Articles by mjlst

NC Gives Medicaid Expansion a Foothold in the Southeast While Giving Many North Carolinians a Helping Hand

October 27, 2023
Health, Healthcare, Healthcare Reform, Insurance

Matt Buechner, MJLST Staffer

North Carolina is set to take a step to address structural racism in communities across the state when it begins Medicaid expansion implementation on December 1. Governor Roy Cooper championed expansion in his state and signed a bipartisan Medicaid expansion bill in March. This signaled the state’s intention to expand the government-sponsored health insurance program for low-income people to roughly 600,000 additional North Carolinians.[1] However, the bill required the legislature to pass a separate state budget law to appropriate funds and implement the plan.[2] The Republican-controlled state legislature passed a delayed two-year budget deal on September 22, which went into effect October 3 after Cooper declined to veto the bill.[3]

Implementation of Medicaid expansion should help North Carolina see the reduction of uninsurance rates that other expansion states have seen since passage of the ACA.[4] A recent study found that while Medicaid expansion helps populations across a state, the eligibility expansion disproportionately helps residents of formerly redlined[5] neighborhoods gain access to coverage.[6] Coverage is essential, as greater access to health insurance leads to medical care, including preventive care and management of chronic illness.[7]

Meanwhile, recent analyses of health disparities and access to health insurance have shown that health disparities in the United States may be less tied to race itself, but rather to structural racism levied against non-white Americans.[8] One recent study showed that states with policies that reflect and reinforce structural racism also see significantly higher rates of premature death among their populations.[9] While these findings may not be surprising, policymakers and advocates can use this evidence to target investments and interventions, while working to disentangle the tapestry of discrimination at the state level.

Accessing Medicaid for Newly Eligible North Carolinians

The Medicaid program currently covers about 2.9 million North Carolinians.[10] But like most states that have yet to expand their Medicaid program, the maximum income requirements for North Carolina Medicaid eligibility for adults is quite low.[11] Adult caregivers of children or adult family members may earn a household modified adjusted gross income (MAGI)[12] up to 37 percent of the federal poverty level (FPL) to maintain North Carolina Medicaid eligibility, while non-caregiver adults do not qualify for Medicaid at all.[13] Medicaid expansion will increase the maximum household MAGI threshold to 138 percent[14] FPL to qualify for Medicaid coverage, regardless of whether an adult cares for an additional family member.[15]

North Carolina currently provides reproductive health care benefits for residents who earn up to 195 percent FPL through their Medicaid Family Planning Program (BE SMART).[16] Nearly half of the expected 600,000 new Medicaid-eligible North Carolinians are currently enrolled in BE SMART and have a qualifying-income under the new 138 percent FPL Medicaid eligibility threshold. These people will automatically be enrolled in full Medicaid coverage.[17] Newly qualifying individuals who do not take part in the BE SMART program must apply (online, in person, by telephone, or by mail) and await determination, which is set to take up to 45 days.[18]

Making Sense of the Federal Dollars at Play

State Medicaid programs are traditionally paid for through a partnership with the federal government. While the state administers the program, the federal government provides the state matching funding, without limit.[19] Matching funds are provided based on an algorithm that measures a state’s ability to pay for the program using the state’s per capita income compared to the per capita income of the nation. This rate is called the Federal Medical Assistance Percentage (FMAP).[20] A state’s FMAP is set by statute to be at least 50 percent, but not more than 83 percent.[21] Using FMAP allows a state with a theoretically lower tax base (relative to the size of their state population) to receive additional federal funding to offset the burden of providing for its residents.

To help states with the burden of paying for an increase in their Medicaid population after expansion, Congress established an enhanced FMAP calculation for a state’s Medicaid expansion population. Beginning with the implementation of expansion in 2014, the federal government provided states with a 100 percent FMAP for the expansion population, followed by a phased down approach.[22] The current FMAP for the expansion population is 90 percent.[23]

To help encourage remaining states to expand their Medicaid program, Congress included a 5 percent FMAP bump for two years post-expansion in the American Rescue Plan—not for the expansion population, but for the traditional Medicaid population.[24] This is particularly enticing for states, because this includes all Medicaid recipients, including children, seniors, people with disabilities, and all other non-expansion groups. On average, these populations account for nearly 80 percent of all Medicaid costs in expansion states, making this benefit likely more lucrative than a 100 percent FMAP rate for expansion populations.[25]

Looking at Health Equity Beyond Expansion

While North Carolina looks to expand its Medicaid population in the coming months, states across the country are purging Medicaid beneficiaries from their programs following the expiration of a federal disenrollment prohibition to qualify for a Covid-era enhanced FMAP.[26] Recent reports estimate that nearly 9 million people across the country have been disenrolled from Medicaid so far, including more than 120,000 North Carolinians–more than 20 percent of North Carolina’s current Medicaid population.[27]

While North Carolina has one of the lowest rates of churn among states across the nation, 87 percent of disenrolled North Carolinians lost coverage for procedural concerns–not eligibility concerns.[28] This means that North Carolina Medicaid beneficiaries are losing their health insurance coverage largely because they did not fill out a form properly or the state had an incorrect address on file.

Few states publicly report the racial and ethnic demographics of their Medicaid disenrollees. For those that do, most seem to be disenrolling Medicaid recipients at even rates based on race and ethnicity.[29] As disenrollment continues and North Carolina moves into expansion of their Medicaid program, policymakers, advocates, and observers will keep a keen eye on the state as it navigates its population’s fluctuating access to Medicaid. This expansion is but one step to ensure that people have equitable access to essential coverage and care.

Notes

[1] Gary D. Robertson, Medicaid Expansion to Begin Soon in North Carolina as Governor Decides to Let Budget Bill Become Law, Associated Press, Sept. 22, 2023, https://apnews.com/article/north-carolina-medicaid-expansion-governor-legislature-330ea1adef37a323b31a9cfe0d470a58.

[2] Id.

[3] In some states, inaction by a governor can lead to a pocket veto, however in others, inaction by a governor leads to passage of the bill. In North Carolina, a bill can become a law following inaction by a governor for ten days. Aimee Wall, The Governor’s Role in the Legislative Process, Coates’ Canons NC Gov’t Law (Jan. 11, 2017), https://canons.sog.unc.edu/2017/01/governors-role-legislative-process/.; Governor Roy Cooper, a Democrat, allowed the two-year budget bill to become law without action. See House Bill 259 / SL 2023-134, N.C. General Assembly, https://www.ncleg.gov/BillLookup/2023/H259 (last visited Oct. 15, 2023).

[4] The Far-Reaching Benefits of the Affordable Care Act’s Medicaid Expansion, Ctr. on Budget and Pol’y Priorities, https://www.cbpp.org/research/health/chart-book-the-far-reaching-benefits-of-the-affordable-care-acts-medicaid-expansion (last visited Oct. 15, 2023).

[5] Redlining occurred, beginning in the 1930s, when the federal government’s Home Owners’ Loan Corporation (HOLC) began the process of rating the investment desirability of various neighborhoods. The rating system used neighborhood racial demography to determine the grades, with the lowest grade reserved for neighborhoods that were “infiltrated with undesirable populations such as Jewish, Asian, Mexican, and Black families.” In turn, banks often refused to grant credit to prospective homeowners looking to purchase homes in those communities, or extended credit with excessive interest rates. Redlining was outlawed by the Fair Housing Act in 1968, but the impact on communities is still seen today. See Jason Semprini et al., Medicaid Expansion Lowered Uninsurance Rates Among Nonelderly Adults in the Most Heavily Redlined Areas, 42 Health Aff. 1439 (2023).

[6] Id.

[7] The Far-Reaching Benefits of the Affordable Care Act’s Medicaid Expansion, Ctr. on Budget and Pol’y Priorities, https://www.cbpp.org/research/health/chart-book-the-far-reaching-benefits-of-the-affordable-care-acts-medicaid-expansion (last visited Oct. 15, 2023).

[8] See Jason Semprini et al., Medicaid Expansion Lowered Uninsurance Rates Among Nonelderly Adults in the Most Heavily Redlined Areas, 42 Health Aff. 1439 (2023); Jaquelyn L. Jahn et al., Legislating Inequity: Structural Racism in Groups of State Laws and Associations with Premature Mortality Rates, 42 Health Aff. 1325 (2023).

[9] Jaquelyn L. Jahn et al., Legislating Inequity: Structural Racism in Groups of State Laws and Associations with Premature Mortality Rates, 42 Health Aff. 1325 (2023).

[10] Gary D. Robertson, N. Carolina Governor Signs Medicaid Expansion Bill into Law, Associated Press, March 27, 2023, https://apnews.com/article/north-carolina-medicaid-expansion-roy-cooper-legislature-f00242e5883bccf816a679a76584a5f9.

[11] The median maximum income limit for adults with family member caregiving responsibilities is 37 percent FPL in states that have not expanded Medicaid and childless adults remain ineligible in all of these states (except Wisconsin), regardless of income. Robin Rudowitz et al., How Many Uninsured Are in the Coverage Gap and How Many Could be Eligible if All States Adopted the Medicaid Expansion? Henry J. Kaiser Family Foundation. (Mar. 31, 2023), https://www.kff.org/medicaid/issue-brief/how-many-uninsured-are-in-the-coverage-gap-and-how-many-could-be-eligible-if-all-states-adopted-the-medicaid-expansion/.

[12] MAGI, as used to determine health care benefit eligibility, uses a different methodology than MAGI as used for tax purposes. For health benefit purposes, MAGI is adjusted gross income plus untaxed foreign income, non-taxable Social Security Benefits, and tax-exempt interest. Modified Adjusted Gross Income (MAGI), HealthCare.gov,  https://www.healthcare.gov/glossary/modified-adjusted-gross-income-magi/#:~:text=MAGI%20is%20adjusted%20gross%20income,%2C%20and%20tax%2Dexempt%20interest (last visited Oct. 15, 2023).

[13] Medicaid Income Eligibility Limits for Adults as a Percent of the Federal Poverty Level, Henry J. Kaiser Family Foundation. (Jan. 1, 2023), https://www.kff.org/health-reform/state-indicator/medicaid-income-eligibility-limits-for-adults-as-a-percent-of-the-federal-poverty-level/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.

[14] The Affordable Care Act established a 5 percent income disregard in determining eligibility for Medicaid and CHIP. The percent thresholds used in this blog post include the built-in income disregard used to establish Medicaid eligibility determinations. CMS Answers to Frequently Asked Questions: Telephonic Applications, Medicaid and CHIP Eligibility Policy and 75/25 Federal Matching Rate, Medicaid.gov. (Aug. 9, 2013),  https://www.medicaid.gov/faq/respect-magi-conversion-how-will-5-disregard-be-applied/index.html.

[15] Questions and Answers about Medicaid Expansion, NC Medicaid Div. of Health Benefits. https://medicaid.ncdhhs.gov/questions-and-answers-about-medicaid-expansion#:~:text=Quick%20Facts%20about%20North%20Carolina%27s,%2Fyear)%20may%20be%20eligible (last visited Oct. 15, 2023).

[16] Facts About the Medicaid Family Planning “BE SMART” Program, N.C. Dept. of Health and Human Svcs. Div. of Med. Assistance and Div. of Public Health. (Sept. 16, 2016), https://files.nc.gov/ncdma/BeSmart_Fact_Sheet-Beneficiaries_2016_09_15.pdf.

[17] Questions and Answers about Medicaid Expansion, NC Medicaid Div. of Health Benefits. https://medicaid.ncdhhs.gov/questions-and-answers-about-medicaid-expansion#:~:text=Quick%20Facts%20about%20North%20Carolina%27s,%2Fyear)%20may%20be%20eligible (last visited Oct. 15, 2023).

[18] Elizabeth Williams et al., Medicaid Financing: The Basics, Henry J. Kaiser Family Foundation, April 13, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-financing-the-basics/.

[19] Elizabeth Williams et al., Medicaid Financing: The Basics, Henry J. Kaiser Family Foundation, April 13, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-financing-the-basics/.

[20] Id.

[21] The District of Columbia and territories have statutorily set FMAPs and the territories each have a statutorily set per capita Medicaid funding cap. Elizabeth Williams et al., Medicaid Financing: The Basics, Henry J. Kaiser Family Foundation, April 13, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-financing-the-basics/.

[22] Elizabeth Williams et al., Medicaid Financing: The Basics, Henry J. Kaiser Family Foundation, April 13, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-financing-the-basics.

[23] Id.

[24] Katie Keith, Final Coverage Provisions in the American Rescue Plan and What Comes Next, Health Aff: Forefront (Mar. 11, 2021), https://www.healthaffairs.org/content/forefront/final-coverage-provisions-american-rescue-plan-and-comes-next.

[25] Id.

[26] Jennifer Tolbert & Meghana Ammula, 10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision, Henry J. Kaiser Family Foundation, June 9, 2023, https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-the-unwinding-of-the-medicaid-continuous-enrollment-provision/#one.

[27] Medicaid Enrollment and Unwinding Tracker, Henry J. Kaiser Family Foundation, Oct. 11, 2023, https://www.kff.org/medicaid/issue-brief/medicaid-enrollment-and-unwinding-tracker/.

[28] Id.

[29] Sophia Moreno et al., What Do Medicaid Unwinding Data by Race and Ethnicity Show? Henry J. Kaiser Family Foundation, Sept. 28, 2023, https://www.kff.org/policy-watch/what-do-medicaid-unwinding-data-by-race-and-ethnicity-show/.

Will Moody v. NetChoice, LLC End Social Media?

October 27, 2023
Constitutional Law, COVID-19, Elections, First Amendment, Internet, Social Media

Aidan Vogelson, MJLST Staffer

At first, the concept that social media’s days may be numbered seems outlandish. Billions of people utilize social media every day and, historically, social media companies and other internet services have enjoyed virtually unfettered editorial control over how they manage their services. This freedom stems from 47 U.S.C. § 230.[1] § 230 withholds liability for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected…”[2]  In other words, if someone makes an obscene post on Facebook and Facebook removes the post, Facebook cannot be held liable for any violation of protected speech. § 230 has long allowed social media companies to self-regulate by removing posts that violate their terms of service, but on September 29, the Supreme Court granted a writ of certiorari in Moody v. NetChoice, LLC, a case that may fundamentally change how social media companies operate by allowing the government at the state or federal level to regulate around their § 230 protections.

At issue in Moody is whether the methods social media companies use to moderate their content are permissible under the First Amendment and whether social media companies may be classified as common carriers.[3] Common carriers are services which hold themselves open to the public and transport people or goods.[4] While the term “common carrier” once referred only to public transportation services like railroads and airlines, the definition now encompasses communications services such as radio and telephone companies.[5] Common carriers are subjected to greater regulations, including anti-discrimination regulations, due to their market domination of a necessary public service.[6]  For example, given our reliance on airlines and telephone companies in performing necessary services, common carrier regulations ensure that an airline cannot decline to sell tickets to passengers because of their religious beliefs and a cellular network cannot bar service to customers because it disapproves of the content of their phone conversations. If social media companies are held to be common carriers, the federal government and the state governments could impose regulations on what content those companies restrict.

Moody stems from state efforts to do just that. The Florida legislature passed State Bill 7072 to curtail what it saw as social media censorship of conservative voices.[7] The Florida law allows for significant fines against social media companies that demonstrate “unfair censorship” or “deplatform” political candidates, like X (formerly Twitter) did when it removed former President Trump from its platform for falsely claiming that the 2020 election was stolen.[8] Florida is not the only state to pursue a common carrier designation for social media. Texas passed a similar law in 2021 (which is currently enjoined by NetChoice, LLC  v. Paxton and will be addressed alongside Moody) and the attorney general of Ohio has sued Google, seeking for the court to declare that Google is a common carrier to prevent the company from prioritizing its own products in search results.[9] Ohio v. Google LLC is ongoing, and while the judge partially granted Google’s motion to dismiss, he found that Ohio’s claim that Google is a common carrier is cognizable.[10] Given the increasing propensity with which states are attempting to regulate social media, the Supreme Court’s ruling is necessary to settle this vital issue.

Supporters of classifying social media companies as common carriers argue that social media is simply the most recent advancement in communication and should accordingly be designated a common carrier, just as telephone operators and cellular networks are. They explain that designating social media companies as common carriers is actually consistent with the broad protections of § 230, as regulating speech on a social media site regulates the speech of users, not the speech of the company.[11]

However, they ignore that social media companies rely on First Amendment and § 230 protections when they curate the content on their sites. Without the ability to promote or suppress posts and users, these companies would not be able to provide the personalized content that attracts users, and social media would likely become an even greater hotbed of misinformation and hate speech than it already is. The purpose of § 230 is to encourage the development of a thriving online community, which is why Congress chose to shield internet services from liability for content. Treating social media companies as common carriers would stifle that aim.

It is unclear how the Court will rule. In his concurrence in Biden v. Knight First Amend. Inst., Justice Thomas indicated he may be willing to consider social media companies as common carriers.[12] The other justices have yet to write or comment on this issue, but whatever their decision may be, the ramifications of this case will be significant. The conservative politicians behind the Florida and Texas laws have specifically decried what they argue is partisan censorship of conservative views about the Covid-19 pandemic and the 2020 election, yet these very complaints demonstrate the need for social media companies to exercise editorial control over their content. Covid-19 misinformation unquestionably led to unnecessary deaths from the Covid-19 pandemic.[13] Misinformation about the 2020 election led to a violent attempted overthrow of our government. These threats of violence and dangerous misinformation are the harms that Congress created § 230 to avoid. Without the ability for social media companies to curate content, social media will assuredly contain more racism, misinformation, and calls for violence. Few would argue given the omnipresence of social media in our modern world, our reliance on it for communication, and the misinformation it spreads that social media does not need some form of regulation, but if the Court allows the Florida and Texas laws implicated in Moody and NetChoice to stand, they will be paving the way for a patchwork quilt of laws in every state which may render social media unworkable

Notes

[1] See 47 U.S.C. § 230.

[2] 47 U.S.C. §230(c)(2)(A).

[3] Moody v. Netchoice, LLC, SCOTUSblog, https://www.scotusblog.com/case-files/cases/moody-v-netchoice-llc/.

[4] Alison Frankel, Are Internet Companies ‘Common Carriers’ of Content? Courts Diverge on Key Question, REUTERS, (May 31, 2022, 5:52 PM), https://www.reuters.com/legal/transactional/are-internet-companies-common-carriers-content-courts-diverge-key-question-2022-05-31/.

[5] Id.

[6] Id.

[7] David Savage, Supreme Court Will Decide if Texas and Florida Can Regulate Social Media to Protect ‘Conservative Speech’, LA TIMES (Sept. 29, 2023, 8:33 AM), https://www.msn.com/en-us/news/us/supreme-court-will-decide-if-texas-and-florida-can-regulate-social-media-to-protect-conservative-speech/ar-AA1hrE2s.

[8] Id.

[9] AG Yost Files Landmark Lawsuit to Declare Google a Public Utility, OHIO ATTORNEY GENERAL’S OFFICE (June 8, 2021), https://www.ohioattorneygeneral.gov/Media/News-Releases/June-2021/AG-Yost-Files-Landmark-Lawsuit-to-Declare-Google-a.

[10] Ohio v. Google LLC, No. 21-CV-H-06-0274 (Ohio Misc. 2022), https://fingfx.thomsonreuters.com/gfx/legaldocs/gdpzyeakzvw/frankel-socialmediacommoncarrier–ohioruling.pdf.

[11] John Villasenor, Social Media Companies and Common Carrier Status: A Primer, BROOKINGS INST. (Oct. 27, 2022), https://www.brookings.edu/articles/social-media-companies-and-common-carrier-status-a-primer/.

[12] Biden v. Knight First Amend. Inst., 141 S. Ct. 1220 (2021),  https://www.law.cornell.edu/supremecourt/text/20-197.

[13] Alistair Coleman, ’Hundreds Dead’ Because of Covid-19 Misinformation, BBC (Aug. 12, 2020), https://www.bbc.com/news/world-53755067.

Brushstroke Battles: Unraveling Copyright Challenges With AI Artistry

October 15, 2023
Artificial Intelligence, Copyrights, Intellectual Property, New Technology

Sara Seid, MJLST Staffer

Introduction

Imagine this: after a long day of thinking and participating in society, you decided to curl up on the couch with your phone and crack open a new fanfiction to decompress.  Fanfiction, a fictional work of writing based on another fictional work, has increased in popularity due to the expansion and increased use of the internet. Many creators publish their works to websites like Archive of Our Own (AO3), or Tumblr. These websites are free and provide a community for creative minds to share their creative works. While the legality of fanfiction in general is debated, the real concern among creators is regarding AI-generated works. Original characters and works are being used for profit to “create” works through the use of Artificial Intelligence. Profits can be generated from fanfiction through the use of paid AI text generators to create written works, or through advertisements on platforms. What was once a celebration of favorite works has become tarnished through the theft of fanfiction by AI programs.

First Case to Address the Issue

Thaler v. Perlmutter is a new and instructive case on the issue of copyright and AI-generated creative works – namely artwork.[1] The action was brought by Stephen Thaler against the Copyright Office for denying his application for copyright due to the lack of human authorship.[2]  The D.C. Circuit court was the first to rule on whether AI-generated art can have copyright protections.[3] The court held that AI-created artwork could not be copyrighted.[4] In considering the plaintiff’s copyright registration application for “A Recent Entrance to Paradise,” the Register concluded that this particular work would not support a claim to copyright because the work “lacked human authorship and thus no copyright existed in the first instance.”[5] The plaintiff’s primary contention was that the artwork was produced by the computer program he created, and, through its AI capabilities, the product was his.[6]

The court went on to opine that copyright is designed to adapt with the times.[7] Underlying that adaptability, however, has been a “consistent understanding that human creativity is the sine qua non at the core of copyrightability,” even as that human creativity is channeled through new tools or into new media.[8] Therefore, despite the plaintiff’s creation of the computer program, the painting was not produced by a human, and not eligible for copyright. This opinion, while relevant and clear, still leaves unanswered questions regarding the extent to which humans are involved in AI-generated work.[9] What level of human involvement is necessary for an AI creation to qualify for copyright?[10] Is there a percentage to meet? Does the AI program require multiple humans to work on it as a prerequisite? Adaptability with the times, while essential, also means that there are new, developing questions about the right ways to address new technology and its capabilities.

Implications of the Case for Fanfiction

Artificial Intelligence is a new concern among scholars. While its accessibility and convenience create endless new possibilities for a multitude of careers, it also directly threatens creative professions and creative outlets. Without the consent of or authority from creators, AI can use algorithms that process artwork and fictional literary works created by fans to create its own “original” work. AI has the ability to be used to replace professional and amateur creative writers. Additionally, as AI technological capacity increases, it can mimic and reproduce art that resembles or belongs to a human artist.[11]

However, the main concern for artists is wondering what AI will do to creative human industries in general.[12] Additionally, legal scholars are equally as concerned about what AI means for copyright law.[13] The main type of AI that fanfiction writers are concerned about is Generative AI.[14] Essentially, huge datasets are scraped together to train the AI, and through a technical process the AI is able to devise new content that resembles the training data but isn’t identical.[15] Creators are outraged at what they consider to be theft of their artistic creations.[16] Artwork, such as illustrations for articles, books, or album covers may soon face competition from AI, undermining a thriving area of commercial art as well.[17]

Currently, fanfiction is protected under the doctrine of fair use, which allows creators to add new elements, criticism, or commentary to an already existing work, in a way that transforms it.[18] The next question likely to stem from Thaler will be whether AI creations are subject to the same protections that fan created works are.

The fear of the possible consequences of AI can be slightly assuaged through the reality that AI cannot accurately and genuinely capture human memory, thoughts, and emotional expression. These human skills will continue to make creators necessary for their connections to humanity and the ability to express that connection. How a fan resonates with a novel or T.V. show, and then produces a piece of work based on that feeling, is uniquely theirs. The decision in Thaler reaffirms this notion. AI does not offer the human creative element that is required to both receive copyright and also connect with viewers in a meaningful way.[19]

Furthermore, the difficulty with new technology like AI is that it’s impossible to immediately understand and can cause feelings of frustration or a sense of threat. Change is uncomfortable. However, with knowledge and experience, AI might be a useful tool for fanfiction creators.

The element of creative projects that make them so meaningful to people is the way that they can provide a true insight and experience that is relatable and distinctly human.[20] The alternative to banning AI or completing rendering human artists obsolete is to find a middle ground that protects both sides. The interests of technological innovation should not supersede the concerns of artists and creators.

Ultimately, as stated in Thaler, AI artwork that has no human authorship does not get copyright.[21] However, this still leaves unanswered questions that future cases will likely present before the courts. Are there protections that can be made for online creators’ artwork and fictional writings to prevent their use or presence in AI databases? The Copyright Act exists to be malleable and adaptable with time.[22] Human involvement and creative control will have to be assessed as AI becomes more prominent in personal and professional settings.

Notes

[1] Thaler v. Perlmutter, 2023 U.S. Dist. LEXIS 145823, *1.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id. at *3.

[7] Id. at *10.

[8] Id.

[9] https://www.natlawreview.com/article/judge-rules-content-generated-solely-ai-ineligible-copyright-ai-washington-report.

[10] Id.

[11] https://www.theguardian.com/artanddesign/2023/jan/23/its-the-opposite-of-art-why-illustrators-are-furious-about-ai#:~:text=AI%20doesn%27t%20do%20the,what%20AI%20art%20is%20doing.%E2%80%9D.

[12] https://www.theguardian.com/technology/2022/nov/12/when-ai-can-make-art-what-does-it-mean-for-creativity-dall-e-midjourney.

[13] https://www.reuters.com/legal/ai-generated-art-cannot-receive-copyrights-us-court-says-2023-08-21.

[14] https://www.theguardian.com/technology/2022/nov/12/when-ai-can-make-art-what-does-it-mean-for-creativity-dall-e-midjourney.

[15] Id.

[16] Id.

[17] Id.

[18] https://novelpad.co/blog/is-fanfiction-legal# (citing Campbell v. Acuff Rose Music, 510 U.S. 569 (1994).

[19] https://www.reuters.com/default/humans-vs-machines-fight-copyright-ai-art-2023-04-01/.

[20] https://news.harvard.edu/gazette/story/2023/08/is-art-generated-by-artificial-intelligence-real-art/.

[21] Thaler v. Perlmutter, 2023 U.S. Dist. LEXIS 145823, *1.

[22] Id. at *10.

Hello! My Name Is…Erie? Personhood for the Great Lakes

October 15, 2023
Climate Change, Environment, Environmental Law

Eric Gross, MJLST Staffer

As the climate change crisis worsens and environmental protection laws continue to fall short of their stated goals, the movement to give natural entities such as lakes, rivers, and forests legal rights associated with personhood has expanded. Legislation driven by the “environmental personhood” movement has recently begun to appear around the world and in the United States as communities make efforts to protect their natural areas from harmful activity.[1] The idea of entities that aren’t people having personhood status is not without precedent. Consider corporations, which have been defined as persons for limited legal purposes.[2] Given the judicial rights already possessed by non-human entities like corporations, legal personhood has become a more attractive tool for those seeking to protect natural entities such as the Great Lakes. However, broad attempts to give natural entities personhood have run into legal challenges.

Lake Erie Bill of Rights Struck Down

In August 2014, the City of Toledo issued a drinking water warning to citizens not to drink the water; agricultural runoff and pollution into Lake Erie had caused a toxic algal bloom.[3] The water remained undrinkable and even unusable for three days.[4] Frustration with years of state government inaction on pollution boiled over, and in February 2019, the City of Toledo voted to establish a bill of rights for Lake Erie.[5] Known as the Lake Erie Bill of Rights (“LEBOR”), the bill was the product of a multi-year effort by Toledo citizens to protect Lake Erie from pollution.[6]

LEBOR essentially gave personhood status to Lake Erie, including legal standing. It established “irrevocable rights for the Lake Erie Ecosystem to exist, flourish and naturally evolve, a right to a healthy environment for the residents of Toledo, and which elevates the rights of the community and its natural environment over powers claimed by certain corporations.”[7] LEBOR declared that “Lake Erie, and the Lake Erie watershed, possess the right to exist, flourish, and naturally evolve” and granted the people of Toledo “the right to a clean and healthy environment.”[8] Under the statute, the City of Toledo, or any of its residents, held the right to sue on behalf of Lake Erie.[9] The law also made governments and corporations strictly liable for violating the rights of Lake Erie “from any jurisdiction” and declared invalid any state laws or rules that conflicted with LEBOR.[10]

Drewes Farms Partnership, an agricultural company that grows crops in four counties near Toledo, brought a lawsuit against the City of Toledo the day after the initiative passed, with the state of Ohio joining as an intervenor soon after.[11] Drewes Farms and Ohio sought to have LEBOR declared invalid. The U.S. District Court for the Northern District of Ohio sided with the corporation and state, holding LEBOR to be unconstitutionally vague and exceeding the power of municipal authority in Ohio.[12] While recognizing the “well-intentioned goal” of the drafters, the court held that LEBOR was impermissibly vague in violation of the 14th Amendment.[13] “LEBOR’s authors failed to make hard choices regarding the appropriate balance between environmental protection and economic activity. Instead, they employed language that sounds powerful but has no practical meaning.”[14] This language, according to the court, could “trap the innocent [agricultural companies] by not providing fair warning” and invited arbitrary enforcement by prosecutors, judges and juries.[15]

Additionally, the court held that LEBOR preempted state law and exceeded municipal authority. “LEBOR’s attempt to invalidate Ohio law in the name of environmental protection is a textbook example of what municipal government cannot do. Lake Erie is not a pond in Toledo. It is one of the five Great Lakes and one of the largest lakes on Earth, bordering dozens of cities, four states, and two countries…Consequently, municipal laws enacted to protect Lake Erie are generally void if they conflict with Ohio law.”[16] The court did note that “with careful drafting, Toledo probably could enact valid legislation to reduce water pollution,” citing a Wisconsin ordinance restricting the use of phosphorus-containing fertilizers in Madison city limits.[17]

Other Options Exist to Protect the Great Lakes

The striking down of LEBOR indicates that while a municipality may enact ordinances to limit water pollution, such ordinances will likely have to remain limited in nature to survive a court’s scrutiny. Broader legislation to protect ecosystems like the Great Lakes will likely have to come through a state’s legislature, at the bare minimum. However, there are other options available to help protect the Great Lakes as a whole.

The public trust doctrine is a legally established method for individuals to protect natural resources that otherwise wouldn’t be able to protect themselves. Cited most frequently with bodies of water, the public trust doctrine establishes that the government maintains certain natural and cultural resources that are “owned” by the public.[18] Recently, the Michigan Attorney General’s 2019 lawsuit to shut down an oil pipeline crossing the Straits of Mackinac cited the public trust doctrine, claiming the lease allowing the pipeline to operate violates the state’s obligation to “protect and preserve the waters of the Great Lakes and the lands beneath them for the public.”[19] Additionally, a 2021 resolution passed by the Metropolitan Water Reclamation District of Greater Chicago recognized that the water of the Great Lakes will remain in the public trust.[20] This resolution from the water district of the largest metropolitan area in the Great Lakes region is another example of a step in the right direction for protecting the Great Lakes and equal access to clean water.

Notably, New York state assemblyman Patrick Burke has introduced legislation to create a more expansive Great Lakes Bill of Rights.[21] Burke’s proposal would create a Great Lakes bill of rights that declares the right of the Great Lakes to exist, flourish and naturally evolve, giving the state and affected localities to sue on the Lakes’ behalf.[22] The proposed legislation is remarkably similar to the struck-down Toledo law, and, if it becomes law, is likely to face similar legal challenges. While such a law would easily overcome the municipal overreach issue from Toledo, a proposed Great Lakes bill of rights statute is still likely to face the same vagueness issue that helped bring down LEBOR. However, in the face of continued pollution and disregard for our environment, laws like this represent the next logical step for protecting our lakes, rivers, and forests, and could finally give the Great Lakes the protection they deserve.

Notes

[1] Nicole Pallotta, Federal Judge Strikes Down ‘Lake Erie Bill of Rights,’ Animal Legal Defense Fund (May 4, 2020), https://aldf.org/article/federal-judge-strikes-down-lake-erie-bill-of-rights/#:~:text=The%20bill%20of%20rights%20established,powers%20claimed%20by%20certain%20corporations.

[2] Nina Totenberg, When Did Companies Become People? Excavating the Legal Evolution, NPR (July 28, 2014), https://www.npr.org/2014/07/28/335288388/when-did-companies-become-people-excavating-the-legal-evolution.

[3] Michael Wines, Behind Toledo’s Water Crisis, a Long-Troubled Lake Erie, N.Y. Times (Aug. 4, 2014), https://www.nytimes.com/2014/08/04/us/toledo-faces-second-day-of-water-ban.html.

[4] Id.

[5] Claire Brown, How Ohio’s Chamber of Commerce Killed an Anti-Pollution Bill of Rights, The Intercept (Aug. 29, 2019), https://theintercept.com/2019/08/29/lake-erie-bill-of-rights-ohio/.

[6] Id.

[7] Lake Erie Bill of Rights, Beyond Pesticides (last visited Oct. 7, 2023), https://www.beyondpesticides.org/assets/media/documents/LakeErieBillofRights.pdf.

[8] Id.

[9] Id.

[10] Id.

[11] Drewes Farms P’ship v. City of Toledo, 441 F.Supp.3d 551 (N.D. Ohio 2020).

[12] Id. at 558.

[13] Id. at 557.

[14] Id. at 556.

[15] Id.

[16] Id. at 557.

[17] Id.

[18] Public trust doctrine, Cornell Law School (last visited Oct. 8, 2023), https://www.law.cornell.edu/wex/public_trust_doctrine#:~:text=Public%20trust%20doctrine%20is%20a,waters%2C%20wildlife%2C%20or%20land.

[19] Jim Malewitz, Michigan AG Dana Nessel files lawsuit to shut down Line 5 in Mackinac Straits, Bridge MI (June 27, 2019), https://www.bridgemi.com/michigan-environment-watch/michigan-ag-dana-nessel-files-lawsuit-shut-down-line-5-mackinac-straits.

[20] Allison Fore, MWRD Board of Commissioners passes resolution that affirms water is a basic human right, Metropolitan Water Reclamation District of Greater Chi. (June 3, 2021), https://mwrd.org/sites/default/files/2021-06/Water%20Equity.pdf.

[21] NYS Assemblyman Patrick Burke Introduces Great Lakes Bill of Rights, N.Y. State Assembly (Mar. 2, 2022), https://nyassembly.gov/mem/Patrick-Burke/story/100976#:~:text=The%20Great%20Lakes%20Bill%20of,and%20the%20Great%20Lakes%20ecosystem.%E2%80%9D.

[22] Id.

The Inaccessible Cure: the Struggle With Feline Infectious Peritonitis and Thoughts on the Underlying Law

October 10, 2023
FDA, Food and Drug Law, Intellectual Property, Patents, Pharmaceuticals

Lan Gan, MJLST Staffer

For fellow feline fanatics, you may share some of my traits. I care for my cat’s health as I care for my own. Besides giving her nutritiously balanced meals, I take notes when she’s unwell and schedule annual physicals for her, just like I would for myself. I also browse online discussions posts of cats. Some make me laugh, some give me new understanding of cat behaviors, but the ones about feline infectious peritonitis are always grim.

Feline Infectious Peritonitis, or FIP, is a severe disease that typically develops in young cats when they are infected with feline enteric coronavirus (FeCV) which later mutates into FIPV and causes inflammations.[1] The mutations happen about ten percent of the time, and, until recently, have almost always been deadly.[2]

In 2018, researchers at the School of Veterinary Medicine at UC Davis partnered with Gilead Sciences and published an article about the discovery of GS-441524, which, through their experiments with cats that were infected with FIPV in an in vitro process, “caused a rapid reversal of disease signs and return to normality with as little as two weeks of treatment in 10/10 cats and with no apparent toxicity.”[3] Another paper, published in 2019, also by researchers of the two institutions, revealed that GS-441524 was an effective treatment for cats with naturally occurring FIP.[4]

This gave cat rescuers and cat owners hope. But despite promising experiment results, Niels Pederson, who partook in the studies and was a long-time researcher devoted to FIP, warned that the development was “proof-of-concept,” showing possibility in terms of science but not immediately translating into commercially available products.[5] Subsequently, GS-441524 did not move forward to become an FDA-approved drug to treat cats.[6] Instead, it seemed to be set aside as Gilead prioritized another drug, remdesivir, which is identical to GS-441524 in part of its structural formula and has the same mechanism of inhibiting coronavirus.[7] When Gilead failed to obtain FDA approval to use remdesivir to treat Ebola, they changed course to study its effects on the then-rising Covid-19 pandemic.[8] GS-441524, with its studies on animals halted, was also part of the race and was argued by some scientists to have more efficacy in treating Covid-19 than remdesivir.[9]

The much-needed cure became inaccessible. In as early as 2019, anxious people were turning to the black market for help. GS-441524 that circulated on the black market had murky origins: potential leaks from lab orders for research, personnel that synthesized the compound themselves in overseas locations such as China.[10] The benefits of the drug, while still salient, based on surveys of cat owners who utilized them, were potentially compromised by the disparity in quality of the black market drugs, and lack of veterinary expertise involved.[11]

Pharmaceutical companies are more than incentivized to patent their research products. A search on World Intellectual Property Organization (WIPO)’s database revealed 66 patents applied for by Gilead, from as early as 2009 to as recently as July 2023.[12] The list of patents documented development in Gilead’s GS-441524 research.[13] Gilead patented GS-441524’s treatment for cats in 2018 and 2020[14], but those accounted for only 3 of the 66 patents they obtained; the rest were regarding human use.[15] Patents benefit their owners by giving them a cause of action against future infringement. They are about owning, not sharing. Patents are the culmination of a strenuous journey of scientific research. But this celebratory landmark might not go any further. Many patents do not make their way onto the market; having one is not itself an incentive for doing so.

Next comes the approval process as stipulated in federal law. 21 U.S.C. § 360b governs the approval process of new animal drugs.[16] The statute lays the burden on pharmaceutical companies – referred to as drug sponsors – of contacting the FDA after initial research of the drug, making the decision to pursue approval for the drug, and conducting tests to ensure the effectiveness and safety of the drug.[17] Additionally, the Generic Animal Drug and Patent Term Restoration Act (GADPTRA) of 1988 provides an abbreviated process for generic copies of approved new animal drugs;[18] the Minor Use and Minor Species Animal Health Act (the “Mums Act”) of 2004 paves paths for drugs affecting a small population of major species of animals (defined as horses, dogs, cats, cattle, pigs, turkeys and chickens) and minor species (those that are not major species) that have few drugs available to them.[19] In 2018, the Animal Drug and Animal Generic Drug User Fee Amendments expanded the eligibility for conditional approval of non-MUMS drugs intending to treat a serious or life-threatening disease or condition or address an unmet animal or human health need, for which a demonstration of effectiveness would require a complex or particularly difficult study or studies.[20]

How has GS-441524 escaped the statutory provisions when they have been amended to be more inclusive? There may be various reasons. It may not qualify for conditional approval under 21 U.S.C. § 360ccc(a)(1)(ii) because peer-reviewed articles have already demonstrated the drug’s effectiveness. It may be hard to quantify the FIP-affected cat population to meet the “minor use” threshold set out in the Mums Act because of the difficulty of FIP testing. Current testing cannot differentiate between FeCV and the mutated FIPV, and an FIP diagnosis is often assumed for young cats based on their higher infection rate.[21] Lastly, no matter which approval process GS-441524 is eligible to take, the process wouldn’t start unless Gilead decides to contact the FDA and set forth the drug for approval. Current statutes create paths, but no incentives to do so. The market may provide some monetary incentives, as treatment costs via the black market can be up to $10,000 for 12 weeks[22], but this is singularly held back by the decision to prioritize approval for human treatment, and the presumption that the approval process of an animal drug would negatively impact the approval process of a similar drug for humans.[23]

The black market is not a long-term solution for FIP treatment. Though the U.S. has yet to adjudicate the circulation of unlicensed FIP treatment, in July 2023, a woman in China was sentenced to 15 years in prison and fined with more than $5 million in damages for producing and selling fake, substandard products pursuant to China’s criminal law statutes.[24] Gilead also holds the exclusive patents on feline treatments. Facing unclear prospects for legitimate FIP treatment, subsequent statutory amendments need to create actual incentives to spur innovation in animal drugs, in addition to the creation of paths. The law should also create safeguards to promote transparency and fairness in the application review process in order to reduce bias against animal drugs.

Notes

[1] Feline Infectious Peritonitis, Cornell Feline Health Center, https://www.vet.cornell.edu/departments-centers-and-institutes/cornell-feline-health-center/health-information/feline-health-topics/feline-infectious-peritonitis (last visited Oct. 2, 2023).

[2] Id.

[3] B.G. Murphy et al., The Nucleoside Analog GS-441524 Strongly Inhibits Feline Infectious Peritonitis (FIP) Virus in Tissue Culture and Experimental Cat Infection Studies, 219 Veterinary Microbology 226, 226 (2018).

[4] Niels C Pedersen, Efficacy and Safety of the Nucleoside Analog GS-441524 for Treatment of cats with Naturally Occurring Feline Infectious Peritonitis, 21(4) J. of Feline Med. & Surgery 271, 271 (2019).

[5] Human Antiviral ‘GS-441524’ Shows Great Promise Against Infectious Disease in Cats, Science Daily (Feb. 13, 2019), https://www.sciencedaily.com/releases/2019/02/190213100442.htm.

[6] Sarah Zhang, A Much-Hyped COVID-19 Drug Is Almost Identical to a Black-Market Cat Cure, The Atlantic (May 8, 2020), https://www.theatlantic.com/science/archive/2020/05/remdesivir-cats/611341/.

[7] Id.

[8] Kai Kupferschmidt & Jon Cohen, WHO Launches Global Megatrial of the Four Most Promising Coronavirus Treatments, Science (Mar. 22, 2020), https://www.science.org/content/article/who-launches-global-megatrial-four-most-promising-coronavirus-treatments.

[9] E.g., Victoria C. Yan & Florian L. Muller, Advantages of the Parent Nucleoside GS-441524 over Remdesivir for Covid-19 Treatment, 11 ACS Med. Chemistry Letters 1361, 1361 (2020).

[10] See Sarah Zhang, A Much-Hyped COVID-19 Drug Is Almost Identical to a Black-Market Cat Cure, The Atlantic (May 8, 2020), https://www.theatlantic.com/science/archive/2020/05/remdesivir-cats/611341/; see also Sarah Jones et al., Unlicensed GS-441524-Like Antiviral Therapy Can Be Effective for at-Home Treatment of Feline Infectious Peritonitis, 11 Animals 2257, 2258 (2021).

[11] Sarah Jones et al., Unlicensed GS-441524-Like Antiviral Therapy Can Be Effective for at-Home Treatment of Feline Infectious Peritonitis, 11 Animals 2257, 2264–67 (2021).

[12] CHEM:(BRDWIEOJOWJCLU-LTGWCKQJSA-N), WIPO, https://patentscope.wipo.int/search/en/result.jsf?_vid=P22-LN8EIR-06824 (last visited Oct. 2, 2023).

[13] Id.

[14] See World Patent No. 169,946 (filed Mar. 13, 2018); see also U.S. Patent No. 0,296,584 (filed Mar. 13, 2018); see also U.S. Patent No. 0,376,014 (filed Apr. 17, 2020).

[15] See CHEM:(BRDWIEOJOWJCLU-LTGWCKQJSA-N), WIPO, https://patentscope.wipo.int/search/en/result.jsf?_vid=P22-LN8EIR-06824 (last visited Oct. 2, 2023).

[16] 21 U.S.C. § 360b.

[17] From an Idea to the Marketplace: The Journey of an Animal Drug through the Approval Process, FDA (Aug. 14, 2020), https://www.fda.gov/animal-veterinary/animal-health-literacy/idea-marketplace-journey-animal-drug-through-approval-process.

[18] Generic Animal Drug and Patent Term Restoration Act (GADPTRA), FDA (Apr. 24, 2023), https://www.fda.gov/animal-veterinary/guidance-regulations/generic-animal-drug-and-patent-term-restoration-act-gadptra.

[19] Conditional Approval Explained: A Resource for Veterinarians, FDA (Sept. 17, 2020), https://www.fda.gov/animal-veterinary/resources-you/conditional-approval-explained-resource-veterinarians.

[20] 21 U.S.C. § 360ccc (a)(1)(ii).

[21] Feline Infectious Peritonitis, Cornell Feline Health Center, https://www.vet.cornell.edu/departments-centers-and-institutes/cornell-feline-health-center/health-information/feline-health-topics/feline-infectious-peritonitis (last visited Oct. 2, 2023).

[22] Sarah Jones et al., Unlicensed GS-441524-Like Antiviral Therapy Can Be Effective for at-Home Treatment of Feline Infectious Peritonitis, 11 Animals 2257, 2264–67 (2021).

[23] Id.

[24] Wu Shubin (吴淑斌), Zhishou Maoyao Yishen Huoxing 15 Nian: Maoquan “Jiumingyao” de Yinmi Shengyi (制售猫药一审获刑15年:猫圈“救命药” 的隐秘生意) [Sentenced at Trial for 15 Years for Manufacturing and Selling Medicine for Cats: The Secret Business of Life-Saving Drugs in Cat-loving Communities], Sanlian Shenghuo Zhoukan (三联生活周刊) [Sanlian Lifeweek] (July 20, 2023), https://mp.weixin.qq.com/s/VKJO_AIVBy3Hm6GhWUOnWA.

Who Is Regulating Regulatory Public Comments?

October 1, 2023
Administrative Law, Agencies, New Technology, Regulatory

Madeleine Rossi, MJLST Staffer

In 2015 the Federal Communications Commission (FCC) issued a rule on “Protecting and Promoting the Open Internet.”[1] The basic premise of these rules was that internet service providers had unprecedented control over access to information for much of the public. Those in favor of the new rules argued that broadband providers should be required to enable access to all internet content, without either driving or throttling traffic to particular websites for their own benefit. Opponents of these rules – typically industry players such as the same broadband providers that would be regulated – argued that such rules were burdensome and would prevent technological innovation. The fight over these regulations is colloquially known as the fight over “net neutrality.” 

In 2017 the FCC reversed course and put forth a proposal to repeal the 2015 regulations. Any time that an agency proposes a rule, or proposes to repeal a rule, they must go through the notice-and-comment rulemaking procedure. One of the most important parts of this process is the solicitation of public comments. Many rules get put forth without much attention or fanfare from the public. Some rules may only get hundreds of public comments, often coming from the industry that the rule is aimed at. Few proposed rules get attention from the public at large. However, the fight over net neutrality – both the 2015 rules and the repeal of those rules in 2017 – garnered significant public interest. The original 2015 rule amassed almost four million comments.[2] At the time, this was the most public comments that a proposed rule had ever received.[3] In 2017, the rule’s rescission blew past four million comments to acquire a total of almost twenty-two million comments.[4]

At first glance this may seem like a triumph for the democratic purpose of the notice-and-comment requirement. After all, it should be a good thing that so many American citizens are taking an interest in the rules that will ultimately determine how they can use the internet. Unfortunately, that was not the full story. New York Attorney General Letitia James released a report in May of 2021 detailing her office’s investigation into wide ranging fraud that plagued the notice-and-comment process.[5] Of the twenty-two million comments submitted about the repeal, a little under eight million of them were generated by a single college student.[6] These computer-generated comments were in support of the original regulations, but used fake names and fake comments.[7] Another eight million comments were submitted by lead generation companies that were hired by the broadband companies.[8] These companies stole individuals’ identities and submitted computer-generated comments on their behalf.[9] While these comments used real people’s identities, they fabricated the content in support of repealing the 2015 regulations.[10]

Attorney General James’ investigation showed that real comments, submitted by real people, were “drowned out by masses of fake comments and messages being submitted to the government to sway decision-making.”[11] When the investigation was complete, James’ office concluded that nearly eighteen of the twenty-two million comments received by the FCC in 2017 were faked.[12] The swarm of fake comments created the false perception that the public was generally split on the issue of net neutrality. In fact, anywhere from seventy-five to eighty percent of Americans say that they support net neutrality.[13]

This is not an issue that is isolated to the fight over net neutrality. Other rulemaking proceedings have been targeted as well, namely by the same lead generation firms involved in the 2017 notice-and-comment fraud campaign.[14] Attorney General James’ investigation found that regulatory agencies like the Environmental Protection Agency (EPA), which is responsible for promulgating rules that protect people and the environment from risk, had also been targeted by such campaigns.[15] When agencies like the FCC or EPA propose regulations for the protection of the public, the democratic process of notice-and-comment is completely upended when industry players are able to “drown out” real public voices.

So, what can be done to preserve the democratic nature of the notice-and-comment period? As the technology involved in these schemes advances, this is likely to become not only a reoccurring issue but one that could entirely subvert the regulatory process of rulemaking. One way that injured parties are fighting back is with lawsuits.

In May of 2023, Attorney General James announced that she had come to a second agreement with three of the lead generation firms involved with the 2017 scam to falsify public comments.[16] The three companies agreed to pay $615,000 in fines for their involvement.[17] This agreement came in addition to a previous agreement in which the three stipulated to paying four million dollars in fines and agreed to change future lead generating practices, and the litigation is ongoing.[18]

However, more must be done to ensure that the notice-and-comment process is not entirely subverted. Financial punishment after the fact does not account for the harm to the democratic process that is already done. Currently, the only recourse is to sue these companies for their fraudulent and deceptive practices. However, lawsuits will typically only result in financial losses. Financial penalties are important, but they will always come after the fact. Once litigation is under way, the harm has already been done to the American public.

Agencies need to ensure that they are keeping up with the pace of rapidly evolving technology so that they can properly vet the validity of the comments that they receive. While it is important to keep public commenting a relatively open and easy practice, having some kind of vetting procedure has become essential. Perhaps requiring an accompanying email address or phone number for each comment, and then sending a simple verification code. Email or phone numbers could also be contacted during the vetting process once the public comment period closes. While it would likely be impractical to contact each individual independently, a random sample would at least flag whether or not a coordinated and large-scale fake commenting campaign had taken place. 

Additionally, the legislature should keep an eye on fraudulent practices that impact the notice-and-comment process. Lawmakers can and should strengthen laws to punish companies that are engaged in these practices. For example, in Attorney General James’ report she recommends that lawmakers do at least two things. First, they should explicitly and statutorily prohibit “deceptive and unauthorized comments.”[19] To be effective these laws should establish large civil fines. Second, the legislature should “strengthen impersonation laws.”[20] Current impersonation laws were not designed with mass-impersonation fraud in mind. These statutes should be amended to increase penalties when many individuals are impersonated.

In conclusion, the use of fake comments to sway agency rulemaking is a problem that is only going to worsen with time and the advance of technology. This is a serious problem that should be taken as such by both agencies and the legislature. 

Notes

[1] 80 Fed. Reg. 19737.

[2] https://www.brookings.edu/articles/democratizing-and-technocratizing-the-notice-and-comment-process/.

[3] Id.

[4] Id.

[5] https://ag.ny.gov/press-release/2021/attorney-general-james-issues-report-detailing-millions-fake-comments-revealing.

[6] https://www.brookings.edu/articles/democratizing-and-technocratizing-the-notice-and-comment-process/.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] https://ag.ny.gov/press-release/2021/attorney-general-james-issues-report-detailing-millions-fake-comments-revealing.

[12] Id.

[13] https://thehill.com/policy/technology/435009-4-in-5-americans-say-they-support-net-neutrality-poll/, https://publicconsultation.org/united-states/three-in-four-voters-favor-reinstating-net-neutrality/.

[14] Id.

[15] https://apnews.com/article/settlement-fake-public-comments-net-neutrality-ae1f69a1f5415d9f77a41f07c3f6c358.

[16] Id.

[17] Id.

[18] https://apnews.com/article/government-and-politics-technology-business-9f10b43b6aacbc750dfc010ceaedaca7.

[19] https://ag.ny.gov/sites/default/files/oag-fakecommentsreport.pdf.

[20] Id.

Victory in the Big Sky Country: The Ramifications of Held v. Montana

October 1, 2023
Climate Change, Constitutional Law, Environment, Environmental Law

Joshua Fuller, MJLST Staffer

Introduction

The battle about climate change rages on. But one group of young students has dealt a significant blow to the state of Montana, claiming that under the Montana Constitution they have a right to a clean environment. This victory, while small in its effect, has reverberated across the nation. This case, Held v. Montana, is the first of its kind. Never before has there been a ruling that a clean environment was a right of a state’s citizens. And while the case will certainly be taken up by the Montana Supreme Court, the door has been opened for climate change activists to consider potential litigation across the country.

Background About the Case:

The Montana Constitution includes the following provision: “All persons are born free and have certain inalienable rights. They include the right to a clean and healthful environment and the rights of pursuing life’s basic necessities, enjoying and defending their lives and liberties, acquiring, possessing and protecting property, and seeking their safety, health and happiness in all lawful ways.”[1] The phrase “right to a clean and healthful environment” is the basis on which the sixteen Montana youth (“the plaintiffs”) filed suit. They sued the state of Montana arguing that the passage of the State Energy Policy Act (the “Act”), which prohibited the state from considering the impacts of greenhouse gas emission when performing an environmental review, violates the clean environment provision in the Montana Constitution.[2] Judge Kathy Seeley, the District Court Judge for the 1st District, agreed with the plaintiffs. In her order, Judge Seeley found that the Act was unconstitutional under the ruling of Park Cnty: “Pursuant to the Court’s decision in Park Cnty., Mont. Code Ann. § 75-1-201(6)(a)(ii) is facially unconstitutional because it eliminates MEPA litigants’ remedies that prevent irreversible degradation of the environment, and it fails to further a compelling state interest.”[3] Shortly after the decision was rendered, a spokesperson for Montana Attorney General, Austen Knudsen, stated, “This ruling is absurd, but not surprising from a judge who let the plaintiffs’ attorneys put on a weeklong taxpayer-funded publicity stunt that was supposed to be a trial”[4] and stated that the Attorney General would be seeking an appeal with the Montana Supreme Court. 

While the future of the case is less than certain, there is light at the end of the tunnel for the plaintiffs. The Montana Supreme Court has often taken the position that the text of the Montana Constitution governs. In their recent decision in Board of Regents of Higher Education v. State, the Court struck down House Bill 102, a firearms bill that would have allowed carrying on Montana public college campuses. A unanimous Court found that under the Montana Constitution,[5] the Board of Regents had controlling power when deciding gun regulations on college campuses.[6] Given the heavy firearms culture that exists in Montana, this decision was of great surprise to many. But the case gave important context to the priorities of the Court. Given the decision to faithfully follow the Montana Constitution, this does give a glimmer of where the Court may lean when the decision goes up for appeal, if the Court takes it up. Additionally, Montana has traditionally been a bulwark of conservation of the land. Two well known National Parks, Glacier and Yellowstone, exist within the boundaries of the state. Protecting the environment, despite the misgivings of the current state administration, has been an important part of the culture. In Montana, Fish, Wildlife & Parks offers conservation easements with landowners, where the landowners are paid by the department to conserve certain parts of their land and limit the use.[7] With several parts of the government for protecting the environment, and a long standing tradition of conservation, there is reason to believe that the Montana Supreme Court would rule in favor of the plaintiffs. 

Implications of the Case

Despite the spokeperson’s statements, the reaction to the decision nationally has been overwhelmingly supportive. Michael Burger, executive director of the Sabin Center for Climate Change Litigation at Columbia University, stated, “Emissions contribute to climate change, climate harms are real, people can experience climate harms individually, and every ton of greenhouse gas emissions matters. These are important factual findings, and other courts in the U.S. and around the world will look to this decision.”[8] Similar litigation has already begun to occur. In Oregon, a county sued major oil companies for exacerbating the current climate change crisis.[9] But Held is the first time that a state has been held accountable for actions that the state attempted to create to get around climate change measures. As of the writing of this article, only six states have provisions in their constitutions that citizens have the right to a clean environment: Hawai’i, Illinois, Massachusetts, Montana, New York, and Pennsylvania.[10] While this may seem insignificant, the holding in Held is a first step for citizens to fight climate change. The court’s decision gives groundwork to other prospective plaintiffs on how to formulate litigation surrounding issues that deal with climate change. 

A New Type of Law?

Perhaps the most important impact of Held is the potential for a new body of law. Environmental law has existed for decades, harkening back to the era of Theodore Roosevelt and his decision to create the National Parks. However, its intersection with constitutional law has only been more recent, and it is far less defined. Despite agencies such as the Environmental Protection Agency and the National Parks Service, litigation surrounding climate change has only emerged in the past couple of decades. This vacuum of law is ripe for the filling. This new law springs forward from the enjoinment of environmental law and constitutional law. This new “Green Constitutional Law” surfaces from the idea that state constitutions have provisions in place that protect the environment and establish the right to a clean climate.[11] Held provides an outline for what green constitutional law may look like. The litigation emanating in other states, and the call for more action to curb global warming, speak to the necessity of such a new form of law. At its core, green constitutional law addresses the idea that all people have the right to “life, liberty, and the pursuit of happiness.”[12] Because the rise of climate change threatens the existence of countless species, including humans, it can be reasonably asked whether the United States Constitution, so quoted above, gives the right to an environment in which its citizens can survive and flourish. A new form of law is arising to help answer this question, to which Held is the foot in the door to begin this change. The battle may be won, but the war has just begun. 

Notes

[1] Mont. Const. Art. II, § 4.

[2] Id.

[3] Held v. Montana, No. CDV-2020-307 (Mont. Dist. Ct., 2023).

[4] David Gelles and Mike Baker, Judge Rules in Favor of Montana Youths in a Landmark Climate Case, The New York Times (Aug. 14, 2023) https://www.nytimes.com/2023/08/14/us/montana-youth-climate-ruling.html.

[5] Mont. Const. art. X, § 9(2)(a).

[6] Bd. of Regents of Higher Educ. of Mont. v. State, 1, 12 (2022 MT 128).

[7] FWP, Habitat Montana, (Last visited Sept. 29, 2023) https://fwp.mt.gov/conservation/landowner-programs/habitat-montana.

[8] Id.

[9] Clark Mindock, US Climate Change Lawsuit Seeks $50 Billion, Citing 2021 Heat Wave, Reuters (June 22, 2023 8:08 PM CDT) https://www.reuters.com/world/us/us-climate-change-lawsuit-seeks-50-billion-citing-2021-heat-wave-2023-06-22/.

[10] John C. Dernbach, The Environmental Rights Provisions of U.S. State Constitutions: A Comparative Analysis, 1 Widener University – Commonwealth Law School (2023).

[11] Kate Burgess, Green Amendments in 2023: States Continue Efforts to Make a Healthy Environment a Legal Right,  National Caucus of Environmental Legislators, (Mar. 27, 2023) https://www.ncelenviro.org/articles/green-amendments-in-2023-states-continue-efforts-to-make-a-healthy-environment-a-legal-right/.

[12] The Declaration of Independence para.2 (U.S. 1776).

Fake It ‘Til You Make It: How Should Deepfakes Be Regulated?

September 18, 2023
Artificial Intelligence, Internet, New Technology, Privacy, Social Media

Tucker Bender, MJLST Staffer

Introduction

While rapidly advancing artificial intelligence (AI) is certain to elevate technology and human efficiency, AI also poses several threats. Deepfakes use machine learning and AI to essentially photoshop individuals into images and videos. The advancement of AI allows unskilled individuals to quickly create incredibly lifelike fake media. Further, in an increasingly digital world, deepfakes can be used to rapidly disseminate misinformation and cause irreparable harm to someone’s reputation. Minnesota is an example of a state that has recently enacted deepfake law. However, some view these laws as a violation of First Amendment rights and as being unnecessary due to incentives for private companies to monitor their sites for misinformation. 

Minnesota’s Deepfake Law

On August 1st, 2023, a deepfake law became effective in Minnesota.[1] In the absence of any federal law, Minnesota joins a handful of states that have enacted legislation to combat deepfakes.[2] Laws vary by state, with some allowing criminal charges in certain situations, while others allow a civil action. Specifically, the Minnesota law imposes civil and criminal liability for the “nonconsensual dissemination of a deep fake depicting intimate parts or sexual acts” and criminal liability for the “use of deep fake technology to influence an election”.[3]

The law imposes severe penalties for each. For creating and disseminating a sexual deepfake, damages can include general and special damages, profit gained from the deepfake, a civil penalty awarded to the plaintiff in the amount of $100,000, and attorney fees.[4] Additionally, criminal penalties can consist of up to three years imprisonment, a fine of up to $5,000, or both.[5] Criminal penalties for use of deepfake technology to influence an election vary depending on whether it is a repeat violation, but can result in up to five years imprisonment, a fine of up to $10,000, or both.[6]

These two deepfake uses appear to elevate the penalties of Minnesota’s criminal defamation statute. The defamation statute allows up to one year of imprisonment, a fine of up to $3,000, or both for whoever “communicates any false and defamatory matter to a third person without the consent of the person defamed”.[7]

It is completely logical for the use of deepfakes to carry harsher penalties than other methods of defamation. Other methods of defamation can be harmful, but typically consist of publications or statements made by a third party about a victim. Deepfakes, on the other hand, make viewers believe the victim is making the statement or committing the act themselves. The image association with a deepfake understandably creates greater harm, as recollection of the deepfake imagery can be difficult for viewers to dissociate from the victim. 

Almost everyone can agree that the Minnesota deepfake law was needed legislation, as evidenced by the bill passing the House in a 127-0 vote.[8] However, the law may be too narrow. Deepfake technology is indisputably damaging when used to create sexually explicit images of someone or to influence an election. But regardless of the false imagery depicted by the deepfake, the image association makes the harm to one’s reputation much greater than mere spoken or written words by a third party. By prohibiting only two uses of deepfake technology in the law, a door is left open for someone to create a deepfake of a victim spewing hateful rhetoric or committing heinous, non-sexual acts. While victims of these deepfakes can likely find redress through civil defamation suits for damages, the criminal liability of the deepfake creators would appear limited to Minnesota’s criminal defamation statute.[9] Further, defamation statutes are better suited to protect celebrities, but deepfakes are more likely to be damaging to people outside of the public eye.[10] There is a need for deepfake-specific legislation to address the technologically advanced harm that deepfakes can cause to the average person.

As state (and possibly federal) statutes progress to include deepfake laws, legislators should avoid drafting the laws too narrowly. While deepfakes that depict sexual acts or influence elections certainly deserve inclusion, so do other uses of deepfakes that injure a victim’s reputation. Elevated penalties should be implemented for any type of deepfake defamation, with even further elevated penalties for certain uses of deepfakes. 

Opposition to Deepfake Laws

Although many agree that deepfakes present issues worthy of legislation, others are skeptical and worried about First Amendment rights, as well as broad legislation undermining valuable uses of the technology.[11] Specifically, skeptics are concerned about legislation that targets political speech, such as the Minnesota statute, as political speech is arguably a category of free speech protected above any other.[12]

Another real concern with broad deepfake legislation is that it would place a burden on innocent creators while doing little to stop those spreading malicious deepfakes. This is due, in part, to the difficulty in tracking down malicious deepfake uploaders, who do so anonymously. Proposed federal regulation suggests a requirement that “any advanced technological false personation record which contains a moving visual element shall contain an embedded digital watermark clearly identifying such record as containing altered audio or visual elements”.[13] However, opponents view this as useless legislation. Deepfake creators and others wanting to spread misinformation clearly have the technical ability to remove a watermark if they can create advanced deepfakes in the first instance.  

Role of Private Parties

Social media sites such as X (formerly known as Twitter) and Facebook should also be motivated to keep harmful deepfakes from being disseminated throughout their platforms. Users of these sites generally will want to be free from harassment and misinformation. This has led to solutions such as X implementing “Community Notes”, which allows videos created using deepfake technology to remain on the platform, but clearly labels them as fake or altered.[14] Private solutions such as this may be the best compromise. Viewers are able to understand the media is fake, while creators are still able to share their work without believing their free speech is being impinged upon. However, the sheer amount of content posted on social media sites makes it inevitable that some harmful deepfakes are not marked accordingly, and thus cause misinformation and reputational injury.

Although altered images and misinformation are nothing new, deepfakes and today’s social media platforms present novel challenges resulting from the realism and rapid dissemination of the modified media. Whether the solution is through broad, narrow, or nonexistent state laws is left to be determined and will likely be a subject of debate for the foreseeable future. 

Notes

[1] https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF1370&ssn=0&y=2023

[2] https://www.pymnts.com/artificial-intelligence-2/2023/states-regulating-deepfakes-while-federal-government-remains-deadlocked/

[3] https://www.revisor.mn.gov/bills/text.php?number=HF1370&type=bill&version=3&session=ls93&session_year=2023&session_number=0

[4] https://www.revisor.mn.gov/bills/text.php?number=HF1370&type=bill&version=3&session=ls93&session_year=2023&session_number=0https://www.revisor.mn.gov/bills/text.php?number=HF1370&type=bill&version=3&session=ls93&session_year=2023&session_number=0

[5] Id.

[6] Id.

[7] https://www.revisor.mn.gov/statutes/cite/609.765#:~:text=Whoever%20with%20knowledge%20of%20its,one%20year%20or%20to%20payment

[8] https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF1370&ssn=0&y=2023

[9] https://www.revisor.mn.gov/statutes/cite/609.765#:~:text=Whoever%20with%20knowledge%20of%20its,one%20year%20or%20to%20payment

[10] https://www.ebglaw.com/wp-content/uploads/2021/08/Reif-Fellowship-2021-Essay-2-Recommendation-for-Deepfake-Law.pdf

[11] https://rtp.fedsoc.org/paper/deepfake-laws-risk-creating-more-problems-than-they-solve/

[12]  Id.

[13] https://www.congress.gov/bill/117th-congress/house-bill/2395/text

[14] https://communitynotes.twitter.com/guide/en/about/introduction

A Tax on the EPA’s Power: The Supreme Court and the Future of Carbon Pricing

April 27, 2023
Climate Change, Energy Law, Environment, EPA, Tax

Quinn Milligan, MJLST Staffer

As climate change becomes a topic of increasing popularity worldwide, policy makers and the legal community alike have turned their attention to fashioning appropriate mechanisms to address carbon emissions. Of the myriad proposals made in recent years, carbon pricing has come to the forefront of climate policy regimes worldwide. Although carbon pricing has been implemented in various parts of the world, the legal system of the United States presents various legal challenges.

Carbon pricing, at a simple level, is an economic tool designed to reduce carbon emissions by forcing individuals and companies to internalize the externality price of the carbon they emit.[1] Caron pricing is implemented predominantly in one of two methods: cap-and-trade systems or a carbon taxation system. A cap-and-trade system is the process of placing a “cap” on the amount of carbon (measured in tons) that can be emitted by those under the regulatory purview of the given cap-and-trade; typically companies are the target of these systems. Once the emissions cap has been set, the regulators allocate “allowances” for all or part of the total cap. Companies that emit less than their allocated cap can sell or trade their remaining allowances to other companies under the cap-and-trade regulation. In essence, the cap-and-trade system creates a monetary incentive for companies to reduce their carbon emissions.[2] In contrast, a carbon tax is much more straightforward. Carbon taxes are imposed on the emission of carbon dioxide that arises through production or consumption of fossil fuels based on the amount of carbon dioxide those activities produce.[3] The tax will be assessed per unit of emissions, typically per ton of carbon dioxide.

Both carbon taxes and cap-and-trade systems are designed to create an economic incentive for companies to reduce their carbon emissions in order to combat climate change at a large scale. While there are various economic arguments for and against the efficiency of both carbon taxes and cap-and-trade systems, there is evidence that both can be effective when well designed and administrated. Importantly, the goal of both main forms of carbon pricing is to take advantage of the financial rationality of actors in the economy and incentivize them to reduce their carbon emissions. Ultimately the policy goal behind incentivizing reduction in carbon emissions is to combat climate change by shifting the burden onto the polluters.[4]

While carbon pricing systems have proven to be an effective method of reducing carbon emissions, the legal system presents important challenges to their implementation. The most recent challenge to the ability of regulators and policy makers came from the Supreme Court’s recent decision to curtail the power of the Environmental Protection Agency (EPA) to limit carbon emissions in West Virginia v. Environmental Protection Agency.[5] The Supreme Court’s decision in late June of 2022 dictated that the EPA cannot put state-level caps on carbon emissions under the Clean Air Act of 1970. The Supreme Court went on to clarify that the power to decide how the U.S. would power itself lies with Congress, and decisions on emissions must come from Congress.[6] The decision represents a signal from the Supreme Court to regulatory agencies generally, not just the EPA, that regulations must arise from the powers specifically delegated by Congress to those agencies.

Previously, the EPA had been using the Clean Air Act to regulate climate change in various manners, particularly through regulation of carbon emissions. In specific, the Court found that the Clean Power Plan established under the Obama administration exceeded the regulatory power granted to the EPA by Congress under the Clean Air Act.[7] The Supreme Court further decided that the power to promulgate rules which would have transformational impacts on the economy must be specifically granted by Congress to regulatory agencies.[8] In this specific context, the Court ruled that the regulation of carbon emissions sought by the EPA would have such transformational impacts on the economy. The Court specified that any time a regulatory agency in the U.S. attempts to promulgate any rule which may have a transformational impact on the economy – which was to regulate carbon emissions and address climate change in this instance – the rule would be presumptively invalid unless Congress had already specifically authorized the agency to promulgate rules and regulations in the area.

This ruling significantly reduces the EPA’s ability to regulate carbon emissions and climate change.[9] The importance of this decision is not so much that the EPA will never be able to regulate carbon emissions or attempt to address climate change, but instead that the accomplishment of the policy goals underlying EPA regulation will certainly be delayed. Because the majority decision emphasized that regulatory decisions of economic and political significance must be supported by clear Congressional authorization, the EPA has been thrown into a sort of stalemate. The direct finding in West Virginia v. EPA that the Clean Power Plan was not adequately supported by Section 111(d) of the Clean Air Act set the EPA’s timetable for accomplishing its policy goals back years.

As many have noticed in recent years, extreme weather events have become more frequent and more severe; our climate is changing before our very eyes. One of the most ironic features of this Supreme Court decision is that the growth of the administrative state maligned by the majority opinion has directly accompanied extreme increases in atmospheric carbon dioxide levels the Clean Power Plan aimed to combat.

Although carbon pricing systems have shown promise in incentivizing participants in the global economy to decrease their carbon emissions, the Supreme Court’s decision in West Virginia v. EPA certainly made it difficult for the EPA to enact any sort of carbon pricing scheme in the near future.[10] At a time when climate change is only becoming a more important issue, the Court’s decision has made the primary environmental agency in the U.S. less able to achieve policy goals that would combat it. While other countries have found success implementing carbon pricing systems, at least for the time being, that option appears unavailable in the U.S.

Notes

[1]https://seors.unfccc.int/applications/seors/attachments/get_attachment?code=TJQGYTI096K3J33ANM1HDWYEU51VRXNC

[2] https://www.edf.org/climate/how-cap-and-trade-works

[3] https://www.c2es.org/content/carbon-tax-basics/

[4] https://www.worldbank.org/en/programs/pricing-carbon

[5] https://www.supremecourt.gov/opinions/21pdf/20-1530_n758.pdf

[6] https://www.cfr.org/in-brief/supreme-court-epa-west-virginia-ruling-delay-us-climate-change-action

[7]https://www.cnbc.com/2022/06/30/-supreme-court-says-epa-lacks-authority-on-climate-standards-for-power-plants.html

[8] https://www.supremecourt.gov/opinions/21pdf/20-1530_n758.pdf

[9] https://www.npr.org/2022/06/30/1103595898/supreme-court-epa-climate-change

[10]https://www.hsph.harvard.edu/news/features/the-supreme-court-curbed-epas-power-to-regulate-carbon-emissions-from-power-plants-what-comes-next/

 

Whistleblowers Reveals…—How Can the Legal System Protect and Encourage Whistleblowing?

April 27, 2023
Agencies, Business Law, Corporate Ethics, Regulatory, Securities Law

Vivian Lin, MJLST Staffer

In July 2022, Twitter’s former head of security, Peiter Zatko, filed a 200+ page complaint with Congress and several federal agencies, disclosing Twitter’s potential major security problems that pose a threat to its users and national security.[1] Though it is still unclear whether  these allegations were confirmed, the disclosure drew significant attention because of data privacy implications and calls for whistleblower protection. Whistleblowers play an important role in detecting major issues in corporations and the government. A 2007 survey reported that in private companies, professional auditors were only able to detect 19% of instances of fraud but whistleblowers were able to expose 43% of incidents.[2]In fact, this recent Twitter scandal, along with Facebook’s online safety scandal in 2021[3] and the famous national security scandal disclosed by Edward Snowden, were all revealed by inside whistleblowers. Without these disclosures, the public may never learn of incidents that involve their personal information and security.

An Overview of the U.S. Whistleblower Protection Regulations

Whistleblower laws aim to protect individuals who report illegal or unethical activities in their workplace or government agency. The primary federal law protecting whistleblowers is the Whistleblower Protection Act (WPA), passed in 1989. The WPA provides protections for federal employees who report violations such as  gross mismanagement, gross waste of funds, abuse of authority, or dangers to public health or safety.[4]

In addition to the WPA, there are other federal laws that provide industry specific whistleblower protections in private sectors. For example, the Sarbanes-Oxley Act (SOX) was enacted in response to the corporate accounting scandals of the early 2000s. It requires public companies to establish and maintain internal controls to ensure the accuracy of their financial statements. Whistleblowers who report violations of securities law can receive protection against retaliation, including reinstatement, back pay, and special damages. To further encourage more whistleblowers to come forward with potential securities violations, Congress passed the Dodd-Frank           Wall Street Reform and Consumer Protection Act (Dodd-Frank) in 2010 which provides incentives and additional protections for whistleblowers. The Securities and Exchange Commission (SEC) established its whistleblower protection program under Dodd-Frank to award qualified whistleblowers for their tips that lead to a successful SEC sanction. Finally, the False Claims Act (FCA) allows individuals to file lawsuits on behalf of the government against entities that have committed fraud against the government. Whistleblowers who report fraud under the FCA can receive a percentage of the amount recovered by the government. In general, these laws give protections for whistleblowers in the private corporate setting, providing anti-retaliation protection and incentives for reporting violations.

Concerns Involved in Whistleblowing and Related Laws

While whistleblower laws in the United States provide important protections for individuals who speak out against illegal or unethical activities, there are still risks associated with whistleblowing. Even with the anti-retaliation provisions, whistleblowers still face retaliation from their employer, such as demotion or termination, and may face difficulties finding new employment in their field. For example, a 2011 report indicated that while the percentage of employees who noticed wrongdoings at their workplaces decreased from the 1992 survey, about one-third of those who called out wrongdoings and were identified as whistleblowers experienced retaliation in the form of threats and/or reprisals.[5]

Besides the fear of retaliation, another concern is the low success rate under the WPA when whistleblowers step up to make a claim. A 2015 research analyzed 151 cases where employees sought protection under the WPA and found that 79% of the cases were found in favor of the federal government.[6] Such a low success rate, in addition to potential retaliation, likely discourages employees from disclosing when they identify wrongdoings at their workplace.

A third problem with the current whistleblowing law is that financial incentives do not work as effectively as expected and might negatively impact corporate governance. From the incentives perspective, bounty hunting might actually discourage whistleblowers when not used well. For example, Dodd-Frank provides monetary rewards for people who report financial fraud that will allow the SEC impose a more than $1 million sanction on the violator, but if an employee discovers a wrongdoing that will not lead to a sanction over $1 million, a study shows that the employee will be less likely to report it timely.[7] From a corporate governance perspective, a potential whistleblower might turn to a regulatory agency for the reward rather than reporting it to the company’s internal compliance program, providing the company with the opportunity to do the right thing.[8]

Potential Changes 

There are several ways in which the current whistleblower regulations can improve. First, to encourage employees to stand up and identify wrongdoings at the workplace, the SEC’s whistleblower protection program should exclude the $1 million threshold requirement for any potential reward. Those who notice illegal behaviors that might not result in a $1 million sanction should also receive a reward if they report the potential risks.[9] Second, to deter retaliation, compensation for retaliation should be proportionate to the severity of the wrongdoing uncovered.[10] Currently, statutes mostly offer backpay, front pay, reinstatement, etc. as compensation for retaliation, while receiving punitive damages beyond that is rare. This mechanism does not recognize the public interest in retaliation cases—the public benefits from the whistleblower’s act while she risks retaliation. Finally, bounty programs might not be the right approach given that many whistleblowers are motivated more by their own moral calling rather than money. Perhaps a robust system ensuring whistleblower’s reports be thoroughly investigated and building stronger protections  from retaliation would work better than bounty programs.

In conclusion, whistleblowers play a crucial role in exposing illegal and unethical activities within organizations and government agencies. While current U.S. whistleblower protection regulations offer some safeguards, there are still shortcomings that may discourage employees from reporting wrongdoings. Improving whistleblower protections against retaliation, expanding rewards to include a wider range of disclosures, and refining the approach to investigations are essential steps to strengthen the system. By ensuring that their disclosures are thoroughly investigated and their lives are not severely impacted, we can encourage more whistleblowers to come forward with useful information which will better protect the public interest and maintain a higher standard of transparency, accountability, and corporate governance in the society.

Notes

[1] Donie O’Sullivan et al., Ex-Twitter Exec Blows The Whistle, Alleging Reckless and Negligent Cybersecurity Policies, CNN (Aug. 24, 2022, 5:59 AM EDT), https://edition.cnn.com/2022/08/23/tech/twitter-whistleblower-peiter-zatko-security/index.html.

[2] Kai-D. Bussmann, Economic Crime: People, Culture, and Controls 10 (2007).

[3] Ryan Mac & Cecilia Kang, Whistle-Blower Says Facebook ‘Chooses Profits Over Safety’, N.Y. Times (Oct. 3, 2021), https://www.nytimes.com/2021/10/03/technology/whistle-blower-facebook-frances-haugen.html.

[4] Whistleblower Protection, Office of Inspector General, https://www.oig.dhs.gov/whistleblower-protection#:~:text=The%20Whistleblower%20Protection%20Act%20 (last accessed: Mar. 5, 2023).

[5] U.S. Merit Systems Protection Board, Blowing the Whistle: Barriers to Federal Employees Making Disclosures 27 (2011).

[6] Shelley L. Peffer et al., Whistle Where You Work? The Ineffectiveness of the Federal Whistleblower Protection Act of 1989 and the Promise of the Whistleblower Protection Enhancement Act of 2012, 35 Review of Public Personnel Administration 70 (2015).

[7] Leslie Berger, et al., Hijacking the Moral Imperative: How Financial Incentives Can Discourage Whistleblower Reporting. 36 AUDITING: A Journal of Practice & Theory 1 (2017).

[8] Matt A. Vega, Beyond Incentives: Making Corporate Whistleblowing Moral in the New Era of Dodd- Frank Act “Bounty Hunting”, 45 Conn. L. Rev. 483.

[9] Geoffrey C. Rapp, Mutiny by the Bounties? The Attempt to Reform Wall Street by the New Whistleblower Provisions of the Dodd-Frank Act, 2012 B.Y.U.L. Rev. 73.

[10] David Kwok, The Public Wrong of Whistleblower Retaliation, 96 Hastings L.J. 1225.

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