Author: thetrichordist

David Lowery’s Suggestions to the Copyright Office for Regulation of the Mechanical Licensing Collective Part 2

The US Copyright Office solicited comments from the public about the operations of the Mechanical Licensing Collective.  The first round of those comments (called “initial comments”) were due in November and the second round of those comments (which are called “reply comments” because they essentially comment on the initial comments) were due December 20.

All the comments focus on some central themes that seem to be on everyone’s mind which can be boiled down to oversight, oversight and more oversight.  While the DLC controls the MLC’s purse strings, the MLC has been given largely uncontrolled power over songwriters that needs to be checked by the government on behalf of the governed.

David Lowery did not file initial comments but as he notes, developments made him feel compelled to speak up in the reply comments.  We’re going to post his reply comments in four parts, and then we’ll post other commenters who we think made really good points (like CISAC and BIEM among others).  (If you want to skip ahead and read the entire comment, you can download it here.)  This is Part 2 of four parts.

Comments of David C. Lowery, Notice of Inquiry for Blanket License Implementation Regulations Issued by the United States Copyright Office Concerning the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018

Failure is Not an Option

Given my perspective of HFA’s horrendous track record of reporting to independent songwriters and publishers of both Anglo-American and all foreign language repertoire, the Copyright Office really must demand public oversight of the MLC in the crucial run-up to the License Availability Date.

We don’t want to find out on January 2, 2021 that the thing doesn’t work and get either a cobbled together manual accounting statement or no accounting statement or payment at all—and consequentially an exponential increase in the unmatched “black box” monies. I cannot imagine that the DLC wants this result, either.

The Congress did not mandate that the MLC could send out defective or placeholder accounting statements with no or low royalty payments. Unless the Copyright Office regulations holds their feet to the fire, this is entirely possible particularly if there is no downside for MLC. It is also important to keep in mind that the major publishers receive direct accountings from the services and will not use the MLC in all likelihood. These would be the same major publishers on the MLC board.

Do you think that the MLC is likely to punish itself for failing to do its job, especially for unrepresented songwriters or non-Anglo-American repertoire? I don’t. If the unmatched royalties are liquidated in the usual fashion they will be paid out by market share to the biggest publishers. Yes, whether intended or not there is a known perverse financial incentive for the biggest publishers to hope the MLC does a poor job. A large unmatched royalties pool will likely benefit big publishers. In theory the Unmatched Royalties Oversight Committee is supposed to look after this and counterbalance this mismatched incentive structure. However, it appears there is no funding allocated to the UROC. Thus, it is not clear how this oversight will be performed.

Respectfully, the Copyright Office should consider that its role is about to change—going forward the Office has been charged by Congress with an oversight responsibility for the entire process. If I end up being correct—that MLC will not only will fail to launch on the License Availability Date but it will be in total meltdown—the Congress must be able to know of any failures well in advance to be able to apply the pressure through saving legislation of some kind, or to at least have some notice there is a serious problem.

It is well within the Office’s current regulatory mandate to specify the deliverables the MLC must make public at key dates leading to launch for 1/1/21. Because there will be a strong tendency caused by extreme moral hazard for the MLC to view its operations through rose colored glasses, these deliverables require a maximum of public disclosure and peer review in order to be both credible and informative.

Here are some considerations the Copyright Office may wish to take into account:

(a) Systems should be publicly disclosed for peer review and comment on rolling basis starting immediately and continuing on a monthly basis thereafter until the launch, and then after the launch to determine how effective the systems work. If MLC fails operational milestones, then detailed explanation must be made in public with a plan to get back on track.

(b) There is no competition for MLC given its quango status and Congressional exclusivity, so no need for secrecy or redactions in its filings.

(c) Systems tests and certifications should be conducted on no less than monthly basis starting immediately with milestones to completion. These milestones and their results should be published in the Federal Register and on Copyright.gov and also circulated to Hill staff.

(d) If MLC is not fully operational by 9/30/20 then both the Copyright Office and the MLC leadership should report to Congress on why and critical path to full operational functionality. Because of the unprecedented nature of the MLC enterprise, “full operational functionality” may be a moving target, but MLC should not be able to set a low bar that results in only the rich people getting paid.

To be continued in Part 3

 

by thetrichordist

David Lowery’s Suggestions to the Copyright Office for Regulation of the Mechanical Licensing Collective Part 1

The US Copyright Office solicited comments from the public about the operations of the Mechanical Licensing Collective.  The first round of those comments (called “initial comments”) were due in November and the second round of those comments (which are called “reply comments” because they essentially comment on the initial comments) were due December 20.

All the comments focus on some central themes that seem to be on everyone’s mind which can be boiled down to oversight, oversight and more oversight.  While the DLC controls the MLC’s purse strings, the MLC has been given largely uncontrolled power over songwriters that needs to be checked by the government on behalf of the governed.

David Lowery did not file initial comments but as he notes, developments made him feel compelled to speak up in the reply comments.  We’re going to post his reply comments in four parts, and then we’ll post other commenters who we think made really good points (like CISAC and BIEM among others).  (If you want to skip ahead and read the entire comment, you can download it here.)

Comments of David C. Lowery, Notice of Inquiry for Blanket License Implementation Regulations Issued by the United States Copyright Office Concerning the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018

I respectfully submit these comments in response to the Copyright Office’s September 24, 2019 Notification of Inquiry and request for comments to assist the Office in drafting regulations relating to the implementation of certain parts of Title I of the Music Modernization Act.

Most relevantly for these purposes, I am an American songwriter, music publisher and member of the bands Cracker and Camper van Beethoven. I teach music business courses at the Terry College of Business at the University of Georgia and am co-author with Steven Winogradsky of the latest edition of the book “Music Publishing: The Complete Guide.” I also founded and am the principal writer of the blog The Trichordist (www.thetrichordist.com). I have testified before the House Judiciary Committee and am active in public policy discussions of the copyright law. I was briefly a member of the Mechanical Licensing Collective’s statutory unmatched funds committee, but resigned.

It was not my intention to respond to the Copyright Office request for comments on these regulations. However, several recent events changed my mind: The MLC’s selection of the Harry Fox Agency (formerly owned by NMPA) as its principal vendor; the selection of ConsenSys apparently as the cryptocurrency vendor of MLC; and the adoption by the Copyright Royalty Judges of the voluntary settlement of the initial administrative assessment after allowing the Songwriters Guild of America to be hounded out of the proceeding by the MLC while ignoring the many helpful points and suggestions made by SGA while it was in the proceeding including in its withdrawal papers.

These events range from the bizarre to the suspicious but lead me to the same conclusion—this process needs a whole lot of sunlight.

I found this language in MLC’s comments particularly troubling:

[G]iven that the MLC’s policies and procedures are still being developed with the [License Availability Date] still over one year away, the MLC believes that regulations concerning the Office’s oversight role may be premature at this time. The MLC believes that the promulgation of regulations concerning the Office’s role in overseeing and regulating the MLC’s operations and policies would be more fruitful once the MLC has fully developed its policies and procedures and is able to provide them to the Office for review.

That is exactly backwards. While the MLC may think oversight is not a fit until they decide how they wish to govern themselves with the power of the compulsory license and the biggest corporations in history behind them, the Copyright Office shouldn’t delay establishing the rules of the road.

The MLC is rapidly becoming a self-licking ice cream cone wrapped in cronyism inside a cryptocurrency. The Copyright Office is in a position to turn this erosion of MLC’s statutory mission back to the light and away from “new boss-ism” as in “meet the new boss, worse than the old boss.”

It seems impossible to ignore the fact that the MLC quango has announced their selection of vendors in a news dump over the Thanksgiving holiday. Having selected the Harry Fox Agency and a cryptocurrency outfit as best of breed vendors, I would expect both the substance and the process of this selection to be fair game for a comment about the MLC, its operations and, of course, its management.

I am reminded of James Madison’s warning in Federalist 51:

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.

Notices of Blanket and Nonblanket Activity

The Office’s request for comments on notices must be seen in light of the subsequent selection of HFA by the MLC. The implications from the MLC being permitted to select their cronies at HFA as a vendor comes up in many places in the Office’s request for comments. In terms of notices, I assume that HFA will be permitted to continue with its business practice of representing both copyright owners and digital music services, most specifically Spotify. In other words, HFA will be on both sides of the same transaction, a clear moral hazard and conflict of interest. Further if HFA is going to continue to collect money from services and pay songwriters, what is the point of inserting a $60 million-dollar layer of MLC bureaucracy in the middle of this transaction? In economic terms this appears to be pure “deadweight loss.”

The MMA clearly envisioned that the establishment of a single MLC would create market efficiency in music licensing. The selection of HFA as a vendor makes a mockery of the MMA by making the market less efficient, and essentially turns the MLC into a parasitic middleman. This is an “own goal.”

At the outset, I must respectfully say that I have first-hand experience with the HFA work product in two different class actions against HFA tech clients. In addition to my two class actions, there have been seven significant lawsuits that I am aware of brought against Spotify, an HFA client. All these lawsuits have similar facts—they were brought by (1) independent publishers that (2) opted out of the “settlement” between Spotify and the National Music Publishers Association and (3) whose claims were summarily ignored until they sued.

In my case, after I sued Spotify I received non-compliant NOIs from HFA (as Spotify’s agent) relating to songs at issue in the case that were backdated approximately five years. These notices were sent from an address that HFA would not have until several years after the back date and that were signed by an officer of Spotify who had left his job over a year before the mailing date. I don’t know what kind of game they were playing—perhaps trying to trick me or my business manager into cashing a paltry check they would argue indicated my acceptance of their license. It didn’t work, and the rest is history.

I have nothing personal against HFA and I actually placed part of my catalog with HFA for administration to see how they would do. At this writing, the jury is out.

I can also not ignore the fact that the entire MLC selection process appears from the outside to be a giant Kabuki dance to cover up business as usual with the reunion of the NMPA with the HFA unit they just sold off. I think it’s fair to say that I’m not alone in raising these questions, which relate directly to the Copyright Office’s questions and the initial round of comments from several commenters.

Public Test of Operability

The following responds to the Office’s questions about usage and reporting requirements.

The MLC announced with no oversight or explanation that is has selected HFA as one of its principal vendors. Because the MLC dragged their heels on disclosing who their vendors would be, the Copyright Office was forced to designate the MLC before the MLC announced its vendors. The Office was therefore largely buying a pig in a poke—as were all songwriters in the history of music. The Office (and the Congress) unintentionally empowered the MLC to essentially do whatever it wanted to fulfill its statutory mandate. The MLC chose HFA in what may be the least suspenseful announcement of the decade.

Respectfully, I think that when the Copyright Office reflects on that decision in a few years, it will be shown to have been a mistake or I will be shown to have been a goat. If HFA works out, I will be happy to be a goat. But if it doesn’t, the bill for both these decisions will come due—and the services won’t be paying that one. Self-published songwriters will be paying with missing or miscalculated royalties.

There have been many notable lawsuits brought against services since I filed my class action in 2015. Some say that these cases drove the services to accept the Title I blanket license due to the retroactive safe harbor. All of these cases have two things in common: They were brought by independent songwriters or publishers and HFA was the backend matching and royalty accounting service in every case. So I would say it differently. What drove the services to take the safe harbor deal (which was great for them) was not the songwriters, it was HFA’s repeated inability to get the job done.

Not only was HFA not punished for its failures, it has been rewarded. This is curious. And the MLC is now supposed to accomplish in 12 months or less that which the industry has been unable to accomplish in decades. Using HFA. Which makes it all very mysterious to people like me.

One way to solve that mystery would be for the MLC to disclose the actual selection criteria and internal recommendations to support the supposed “unanimous” selection of HFA. Was this the work of a dedicated group of likeminded people or was it based on objective criteria? If, for example, MLC were to have given HFA and MRI a problem to solve, I would like to know exactly what that problem is so that I could assign the solution of the problem set as an academic project. I would be happy to publish the results, as could any other academic wishing to conduct such peer review.

Unfortunately, I seriously doubt that MLC has any intention of being that transparent unless they are required to do so by regulations. Which leads one to ask, why so secretive?

To be continued in Part 2

 

by thetrichordist

Press Release: Songwriters Guild Of America Files Reply Comments With Us Copyright Office Again Urging Stringent Oversight Of Music Licensing Collective

We wanted to post this press release from the Songwriters Guild regarding its reply comments to the Copyright Office public consultation on regulating the Mechanical Licensing Collective.

The Guild generously raises some very helpful issues and also is concerned about David’s departure from the MLC.  Unfortunately, the Guild’s comment is still not available on the Regulations.gov website, so Artist Rights Watch linked to a copy of it.  We’re not quite sure why the Copyright Office hasn’t gotten around to posting the Guild’s comment (or David’s yet for that matter) along with the 32 others they have posted before the Christmas break, but we’ll keep you informed on their progress.  Hopefully that’s just an oversight that we noticed because we’re back to work now.

Here’s the press release.

New York, December 20, 2019–  The Songwriters Guild of America (SGA), the longest established and largest music creator advocacy and copyright administrative organization in the United States run solely by and for songwriters, composers and their heirs, has submitted a series of comments and requests to the US Copyright Office regarding oversight of the newly-formed Mechanical Licensing Collective (MLC).  Its comments were filed on December 20, 2019 at the invitation of the Register of Copyrights, pursuant to the duties assigned to the Librarian of Congress and the Copyright Office under the Music Modernization Act of 2018 (MMA).  SGA’s comment is here.

“Due to the inherent and sometimes unavoidable conflicts of interest surrounding the formation and activities of the MLC under the law,” states SGA president and songwriter Rick Carnes, “the music creator community believes that the highest degree of scrutiny must be applied by the US Government in overseeing MLC activities.  Hundreds of millions of dollars in songwriter and composer royalties will be at stake on an annual basis, and to protect us from conflicts of interest within the MLC in regard to such issues as matching currently unclaimed royalties to their proper owners, Congress wisely placed the responsibility of evaluating MLC  activities for fairness, transparency and accuracy to the US Copyright Office.  SGA fully supports the efforts of the Register of Copyrights to formulate regulations that protect the rights of music creators as Congress intends, and will work with the Office to help ensure it is enabled to vigorously and effectively perform its oversight functions.”

Specifically, the comments filed by SGA include requests for regulations governing the MLC that mandate:

  1. Recognition of the obvious and overwhelming necessity for inclusion of songwriter and composer information in the MLC Musical Works Database;
  2. Adoption of internal MLC rules requiring adherence by board and committee members to strict conflict of interest policies;
  3. Inclusion in the MLC by-laws of a process for replacing music creator board and committee members that includes meaningful music creator community participation in the selection process without music publisher interference, and review and approval by the USCO and the Librarian of Congress of all such music creator candidates and appointees. (“To do otherwise,” states Carnes, “would be akin to empowering the wolves to select the watchdogs that purportedly guard the sheep”);
  4. The immediate compilation, calculation and publication of the aggregate amounts of unmatched royalties being held or already transferred to the MLC by digital music distributors, and to update such information on an ongoing basis;
  5. The allocation of sufficient funds specifically enumerated in the MLC budget to be utilized solely for mounting a bona fide, global effort to identify unmatched royalties.

SGA also applauded the recent appointment of Maria Strong to serve as Acting US Register of Copyrights, and urged the Librarian of Congress to select as permanent Register a person  especially knowledgeable about and sympathetic to the rights and needs of the creator and author community, and without conflicts of interest in regard to prior affiliation with digital distributors, big tech, and/or corporate copyright owners (and their respective trade associations).

Finally, SGA suggested that the Copyright Office exercise diligent oversight in reviewing certain recent MLC initiatives, including the awarding of contracts to potentially controversial third parties such as The Harry Fox Agency and ConsenSys, and in investigating the sudden withdrawal from participation on the MLC  Unclaimed Royalties Oversight Committee of songwriter, recording artist and music creator rights activist David Lowery.

“SGA’s intended role in this process,” concludes Carnes “is to serve as an independent monitor of MLC activities, working with the US Copyright Office and other US Government agencies in ensuring that the rights and interests of music creators under the MMA are fully observed.  We have operated as an organization for over 85 years with a two-word mission statement: Protect Songwriters. And that is exactly what we intend to do in this case.”

 

 

by thetrichordist

Happy Holidays and David’s Copyright Office Comments

We wanted to wish all our readers happy holidays and thank you again for supporting the Trichordist!

As some of you may know, the Copyright Office comment period for MLC regulations just closed.  We will be posting David’s comments and selected other commenters here for some holiday reading starting tomorrow.

We want to thank the Society of Composers and Lyricists for mentioning David in their comments.

SLC NOI Reply Comments

 

by thetrichordist

RIP Scott Timberg and GoFundMe Page

We were devastated to hear of the death of Scott Timberg, a good friend of the artist rights movement and gifted writer.  His most recent work the definitive Culture Crash: The Killing of the Creative Class will be a vital resource for advocates for many years to come.

A GoFundMe memorial and college fund page was set up by David Dailey for Scott’s wife and son.  We urge everyone to contribute something however small.

by thetrichordist

As if it weren’t hard enough: @TheFOWShow Covers the Direct Shot Supply Chain Debacle–MusicTechPolicy

by Chris Castle

If you are lucky enough to have an independent record store in your community today (mine is the fabulous Waterloo Records), you may not realize just how lucky you really are.  For an independent record store to have survived the last 20 years is something of a modern miracle.  (I think the Waterloo story should be a Harvard Business School case study, frankly.)

It’s also important to realize that physical configurations contributed to 25% of global recorded music revenues in 2018.  Vinyl alone accounts for 3.6% of global revenue.  But–all the majors have outsourced their U.S. physical distribution to a company called “Direct Shot” and the result is a disaster for this delicate ecosystem.  I find it hard to believe that any sales guys had much to do with that decision–it has that extra special Boston Consulting Group stench to it.

The point is that the one way that it could be harder for retailers than it already is due to contractions in the market and streaming cannibalization is if the labels also contracted their stock, shorted them, or just simply didn’t timely deliver the records the stores ordered.  It’s also a silly move for the labels–that’s a nice 25% of revenue you got there, be a shame if something happened to it.

This episode of the first-rate Future of What podcast hosted by the brilliant Portia Sabin is one of the first in depth public conversations on this vital topic we’ve seen.  You may also want to read the open letter from retailers to the major labels that appeared earlier this year, as well as an in depth post about the Direct Shot debacle in the MusicBiz blog.

Stay tuned.

by thetrichordist

Guest Post: MIC Coalition Filing Reveal: The Zombie Transparency in Music Licensing and Ownership Act–@ArtistRights Watch

By Chris Castle

Remember the horrific Transparency in Music Licensing and Ownership Act from the last Congress?  (See “The Transparency in Music Licensing and Ownership Act: The Domesday Book Meets A Unicorn“.)

Well, guess what–it’s not really dead!  A little tea-leaf reading suggests that the MIC Coalition (one of the largest and most anticompetitive lobbying groups in history) have plans to amend the Music Modernization Act’s blanket license to all licensing verticals if they had their way.  That would include “general licensing” in bars and restaurants to satisfy their hotel, restaurant and “beverage” folks.  So there’s definitely some there there.

 

MIC Coaltion Members 2019
MIC Coalition Members

The MIC Coalition cartel filed a comment with the Copyright Office that makes one thing clear–this rule making is going to be a scorched earth donnybrook of epic proportions.

The big reveal in the MIC Coaltion’s filing is based on this passage in the legislative history for the Music Modernization Act:

Testimony provided by Jim Griffin at the June 10, 2014 Committee hearing highlighted the need for more robust metadata to accompany the payment and distribution of music royalties. With millions of songs now available to subscribers worldwide, technology also has a role to play through digital fingerprinting of a sound recording. However, there is no reliable, public database to link sound recordings with their underlying musical works. Unmatched works routinely occur as a result of different spellings of artist names and song titles….Music metadata has more often been seen as a competitive advantage for the party that controls the database, rather than as a resource for building an industry on.

The entire concept of maintaining a static look up database of not only all songs in the history of recorded music, but also all sound recordings in the history of recorded music that can be queried in real time is really not that different than the Domesday Book–when William the Conquerer made a big list of all property, people and chickens in England in the “Great Survey” in 1086.  Like the Domesday Book, the “musical works database” will be full of mistakes due to the dynamic nature of the things it is purporting to count.

But the reveal is the heaping praise on the horrific Transparency in Music Licensing and Ownership Act which was designed to destroy the PRO system (just like the MIC Coalition):

In response to the Copyright Office recommendations, Representative Jim Sensenbrenner introduced the Transparency in Music Licensing and Ownership Act, H.R. 3350, in July of 2017, which was cosponsored by several members of the House Judiciary Committee. The bill would provide for a database, housed at and overseen by the U.S. Copyright Office, to aid businesses and establishments that publicly perform musical works and sound recordings in identifying and compensating the holders of rights in those works. 

Fasten your seatbelts, it’s going to be a bumpy night.

by thetrichordist

Guest Post: UK Official Investigating PledgeMusic Directors, Asks the Public for Information

By Chris Castle

Don’t believe the headlines–just because there’s no money for artists from the PledgeMusic bankruptcy does not mean that the story is over.  It just means that justice is going to take longer.  If you were paying attention, it should have been obvious from the beginning that PledgeMusic was a financial roach motel–the money goes in but doesn’t come out.

In the least suspenseful story of the decade if not longer, it appears that PledgeMusic’s officers and directors ran the company straight into the ground.  It’s unclear from the Official Receiver’s report (which is available here) whether Pledge had any cash on hand when it filed for liquidation.  The Official Receiver appears to value the company’s intellectual property at £20,000 as its only asset.  Pledge had £7.4 million in “debt” so nothing for the artists or anyone else.

However, the really important part of the Official ReceiverReceiver’s report relates to the officers and directors.

Pledge Liquidator 1

So unpacking that paragraph, the directors seek to avoid liability by saying they weren’t involved with the “day to day running of the company”.  Well, no kidding.  That’s why they are directors.   But they are answering a question that isn’t relevant.  The question is not whether they were involved with the day to day, the question is what did they know about the company’s insolvency and when did they know it?  A related question is whether they were willfully blind about the financial condition of the company?

It is difficult to understand how they couldn’t have known about the company’s financial condition.  This is not something you find out from interviewing Benji Rogers.  This is something you find out by examining board minutes, financial statements, internal accounting, and of course internal emails.

It must be said, of course, that stating that “the company continued to operate as previously” begs the question “previously” to what date?  And of course, if it continued to operate as an insolvent, that doesn’t really help them.  At all.

Let’s not forget that to a large degree, once the board becomes aware that their company is insolvent, their fiduciary duty shifts from the shareholders to the creditors, especially if the board fails to disclose the insolvency to creditors and fails to seek bankruptcy protection (which goes by different names in the UK, administration or liquidation).

And that last sentence is also telling.  Why did the board seek legal advice about whether the pledge monies were or were not trust monies?  Again, answering a question that wasn’t asked exactly.  Who gave them this advice, what prompted the board to ask for it, when did they ask for it and what happened after they got the advice?  Did the lawyer also tell the board that they could tell the public they were soliciting funds for one purpose and then use the money for an entirely different purpose for their or the company’s own benefit?

You see, it doesn’t really matter whether the monies were held in trust if the entire process was a fraud.  But I’d still like to hear from that lawyer as to exactly what he or she told them–I seriously doubt that it’s quite as broad as all that.

But here is the punchline of the Official Receiver’s report:

Pledge Liquidator 2

It does not sound to me like the Official Receiver (the liquidator) views her work as completed.  What it appears remains to be determined now is whether the cause of the insolvency (or bankruptcy) requires further action, including a referral by the Official Receiver to Scotland Yard and/or the Crown Prosecution Service (which is essentially the prosecution arm of the Home Office–the people with the white wigs for the BBC watchers).

Artists should feel free to call the Official Receiver at the number they gave or I believe you can still email to LondonB.OR@insolvency.gov.uk using the matter LQD5671373 in the subject.

by thetrichordist

Guest Post by @cagoldberglaw:  Scared as Hell: Section 230 Denies Access to Justice, Not Free Speech Protection via @musictechpolicy

By Carrie A. Goldberg

[Chris Castle editor’s note:  We should all be aware that in addition to the “value gap” of the DMCA safe harbor, Big Tech also has another safe harbor in Section 230 which I call the “values gap.”  You have to ask yourself, how do they sleep at night?  We are honored to be able to post this article by one of the great lawyers of our time, Carrie Goldberg, author of the new book Nobody’s Victim: Fighting Psychos, Stalkers, Pervs, and Trolls and victim rights lawyer extraordinaire.  Carrie is going after Grindr for putting a product into commerce with a design defect that allows stalkers to use the app to assault users.  This argument is similar to the Ford Pinto’s exploding gas tank.  This post started as a Twitter thread, and we’re very pleased that Carrie agreed to let us post it as an article.]

For the past 2-1/2 years my firm has been in the fight of our life in the case Herrick vs. Grindr which involved owners and operators of the Grindr gay dating app refusing to assist our client, Matthew Herrick, when mobs of strangers were coming to his home to have sex with him.

Using Grindr’s geolocating and other technology, Herrick’s ex impersonated him and directed over 1200 men to him in person. Sometimes 23 a day. Herrick went to the police and got an order of protection. Nothing Herrick was able to do helped to stop this assault.

And neither did Grindr. No, Grindr said in court they didn’t need to help Matthew because the Communications Decency Act Section 230 protected them from any legal responsibility for harms caused by their app.  The district judge agreed. We appealed it to a panel of judges sitting on the Second Circuit Court of Appeals.

The Second Circuit panel also said Grindr bore no responsibility to Matthew and that the earlier judge was right to throw the case out. We sought a rehearing en banc before all the judges on the Second Circuit trying to explain that we were not suing for words or communications from a user (for which Grindr would get Section 230 immunity) but rather, we were suing Grindr because its product was defective.

Why?  Because Grindr designed their product without an internal system or other protective functionality to save users and the world at large from people abusing their product to impersonate, stalk, prey—easily foreseeable harms that a reasonable person could have predicted might happen before Grindr was put into commerce.

In August we submitted a cert petition for the Supreme Court of the United States to review the Second Circuit’s ruling and reverse it. We’ll know Oct. 1 if they will. In my practice, I see a lot of people like Matthew whose lives were destroyed because apps and social media companies ignored them.  People who are victims of revenge porn, sextortion, harassment, doxxing, horrible content coming up in search engines, all of which could be prevented by eliminating these design defects and putting people over profits.

These Big Tech companies have ZERO incentive to build safety precautions into their products because this 1996 law Section 230 has been interpreted by the courts to shield tech companies from just about any responsibility.  It means we as individuals CAN NOT sue them. A bunch of politicians, lobbyists and even some professors will say that Section 230 protects our speech.

That is not true.

What Section 230 does is remove options for us as individuals when lives are destroyed through tech. Our courts are no longer an option for us to get justice.  I can’t overstate how extreme it is for there to be companies that are UNTOUCHABLE by our courts.

Our tort system is centuries old and it is the great equalizer enforced by the courts—an entire branch of government and integral to our entire concept of checks and balances. In almost every kind of harm, for a couple hundred bucks a single person can use the tort law and the courts to hold the most powerful person or company responsible if they caused us harm and we can stop them from further hurting us which is Matthew’s case.

The ramifications of Section 230 immunity don’t just impact those harmed. Section 230 harms us all as a society. We are entering an era of greater surveillance, Artificial Intelligence, self-driving cars, facial recognition technology.  Companies developing this have ZERO incentive to be thinking about how their products will be abused and exploited by bad actors. Why?  First and foremost because there is no pressure on them from the threat of litigation.

So in addition to Matthew’s battle with the courts, my big discovery is that our politicians are now inserting language into our international trade agreements that echos Section 230.

If they succeed and we are injured by some other country’s negligent tech product, app or social media company, our country is immunizing those companies too. Those international companies now can’t be sued by us either.

Look at Article 19.17 of NAFTA 2.0 . nafta excerpt

The language, which is even MORE expansive than Section 230 in protecting tech companies was already included in NAFTA.

And we have some politicians working to include it in trade deals with Japan, India, and the EU.  This is INSANE.

These politicians are taking away our rights against tech companies in our own country and others. This means they can all be as exploitive of users and privacy and human rights as they want.

Everybody should be scared as hell. Section 230 is NOT about online speech. It is about access to justice.  No other industry is immune like this. These companies basically have sovereign immunity. The most powerful, wealthy, omniscient, omnipotent industry in the history of the world has as much or more protections from being sued as a government.

We need to hold our politicians accountable. We need to expose those who are fighting against our individual rights and voting to exclude these companies from judicial systems around the world. Additionally, if our American companies don’t like changes we make to Section 230, they’ll just relocate to a country with whom we have a trade agreement.

Who in congress is THAT owned by Big Tech that they would betray the American people and strip them of all recourse for injuries that occur online?

by thetrichordist