December 5, 2009
Rescuing the Print Media
U.S. Senator Ben Cardin has introduced The Newspaper Revitalization Act, which if passed would amend three sections of the Internal Revenue Code to expressly allow newspapers to become tax-exempt 501(c)(3) organizations. This paper explores the question of why from a First Amendment standpoint the public might wish struggling newspapers to restructure as tax-exempt organizations in spite of the proliferation of news sources now available. It also explores some of the problems that would or could accompany tax-exempt status and evaluates how seriously we should take those concerns.
Specifically, this paper discusses the basics of Cardin's proposal; why a Madisonian or marketplace model of free speech might compel the passage of this legislation; and arguments by those who suggest that citizen journalism or other models of newsgathering can replace newspapers. It also looks at potential drawbacks to the legislation, such as constitutional challenges based on viewpoint discrimination; whether newspapers will have to abandon editorial page endorsements or can structure their business models to keep them; potential increased scrutiny of reporters' objectivity; and the potential for newspapers to appear state-controlled rather than independent.
December 4, 2009
Canadian Court Hears Case Against Iranian Government Over Death of Journalist
Kazemi was 54 when she died in Iranian custody on July 11, 2003, almost three weeks after she was arrested for taking pictures outside a prison during a student protest in Tehran. In March 2005, Shahram Azam, a former staff physician in Iran's Defence Ministry said he had examined Kazemi in hospital four days after her arrest and found signs of torture - a very brutal rape, skull fracture, broken fingers, missing fingernails, a crushed big toe and a broken nose.
Her son brought the case against the government of Iran. Here's more.
GE, Comcast and NBCTwo New York Times articles on the GE/Comcast NBC deal and its implications, here and here.
Collecting a Libel Tourism Judgment
A libel plaintiff sued an American defendant in a foreign nation where he took advantage of plaintiff-favoring defamation law to obtain a hefty judgment. He brings this judgment to the defendant’s State in the United States to collect from her bank account. The defendant’s State’s court could not have entered the plaintiff’s judgment because of First-Amendment doctrines that stem from New York Times v. Sullivan.
How should the United States court respond to the “libel tourist” and his judgment? My succinct article summarizes the tangled tale that emerges. Invoking a public policy exception to comity, United States courts have rejected foreign-nation defamation judgments. State legislation has buttressed these decisions. A Bill has been introduced in Congress to repel these judgments at the water’s edge. Against this tide, my article maintains that courts in the United States ought to take a more nuanced approach and recognize at least some overseas defamation judgments.
This draft article is in press at the Washington and Lee Law Review and at the Faculty of Law, Aix-Provence, France. It will undergo the usual editorial processes. The draft that follows was presented to the Remedies Discussion Forum at the Faculty of Law, Aix-Provence in the spring of 2009.
December 3, 2009
What Does the Camera Capture?French legislator Valerie Boyer wants digitally altered photos to be labelled as such. For one thing, she thinks such labelling would assist in a fight against anorexia. Not everyone agrees. Read more here in a New York Times article.
Britain's Justice Minister Says Libel Laws Will Be Reformed; They Are Having Chilling Effect On Free SpeechBritain's Justice secretary, Jack Straw, has announced a plan to attack "libel tourism," which he says is "chilling" democracy in the country, according to this Guardian article. Mr. Straw says that current status of libel law in Great Britain "threatens free speech by making it prohibitively expensive for publishers to defend themselves." Here's more from the New Statesman, which scored an exclusive interview with Mr. Straw.
December 2, 2009
Comparing (Internet) Network Discrimination in Canada and the US
The issue of what discriminatory use of a network means has arisen in two recent decisions of the United States and Canadian federal communications commissions, the FCC and the CRTC respectively. The topic is a contemporary and hotly debated one, as when a course is fixed it will strongly influence the future of the Internet. It can be stated as the dichotomy of open and competitive or closed and oligopolistic. A study and comparison of the two different approaches is vital to clarify the debate, and hopefully guide Canadian policy in a direction that will benefit the whole community.
Download the paper from SSRN at the link.
Freedom of Expression in Uganda
Freedom of expression in Uganda has been subject to a number of restrictions since colonial period to date. However in 1986 when the NRM government under the leadership of Yoweri Museveni came into power, there was a paradigm shift into a more liberal approach to the enjoyment of this freedom. A new constitution was promulgated which guaranteed the right to freedom of expression and right of access to information in the possession of the state. One may safely argue that these provisions were domesticated into Ugandan law as a result of ratification of international covenants.These freedoms have however been restricted especially when the media, both electronic and print, have engaged government in political debate, dialogue or criticism. These constitutional guarantees have been restricted by the enactment of punitive laws and creation of institutions meant to suppress media houses and restrict access to information. This has created a situation of self censorship among the media houses as opposed to their primary role of dissemination of information and watch dog to government excesses, a cornerstone to their contribution to democracy. This paper seeks to discus the historical evolution of this freedom in Uganda and examine the legal regime governing press freedom and identify the legal and other practical limitations to the full enjoyment of this right.
Download the paper from SSRN at the link.
December 1, 2009
FTC Hosts Workshop On the Internet and Journalism
The Federal Trade Commission is hosting a workshop on the future of journalism. From the FTC website, here's more:
The Federal Trade Commission will hold two days of workshops on December 1 and 2, 2009, to explore how the Internet has affected journalism. The event is free and open to the public. The workshop will assemble representatives from print, online, broadcast and cable news organizations, academics, consumer advocates, bloggers, and other new media representatives.
Updates regarding the December 1 and 2, 2009 workshops, including an agenda and panelists will be posted on this webpage, or can be accessed via RSS Feed from this webpage.
Due to the large number of pre-registrants, we anticipate that the FTC's Conference Center will reach full capacity. Pre-registration does not guarantee seating, and attendees will be admitted on a first-come, first-served basis starting at 8 a.m. each day. Please remember to bring a picture ID. Once the Conference Center is full, attendees will be directed to an overflow room located in the FTC Headquarters building at 600 Pennsylvania, Ave. NW, Washington, DC, 20580. The workshop will also be webcast via a link on this webpage.
GE, Comcast Nearing Deal Over NBC/UniversalFrom the New York Times: GE is nearing a deal to sell NBC to Comcast. First hurdle--helping Vivendi divest itself of its stake in the media giant.
Did Bernard Malamud Plagiarize?
In writing The Fixer, Bernard Malamud plagiarized from Mendel Beilis’s memoir and debased the memories of Beilis and his wife. This short essay corrects the record.
Download the essay from SSRN at the link.
Georgia Author Loses Defamation By Fiction Case
Novelist Haywood Smith lost a defamation by fiction case in a Georgia court last week. The plaintiff, Vickie Stewart, claimed that one of the characters in the book The Red Hat Society too closely resembled her, and the jury agreed, awarding her $100,000 in damages. However, she did not get attorneys' fees.
According to the Gainesville Times, the judge instructed the jury that under Georgia law, "In order to find libel, a jury must find that a publication contains false and defamatory statements concerning the plaintiff that were communicated to a third party, that the person making the statements was negligent by not exercising ordinary care in making them, and that the plaintiff was injured by the statements."
The author has said she will not appeal.
November 30, 2009
Sixth Circuit Upholds Denial of Preliminary Injunction In Adult Bookstore Case
The Sixth Circuit has upheld the denial of a preliminary injunction to a Memphis, Tennessee bookstore that sells "adult-themed" material.
Plaintiff's first argument is that the definition of "adult bookstore" violates the Equal Protection Clause. The Tennessee Act regulates "adult-oriented establishments," which include "adult bookstore[s]":"Adult bookstore" means a business that  offers, as its principal or predominate stock or trade, sexually oriented material, devices, or paraphernalia, whether determined by the total number of sexually oriented materials, devices or paraphernalia offered for sale or by the retail value of such materials, devices or paraphernalia, specified sexual activities, or any combination or form thereof, whether printed, filmed, recorded or live, and  that restricts or purports to restrict admission to adults or to any class of adults. The definition specifically includes items sexually oriented in nature, regardless of how labeled or sold, such as adult novelties, risque gifts or marital aids;
Tenn. Code Ann. § 7-51-1102(1) (emphasis and numeration added). A bookstore will be deemed "adult" under the Act only if, first, its "principal or predominate stock" consists of sexually oriented or adult materials, and second, if it "restricts or purports to restrict" its premises to adults. Plaintiff argues that the second criterion makes the Act under-inclusive, in violation of the Equal Protection Clause. While a bookstore with a predominantly adult stock that excludes minors from its premises is subject to the Act, an identical bookstore that does not so restrict admission -- by, for example, setting up a "small front room" containing its insignificant stock of non-adult materials -- is not subject to the Act. Plaintiff argues that distinguishing between these two types of bookstores constitutes unequal treatment without a rational basis. The rational basis for the distinction is absent, Plaintiff maintains, because both types of bookstores are equally likely to produce the adverse secondary effects targeted by the Act, and no rationale supports exempting from regulation adult bookstores that admit minors....
Equal protection of the laws guaranteed by the Fourteenth Amendment "must coexist with the practical necessity that most legislation classifies for one purpose or another, with resulting disadvantage to various groups or persons." ...The Supreme Court has stated that courts will "uphold the legislative classification," if "a law neither burdens a fundamental right nor targets a suspect class, . . . so long as it bears a rational relation to some legitimate end."...
In this case, no "suspect class" is targeted. Nor does Plaintiff argue that a fundamental right associated with the freedom of expression is burdened. Plaintiff concedes that this classification needs only a rational basis to survive constitutional scrutiny. ...
As an initial matter, we note that the bookstores allegedly advantaged by an exemption from the Act are probably few in number, if any such establishments exist at all. Tennessee law prohibits the display of adult material "anywhere minors are lawfully admitted." ...Any bookstore "principally or predominantly" devoted to adult merchandise that wishes to avoid regulation as an "adult-oriented establishment" and sets up a small general-merchandise section, to which minors are admitted, runs a high risk of violating this law and incurring criminal penalties. It is unsurprising, therefore, that Plaintiff does not identify any actual bookstores in Shelby County that meet the first, but not the second, criterion of an "adult bookstore" under the Act.
Even if the kinds of bookstores Plaintiff describes exist, or, as Plaintiff suggests, will come into existence as operators "scramble to establish a small front room of some minor amount of non-adult materials" into which minors are admitted, Appellant's Br. at 23, the "classification" does not lack a rational basis. "Th[e] [rational-basis] standard permits a court to hypothesize interests that might support legislative distinctions, whereas heightened scrutiny limits the realm of justification to demonstrable reality."... We can readily hypothesize the state's interest in confining regulation to bookstores that meet both definitional criteria. As a matter of practice, sexually oriented businesses, including bookstores, commonly restrict admission to adults. Moreover, only those businesses that cater to adults would restrict access in this manner. Restricted access is thus a reliable indicator that the goods offered or displayed on the premises are of an adult or explicit nature. A prominent display advertising an establishment as an "adult store," moreover, is a more objective indicator that the store is of the kind the Act aims to regulate, than the mere share of its stock or trade comprised of adult materials. Hence, it is not irrational for the legislature to use the access restriction as a means of identifying those bookstores that are likely to produce adverse secondary effects targeted by the Act.
Our court has adjudicated an analogous challenge to a restriction of business hours, which applied to adult establishments offering live entertainment but excepted those offering "nonlive entertainment." ... We explained that so long as a regulation "furthers a substantial government interest . . . and there is no evidence of an impermissible motive on the part of" the legislature, such an exception "is not a cause for concern under rational-basis review because a government may implement its program of reform by gradually adopting regulations that only partially ameliorate a perceived evil." ...The same reasoning is pertinent to this case: even if Plaintiff is correct that the exempted bookstores are as liable to produce pernicious secondary effects as the regulated bookstores, Tennessee and Shelby County are permitted to implement a gradual and incomplete solution "that only partially ameliorate[s]" such effects.
Thus, we hold that the district court did not err in determining that Plaintiff has not shown a substantial likelihood of succeeding on the merits of the challenge to the "adult bookstore" definition.
Plaintiff claims that the prohibition is unconstitutional for yet another reason: it violates the Due Process Clause because it allegedly imposes strict liability on the owner for any violations by employees or customers. The Act states that a license or permit will be revoked "when an operator, employee, entertainer, or escort knew, or should have known, of the violation and authorized, approved, or, in the exercise of due diligence, failed to take reasonable efforts to prevent the violation." Plaintiff asserts that an establishment's license will be revoked if an employee "whose knowledge cannot be imputed to the business itself" fails to take a reasonable effort to prevent alcohol use on the premises. ... While the district court did not address this argument, its interpretive premise is without merit. As Shelby County explains, "[a] violation by an employee imperils that employee's permit," but "does not imperil the operator's license, unless [the operator] 'knew, or should have known of the violation and authorized, approved, or, in the exercise of due diligence, failed to take reasonable efforts to prevent the violation.'" ...We agree, as this interpretation of the challenged provision is also compelled by the general standard for revocation of operator's licenses and employees' permits. The Act provides for a revocation or suspension of an operator's license on the basis of an employee's actions only if an operator "has a duty to supervise conduct on the premises," and "knew, or should have known, of the violation and authorized, approved, or, in the exercise of due diligence, failed to take reasonable efforts to prevent the violation." ...Because the Act does not punish operators of adult establishments on the basis of strict liability, we affirm the district court's determination that no substantial likelihood of success on the merits of this claim was demonstrated.
Finally, Plaintiff challenges the Act's provision on "[p]enalties for violation of part," which states:(a) (1) A violation of this part shall, for a first offense, be a Class B misdemeanor, punishable by a fine only of five hundred dollars ($ 500), and shall result in the suspension or revocation of any license.(2) A second or subsequent violation of this part is a Class A misdemeanor, and shall result in the suspension or revocation of any license.
(b) Each violation of this part shall be considered a separate offense, and any violation continuing more than one (1) hour of time shall be considered a separate offense for each hour of violation.
Tenn. Code Ann. § 7-51-1119. Section 7-51-1109 specifies that an operator whose license is revoked is disqualified from receiving an adult-oriented establishment license for five years. Plaintiff argues that a punitive revocation of a license on the basis of past violations of this Act constitutes an unconstitutional prior restraint on future protected expression.
The district court declined to consider this claim on the merits because it determined that Plaintiff, who has not applied for a license nor had a license revoked, lacked standing to challenge the penalty provision. Plaintiff protests that it need not wait for a license revocation to bring a facial challenge on overbreadth grounds. Appellant's Br. at 54-55. "[I]t is well established that one has standing to challenge a statute on the ground that it delegates overly broad licensing discretion to an administrative office, whether or not his conduct could be proscribed by a properly drawn statute, and whether or not he applied for a license." ... Plaintiff does not exactly articulate a challenge on the grounds of overly broad or unbridled discretion. However, the essence of Plaintiff's claim is that the allegedly unconstitutional applications of this provision are substantial relative to legitimate applications because punitive revocation suppresses future protected speech "unconnected to the negative secondary effects cited as legislative justification," Schultz v. City of Cumberland, 228 F.3d 831, 849 (7th Cir. 2000). Treating Plaintiff's arguments charitably, we hold that Plaintiff does have standing to bring this facial challenge to the Act on the basis of its penalty provision.
Constitutional invalidity of prior restraints may result from one or both of "two evils . . .: (1) the risk of censorship associated with the vesting of unbridled discretion in government officials; and (2) 'the risk of indefinitely suppressing permissible speech' when a licensing law fails to provide for the prompt issuance of a license." ...The Tennessee Act's licensing scheme is a prior restraint on protected expression. ... Prior restraints are not unconstitutional per se. Richland Bookmart, Inc., 555 F.3d at 533 (citing Odle, 421 F.3d at 389). Where license issuance is based on explicit and objective criteria, a licensing scheme passes constitutional muster when it "guarantee[s] applicants a prompt final judicial decision on the merits of a license denial and preservation of the status quo while an application or judicial review of a license denial is pending." ...Logically, the same procedural guarantees required for license denials are required for license revocations. Furthermore, "[s]ystems of prior restraint . . . [must] also pass the appropriate level of scrutiny."
Plaintiff raises other grounds for its facial attack on the Act, all of which are waived and/or addressed by our opinion in the companion case. Plaintiff's claim that the definition of "adult cabaret," § 7-51-1102(2), renders the Act unconstitutionally overbroad was found to lack merit in Entertainment Productions. Plaintiff's claims that the definition of "specified sexual activities," § 7-51-1102(27), and the prohibition on "fondling," § 7-51-1114(d)(1)(D), are overbroad and/or not narrowly tailored are waived. While Plaintiff identifies these claims in its initial complaint, they are not presented in its Memorandum in Support of Motion for a Preliminary Injunction, and were therefore not addressed by the district court. Lastly, Plaintiff's claim that the prohibition on touching and the buffer-zone requirement are overbroad and/or not narrowly tailored is also waived because it was not presented in its Memorandum in Support of Motion for a Preliminary Injunction and was not addressed by the district court. In any case, we rejected this claim on the merits in Entertainment Productions.
For the foregoing reasons, we affirm the district court's denial of the preliminary injunction.
The case is East Brooks Books v. Shelby County, TN, decided Nov. 25, 2009.
Publicist: Salahis Not Asking For Pay For Their StoryAccording to an AP story, the PR rep for Tareq and Michale Salahi says the couple is not seeking payment for its story from the media.
Secret Service Interviews SalahisThe New York Times reports that the Secret Services has interviewed the Salahis... and on Ed Rollins' comments on CNN's State of the Union about the Salahis' possible reality show career.
Stephen Fry Leaves Social Networking Site, Saying It Leaked His Private Information To Other MembersComedian and social critic Stephen Fry has deleted his profile on the social networking site Plaxo with "no plans to return," saying that the site "compromised" his privacy by allowing other members to view his information. Comcast owns the site, which competes with Linkedin. Read more here in a Guardian story.
Roger Avary Sent Back To Jail, Loses Work Release ArrangementOscar winner Roger Avary ("Pulp Fiction") who's been Tweeting since his 1 year sentence for vehicular homicide began some months ago has found that Tweeting wasn't such a good idea. His sentence originally allowed him work release. Now, because his regular Tweets have gained such popularity, the judge has sent him back to regular confinement. Read more here in a CNN story and here in a BBC article.
November 29, 2009
Former Washington Times Editorial Editor Files Suit Against PaperRichard Miniter, the former editorial page editor at the Washington Times, which is owned by the Unification Church, is suing the paper for breach of contract. He has also filed a complaint with the EEOC for religious discrimination. On today's CNN Reliable Sources, he told Howard Kurtz that he would like to see the paper pay him his back pay and to see the paper sold to another owner.
Salahis Asking For Pay To Tell StoryThe New York Times reports that the Salahis, the couple who turned up uninvited at the White House dinner last Tuesday, now would like payment to tell their side of the story to the media. They have put off a scheduled appearance on tomorrow's "Larry King" show. More coverage here.
Tax Incentives Available To the Australian Arts
This Report contains an overview of the current Australian tax treatment of the arts industry. To assist with this analysis, the art sector is divided into three broad categories: artists, art bodies and contributors. The Report highlights a number of mechanisms in the Australian tax system which relate to the arts - some which assist and some which do not.
Briefly, the major observations are:
• Employee-artists are subject to similar rules as those that apply to other
• For business-artists:
a) If trading as a sole trader (contractor), the business-artist may be deemed an ‘employee’ for Superannuation Guarantee purposes. This assists business-artists to accumulate superannuation savings for their retirement.
b) To smooth out income fluctuations, there is the ability to average income in a year when there is above-average professional income.
c) They could be regarded as a ‘small business’, and thereby access a number of tax concessions, such as small business capital gains tax (CGT) concessions.
d) Rules can quarantine artistic tax losses, so the losses cannot offset other income, such as part-time wages. There is a carve-out for some artists if their non-artist income is less than $40,000 per annum.
e) Rules can attribute personal service artistic income directly to artists even though a business structure (such as ‘company’) has been interposed between artists and their clients.
• For Art Bodies:
a) The constitution of the Art Body may enable it to be exempt from income tax.
b) The Art Body may be eligible to register as a Deductible Gift Recipient (DGR). Status, as a DGR means that donations to the Art Body may be tax deductible for taxpayers.
c) If the Art Body is not exempt from income tax, then its tax treatment will depend on the business form utilised.
• For Individuals (alive) the tax treatment of their contributions to the arts vary:
a) Donations of cash or property to non-DGRs would normally not be deductible for taxpayers. However, this can be altered if the individual donates through an intermediary DGR (such as the Australian Business Arts Foundation), which then can forward the contribution to a non-DGR. Donations through an intermediary DGR will be tax deductible for the taxpayer.
b) The ‘net inflated amount’ may be tax deductible when there is a minor benefit received in return for donations to DGRs, such as charity dinners and charity auctions.
c) Deductions for cultural goods are available for donations to certain cultural institutions.
d) Deductions for donations to DGRs of other non-cultural goods and land can be available. However, the taxpayer could have a deemed capital gain for the donation, which may negate the benefit of the tax deduction for the donation.
e) Volunteering of time and services (including expenses incurred in doing volunteer work) is unlikely to be tax deductible for volunteers.
f) The purchase of art work is likely to be subject to restrictive CGT rules that either limit the cost base or quarantine subsequent capital losses on disposal of the art.
• For Individuals who make testamentary donations, these will normally not be tax deductible unless the donation is of cultural goods (in very limited circumstances).
• For enterprises purchasing or supporting the arts, they may be able to claim a tax deduction for advertising received in connection to the support. However, such a deduction could be denied or reduced if the purchase includes ‘entertainment’.
• Individuals can set up their own DGRs by creating a Prescribed Private Fund (PPF), a non-profit trust which itself contributes to other DGRs which may include Art Bodies.
• New film tax offset incentives have been introduced which replace the prior deduction system.
After providing an overview of the Australian tax system, this Report analyses the tax treatment of Artists, Art Bodies and Contributors. The Report also canvasses the new tax offset concessions for the film industry, and then outlines some concluding observations about potential reforms that will be further developed in Report #4.
Download the paper at the link.