policy was no longer in check.

A. Addressing the Black Box Royalty Problem

1. The MMA’s Solution: Creating the MLC

Three years prior to the passage of the MMA, the Copyright Office Music Marketplace Report had concluded that a centralized, comprehensive database of mechanical copyright ownership “would substantially enhance transparency in the music licensing system, reduce transaction costs, and facilitate direct licensing through private negotiation in the open market.”¹³⁷ Other music licensing regimes, such as public performance licensing, successfully used the combination of a collective licensing organization and a blanket license to streamline similar transaction cost issues, providing a potential model for success.¹³⁸ Thus, throughout discussions about the MMA, the concept of a responsible collective licensing body was highly supported across the industry. The entity that was created, the MLC, serves the primary role of administering the new blanket licenses and royalties and maintaining a comprehensive database of mechanical copyright holders.

Under the MMA, DSPs also agreed to pay all costs associated with this new licensing entity.¹³⁹ Unlike any other existing licensing collective, the MLC does not take a commission from the royalty pool before distributing royalties, ensuring that composition rights holders retain one hundred percent of all royalties passed through the MLC and that their royalty money is not further diminished through the new collective licensing agency’s establishment.¹⁴⁰ In exchange, when DSPs obtain a blanket mechanical license from the MLC, they are broadly shielded from extremely costly infringement liability and burdensome statutory damages.¹⁴¹

At the outset of drafting the MMA, the growing multi-million-dollar pool of unpaid black box royalties presented one of the most pressing challenges to restoring order in the mechanical copyright system. Exorbitant transaction costs from individually licensing mass amounts of content—not to mention the ex-post transaction costs of litigating licensing failures—directly cut against the compulsory license’s original purpose and placed both copyright holders and DSP licensees in untenable positions. Thus, a blanket compulsory license under the MWMA, covering all songs under a single lump-sum royalty fee, represented a major solution to one of the most glaring problems in the pre-MMA digital copyright licensing space. It was to be administered by the newly formed MLC entity, which became officially designated to carry out the MMA’s statutory responsibilities by the Copyright Office in July 2019.¹⁴²

In January 2021, the MLC launched its full operation and began administering blanket licenses.¹⁴³ Only qualified DSPs are eligible to receive this blanket license,¹⁴⁴ and at the time the MLC became operational, it reported that over forty eligible DSP services had started using its blanket license.¹⁴⁵ DSPs now no longer have to individually license songs by the tens of thousands and, as a tradeoff for this newfound legal security, the DSP licensees must pay out the full cost of mechanical licensing fees to the newly formed MLC entity. On a monthly basis, each DSP sends the MLC data that logs all recordings used on the streaming service that month, as well as the corresponding mechanical royalties owed, which the MLC maintains in its “MLC Portal.”¹⁴⁶ It is then responsible for locating and paying out known rights holders in monthly payments,¹⁴⁷ the first one of which was completed in April 2021.¹⁴⁸ The MLC’s model ensures that DSPs regularly process and pay royalties for all licensed works—even those with missing or incomplete songwriter information—rather than allowing them to hold onto royalty money under the pretext that rights holders information was nonexistent or too hard for DSPs to track down.

After the MLC distributes royalties to known rights holders, it places all unmatched and unclaimed royalties in an interest-earning account for three years, where they await a potential match with their copyright holders.¹⁴⁹ The MLC distinguishes between royalties that may be “unmatched,” such as the black box royalties that have no known association with any musical work in the MLC database, and “unclaimed” royalties, which are matched to a song but cannot be paid out because shares of the song have not yet been claimed by their rights holders.¹⁵⁰ Both types of royalties make up the sum of money pooled into this account. If, after three years, the royalties remain unmatched or unclaimed, they are liquidated to known copyright holders—both publishers and songwriters.¹⁵¹ Ultimately, while some unclaimed royalties may never make it into the hands of their rightful owners, the MLC’s pooling measure strengthens incentives for artists in the copyright system by ensuring that the money is, at the very least, redistributed amongst the rights-holding community. Prior, DSPs financially benefited from songwriters’ failure to locate their unmatched royalties, as the unpaid money sat in their pockets and created no incentive for DSPs to seek a solution to orphaned royalties.¹⁵² This further discouraged music composition rights holders, especially songwriters, who felt DSP’s unpaid use of their work signaled just how little both DSPs and the industry at large valued their contributions to music.

While the DSPs benefited from legal clarity as a result of MLC’s creation, the legislation largely arose from a recognition that songwriters needed to be “properly protected” and that a new mechanical licensing system required creating “sufficient incentives . . . to find the people the money [from royalties] belong[ed] to.”¹⁵³ With songwriters’ concerns placed at the center of the legislation, an independent collective like the MLC primarily protects and advocates for the mechanical rights of composition copyright holders. The MLC thus aims to ensure that, eventually, as few royalties as possible will languish in the ownerless “black box” pool by creating an accessible mechanism for songwriters and publishers to claim ownership of a work.

Though DSPs still escaped the primary burden of locating and paying out rights holders, the MMA took part of this burden off the shoulders of rights holders as the MMA established the MLC to increase transparency in the mechanical licensing process and conduct outreach to artists. Title I of the MMA imbued the MLC with the responsibility of “engag[ing] in efforts to identify musical works . . . and locate the copyright owners of such musical works,” creating an obligation on the part of the MLC to seek out rights holders rather than allow black box royalties to accrue without accountability.¹⁵⁴ A central part of executing this mandate included creating a “musical works database” within the MLC Portal, known as the MLC Public Work Search.¹⁵⁵ The public can access the records in the Public Work Search, while verified “members”—payable publishers or songwriters—can use related portals to register their works or find and claim an ownership share in an already registered work.¹⁵⁶ Each MLC database entry contains comprehensive information about the listed song, including the percentage of ownership share in the work, the identity and location of the composition copyright owners, if known, and ownership information regarding the sound recording that embodies the musical work.¹⁵⁷ For example, Figure 6 shows MLC entries for two versions of SZA’s “Kill Bill.”¹⁵⁸ The entry for the song’s original release indicates that the MLC database has information for 100% of the “total known shares” of songwriter ownership, including songwriter names and publishers. In contrast, the version of “Kill Bill” featuring Doja Cat indicates that only 82.5% of the song’s ownership is accounted for in the MLC Portal, so the song’s publisher or collaborating songwriter may search the song and discover whether their share of the work remains unattributed.

Figure 6. MLC’s Comprehensive Database: The Public Work Search

Source: The MLC Public Work Search, supra note 21 (searched under “Work Title” for the song “Kill Bill,” added writer name criteria, and searched for Rob Bisel).

The MLC’s user-friendly database lowers the barrier to entry for copyright holders to assert ownership of their works, making it feasible for them to monitor their rights in licensing transactions. Additionally, by increasing assurances that songwriters will get paid correctly and reliably for what they are owed, the MLC’s Portal and Public Work Search should resolve gaps in songwriter pay and bolster the incentive for creators.

The MLC also works with another entity established in Title I of the MMA called the Digital Licensee Coordinator (“DLC”), which represents DSPs in the new post-MMA licensing system and helps the MLC carry out its mandate.¹⁵⁹ The DLC is required to “assist the [MLC] in the efforts . . . to locate and identify copyright owners of unmatched musical works” through active outreach to the songwriting community.¹⁶⁰ Together, the MLC and DLC create resources and host webinars oriented toward independent songwriters to educate them on how to assert their rights in the post-MMA copyright regime.¹⁶¹ The accessibility and transparency built into the MMA aim to further lower the transaction cost barrier for DSPs and rights holders alike to fulfill obligations that accompany the compulsory license.

Lastly, Title I of the MMA sought to make music composition copyright holders whole by capturing the millions of dollars of unpaid royalties held by the DSPs prior to the MMA’s passage, bestowing upon the MLC the responsibility of uniting historical unmatched royalties with their proper rights holders.¹⁶² In February 2021, twenty-one DSPs finally transferred over $424 million to the MLC in historical unmatched royalties and provided accompanying usage data to help determine how the money should correspond with eventual royalty payments.¹⁶³ Despite the DSPs’ continued use of songwriters’ content on their platforms over the preceding decade, this money represented the first mechanical royalty payment made for content with “unmatched” copyright owners. The MLC made its first payment of formerly unmatched royalties from the $424 million pool in June 2022.¹⁶⁴ As of June 2023, the MLC has distributed $24 million of the originally unpaid, unmatched royalties.¹⁶⁵ The MLC has not yet paid out all historical unmatched royalties; however, its success in doing so will play an essential role in restoring songwriters’ trust in the music copyright system to protect their work and provide the financial incentives promised by copyright’s underlying policy goals.

2. Unfolding Reality: The MLC in Action

As reasonably expected for the establishment of a new entity, the MLC was not operational until over two years after the MMA was passed, and only a few years have since passed for the MLC to prove its worth as a solution to the publishers’ and songwriters’ concerns.¹⁶⁶ That said, the MLC achieved a robust operation rather quickly, with over 30 million songs registered in its database as of March 2023¹⁶⁷ and having already distributed over $1.5 billion in mechanical royalties as of its recent metric announcement in October 2023.¹⁶⁸

While these metrics contextualize the growth of the MLC, they reveal less about the entity’s success in achieving its founding goals. In this regard, however, it also seems relatively successful in its early stages, though much remains to be seen.¹⁶⁹ As of March 2023, the MLC announced that it had achieved a consistent 89% match rate for all royalty payments passing through the collective,¹⁷⁰ and in October 2023, the collective achieved a just slightly higher match rate at 90%.¹⁷¹ This match rate refers to the rate at which the MLC can properly attribute royalties to an existing song in its database, not the rate at which royalties are actually claimed, which still requires a proactive assertion of ownership by the copyright holder.¹⁷² With approximately 25% of all royalties deemed missing or unmatched before 2018, matched royalties have increased by about 15% between the pre-MMA system and now due to the MLC’s database and matching system.¹⁷³ The MLC’s CEO, Kris Ahrend, suggests that the more data the MLC receives, the more it will be able to close out this gap; the MLC continues to grow its database with the participation of its publisher and songwriter members.¹⁷⁴ Most recently, the MLC has partnered with five music data matching vendors to improve its match rate, though the MLC’s greatest challenge will remain in gathering data on its most difficult songs—“those created by DIY, unsigned songwriters, many of whom are still unaware of The MLC.”¹⁷⁵

Additionally, concerning the historical unmatched royalties accrued before 2018, $200 million of the original $242 million pool paid in February 2021 has been matched with copyright holders, meaning that the MLC has almost fully accounted for the historical void of rights holder information in just under three years after its founding.¹⁷⁶ Though it has paid out only a small fraction of these royalties to date, this is due to circumstances outside the MLC’s control.¹⁷⁷

In sum, the MLC is, on paper, doing what the MMA intended—just perhaps more slowly than songwriters and publishers would like. Though more work remains, initial data suggests that the MLC has absorbed a significant amount of the existing transaction costs that complicated and cluttered the pre-MMA mechanical licensing system. DSPs can no longer get away with licensing content for free, hundreds of thousands of unverified NOIs have been eliminated, and composition rights holders can seek out their work and lay claim to what they are rightfully owed.¹⁷⁸ There are, of course, criticisms of the MLC as well. Songwriters have protested the MLC’s refusal to publicize the sum of money it holds in unmatched royalties, claiming that the MLC has an incentive to refuse transparency, as the majority of its board is comprised of publishing company representatives who disproportionately benefit if the unmatched royalty pool remains orphaned.¹⁷⁹ These grievances indicate songwriters’ ongoing scramble for remuneration at the bottom of the value chain.¹⁸⁰ Thus, even though addressing songwriter incentive was one of the MMA’s core goals, it has become likely that MLC can only do so much to remedy this concern.

B. A New Regime for Royalty Rate Setting

1. The MMA’s Solution: A Willing Buyer–Willing Seller Rate

As previously explored, one of the direst realities prior to the passage of the MMA was the rapidly disappearing songwriter profession. Statistics and widespread testimony illustrated just how much songwriters’ livelihoods had been altered by the rise of DSPs; this reality was a repeated feature of discussion at the Senate’s hearing on the MMA in 2018 and framed a sense of urgency around passing the law.¹⁸¹ While unmatched and unpaid royalties accounted for a fraction of songwriters’ diminished incentive, the bottom line remained that there was simply no longer enough money being generated by mechanical royalties in the digital age. The massive reduction in overall mechanical royalties caused by streaming’s replacement of physical albums or digital download sales and the long-depressed statutory royalty rates produced an untenable situation for songwriters. Though publishers, too, felt the strain on mechanical royalty revenue, the plight of songwriters demanded resolution by the MMA for copyright policy to achieve its stated goals.

Title I of the MMA, therefore, introduced a new standard for the CRB to use when determining mechanical royalty rates—not only for streaming but for all other mechanical royalties as well. The MMA shifted the CRB’s rate-setting standard from the highly criticized “policy-oriented” rate to a “willing buyer–willing seller” rate meant to reflect market demand. The standard, which the music industry had demanded for years, requires that the CRB “establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller.”¹⁸² As cited in another CRB rate proceeding that utilized the willing buyer–willing seller rate standard, “the Judges look to . . . a hypothetical marketplace, free of the influence of compulsory, statutory licenses.”¹⁸³

To make rate determinations under this standard, CRB judges are also to “base their decision on economic, competitive, and programming information presented by the parties,” which may include factors like the degree to which a compulsory licensee’s service interferes with or enhances a musical work copyright holder’s other revenue streams and the parties’ “relative creative contribution, technological contribution, capital investment, cost, and risk.”¹⁸⁴ Before the MMA, the CRB followed a “limited-evidence process,” and any market data was excluded from consideration when setting mechanical rates.¹⁸⁵ Thus, while the original 801(b) factors demanded that the CRB consider “fair income under existing economic conditions” as suggested by the incentive theory of copyright policy, pre-MMA rates clearly could not fully adjust for economic realities when the legal regime excluded market data from consideration.¹⁸⁶

Despite the full legislative history showing the initial access-incentive justification for the mechanical compulsory license,¹⁸⁷ in the 2015 Copyright Office Music Marketplace Report, the Office asserted that a compulsory license “should exist only when clearly needed to address a market failure.”¹⁸⁸ The report explicitly called on Congress to adopt a “uniform market-based ratesetting standard,” stating that “[t]here is no policy justification for a standard that requires music creators to subsidize those who seek profit from their works.”¹⁸⁹ In taking this position, the Copyright Office acknowledged that the supposed access-incentive reasoning behind the compulsory license overtly restrained creators’ sense of incentive by forcing them to underwrite licensees’ royalty costs at their own expense. The willing buyer–willing seller rate-setting standard had also already been implemented in most other CRB rate proceedings.¹⁹⁰ Some critics argue that shifting from a policy-oriented analysis to a willing buyer–willing seller analysis abandons copyright’s underlying policy goals;¹⁹¹ however, the failure of 801(b) factors to adequately support incentive, as shown by the Copyright Office’s findings, suggests that a willing buyer–willing seller rate could better account for some typical copyright policy considerations than the original policy factors themselves.

Additionally, songwriters and publishers advocated for this change in hopes that it would lead to higher compensation, reinforcing this provision’s goal of recalibrating the incentive-access tradeoff. Though the willing buyer–willing seller rate would not fully create free market mechanical rates, as would be possible without any compulsory license regime, theoretically, it at least mimics a free-market reality tempered by CRB review. David Israelite described these rate-setting alterations, stating that if “songwriters are to remain in a compulsory license prison,” the MMA’s rate-setting provisions “at least improve the conditions of their confinement.”¹⁹² As his tone connotes, publishers and songwriters generally would have much preferred the abolition of the compulsory license “prison” entirely, yet in the name of achieving consensus legislation, accepted the shift to the willing buyer–willing seller rate.¹⁹³ One skeptical songwriter described the songwriting community’s celebration of the willing buyer–willing seller rate as an “example of Stockholm Syndrome” in reaction to a “beautification” of the dreaded compulsory license.¹⁹⁴ Those who share this belief doubt that a willing buyer–willing seller rate regime will make any substantive difference in improving the massive incentive problem in the streaming era.

2. Unfolding Reality: Phonorecords IV Under a Willing Buyer–Willing Seller Rate

Since the MMA’s passage in 2018, only one CRB proceeding has been decided under the new rate-setting regime, and this proceeding provided only minimal foreshadowing as to whether the rate standard can bring composition copyright holders closer to fair compensation of decades past. Phonorecords IV, which set the royalty rates for musical compositions between 2023 and 2027, began in 2021.¹⁹⁵ At its outset, the key industry parties involved in the proceedings—the National Music Publishers’ Association, the Nashville Songwriters Association International, and the Digital Media Association (which represents the DSPs)—seemed poised for an extensive legal battle, as all submitted drastically disparate rate proposals to the CRB.¹⁹⁶

Phonorecords IV represented a major moment for many songwriters who eagerly anticipated the first rate proceeding to implement MMA’s new standard.¹⁹⁷ However, in a surprising turn, industry players ultimately settled in August 2022 before the CRB’s final adjudication, agreeing on a royalty headline rate of 15.35% of the DSP’s total annual revenue.¹⁹⁸ When the CRB approved the settlement and published its rate determinations in December 2022, it was rebuked by a number of songwriter groups, as they had held out hope that the new rate-setting standard would enable another needed rate increase.¹⁹⁹ Several opposition comments submitted to the CRB asserted songwriters’ concerns that the settlement “would thwart application of the willing buyer, willing seller rate setting standard,” which would have been applied for the first time in the absence of a settlement.²⁰⁰

In its final publication of the Phonorecords IV rate determination, the CRB did note that although the willing buyer–willing seller standard “was not expressly applied as it would be in a full proceeding, the operable rate standard exist[ed] as a relevant factor” when considering the validity of the settlement.²⁰¹ The settlement, thus, was not devoid of the new standard, though the extent of its impact on the CRB’s decision-making remains unclear. The CRB stated it found no “reasonable basis” to reject the settlement and its suggested reasons may allude to the influence of the new rate standard.²⁰² The CRB asserted that it found no persuasive economic argument for rejecting the settlement, particularly indicating that the rate structure was not “gratuitous.”²⁰³ Instead, the settlement included thoughtful changes to prior rates and was designed through a careful negotiation in which “complex terms in [the] commercial agreement” represented a “market [that is] itself . . . complex.”²⁰⁴ While this does not fully provide an analysis of how rates may have differed if they had been developed by the CRB under a pure willing buyer–willing seller standard, it suggests that the factors used to consider a free and competitive market do not necessarily lend themselves to as noticeably high of a rate change as many in the industry may have anticipated.

Additionally, the negotiation itself is viewed to represent prices set between a willing buyer and a willing seller, and, as a practical matter, this may forebode a stifled rate standard for future Phonorecord rate proceedings. Strong evidence suggests that regardless of settlement, the willing buyer–willing seller rate holds little weight when mechanical royalty rates have no hypothetical market of willing buyers and willing sellers—the mechanical royalty has never once been considered in the context of true market demand.²⁰⁵ In 1995, Congress enacted the Digital Performance Right in Sound Recordings Act, in which a willing buyer–willing seller standard similarly replaced 801(b) policy factors in CRB rate proceedings for noninteractive public performance royalties.²⁰⁶ In that situation, the Copyright Arbitration Royalty Panel, the predecessor to the CRB, was left with “the unenviable task of ascertaining what a willing webcaster and a willing record label would consider to be a fair deal for Internet radio royalties in the face of an almost total absence of real world evidence.”²⁰⁷ In the same vein, the willing buyer–willing seller mechanical license rate “seeks to construct or emulate [a ‘market’ that] does not exist and often has never existed.”²⁰⁸ Under this analysis, it seems possible that the NMPA, in pursuing this settlement over litigating for a desirable rate, may have filled the vacuum of market knowledge with a rate that will lay a foundation for future decisions and is less than desirable for publishers and songwriters in the long run. Notably, in past rate proceedings for a willing buyer–willing seller standard, the CRB found that “[t]here is no a priori reason to conclude that the rates set in [an] earlier proceeding failed to reflect or approximate market forces.”²⁰⁹

The Phonorecords IV settlement may suggest that, at least in the short term, the MMA’s new rate-setting standard will result in no real improvement in incentives for songwriters, as demanded to rectify the current imbalanced copyright policy. The early days of the Phonorecords IV proceeding may also provide insight into challenges posed by converting to this new rate-setting norm. Immediately after the parties to Phonorecords IV submitted their rate proposals, the CRB used the new willing buyer–willing seller standard to deny the NMPA’s request for further documentation regarding an initial lowball DSP proposal.²¹⁰ The CRB rejected their request for information from the DSPs explaining the “historical quantum” of DSP revenue to be deducted from the mechanical royalty pool under the DSPs’ rate proposal and information on the “impact” of those proposed deduction terms on mechanical royalties.²¹¹ The CRB held that such justifications for further documents may have been relevant under two of the former 801(b) standards of fairness and “disruption-avoidance,” but that such considerations of “impact,” “historical quantum” of revenue, and deduction terms no longer appeared to be appropriate when purely assessing market factors relating to the parties’ investment in their products and positions in relation to economic demand.²¹² This further suggests that though the standard may in some ways seem liberatory by providing a comparison to an open market, it may also limit composition copyright holders from making arguments about traditional copyright policy considerations, including fairness.

Despite early signs that the willing buyer–willing seller standard may not yield the rate increases publishers and songwriters sought, any overall rate increases may also raise a concern on the horizon for DSPs. Phonorecords III, which set rates for 2017 to 2022, was the last CRB proceeding conducted under the pre-MMA standard judged by 801(b) factors, and it introduced the most significant rate increase in the CRB’s history when it increased the headline rate from 10.5% of DSP’s revenue to 15.1%.²¹³ The DSPs appealed this major win for publishers and songwriters, and not long after the CRB affirmed Phonorecord III on appeal, Spotify and YouTube music raised their prices just a few days apart from each other, indicating that when incentives to copyright holders improve, the access variable, in turn, is affected as well.²¹⁴ Apple Music and Amazon Music also raised their prices the year before in 2022.²¹⁵ While this price increase occurred in the aftermath of the Phonorecords III, a proceeding that was not the product of MMA legal changes, it raises questions about the cost of the willing buyer–willing seller rate should it achieve its intended outcome of increasing copyright holder compensation. Increased royalty rates are of particular concern for Spotify, which has operated at a loss every year since its founding despite being the United States’ most popular music streaming platform.²¹⁶ As indicated by the price hikes, the burden of licensing costs is ultimately passed on to the consumer and impinges on public access to copyrighted works. Nonetheless, while this concern remains in the background, the balance between access and incentive likely still demands an increase in consumer prices to effectuate the increased incentive necessary to salvage the songwriting profession.

Table 2. Pre- and Post-MMA Policy Concerns
Policy Goal	Pre-MMA Score	Post-MMA Score
Incentives	Incentive for songwriters is LOW; attributable to a minimal statutory royalty rate, governmental restrictions on both types of songwriters’ royalties, and industry structure providing equal payout between publishers and songwriters.	MARGINALLY IMPROVED. It will require several more years to see how much the MMA altered incentives for creators. However, songwriter testimony strongly suggests that creators at the bottom of the copyright chain of value have not seen the MMA substantively move the needle on the incentive variable. This remains an urgent problem in the copyright policy triad, indicating that the equilibrium of policy goals remains unbalanced.
Access	Access is HIGH in the short term, with concern that this variable may shift if DSPs continue operating at a deficit.	HIGH, but the same problem remains as prior to the MMA. Costs will likely be pushed onto the consumer if royalty rates continue to rise in response to the unsolved incentive variable.
Transaction Costs	Transaction costs are HIGH. While the compulsory license reduces transaction costs of licensing negotiation, matching royalties to songwriters imposes high transaction costs for DSPs and songwriters alike.	VASTLY IMPROVED. The MLC has effectively begun to reduce transaction costs by mimicking the collective licensing and blanket license model of other areas of copyright law. It will take several more years to see the full efficiency of the MLC, but it has driven strong results thus far.

III. CONSIDERATIONS FOR THE FUTURE

A. Approaching the First MLC Five-Year Review

Section 102(a)(3)(B)(ii) of Title I of the MMA calls for periodic review of the MLC’s designation by the Copyright Office every five years to review the entity’s functioning and determine whether the MLC shall continue its designation as the MMA’s chosen organization to orchestrate and manage mechanical licensing.²¹⁷ January 2024 marked the beginning of this first review period, though it remains uncertain what the scope of this review will include.²¹⁸ The MMA suggests that the Copyright Office will solicit information to assess only the high-level question of continued designation rather than initiating a review with further recommendations or imperatives for the MLC’s improvement.²¹⁹ Some songwriters hoped the review would include more, having raised concerns on various alleged issues regarding songwriter representation within MLC’s Board and other critiques beyond the scope of this Note.

Currently, no known reason exists to suspect that MLC’s designation will change. The MLC attained substantial achievements thus far in a short time, establishing its infrastructure, creating a robust and growing database, building out resources, and paying out upwards of $1.5 billion in royalties.²²⁰ Its success was publicly affirmed by an array of industry players in a June 2023 House Judiciary Committee hearing on the MMA’s five-year milestone.²²¹ Even with successes, there has been insufficient time to prove the MLC’s full success or to render it ineffective so as to cause a deeper assessment of the MLC’s designation.

B. Reconsidering the Compulsory Mechanical License: Theoretical Shifts Versus Industry Realities

A handful of songwriters have used the pending five-year review as a moment to demand another, more fundamental review of the music licensing system—a review of the mechanical compulsory license.²²² The Copyright Board outright rejected this suggestion, stating that because only two and a half years have passed since the MMA’s licensing changes were implemented, it would be “premature at this time to engage in a new study of the Section 115 license.”²²³

While this demand was more of a pipe dream—and not within the MMA’s review requirements—the early success of the MLC certainly calls into question the basic necessity of a compulsory license. The mechanical compulsory license was once a fix-all solution to calibrating incentive, access, and transaction costs, but now, the MMA’s new collective licensing organization and blanket licensing system appear to pull their weight in correcting transaction costs. Even before the MMA implemented this model, it has been effective in multiple other areas of music copyright law as a solution to mass licensing numerous small, discrete pieces of content. Meanwhile, the compulsory aspect of the mechanical license continues to prevent a recalibration of the access-incentive equilibrium vis-à-vis an unprecedentedly high level of access and demand for music and an unprecedently low level of songwriter incentive to create it.

Theoretically, abolishing the mechanical compulsory license likely makes sense. In addition to being an anomaly in the American system, today, the U.S. remains the only country outside Australia to maintain compulsory licensing for mechanical rights.²²⁴ Its use has also clearly been controversial throughout its history; in 2004, at the earliest outset of streaming in the music industry, then-Register of Copyrights Marybeth Peters called on the House Judiciary Committee to eliminate the compulsory license, recognizing that it violated basic principles of copyright policy and was a deviation from music licensing norms in the rest of the world.²²⁵ Traditional economic assumptions would strongly suggest that, given the music copyright system’s intense reliance on mechanical licenses, high demand from licensees would compel licensing parties to reach a deal reflective of free market demand without obligating composition rights holders to license their work under a compulsory regime. In other areas of copyright law, the free-market forces are continually presumed to engender a successful equilibrium between incentive and access, and both here and in other licensing regimes, the blanket licensing scheme has compensated for other concerns by accounting for transaction costs.

Still, while copyright’s theoretical underpinnings may support such a change, it is widely accepted throughout the music industry that its abolition will never happen. The Copyright Office asserted that review of the compulsory licenses would be “premature” at this juncture and did not rule out the possibility somewhere down the line, should the implications of the MMA be more fully played out and the MLC prove a comprehensive alternative.²²⁶ However, throughout decades past, music industry players have voiced overpowering concerns that eliminating the compulsory license would cause “unnecessary disruptions” in the dynamics of the music industry.²²⁷ Even more critically, a vast majority of the music industry’s convoluted legal patchwork is owed to the outsized influence of vigorous and effective lobbying in Congress at the expense of copyright holders. Far too many players in the copyright landscape depend upon the compulsory mechanical license’s below-market rates, and lobbying forces at record labels, DSPs, radio stations, and beyond will likely ensure that this reality never comes to fruition.²²⁸

C. Songwriters’ Continued Plight Post-MMA

Despite the MLC’s relative successes thus far, the MMA’s fundamental flaw may be that it fixed the glaring problem of untenably burdensome transaction costs without addressing the looming, more existential incentive problem, which lies at the very core of copyright policy. In many ways, the distressing pre-MMA stories and statistics about songwriters explored in this Note have carried into the present day. As Grammy-nominated songwriter Erika Nuri Taylor told the Washington Post in 2023, “I got my real estate license [three years ago] because I thought I’m not going to be able to sustain being a creative person, a songwriter, for the next 10 to 15 years if nothing changes in the music industry.”²²⁹ Taylor, who has written for the likes of Enrique Iglesias, Janelle Monáe, and Meghan Trainor and has been a professional songwriter since 1992, says that her royalty income has been cut in half over the past five years, even after the hopeful enactment of the MMA.²³⁰ Today, she reluctantly considers herself a full-time real estate agent, holding out hope that she can still write songs on the side despite it once being her entire career. Her testimony is just one of many that have persisted after the MMA’s enactment.

Many songwriters will continue to create for the love of it, seeing their art form as a “spiritual calling” for which they have made great sacrifices.²³¹ Perhaps this indicates that despite great financial pressures, the songwriter profession may evolve to become less reliant on copyright’s promise of financial remuneration and will continue to be driven by an intrinsic desire to create. Alternative theories of copyright address this objection, arguing that perhaps copyright ownership and its accompanying “incentives” to create actually play a very minimal role in motivating creative work.²³² However, even amidst these alternative considerations and the possibility that songwriters may still create outside the bounds of adequate copyright incentives, songwriters persistently indicate the impact that low royalty rates across both mechanical and public performance royalties have on songwriting as a profession beyond its persistence as an art form.²³³ Another songwriter cites that modern-day music no longer reflects the caliber of decades past because much talent is lost when many just “can’t afford to do it anymore.”²³⁴ In practice, modern copyright regimes serve as the foundation for entire creative industries; here, the music copyright system’s success dictates the success of the music industry as a whole, making it rather alarming when copyright laws fail to sustain their promise of a “fair return” for the class of creators upon which the music industry is built, resulting in the dying of one of the industry’s most integral professions.²³⁵

Notably, there are also some critical confounding variables at play in the songwriter’s plight beyond anything the drafters of the MMA could have predicted. Given that the CRB did not finalize the DSPs’ appeal of the Phonorecords III rates for 2018 to 2022 until August 2023, the MLC could not pay out royalties for that term without established rates; this ultimately delayed the full payment of an additional $700 to 800 million in streaming royalties over the past five years.²³⁶ From the rights holders’ perspective, even while their royalties may have been increasing on paper since 2018, in reality, they have seen no such improvement in their financial circumstances, as their payments have been frozen at 2017 rates well into 2023. Many in the industry felt the arduous appeal process was disastrous for the publishing and songwriter economy, and Phonorecords IV ended in a settlement in large part because music publishers were adamant about avoiding the impossibly burdensome costs of litigation and further wreckage it could cause for songwriters and publishers.

Until composition rights holders receive full payment from Phonorecords III and routine payments on Phonorecords IV, it is hard to judge the potential adequacy of Phonorecord IV rates that arise from the MMA’s new rate standard or, more generally, how effective the financial incentives are for songwriters within the current copyright licensing system. Further, as suggested by the Copyright Office, it may take several more years for the MMA’s efficacy to come into full view, as both the MLC works toward achieving its envisioned efficiency and the willing buyer–willing seller gets tested in the Phonorecords V CRB proceeding.

CONCLUSION

In June 2023, the U.S. House of Representatives marked the MMA’s impending five-year anniversary with a House Judiciary hearing in Nashville, reopening a conversation with representatives from across the music industry about the law’s realized impact since its implementation in 2018.²³⁷ As discussion resumes on Capitol Hill, there is a renewed opportunity to reflect on the underlying objectives of a music copyright system and whether Title I has brought the current legal regime closer to those aims. Sustained conversation on these issues is more pressing than ever, as many in the music industry fear disruptive impact of artificial intelligence on a system already in slow rehabilitation from the shift to the digital age.

In taking stock of the industry’s current position, Title I of the MMA represents a major success in many ways. Its actualization was made possible by an unprecedented will within the music industry, with often opposing parties rallying behind the conviction that the music copyright system urgently needed to change. Title I of the MMA has pulled the industry from the brink of crisis, effectively eliminating untenable transaction costs that left an antiquated licensing system nearly non-functional.

In other ways, however, Title I also represents a band-aid solution to a crisis that boiled over in a fragmented legal scheme—a consequence of years of balkanized laws and decision-making heavily influenced by lobbying forces rather than fully reasoned policy. The industry’s united front may have emerged not from a desire to affirm value of the copyright system or artists’ creative works, but merely from the recognition that there was no other way out beyond a legal solution. As a result, Title I of the MMA has achieved relatively marginal results for one of its central aspirations and one of the industry’s most looming concerns—the hollowing out of the songwriting profession. The plight of the songwriter thus remains one of the music industry’s most fundamental yet unanswered problems in the digital age.

98 S. Cal. L. Rev. 205

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Tara Steinmetz*

* Articles Editor, Southern California Law Review, Volume 98; J.D. 2025, University of Southern California Gould School of Law; B.A. 2020, University of California, Los Angeles. Thank you to my advisors, Professors Jonathan Barnett and Emio Zizza, for their support and guidance, and to the members of the Southern California Law Review for their hard work and thoughtful suggestions on my Note.

INTRODUCTION

I. BACKGROUND

A.Executing Bilateral Extradition Treaties

B.The Extradition Process in the United States: Foreign Requests

C.Extradition Treaty Interpretation in the United States

II. INTERPRETING THE “CHARGING DOCUMENT”

A.Overview of the Circuit Split

B.Manrique v. Kolc

C.Vitkus v. Blinken

III. INTERNATIONAL RELATIONS AND DUE PROCESS

A.Due Process and Treaty Interpretation

B.Relevant Background

C.Foreign relations and the interpretation of “the Charging Document” requirement

CONCLUSION

98 S. Cal. L. Rev. 761

Introduction

I.A Historic Influx of Unaccompanied Children

II.The Legal Foundation Underpinning ORR’s Apprehension, Custody, and placement of Unaccompanied Children

A.The Flores Settlement Agreement of 1997

B.The Homeland Security Act of 2002

C.The William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008

D.ORR’s Role in Child Custody and Placement

III. Labor Law’s Role in protecting Unaccompanied Children

A. The Fair Labor Standards Act of 1938 and Related Child Labor Policies

B. Varying State Child Labor Laws

C. Anti-Trafficking Laws Protecting Unaccompanied Children

IV. ISSUES WITH and possible solutions for ORR’s PLACEMENT OF UNACCOMPANIED MINORS AND Federal enforcement of Child LABOR LAWs

A.Issues with ORR’s Custody, Placement, and Post-Release Supervision of Unaccompanied Minors

1.Proper Vetting of Sponsors Versus Speed of Release

2.Keeping Track of Migrant Children Paroled into Sponsor Homes

3.Implementing Reporting Requirements for Sponsors

4.Enforcement Mechanism Needed

B. Inadequacies in FLSA Penalties and DOL Enforcement Capabilities

1.DOL’s Chronic Underfunding Increases the Risk that Unaccompanied Minors Go Unnoticed by Federal Investigators

2. Current FLSA Penalties Are Inadequate to Deter Bad Actors from Committing Child Labor Law Violations

C. Summary of Solutions

CONCLUSION

98 S. Cal. L. Rev. 761

Introduction

Homelessness Compared and Explained

A.A Preliminary Note on Method

B. Homelessness Compared

C. The Social Safety Net

D. Public Opinion and Ideology

E. Race and Homelessness

F. America’s Turn to Criminalization

Homelessness and the Law

A. Law Prior to Grants Pass

B. City of Grants Pass Heads to the Supreme Court

C. The Supreme Court’s Ruling

D. What Should the Court Have Done?

E. A Change in Ideology Must Now Precede a Change in Law

Conclusion

Appendix

98 S. Cal. L. Rev. 761

Introduction

I. Deputization

A. What Is Deputization?

B. Who Would Deputize?

1. California Bureau of Field Enforcement

C. Who Would Be Deputized?

II. Deputization to Perform Outreach

III. Deputization to Investigate

A. The Municipal Nondelegation Doctrine

Legislative Actions

Municipal Actions

Private Parties

Standard for Delegation

Conclusion

98 S. Cal. L. Rev. 725

INTRODUCTION

I. BACKGROUND: GENERATIVE ARTIFICIAL INTELLIGENCE

A. How the Technology Works

B. Generative AI in the Music Context

C. Copyright Office on AI

II. LEGAL BACKGROUND: COPYRIGHT LAW

A. Requirements for Protection

B. Rights Conferred by Copyright Ownership

Reproduction Right

Adaptation Right