Spirit of the Law’ Returns to US Courts Conventional Thinking Has Been Turned on Its Head BRUCE LOVE

TUESDAY 12 DECEMBER 2017

Innovative Lawyers North America

Law ‘Spirit of the law’ returns to US courts Conventional thinking has been turned on its head BRUCE LOVE

curious trend in litigation has seemingly linked President Donald Trump’s attempts to Aimpose travel bans by executive order with disputes over internet radio royalty payments, the individual’s right to selection of more favourable jurisdictions for pursuing claims, and the right to criticise your employer on job review websites. In disparate legal areas covering immigration, intellectual property, product liability and freedom of speech, a handful of innovative litigators have turned conventional thinking on its head and dragged that oft-evoked, yet rarely truly encountered, “spirit of the law” into courtrooms across the US. In one case that has severely curbed the scope for so-called forum shopping, the outcome may not sound immediately The Flamingos in the mid-1950s: older recordings are not protected by federal copyright law © Gilles Petard/Red- positive for individual rights. Its defenders ferns/Getty Images insist, however, that it promotes fairness and certainty for all. The Supreme Court in June ruled in Bristol-Myers Squibb v and federalism — the proper relationship associate justice Sonia Sotomayor — were Superior Court that, in product liability between the national government and the persuaded by Mr Katyal’s reasoning. and mass tort cases, plaintiffs can only sue states. “In this age where people think companies in states where they purchase Mr Katyal sees strong links between everything is politicised in America, eight or use the product. his work for Bristol-Myers Squibb and out of the nine justices agreed with our The ruling — an eight-to-one decision his Supreme Court arguments against the position,” says Mr Katyal, who before that broadly united both liberal and US travel ban — a policy which remains joining Hogan Lovells served as acting conservative judges — stops plaintiffs controversial and subject to further legal solicitor general of the United States. choosing jurisdictions based on where dispute. Rather than take the tried and tested they think they will have the most “Both cases showed a distinct departure path of approaching the current laws favourable outcome. from earlier points in American history, and explaining why his case did not fit, Hogan Lovells partner Neal Katyal, who when laws were more uniform without Mr Katyal’s strategy was to strip away argued seven of the 62 cases brought to expansive jurisdictions,” says Mr Katyal. decades of precedent and tell the court the Supreme Court last year — including “In both instances we were aiming for a that the law — as it currently stood — was representing the State of Hawaii against return to the way the law had always been being incorrectly applied. President Trump’s travel ban on visitors intended.” “That was our whole argument in the from some Muslim-majority countries Arguments of fairness and spirit of travel ban case as well; courts have made — says the decision gives litigants of all the law aside, the casual observer of the incremental steps in giving the president stripes more certainty in where lawsuits Supreme Court still may have expected deference, but the latest step is in tension will be heard. those of its judges perceived to be on the with the founding documents of our Rather than curtailing individual rights, political left — the Democratic nominees country,” says Mr Katyal, who clerked for Mr Katyal’s belief is that at its heart, — to be deaf to an argument curbing the Supreme Court associate justice Stephen limiting venue shopping is about fairness, rights of individuals to bring suit against Breyer. the spirit of the law as it was intended, corporate America. Yet all but one — Ronald Mann, a professor at the Innovative Lawyers North America

simply weren’t there.” Mr Gass says it was natural for lawyers to bring all their knowledge of past cases in federal jurisdictions and assume the states work the same way. “When there’s a large body of law seemingly already established, it’s not always easy — or obvious — to go all the way back to the original intent,” he says. Previously it had been a complex question that defence teams had tried to tackle: what specific rights did state laws afford these recordings? “But no one had yet asked the question: did these laws protect them at all?” When working on the defence for cases in Illinois and California, Mr Gass’s Latham & Watkins team developed a Happy together: The Turtles © ABC Photo Archives/Getty Images more aggressive argument which let them sidestep the question of which particular Columbia Law School in New York, thinks playing pre-1972 recordings. Such older rights states granted these old recordings. Mr Katyal’s success was in persuading the recordings are not protected by federal Instead, Mr Gass argued that states grant court to see the case as an effort to work copyright law. them no copyright protection. The result around the decision of previous cases. Musical acts including The Turtles — has been a seismic shift in copy right law. “The groundwork for this case was set in famous for the 1967 hit “Happy Together” Opposing counsel in the California case two previous cases — Daimler AG v Bauman — and the owners of master recordings found the idea to be so radical that they and BNSF Railway Co. v Tyrrell — in which for several artists including Jimmy Reed, issued a threat of sanctions. The case is the Supreme Court put limitations on the T-Bone Walker, the Flamingos and the on appeal before the California Supreme jurisdictions of state courts,” says Mr Moonglows, are among those who have Court. At the time of the Illinois decision, Mann. “These cases have shown that the brought actions. opposing counsel John DeStefano, of system doesn’t need to tolerate jurisdiction Suits have been brought in a number Hagens Berman Sobol Shapiro, told shopping. The Supreme Court justices of states, including California, Florida, Bloomberg the ruling had “failed to have a strong sense that it’s not fair that Georgia, Illinois and New York. Strategies recognise the importance of protecting plaintiffs can choose courts they think are have included going after streaming artists’ rights in their creative efforts as more favourable when defendants never services for transferring sound recordings technology evolves”. get to choose.” without the owner’s consent and Yet state courts have found the argument A few blocks over from Mr Katyal’s infringement of the artists’ state copyright convincing, and Mr Gass is adamant that offices in Washington DC, Latham & protection. a return to the original intent of the law Watkins partner Andrew Gass has been Mr Gass’s team had been defending promotes fairness and certainty for all using similar litigation strategies to upend radio and streaming services iHeartMedia parties. the status quo in an entirely different area and Pandora in cases against the owners Charles Cronin, a music law lecturer of law. Defending multiple lawsuits in of master recording rights from the 1950s at the University of Southern California courtrooms across the US, Mr Gass has led and 1960s, who were suing for payment Gould School of Law, agrees that, without a revolution in the way the law deals with of royalties. In June they won a significant such rulings, there is potential for disarray music copyright and royalties. Like Mr battle. in the laws concerning what music can be Katyal, Mr Gass has challenged convention “We argued that state copyright laws protected. and convinced the courts that the law as it are pretty much limited to protecting “A number of these types of plaintiffs has been applied for decades has strayed unpublished works — they don’t cover have been seeking in state courts quasi- considerably from its original intent. sound recordings which have been broadly copyright protection for broadcast In the age of online streaming, disputes sold with the authors’ permission,” says Mr and streaming performances of sound over intellectual property in the music Gass. “Even though conventional wisdom recordings, based on common law torts like industry have become ripe for litigation. had held for years that such recordings unfair competition and misappropriation,” In particular, legal battles have arisen were protected to some degree, when you says Mr Cronin. “But these laws, and their over whether individual states can force actually peeled back the layers of time application, vary greatly among the 50 streaming services to pay royalties for and cases, you found that the protections states. “Without federal law governing copyright protection for pre-1972 sound recordings, there is a potential for complete disarray and unpredictability in this area of the law as state courts apply the law of their jurisdiction,” he says, echoing agreement that a return to the spirit of the law — and greater clarity — may be helpful for many practice areas.