What Trump's nominee said last year during a hearing could send shivers down the spines of broadcasters and other copyright holders.
On Monday, President Donald Trump nominated Brett Kavanaugh as the next Supreme Court Associate Justice. If he is confirmed, television broadcasters as well as the owners of copyrighted movies and television shows could be in for a gigantic shock to the system.
To understand why, one must appreciate Kavanaugh's judicial philosophy. Last week in previewing Kavanaugh, we showcased how he was leery of permitting states to dictate how federal courts operate. That could present problems to libel defendants, among others who have been relying on special free speech protection laws like anti-SLAPP statutes. But if Kavanaugh has a signature, it's the judge's heavy skepticism of the administration state. He isn't so quick to rely on government agencies for interpretation of statutes in the absence of clear directive from Congress. What's more, he thinks it is outside the judge's purview to consider what makes most policy sense. Rewriting the laws through doctrines is a big no-no for judges in his worldview.
One of the best examples of how Kavanaugh might act on the Supreme Court is a case that never actually resulted in an opinion. It was also a case that held enormous significance to the television industry. That's Fox Television Stations v. FilmOn.TV Networks, which was heard at the D.C. Circuit Court of Appeals in March 2017. After the hearing, Neal Katyal, the attorney for the broadcasters not to mention the former Acting Solicitor General, called the two-hour event the "longest oral argument of my life." This might explain why the broadcasters then chose to settle the case rather than risk a disastrous ruling.
FilmOn is a streamer. It began operations more than a decade ago under billionaire renegade Alki David as a disruptor. For a short while, FilmOn was usurped by another streamer, Aereo, which became the defendant in a famous copyright case that went up to the Supreme Court. Aereo went under after the high court determined that it was publicly performing copyrighted works without a license. But the Supreme Court's decision opened a new argument by likening streaming operations to a cable system.
After the Supreme Court's Aereo ruling, FilmOn brought forward the contention that Section 111 of the 1976 Copyright Act grants cable systems a compulsory license to retransmit broadcast programming to the public, using "wires, cables, and other communications channels."
The U.S. Copyright Office wouldn't make a firm determination after FilmOn attempted to render payment, but the agency was skeptical. FilmOn lost in D.C. federal court, and that provides the background for the oral argument that resulted.
Kavanaugh was part of a three-member panel (including jilted Supreme Court nominee Merrick Garland) that threw sharp questioning at Katyal. (Listen to the complete hearing here.)
The broadcasters attempted to argue that what separated FilmOn from a traditional cable system is that it operated online with the potential of transmitting programming globally.
"The whole point of Section 111 is to focus on narrow geographies," said Katyal.
"'Cable system' if it hadn't been defined in the statute — I would think, 'Inherently localized' makes some sense as an instinct," responded Kavanaugh. "But the problem for you...is that Congress did define what a cable system is in a way that is broader than perhaps what my instinct would have been about what a cable system is by using these broad phrases, including 'other communications channels.' And so I think the Copyright Office's 'It's inherently localized' really goes to a cable system as what we instinctually think not in my judgment to the defined terms for what Congress has put in for what's a cable system."
"I would think it cuts the other way," the broadcasters' lawyer retorted. "If you accept their interpretation, you are effectively gutting cable system. Everything is a cable system, then."
Kavanaugh was having none of it.
"Congress arguably, if the text means what it says, did that," the judge continued, soon thereafter adding that this was a great statutory interpretation case. "Is it a statute that Congress meant to freeze in time and to update it when new technologies came along? Or is it a statute where Congress gave it open-ended terminology that would encompass the known unknowns?"
In other words, the Supreme Court nominee is getting to a topic of enormous stakes — what does one do when new technology outpaces the law? Many judges might look at the intent of lawmakers and consider the subsequent interpretation by regulators, but Kavanaugh seems to side with the alternative view that only Congress can come along to provide new guidance.
Kavanaugh takes this philosophy over Katyal's stated view at the hearing that there were statutory clues that new technology was a threat in the 1970s and Congress was attempting to restore property rights and limit the definition of a cable system, and to hold otherwise, would "radically reshape broadcast TV in this country."
Kavanaugh agreed as a policy matter that property rights were important, but...
"Why should we construe this section narrowly?" asked Kavanaugh in reference to Section 111. "I guess I'm going to challenge that premise because why not just construe it as written? I'm thinking of each of these as you call them tie-breakers. What if this decided the case? The presumption against compulsory licensing seems to come out of thin air. It sounds good, but I don't see it in any law."
Katyal then attempted to argue that the judges should give Chevron deference to the Copyright Office. That hits a sensitive point as conservative judges — like Neil Gorsuch — have signaled they would like nothing better than to walk back the doctrine whereby courts defer to government agencies to interpret ambiguous language in statutes. And if Congress doesn't fill the vacuum with its own amendments, well, that's tough luck.
"I don't think we can use congressional inaction in any way," Kavanaugh told Katyal. "We just don't know...Congress not acting is not the same as Congress acting."
"But it's not just about congressional inaction, it's congressional inaction in the teeth of an administrative interpretation," attempted Katyal.
"That doesn't mean that the majority of both houses approved of the Copyright Office," retorted Kavanaugh. "This is a huge grant of authority to the Executive Branch. Huge. Which is you can do any crazy thing you want, Executive Branch, and if Congress doesn't overrule it, you can call it congressional acquiescence."
Hopefully, all this illustrates the point that entertainment industry interests could be in for a rude awakening when it comes to a lot of the regulatory scheme they've relied upon to stop usurpers to the throne. (Plus, he might upend the administrative state in other ways. For example, see this short 2009 concurring opinion where Kavanaugh raises doubts about the constitutionality of the Copyright Royalty Board.) Of course, this all cuts the other way, too, as the industry might enjoy less regulation itself, but nevertheless, his appointment to the Supreme Court could inject instability for the entertainment industry, or at least, not stand in the way of marketplace upheaval triggered by technological advancements. If that means copyright holders lose their grip on charging high licensing rates, well, the industry better be prepared to invest more in legislative lobbying efforts.