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Tennessee’s Netflix Law And The Entertainment Industry’s Public Image Problem

The state’s governor has just signed a bill criminalizing “entertainment services theft.” I can understand services like Netflix and HBOGO having a legitimate interest in cracking down on folks who steal and resell large numbers of passwords, as Tim Lee at Ars Technica reports is what the bill’s sponsor really intended. But it’s not clear why either that problem or the prospect of multiple people using the same password are a problem that require legislation rather than vigorous internal enforcement of Netflix’s Terms of Use (it’s not at all clear to me that Netflix wanted or pushed for this legislation, though perhaps they did). In fact, those terms make it clear that having multiple people within a household using the same account is a design feature of the service rather than a bug that requires vigorous regulation:

-You are also responsible for maintaining the confidentiality of your account and password and for restricting access to your computer or Netflix ready device. If you disclose your password to anyone or share your account and/or devices with other people, you take full responsibility for their actions.

-You may instantly watch on up to six unique authorized Netflix ready devices. For certain membership plans, you will be allowed to instantly watch simultaneously on more than one Netflix ready device within your household, up to total of four devices at a given time.

-You also agree not to impersonate any other person while using the Netflix service, conduct yourself in a vulgar or offensive manner while using the Netflix service, or use the Netflix service for any unlawful purpose.

Presumably, when Netflix wrote that customer agreement, it assumed it would be able to enforce it by monitoring customer behavior and banning or referring for prosecution users who flagrantly violate the rules.

From a more strategic perspective, I question the wisdom of providers pushing for harsh legislation against content theft as a hedge against a shifting market. For the record, I am not comfortable with torrenting content, and made a resolution to stop doing it a while ago. And I don’t really object to prosecutions of services that systematically copy and distribute content illegally. But prosecuting individual users seems both unlikely to deter people from seeking content at lower prices or for free, and to do some harm when industries try to shift to new models in the future. The cost of investigating, indicting, and prosecuting individual users is high enough that it can’t and won’t happen to everyone—or more importantly, to a sufficiently large number of people such that everyone will have to think hard before they torrent.

And big public pushes for anti-piracy legislation tend to overshadow innovation, especially when the innovation we see the results of are things like the movie studios’ obsession with 3D as a way to get moviegoers to pay more for tickets. Fairly or unfairly, I think a lot of consumers look at the entertainment industry as the equivalent of the kid on the playground with a cool toy he’ll only let you play with under circumstances so restrictive you long to feed him a hearty meal of sand. Sure, companies like Apple and Amazon have beat content-creating industries to the punch technologically, but I also think they’re also perceived as companies that are in the business of getting consumers access to what they want, and so people don’t feel a deep and burning desire to stick it to them. Part of the reason Hulu is so brilliant is that it both meets a consumer demand and helps boost the perception that NBCUniversal, Fox, and Disney-ABC are as invested as users are in getting content out there.

I’m fond of hybrid solutions, and I think the one here might be for the industries to focus on narrower legislation while marketing their innovations more aggressively. Winning the war on illicit content use is going to be as much a matter of customer service as it is of publicly decrying violations of intellectual property law.

Why Rick Scott’s Drug Testing Scheme Violates The Constitution

On Tuesday, Florida Gov. Rick Scott (R) signed a law requiring welfare recipients to undergo drug testing — potentially providing thousands of new customers to Solantic, a company Scott used to run that is now owned by a trust in his wife’s name. The ACLU responded almost immediately with a lawsuit challenging this law, and, as Professor Adam Winkler explains, this lawsuit is very likely to succeed:

Random drug testing is what is known as a “suspicion-less” search. Even without probable cause to believe the person required to pee in a cup has done anything wrong, he or she is forced to turn over bodily fluids for government inspection.

The Supreme Court has upheld the ability of government to mandate random drug tests in a few limited circumstances. The earliest cases held that people with sensitive government jobs in high-risk public safety environments, like railroad operators, or involving national security, like border and customs agents, could be required to submit to testing. The Court’s most expansive ruling allowed public high schools to randomly test student athletes, even though the public safety concerns weren’t nearly as apparent.

High school students, however, have historically enjoyed fewer constitutional protections than mature adults, and courts have generally frowned upon random drug testing of them. Indeed, courts have stuck down policies just like the ones put in place by Florida this week. (See, for example, here and here.)

Scott’s self-enriching drug testing plan is merely the latest example of Republicans ignoring the Constitution to push their own partisan agenda. Indeed, GOP attempts to rewrite the Constitution to achieve their own partisan objectives have become so common that Scott’s assault on the Fourth Amendment is almost passé:

  • Ending Senate Elections: Sen. Mike Lee (R-UT) recently claimed that the ratification of the 17th Amendment, which allows voters to elect their own senators, “was a mistake.” Scalia agrees.
  • Social Security and Medicare: Even though the House GOP’s plan to eliminate Medicare has thrown the GOP’s poll numbers into a nose dive, several GOP senators want to repeal Medicare and Social Security by having them declared unconstitutional.

Scott, however, may win a prize as the first GOPer to sign an unconstitutional law that may be designed to increase his own already massive fortune.

REPORT: Senate Confirmed A Smaller Percentage Of Obama’s Judges Than Any Other President In History

Throughout President Obama’s first two years in office, Senate Republicans waged war on his judiciary nominees — allowing only a handful of them to be confirmed. The GOP’s obstructionism grew so bad that conservative Chief Justice John Roberts scolded the Senate for its dismal confirmation record. A new report by the Alliance for Justice shows that the GOP’s obstructionism was truly historic — the worst obstructionism any new president faced at any point in American history:

[T]he Senate confirmed fewer of [Obama's] district and circuit nominees than every president back to Jimmy Carter, and the lowest percentage of nominees – 58% – than any president in American history at this point in a President’s first term. By comparison, Presidents George W. Bush, Clinton, George H.W. Bush, Reagan and Carter had 77%, 90%, 96%, 98%, and 97% of their nominees confirmed after two years, respectively.

Senate Republicans’ mass obstruction of Obama’s judges stands in stark contrast to the treatment afforded to past presidents. Indeed, the Senate confirmed fewer judges during Obama’s first two years in office than it did during the same period in the Carter Administration, even though the judiciary was 40 percent smaller while Carter was in office.

Disturbingly, much of this obstructionism targeted women and people of color. Although Obama’s nominees are the most diverse in American history, every district court nominee with unanimous Republican opposition in the Senate Judiciary Committee was a woman or person of color.

How Iowa and New Hampshire Primaries Undermine Democracy

Residents of Iowa and New Hampshire have long taken pride in having the first-in-the-nation presidential caucus and primary, respectively. How well candidates do in those early states usually makes or breaks a campaign. Which naturally begs the question: is it fair that two small, homogeneous states have so much power? While Iowans and New Hampshirites consider the advantage of pre-screening candidates for the rest of the country something like their birthright, the rest of the country often see them as spoiled — politicos joke that no one will vote for you in Des Moines or Concord unless you’ve had coffee in their kitchen three times.

Yesterday the New York Times’ David Leonhardt pointed out that the absurdly disproportionate influence of Iowa and New Hampshire seriously undermines the democratic concept of “one man, one vote”:

Two economists, Brian Knight and Nathan Schiff, set out a few years ago to determine how much Iowa, New Hampshire and other early-voting states affected presidential nominations.[...]

The economists estimated that an Iowa or New Hampshire voter had the same impact as five Super Tuesday voters put together. This system, the two men drily noted in a Journal of Political Economy paper, “represents a deviation from the democratic ideal of ‘one person, one vote.’ ” [...]

The two states have dominated the nominating process for so long that it’s easy to think of their role as natural.

But it is not natural. It’s undemocratic, in fact. It is unfair to voters in the other 48 states. And it distorts economic policy in several damaging ways.

The most obvious example, Leonhardt writes, is that every lawmaker with future presidential aspirations (that is to say, almost all of them) will always vote to protect pointless and expensive ethanol subsidies because Iowans basically make it a prerequisite of getting their vote. This year, Republican candidates are moving farther to the right and disavowing moderate positions in no small part because Iowa primary voters are more conservative than their national counterparts.

While candidates lavish attention on a small group of primary voters in New Hampshire and Iowa in endless kowtowing to “retail politics,” millions of voters in other states don’t get the chance to have their voices heard before front-runner candidates already seal their position. In other words, candidates have little incentive to know or care about the preferences of voters in states that are bigger, more diverse, and more representative of national opinion.

This leaves the other 48 states jockeying for position to try to increase their own influence in presidential primary elections. But Iowa and New Hampshire residents — and the national politicians who pander to them — have proven fiercely protective of their position in the primary calendar. In 2008 two states — Michigan and Florida — were penalized by the DNC for moving up their primary dates: Democratic primary voters in those states were effectively disenfranchised when half of their delegates were not seated.

Leonhardt’s article is a good reminder that the order states vote in is completely arbitrary but has enormous consequences on which candidates end up having the most powerful position on earth.

South Carolina Senate Votes To Cap Punitive Damage Awards

The South Carolina Senate passed a corporate-supported bill on Tuesday to limit to amount of punitive damage awards in that state:

The bill would create a tiered system of damages based upon the degree of negligence or criminal behavior involved. Most lawsuits would cap punitive damages at $500,000, or three times actual costs, whichever is greater.

But that cap rises to $2 million, or four times actual damages, under several circumstances, including if an injury resulted because of an unreasonable profit-based decision or if the person or business that caused the injury was subject to a felony conviction.

The cap is lifted entirely if the person or business that caused the injury is convicted of a felony, intended to harm or was under the influence of drugs and alcohol.

Historically, punitive damages have been used to prevent situations where corporations inflate their profits through strategic lawbreaking. If a car company determines that it can save $100 million by making unsafe cars, but only pay out $50 million in damages due to wrongful death lawsuits, their executives will likely decide to sell the unsafe cars unless they face some extra consequence. Accordingly, punitive damages are intended to jack up the cost of lawbreaking until it no longer makes financial sense for big corporations to flout the law.

South Carolina’s bill would undermine this goal by capping the extent of those damages, and it is part of a much larger pattern of assaults on the judiciary’s power to ensure that corporations are held accountable for lawbreaking. Beginning in 1996, the Supreme Court started imposing constitutional limits on punitives.

This year, the Court also gave corporate America all the tools it needs to eliminate class action lawsuits by consumers — effectively enabling corporations to systematically scam thousands of consumers out of a few dollars at a time with complete and utter impunity. And a long series of Supreme Court cases endorsed an abusive practice known as “forced arbitration” that allows corporations to force their consumers, workers, and patients to sign away their right to sue the company in a fair and impartial court before the company will even do business with them.

Cuccinelli Can’t Name A Supreme Court Case Supporting His Attack On Health Reform

Last night on CNN, host Eliot Spitzer asked Virginia Attorney General Ken Cuccinelli (R) to name a single recent Supreme Court case striking down a law, like the Affordable Care Act, which regulates the national economy. In response, Cuccinelli could do nothing more than babble:

SPITZER: Name the case where the Supreme Court has overruled an economic regulation passed by Congress in the last twenty years — an economic regulation.

CUCCINELLI: An economic regulation? We’ve got four Commerce Clause cases in the last eighty years.

SPITZER: Name one. Name One.

CUCCINELLI: The ones that have ruled for the limited government side are not, ah, didn’t involve products, well, they didn’t involve products they involved enforcement. I will tell you this: federal government is the one expanding the law here. Not us. Not us.

Watch it:

The reason why Cuccinelli could not cite a single case supporting his meritless arguments against the Affordable Care Act is because no such case exists. Rather, there is a long line of cases stretching back as far as 1824 saying that it is not the job of judges to second guess how Congress decides to regulate the national economy.

To be fair, there was a brief period from the 1880s until the 1930s when the Supreme Court invalidated everything from child labor laws to pro-union regulations to antitrust suits, but this disastrous line of cases was overruled more than seventy years ago. No Supreme Court case from either the last 70 years or the first century of the American republic supports Cuccinelli’s assault on health care.

Indeed, a close reading of Cuccinelli’s briefs challenging health reform suggests that Cuccinelli’s real goal is to bring back the era when nearly everything was forbidden by the Supreme Court. In one of his briefs challenging health reform, Cuccinelli suggests that Congress is allowed to regulate “commerce on one hand” but not “manufacturing or agriculture.” This is exactly the same discredited vision of the Constitution the Supreme Court implemented in the late 19th and early 20th century, and it would strike down child labor laws, the minimum wage, the federal ban on whites-only lunch counters, and countless other cherished laws.

Justiceline: June 2, 2011

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