Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.
Speaker 2: By four. Ah, there's mister Midnight Jack Devil.
Speaker 1: Oh, good evening night, owls, and thank you for allowing
Speaker 1: me into your living rooms.
Speaker 2: You're meddling the things you don't understand who, ladies.
Speaker 1: And gentlemen, please stay tuned for a live television first,
Speaker 1: as we attempt to commune with the Devil.
Speaker 3: The horror movie Late Night with the Devil is about
Speaker 3: a seventies talk show host who keeps the cameras rolling
Speaker 3: during a live satanic incident, unleashing evil into the living
Speaker 3: rooms of viewers. It sounds scary, right, but what actually
Speaker 3: scared a lot of viewers more was the film's use
Speaker 3: of AI to generate artwork used in cutaways linking segments
Speaker 3: of the show. The social media backlash even included calls
Speaker 3: to boycott the movie. Of course, the use of AI
Speaker 3: in films and television has been a hot button topic
Speaker 3: in Hollywood, witnessed last year's strikes, where it was an
Speaker 3: obstacle to reaching deals with the writers and actors' unions,
Speaker 3: And now a federal court has issued the first ruling
Speaker 3: of its kind on whether works generated by AI. In
Speaker 3: this case, an artwork can be copyrighted. The DC Circuit
Speaker 3: Court ruled unanimously that human authorship is required to get
Speaker 3: copyright protection for a work. Joining me is intellectual property
Speaker 3: litigator Terence Ross, a partner at Katin Yutchen Rosenman. So
Speaker 3: Terry tell us about this work created by a computer scientist.
Speaker 1: Well, Jue, we talked about this in a past show,
Speaker 1: way back when this whole issue was still percolating in
Speaker 1: lower courts, and now we have the first appellate court
Speaker 1: decision on whether or not artificial intelligence can create works
Speaker 1: that can be copyrighted. And to refresh everyone's memory, this
Speaker 1: involves a computer scientist by the name of doctor Steven Taller,
Speaker 1: and he came up with his own generative artificial intelligence,
Speaker 1: which he has dubbed the Creativity Machine. And just so
Speaker 1: everybody understands, AI gets used in a lot of misleading
Speaker 1: contexts and commercials and advertising. Nowadays, real artificial intelligence is
Speaker 1: called generative AI because it's capable of learning and it
Speaker 1: improves itself without human interaction. And so doctor Toller came
Speaker 1: up with this creativity machine, and he asked it to
Speaker 1: paint a picture for him and rendered a lovely work,
Speaker 1: multi colored work, what appeared to me to be a
Speaker 1: garden scene. But doctor Toller gave it the name A
Speaker 1: Recent Entrance to Paradise, and he printed that off a printer.
Speaker 1: He took it to the US Copyright Office and filed
Speaker 1: an application to register that work for copyright registration purposes,
Speaker 1: and on the form said it was created by this
Speaker 1: creativity machine. Not surprisingly, the US Copyright Office denied that
Speaker 1: application for registration. And by way the historical background, this
Speaker 1: didn't come as a surprise to anybody. Way back in
Speaker 1: nineteen seventy three, the US Copyright Office, in its internal
Speaker 1: regulations announced that only humans can obtain copyright registrations. So
Speaker 1: this is a really longstanding position of the Copyright Office.
Speaker 1: It's not something unique to this case or unique to
Speaker 1: artificial intelligence or the current trend in AI. If your
Speaker 1: application is denied by the Copyright Office, you have a
Speaker 1: right to appeal that decision to the United States District
Speaker 1: Court for the District of Columbia, because the Copyright Office
Speaker 1: is headquartered in DC, and doctor Toller did that. The
Speaker 1: District Court judge who was assigned that case agreed with
Speaker 1: the US Copyright Office that only humans get copyrights and
Speaker 1: affirmed the decision by the US Copyright Office. Doctor Toller
Speaker 1: appealed from that District Court decision to the Federal Pellet
Speaker 1: Court for the District Columbia, which is called the United
Speaker 1: States's Court of Appeals for the District of Columbia Circuit,
Speaker 1: which coincidentally is the court that I was a law
Speaker 1: clerk on. And we get a decision in that case
Speaker 1: finally from the DC Circuit, and the DC Circuit affirmed
Speaker 1: the District Court, which in turn had affirmed the US
Speaker 1: Copyright Office. The DC Circuit agreed with everybody else who
Speaker 1: had looked at this and said that copyright registrations can't
Speaker 1: be granted to robots.
Speaker 3: And so this was not a surprising decision, right that
Speaker 3: the Copyright Act requires a human being.
Speaker 1: It certainly wasn't a surprise to me. I think the
Speaker 1: consensus was the case would come out this way, and
Speaker 1: it's really driven by the factual predicate. Doctor Toller was
Speaker 1: unequivocal in telling the Copyright Office and every step on
Speaker 1: appeal that he was not the creator of this drawing,
Speaker 1: that it was the creativity machine, a generative AI that
Speaker 1: had rendered the drawing. So there was no dispute on
Speaker 1: the facts. There was no line drawing to be done.
Speaker 1: There's no gray areas, had a nice, crisp, clear presentation
Speaker 1: of that central fact. Given that lack of dispute on facts,
Speaker 1: it was really then driven by the law. And the
Speaker 1: interesting thing about the DC Circuit's opinion, which differed from
Speaker 1: the Copyright Office decision in the District Court decision, is
Speaker 1: a laser like focus by the DC Circuit on the
Speaker 1: techs of the Copyright Act in nineteen seventy six. And
Speaker 1: this is sort of the trend in appellate courts and
Speaker 1: the Supreme Court these days. What is referred to by
Speaker 1: lawyers as textual analysis. It is no longer some right
Speaker 1: wing theory propagated by Justice Scalia. It is this concept
Speaker 1: of textural literalism has just seized the appellate courts. In
Speaker 1: the Supreme Court, you see both the so called liberal
Speaker 1: justice of the Supreme Court and the conservative justices on
Speaker 1: the Supreme Court agreeing that you apply this sort of
Speaker 1: textual analysis whenever there's a statute of Constitution up. This
Speaker 1: is a sea change from twenty years ago, and here
Speaker 1: you see it being done by the DC Circuit in
Speaker 1: connection with this case and what they do that the
Speaker 1: DC Circuit marched through the Copyright Act and they said,
Speaker 1: you know, there's a distinction in the text of the
Speaker 1: Copyright Act between machines and authors. And they laid out
Speaker 1: that themes don't own property because under the Act, copyrights
Speaker 1: are property and authors get to own copyrights, but machines
Speaker 1: don't own property. Machines don't have a lifetime because copyright
Speaker 1: registrations are measured in part by the lifetime of the
Speaker 1: author plus a certain number of years. But machines don't
Speaker 1: have a lifetime. Machines have no errors. There's nobody who
Speaker 1: inherits for a machine in part because it doesn't have
Speaker 1: a death, doesn't have a lifetime. And yet there's a
Speaker 1: provision in there that says the errors of authors obtain
Speaker 1: their rights, So how do you account for that? And
Speaker 1: then there's also provision in the text about the nationality
Speaker 1: and domicile of authors. Yet machines don't have nationality, machines
Speaker 1: don't have domicile. Indeed, the court pointed out that in
Speaker 1: the text of the Copyright Act nineteen seventy six, every
Speaker 1: time a machine is referenced, it is as a tool
Speaker 1: being used by human authors, and they thought that was telling.
Speaker 1: And there's express reference to computer programs. Computer programs don't
Speaker 1: get to register themselves. They're simply a tool used by
Speaker 1: human beings to create works. And they thought that this
Speaker 1: distinction between machines and authors in the text was determintive here.
Speaker 1: And therefore they came to the conclusion. And if you
Speaker 1: follow their logic, if you grew with the logic that
Speaker 1: we followed, the text seems inescapable that an author for
Speaker 1: purposes of copyright has to be a human being.
Speaker 3: Coming up, what about works created by input from a
Speaker 3: human and AI? This is Bloomberg. A unanimous DC Circuit
Speaker 3: court has ruled that copyright protection requires human authorship, a
Speaker 3: setback to efforts seeking intellectual property protection for AI generated creations.
Speaker 3: I've been talking to intellectual property litigator Terrence Fross, a
Speaker 3: partner at Caton Mutchen Rosenman Terry. What arguments did the
Speaker 3: computer scientist make to try to get the court to
Speaker 3: find that there should be a copyright issued for a
Speaker 3: wholly AI generated work?
Speaker 1: So Peller makes a couple arguments. The only one that
Speaker 1: they gave much credence to was dictionary definition. There are
Speaker 1: dictionary definitions where you look up creator and the definition
Speaker 1: suggests it could be a machine. But as VC Circuit
Speaker 1: pointed out, we don't go to a dictionary definition unless
Speaker 1: there's ambiguity in the statute. And here they said, you know,
Speaker 1: we're doing a textual analysis. Here, we're looking strictly the text,
Speaker 1: and the text is clear as can be that there
Speaker 1: is a distinction drawn between authors who have get copyrights
Speaker 1: and machines who are merely tools used by authors, and
Speaker 1: therefore we don't need to look at any dictionary definition. Now,
Speaker 1: the rest of the arguments made by Polar and the
Speaker 1: DC CERCUM was clear on this and correct. I think
Speaker 1: they described as public policy arguments. And again this is telling.
Speaker 1: They said on all these other public policy are hums.
Speaker 1: You have you take those to the Congress. And there's
Speaker 1: a great quote in here they say, our duty as
Speaker 1: a court is to apply the statute as written. That's
Speaker 1: a quote, apply the statute is written. I mean, this
Speaker 1: would make Justice Scalia so happy that this has become
Speaker 1: the norm now. And you know what, if that's the
Speaker 1: standard you're going to use for analysis, then there's no
Speaker 1: question how this case should come out, because in fact,
Speaker 1: most of the argument made by doctor Tholer, aren't simply
Speaker 1: public policy arguments as to why Congress should rewrite the
Speaker 1: Copyright Act.
Speaker 3: So this work was created wholly by AI. What about
Speaker 3: works that are created with a mixture of human and
Speaker 3: AI input? Are they copyrightable?
Speaker 1: So this is the issue that is really getting all
Speaker 1: the discussion in the academic circles that I run in.
Speaker 1: And Poller made argument like that, which the DC Circuit
Speaker 1: again lumped into the public policy type arguments, and what
Speaker 1: they said is that we only decide cases that are
Speaker 1: presented to us. These what they described as line drawing arguments.
Speaker 1: You know, where do you draw the line between a
Speaker 1: human author and a machine author? These line drawing arguments
Speaker 1: aren't presented to us here, and so we're not going
Speaker 1: to decide those. And they recognize that there and there
Speaker 1: were in the Amikus briefs disagreements over how much of
Speaker 1: a contribution by AI makes it a machine generated work
Speaker 1: as opposed to human generated work, and the DC Certus said,
Speaker 1: that's not this case. Doctor Toller has never made that argument.
Speaker 1: He's been crystal clear that the machine, the robot, did
Speaker 1: all the drawing here, and that's all we have to
Speaker 1: decide again. This is the sort of decision that would
Speaker 1: make Justice Skilly a proud. It looks at the text
Speaker 1: and it does not come to render it opinions or
Speaker 1: tell Congress how to do its job. It simply plays
Speaker 1: referee and makes a decision on what is actually presented
Speaker 1: to it.
Speaker 3: So I read that the Copyright Office how's allowed the
Speaker 3: registration of works made by humans who use AI.
Speaker 1: That is correct. There have been several of those because
Speaker 1: those were allowed. I'm not sure how we ever get
Speaker 1: a review in a court of law of that. At
Speaker 1: some point we will have a case where the Copyright
Speaker 1: Office is not enough human involvement, too much machine involvement,
Speaker 1: and then that will get us a review and we
Speaker 1: might understand this better. But think about it in these terms.
Speaker 1: Humans use machines all the time to create works. As
Speaker 1: a newsperson, you're doing that with your typewriter. Authors are
Speaker 1: doing that with their typewriters laptops. Journalists on the nationwide
Speaker 1: news networks are doing it with cameras. Radio newscasters are
Speaker 1: sticking them microphone in front of the sports hero and
Speaker 1: recording his thoughts. Humans use machines all the time, and
Speaker 1: there should be no difference with respect to using AI
Speaker 1: to help. Indeed, a son, Teddy, who is a computer coder,
Speaker 1: and there are so many different artificial intelligence programs out
Speaker 1: there right now that help coders source coders to write
Speaker 1: programs and makes their job more efficient, more effective. Does
Speaker 1: that mean the human's not involved? I don't think so.
Speaker 1: So I think that's the answer to that question. It's
Speaker 1: simply the machine being used by human. It's not the
Speaker 1: machine getting a copyright registration.
Speaker 3: Maybe I'll have AI assistance in writing the lead into
Speaker 3: this segment.
Speaker 1: Oh god, I'm sure you could.
Speaker 3: It seems like AI is everywhere and there are so
Speaker 3: many lawsuits over AI. What are the stakes here?
Speaker 1: So, Jude, this is a surprisingly important issue. If you remember,
Speaker 1: almost two years ago, the Screenwriters Guild the Writer Skilled
Speaker 1: of America went on strike and stopped all production of
Speaker 1: film and television shows. Even reality shows got stopped because
Speaker 1: they have writers. And one of the core issues that
Speaker 1: was presented was the use by the studios of artificial
Speaker 1: intelligence to write scripts. The writers viewed this as an
Speaker 1: existential threat to their business, to their work, that it
Speaker 1: would put writers out on the street because artificial intelligence
Speaker 1: would simply take over and do all the script writing,
Speaker 1: and that was one of the concessions that they obtained
Speaker 1: when that striker was settled. But the point here is
Speaker 1: that if artificial intelligence scripts cannot be copyrighted, then that
Speaker 1: shifts the bargaining power to the writers, because a studio
Speaker 1: that's producing spending two hundred and fifty million dollars on
Speaker 1: a big hit score generally a billion dollars in revenues
Speaker 1: cannot afford to go without a copy. And so this
Speaker 1: is actually very important in the computer context. And we
Speaker 1: just talked about how artificial intelligence is being used to
Speaker 1: help coders write new applications, new software. If again those companies,
Speaker 1: the Microsofts of the world, can't get copyrights on their
Speaker 1: new computer programs because of the use of artificial intelligence,
Speaker 1: that will limit their willingness to employ artificial intelligence in
Speaker 1: that way, and so again the computer scientists, the coders
Speaker 1: will keep their jobs. So this is really important. And
Speaker 1: the problem is people don't understand the extent of which
Speaker 1: copyright impacts the economy. It is really critical, and the
Speaker 1: founders saw it this way. The Founders viewed copyright it's
Speaker 1: one of the most important drivers of the US economy,
Speaker 1: and that came to fruition, and by stopping robots from
Speaker 1: getting copyrights, we preserve enormous amounts of cre native positions
Speaker 1: in the economy across multiple businesses. And that's why this
Speaker 1: decision is so important, not just in an abstract sense,
Speaker 1: but as a very real consequence for the United States
Speaker 1: economy in multiple industries.
Speaker 3: Teller's lawyer says that they're going to appeal to the
Speaker 3: full DC Circuit and if that doesn't work, they're going
Speaker 3: to appeal to the Supreme Court. Do you think the
Speaker 3: DC Circuit would take this case on bank?
Speaker 1: Now? And I understand how the DC Circuit works on
Speaker 1: these It's what's known as a petition for rehearing on bank,
Speaker 1: so that all the active judges would sit on it.
Speaker 1: In this case, there were two active judges and one
Speaker 1: senior judge, so sometimes they use it. Well, look, there
Speaker 1: was a scene, but it was only one senior judge
Speaker 1: and the panel was unanimous. But setting that aside, the
Speaker 1: internal rules used by the DC Circuit to grant a
Speaker 1: petition for rehearing on bank aren't satisfied by this decision,
Speaker 1: And if he then takes it to the Supreme Court,
Speaker 1: the Supreme Court will deny the petition for CERTSCRI because
Speaker 1: there is no split amongst the circuit courts that needs
Speaker 1: to be resolved, and this issue is not such a
Speaker 1: unique issue of law that's liable to come up on
Speaker 1: a repeated basis. So both those types of heal and
Speaker 1: appeal to the en bancd DC circuit or a petition
Speaker 1: for ressearchs ther Supreme Court are going to get denied.
Speaker 1: Are simply a waste of his time. But apparently that's
Speaker 1: part of what's going on here, is to generate some
Speaker 1: sort of publicity surrounding the use of artificial intelligence in
Speaker 1: the creative process.
Speaker 3: It seemed like he was trying to make this a
Speaker 3: test case, no question about it.
Speaker 1: This was the pest case and it served that purpose,
Speaker 1: and that respected actually was pretty useful. As I said,
Speaker 1: copyright impacts a lot of segments of the economy, and
Speaker 1: it's really really important that we got this resolution on
Speaker 1: separate track. The Patent Office has also internally ruled that
Speaker 1: only humans get patents, because you'd take the same logic
Speaker 1: that doctor Toller uses respect to copyright registration and apply
Speaker 1: to patent registration against Patents are a critical component of
Speaker 1: the US economy, a real driver of the economy, and
Speaker 1: we don't yet have the same clarity, but I'm pretty
Speaker 1: confident that the Patent Office rules on requiring human to
Speaker 1: be the applicants for patents will be upheld again. That
Speaker 1: would be a very important we'd like to see a
Speaker 1: test case on that.
Speaker 3: With all the cases percolating over these issues, I'm sure
Speaker 3: we will. It's been great to have you on again, Terry.
Speaker 3: Thanks so much. That's Terrence Ross, a partner at Katon
Speaker 3: Muchen Rosenmann. The latest effort to get the Supreme Court
Speaker 3: to restrain government regulation has an unlikely opponent, President Donald Trump.
Speaker 3: In a case that offers a chance to impose new
Speaker 3: limits on regulatory agencies, the Justice Department defended the FCC's
Speaker 3: Universal Service Fund. It's an eight billion dollar telecom subsidy
Speaker 3: program which you use. This is a charge on monthly
Speaker 3: telephone bills to subsidize phone and broadband service for poor people,
Speaker 3: rural residents, schools, and libraries. Taking this position even as
Speaker 3: Trump works to decimate federal agencies with a barrage of
Speaker 3: job and funding cuts. Some conservative justices voiced concern during
Speaker 3: the oral arguments on Wednesday that Congress had unconstitutionally handed
Speaker 3: off its taxing power to the FCC without sufficient limits.
Speaker 3: Here's Justice Neil Gorstch, who described the program's funding mechanism
Speaker 3: as unprecedented.
Speaker 2: We've got a feebody of law, We've got a rate
Speaker 2: setting body of law. This isn't either one of those.
Speaker 2: This is this is just a straight up tax without
Speaker 2: any any numerical limit, any cap, any rate. And we've
Speaker 2: never approved something like that before.
Speaker 3: But Justice Elena Kagan pointed to other constraints in the law,
Speaker 3: including its instruction to the end CC that rural areas
Speaker 3: should get services that are reasonably comparable to urban areas.
Speaker 4: I mean, this is all basic stuff. These are not
Speaker 4: exorbitant things, These are not gratuitous things. This is just
Speaker 4: like the way the FCC has operated that program is
Speaker 4: consistent with the standards that have been set in this program,
Speaker 4: which is, these are providing basic services for people who
Speaker 4: live in North Dakota and for people who live below
Speaker 4: the poverty line. And by the way, as mister Clement said,
Speaker 4: those basic services benefit all of us because we should
Speaker 4: all be able to talk to people in North Dakota.
Speaker 3: Joining me is constitutional law expert Harold krant A professor
Speaker 3: at the Chicago Kent College of Law, Hew tell Us
Speaker 3: about this FCC program and the issue here.
Speaker 2: In the nineteen ninety six Congress passed the Toll Communications
Speaker 2: Act and said is a major part of that act
Speaker 2: to subsidize service to rural and low income areas. And
Speaker 2: so they thought was to get into the wired technology world,
Speaker 2: we have to bring all of the country together. And
Speaker 2: to do that, there are certain criteria that are set
Speaker 2: about how the FCC is supposed to determine how much
Speaker 2: sort of subsidy it gives to rural and low income areas, schools, libraries,
Speaker 2: and the like the following year. And there's certain kinds
Speaker 2: of intelligible principles or principles set into the statutes, such as,
Speaker 2: quote the quality service ship to be available at rates
Speaker 2: and that access to advanced technology quote should be available
Speaker 2: in all regions of the country. So that's the basic
Speaker 2: construct and the first argument in the cases whether that
Speaker 2: suffers under the non delegation doctrine because it's too open ended,
Speaker 2: it's too vague, and it gives a lot of discretion
Speaker 2: to the FCC.
Speaker 3: Explain the non delegation doctrine.
Speaker 2: So under the non delegation doctrine the Court in the
Speaker 2: nineteen thirties and has given lip service since. Has held
Speaker 2: that if Congress doesn't specify the standards under which executive
Speaker 2: agencies should act, that they may have given away their
Speaker 2: own legislative authority and therefore violated Article one of the Constitution.
Speaker 2: And there are a number of cases in which statutes
Speaker 2: were struck down in the nineteen thirties and since then
Speaker 2: the Court has cited to the non delegation doctrine. About
Speaker 2: five justices argued that it should be come back and
Speaker 2: be more actively enforced in some way, and they've used
Speaker 2: it mainly as a way to limit delegations by reading
Speaker 2: delegations more narrowly to what what they say would otherwise
Speaker 2: be an excessive delegation issue. So this has been part
Speaker 2: of the war on administrative agencies, is to suggest that
Speaker 2: Congress can't give open ended delegations to them, even though
Speaker 2: there are many open ended delegations in the statute books.
Speaker 2: So on this first point, there was an argument about
Speaker 2: how Congress simply hadn't done this job. It gave too
Speaker 2: much discretion, in other words, to the agency to determine
Speaker 2: how much to subsidize to rural areas and to lowing
Speaker 2: preme areas, and how much then for fees to impose
Speaker 2: upon the national telecoms. A good example of this is
Speaker 2: a question that was raised by Justice Gorsuch. He said,
Speaker 2: what about forcing everybody to have some kind of access
Speaker 2: to stylink elon Musk's sail life service. And his point
Speaker 2: was just to show that, you know, maybe that's within
Speaker 2: the literal terms of the statute, and therefore it's very problematic.
Speaker 2: And he also said the fact that this is a
Speaker 2: tax also suggests that the delegation should be more narrowly construed.
Speaker 2: Justice Kavanaugh asked an interesting question about whether delegations to
Speaker 2: independent agencies, which we think the FCC is, whether that
Speaker 2: should be construed more narrowly because of the lack of
Speaker 2: presidential control. So usually the some of the more interesting
Speaker 2: questions on the excessive delegation question that was raised. At
Speaker 2: the end of the day, it seems as if the
Speaker 2: Supreme Court will reject the excessive delegation argument. And indeed,
Speaker 2: what's probably interesting that bear's stress here is that President
Speaker 2: Trump has defended the delegation right, even though he was
Speaker 2: on a crusade against administrative agencies. Now that he's in
Speaker 2: a White House, he may be singing a different tune
Speaker 2: in his administration than defend this under the traditional intelligible
Speaker 2: principle task, which asked whether Congress has articulated sufficient guidance
Speaker 2: to restrain the conduct of the administrative agencies, and the
Speaker 2: principles we discussed earlier in the statute apparently satisfy that
Speaker 2: in terms of the Trump administration, and many the justices
Speaker 2: seem to be satisfied with that as well.
Speaker 3: So does it seem as if there might be three
Speaker 3: votes Gorsuch, Alito, and Thomas against this program, and that
Speaker 3: the liberals and the conservatives that are more in the
Speaker 3: middle of the court would vote to uphold it.
Speaker 2: That's my best guess. I mean Justice kevinaugh might be
Speaker 2: on the dissenting side as well. Justice Barrett had some concerns,
Speaker 2: but I think at the end of the day, the
Speaker 2: Chief Justice and Justice Barreit will vote to uphold the program.
Speaker 2: So that's just the first challenge in the case. Then,
Speaker 2: one year after the statute was passed, the FCC decided
Speaker 2: to shift responsibility to a private group called the Universal
Speaker 2: Services Administrative Company to make the calculations about how much
Speaker 2: subsidy should be given to these low income communities, and accordingly,
Speaker 2: after getting that number, how much fees had to be
Speaker 2: assessed on the telecoms. So they have a very important
Speaker 2: role under the statute because they actually do the numbers
Speaker 2: crunching and the forecasting to determine how big the substitt
Speaker 2: should be, and again what kind of fees then to
Speaker 2: assess the telecoms. And on this part of the statutory
Speaker 2: scheme or really the ad ministry of scheme, the challenger
Speaker 2: said that this is an excessive amount of authority to
Speaker 2: private individuals, that private individuals cannot have this much authority
Speaker 2: under the terms of the United States because they're not
Speaker 2: subject to the appointment of authority of the president or
Speaker 2: to the president's removal powers. And so that was part
Speaker 2: of the reason this statue was held on constitutional by
Speaker 2: the Fifth Circuit. And the court then debated this private
Speaker 2: delegation aspect of the statutory scheme as well. And again
Speaker 2: what's interesting is that the up administration defended, it defended
Speaker 2: the role for private parties, and their argument was that
Speaker 2: the private parties do make the calculations, they are important,
Speaker 2: but they're subject to FCC oversight and that oversight is sufficient.
Speaker 2: And one can wonder if the administration is sensitive to
Speaker 2: the role of private parties these days because of Doge
Speaker 2: and Elon Musk. I don't know, but that's certainly one
Speaker 2: way to read this. But they certainly have had a
Speaker 2: different tune about the role of private parties once they
Speaker 2: assume power.
Speaker 3: So this is another chance for the Court to impose
Speaker 3: new limits on regulatory agencies, which the Court has already
Speaker 3: taken a sledgehammer to. Do you think they'll pass up
Speaker 3: this chance.
Speaker 2: Yeah, There's another case that'spending in the Supreme Court which
Speaker 2: poses somewhat of analogous question about non delegation and the
Speaker 2: role of private parties. Neither case is the role of
Speaker 2: the private party's egregious, though I will say in this
Speaker 2: case the subjects come to many billions of dollars, so
Speaker 2: we're not talking about a minor sort of program at all.
Speaker 2: And obviously to the telecoms just makes a huge difference.
Speaker 2: But in both cases it seems that the delegation was
Speaker 2: more circumscribed by Congress than in other cases that we've
Speaker 2: seen in the last fifty years. I mean, you know,
Speaker 2: the original delegation to the Federal Communications Commission was to
Speaker 2: regulate the airwaves in the public interest according to the
Speaker 2: public interest and necessity. That's about as broad of a
Speaker 2: delegation as one could imagine, and yet that has been upheld.
Speaker 2: So in comparison the seeing these two cases, they seem
Speaker 2: to be more cabinet delegations. Obviously, lower courts have taken
Speaker 2: the bit and held some of these statutory schemes to
Speaker 2: be unconstitutional, which is why they're percolating up to the
Speaker 2: Supreme Court. So it will be interesting to see what
Speaker 2: the Court does with it. But again, I think one
Speaker 2: of the first interesting notes is that President's Trump administration
Speaker 2: has basically used the same argumentation as President Bind's administration
Speaker 2: in finding the intelligible principle and suggesting that that's all
Speaker 2: that's needed to uphold a delegation.
Speaker 3: So in Justice Katanji Brown Jackson asked that question about
Speaker 3: the implications of striking down the program. She got a
Speaker 3: big yes from Acting Solicitor General Sarah Harris.
Speaker 5: There are a number of different agencies that have similar
Speaker 5: kinds of revenue generating. I know some people call them
Speaker 5: fees and not taxes. I've already established that in my
Speaker 5: view that doesn't make a difference a number of agencies
Speaker 5: that have these kinds of general statements about raising revenue
Speaker 5: that they determine as necessary or appropriate to carry out responsibilities.
Speaker 5: So let me just say that if we find that
Speaker 5: this one is unconstitutional, are all of these programs in
Speaker 5: jeopardy in your view?
Speaker 3: Yes? Thank you, hell I'll ask you the question that
Speaker 3: Justice Jackson asked, if the justices did strike down the
Speaker 3: part of the law that authorizes the program's funding mechanism,
Speaker 3: would that endanger similar funding setups at the FED and
Speaker 3: the FDIC, for example.
Speaker 2: And indeed it would, and that was part of the
Speaker 2: concern that was expressed during the oral argument, is what
Speaker 2: would be the ripple effect of finding this kind of
Speaker 2: CE assessment scheme to be unconstitutional? Because this is somewhat
Speaker 2: of an unusual scheme, but it does have echoes, as
Speaker 2: you point out, with the FED and in some other
Speaker 2: agencies as well. And so to the extent that there
Speaker 2: is discretion that Congress has vested in these agencies to
Speaker 2: determine assessments and fees, then that would pose a huge
Speaker 2: target for litigation. If the Supreme Court Knoxis went down
Speaker 2: on under delegation grounds, And I want.
Speaker 3: To ask you a question that I've been asking a
Speaker 3: lot of people lately. The Trump administration has taken five
Speaker 3: emergency appeals to the Supreme Court. I mean, the ones
Speaker 3: before the court right now involve birthright citizenship, teacher training grants,
Speaker 3: mass firings of probationary employees, and there are more cases
Speaker 3: in the pipeline that the administration is expected to take
Speaker 3: to the Supreme Court. Do you think the justices are
Speaker 3: going to be receptive to this onslaught of emergency appeals
Speaker 3: or start to get perhaps a little annoyed.
Speaker 2: I think the Court will get I mean, I think
Speaker 2: it's understandable that there's more claims at the beginning of
Speaker 2: the administration, given the whole series of executive orders that
Speaker 2: were administered and articulated. But if that pace continues, I
Speaker 2: think the Court will get annoordered. I think the Court
Speaker 2: will give a second look to the question of nationwide injunctions.
Speaker 2: It hasn't really weighed in on the issue that it
Speaker 2: was so contentious during the Biden administration, and now that
Speaker 2: the shoes on the other foot, maybe they'll say, you know,
Speaker 2: we probably should have stepped in earlier and clarified when
Speaker 2: there can be a nationwide injunction because we're just being
Speaker 2: forced into this position of having to react all the
Speaker 2: time because of the imposition of these nationwide injunctions.
Speaker 3: Well, we'll see whether they decide to take that case
Speaker 3: or not. Thanks so much, Hal. That's Professor Harold Krant
Speaker 3: other Chicago cant College of Law. And that's it for
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